Commercial Paper Programs · short-term financing of operations and was sold primarily to banks through commercial paper dealers. •There was a concern that if short-term paper that

Commercial Paper Programs

Thursday, December 3, 2015

12:00 PM – 1:00 PM EST

Presenters:

Ze’-ev D. Eiger, Partner, Morrison & Foerster LLP Jerry R. Marlatt, Senior Of Counsel, Morrison & Foerster LLP

1. Presentation

2. Frequently Asked Questions about Commercial Paperand Commercial Paper Programs

3. Model Commercial Paper Dealer Agreement, 4(2)Program & Guidance Notes

4. Model Commercial Paper Dealer Agreement, 3(a)(3)Program & Guidance Notes

5. Model Global Commercial Paper Dealer Agreement& Guidance Notes

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Commercial Paper Programs

December 3, 2015

Presented by:

Ze’-ev D. Eiger

Jerry R. Marlatt

2

What Is Commercial Paper?

• Commercial paper is a term that tends to be used to refer to

corporate short-term debt securities. Maturities are typically less than

12 months.

• Classically, commercial paper meant debt securities issued under

Section 3(a)(3) of the Securities Act.

• There has also developed a market in short-term corporate debt

issued under Section 4(a)(2) of the Securities Act.

• There are differences between the two types of commercial paper in

terms of investor base, use of proceeds and securities law

requirements for issuance.

3

Historical Roots

• The legislative history of the Securities Act provides an explanation of

the genesis of Section 3(a)(3).

• Commercial paper was issued by merchants and manufacturers for

short-term financing of operations and was sold primarily to banks

through commercial paper dealers.

• There was a concern that if short-term paper that arises out of or

finances current transactions and rarely bought by private investors

were required to be registered, it would radically interfere with

commercial banking transactions.

• The original Federal Reserve Act included commercial paper as an

instrument rediscountable by Federal Reserve banks.

• In 1933, the Federal Reserve requested an exemption for commercial

paper and provided the language that became Section 3(a)(3).

4

Section 3(a)(3) Requirements

• Section 3(a)(3) provides an exemption from the registration

requirements of the Securities Act for:

• Any note, draft, bill of exchange, or banker’s acceptance which arises out of a

current transaction or the proceeds of which have been or are to be used for

current transactions, and which has a maturity at the time of issuance of not

exceeding nine months, exclusive of days of grace, or any renewal thereof the

maturity of which is likewise limited;

• In 1961, the SEC stated in Rel. 33-4412:

• The legislative history of the Securities Act makes clear that Section 3(a)(3)

applies only to prime quality negotiable commercial paper of a type not ordinarily

purchased by the general public, that is, paper issued to facilitate well-recognized

types of current operational business requirements and of a type discountable by

Federal Reserve banks.

• [T]he staff of the Commission has interpreted Section 3(a)(3) to exclude as not

satisfying the nine-month maturity standard, obligations payable on demand or

having provisions for automatic “roll-over.”

5

Section 3(a)(3) Requirements (cont’d)

• The SEC imposed six separate characteristics as necessary for

qualifying for Section 3(a)(3):

• Negotiable

• Prime quality

• Eligible for discount at Federal Reserve banks

• Not ordinarily purchased by the general public

• Used to facilitate “current transactions”

• Maturity of nine months or less with no automatic roll-over.

6

“Current Transactions”

• Through a long series of no-action letters, the staff has defined

current transaction for a variety of businesses.

• Traditionally, it was necessary to trace the use of proceeds to

identifiable current transactions.

• Today, following a 1986 staff response, it is only necessary to

demonstrate that current transactions on the balance sheet exceed

the amount of commercial paper outstanding at any time.

• Inventories and accounts receivable have long been accepted as

current transactions. Also operating expenses, such as salaries,

short-term lending, federal, state and local taxes, and various types

of bank loans with maturities not exceeding five years, have been

accepted.

• However, acquisition financing is NOT considered a current

transaction.

7

Section 3(a)(3) as Public Offering

• Section 3(a)(3) provides an exemption from the requirement in

Section 5 of the Securities Act to register any offer or sale of

securities with the SEC.

• 3(a)(3) commercial paper is not a privately placed security

• This is important, for example, in connection with 1940 Act exemptions under

Sections 3(c)(1) and 3(c)(7), which may not be used if the issuer is making a

public offering.

• To meet the “not ordinarily purchased by the general public” standard,

commercial paper is normally issued in minimum denominations of

$100,000, although occasionally you will see $25,000 minimum

denominations.

• 3(a)(3) commercial paper is usually rated “A-1” to satisfy the prime

quality standard.

8

Continuous Issuance

• Commercial paper is issued in continuously offered programs.

• Typical maturities are in the range of 7 to 21 days

• See FRB H.15 releases and the Commercial Paper releases for maturity

distributions and other statistics.

• Volume statistics are available at:

http://www.federalreserve.gov/releases/CP/volumestats.htm

• Proceeds of commercial paper are often used to pay off maturing

commercial paper.

• In the days before shelf registration, it would have been impossible to

issue this frequently if registration were required.

• And even today, the registration costs would be prohibitive

considering the high frequency of issuance.

9

Book-entry Considerations

• Since 1990, virtually all commercial paper is issued in book-entry

form through DTC or other clearing entities.

• The issuing and paying agent (or depositary bank) holds a master

note for the benefit of DTC and records on its records daily issuance

and redemptions of commercial paper.

• There is generally no involvement of counsel in daily issuances.

• Companies issue commercial paper by direct calls to a dealer’s

commercial paper desk.

• Upon agreement on terms, dealers will buy the entire daily issuance

and resell to investors.

10

Private Commercial Paper

• Nowadays, commercial paper may also be issued under Section

4(a)(2) as a private placement of securities.

• Historically, the 3(a)(3) market was larger and deeper than the 4(a)(2)

market because privately placed securities are restricted securities.

• Today the two markets provide about the same liquidity.

• The advantage of Section 4(a)(2) is that the section does not have

any maturity limitations, so longer dated paper can be issued, and

proceeds do not have to be used for current transactions.

• Most privately placed commercial paper is issued in Rule 144A

programs, although some programs still issue to institutional

accredited investors.

11

4(a)(2) Requirements

• Historically, private placements were conducted under old Section

4(2) with resales to a limited number of investors under the so-called

Section 4(1½) exemption. This sharply limited the size of the market.

• Today, between Regulation D and Rule 144A, the private placement

market is approaching the public securities market in size.

• Until the recent enactment of the JOBS Act, the prohibition on

general solicitations in Rule 502(c) applied to commercial paper

issued under Section 4(a)(2).

• Occasionally, issuers would trip over this limitation and have to stay out of the

market for 30 to 60 days.

12

JOBS Act Changes to 4(a)(2) Offers

• Title II of the Jumpstart Our Business Startups (JOBS) Act of 2012

directed the SEC to eliminate the ban on general solicitation and

general advertising for certain offerings under Rule 506 of Regulation

D and under Rule 144A.

• Under the SEC rulemaking, new paragraph (c) was added to Rule

506 to permit general solicitations under certain circumstances.

• Incidentally, this rulemaking now permits general solicitation in an

offering even though the issuer is relying on Section 3(c)(1) or 3(c)(7)

of the 1940 Act, which prohibits a public offering.

• Thus, a Rule 144A program no longer risks being out of the market

for 30 to 60 days as a result of an inadvertent publicity problem.

13

JOBS Act Changes to 4(a)(2) Offers (cont’d)

• However, in order to use general solicitation under Rule 506(c), the

issuer and offering participants must not be “bad actors.”

• An offering is disqualified from relying on Rule 506(c) if a “covered person” has a

relevant criminal conviction, regulatory or court order or other disqualifying event.

• “Covered persons” include: (1) the issuer, including its predecessors and affiliated

issuers; (2) directors, general partners, and managing members of the issuer; (3)

executive officers of the issuer, and other officers of the issuers that participate in

the offering; (4) 20% beneficial owners of the issuer, calculated on the basis of

total voting power; (5) promoters connected to the issuer; (6) for pooled

investment fund issuers, the fund’s investment manager and its principals; and (7)

persons compensated for soliciting investors, including their directors, general

partners and managing members.

• Certifications as to bad actor status are time consuming to obtain and

this is not practical for commercial paper which can be issued daily.

• As a result, issuers and dealers do not use general solicitation and

instead rely just on Section 4(a)(2) rather than Rule 506(c)

14

Use of Proceeds of 4(a)(2) Paper

• One of the advantage of 4(a)(2) commercial paper is that there is no

requirement to use the proceeds for current transactions.

• 4(a)(2) commercial paper programs are often used to finance

acquisitions until term financing can be arranged.

• Proceeds can be used for any legitimate purpose consistent with the

board resolutions for the program.

15

Disadvantages of 4(a)(2) Paper

• 4(a)(2) commercial paper is still a “restricted security.”

• Some investors have limits on the amount that they can invest in

restricted securities.

• This might have some impact in the secondary market, but generally

the secondary market is a dealer market, i.e., most sales in the

secondary market are back to dealers who may hold or may resell

the paper to other customers.

16

Conversion of 3(a)(3) to 4(a)(2)

• It is not uncommon for issuers to convert 3(a)(3) commercial paper

programs to 4(a)(2) programs.

• Historically, there were transition issues in moving from a public

offering program to a privately placed program to avoid integration of

the private program with the public program while losing the 3(a)(3)

exemption.

• This was addressed by covenants to use the proceeds for current

transactions, but to make sales only to QIBs, for a six month period.

• With the changes brought about by the JOBS Act, this overlap should

no longer be necessary to deal with the general solicitation issues

created by the 3(a)(3) programs.

