EXHIBIT 4.3
Draft of November 1, 1994
________________________________________________________________________________
BEST BUY CO., INC.,
BEST BUY CAPITAL, L.P.
TO
HARRIS TRUST AND SAVINGS BANK
Trustee
________________
Indenture
Dated as of November 3, 1994
________________
$288,227,848
6 1/2% Convertible Subordinated Debentures
Due November 3, 2024
________________________________________________________________________________
.....................................
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
- - ------------------ ---------
Section 310 (a)(1) .................................... 609
(a)(2) .................................... 609
(a)(3) .................................... Not Applicable
(a)(4) .................................... Not Applicable
(b) .................................... 608, 610
Section 311 (a) .................................... 613
(b) .................................... 613
Section 312 (a) .................................... 701
702(a)
(b) .................................... 702(b)
(c) .................................... 702(c)
Section 313 (a) .................................... 703(a)
(a)(4) .................................... 101, 1004
(b) .................................... 703(a)
(c) .................................... 703(a)
(d) .................................... 703(b)
Section 314 (a) .................................... 704
(b) .................................... Not Applicable
(c)(1) .................................... 102
(c)(2) .................................... 102
(c)(3) .................................... Not Applicable
(d) .................................... Not Applicable
(e) .................................... 102
Section 315 (a) .................................... 601
(b) .................................... 602
(c) .................................... 601
(d) .................................... 601
(e) .................................... 514
Section 316 (a) .................................... 101
(a)(1)(A) .................................... 502
512
(a)(1)(B) .................................... 513
(a)(2) .................................... Not Applicable
(b) .................................... 508
(c) .................................... 104(c)
Trust Indenture Indenture
Act Section Section
- - ------------------ ---------
Section 317 (a)(1) .................................... 503
(a)(2) .................................... 504
(b) .................................... 1003
Section 318 (a) .................................... 107
______________
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
-ii-
TABLE OF CONTENTS
PAGE
Parties........................................................... 1
Recitals of the Company and Best Buy Capital...................... 1
ARTICLE ONE
Definitions and Other Provisions of
General Application
SECTION 101. Definitions:
Act............................................. 3
Additional Dividends............................ 3
Additional Interest............................. 3
Affiliate; control.............................. 3
Applicable Price................................ 4
Bank Agreement.................................. 4
Best Buy Capital................................ 4
Board of Directors.............................. 4
Board Resolution................................ 4
Business Day.................................... 4
Capital Lease Obligation........................ 4
Closing Price................................... 4
Commission...................................... 4
Common Stock.................................... 5
Common Stock Fundamental Change................. 5
Company......................................... 5
Company Request; Company Order.................. 5
Conversion Agent................................ 5
Conversion Date................................. 5
Conversion Expiration Date...................... 6
Corporate Trust Office.......................... 6
corporation..................................... 6
Defaulted Interest.............................. 6
Designated Senior Holder........................ 6
Event of Default................................ 6
exchange date................................... 6
Exchange Election............................... 6
Exchange Event.................................. 6
Expiration Date................................. 6
Fundamental Change.............................. 6
General Partner Contribution.................... 7
Guarantee; primary obligor...................... 7
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-i-
PAGE
Holder.......................................... 7
Incur........................................... 7
Indebtedness.................................... 7
Indenture....................................... 8
Interest Payment Date........................... 8
Junior Subordinated Payment..................... 8
Limited Partnership Agreement................... 8
Maturity........................................ 8
Non-Stock Fundamental Change.................... 8
Notice of Conversion............................ 8
Notice of Exchange.............................. 8
Officers' Certificate........................... 8
Opinion of Counsel.............................. 9
Outstanding..................................... 9
Parent Guarantee................................ 10
Paying Agent.................................... 10
Payment Blockage Period......................... 10
Person.......................................... 10
Predecessor Security............................ 10
Preferred Securities............................ 10
Proceeding...................................... 10
Purchased Shares................................ 10
Purchaser Stock Price........................... 10
Redeemable Interest............................. 10
Redemption Date................................. 11
Redemption Price................................ 11
Reference Date.................................. 11
Reference Market Price.......................... 11
Regular Record Date............................. 11
Responsible Officer............................. 11
Securities...................................... 11
Securities Payment.............................. 11
Security Register;
Security Registrar............................ 11
Senior Indebtedness............................. 11
Senior Nonmonetary Default...................... 13
Senior Payment Default.......................... 13
Series A Preferred Stock........................ 13
Special Record Date............................. 13
Stated Maturity................................. 13
Subsidiary...................................... 13
Trading Day..................................... 14
Trustee......................................... 14
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-ii-
PAGE
Trust Indenture Act............................. 14
Vice President.................................. 14
SECTION 102. Compliance Certificates and
Opinions...................................... 14
SECTION 103. Form of Documents
Delivered to Trustee.......................... 14
SECTION 104. Acts of Holders; Record Dates................... 15
SECTION 105. Notices, Etc., to Trustee, Company
and Best Buy Capital.......................... 17
SECTION 106. Notice to Holders; Waiver....................... 17
SECTION 107. Conflict with Trust Indenture Act............... 18
SECTION 108. Effect of Headings and
Table of Contents............................. 18
SECTION 109. Successors and Assigns.......................... 18
SECTION 110. Separability Clause............................. 18
SECTION 111. Benefits of Indenture........................... 19
SECTION 112. Governing Law................................... 19
SECTION 113. Legal Holidays.................................. 19
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally................................. 19
SECTION 202. Form of Face of Security........................ 20
SECTION 203. Form of Reverse of Security..................... 24
SECTION 204. Form of Trustee's
Certificate of Authentication................. 27
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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PAGE
ARTICLE THREE
The Securities
SECTION 301. Title and Terms................................. 27
SECTION 302. Denominations................................... 29
SECTION 303. Execution, Authentication,
Delivery and Dating........................... 29
SECTION 304. Temporary Securities............................ 30
SECTION 305. Registration, Registration of
Transfer and Exchange......................... 31
SECTION 306. Mutilated, Destroyed,
Lost and Stolen Securities.................... 32
SECTION 307. Payment of Interest;
Interest Rights Preserved..................... 33
SECTION 308. Persons Deemed Owners........................... 35
SECTION 309. Cancellation.................................... 35
SECTION 310. Computation of Interest......................... 35
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and
Discharge of Indenture........................ 36
SECTION 402. Application of Trust Money...................... 37
ARTICLE FIVE
Remedies
SECTION 501. Events of Default............................... 38
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-iv-
PAGE
SECTION 502. Acceleration of Maturity;
Rescission and Annulment...................... 40
SECTION 503. Collection of Indebtedness and
Suits for Enforcement by
Trustee....................................... 41
SECTION 504. Trustee May File Proofs of Claim................ 42
SECTION 505. Trustee May Enforce Claims
Without Possession of
Securities.................................... 43
SECTION 506. Application of Money Collected.................. 43
SECTION 507. Limitation on Suits............................. 44
SECTION 508. Unconditional Right of Holders to
Receive Principal and
Interest and to Convert....................... 45
SECTION 509. Restoration of Rights and Remedies.............. 45
SECTION 510. Rights and Remedies Cumulative.................. 45
SECTION 511. Delay or Omission Not Waiver.................... 46
SECTION 512. Control by Holders.............................. 46
SECTION 513. Waiver of Past Defaults......................... 46
SECTION 514. Undertaking for Costs........................... 47
SECTION 515. Waiver of Stay or Extension Laws................ 47
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and
Responsibilities.............................. 48
SECTION 602. Notice of Defaults.............................. 48
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-v-
PAGE
SECTION 603. Certain Rights of Trustee....................... 48
SECTION 604. Not Responsible for Recitals
or Issuance of Securities..................... 50
SECTION 605. May Hold Securities............................. 50
SECTION 606. Money Held in Trust............................. 50
SECTION 607. Compensation and Reimbursement.................. 50
SECTION 608. Disqualification; Conflicting
Interests...................................... 51
SECTION 609. Corporate Trustee Required;
Eligibility................................... 51
SECTION 610. Resignation and Removal;
Appointment of Successor...................... 52
SECTION 611. Acceptance of Appointment by
Successor..................................... 53
SECTION 612. Merger, Conversion, Consolidation
or Succession to Business..................... 54
SECTION 613. Preferential Collection of
Claims Against Company........................ 54
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names
and Addresses of Holders...................... 54
SECTION 702. Preservation of Information;
Communications to Holders..................... 55
SECTION 703. Reports by Trustee.............................. 55
SECTION 704. Reports by Company.............................. 56
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-vi-
PAGE
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc.,
Only on Certain Terms......................... 56
SECTION 802. Successor Substituted........................... 58
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without
Consent of Holders............................ 58
SECTION 902. Supplemental Indentures with
Consent of Holders............................ 59
SECTION 903. Execution of Supplemental Indentures............ 60
SECTION 904. Effect of Supplemental Indentures............... 61
SECTION 905. Conformity with Trust Indenture Act............. 61
SECTION 906. Reference in Securities to
Supplemental Indentures....................... 61
ARTICLE TEN
Covenants; Representations and Warranties
SECTION 1001. Payment of Principal
and Interest.................................. 61
SECTION 1002. Maintenance of Office or Agency................. 62
SECTION 1003. Money for Security Payments to
Be Held in Trust.............................. 62
SECTION 1004. Statement by Officers as to
Default....................................... 63
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-vii-
PAGE
SECTION 1005. Existence....................................... 64
SECTION 1006. Maintenance of Properties....................... 64
SECTION 1007. Payment of Taxes and Other Claims............... 64
SECTION 1008. Additional Covenants............................ 65
SECTION 1009. Representations and Warranties.................. 66
ARTICLE ELEVEN
Subordination of Securities
SECTION 1101. Securities Subordinate to Senior
Indebtedness.................................. 67
SECTION 1102. Payment Over of Proceeds Upon
Dissolution, Etc. ............................ 67
SECTION 1103. No Payment When Senior
Indebtedness in Default....................... 69
SECTION 1104. Payment Permitted If No Default................. 71
SECTION 1105. Subrogation to Rights of Holders
of Senior Indebtedness........................ 71
SECTION 1106. Provisions Solely to Define
Relative Rights............................... 72
SECTION 1107. Trustee to Effectuate Subordination............. 72
SECTION 1108. No Waiver of Subordination
Provisions.................................... 73
SECTION 1109. Notice to Trustee............................... 73
SECTION 1110. Reliance on Judicial Order or
Certificate of Liquidating Agent.............. 75
SECTION 1111. Trustee Not Fiduciary for Holders
of Senior Indebtedness........................ 75
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-viii-
PAGE
SECTION 1112. Rights of Trustee as Holder of
Senior Indebtedness;
Preservation of Trustee's
Rights........................................ 75
SECTION 1113. Article Applicable to Paying
Agents........................................ 76
ARTICLE TWELVE
Conversion of Securities
SECTION 1201. Conversion Rights................................... 76
SECTION 1202. Conversion Price Adjustments........................ 79
ARTICLE THIRTEEN
Redemption of Securities
SECTION 1301. Conditional Right of Redemption;
Mandatory Redemption................................ 92
SECTION 1302. Applicability of Article............................ 92
SECTION 1303. Election to Redeem; Notice
to Trustee........................................ 92
SECTION 1304. Notice of Redemption................................ 93
SECTION 1305. Deposit of Redemption Price......................... 93
SECTION 1306. Securities Payable on
Redemption Date................................... 93
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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PAGE
ARTICLE FOURTEEN
Exchange
SECTION 1401. Optional Exchange for Depositary
Shares Representing Series A
Preferred Stock............................... 94
TESTIMONIUM....................................................... 96
SIGNATURES AND SEALS.............................................. 96
ACKNOWLEDGEMENTS.................................................. 97
ANNEX A: Form of Amended and Restated Agreement of Limited Partnership
of Best Buy Capital, L.P., dated as of November 3, 1994.