17

Side-by-side Programs

• Some issuers still operate side-by-side 3(a)(2) and 4(a)(2) programs.

• Historically, there had to be careful segregation of proceeds and use

of proceeds, and perhaps different maturities to deal with the

integration issue.

• Today, after the JOBS Act, the integration concern from general

solicitation is removed but also perhaps there is no longer a reason to

operate two programs.

18

Asset-Backed Commercial Paper

• Starting in the 1980s, asset-backed commercial paper (ABCP)

programs become common.

• Under accounting rules at the time, the sponsor of the program could

operate the program off-balance sheet, so no capital was required to

be held against the assets.

• Numerous ABCP programs foundered during the financial crisis and

today they are much less common; ABCP volumes have declined

from a high of about $1.2 trillion to less than $300 billion today.

• Revised accounting rules and other regulatory developments have

made it increasingly difficult to maintain these programs off-balance

sheet, so much of the reason for their separate existence is gone.

• They are still used, however, for trade receivables financing and other

short-term, maturity-matched lending situations.

19

1940 Act Considerations

• With ABCP, because the issuer is an SPV and not an operating

company, it is necessary to consider what exemption from the 1940

Act may be available.

• Many ABCP programs previously relied on Sections 3(c)(1) or 3(c)(7)

for an exemption.

• For bank sponsors, the Volcker Rule will now require a careful

examination of other possible exemptions under the 1940 Act or

exemptions under the Volcker Rule from the definition of “covered

fund.”

• Section 3(c)(5) of the 1940 Act or Rule 3a-7 under the 1940 Act are

possibilities and also compliance with the definition of “qualifying

asset-backed commercial paper conduit” under the Volcker Rule.

• If swaps are used in the program, attention must also be paid to the

Commodity Exchange Act and initial and variation margin

requirements.

20

Disclosure Considerations

• Disclosure practices for commercial paper developed from the

historical antecedent of Section 3(a)(3), where commercial paper was

used for commercial banking transactions.

• Section 3(a)(3) itself does not impose any disclosure requirements.

• Disclosure documents for commercial paper have traditionally been

very brief, providing little more than identification of the issuer.

Accordingly the offering documents may be little more than a term

sheet.

• 4(a)(2) commercial paper adopted the same disclosure approach.

• As a consequence, 10b-5 letters from counsel are not utilized in the

commercial paper market.

21

Issuing Documents

• Issuing Agreement

• Issuing and Paying Agency Agreement

• Depositary Agreement

• Agreement with distributing dealer

• Commercial Paper Dealer Agreement

• Private Placement Agreement

• Disclosure Document

• Offering Circular

• Private Placement Memorandum

• Liquidity Agreement

22

Practical Considerations

• Maturity limits on 4(a)(2) commercial paper:

• Seldom sold with maturities longer than 390 days, a limit determined by money

market fund considerations, as money market funds have traditionally been very

active purchasers of commercial paper;

• MTN and senior note programs are usually established for issuance of maturities

of one year or more;

• Generally, investment banks have separate desks for commercial paper and MTN

and senior note programs;

• MTN and senior note programs have more traditional prospectus disclosure; at

longer maturities, the rationale for brief disclosure documents isn’t supported.

23

Securities Law Liability

• No liability under Section 11 of the Securities Act for issuers with

respect to 3(a)(3) or 4(a)(2) programs.

• After Gustafson v. Alloyd, there is no liability under Section 12(a)(2) of

the Securities Act for privately placed commercial paper.

• Section 17 of the Securities Act will support SEC actions, but not

investor actions.

• Sections 12(a)(2) and 17 of the Securities Act apply to 3(a)(2)

commercial paper, notwithstanding the exemption from registration

provided by Section 3(a)(3).

24

Securities Law Liability (cont’d)

• For investors, Rule 10b-5 under the Securities Exchange Act

provides principal remedy against both dealers and issuers.

• Consider the exclusion from the definition of a “security” in Section 3(a)(10) of the

Securities Exchange Act for “any note which has a maturity at the time of issuance

of not exceeding nine months,” which appears to exclude 3(a)(3) commercial

paper. However, notes which fail the ‘prime quality’ standard have been held to

fall outside this exclusion.

• After the SEC’s enforcement proceeding settlement against Goldman

Sachs in the 1974 arising out of the Penn Central bankruptcy and

commercial paper default, many dealers have assumed that they will

be unable to avoid liability for any defaulted commercial paper.

• The SEC stated that Goldman had failed to conduct a reasonable

investigation of Penn Central and had implicitly represented to its

customers that the issuer was creditworthy.

25

Due Diligence Defense

• Classic due diligence inquiry not possible due to issuance

mechanics.

• No 10b-5 opinions are given.

• No accountant’s comfort letters are received.

• There is no questioning of management prior to each issuance.

• Thus there can be no “reasonable investigation.”

• Some dealers established credit departments to monitor their issuers

continuously.

• Generally, dealers act defensively and rating downgrades or headline

events can lead to dealers and investors refusing to roll over an

issuer’s commercial paper, forcing the issuer to rely on bank lines of

credit.

F R E Q U E N T L Y A S K E D Q U E S T I O N S A B O U T C O M M E R C I A L P A P E R A N D

C O M M E R C I A L P A P E R P R O G R A M S

Understanding Commercial Paper

What is commercial paper?

Commercial paper (“CP”) is a term used to refer to

short-term debt securities that are in the form of a

promissory note and have maturities of nine months or

less (although typically 30 days or less). CP is usually

unsecured, issued in large denominations of $100,000,

€100,000, £100,000 or more and sold at a discount from

its face value. CP is occasionally interest-bearing.

Institutional money market investors, including money

market funds, insurance companies and banks, are the

main purchasers of CP, and these purchasers are almost

always (1) in the U.S., either qualified institutional

buyers (“QIBs”) or institutional accredited investors

(“IAIs”) and (2) in Europe, qualified investors.

CP is issued to U.S. investors pursuant to U.S. CP

programs and to European investors pursuant to Euro

CP programs. We discuss the differences between U.S.

CP programs and Euro CP programs below under

“Structure of U.S. Commercial Paper Programs” and

“Structure of Euro Commercial Paper Programs.”

Why is commercial paper attractive?

CP is an attractive funding alternative for issuers for

several reasons. First, CP issuers frequently use CP

proceeds to fund short-term liquidity needs instead of

relying on short-term borrowings under revolving

credit facilities and other lines of credit from banks.

Second, CP issuers can easily roll over CP, which means

that the proceeds from new issuances are used to pay

the obligations resulting from maturing issuances. As

such, CP issuers can often continue to utilize CP

proceeds uninterrupted. Third, there are clearly defined

exemptions from registration under the Securities Act of

1933, as amended (“Securities Act”), for CP. Fourth, CP

programs are relatively straightforward to set up and

do not require extensive disclosures.

CP is attractive to institutional money market

investors mainly because the short-term maturity of CP

enables such investors to satisfy certain liquidity and

investment rating requirements under the Investment

Company Act of 1940, as amended (the “Investment

Company Act”). For more information, see “Is

commercial paper rated? Is a back-up bank facility

required?” below.

Is commercial paper rated? Is a back-up bank facility

required?

CP is often rated, in the United States, by a nationally

recognized statistical rating organization (“NRSRO”),

and in Europe, by a credit rating agency, such as

Standard & Poor’s, Moody’s and Fitch. There is no

express rule requiring that CP be rated, but existing

guidance from the Securities and Exchange Commission

(“SEC”) and practical considerations have created a de

facto rating requirement in the United States. As is

discussed below in “—What offering exemptions are

used for commercial paper?,” CP in the United States is

issued pursuant to the exemption from registration

under Section 3(a)(3) of the Securities Act (“Section

3(a)(3)”) or in a private placement pursuant to Section

4(a)(2) of the Securities Act (“Section 4(a)(2)”). The SEC,

in an adopting release and subsequent no-action letters,

has established various criteria that must be satisfied in

order for an issuer to rely on Section 3(a)(3). Among

these requirements is that CP must be of prime quality.

This prime quality condition has customarily been

satisfied when CP is rated highly by an NRSRO. If CP is

unrated or rated less than investment grade, then the

CP issuer could obtain a back-up bank facility, although

it is unclear whether the SEC would issue a no-action

letter permitting this arrangement. Alternatively, if CP

is unrated, the sponsoring dealer could provide a letter

to issuer’s counsel stating that in such dealer’s view the

CP would, if rated, be given a prime rating and that

issuer’s counsel may use such letter as the basis for

opining that the CP is entitled to the exemption under

Section 3(a)(3).

Without a rating provided by an NRSRO or some

alternative arrangement that confers the comfort of a

“prime” rating, a CP issuance will not be possible.

Money market funds, which have traditionally been

major purchasers of CP, are subject to restrictions under

Rule 2a-7 under the Investment Company Act (“Rule

2a-7”) that limit their ability to invest in securities that

are not in the two highest rating categories.1

Standard & Poor’s, Moody’s and Fitch utilize three

generic short-term ratings, which apply to CP, in order

of credit quality from high to low: tier-1, tier-2, and tier-

3. Standard & Poor’s and Fitch have also used a plus (+)

with respect to their tier-1 rating to denote

overwhelming safety. Since the analytical approach in

assigning a short-term rating is virtually identical to the

one followed in assigning a term debt rating (i.e.,

medium-term note and/or long-term bond), a strong

link or “correlation” between an issuer’s short-term and

term debt ratings has evolved for the rating agencies, as

follows:

Term Rating CP Rating

AAA to AA Tier-1+

AA- to A Tier-1

A- to BBB Tier-2

BBB- and lower Tier-3 and lower

1 In March 2011, the SEC proposed amendments to Rule 2a-7 to remove references to credit ratings. The amendments were intended to implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), specifically section 939A, which is designed to reduce reliance on credit ratings in response to the financial crisis of 2008. The SEC re-proposed these amendments in July 2014 and the public comment period ended in October 2014. If the amendments are adopted, money market fund boards (or their delegates) must determine that portfolio securities have “minimal credit risk” instead of relying in part on objective standards, such as credit ratings. In addition, other recent money market reforms, including the requirement of a basis point floating net asset value (NAV) per share on institutional prime and tax-exempt money market funds and the imposition of liquidity fees and redemption gates in July 2014, have resulted in money market funds moving away from CP in order to improve liquidity.

2

Can a guaranty be used instead of a back-up bank

facility?

Yes, commercial paper can be guaranteed by an

organization with excellent credit, such as a bank. In

such cases, a letter of credit is typically used for this

purpose (such CP is referred to as “letter of credit CP”).

The letter of credit is an unconditional obligation of the

issuing bank to pay out of its own funds maturing CP,

in exchange for a fee which is a certain percentage of the

amount of CP issued. Most letters of credit are “direct-

pay” (i.e., the letter of credit bank pays the CP holders

and the issuer or the issuer’s parent reimburses the

letter of credit bank pursuant to a reimbursement

agreement). The other type of letter of credit is a

“stand-by” letter of credit. Under a stand-by letter of

credit, the letter of credit bank must pay only in the

event that the issuer does not. Due to the short-term

nature of CP and the expectation of CP investors to

quickly receive interest, if applicable, and principal

payments, a stand-by letter of credit is not as popular

with CP investors as a direct-pay letter of credit.

What U.S. offering exemptions are used for commercial

paper?

CP is not registered under the Securities Act and is

issued pursuant to the exemption from registration

under Section 3(a)(3) or in a private placement pursuant

to Section 4(a)(2). In addition, CP can also benefit from

the general exemption under Section 3(a)(2) for

securities that are either issued or guaranteed by certain

banks or supported by a letter of credit from a bank.

Structure of U.S. Commercial Paper Programs

Are there different types of U.S. commercial paper

programs?

Yes, a U.S. CP program can be structured for the

issuance of CP pursuant to Section 3(a)(3) or Section

4(a)(2). Some issuers even maintain a Section 3(a)(3)

program and a Section 4(a)(2) program simultaneously.

For a helpful summary of the differences between

Section 3(a)(3) programs and Section 4(a)(2) programs,

see the “Comparison Table” at the end of these

Frequently Asked Questions.

What are the requirements for issuing commercial paper

pursuant to Section 3(a)(3)?

Section 3(a)(3) itself is brief and only exempts “any note,

draft, bill of exchange or banker’s acceptance which

arises out of a current transaction or the proceeds of

which have been or are to be used for current

transactions, and which has a maturity at the time of

issuance not exceeding nine months, exclusive of days

of grace, or any renewal thereof the maturity of which is

likewise limited.” However, a long line of SEC releases,

non-action letters and other guidance have established

that CP must:

• be of prime quality and negotiable;

• be of a type not ordinarily purchased by the

general public;

• be of a type eligible for discounting by Federal

Reserve banks;

• have a maturity not exceeding nine months;

and

• be issued to facilitate current transactions.

3

How is the “prime quality and negotiable” requirement

satisfied?

The prime quality requirement has customarily been

satisfied when CP is rated highly enough by an NRSRO.

Such ratings depend on the creditworthiness of the

issuer or the guarantor, if any. If the CP is unrated or

rated less than investment grade, then the CP issuer

could obtain a back-up bank facility, although it is

unclear whether the SEC would issue a no-action letter

permitting this arrangement. Alternatively, if the CP is

unrated, the sponsoring dealer could provide a letter to

issuer’s counsel stating that in such dealer’s view the CP

would, if rated, be given a prime rating and that issuer’s

counsel may use such letter as the basis for opining that

the CP is entitled to the Section 3(a)(3) exemption.

How is the “type not ordinarily purchased by the general

public” requirement satisfied?

With respect to the requirement that the CP be of a

“type not ordinarily purchased by the general public,”

the relevant factors are (1) denomination, (2) type of

purchaser and (3) manner of sale. The minimum

denomination described in SEC no-action letters is

typically $100,000, although in practice CP is sold in

much higher denominations. CP purchasers should be

institutional investors or highly sophisticated

individuals and SEC no-action letters often refer to sales

to “institutions or individuals who normally purchase

commercial paper.” The marketing of CP also should

be clearly aimed at appropriate purchasers and

advertising in publications of general circulation should

generally be avoided. However, the SEC has not

objected to tombstone advertisements announcing

Section 3(a)(3) program establishments or limited

advertisements in publications of general circulation.

How is the “type eligible for discounting by Federal Reserve

banks” requirement satisfied?

Regulation A of the Federal Reserve Board (“Regulation

A”) sets forth the eligibility requirements for

discounting, which is the method by which a non-

interest bearing note is valued prior to maturity.2

Regulation A provides that a Federal Reserve bank may

discount for a member bank a negotiable note, draft, or

bill of exchange bearing the endorsement of a member

bank that: (1) has a maturity not exceeding ninety days

(except agricultural paper which may carry a maturity

of up to nine months); (2) has been issued or drawn, or

the proceeds of which are to be used in producing,

purchasing, carrying or marketing goods or in meeting

current operating expenses of a commercial, agricultural

or industrial business; and (3) is to be used neither for

permanent or fixed investment such as land, buildings

or machinery, nor for speculative transaction or

transactions in securities (except direct obligations of

the Unites States government). However, even if CP

fails to satisfy the eligibility requirements under

Regulation A, such CP may still qualify for the Section

3(a)(3) exemption if such CP is “of a type” so eligible for

discounting.3 Notwithstanding the above, the SEC in

2 One of the functions of Federal Reserve banks is to extend temporary credit to member banks of the Federal Reserve System, thereby assisting the member banks with absorbing sudden withdrawals of deposits or seasonal requirements that cannot be replenished from the member banks’ own resources. A member bank may borrow from a Federal Reserve bank in one of two ways. It can rediscount short-term commercial, industrial, agricultural or other business paper that it has previously discounted for its customers (under this method, the borrowings are referred to as discounts). Alternatively, it can issue its own promissory notes secured by paper eligible for discounting, government securities or other acceptable collateral (borrowing of this type is referred to as “advances”). 3 A Federal Reserve bank, if it chooses, may make advances on notes regardless of whether such notes conforms to the eligibility requirements set forth in the regulations regarding automatic discountability of such notes.

4

various no-action letters has considered as satisfied the

requirement that the CP be of a “type eligible for

discounting by Federal Reserve banks” if the prime

quality requirement also is satisfied for such CP.

How is the “maturity not exceeding nine months”

requirement satisfied?

The requirement that the CP have a maturity not

exceeding nine months can be satisfied by limiting the

permitted maturity to 270 days in the documentation

establishing the CP program. Demand notes and notes

with automatic rollover, extension or renewal

provisions that extend maturity past the 270-day mark

would not meet this requirement.

How is the “current transactions” requirement satisfied?

The current transactions requirement has been the

subject of the majority of the SEC no-action letters

regarding Section 3(a)(3). For corporate issuers, it is

often clear enough that the proceeds of the CP will be

used for current transactions, including financing of

inventory or accounts receivable (also referred to as

“working capital”), recurring or short-term operating

expenses, such as the payment of salaries, rent, taxes,

dividends or general administrative expenses and the

interim financing of equipment or construction costs,

pending permanent financing, for a period of not longer

than one year. The proceeds of CP are often used to pay

off maturing CP.

In those cases where it is not possible to trace

particular proceeds to particular uses, the SEC has

accepted the use of limitations on the amount of CP

issued according to formulas based on various

categories of current transactions. The more expansive

of these formulas include limiting the amount of CP

outstanding at any one time to not more than the

aggregate amount utilized by the CP issuer for specified

current transactions, including in circumstances where

the proceeds are loaned or advanced to a guarantor or

its subsidiaries. The SEC also has indicated that a CP

issuer should use a balance sheet test for determining

the relevant CP capacity, whereby the CP issuer

determines the capital it has committed to current assets

and the expenses of operating its business over the

preceding 12-month period. Principal uses of proceeds

that clearly do not qualify for current transaction status

include financing the purchase of securities, whether in

connection with a takeover, for investment purposes or

as issuer repurchases, capital expenditures such as the

purchase of land, machinery, equipment, plants or

buildings, and the repayment of debt originally

incurred for an unacceptable purpose.

What are the requirements for issuing commercial paper

pursuant to Section 4(a)(2)?

Section 4(a)(2) programs are structured so that the sale

of CP by the issuer (either to dealers acting as principal

or directly to purchasers) is exempt from registration

under the safe harbor provided by Rule 506 of

Regulation D under the Securities Act (“Regulation D”).

Under Rule 506(b) of Regulation D, an issuer can be

assured it is within the Section 4(a)(2) exemption by

satisfying the following standards:

• the issuer cannot use general solicitation or

advertising to market the securities;

• the issuer may sell its securities to an unlimited

number of accredited investors and up to 35

other purchases (all non-accredited investors,

either alone or with a purchaser representative,

must be sophisticated);

• the issuer must decide what information to

give to accredited investors, so long as it does

5

not violate the antifraud prohibitions of the

federal securities laws (but the issuer must give

non-accredited investors disclosure documents

that are generally the same as those used in

registered offerings and if the issuer provides

information to accredited investors, it must

make this information available to non-

accredited investors as well);

• the issuer must be available to answer

questions by prospective purchasers; and

• financial statement requirements are the same

as for Rule 505 of Regulation D.