___________
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
-x-
INDENTURE, dated as of November 3, 1994, among Best Buy Co., Inc., a
corporation duly organized and existing under the laws of the State of Minnesota
(herein called the "COMPANY"), having its principal office at 7075 Flying
Cloud Drive, Eden Prairie, Minnesota 55344, Best Buy Capital, L.P., a limited
partnership organized under the laws of the State of Delaware (herein called
"Best Buy Capital"), having its principal office at c/o Best Buy Co. Inc., 7075
Flying Cloud Drive, Eden Prairie, Minnesota and Harris Trust and Savings Bank, a
corporation duly organized and existing under the laws of Illinois, as Trustee
(herein called the "TRUSTEE"). Unless otherwise defined herein, all
capitalized items used herein shall have the meanings ascribed to them in the
Amended and Restated Agreement of Limited Partnership of Best Buy Capital, dated
as of November 3, 1994 (the "LIMITED PARTNERSHIP AGREEMENT"), as in effect on
the date hereof, the form of which is attached as Annex A hereto.
RECITALS OF THE COMPANY AND BEST BUY CAPITAL
WHEREAS, Best Buy Capital may pursuant to the Underwriting Agreement
dated October 27, 1994 among the Company, Best Buy Capital and the Underwriters
named therein issue up to $230,000,000 aggregate liquidation preference of its 6
1/2% Convertible Monthly Income Preferred Securities (the "PREFERRED
SECURITIES") with a liquidation preference of $50 per Preferred Security;
WHEREAS, the Company is guaranteeing the payment of Dividends on the
Preferred Securities (if and to the extent declared from funds of Best Buy
Capital legally available therefor), and payment of the Redemption Price and
payments on liquidation with respect to the Preferred Securities, to the extent
provided in the Guarantee Agreement dated November 3, 1994, between the Company
and Best Buy Capital (the "PARENT GUARANTEE") for the benefit of the holders
of the Preferred Securities;
WHEREAS, the Company wishes to sell to Best Buy Capital, and Best
Buy Capital wishes to purchase from the Company, Securities in an aggregate
principal amount equal to the sum of the capital contributed by the Company to
Best Buy Capital as the general partner thereof (the "GENERAL PARTNER
CONTRIBUTION") and the aggregate stated liquidation preference of the Preferred
Securities issued and sold by Best Buy Capital pursuant to the Underwriting
Agreement, less $2,911,392, which is equal to 1% of such sum;
WHEREAS, so long as Best Buy Capital is a Holder of Securities and
any Preferred Securities are outstanding, the Limited Partnership Agreement
provides that (i) the holders of Preferred Securities may, on or before the
Conversion Expiration Date, cause the Conversion Agent to (a) exchange such
Preferred Securities for Securities held by Best Buy Capital and (b) immediately
convert such Securities into Common Stock and (ii) under certain circumstances
the holders of Preferred Securities may cause the Conversion Agent to (a)
exchange such Preferred Securities for Securities held by Best Buy Capital and
(b) immediately exchange such Securities for Depositary Shares, each
representing a 1/100th interest in a share of Series A Preferred Stock;
WHEREAS, the Company has duly authorized the creation of an issue of
its 6 1/2% Convertible Subordinated Debentures Due November 3, 2024 (the
"SECURITIES"), of substantially the tenor and amount hereinafter set forth and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture; and
WHEREAS, all things necessary to make the Securities, when executed
by the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
-2-
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted at the
date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"ACT", when used with respect to any Holder, has the meaning
specified in Section 104.
"ADDITIONAL DIVIDENDS" means dividends that shall accumulate on
any dividend arrearages in respect of the Preferred Securities at the rate of 6
1/2% per annum compounded monthly.
"ADDITIONAL INTEREST" means interest that shall accrue on any
interest on the Securities that is not paid when due or not paid during an
extension of an interest payment period, which in either case shall accrue at
the rate of 6 1/2% per annum compounded monthly.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to
the foregoing.
-3-
"APPLICABLE PRICE" has the meaning specified in Section 1202.
"BANK AGREEMENT" means the Credit Agreement dated as of July 29,
1994, between the Company and First Bank National Association, as Agent, as such
Agreement may hereafter be amended, restated, supplemented or otherwise modified
from time to time, together with all other documents executed in connection
therewith.
"BEST BUY CAPITAL" means the Person specified as such in the first
paragraph of this instrument.
"BOARD OF DIRECTORS" means either the board of directors of the
Company or any duly authorized committee of that board.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY" means any day other than a day on which banking
institutions in New York City or Chicago are authorized or obligated by law or
executive order to close.
"CAPITAL LEASE OBLIGATION" of any Person means the obligation to
pay rent or other payment amounts under a lease of (or other Indebtedness
arrangements conveying the right to use) real or personal property of such
Person which is required to be classified and accounted for as a capital lease
or a liability on the face of a balance sheet of such Person in accordance with
generally accepted accounting principles. The stated maturity of such
obligation shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a penalty.
"CLOSING PRICE" has the meaning specified in Section 1202.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
-4-
"COMMON STOCK" includes any stock of any class of the Company
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which is not subject to redemption by the Company. However,
subject to the provisions of Article 12, shares issuable on conversion of
Securities shall include only shares of the class designated as Common Stock of
the Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which are not subject to redemption by the Company; PROVIDED that if at
any time there shall be more than one such resulting class, the shares of each
such class then so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes resulting from all such
reclassifications.
"COMMON STOCK FUNDAMENTAL CHANGE" has the meaning specified in
Section 1202.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"CONVERSION AGENT" means the Person appointed under the Limited
Partnership Agreement to act on behalf of the holders of Preferred Securities in
effecting the conversion of Preferred Securities as and in the manner set forth
in the Limited Partnership Agreement and Section 1201 hereof and in effecting
the exchange of Preferred Securities for Depositary Shares representing Best Buy
Preferred Stock as and in the manner set forth in the Limited Partnership
Agreement and Section 1401 hereof.
"CONVERSION DATE" has the meaning specified in Section 1201.
-5-
"CONVERSION EXPIRATION DATE" has the meaning specified in Section
6 of the Limited Partnership Agreement.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee
in Chicago, Illinois, at which at any particular time its corporate trust
business shall be administered.
"CORPORATION" means a corporation, association, company,
joint-stock company or business trust.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DESIGNATED SENIOR HOLDER" means (i) with respect to the Bank
Agreement, the agent bank or such other Person designated as such thereunder and
(ii) with respect to any Senior Indebtedness, the Person designated as such in
accordance with the terms of the instrument evidencing such Senior Indebtedness.
"EVENT OF DEFAULT" has the meaning specified in Section 501.
"EXCHANGE DATE" has the meaning specified in Section 1401.
"EXCHANGE ELECTION" means the right of holders of a majority of
the aggregate liquidation preference of Preferred Securities then outstanding,
upon an Exchange Event, to cause the Conversion Agent to (i) exchange the
Preferred Securities for Securities held by Best Buy Capital and (ii)
immediately exchange such Securities for Depositary Shares, each representing a
one-one hundredth (1/100th) interest in a share of Series A Preferred Stock.
"EXCHANGE EVENT" means failure of Holders of Preferred Securities
(including any such failure following an election by Best Buy to extend interest
payments on the Securities in accordance with their terms) to receive, for 15
consecutive months the full amount of dividend payments (including Additional
Dividends) accumulated on the Preferred Securities.
"EXPIRATION DATE" has the meaning specified in Section 1202.
"FUNDAMENTAL CHANGE" has the meaning specified in Section 1202.
-6-
"GENERAL PARTNER CONTRIBUTION" has the meaning specified in the
Recitals to this instrument.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Indebtedness of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and
including, without limitation, any obligation of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase of)
any security for the payment of such Indebtedness, (ii) to purchase property,
securities or services for the purpose of assuring the holder of such
Indebtedness of the payment of such Indebtedness, or (iii) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such Indebtedness
(and "GUARANTEED," "GUARANTEEING" and "GUARANTOR" shall have meanings
correlative to the foregoing); PROVIDED, HOWEVER, that the Guarantee by any
Person shall not include endorsements by such Person for collection or deposit,
in either case, in the ordinary course of business.
"HOLDER" means a Person in whose name a Security is registered in
the Security Register.
"INCUR" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, Guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to
generally accepted accounting principles or otherwise, of any such Indebtedness
or other obligation as a liability on the balance sheet of such Person (and
"INCURRENCE," "INCURRED," "INCURRABLE" and "INCURRING" shall have
meanings correlative to the foregoing); PROVIDED, HOWEVER, that a change in
generally accepted accounting principles that results in an obligation of such
Person that exists at such time becoming Indebtedness shall not be deemed an
Incurrence of such Indebtedness.
"INDEBTEDNESS" means (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person,
(i) all Indebtedness described in clauses (i)-(ix) of the definition of Senior
Indebtedness (all references to Best Buy in such definition being deemed to
refer to such Person) and (ii) the maximum fixed redemption or repurchase price
of Redeemable Interests of such Person at the time of determination.
-7-
"INDENTURE" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"INTEREST PAYMENT DATE" means the Stated Maturity of each
installment of interest on the Securities, which shall be on the last day of
each calendar month of each year commencing November 30, 1994 until the
principal of the Securities is paid or duly provided for.
"JUNIOR SUBORDINATED PAYMENT" has the meaning specified in Section
1102.
"LIMITED PARTNERSHIP AGREEMENT" has the meaning specified in the
first paragraph of this instrument.
"MATURITY", when used with respect to any Security, means the date
on which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"NON-STOCK FUNDAMENTAL CHANGE" has the meaning specified in
Section 1202.
"NOTICE OF CONVERSION" means the notice to be given by a holder of
Preferred Securities to the Conversion Agent directing the Conversion Agent to
exchange such Preferred Securities for Securities and to convert such Securities
into Common Stock on behalf of such holders.
"NOTICE OF EXCHANGE" has the meaning specified in Section 1401.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman
of the Board, a Vice Chairman of the Board, the President or a Vice President,
and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company.
-8-
"OPINION OF COUNSEL" means a written opinion of counsel, who may
be counsel for the Company, and who shall be acceptable to the Trustee.
"OUTSTANDING", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, EXCEPT:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; PROVIDED that, if such Securities
are to be redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision therefor satisfactory to the Trustee has
been made; and
(iii) Securities which have been paid pursuant to Section 306,
converted into Common Stock pursuant to Section 1201, exchanged for Series
A Preferred Stock pursuant to Section 1401 or in exchange for or in lieu
of which other Securities have been authenticated and delivered pursuant
to this Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to
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the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor.
"PARENT GUARANTEE" has the meaning specified in the Recitals to
this instrument.
"PAYING AGENT" means any Person authorized by the Company to pay
the principal of or interest on any Securities on behalf of the Company.
"PAYMENT BLOCKAGE PERIOD" has the meaning specified in Section
1103.
"PERSON" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"PREDECESSOR SECURITY" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"PREFERRED SECURITIES" has the meaning specified in the Recitals
to this instrument.
"PROCEEDING" has the meaning specified in Section 1102.
"PURCHASED SHARES" has the meaning specified in Section 1202.
"PURCHASER STOCK PRICE" has the meaning specified in Section 1202.
"REDEEMABLE INTEREST" of any Person means any equity security of
or other ownership interest in such Person that by its terms or otherwise is
required to be redeemed prior to the Stated Maturity of the principal of the
Securities or is or may be redeemable at the option of the holder thereof at any
time prior to the Stated Maturity of the principal of the Securities;
PROVIDED, HOWEVER, that interests which are redeemable solely for any equity
security of or other ownership interest in such Person that by its terms or
otherwise is not required to be redeemed
-10-
prior to the Stated Maturity of the principal of the Securities shall not
constitute Redeemable Interests.
"REDEMPTION DATE", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"REFERENCE DATE" has the meaning specified in Section 1202.
"REFERENCE MARKET PRICE" has the meaning specified in Section
1202.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date means the Business Day next preceding such Interest Payment Date.
"RESPONSIBLE OFFICER", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"SECURITIES" has the meaning specified in the Recitals to this
instrument.
"SECURITIES PAYMENT" has the meaning specified in Section 1102.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in Section 305.