Resales of CP by dealers to QIBs (or to purchasers that

dealers and any persons acting on the dealers’ behalf

reasonably believe to be QIBs) are exempt under the

safe harbor of Rule 144A under the Securities Act (“Rule

144A”). Resales of CP by dealers to IAIs are exempt

under the “Rule 4(a)(1½)” exemption. In addition,

resales of CP by dealers (including dealers no longer

acting as underwriters with respect to such CP) to IAIs

are exempt under the dealer exemption under Section

4(a)(3) of the Securities Act.

Because resales by dealers and secondary market

transfers are made in reliance on Rule 144A, a Section

4(a)(2) program issuer and guarantor must comply with

the information requirements of Rule 144A(d)(4). Public

companies are automatically in compliance if they

continue to file reports under the Securities Exchange

Act of 1934, as amended (“Exchange Act”). Section

4(a)(2) program private placement memorandums

(“PPMs”) include language offering purchasers the

opportunity to ask questions of, and receive answers

from, the issuer/guarantor about the terms and

conditions of the offering or generally about the

company in accordance with Rule 502(b)(2)(iv) of

Regulation D.

What are the advantages and disadvantages of using

the Section 3(a)(3) exemption?

The Section 3(a)(3) exemption is an exemption for the

CP itself. Therefore, if the conditions established by the

SEC are met, there is no need for the issuer or secondary

market resellers to ensure that each sale of CP is a

private placement in accordance with the Securities Act.

As a result, Section 3(a)(3) programs are often preferred

to Section 4(a)(2) programs. However, the primary

reason issuers are unable to use the Section 3(a)(3)

exemption is that they plan to use the proceeds of a CP

issuance for purposes that do not clearly meet the

current transactions requirement or the CP has a

maturity longer than nine months. Some issuers

simultaneously maintain a Section 3(a)(3) program and

a Section 4(a)(2) program and issue CP under the

Section 4(a)(2) program when raising money for the

purchase of a fixed asset or for takeover financing. In

such cases, the SEC has issued no-action letters to the

effect that it will not apply the “integration doctrine” to

the CP issuances so long as the purpose and use of

proceeds of the two programs are distinct.

What are the advantages and disadvantages of using

the Section 4(a)(2) exemption?

An issuer may decide to structure its CP program as a

Section 4(a)(2) program in order to avoid the current

transactions requirement and the 270-day limitation on

maturity under Section 3(a)(3). The issuers in a Section

4(a)(2) program can use the proceeds for any purpose,

including to finance capital expenditures or acquisitions

or to refinance existing debt originally incurred for these

purposes (subject to restrictions under Regulation T of

the Board of Governors of the Federal Reserve System

6

(“Regulation T”), which are discussed below).

Although a Section 4(a)(2) program would not be

subject to a 270-day maturity limitation, the maturity of

CP rarely exceeds 397 days, because money market

funds (which are major purchasers of CP) are restricted

under Rule 2a-7 from purchasing notes with maturities

exceeding 397 days.

The drawbacks to a Section 4(a)(2) program mostly

stem from the fact that Section 4(a)(2) CP, unlike Section

3(a)(3) CP, is restricted. Therefore, each resale of CP,

including each resale by a purchaser in the secondary

market, must be made in a private placement

transaction. However, the practical impact of this is

somewhat lessened due to the fact that investors often

hold CP until maturity. In addition, a broker-dealer’s

purchase, as principal, of restricted securities, such as

Section 4(a)(2) CP, is subject to Regulation T, which

restricts broker-dealers from extending unsecured credit

if the proceeds are used by the CP issuer to buy, carry or

trade in securities. Furthermore, some investors have

limitations on the amount that they can invest in

restricted securities, such as money market funds

which, under Rule 2a-7, can only purchase and hold a

limited amount of illiquid securities.

Can a Section 3(a)(3) commercial paper program be

converted into a Section 4(a)(2) commercial paper

program? Can a Section 3(a)(3) commercial paper

program be operated simultaneously with a Section

4(a)(2) commercial paper program?

It is not uncommon for issuers to convert Section 3(a)(3)

CP programs to Section 4(a)(2) programs, particularly if

the issuer would like to use the CP program to fund an

acquisition. In such case there is a concern with

avoiding integration of the resulting Section 4(a)(2)

program with the issuer’s other offerings and programs.

However, this concern is addressed by covenants in the

dealer agreement whereby the CP issuer agrees for a

six-month period to use CP proceeds only for current

transactions and to only issue CP with maturities of

nine months or less.

Some issuers also simultaneously maintain a Section

3(a)(3) program and a Section 4(a)(2) program. In such

case there has to be careful segregation of the proceeds

of each program and the use of proceeds of each

program need to be distinct due to the current

transactions requirement under Section 3(a)(3).

Structure of Euro Commercial Paper Programs

What offering exemption is used?

Euro CP is exempt from registration with the SEC

pursuant to Regulation S under the Securities Act due to

the fact that the issuers of Euro CP are foreign and are

targeting investors outside of the United States. In

addition, Euro CP is not typically listed on an exchange.

How are Euro commercial paper programs different

from U.S. commercial paper programs?

There are a few differences between CP issued under

U.S. CP programs and CP issued under Euro CP

programs. First, Euro CP can have a maturity less than

one year (e.g., 364 days). Second, Euro CP typically is

issued in bearer form (in which case title passes by

delivery) rather than registered form. Third, Euro CP

clears through the European clearing entities Euroclear

Bank SA/NV (“Euroclear”) and Clearstream Banking,

société anonyme (“Clearstream”) rather than the U.S.

clearing entity The Depository Trust Company (“DTC”).

Fourth, Euro CP sometimes carries the Short-Term

7

European (STEP) label, which CP issuers can apply for

and which indicates to investors that the CP issuer and

the Euro CP program have met certain standards

relating to the disclosure of information, the format for

documentation and settlement of the Euro CP. The

criteria for a STEP label is set out in the STEP Market

Convention which is available at

http://www.stepmarket.org/step-convention.html.

The documentation for Euro CP programs is similar to

the documentation for U.S. CP programs (which we

discuss below under “Disclosure and Documentation

for Commercial Paper and Commercial Paper

Programs”), although there are a few differences. The

offering document for a Euro CP program, which is

referred to as an “information memorandum,” typically

contains the form of the CP, and Euro CP programs use

global notes rather than master notes. A “signing

memorandum” is often used which is a formal checklist

of documents and responsibilities. Euro CP programs

also have a “deed of covenant” under which holders of

Euro CP are given direct rights of enforcement against

the CP issuer or guarantor, if applicable, should the CP

issuer default on a payment.

The Securities Industry and Financial Markets

Association (“SIFMA”) has published standard forms of

dealer agreements for U.S. CP programs (pursuant to

Section 3(a)(3) and Section 4(a)(2)), which are available

at http://www.sifma.org/services/standard-forms-and-

documentation/corporate-credit-and-money-markets/.

Similarly, the International Capital Markets Association

(“ICMA”) has published standard forms of information

memorandum, dealer agreement and global note for

Euro CP programs, which are available under Section

7(X) of the ICMA Primary Market Handbook, which is

available to ICMA members and subscribers at

http://www.icmagroup.org/Regulatory-Policy-and-

Market-Practice/Primary-Markets/ipma-handbook-

home/.

For a helpful summary of the differences between U.S.

CP programs and Euro CP programs, see the

“Comparison Table” at the end of these Frequently

Asked Questions.

Distribution and Settlement of Commercial Paper

How is commercial paper distributed?

CP issuers can market directly to investors, but most

issuers choose to use the services of dealers. CP

programs, like medium-term note (“MTN”) programs,

may include more than one dealer. In Section 4(a)(2)

programs, dealers are sometimes referred to as

placement agents, and in Euro CP programs, dealers are

sometimes referred to as managers. Companies issue CP

by calling a dealer’s CP desk directly and, upon

agreeing on terms, dealers buy an issuer’s entire daily

issuance and resell it to investors. There is generally no

involvement of counsel in the daily issuance of CP.

What are the roles and responsibilities of dealers?

Dealers are responsible for the distribution of CP.

Dealers purchase CP from issuers as “principal” and

then immediately resell the CP to investors or place the

CP as “agent” directly with investors. The lead dealer

for a CP program (referred to as an “arranger” for a

Euro CP program) also serves two additional functions:

(1) coordinating the establishment of the CP program

with the issuer and the drafting of the legal

documentation (with the assistance of legal counsel);

and (2) coordinating with the issuer to make sure that

the CP program stays current. Investment banks

8

appointed as initial dealers under the CP program can

be possible dealers of any future CP issued under the

program, and most CP programs allow for additional

dealers to be appointed under the program from time to

time.

Is there a secondary market for commercial paper?

Yes, but it is limited. CP has a very short maturity and

most investors in the CP market purchase CP at

issuance and hold it until maturity. If investors sell CP,

they typically sell CP back to CP dealers. In addition,

CP issued pursuant to Section 4(a)(2) is restricted. As a

result, there is little trading of CP in secondary markets.

Instead, many investors continuously roll over maturing

CP, which means that they purchase newly issued CP

from the same issuer once their holdings of CP mature.

As a result, CP issuers usually refinance the repayment

of maturing CP with newly issued CP.

Is a master note used?

The CP issued under a particular CP program is

typically represented by a single master note, registered

in the name of Cede & Co., as nominee for DTC, and

held by the issuing and paying agent (“IPA”) as

custodian for DTC. DTC makes available a standard

form of master note for corporate CP. Most CP

transactions are settled by book-entry through DTC’s

Money Market Instrument (“MMI”) program and most

CP is identified by a CUSIP number. DTC provides

dealers with a record of the transactions and dealers

provide investors with trade confirmations. Secondary

market trades also are recorded with computer entries.