"SENIOR INDEBTEDNESS" means the principal of, premium, if any,
interest on and any other payment due pursuant to any of the following, whether
Incurred on or prior to the date hereof or hereafter Incurred:
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(i) all obligations of the Company for money borrowed
(including all obligations of the Company under the Bank Agreement,
including all reborrowings, if any, by the Company);
(ii) all obligations of the Company evidenced by notes,
debentures, bonds or other similar instruments, including obligations
Incurred in connection with the acquisition of property, assets or
businesses;
(iii) all Capital Lease Obligations of the Company;
(iv) all reimbursement obligations of the Company with respect
to letters of credit, bankers' acceptances or similar facilities issued
for the account of the Company;
(v) all obligations of the Company issued or assumed as the
deferred purchase price of property or services, including all obligations
under master lease transactions pursuant to which the Company or any of
its subsidiaries have agreed to be treated as owner of the subject
property for federal income tax purposes (but excluding trade accounts
payable, accrued liabilities resulting from the sale of extended service
plans, or accrued liabilities arising in the ordinary course of business);
(vi) all payment obligations of the Company under interest rate
swap or similar agreements or foreign currency hedge, exchange or similar
agreements at the time of determination, including any such obligations
Incurred by the Company solely to act as a hedge against increases in
interest rates that may occur under the terms of other outstanding
variable or floating rate Indebtedness of the Company;
(vii) all obligations of the Company under secured inventory
financing credit lines;
(viii) all obligations of the type referred to in clauses (i)
through (vii) above of another Person and all dividends of another Person
the payment of which, in either case, the Company has assumed or
Guaranteed or for which the Company is responsible or liable, directly or
indirectly, jointly or severally, as obligor, Guarantor or otherwise; and
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(ix) all amendments, modifications, renewals, extensions,
refinancings, replacements and refundings by the Company of any such
Indebtedness referred to in clauses (i) through (viii) above (and of any
such amended, modified, renewed, extended, refinanced, refunded or
replaced Indebtedness);
PROVIDED, HOWEVER, that the following shall not constitute Senior
Indebtedness: (A) any Indebtedness owed to a Person when such Person is a
Subsidiary of the Company, (B) any Indebtedness which by the terms of the
instrument creating or evidencing the same expressly provides that it is not
superior in right of payment to the Securities, or (C) any Indebtedness to the
extent Incurred in violation of this Indenture. For purposes of this
definition, "INDEBTEDNESS" includes any obligation to pay principal, premium
(if any), interest, penalties, reimbursement or indemnity amounts, fees and
expenses (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-petition interest is allowed in such proceeding). Such Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of such Senior Indebtedness.
"SENIOR NONMONETARY DEFAULT" has the meaning specified in
Section 1103.
"SENIOR PAYMENT DEFAULT" has the meaning specified in Section 1103.
"SERIES A PREFERRED STOCK" means the Series A Cumulative
Convertible Preferred Stock par value $1.00 per share, of the Company having a
liquidation preference of $5,000.00 per share.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"STATED MATURITY", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal, together with any accrued and unpaid
interest (including Additional Interest), of such Security or such installment
of interest is due and payable.
"SUBSIDIARY" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or
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indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.
"TRADING DAY" has the meaning specified in Section 1202.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; PROVIDED,
HOWEVER, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"VICE PRESIDENT", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person,
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or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
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(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the case may be. With regard to
any record date, only the Holders on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
SECTION 105. NOTICES, ETC., TO TRUSTEE, COMPANY AND BEST BUY CAPITAL.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document
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provided or permitted by this Indenture to be made upon, given or furnished to,
or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Judy
Bartolini,
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company, or
(3) Best Buy Capital by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to Best
Buy Capital addressed to it at the address of its principal office
specified in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by Best Buy Capital.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders
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shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company or
Best Buy Capital shall bind their respective successors and assigns, whether so
expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
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SECTION 111. BENEFITS OF INDENTURE.
The Company's obligations under this Indenture and the Securities
will also be for the benefit of the holders from time to time of the Preferred
Securities. Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness, the holders of Preferred
Securities and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security or the last date on which a Holder has the right
to convert his Securities shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal or conversion of the Securities need not be made on such date, but may
be made on the next succeeding Business Day with the same force and effect as if
made on the Interest Payment Date or Redemption Date, or at the Stated Maturity,
or on such last day for conversion, PROVIDED that no interest shall accrue for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.
ARTICLE TWO
Security Forms
SECTION 201. FORMS GENERALLY.
The Securities and the Trustee's certificates of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or
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endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.
The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these or other methods, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. FORM OF FACE OF SECURITY.
BEST BUY CO., INC.
6 1/2% Convertible Subordinated Debentures
Due November 3, 2024
No._________ $___________
Best Buy Co., Inc., a corporation duly organized and existing under
the laws of the State of Minnesota (herein called "BEST BUY", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to _____________ ________________, or
registered assigns, the principal sum of _________ Dollars on the earliest of
(i) November 3, 2024 or (ii) the date upon which Best Buy Capital, L.P. ("BEST
BUY CAPITAL") is dissolved, wound up, liquidated or terminated, and to pay
interest thereon at the rate of 6 1/2% per annum from November 3, 1994, payable
monthly in arrears on the last day of each calendar month of each year (each an
"INTEREST PAYMENT DATE"), commencing November 30, 1994, until the principal
hereof is paid or made available for payment. Interest will compound monthly
and will accrue at the rate of 6 1/2% per annum on any interest installment that
is not paid at the end of any monthly interest period or when otherwise due
("ADDITIONAL INTEREST"). The amount of interest payable for any period will
be computed on the basis of twelve 30-day months and a 360-day year and, for any
period shorter than a full monthly interest period, will be computed on the
basis of the actual number of days elapsed in such period. In the event that
any date on which interest is payable on this Security is not a Business Day,
then a payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such
-20-
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. A "BUSINESS
DAY" shall mean any day other than a day on which banking institutions in New
York City or Chicago are authorized or required by law to close. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, which shall be the
Business Day next preceding such Interest Payment Date. Any such interest not
so punctually paid or duly provided for will forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
Best Buy shall have the right at any time and from time to time
during the term of this Security to extend interest payment periods for up to 60
months, during which periods interest will compound monthly and Best Buy shall
have the right to make partial payments of interest on any Interest Payment
Date, and at the end of which periods Best Buy may pay all interest then accrued
and unpaid (together with Additional Interest); PROVIDED that during any such
extended interest payment period neither Best Buy nor any majority-owned
Subsidiary of Best Buy may declare or pay any dividend on, or redeem, purchase,
acquire for value or make a liquidation payment with respect to, any of its
common or preferred stock (other than as a result of a reclassification of such
common or preferred stock or the exchange or conversion of one class or series
of common or preferred stock for another class or series of common or preferred
stock), or make any guarantee payments with respect to the foregoing (other than
payments under the Parent Guarantee or dividends or guarantee payments to Best
Buy from a majority-owned Subsidiary of Best Buy). Prior to the termination of
any such extended interest payment period, Best Buy may further extend the
interest payment period, PROVIDED that such extended interest payment period
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together with all such further extensions thereof may not exceed 60 months, nor
may such extended interest payment period extend the Stated Maturity of this
Security. After Best Buy has paid all accrued and unpaid interest (including
Additional Interest) following an extended interest payment period, it may again
extend interest payment periods for up to 60 months, subject to the preceding
sentence. Best Buy shall give the Holder of this Security and the Trustee
notice of its selection of an extended interest payment period five Business
Days prior to the first scheduled Interest Payment Date on which the scheduled
interest payment shall be deferred pursuant to such selection and, if Best Buy
Capital is the Holder of this Security, no later than the last date on which
Best Buy Capital would be required to notify the New York Stock Exchange of the
record or payment date of the related dividend payment on the 6 1/2% Convertible
Monthly Income Preferred Securities of Best Buy Capital.
Payment of the principal of and interest on this Security will be
made at the office or agency of Best Buy maintained for that purpose in Chicago,
Illinois, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
PROVIDED, HOWEVER, that at the option of Best Buy payment of interest may be
made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Security Register.
Reference is hereby made to the further provisions of the Indenture
summarized on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, Best Buy has caused this instrument to be duly
executed under its corporate seal.
Dated: ___________ __, 1994
BEST BUY CO., INC.
By:___________________________
Name:
Title:
Attest:_______________________
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SECTION 203. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of Securities of
Best Buy, designated as its 6 1/2% Convertible Subordinated Debentures Due
November 3, 2024 (herein called the "SECURITIES"), limited in aggregate
principal amount to $288,227,848, issued and to be issued under an Indenture,
dated as of November 3, 1994 (herein called the "INDENTURE"), among Best Buy,
Best Buy Capital and Harris Trust and Savings Bank of Chicago, as Trustee
(herein called the "TRUSTEE", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of Best Buy, Best Buy Capital, the
Trustee, the holders of the Securities, the holders of Preferred Securities and
the holders of Senior Indebtedness and of the terms upon which the Securities
are, and are to be, authenticated and delivered. All terms used in this
Security which are defined in the Indenture or in the Limited Partnership
Agreement attached as Annex A thereto shall have the meanings assigned to them
in the Indenture or the Limited Partnership Agreement, as the case may be.
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
If an Event of Default with respect to the Securities shall occur
and be continuing, the principal of the Securities may be declared due and
payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of Best
Buy, Best Buy Capital and the rights of the Holders of the Securities under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of 66-2/3% in aggregate principal amount of the Securities at the time
Outstanding and while the Preferred Securities are outstanding, the consent of
holders of 66-2/3% in aggregate liquidation preference of
-24-
such Preferred Securities. Any such consent by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent is made upon this Security.
Subject to and in compliance with the provisions of the Indenture,
the Securities are convertible at any time on or before the close of business on
the date of their Stated Maturity at the option of the Holder into fully paid
and nonassessable shares of Common Stock of Best Buy at an initial conversion
price of $45.00 aggregate principal amount of Securities per share of Common
Stock of Best Buy, subject to adjustment as provided for in the Indenture. The
Holder of the Securities will be entitled to receive the interest payable on the
Securities on the Interest Payment Date notwithstanding the conversion thereof
following the Regular Record Date immediately preceding such Interest Payment
Date. Except as otherwise provided in the immediately preceding sentence, in
the case of any Security which is converted, interest whose Stated Maturity is
after the date of conversion of such Security shall not be payable, and the
Company shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest on the Securities being
converted. Each conversion will be deemed to have been effected immediately
prior to the close of business on the day on which notice was received by the
Conversion Agent from a holder of the Preferred Securities effecting a
conversion thereof pursuant to its conversion rights under the Limited
Partnership Agreement and as provided in the Indenture. No fractional shares of
the Common Stock of Best Buy will be issued as a result of conversion, but in
lieu thereof, in the sole discretion of Best Buy, such fractional interest will
be paid in cash by Best Buy.
In the event that, following the Conversion Expiration Date (as
defined in the Indenture), less than 5% of the original aggregate principal
amount of the Securities remain Outstanding, such Securities shall be subject to
redemption at the option of Best Buy upon not less than 30 days' nor more than
60 days' notice, at a Redemption Price equal to 100% of the principal amount,
together with accrued and unpaid interest (including Additional Interest) to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities of
record at the close of business on the relevant Record Dates referred to on the
face hereof, all as provided in the Indenture.
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The Company has covenanted to exercise such right to redeem if Best Buy Capital
redeems its Preferred Securities.
The Securities are exchangeable (in whole but not in part) at the
request of the Holders of the Securities following the occurrence of an Exchange
Event at the Exchange Price for Depositary Shares, each representing a
fractional interest in a share of Best Buy Series A Preferred Stock as provided
under the terms of the Indenture.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of Best Buy,
which is absolute and unconditional, to pay the principal of and interest on
this Security at the times, place and rate, and in the coin or currency, herein
prescribed or to convert or exchange this Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of Best Buy in Chicago, Illinois, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to Best Buy
and the Security Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons
in denominations of $50 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but Best Buy may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, Best Buy, the Trustee and any agent of Best Buy or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue,
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and neither Best Buy, the Trustee nor any such agent shall be affected by notice
to the contrary.
SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned
Indenture.
_________________________,
AS TRUSTEE
By: _______________________
AUTHORIZED OFFICER
ARTICLE THREE
The Securities
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $288,227,848,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 304,
305, 306, 906 or 1201.
The Securities shall be known and designated as the "6 1/2%
Convertible Subordinated Debentures Due November 3, 2024" of the Company. Their
Stated Maturity shall be the earliest of November 3, 2024 or the date upon which
Best Buy Capital is dissolved, wound-up, liquidated or terminated, and they
shall bear interest at the rate of 6 1/2% per annum, from November 3, 1994 or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, as the case may be, payable monthly, in arrears, on the last
day of each calendar month of each year, commencing November 30, 1994 until the
principal thereof is paid or made available for payment. Interest will compound
monthly and will accrue at the rate of 6 1/2% per annum on any interest
installment that is not paid when due or during an extension of an interest
payment period as set forth below in this Section 301. In the event that any
date on which interest is payable on the Securities is not a
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Business Day, then a payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
The Company shall have the right, at any time and from time to time
during the term of the Securities, to extend an interest payment period for up
to 60 months, provided that during the period of any such extension, interest
will continue to accrue and compound monthly. The Company shall have the right
to make partial payments of interest during any such extended interest payment
period. At the end of any such extended interest payment period, the Company
shall pay all interest then accrued and unpaid (together with Additional
Interest thereon). Prior to the termination of any such extended interest
payment period, the Company may further extend the interest payment period,
provided that such extended interest payment period together with all such
further extensions thereof may not exceed 60 months and provided, further, that
no extended interest payment period shall extend the Stated Maturity of the
Securities. After the Company has paid all accrued and unpaid interest
(including Additional Interest) following an extended interest payment period,
it may again extend interest payment periods for up to 60 months, subject to the
preceding sentence. The Company shall give the Holders of the Securities and
the Trustee notice of its selection of an extended interest payment period five
Business Days prior to the first scheduled Interest Payment Date on which the
scheduled interest payment shall be deferred pursuant to such selection and, if
Best Buy Capital is the Holder of the Securities, no later than the last date on
which Best Buy Capital would be required to notify the New York Stock Exchange
of the record or payment date of the related dividend payment on the Preferred
Securities. In addition, at any time when any Preferred Securities are
outstanding, the Company shall give Best Buy Capital notice of its selection of
an extended interest payment period at least one Business Day prior to the
earlier of (i) the Interest Payment Date and (ii) the date Best Buy Capital is
required to give notice of the record or payment date of any Dividend payable on
the Preferred Securities to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Preferred Securities, but in
any event not less than two Business Days prior to such record date. The
Company, as general partner of Best Buy Capital, shall give
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notice of the Company's selection of an extended interest payment period to the
holders of the Preferred Securities.
The principal of and interest on the Securities shall be payable at
the office or agency of the Company in Chicago, Illinois maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose; PROVIDED, HOWEVER, that at the option of the Company payment of
interest may be made (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or (ii) by wire
transfer in immediately available funds at such place and to such account as may
be designated by the Person entitled thereto as specified in the Security
Register.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Eleven.
The Securities shall be convertible as provided in Article Twelve.
The Securities shall be redeemable as provided in Article Thirteen.
The Securities shall be exchangeable as provided in Article
Fourteen.
SECTION 302. DENOMINATIONS.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $50 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to
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hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities
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shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "SECURITY REGISTER") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "SECURITY REGISTRAR" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
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No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1201 not involving any transfer.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not
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less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder at his address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and, if so
listed, upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue (including in each such case Additional Interest),
which were carried by such other Security.
In the case of any Security which is converted after any Regular
Record Date and on or prior to the next succeeding Interest Payment Date (other
than any Security whose Maturity is prior to such Interest Payment Date),
interest whose Stated Maturity is on such Interest Payment Date shall be payable
on such Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of
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business on such Regular Record Date. Except as otherwise expressly provided in
the immediately preceding sentence, in the case of any Security which is
converted, interest whose Stated Maturity is after the date of conversion of
such Security shall not be payable, and the Company shall not make nor be
required to make any other payment, adjustment or allowance with respect to
accrued but unpaid interest on the Securities being converted.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 307) interest (including Additional Interest) on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or conversion shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
SECTION 310. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months and, for any period shorter than a full
monthly interest period, shall be computed on the basis of the actual number of
days elapsed in such period.
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ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to any
surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company
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and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal and interest (including Additional Interest) to the
date of such deposit (in the case of Securities which have become
due and payable) or to the Stated Maturity or Redemption Date, as
the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee. All moneys
deposited with the Trustee pursuant to Section 401 (and held by it or any Paying
Agent) for the payment of Securities subsequently converted shall be returned to
the Company upon Company Request.
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ARTICLE FIVE
Remedies
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Eleven or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) failure to pay any principal of the Securities when due;
(2) failure to pay any interest on the Securities, including any
Additional Interest, when due and such failure continues for a period of
10 days; PROVIDED that a valid extension of the interest payment period
by the Company pursuant to this Indenture shall not constitute a default
in the payment of interest for this purpose;
(3) failure by the Company to issue and deliver the Series A
Preferred Stock or Common Stock upon an election to convert the Securities
for Common Stock or exchange the Securities for Depositary Shares
representing Series A Preferred Stock;
(4) failure by the Company to perform in any material respect any
other covenant herein for the benefit of the holders of Securities
continued for a period of 60 days after written notice to the Company from
any Holder of the Securities or any holder of Preferred Securities;
(5) the dissolution, winding up, liquidation or termination of
Best Buy Capital; or
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(6) entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or Best Buy Capital
in an involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company or Best Buy Capital a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or Best Buy Capital under any applicable Federal or State law,
or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or Best Buy Capital
or of any substantial part of the property of either, or ordering the
winding up or liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and
in effect for a period of 60 consecutive days; or
(7) the commencement by the Company or Best Buy Capital of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by either the Company or Best Buy Capital to the entry of a decree
or order for relief in respect of itself in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against either the Company or
Best Buy Capital, or the filing by either of them of a petition or answer
or consent seeking reorganization or relief under any applicable Federal
or State law, or the consent by either the Company or Best Buy Capital to
the filing of such petition or to the appointment of or
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taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or Best Buy Capital
or of any substantial part of the property of either of them, or the
making by either of them of an assignment for the benefit of creditors, or
the admission by either of them in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company or Best Buy Capital in furtherance of any such action.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities shall have the right to declare the principal of and
the interest on all the Securities (including any Additional Interest) and any
other amounts payable hereunder to be due and payable immediately, provided,
however that if upon an Event of Default, the Trustee or the Holders of at least
25% in aggregate principal amount of the outstanding Securities fail to declare
the payment of all amounts on the Securities to be immediately due and payable,
the holders of at least 25% in aggregate liquidation preference of Preferred
Securities then outstanding shall have such right, by a notice in writing to the
Company (and to the Trustee if given by Holders or the holders of Preferred
Securities) and to enforce any and all other rights of Holders of Securities as
creditors with respect to the Securities. Upon any such declaration such
principal and all accrued interest shall become immediately due and payable.
The Company expressly acknowledges that, under the terms of the
Preferred Securities, the holders of outstanding Preferred Securities shall have
the right to appoint a Special General Partner, which Special General Partner
shall be authorized to exercise the right of the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities to accelerate
the principal amount of the Securities and to enforce the Holders' other rights
hereunder and under the Securities.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the
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Trustee as hereinafter provided in this Article, the Holders of a majority in
principal amount of the Outstanding Securities, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including any Additional Interest) on
all Securities,
(B) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities,
and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest (including any
Additional Interest) on any Security when such interest
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becomes due and payable and such default continues for a period of 30 days,
or
(2) default is made in the payment of the principal of any Security
at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest (including any Additional Interest), and,
to the extent that payment thereof shall be legally enforceable, interest on any
overdue principal and on any overdue interest (including any Additional
Interest), at the rate borne by the Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
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No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Subject to Article Eleven, any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal or interest (including any Additional Interest), upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest (including any Additional Interest) on the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal
and interest (including any Additional Interest), respectively.
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SECTION 507. LIMITATION ON SUITS.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
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SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST
AND TO CONVERT.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and (subject to Section 307) interest
(including any Additional Interest) on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to convert such Security in accordance with Article Twelve
and to institute suit for the enforcement of any such payment and right to
convert, and such rights shall not be impaired without the consent of such
Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
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SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, PROVIDED that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. WAIVER OF PAST DEFAULTS.
Subject to Section 1008 hereof, the Holders of not less than a
majority in principal amount of the Outstanding Securities may on behalf of the
Holders of all the Securities waive any past default hereunder and its
consequences, except a default
(1) in the payment of the principal of or interest (including any
Additional Interest) on any Security; or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Inden-
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ture; but no such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; PROVIDED, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or in any suit for the
enforcement of the right to receive the principal of and interest (including any
Additional Interest) on any Security, convert any Security in accordance with
Article Twelve or exchange any Security in accordance with Article Fourteen.
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE SIX
The Trustee
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as provided
by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any default hereunder
as and to the extent provided by the Trust Indenture Act; PROVIDED, HOWEVER,
that in the case of any default of the character specified in Section 501(4), no
such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
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(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
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(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. MAY HOLD SECURITIES.
The Trustee, any Paying Agent, any Security Registrar, any
Conversion Agent or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar,
Conversion Agent or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation
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shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 at its Corporate
Trust Office in Chicago, Illinois. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
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with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for
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at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; PROVIDED that, on request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and
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certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
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(a) semiannually, not later than February 15 and August 15 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of a date not more than 15 days prior
to the delivery thereof, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list
of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
EXCLUDING from any such list names and addresses received by the Trustee in
its capacity as Security Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture
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Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; PROVIDED that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an
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entirety shall be a corporation, partnership or trust, shall be organized
and validly existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of and interest (including any Additional Interest) on all the
Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed and shall
have provided for conversion rights in accordance with Section 1201 and
exchange rights in accordance with Section 1401;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or a
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) such consolidation or merger or conveyance, transfer or lease
of properties or assets of the Company is permitted under, and does not
give rise to any breach or violation of, the Limited Partnership Agreement
or the Parent Guarantee; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
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SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, Best Buy Capital, when authorized by a resolution of the
General Partner, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to secure the Securities; or
(4) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Section 1201; or
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(5) to make provision with respect to the exchange rights of
Holders pursuant to the requirements of Section 1401; or
(6) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions of
this Indenture, PROVIDED that such action pursuant to this clause (6) shall
not adversely affect the interests of the Holders or, so long as any of the
Preferred Securities shall remain outstanding, the holders of the Preferred
Securities.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than 66 2/3% in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, Best Buy Capital, when authorized by resolution of the General
Partner, and the Trustee may enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders under this Indenture; PROVIDED, HOWEVER,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest (including any Additional Interest) on, any
Security, or reduce the principal amount thereof or the rate of interest
thereon, or change the place of payment where, or the coin or currency in
which, any Security or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or adversely affect the right to convert any Security
as provided in Article Twelve (except as permitted by Section 901(4)), or
adversely affect the right to exchange any Security as provided in Article
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Fourteen (except as permitted by Section 901(5)), or modify the provisions
of this Indenture with respect to the subordination of the Securities in a
manner adverse to the Holders,
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby;
PROVIDED, that, so long as any of the Preferred Securities remains
outstanding, no such amendment shall be made that adversely affects the holders
of the Preferred Securities, and no termination of this Agreement shall occur,
and no waiver of any Event of Default or compliance with any covenant under this
Agreement shall be effective, without the prior consent of the holders of at
least 66-2/3% of the aggregate liquidation preference of the outstanding
Preferred Securities unless and until the Subordinated Debentures and all
accrued and unpaid interest (including any Additional Interest) thereon have
been paid in full.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture
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which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE TEN
Covenants; Representations and Warranties
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST.
The Company will duly and punctually pay the principal of and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.
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SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in Chicago, Illinois an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange, where Securities
may be surrendered for conversion and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside Chicago, Illinois) where the Securities may
be presented or surrendered for any or all such purposes and may from time to
time rescind such designations; PROVIDED, HOWEVER, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in Chicago, Illinois for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying
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Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or interest on
any Security and remaining unclaimed for two years after such principal or
interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.
SECTION 1004. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults
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and the nature and status thereof of which they may have knowledge.
SECTION 1005. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises; PROVIDED, HOWEVER,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all properties used or useful in the conduct
of its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED,
HOWEVER, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary;
PROVIDED, HOWEVER, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability
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or validity is being contested in good faith by appropriate proceedings.
SECTION 1008. ADDITIONAL COVENANTS.
The Company agrees that neither it nor any of its Subsidiaries will
declare or pay any dividend on, or redeem, purchase, acquire for value or make a
liquidation payment with respect to, any of its Common Stock or preferred stock
(other than as a result of a reclassification of such Common Stock or preferred
stock or the exchange or conversion of one class or series of Common Stock or
preferred stock for another class or series of Common Stock or preferred stock),
or make any guarantee payments with respect to the foregoing (other than
payments under the Parent Guarantee or dividends or guarantee payments to the
Company from a Subsidiary) if at such time (a) there shall have occurred any
event that, with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder or under the Securities, (b) the
Company shall be in default with respect to its payment or other obligations
under the Parent Guarantee or (c) the Company shall have given notice of its
selection of an extended interest payment period as provided herein and such
period, or any extension thereof, shall be continuing. The Company also
covenants (i) to remain the General Partner of Best Buy Capital; PROVIDED that
any permitted successor of the Company under the Limited Partnership Agreement
may succeed to the Company's duties as General Partner, (ii) to cause at least
21% of the total value of Best Buy Capital and at least 21% of all interests in
the capital, income, gain, loss, deduction and credit of Best Buy Capital to be
held by the Company, as a General Partner of Best Buy Capital, (iii) not to
voluntarily dissolve, wind-up or liquidate Best Buy Capital, (iv) to perform
timely all of its duties as General Partner (including the duty to declare and
pay Dividends on the Preferred Securities), (v) to maintain direct ownership of
all partnership interests of Best Buy Capital other than the Preferred
Securities and any Special General Partnership Interest, except as may be
permitted by the Limited Partnership Agreement, (vi) to use its reasonable
efforts to cause Best Buy Capital to remain a limited partnership and otherwise
to continue to be treated as a partnership for United States federal income tax
purposes and (vii) to issue Series A Preferred Stock in the form of Depositary
Shares or Common Stock upon an election by Holders to exchange or convert the
Securities.
The Company also covenants that so long as any Securities are held
by Best Buy Capital, the General Partner
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shall not (i) direct the time, method and place of conducting any proceeding for
any remedy available to the Special General Partner, or exercising any trust or
power conferred on the Special General Partner with respect to the Securities,
(ii) waive any past default which is waivable under this Agreement, (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Securities shall be due and payable, or (iv) consent to any amendment,
modification or termination of the Securities or of this Indenture without, in
each case, obtaining the prior approval of the holders of at least 66 2/3% or
more of the aggregate liquidation preference of the Preferred Securities then
outstanding, PROVIDED, HOWEVER, that where a consent under the Securities
would require the consent of each holder affected thereby, no such consent shall
be given by the General Partner without the prior consent of each holder of the
Preferred Securities. The General Partner shall not revoke any action
previously authorized or approved by a vote of Preferred Securities, without the
approval of the holders of Preferred Securities representing 66 2/3% or more of
the aggregate liquidation preference of the Outstanding Preferred Securities.
SECTION 1009. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants that:
(a) It is a corporation, validly existing and in good standing
under the laws of the State of Minnesota, with all power and authority
(corporate and other) to own its properties and conduct its business as
now being conducted.
(b) It has full power and authority to enter into this Indenture
and to incur and perform the obligations provided for herein, all of which
have been duly authorized by all proper and necessary corporate action.
(c) The execution and delivery of this Indenture and the
performance by the Company of all its obligations hereunder will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement, fiscal agency agreement or other agreement
or instrument to which the Company is a party or by which the Company is
bound or subject, nor will this Indenture result in a violation of the
provisions of the Company's Certificate of Incorporation or By-laws.
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(d) This Indenture and the Securities have been duly authorized,
executed and delivered by the Company and constitute the valid and legally
binding obligation of the Company enforceable in accordance with their
respective terms, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles.
ARTICLE ELEVEN
Subordination of Securities
SECTION 1101. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner herein-after set forth in this Article (subject to Article Four),
the payment of the principal of and interest (including any Additional Interest)
on each and all of the Securities are hereby expressly made subordinate and
subject in right of payment to the prior payment in full in cash of all Senior
Indebtedness.
This Article Eleven shall constitute a continuing offer to all
persons who become holders of, or continue to hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior Indebtedness
and such holders are made obligees hereunder and any one or more of them may
enforce such provisions. Holders of Senior Indebtedness need not prove reliance
on the subordination provisions hereof.
SECTION 1102. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
Upon any payment or distribution of assets of the Company to
creditors upon (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its assets, or (b) any
liquidation, dissolution or other winding up of the Company, whether voluntary
or involuntary and whether or not involving insolvency or bankruptcy, or
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(c) any assignment for the benefit of creditors or any other marshalling of
assets or liabilities of the Company, then and in any such event specified in
(a), (b) or (c) above (each such event, if any, herein sometimes referred to as
a "PROCEEDING");
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of all amounts due on or to become due on or in
respect of all Senior Indebtedness, before the Holders of the Securities
are entitled to receive any payment or distribution of any kind or
character whether in cash, property or securities (including any payment
or distribution which may be payable or deliverable to Holders of the
Securities made in respect of any other Indebtedness of the Company
subordinated to the payment of the Securities, such payment or
distribution being hereinafter referred to as a "JUNIOR SUBORDINATED
PAYMENT"), on account of the principal of (and premium, if any) or
interest on the Securities or on account of any purchase, redemption or
other acquisition of Securities by the Company, any Subsidiary of the
Company, the Trustee or any Paying Agent (all such payments,
distributions, purchases, redemptions and acquisitions, whether or not in
connection with a Proceeding, herein referred to, individually and
collectively, as a "SECURITIES PAYMENT"); and
(2) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders of the Securities or the Trustee would be
entitled but for the provisions of this Article (including, without
limitation, any Junior Subordinated Payment) shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Senior Indebtedness or
their representative or representatives or to the trustee or trustees
under any indenture under which any instruments evidencing any of such
Senior Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Indebtedness
held or represented by each, to the extent necessary to make payment in
full in cash of all Senior Indebtedness remaining unpaid, after giving
effect to any concurrent payment to the holders of such Senior
Indebtedness.
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In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received in
connection with any Proceeding any Securities Payment before all Senior
Indebtedness is paid in full or payment thereof provided for in cash, then and
in such event such Securities Payment shall be paid over or delivered forthwith
to the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of assets of the
Company for application to the payment of all Senior Indebtedness remaining
unpaid, to the extent necessary to pay all Senior Indebtedness in full in cash
after giving effect to any concurrent payment to or for the holders of Senior
Indebtedness.
For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include a payment or distribution of stock or securities
of the Company provided for by a plan of reorganization or readjustment
authorized by an order or decree of a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy law or of any other
corporation provided for by such plan of reorganization or readjustment which
stock or securities are subordinated in right of payment to all then outstanding
Senior Indebtedness to substantially the same extent, or to a greater extent
than, the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the conveyance
or transfer of all or substantially all of its properties and assets as an
entirety to another Person upon the terms and conditions set forth in Article
Eight shall not be deemed a Proceeding for the purposes of this Section if the
Person formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer such properties and assets as an
entirety, as the case may be, shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions set forth in Article Eight.
SECTION 1103. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.
In the event that any Senior Payment Default (as defined below)
shall have occurred, then no Securities Payment shall be made, nor shall any
property of the Company or any Subsidiary of the Company be applied to the
purchase, acquisition, retirement or redemption of the Securities,
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unless and until such Senior Payment Default shall have been cured or waived in
writing or shall have ceased to exist or all amounts then due and payable in
respect of such Senior Indebtedness (including amounts that have become and
remain due by acceleration) shall have been paid in full in cash. "SENIOR
PAYMENT DEFAULT" means any default in the payment of principal of (or premium,
if any) or interest on any Senior Indebtedness when due, whether at the stated
maturity of any such payment or by declaration of acceleration, call for
redemption, mandatory payment or prepayment or otherwise.
In the event that any Senior Nonmonetary Default (as defined below)
shall have occurred and be continuing, then, upon the receipt by the Company and
the Trustee of written notice of such Senior Nonmonetary Default from the
Designated Senior Holder of such certain Senior Indebtedness, no Securities
Payment shall be made, nor shall any property of the Company or any Subsidiary
of the Company be applied to the purchase, acquisition, requirement or
redemption of the Securities, during the period (the "PAYMENT BLOCKAGE
PERIOD") commencing on the date of such receipt of such written notice and
ending (subject to any blockage of payments that may then or thereafter be in
effect as the result of any Senior Payment Default) on the earlier of (i) the
date on which the Senior Indebtedness to which such Senior Nonmonetary Default
relates is discharged or such Senior Nonmonetary Default shall have been cured
or waived in writing or shall have ceased to exist and any acceleration of
Senior Indebtedness to which such Senior Nonmonetary Default relates shall have
been rescinded or annulled or (ii) the 179th day after the date of such receipt
of such written notice. No more than one Payment Blockage Period may be
commenced with respect to the Securities during any period of 360 consecutive
days and there shall be a period of at least 181 consecutive days in each period
of 360 consecutive days when no Payment Blockage Period is in effect. Following
the commencement of any Payment Blockage Period, the holders of the Senior
Indebtedness will be precluded from commencing a subsequent Payment Blockage
Period until the conditions set forth in the preceding sentence are satisfied.
For all purposes of this paragraph, no Senior Nonmonetary Default that existed
or was continuing on the date of commencement of any Payment Blockage Period
with respect to the Senior Indebtedness initiating such Payment Blockage Period
shall be, or be made, the basis for the commencement of a subsequent Payment
Blockage Period by holders of Senior Indebtedness or their representatives
unless such Senior Nonmonetary Default shall have been cured for a period of not
less than 90 consecutive days. "SENIOR NONMONETARY DEFAULT" means the
occurrence or existence and continuance of any default (other than a
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Senior Payment Default) or any event which, after notice or lapse of time (or
both), would become an event of default (other than a Senior Payment Default),
under the terms of any instrument or agreement pursuant to which any Senior
Indebtedness is outstanding, permitting (after notice or lapse of time or both)
one or more holders of such Senior Indebtedness (or a trustee or agent on behalf
of the holders thereof) to declare such Senior Indebtedness due and payable
prior to the date on which it would otherwise become due and payable.
The provisions of this Section shall not apply to any Securities
Payment with respect to which Section 1102 hereof would be applicable.
SECTION 1104. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this Indenture or
in any of the Securities shall prevent the Company, at any time except during
the pendency of any Proceeding referred to in Section 1102 hereof or under the
conditions described in Section 1103 hereof, from making Securities Payments.
SECTION 1105. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the payment in full in cash of all Senior Indebtedness,
the Holders of the Securities shall be subrogated to the rights of the holders
of such Senior Indebtedness to receive payments and distributions of cash,
property and securities applicable to the Senior Indebtedness until the
principal of and interest on the Securities shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
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SECTION 1106. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional (and which, subject to the rights
under this Article of the holders of Senior Indebtedness, is intended to rank
equally with all other general obligations of the Company), to pay to the
Holders of the Securities the principal of and interest (including any
Additional Interest) on the Securities as and when the same shall become due and
payable in accordance with their terms; or (b) affect the relative rights
against the Company of the Holders of the Securities and creditors of the
Company other than the holders of Senior Indebtedness; or (c) prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
SECTION 1107. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the Indebtedness of the Company owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved. If the Trustee
does not file a proper claim at least 30 days before the expiration of the time
to file such claim, then the holders of the Senior Indebtedness and their
agents, trustees or other representatives are authorized to do so (but shall in
no event be liable for any failure to do so) for and on behalf of the Holders of
the Securities.