Unlike a global note, which represents just one issue

of securities (or a portion of one issuance that exceeds

$500 million), a master note can represent all issuances

under a CP program. The terms of each particular CP

issuance are recorded in the IPA’s book-entry system.

Those records are continuously updated by the IPA as

CP matures and new CP is issued. DTC’s master note

form allows the attachment of riders, and riders

typically include legends required for the relevant

registration exemptions (in the case of a Section 4(a)(2)

program or a Rule 144A program) and where a program

contemplates interest-bearing CP, details regarding

interest calculations and procedures for interest

payments.

As discussed above, Euro CP is typically in bearer

form, global notes are typically used and the clearing

entity is Euroclear or Clearstream.

Disclosure and Documentation for Commercial Paper and Commercial Paper Programs

What documentation is used for commercial paper

programs? How is it different from stand-alone

issuances of commercial paper?

The documents used in a CP program are fairly

standardized. They are generally not heavily negotiated

compared to the documents for an MTN program. The

key documents for a CP program are the following:

• the PPM in the case of a Section 4(a)(2)

program, the offering circular in the case of a

Section 3(a)(3) program and the information

memorandum in the case of a Euro CP

program;4

• the dealer agreement;

• the issuing and paying agent agreement

(“IPAA”);

• the master note (in the case of a Euro CP

4 References in these Frequently Asked Questions to PPM shall also refer to an offering circular.

9

program, global notes are used);

• the guaranty, if applicable; and

• the legal opinions.

For a discussion of CP program legal opinions, see “Due

Diligence and Securities Act Liability—What level of

due diligence is required? Are legal opinions required?”

When an investment grade issuer establishes a CP

program through a subsidiary (as is typically the case

for foreign issuers wishing to access the U.S. market),

the CP issued by the subsidiary is guaranteed by the

parent, which executes a stand-alone guaranty. The

SIFMA form dealer agreements for guaranteed CP also

include guaranty forms, which dealers are typically

reluctant to negotiate (the ICMA form dealer agreement

does not include a guaranty form).

The documentation required for a stand-alone

issuance of CP is geared towards a one-off issuance

instead of repeated issuances under a program. As

such, the mechanics are much simpler, the roles of the

IPA and dealer are circumscribed (since they are not

involved in repeat issuances) and a stand-alone issuance

of CP has a global note instead of a master note. In

addition, CP programs can have more than one dealer,

whereas stand-alone issuances of CP only have one

dealer.

What information is provided in the private placement

memorandum or information memorandum?

A typical CP PPM or information memorandum

includes a very short description of the CP issuer and/or

guarantor. The rest of the PPM or information

memorandum describes the CP itself, including the

terms, ratings, denominations, the relevant exemption

from registration (in the case of a U.S. CP program) and

the use of proceeds. A brief section describing the tax

treatment of payments under the CP may be included,

particularly if the CP issuer or guarantor is a non-U.S.

entity. In a Section 4(a)(2) program, the PPM may also

include the deemed representation of the purchasers

that they are IAIs.

CP PPMs and information memoranda are much

shorter than prospectuses used in registered offerings

(or in offerings in Europe that are compliant with

Directive 2003/71/EC (as amended, including by

Directive 2010/73/EU)) and the information memoranda

used in other unregistered offerings, because investors

rely mainly on the credit ratings of the CP issuer or

guarantor, rather than disclosure, when deciding

whether to purchase. Nevertheless, CP PPMs and

information memoranda may incorporate by reference

or include the publicly available or filed disclosure of

the issuer and/or guarantor for the benefit of investors.

In addition, for Section 4(a)(2) programs, the PPM

typically includes language stating that purchasers will

have the opportunity to ask questions of, and receive

answers from, the issuer or the guarantor.

What is covered by the dealer agreement?

The dealer agreement (also called the placement

agreement in a Section 4(a)(2) program) governs the

relationship between the CP issuer and the dealers for

the duration of the CP program and sets the terms for

any sales of CP to or through the dealers. The dealers’

role is to advise the CP issuer regarding pricing and

potential investors. The dealers also coordinate with the

ratings agencies as most CP is rated investment grade.

SIFMA publishes model dealer agreements for Section

3(a)(3) and Section 4(a)(2) programs (for Euro CP

programs, ICMA publishes a model dealer agreement).

These model agreements include forms of legal opinion

10

letters and include explanatory notes. Each dealer

usually has its own standard form of dealer agreement

in the same way that each underwriter has a standard

form of underwriting agreement. If a CP program has

more than one dealer, the CP issuer typically enters into

a separate dealer agreement with each dealer.

The dealer agreement typically allows the parties to

agree, on an issuance-by-issuance basis, either for the

dealers to purchase CP from the issuer as principal

(which is similar to a firm commitment underwriting) or

for the dealers to act as agents and arrange for sales

from the issuer to purchasers. However, for most

issuances, dealers act as principal in purchasing CP

from the issuer and reselling the CP to investors that the

dealers have identified in advance. Investors usually

hold CP to maturity, but dealers may provide liquidity

to their clients by repurchasing the CP prior to maturity.

Generally, dealers may be compensated through a

reselling commission. Alternatively, the CP issuer

compensates the dealers by paying them a fee based on

the amount of CP outstanding.

The dealer agreement also contains representations,

warranties and covenants by the CP issuer that are

deemed to be made on the date the CP program

commences and again each time CP is issued or the

PPM or information memorandum is amended. The

representations, warranties and covenants, among other

things, establish the factual basis for the relevant

registration exemption, confirm the accuracy of the PPM

or information memorandum and confirm the due

corporate existence of the CP issuer and guarantor and

the due authorization, execution and enforceability of

the CP program documents.

The dealer agreement also requires the CP issuer to

deliver closing certificates and legal opinion letters, as

well as executed versions of the other CP program

documents, and to undertake to inform the dealers of

material developments. The CP issuer also agrees to

indemnify the dealers for losses arising from material

misstatements or omissions in the PPM or information

memorandum (which may include the CP issuer’s

public filings and other public information included or

incorporated by reference in the PPM or information

memorandum) and from the CP issuer’s breach of a

representation, warranty or covenant in the dealer

agreement, including any CP issuer action that may

invalidate the relevant registration exemption.

What is covered by the issuing and paying agency

agreement?

In order to establish a CP program, the issuer will need

to appoint an IPA, which is a third-party trust company

or bank that serves a function similar to a trustee under

an indenture.5 The IPA plays various roles under a CP

program, including coordinating settlement of CP with

DTC, processing CP payments, assigning CUSIP

numbers to each issuance of CP and acting as custodian

of the master note representing the CP issued under the

program.

The IPAA governs the relationship between the CP

issuer and the IPA. The IPAA includes provisions

regarding the following:

• communications between the CP issuer and the

IPA regarding CP issuances and the timing of

such communications;

• the issuance and delivery of the CP;

5 A trustee under an indenture acts as a fiduciary for the noteholders and represents the noteholders in dealings with the issuer, while an IPA under an IPAA performs administrative functions and noteholders must act independently and have no way of communicating with each other.

11

• the mechanics for payment of principal and

interest to holders of the CP;

• the amount of the IPA’s fees;

• the removal of the IPA and the appointment of

successors; and

• representations and warranties and

indemnification from the CP issuer to the IPA

for purposes of protecting the IPA from

liability to the CP purchasers.

Each IPA has a preferred form of IPAA which contains

terms that are usually market standard and non-

controversial.

Due Diligence and Securities Act Liability

What level of due diligence is required?

Since CP is issued daily, it is not practical to have

management due diligence sessions or legal opinions

and accountant’s comfort letters provided for each

issuance of CP. As a result, some dealers have

established credit departments to monitor their issuers

continuously. Generally, dealers act conservatively and

may refuse to roll over an issuer’s CP if there are any

rating downgrades or headline events, thus forcing that

issuer to rely on bank lines of credit for its short-term

funding needs.

Are legal opinions required?

CP issuers (and guarantors, if any) are expected to

deliver legal opinions to the dealers when a CP program

is established. In the case of U.S. CP programs, outside

U.S. counsel typically delivers many of the required

opinion paragraphs, while in-house and/or local counsel

qualified in the issuer’s or guarantor’s jurisdiction

deliver others (such as the opinion paragraphs

regarding (1) no litigations or governmental

proceedings and (2) no liens, encumbrances, violations

or breaches). Since the offering documents for CP

programs are fairly short and most of the disclosures

regarding the CP issuer are incorporated by reference

from the CP issuer’s periodic reports filed with the SEC

or (in the case of Euro CP programs) published in the

CP issuer’s home country, negative assurance letters

typically are not required.

The SIFMA form of dealer agreement includes a form

of opinion for issuer’s counsel, which includes opinion

paragraphs on the following:

• the corporate existence of the CP issuer;

• the due authorization, execution and

enforceability of the CP program documents

by and against the CP issuer;

• the due authorization and enforceability of the

CP by and against the CP issuer;

• no requirement for the registration of the CP

under the Securities Act;

• no consent or action of, or filing or registration

with, any governmental or public regulatory

body or authority is required to authorize, or is

otherwise required in connection with the

execution, delivery or performance of, the

dealer agreement, the CP or the IPAA;

• neither the execution and delivery of the dealer

agreement and the IPAA, nor the issuance of

the CP, nor the fulfillment of or compliance

with the terms and provisions of either thereof

by the CP issuer, will (i) result in the creation

or imposition of any mortgage, lien, charge or

encumbrance of any nature whatsoever upon

any of the properties or assets of the CP issuer,

or (ii) violate or result in a breach or default

12

under any of the terms of the CP issuer’s

charter documents or by-laws, any contract or

instrument to which the CP issuer is a party or

by which it or its property is bound, or any law

or regulation, or any order, writ, injunction or

decree of any court or government

instrumentality, to which the CP issuer is

subject or by which it or its property is bound;

• no litigation or governmental proceeding

pending, or to the knowledge of such counsel

threatened, against or affecting the CP issuer or

any of its subsidiaries which might result in a

material adverse change in the condition

(financial or otherwise), operations or business

prospects of the CP issuer or the ability of the

issuer to perform its obligations under the

dealer agreement, the CP or the IPAA;

• the CP issuer not being an investment

company under the Investment Company Act;

• the CP issuer nor any of its revenues, assets or

properties having any right of immunity from

service of process or from the jurisdiction of

competent courts of the CP issuer’s jurisdiction

of organization and the United States or the

State of New York in connection with any suit,

action or proceeding, attachment prior to

judgment, attachment in aid of execution of a

judgment, or execution of a judgment or from

any other legal process with respect to its

obligations under the dealer agreement, the

IPAA or the CP.