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SECTION 1108. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) permit the Company to borrow,
repay and then reborrow any or all of the Senior Indebtedness; (iii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (iv) release any Person liable in any
manner for the collection of Senior Indebtedness; (v) exercise or refrain from
exercising any rights against the Company and any other Person; and (vi) apply
any sums received by them to Senior Indebtedness.
SECTION 1109. NOTICE TO TRUSTEE.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof from the Company, any holder of Senior Indebtedness, any
Designated Senior Holder or from any trustee, fiduciary or agent
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therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 601 hereof, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section at least
three Business Days prior to the date upon which by the terms hereof any money
may become payable for any purpose (including, without limitation, the payment
of the principal of or interest on any Security), then, anything herein
contained to the contrary notwithstanding, but without limiting the rights and
remedies of the holders of Senior Indebtedness or any trustee, fiduciary or
agent therefor, the Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by it
within two Business Days prior to such date. Any notice required or permitted
to be given to the Trustee by a holder of Senior Indebtedness or by any
Designated Senior Holder shall be in writing and shall be sufficient for every
purpose hereunder if in writing and either (i) sent via facsimile to the
Trustee, the receipt of which shall be confirmed via telephone, or (ii) mailed,
first class postage prepaid, or sent by overnight carrier, to the Trustee
addressed to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address furnished in writing to
such holder of Senior Indebtedness by the Trustee.
Subject to the provisions of Section 601 hereof, the Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness or Designated Senior
Holder (or a trustee, fiduciary or agent therefor to establish that such notice
has been given by a holder of Senior Indebtedness or Designated Senior Holder or
a trustee, fiduciary or agent therefor). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness or Designated Senior
Holder to participate in any payment or distribution pursuant to this Article,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
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Notwithstanding anything else contained herein, no notice, request
or other communication to or with the Trustee shall be deemed given unless
received by a Responsible Officer at the Trustee's principal corporate trust
office.
SECTION 1110. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee, subject to the provisions of Section 601
hereof, and the Holders of the Securities shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Securities, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article, provided that the foregoing shall
apply only if such court has been apprised of the provisions of this Article.
SECTION 1111. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
or otherwise.
SECTION 1112. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
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Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 607 hereof.
SECTION 1113. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee;
PROVIDED, HOWEVER, that Section 1111 hereof shall not apply to the Company
or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
ARTICLE TWELVE
Conversion of Securities
SECTION 1201. CONVERSION RIGHTS.
(a) The Securities are convertible, at the option of the Holder, at
any time on or before the close of business at the Stated Maturity, unless
previously exchanged pursuant to Article Fourteen, into fully paid and
nonassessable shares of Common Stock of the Company at an initial conversion
price of $45.00 aggregate principal amount of Securities per share of Common
Stock, subject to adjustment as described in Section 1202. A Holder of
Securities may convert any portion of the principal amount of the Securities
into that number of fully paid and nonassessable shares of Common Stock
(calculated as to each conversion to the nearest 1/100th of a share) obtained by
dividing the principal amount of the Securities to be converted by such
conversion price.
(b) In order to convert a portion of the Securities, the Holder
shall deliver to the Conversion Agent an irrevocable Notice of Conversion
setting forth the principal amount of Securities to be converted, together with
the name or names, if other than the Holder, in which
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the shares of Common Stock should be issued upon conversion. In addition, a
holder of Preferred Securities may exercise its right under the Limited
Partnership Agreement to convert such Preferred Securities into Common Stock by
delivering to the Conversion Agent such Preferred Securities and an irrevocable
Notice of Conversion setting forth the information called for by the preceding
sentence and directing it (i) to exchange such Preferred Security for a portion
of the Securities held by Best Buy Capital (at an exchange rate of $50 principal
amount of Securities for each Preferred Security) and (ii) to immediately
convert such Securities, on behalf of such holder, into Common Stock of Best Buy
pursuant to this Article Twelve; if such Notice of Conversion (accompanied by
such Preferred Securities) is delivered before the close of business on the
Conversion Expiration Date with respect to the Preferred Securities, Best Buy
Capital shall deliver Securities held by it to the Conversion Agent for exchange
in accordance with this paragraph, and the Conversion Agent shall immediately
convert such Securities on behalf of such holders. So long as any Preferred
Securities are outstanding, Best Buy Capital shall not convert any Securities
except pursuant to a Notice of Conversion delivered to the Conversion Agent by a
holder of Preferred Securities.
If a Notice of Conversion is given on the Regular Record Date, the
Holder will be entitled to receive the interest payable on the portion of
Securities to be converted on the subsequent Interest Payment Date
notwithstanding the conversion thereof prior to such Interest Payment Date.
Except as otherwise provided in the immediately preceding sentence, in the case
of any Security which is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable, and the Company shall
not make nor be required to make any other payment, adjustment or allowance with
respect to accrued but unpaid interest on the Securities being converted. Each
conversion shall be deemed to have been effected immediately prior to the close
of business on the day on which the Notice of Conversion was received (the
"CONVERSION DATE") by the Conversion Agent from the Holder or from a holder of
the Preferred Securities effecting a conversion thereof pursuant to its
conversion rights under the Limited Partnership Agreement, as the case may be.
The Person or Persons entitled to receive the Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such Common Stock as of the Conversion Date. As promptly as practicable on or
after the Conversion Date, the Company shall issue and deliver at the office of
the Conversion Agent, unless otherwise directed by the Holder in the Notice of
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Conversion, a certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with the cash payment, if
any, in lieu of any fraction of any share to the Person or Persons entitled to
receive the same. The Conversion Agent shall deliver such certificate or
certificates to such Person or Persons.
(c) The Company's delivery upon conversion of the fixed number of
shares of Common Stock into which the Securities are convertible (together with
the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at Maturity of the
portion of Securities so converted and any unpaid interest accrued on such
Securities at the time of such conversion.
(d) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, such fractional interest will be paid
in cash by the Company.
(e) In the event of the conversion of any Security in part only, a
new Security or Securities for the unconverted portion thereof will be issued in
the name of the Holder thereof upon the cancellation thereof in accordance with
Section 305.
(f) In effecting the conversion transactions described in this
Section or the exchange transactions described in Article Fourteen hereof, the
Conversion Agent is acting as agent of the holders of Preferred Securities (in
the exchange of Preferred Securities for Securities) and as agent of the Holders
of Securities (in the exchange of Securities for Common Stock or Series A
Preferred Stock), as the case may be, directing it to effect such conversion or
exchange transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities held by Best Buy Capital from time to time for Preferred
Securities in connection with the conversion or exchange of such Preferred
Securities in accordance with Articles Twelve and Thirteen hereof, (ii) to
convert all or a portion of the Securities into Common Stock and thereupon to
deliver such shares of Common Stock in accordance with the provisions of this
Article Twelve and to deliver to Best Buy Capital a new Security or Securities
for any resulting unconverted principal amount and (iii) to exchange all of the
Securities following the occurrence of an Exchange Event for Depositary Shares
representing Series A Preferred Stock in accordance with the provisions of
Article Thirteen hereof and thereupon to deliver such Depositary Shares to the
Persons entitled to receive them.
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SECTION 1202. CONVERSION PRICE ADJUSTMENTS.
(a) The conversion price shall be subject to adjustment from time
to time as follows:
(i) In case the Company shall pay or make a dividend or other
distribution on any class or series of capital stock of the Company exclusively
in Common Stock, the conversion price in effect at the opening of business on
the day following the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution shall be reduced by multiplying
such conversion price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution or exchange, such reduction to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this subparagraph (i), the number of shares
of Common Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company shall not pay any dividend or make any
distribution on shares of any class or series of Capital Stock of the Company
exclusively in Common Stock held in the treasury of the Company.
(ii) In case the Company shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall otherwise
issue to all holders of its Common Stock, rights or warrants entitling the
holders thereof to subscribe for or purchase shares of Common Stock at a price
per share less than the current market price per share (determined as provided
in subparagraph (vii) of this Section 1202(a)) of the Common Stock on the date
fixed for the determination of stockholders entitled to receive such rights or
warrants, the conversion price in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by multiplying
such conversion price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such current market price
and the denominator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination plus the number
of shares of Common Stock so offered for subscription or
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purchase, such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this subparagraph (ii), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company.
The Company shall not issue any rights or warrants in respect of shares of
Common Stock held in the treasury of the Company. In case any rights or
warrants referred to in this subparagraph (ii) in respect of which an adjustment
shall have been made shall expire unexercised within 45 days after the same
shall have been distributed or issued by the Company, the conversion price shall
be readjusted at the time of such expiration to the conversion price that would
have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
(iii) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced and, conversely,
in case outstanding shares of Common Stock shall each be combined into a smaller
number of shares of Common Stock, the conversion price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(iv) Subject to the last sentence of this subparagraph (iv), in case
the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock evidences of its indebtedness, shares of any class or series of
capital stock, cash or assets (including securities, but excluding any rights or
warrants referred to in subparagraph (ii) of this Section 1202(a), any dividend
or distribution paid exclusively in cash and any dividend or distribution
referred to in subparagraph (i) of this Section 1202(a)), the conversion price
shall be reduced so that the same shall equal the price determined by
multiplying the conversion price in effect immediately prior to the
effectiveness of the conversion price reduction contemplated by this
subparagraph (iv) by a fraction of which the numerator shall be the current
market price per share (determined as provided in subparagraph (vii) of this
Section 1202(a)) of the Common Stock on the date fixed for the payment of such
distribution (the "REFERENCE DATE") less the fair market value (as determined
in good faith by the Board of
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Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors), on the Reference Date, of the portion of the
evidences of indebtedness, shares of capital stock, cash and assets so
distributed applicable to one share of Common Stock and the denominator shall be
such current market price per share of the Common Stock, such reduction to
become effective immediately prior to the opening of business on the day
following the Reference Date. If the Board of Directors determines the fair
market value of any distribution for purposes of this subparagraph (iv) by
reference to the actual or when issued trading market for any securities
comprising such distribution, it must in doing so consider the prices in such
market over the same period used in computing the current market price per share
of Common Stock pursuant to subparagraph (vii) of this Section 1202(a). For
purposes of this subparagraph (iv), any dividend or distribution that includes
shares of Common Stock or rights or warrants to subscribe for or purchase shares
of Common Stock shall be deemed instead to be (1) a dividend or distribution of
the evidences of indebtedness, shares of capital stock, cash or assets other
than such shares of Common Stock or such rights or warrants (making any
conversion price reduction required by this subparagraph (iv)) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (making any further conversion price reduction required
by subparagraph (i) or (ii) of this Section 1202(a), except (A) the Reference
Date of such dividend or distribution as defined in this subparagraph (iv) shall
be substituted as "the date fixed for the determination of stockholders entitled
to receive such dividend or other distribution," "the date fixed for the
determination of stockholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of subparagraphs (i)
and (ii) of this Section 1202(a) and (B) any shares of Common Stock included in
such dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of
subparagraph (i) of this Section 1202(a).
(v) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding, in the case of
any regular cash dividend on the Common Stock, the portion thereof that does not
exceed the per share amount of the next preceding regular cash dividend on the
Common Stock (as adjusted to appropriately reflect any of the events referred to
in subparagraphs (i), (ii), (iii), (iv), (v) and (vi) of this Section 1202(a)),
or all of such regular cash dividend if the annualized amount thereof per share
of Common Stock does
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not exceed 15% of the current market price per share (determined as provided in
subparagraph (vii) of this Section 1202(a)) of the Common Stock on the Trading
Day (as defined in Section 1202(e)) next preceding the date of declaration of
such dividend), the conversion price shall be reduced so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately prior to the effectiveness of the conversion price reduction
contemplated by this subparagraph (v) by a fraction of which the numerator shall
be the current market price per share (determined as provided in subparagraph
(vii) of this Section 1202(a)) of the Common Stock on the date fixed for the
payment of such distribution less the amount of cash so distributed and not
excluded as provided above applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common Stock,
such reduction to become effective immediately prior to the opening of business
on the day following the date fixed for the payment of such distribution.