• the absence of foreign withholding tax;

• the choice of New York law as valid, effective

and irrevocable choice of law;

• the submission by the CP issuer to the

jurisdiction of the courts of the United States

District Court and the State of New York

located in the Borough of Manhattan as valid

and binding upon the CP issuer; and

• any final judgment rendered by any federal or

state court of competent jurisdiction located in

the State of New York in an action to enforce

the obligations of the CP issuer under the

dealer agreement, the IPAA or the CP is

capable of being enforced in the courts of the

CP issuer’s jurisdiction of organization.

The legal opinions provided by guarantor’s counsel are

very similar, except that an opinion on the

enforceability of the guarantee (rather than the CP) is

provided. In addition, in the case of Euro CP programs,

the legal opinions provided tend to be more limited

than those provided in U.S. CP programs.

Dealers and IPAAs sometimes hire their own counsel

for CP programs. CP dealers instead rely on the

opinion delivered to them by issuer’s counsel, which is

in contrast to other types of offerings (e.g., Rule

144A/Regulation S offerings, Section 4(a)(2) private

placements and Section 3(a)(2) offerings).

Are there any Securities Act liability considerations?

There is no liability under Section 11 of the Securities

Act for issuers of CP issued under either Section 3(a)(3)

or Section 4(a)(2). After the decision of the U.S.

Supreme Court in Gustafson v. Alloyd, there is also no

liability under Section 12(a)(2) of the Securities Act for

issuers of privately placed CP. However, Securities Act

Section 17 will support SEC actions and Sections 12(a)(2)

and 17 of the Securities Act do apply to Section 3(a)(3)

CP. For CP investors, Rule 10b-5 under the Exchange

Act provides the principal remedy against both CP

13

dealers and issuers, a private cause of action for

material misstatements or omissions in offering

documents. It is worth noting the exclusion from the

definition of a “security” in Section 3(a)(10) of the

Exchange Act for “any note which has a maturity at the

time of issuance of not exceeding nine months,” as this

language appears to exclude Section 3(a)(3) CP.

However, CP that does not satisfy the “prime quality”

standard has been held to fall outside this exclusion.

After the SEC’s enforcement proceeding against and

settlement with Goldman Sachs arising out of the Penn

Central bankruptcy in 1970 and resulting CP default of

Penn Central, many dealers have assumed that they will

be unable to avoid liability for any defaulted CP. The

SEC stated that Goldman Sachs had failed to conduct a

reasonable investigation of Penn Central and had

implicitly represented to its customers that the CP

issuer was creditworthy.

Asset-Backed Commercial Paper

How is asset-backed commercial paper structured?

Although the majority of CP is issued by corporate

issuers, CP can also be asset-backed (“ABCP”), in which

case a bankruptcy-remote special purpose vehicle

(“SPV”) or conduit is used for issuance. The SPV uses

the proceeds of an issuance primarily to purchase

interests in various types of assets. Repayment of the

ABCP issued by the conduit depends primarily on the

cash collections received from the conduit’s underlying

asset portfolio and the conduit’s ability to issue new

ABCP. Typically, a bank or other financial institution

will provide liquidity support to bridge any gap when

maturing ABCP cannot be refinanced by the issuance of

new ABCP. Some common assets financed with ABCP

include trade receivables, consumer debt receivables,

and auto and equipment loans and leases. An ABCP

conduit may also use proceeds to invest in securities,

including asset- and mortgage-backed securities,

corporate and government bonds, and CP issued by

other entities, and to make unsecured corporate loans.

Starting in the 1980s, ABCP programs became

common. Under accounting rules at the time, the

sponsor of an ABCP program could operate the

program off-balance sheet. Accordingly, the sponsor

did not have to hold any capital against the SPV’s

underlying asset portfolio. However, numerous ABCP

programs foundered during the financial crisis of 2008,

as declining asset values put strain on the ABCP market.

Some ABCP issuers continued to access the market

though mainly on an overnight basis. In addition,

several government-sponsored programs, such as the

Commercial Paper Funding Facility (CPFF) and the

Asset-Backed Commercial Paper Money Market Mutual

Fund Liquidity Facility (AMLF), helped ensure that

liquidity was still available to issuers and investors.

Nevertheless, the ABCP market was never able to fully

recover from the financial crisis of 2008 and its

aftermath.

Why did the asset-backed commercial paper market fail

and is it coming back?

The ABCP market failed during the financial crisis

because of losses in fundamental assets, including

residential mortgage-backed securities (RMBS), which

backed the ABCP. These losses were significant because

the fundamental assets had longer maturities than the

ABCP and thus were not as liquid. Once issuers began

extending maturities for ABCP in response to falling

asset prices and the maturity mismatch, investors began

14

reassessing the riskiness of ABCP. However, this made

it more difficult for issuers to roll over ABCP, thus

creating a contagion effect that resulted in a liquidity

shock to the banking sector. Although the government-

sponsored programs were helpful in stemming some

losses, they could not prevent the collapse of the ABCP

market.

Today ABCP programs are less common and it does

not appear likely that the ABCP market will return to its

pre-financial crisis levels. ABCP volumes have declined

from a high of approximately $1.2 trillion to

approximately $219.4 billion as of March 20, 2015.

Revised accounting rules and other regulatory

developments have made it increasingly difficult to

maintain ABCP programs off-balance sheet, eliminating

much of the rationale for sponsors to maintain these

programs through an SPV. ABCP programs though are

still used today for trade receivables financing and other

short-term, maturity-matched lending situations.

What is collateralized commercial paper and how is it

different from asset-backed commercial paper?

ABCP is backed by liquidity agreements that are usually

provided by the sponsoring bank, and collateralized

commercial paper (“CCP”) is issued with asset collateral

in the form of repurchase agreements (“repos”). This

means that CCP investors have access to repo collateral

and the repo counterparty in event that the issuer does

not meet its obligations under the CPP, while ABCP

investors have the benefit of a liquidity provider. CCP

is similar to unsecured CP in the sense that while CCP

investors can claim repo collateral if there is any delay

or default in payments, it is primarily the obligation of

the issuer or the parent to make payments on a timely

basis. On the other hand, in the case of ABCP, the

ultimate borrowers are often anonymous to the

investors, and since an ABCP conduit is a legally

separate SPV, ABCP investors do not have legal

recourse against the sponsors of the vehicle but do have

recourse to the underlying assets.

CCP was first introduced by Barclays Bank plc in

November 2010 and thus far has been issued

predominantly by financial institutions. Financial

institutions have used the proceeds from CCP to funds

the term repo positions of their broker-dealer

subsidiaries affected by the 2010 money market reforms

(reflected in the 2010 amendments to Rule 2a-7). CCP is

attractive to investors because it is collateralized, and it

also allows money market funds to overcome maturity

restrictions as CCPs are typically backed by term repos

which have been designated illiquid securities by

revised Rule 2a-7 (term repos do not meet maturity

restrictions imposed on money funds to meet liquidity

requirements and are now confined to less than 5% of a

money market fund’s holdings).

The use of SPVs and the presence of asset collateral

have caused some to question whether CCP creation is

just another form of ABCP. This is a valid concern since

the financial crisis of 2008 partially resulted from

subprime mortgages and financial receivables of

questionable credit quality becoming part of the vast

anonymous asset pools backing ABCP programs. The

off-balance sheet SPVs, typically having full liquidity

support from sponsoring banks, provided side pockets

for banks to profit from additional asset pools without

having to disclose their existence. The recent regulatory

overhaul has resulted in on-balance sheet consolidation

of ABCP and higher costs to administer them. There

currently is no consensus from regulators and industry

participants whether CCP should be treated as an

15

unsecured obligation of the issuer or subject to the same

treatment ABCP receives.

Miscellaneous

Is there a foreign withholding tax?

Depending on the home jurisdiction of the CP issuer

and/or guarantor, foreign withholding tax requirements

may apply to CP payments. Foreign and U.S. tax

counsel should be involved in the planning stages of the

CP program establishment when a foreign issuer or

guarantor is involved. This is particularly true when

dealing with jurisdictions where at-source withholding

tax relief is available only through investor

certifications.

Are there any Investment Company Act considerations

for foreign issuers of commercial paper?

When foreign issuers enter the U.S. CP market, they

often do so by forming a U.S. corporate subsidiary to act

as the CP issuer under the CP program. In such cases, it

is likely that the CP issuer will fall within the definition

of an “investment company” under the Investment

Company Act. Therefore, the CP issuer will need to

find an applicable exemption from registration under

the Investment Company Act. Some common

exemptions used in these circumstances include Rule

3a-5 (an exemption for certain finance subsidiaries) and

Rule 3a-3 (available if the CP issuer has only short-term

CP, or CP with maturities of 270 days or less,

outstanding) under the Investment Company Act.

Section 3(c)(1) of the Investment Company Act also

provides an exemption for issuers that issuer only short-

term CP. However, in order to establish these

exemptions, both the subsidiary and the foreign parent

must meet certain requirements. Counsel for the CP

issuer often must analyze the foreign parent’s

unconsolidated financial statements and obtain back-up

certificates confirming certain facts before being able to

deliver an opinion as to the entity’s investment

company status. Because these considerations can

require structural changes to the CP program and

involve significant administrative efforts for the CP

issuer, they should be discussed as early as possible in

the process for establishing the CP program.

_____________________

By, Ze’-ev D. Eiger, Partner, Jeremy Jennings-Mares,

Partner and Jerry R. Marlatt, Partner,

Morrison & Foerster LLP

© Morrison & Foerster LLP, 2015

16

COMPARISON TABLE

The following table provides a summary of the main differences between U.S. CP programs and Euro CP programs. The table is not a complete discussion of all applicable requirements and should be read in conjunction with the Frequently Asked Questions and the applicable rules.

Type of CP Program

Offering Exemption

Requirements Advantages Disadvantages Investors Listing Settlement

U.S. CP program

Section 3(a)(3)

CP must:

• be of prime quality and negotiable;

• be of a type not ordinarily purchased by the general public;

• be of a type eligible for discounting by Federal Reserve banks;

• have a maturity not exceeding nine months; and

• be issued to facilitate current transactions; and

• be issued to facilitate current transactions

• CP is not restricted

• No need for the issuer or secondary market resellers to ensure that each sale of CP is a private placement

• Can use general solicitation

• Must satisfy the current transactions requirement

• Cannot have a maturity longer than nine months

Institutional money market investors

None DTC

U.S. CP program

Section 4(a)(2)

Sale of CP must be exempt from registration under the safe harbor provided by Rule 506 of Regulation D

Under Rule 506(b) of Regulation D:

• issuer cannot use general solicitation;

• issuer may sell securities to an unlimited number of accredited investors and up to 35 other purchases (all non-accredited investors, either alone or with a purchaser representative, must be sophisticated);

• issuer must decide what information to give to accredited

• No current transactions requirement

• Can have a maturity longer than nine months

• CP is restricted (although resales permitted under Rule 144A)

• Cannot use general solicitation unless sell only to accredited investors

• Potential integration with other private placements

Institutional money market investors

None DTC

investors, so long as do not violate the antifraud prohibitions of the federal securities laws;

• issuer must be available to answer questions by prospective purchasers; and

• financial statement requirements are the same as for Rule 505 of Regulation D

Euro CP program

Regulation S

Sales only to non-U.S. persons in “offshore transactions” with no “directed marketing efforts” in the U.S.

• No current transactions requirement

• Can have a maturity longer than nine months

• CP is restricted

• Investors cannot be U.S. persons

• Cannot have directed marketing efforts in U.S.

Non-U.S. qualified investors

None, but may have Short-Term European (STEP) label

Euroclear/ Clearstream

[4(2) Program; Guaranteed]

Model Commercial Paper Dealer Agreement

Guidance Notes

The Bond Market Association (“the Association”) is publishing a guaranteed form of Model Commercial Paper Dealer Agreement (the “Agreement”) for use by issuers and dealers in establishing guaranteed commercial paper programs which are exempt from registration under the U.S. Securities Act of 1933, as amended (the “1933 Act”), pursuant to the exemption contained in Section 4(2) of the 1933 Act.

A separate model agreement is being published contemporaneously herewith, for use in establishing commercial paper programs which are exempt from 1933 Act registration pursuant to the exemption contained in Section 3(a)(3) of the 1933 Act.

After consideration by representatives of market participants, it was decided that a guaranteed form of model commercial paper agreement would be useful in providing guidance to market participants and would also provide increased consistency and precision in documenting the relationship among issuers, guarantors and dealers of commercial paper.

As with other Association model agreements, use of this Agreement is not intended to be mandatory, and indeed even the firms that participated in its preparation may vary its terms from transaction to transaction. However, it is hoped that market participants will become comfortable with most of the Agreement’s provisions, thereby limiting negotiation in any particular case to a relatively small number of provisions.

To assist users of the Agreement, the Association has prepared the following Guidance Notes that explain certain sections of the Agreement. They are aimed principally at issuers and guarantors and their counsels, who may be unfamiliar with this model agreement and the reasons behind certain of its provisions. In many cases the notes highlight the differences between the 3(a)(3) and the 4(2) model agreements, to explain why it may be inappropriate to have the two agreements identical in certain contexts.

These Guidance Notes should not be relied upon by any party to determine, without appropriate legal or other relevant professional advice, whether any provision of the Agreement, or the Agreement as a whole, is suitable to that party’s particular circumstances and needs.

Capitalized terms not otherwise defined have the meanings given to them in the Agreement.

The Bond Market Association is the trade association representing securities firms and banks that underwrite, trade and sell debt securities and money market instruments, including investment grade and non-investment grade corporate debt securities, commercial paper and mortgage and other asset-backed securities.

May 2004 Guaranteed Commercial Paper Dealer Agreement 4(2) Guidance Notes 1

Title of Agreement: Some dealers’ practice has been to call agreements relating to 4(2) programs “Placement Agreements” and the dealers “placement agents”, at least partly on the basis that “commercial paper” is frequently assumed to mean notes issued and sold pursuant to the 3(a)(3) exemption, and also to reinforce the principle that the “dealer” typically places 4(2) paper rather than buying as principal, the reasons for which are more fully discussed below. The final consensus of the group of Association member firms that prepared this Agreement (the “Working Group”) was that it is made sufficiently clear that the program seeks to fit within the 4(2) exemption, if that fact is specifically highlighted in the title of the Agreement.

Section 1.2: Clause (a) requires that any agreements for 4(2) commercial paper to be issued by the Issuer contain selling restrictions which are “substantially identical” to those contained in this Agreement. This is more restrictive than the 3(a)(3) form, which contains no requirements as to the substance of any other agreements on the same program. The reason for this is that each dealer will need to be certain that the provisions relating to compliance with the 4(2) exemption are substantially identical for the entire program, out of concern that noncomplying issuances and sales would be integrated with, and taint, otherwise complying sales.

Similarly, Section 1.2 in the 4(2) Agreement does not permit sales directly by the Issuer or the Guarantor, as does the same section in the 3(a)(3) Agreement. This is because of the importance of controlling the manner of 4(2) offers and sales, and concern about integration where such controls fail.

Section 1.3: Unlike Section 3(a)(3), there is no maximum maturity required for the 4(2) exemption. A 397-day maximum maturity has been included reflecting the market’s view of the maximum term for commercial paper (pursuant to Rule 2a-7 under the 1940 Act, this is the longest maturity instrument that money market funds are permitted to buy), but in certain cases a shorter maximum may be desirable or required. An example is the case of an issuer that relies on the exemption from the Investment Company Act of 1940, as amended (the “1940 Act”) provided by Section 3(c)(1) thereof, which limits maturities of the issuer’s securities to 270 days. In addition, in the case of longer maturities of commercial paper, there is the risk of overlap with maturities of other securities issued or guaranteed by the Issuer, in particular under a medium-term note program, whether publicly offered or privately placed. See the discussion of “integration” below under Sections 1.6(i) and 1.7(a).

Section 1.6 generally: Sections 1.6 and 1.7 contain the requirements for offers and sales which form the basis for availability of the private placement exemption from registration under Section 4(2) of the Securities Act. Issuers and guarantors should make sure they understand the provisions of these sections, and should consult counsel for an explanation of any parts thereof which they do not understand, including the defined terms and references to statutes.

May 2004 ■ Guaranteed Commercial Paper Dealer Agreement 4(2) Guidance Notes ■ 2

Certain of these requirements also make reference to Rule 506 under the Securities Act, which is part of Regulation D and provides guidance as to how a private placement should be conducted. Regulation D establishes a non-exclusive safe harbor for private placements. The principal advantage to establishing full reliance on Regulation D is that it does not limit the number of offerees, but only the number of purchasers (to 35). As drafted, the Agreement provides for a valid 4(2) exemption based on existing interpretations of that section; it does not establish full reliance on Regulation D, but does take advantage of some of its guidance as to private placements.

In preparing this Agreement for use in any particular transaction, parties may prefer to eliminate references to Rule 506 in the event that they do not wish to place any reliance on its safe harbor. Alternatively, they may wish to fully rely on the safe harbor of Rule 506, in which case a requirement to file Form D and appropriate amendments should be added. (A form of provision requiring such filings and making other conforming changes to the Agreement appears as paragraph 2 on the Addendum to the Agreement; conforming changes to the legal opinion and model corporate resolutions appear in brackets in those documents.)

Generally, information about the offering of the Notes should not be included on the Issuer’s or the Guarantor’s website in order to avoid such information being deemed general solicitation or general advertising.

Section 1.6(g): Resales of the Notes may be made (and in some cases will be required to be made) in accordance with Rule 144A under the 1933 Act, which permits resales to certain very large institutional purchasers, called Qualified Institutional Buyers (“QIBs”), subject to compliance with certain conditions. Among the conditions under Rule 144A is that information similar to that published by public companies be made available to prospective purchasers of the Notes. It is this requirement that gives rise to the provision in Section 1.6(g) that if the Issuer or the Guarantor is not (or ceases to be) subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and (in the case of a foreign issuer) is not furnishing information in accordance with Rule 12g3-2(b) under the 1934 Act, it will make available upon request the information required under Rule 144A. That information consists of:

a very brief statement of the nature of the business of the issuer or the guarantor and the products and services it offers; and the issuer’s or the guarantor’s most recent balance sheet and profit and loss and retained earnings statements, and similar financial statements for such part of the two preceding fiscal years as the issuer or guarantor has been in operation (the financial statements should be audited to the extent reasonably available).