(vi) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of Best Buy's Common Stock
shall expire and such tender or exchange offer shall involve the payment by the
Company or such subsidiary of consideration per share of Common Stock having a
fair market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors) at the last time (the "EXPIRATION TIME") tenders or exchanges may
be made pursuant to such tender or exchange offer (as it shall have been
amended) that exceeds 10% of the current market price per share (determined as
provided in subparagraph (vii) of this Section 1202(a)) of the Common Stock on
the Trading Day (as defined in Section 1202(e)) next succeeding the Expiration
Time, the conversion price shall be reduced so that the same shall equal the
price determined by multiplying the conversion price in effect immediately prior
to the effectiveness of the conversion price reduction contemplated by this
subparagraph (vi) by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the current market price per share
(determined as provided in subparagraph (vii) of this Section 1202(a)) of the
Common Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the
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shares deemed so accepted, up to any such maximum, being referred to as the
"PURCHASED SHARES") and (y) the product of the number of shares of Common
Stock outstanding (less any Purchased Shares) at the Expiration Time and the
current market price per share (determined as provided in subparagraph (vii) of
this Section 1202(a)) of the Common Stock on the Trading Day next succeeding the
Expiration Time, such reduction to become effective immediately prior to the
opening of business on the day following the Expiration Time.
(vii) For the purpose of any computation under subparagraphs (ii),
(iv), (v) and (vi) of this Section 1202(a), the current market price per share
of Common Stock on any date in question shall be deemed to be the average of the
daily Closing Prices (as defined in Section 1202(e)) for the five consecutive
Trading Days selected by the Company commencing not more than 20 Trading Days
before, and ending not later than, the earlier of the day in question and, if
applicable, the day before the "ex" date with respect to the issuance or
distribution requiring such computation; PROVIDED, HOWEVER, that if another
event occurs that would require an adjustment pursuant to subparagraph (i)
through (vi), inclusive, the Board of Directors may make such adjustments to the
Closing Prices during such five Trading Day period as it deems appropriate to
effectuate the intent of the adjustments in this Section 1202(a), in which case
any such determination by the Board of Directors shall be set forth in a Board
Resolution and shall be conclusive. For purposes of this paragraph, the term
"ex" date, (1) when used with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way on the New York Stock
Exchange or on such successor securities exchange as the Common Stock may be
listed or in the relevant market from which the Closing Prices were obtained
without the right to receive such issuance or distribution, and (2) when used
with respect to any tender or exchange offer means the first date on which the
Common Stock trades regular way on such securities exchange or in such market
after the Expiration Time of such offer.
(viii) The Company may make such reductions in the conversion price,
in addition to those required by subparagraphs (i), (ii), (iii), (iv), (v) and
(vi) of this Section 1202(a), as it considers to be advisable to avoid or
diminish any income tax to holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes. The Company
from time to time may reduce the conversion price by any amount for any period
of time if the period is at least
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twenty (20) days, the reduction is irrevocable during the period, and the Board
of Directors of the Company shall have made a determination that such reduction
would be in the best interest of the Company, which determination shall be
conclusive. Whenever the conversion price is reduced pursuant to the preceding
sentence, the Company shall mail to holders of record of the Securities a notice
of the reduction at least fifteen (15) days prior to the date the reduced
conversion price takes effect, and such notice shall state the reduced
conversion price and the period it will be in effect.
(ix) No adjustment in the conversion price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
conversion price; PROVIDED, HOWEVER, that any adjustments which by reason of
this subparagraph (ix) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.
(x) Whenever the conversion price is adjusted as herein provided:
(1) the Company shall compute the adjusted conversion price
and shall prepare a certificate signed by the Chief Financial
Officer or the Treasurer of the Company setting forth the adjusted
conversion price and showing in reasonable detail the facts upon
which such adjustment is based, and such certificate shall forthwith
be filed with the transfer agent for the Preferred Securities; and
(2) a notice stating the conversion price has been adjusted
and setting forth the adjusted conversion price shall as soon as
practicable be mailed by the Company to all record holders of
Preferred Securities at their last addresses as they appear upon the
stock transfer books of the Company.
(b) RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE OF ASSETS.
In the event that the Company shall be a party to any transaction (including
without limitation any recapitalization or reclassification of the Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination of the
Common Stock), any consolidation of the Company with, or merger of the Company
into, any other person, any merger of another person into the Company (other
than a merger which does not result in a
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reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), any sale or transfer of all or substantially all
of the assets of the Company or any compulsory share exchange) pursuant to which
the Common Stock is converted into the right to receive other securities, cash
or other property, then lawful provision shall be made as part of the terms of
such transaction whereby the holder of each Security then outstanding shall have
the right thereafter to convert such Security only into (i) in the case of any
such transaction other than a Common Stock Fundamental Change (as defined in
Section 1202(e)), the kind and amount of securities, cash and other property
receivable upon such transaction by a holder of the number of shares of Common
Stock of the Company into which such Security could have been converted
immediately prior to such transaction, after giving effect, in the case of any
Non-Stock Fundamental Change, to any adjustment in the conversion price required
by the provision of Section 1202(d), and (ii) in the case of a Common Stock
Fundamental Change, common stock of the kind received by holders of Common Stock
as a result of such Common Stock Fundamental Change in an amount determined
pursuant to the provisions of Section 1202(d). The Company or the person formed
by such consolidation or resulting from such merger or which acquired such
assets or which acquires the Company's shares, as the case may be, shall make
provision in its certificate or articles of incorporation or other constituent
document to establish such right. Such certificate or articles of incorporation
or other constituent document shall provide for adjustments which, for events
subsequent to the effective date of such certificate or articles of
incorporation or other constituent document, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 1202. The
above provisions shall similarly apply to successive transactions of the
foregoing type.
(c) PRIOR NOTICE OF CERTAIN EVENTS. In case:
(i) the Company shall (1) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash that would not
require an adjustment pursuant to 1202(a)(iv) or (v) or (2) authorize a
tender or exchange offer that would require an adjustment pursuant to
Section 1202(a)(vi);
(ii) the Company shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any shares
of stock of any class or series or of any other rights or warrants;
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(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company shall be
required, or of the sale or transfer of all or substantially all of the
assets of the Company or of any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or other property;
or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the transfer agent for the
Preferred Securities, and shall cause to be mailed to the holders of record of
the Preferred Securities, at their last addresses as they shall appear upon the
stock transfer books of the Company, at least fifteen days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record (if any) is to be taken for the purpose of such
dividend, distribution, redemption, repurchase, rights or warrants or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, redemption, repurchase,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding up (but no failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the corporate action required to be specified in such notice).
(d) ADJUSTMENTS IN CASE OF FUNDAMENTAL CHANGES. Notwithstanding
any other provision in this Section 1202 to the contrary, if any Fundamental
Change (as defined in Section 1202(e)) occurs, then the conversion price in
effect will be adjusted immediately after such Fundamental Change as described
below. In addition, in the event of a Common Stock Fundamental Change (as
defined in Section 1202(e)), each Security shall be convertible solely into
common stock of the kind and amount received by holders of Common Stock as the
result of such Common Stock Fundamental Change as
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more specifically provided in the following clauses (d)(i) and (d)(ii).
For purposes of calculating any adjustment to be made pursuant to this Section
1202(d) in the event of a Fundamental Change, immediately after such Fundamental
Change:
(i) in the case of a Non-Stock Fundamental Change (as defined in
Section 1202(e)), the conversion price of the Securities shall thereupon
become the lower of (A) the conversion price in effect immediately prior
to such Non-Stock Fundamental Change, but after giving effect to any other
prior adjustments effected pursuant to this Section 1202, and (B) the
result obtained by multiplying the greater of the Applicable Price (as
defined in Section 1202(e)) or the then applicable Reference Market Price
(as defined in Section 1202(e)) by a fraction of which the numerator shall
be $50 and the denominator shall be an amount per Security determined by
the General Partner in its sole discretion, after consultation with a
nationally recognized investment banking firm, to be the equivalent of the
hypothetical redemption price that would have been applicable if the
Securities had been redeemable during such period; and
(ii) in the case of a Common Stock Fundamental Change, the
conversion price of the Securities in effect immediately prior to such
Common Stock Fundamental Change, but after giving effect to any other
prior adjustments effected pursuant to this Section 1202, shall thereupon
be adjusted by multiplying such conversion price by a fraction of which
the numerator shall be the Purchaser Stock Price (as defined in Section
1202(e)) and the denominator shall be the Applicable Price; PROVIDED,
HOWEVER, that in the event of a Common Stock Fundamental Change in which
(A) 100% of the value of the consideration received by a holder of Common
Stock is common stock of the successor, acquiror or other third party (and
cash, if any, is paid with respect to any fractional interests in such
common stock resulting from such Common Stock Fundamental Change) and (B)
all of the Common Stock shall have been exchanged for, converted into or
acquired for common stock (and cash with respect to fractional interests)
of the successor, acquiror or other third party, the conversion price of
the Securities in effect immediately prior to such Common Stock
Fundamental Change shall thereupon be adjusted by multiplying such
conversion price by a fraction of which the numerator shall be one (1) and
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the denominator shall be the number of shares of common stock of the
successor, acquiror, or other third party received by a stockholder for
one share of Common Stock as a result of such Common Stock Fundamental
Change.
(e) DEFINITIONS. The following definitions shall apply to terms
used in this Section 1202:
(1) "APPLICABLE PRICE" shall mean (i) in the event of a
Non-Stock Fundamental Change in which the holders of the Common Stock
receive only cash, the amount of cash received by a stockholder for one
share of Common Stock and (ii) in the event of any other Non-Stock
Fundamental Change or any Common Stock Fundamental Change, the average of
the daily Closing Prices of the Common Stock for the ten (10) consecutive
Trading Days prior to and including the record date for the determination
of the holders of Common Stock entitled to receive securities, cash or
other property in connection with such Non-Stock Fundamental Change or
Common Stock Fundamental Change, or, if there is no such record date, the
date upon which the holders of the Common Stock shall have the right to
receive such securities, cash or other property, in each case, as adjusted
in good faith by the Board of Directors of Best Buy to appropriately
reflect any of the events referred to in subparagraphs (i), (ii), (iii),
(iv), (v) and (vi) of Section 1202(a).
(2) "CLOSING PRICE" of any common stock on any day shall mean
the last reported sale price regular way on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and
asked prices regular way of such common stock, in each case on the
principal national securities exchange on which such common stock is
listed, if the common stock is listed on a national securities exchange,
or the National Market System of the National Association of Securities
Dealers, Inc., or, if the common stock is not quoted or admitted to
trading on such quotation system, on the principal quotation system on
which the common stock is listed or admitted to trading or quoted, or, if
not listed or admitted to trading or quoted on any national securities
exchange or quotation system, the average of the closing bid and asked
prices of the common stock in the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a
similarly generally accepted reporting service, or, if not so available in
such manner, as furnished by any New York Stock Exchange member firm
selected from time to time by the
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Board of Directors of Best Buy for that purpose or, if not so available in
such manner, as otherwise determined in good faith by the Board of
Directors.
(3) "COMMON STOCK FUNDAMENTAL CHANGE" shall mean any Fundamental
Change in which more than 50% of the value (as determined in good faith by
the Board of Directors) of the consideration received by holders of Common
Stock consists of common stock that for each of the ten consecutive
Trading Days referred to with respect to such Fundamental Change in
Section 1202(e)(1) above has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on the National Market System of the National Association of
Securities Dealers, Inc.; PROVIDED, HOWEVER, that a Fundamental Change
shall not be a Common Stock Fundamental Change unless either (i) the
Company continues to exist after the occurrence of such Fundamental Change
and the outstanding Securities continue to exist as outstanding
Securities, or (ii) not later than the occurrence of such Fundamental
Change, the outstanding Securities are converted into or exchanged for
convertible subordinated debentures of a corporation succeeding to the
business of the Company, which convertible subordinated debentures have
terms substantially similar to those of the Securities.
(4) "FUNDAMENTAL CHANGE" shall mean the occurrence of any
transaction or event in connection with a plan pursuant to which all or
substantially all of the Common Stock shall be exchanged for, converted
into, acquired for or constitute solely the right to receive securities,
cash or other property (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); PROVIDED, HOWEVER,
in the case of a plan involving more than one such transaction or event,
for purposes of adjustment of the conversion price, such Fundamental
Change shall be deemed to have occurred when substantially all of the
Common Stock of the Company shall be exchanged for, converted into, or
acquired for or constitute solely the right to receive securities, cash or
other property, but the adjustment shall be based upon the highest
weighted average of consideration per share which a holder of Common Stock
could have received in such transactions or events as a result of which
more than 50% of the Common Stock of the Company shall have been exchanged
for, converted into, or acquired for or
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constitute solely the right to receive securities, cash or other property.
(5) "NON-STOCK FUNDAMENTAL CHANGE" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(6) "PURCHASER STOCK PRICE" shall mean, with respect to any
Common Stock Fundamental Change, the average of the daily Closing Prices
of the common stock received in such Common Stock Fundamental Change for
the ten (10) consecutive Trading Days prior to and including the record
date for the determination of the holders of Common Stock entitled to
receive such common stock, or, if there is no such record date, the date
upon which the holders of the Common Stock shall have the right to receive
such common stock, in each case, as adjusted in good faith by the Board of
Directors to appropriately reflect any of the events referred to in
subparagraphs (i), (ii), (iii), (iv), (v) and (vi) of Section 1202(a).
(7) "REFERENCE MARKET PRICE" shall initially mean $25.00 and in
the event of any adjustment to the conversion price other than as a result
of a Non-Stock Fundamental Change, the Reference Market Price shall also
be adjusted so that the ratio of the Reference Market Price to the
conversion price after giving effect to any such adjustment shall always
be the same as the ratio of $25.00 to the initial conversion price per
share.
(8) "TRADING DAY" shall mean a day on which securities are
traded on the national securities exchange or quotation system or in the
over-the-counter market used to determine the Closing Price.
(f) DIVIDEND OR INTEREST REINVESTMENT PLANS. Notwithstanding the
foregoing provisions, the issuance of any shares of Common Stock pursuant to any
plan providing for the reinvestment of dividends or interest payable on
securities of the Company and the investment of additional optional amounts in
shares of Common Stock under any such plan, and the issuance of any shares of
Common Stock or options or rights to purchase such shares pursuant to any
employee benefit plan or program of the Company or pursuant to any option,
warrant, right or exercisable, exchangeable or convertible security outstanding
as of the date the Securities were first issued, shall not be deemed to
constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to
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which any of the adjustment provisions described above applies. There shall
also be no adjustment of the conversion price in case of the issuance of any
stock (or securities convertible into or exchangeable for stock) of Best Buy
except as specifically described in this Section 1202. If any action would
require adjustment of the conversion price pursuant to more than one of the
provisions described above, only one adjustment shall be made and such
adjustment shall be the amount of adjustment that has the highest absolute value
to the holder of the Securities.
(g) CERTAIN ADDITIONAL RIGHTS. In case the Company shall, by
dividend or otherwise, declare or make a distribution on its Common Stock
referred to in Section 1202(a)(iv) or 1202(a)(v) (including, without limitation,
dividends or distributions referred to in the last sentence of Section
1202(a)(iv)), the holder of the Securities, upon the conversion thereof
subsequent to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution and prior to the
effectiveness of the conversion price adjustment in respect of such
distribution, shall also be entitled to receive for each share of Common Stock
into which the Securities are converted, the portion of the shares of Common
Stock, rights, warrants, evidences of indebtedness, shares of capital stock,
cash and assets so distributed applicable to one share of Common Stock;
PROVIDED, HOWEVER, that, at the election of the Company (whose election
shall be evidenced by a resolution of the Board of Directors) with respect to
all holders so converting, the Company may, in lieu of distributing to such
holder any portion of such distribution not consisting of cash or securities of
the Company, pay such holder an amount in cash equal to the fair market value
thereof (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors). If any conversion of Securities described in the immediately
preceding sentence occurs prior to the payment date for a distribution to
holders of Common Stock which the holder of Securities so converted is entitled
to receive in accordance with the immediately preceding sentence, the Company
may elect (such election to be evidenced by a resolution of the Board of
Directors) to distribute to such holder a due bill for the shares of Common
Stock, rights, warrants, evidences of indebtedness, shares of capital stock,
cash or assets to which such holder is so entitled, PROVIDED that such due
bill (i) meets any applicable requirements of the principal national securities
exchange or other market on which the Common Stock is then traded and (ii)
requires payment or delivery of such shares of Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or
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assets no later than the date of payment or delivery thereof to holders of
shares of Common Stock receiving such distribution.
ARTICLE THIRTEEN
Redemption of Securities
SECTION 1301. CONDITIONAL RIGHT OF REDEMPTION; MANDATORY REDEMPTION.
In the event that, following the Conversion Expiration Date in
respect of the Preferred Securities, less than 5% of the original aggregate
principal amount of the Preferred Securities remain Outstanding, the Securities
shall be subject to redemption at the option of the Company at the Redemption
Price specified in the form of Security hereinbefore set forth, together with
accrued interest (including Additional Interest) to the Redemption Date,
provided that if the Company elects to redeem Securities, the aggregate
principal amount of Securities so redeemed shall be not less than the aggregate
liquidation preference of the Preferred Securities then outstanding.
The Company covenants that if Best Buy Capital redeems the Preferred
Securities in accordance with the terms thereof, the Company will exercise its
foregoing right of redemption, shall redeem the Securities not later than the
date of redemption of the Preferred Securities, and shall pay the Redemption
Price therefor prior to 12:00 noon, New York City time on the date of such
redemption.
SECTION 1302. APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company, as
permitted by Section 1301, shall be made in accordance with such provision and
this Article.
SECTION 1303. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem Securities pursuant to Section
1301 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least [35] days and no more than
60 days prior to the Redemption Date fixed by the Company, notify the Trustee of
such Redemption Date and of
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the principal amount of Securities to be redeemed and provide a copy of the
notice of redemption given to Holders of Securities to be redeemed pursuant to
Section 1304.
SECTION 1304. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 35 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date, and
(4) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1305. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent, (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
SECTION 1306. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date
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(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; PROVIDED, HOWEVER, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the Redemption Date at the rate borne by the Security.
ARTICLE FOURTEEN
Exchange
SECTION 1401. OPTIONAL EXCHANGE FOR DEPOSITARY SHARES REPRESENTING SERIES A
PREFERRED STOCK.
For so long as any Preferred Securities are outstanding, the
Securities shall be exchangeable at the request of Holders thereof, following an
Exchange Election by a Majority in Liquidation Preference of the Preferred
Securities for Depositary Shares (as such terms are defined in the Limited
Partnership Agreement), each representing ownership of 1/100th of a fully paid
and non-assessable share of Series A Preferred Stock, subject to the following
terms and conditions:
(a) The Conversion Agent, upon receiving irrevocable notice of an
Exchange Election by the holders of a majority in Liquidation Preference
of the Preferred Securities (a "Notice of Exchange"), shall promptly
deliver a copy of such notice to the Company, the Trustee and Best Buy
Capital.
(b) All outstanding Preferred Securities shall be deemed to have
been exchanged, immediately prior to the close of business on the date of
the Exchange Election (the "exchange date"), for Securities held by Best
Buy Capital, at an exchange rate of $50 principal amount of Securities for
each Preferred Security, and Best Buy
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Capital shall promptly deliver the Securities deemed to have been so
exchanged to the Conversion Agent, on behalf of the holders of exchanged
Preferred Securities. As promptly as practicable after the exchange date,
the Company shall issue and deposit with the Depositary, pursuant to the
Deposit Agreement, a certificate or certificates for the number of fully
paid and non-assessable shares of Series A Preferred Stock issuable at the
rate referred to in paragraph (c) below upon the exchange contemplated in
such paragraph in return for a Depositary Receipt or Receipts issued by
the Depositary evidencing a proportionate number of Depositary Shares in
respect of the Series A Preferred Stock so deposited. The Company shall
request that the Depositary Receipts be issued in the names of the holders
of Preferred Securities designated in the Notice of Exchange.
(c) The Company shall thereafter, promptly upon request by the
Conversion Agent, exchange such Securities for Depositary Shares, each
representing a 1/100th interest in a fully paid and non-assessable share
of its Series A Preferred Stock and evidenced by Depositary Receipts, at
the rate of one Depositary Share for each $50 principal amount of
Securities (which rate is equivalent to one Depositary Share or 1/100th of
a share of Series A Preferred Stock for each Preferred Security). Any
accumulated and unpaid dividends on the Preferred Securities (including
any Additional Dividends thereon) at the time of the Exchange Election
shall from and after the time of such exchange be treated as accumulated
and unpaid dividends on the Series A Preferred Stock issued in exchange
for the Securities. The Person or Persons entitled to receive the Series
A Preferred Stock issuable upon such exchange shall be treated for all
purposes as the record holder or holders of such Series A Preferred Stock
as of the exchange date. As promptly as practicable on or after the
exchange date, the Company shall deliver at the office of the Conversion
Agent the Depositary Receipt or Receipts representing the Series A
Preferred Stock issuable upon such exchange. The Conversion Agent shall
deliver such Depositary Receipt or Receipts to the Person or persons
entitled to receive the same.
(d) The Company will use its best efforts to have the Depositary
Shares listed for trading on the New York Stock Exchange or such other
securities exchange on which the Preferred Securities may be listed at the
time of the Exchange Election.
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____________________
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
BEST BUY CO., INC.
By: _______________________________________
Richard M. Schulze
Chairman and Chief Executive Officer
BEST BUY CAPITAL, L.P.
By: Best Buy Co., Inc.,
General Partner
By: _______________________________________
Richard M. Schulze
Chairman and Chief Executive Officer
HARRIS TRUST AND SAVINGS BANK
By: _______________________________________
Judith M. Bartolini
Vice President
Attest:___________________________
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STATE OF ________ ) ss.:
COUNTY OF ________ )
On the _____ day of November, 1994, before me personally came
Richard M. Schulze, to me known, who, being by me duly sworn, did depose and say
that he is the Chairman and Chief Executive Officer of Best Buy Co., Inc., a
corporation described in and which executed the foregoing instrument; and that
he signed his name thereto by authority of the Board of Directors of such
corporation.
_____________________________________
STATE OF ________ ) ss.:
COUNTY OF ________ )
On the _____ day of November, 1994, before me personally came
Richard M. Schulze, to me known, who, being by me duly sworn, did depose and say
that he is the Chairman and Chief Executive Officer of Best Buy Co., Inc., the
General Partner of Best Buy Capital, L.P., a limited partnership described in
and which, through the General Partner, executed the foregoing instrument; and
that he signed his name thereto by authority of the Board of Directors of such
General Partner.
_____________________________________
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STATE OF ________ ) ss.:
COUNTY OF ________ )
On the _____ day of November, 1994, before me personally came Judith
M. Bartolini, to me known, who, being by me duly sworn, did depose and say that
she is a Vice President of Harris Trust and Savings Bank, a corporation
described in and which executed the foregoing instrument; and that she signed
her name thereto by authority of the Board of Directors of such corporation.
_____________________________________
STATE OF _________ ) ss.:
COUNTY OF ________ )
On the _____ day of November, 1994, before me personally came C.
Potter, to me known, who, being by me duly sworn, did depose and say that she is
a Vice President of Harris Trust and Savings Bank, one of the corporations
described in and which executed the foregoing instrument; that she knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation, and that she signed her name thereto by like authority.
_____________________________________
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