(Rule 144A(d)(4)(i)). Such information must be “reasonably current,” which will be presumed to be the case where:

(A) The balance sheet is as of a date less than 16 months before the date of resale, the statements of profit and loss and retained earnings are for the 12 months preceding the date of such balance sheet, and if such balance sheet is not as of a date less than six months before the date of resale, it shall be accompanied by additional statements of profit and loss and retained earnings for the period from


the date of such balance sheet to a date less than six months before the date of resale; and

(B) The statement of the nature of the issuer’s or the guarantor’s business and its products and services offered is as of a date within 12 months prior to the date of resale; or

(C) With regard to foreign private issuers or guarantors, the required information meets the timing requirements of the issuer’s or the guarantor’s home country or principal trading markets. (Rule 144A(d)(4)(ii)).

Section 1.6(h): There are several reasons for which a Note may be ineligible for resale under Rule 144A. In the case of commercial paper, the principal reason which is under the Issuer’s control is the unavailability of issuer information as described above.

Because the selling restrictions applicable to the Notes provide that resales are permitted to QIBs under Rule 144A (and, as indicated above, in some circumstances the dealers will be required to sell in accordance with Rule 144A), it is necessary for the Issuer to inform the Dealer, and for changes to be made in the Private Placement Memorandum disclosure, if such Rule 144A resales are not permitted for any reason with respect to any particular Notes. The selling restrictions applicable to the Notes appear on Exhibit A to the Agreement.

Section 1.6(i): This Section is necessary to reduce the risk of integration of this program into other issuances by the Issuer or the Guarantor. Although each of the covenants in this Section relates directly to the Issuer’s and Guarantor’s 3(a)(3) programs, they are necessary in this Agreement so that the Dealer under this Agreement (which may not be a dealer on such 3(a)(3) programs and therefore would have no way of monitoring the way that program is conducted) has some comfort that the such 3(a)(3) programs are being properly conducted.

Issuers and guarantors are advised to discuss with their counsel the specific requirements to ensure availability of the 3(a)(3) exemption, and establish appropriate internal procedures and controls. This Section may be deleted where neither the Issuer nor the Guarantor has a 3(a)(3) program, or any present intention of establishing one.

Section 1.7(a): This Section focuses again on measures to prevent integration with other offerings by the Issuer or the Guarantor, although it is more broad than 1.6(i), which focuses only on the contemporaneous 3(a)(3) program. In this Section, the Issuer and the Guarantor confirm that they have not sold Notes or any securities “substantially similar to” Notes except under this Agreement or similar agreements relating to this 4(2) program with other dealers.

Various interpretations under the federal securities laws discuss the “substantially similar” standard in the integration context. The standard is not always clear, and is a factual determination in each case, but it is apparent that it is the substance, not the title of the securities or whether or not they are issued


under the same program, that will be scrutinized. For example, offerings of debt instruments that have maturities within one year of each other should be analyzed as to integration. Because of the fact-dependent nature of the question, Issuer and Guarantor officials who are involved in the issuance of Notes under this program should have ongoing discussions with their legal counsel to reduce the risk of integration.

Section 1.7(b): In order to monitor its compliance with Regulation T as currently interpreted by the Federal Reserve Board, the Dealer needs to know if the Issuer is using the proceeds of Notes issued in a 4(2) program to buy, carry or trade securities, whether in connection with the acquisition of another company or otherwise. If that is the use of the proceeds of the sale of Notes, and the Dealer has purchased the Notes as principal and does not resell them on the day of issue, the Dealer may be required to resell the Notes only to persons it reasonably believes to be QIBs. This provision requires the Issuer to notify the Dealer when its planned use of proceeds of the Notes will potentially place the Dealer in this position.

Section 2.11: In most cases, the phrase "or an entity controlled by an investment company" will not be included following the language “Neither the Issuer nor the Guarantor is an ‘investment company’” in the representation in Section 2.9 of the Agreement and in the Model Opinions. However, where both the Issuer [or the Guarantor] and its parent are U.S. domiciled companies, 25% or more of the voting securities of the Issuer [or the Guarantor] are owned by a company (a “Control Person”) and (i) material transactions (e.g., material purchases or sales of goods or services, or material lending or borrowing arrangements) exist between such issuer and an "affiliated person" of the Control Person, or (ii) the proceeds of the securities are to be used to acquire some or all of the securities of an investment company, insurance company, broker/dealer, underwriter or investment adviser, the phrase should be included. In cases where it is contemplated that the phrase will be included, the Issuer and the Guarantor should discuss the inclusion of such language with counsel.

Section 2.12: This representation covers both the Private Placement Memorandum and the Company Information, even though the latter is defined to include the former as well as additional material. The Dealer needs to have the Issuer’s and the Guarantor’s confirmation of the statements made in this Section as to the narrower contents of the Private Placement Memorandum standing alone (since this is the only material the Dealer is actually delivering in all cases to purchasers) as well as to the broader universe of all available Company Information.

Section 4.3: This Section requires the Issuer and the Guarantor to notify the Dealer when an event occurs that would render the Private Placement Memorandum incomplete or inaccurate. It does not necessarily require the Issuer or the Guarantor to give the Dealer or anyone else specific information about the event, and only requires the Issuer and the Guarantor to promptly update the Private Placement Memorandum if the Dealer is then holding Notes in inventory. If the Issuer and Guarantor do not update in that instance, the Dealer would be unable to resell the Notes held in inventory, since a


current Private Placement Memorandum would not be available. Positioning of Notes in inventory by the Dealer enhances the Notes’ liquidity, thereby creating an important benefit for the Issuer.

Section 5.1: The indemnification provision covers both Company Information and the Private Placement Memorandum for the same reason that both are covered under the representation in Section 2.12 (see note above with respect to that Section).

Section 6.2: The defined term “Company Information” includes a large amount of Guarantor-related information beyond that which is included in the Private Placement Memorandum. In light of the brevity of materials formally distributed in commercial paper programs (and the trend toward even briefer sales notices), investors are presumed to be basing investment decisions on the Guarantor’s publicly available information, including reports and other documents filed pursuant to the 1934 Act.

Section 6.15: The requirement of not less than $5 million in investments is based on the definition of a “qualified purchaser” under the 1940 Act and is intended to set a standard believed to be comfortably higher than the “accredited investor” standard in Regulation D under the Securities Act. The definition of “Sophisticated Individual Accredited Investor” is not based on any statutory, regulatory or interpretive standard (other than by analogy to the “qualified purchaser” definition) but rather reflects the sense of the working group that Dealers should not sell privately placed commercial paper to “ordinary” individual accredited investors.

Sections 7.2 and 7.3: If the Dealer is not located in New York City, appropriate changes may be made in these sections to reflect another governing law and jurisdiction where lawsuits may be brought.

Agreement — General: The Internal Revenue Service (“IRS”) has issued regulations that require the disclosure to the IRS of certain transactions classified as “reportable transactions.” One class of reportable transactions are transactions where one or more of the parties are subject to explicit or implicit confidentiality or nondisclosure restrictions that are applicable to the tax treatment or tax structure of the transaction, and the tax consequences of the transaction are discussed in the transaction documents. There is no confidentiality or nondisclosure requirement in the Agreement nor is one intended to be implied with respect to the tax treatment or tax structure of the transaction. An issuer concerned about this issue may wish, however, to consider adding tax confidentiality waiver language to avoid any question as to whether the transaction would be required to be disclosed as a “reportable transaction.”

Addendum — General: As indicated by the first footnote to the Addendum, its purpose is to provide a method for the parties to alter the model Agreement language in ways that reflect the particular details of the transaction or other negotiated matters. As a starting point, the Addendum provides model language for provisions that will be appropriate only in certain cases, as indicated in the respective footnotes.


The Addendum can also be used to tailor the model Agreement to the transaction. Parties to each transaction where the model Agreement is used will need to determine how to tailor it to their needs: whether by actually amending certain provisions; by using the model Agreement as if it were a printed form and describing all additions and deletions to the model language on the Addendum; or by other means.

Exhibit A: The private placement legend will appear on all Private Placement Memoranda and all Notes, in substantially the form of Exhibit A. Please note that slight language changes are necessary to adapt the legend for the separate locations: e.g., “The Notes have not been registered...” would become “This Note has not been registered...” (emphasis added) when appearing as the Note itself.

By appearing on Private Placement Memoranda, it will constitute the principal means by which the resale restrictions are communicated to the holders of the Notes. In most cases the Note will be a book-entry Note certificate held by or on behalf of DTC, so the legend serves no real notice purpose to the beneficial owners of the Notes. However, it may be desirable to have a legend on the Note because of Section 8-204(1) of the Uniform Commercial Code, which provides that:

“A restriction on transfer of a security imposed by the issuer, even if otherwise lawful, is ineffective against a person without actual knowledge of the restriction unless

(1) the security is certificated and the restriction is noted conspicuously on the security certificate; or

(2) the security is uncertificated and the registered owner has been notified of the restriction; or …”

The Notes, although generally reflected by DTC book entries, are considered certificated under the UCC because DTC actually holds (directly or through an agent) a Note certificate. Therefore, clause (1) of UCC § 8-204 is applicable and would suggest use of a legend in order to make the selling restrictions binding on purchasers. See Comment 4 to UCC § 8-204.

Exhibit B: The provisions in Exhibit B lay out the procedural arrangements that would apply in any case where indemnification is sought.

Exhibit C: Exhibit C sets forth a standard form of Statement of Terms for interest-bearing commercial paper notes that can be delivered to purchasers in the increasing number of cases where interest-bearing notes are issued.

Although provisions for optional redemption are not provided in Exhibit C, issuers and dealers may consider adding such provisions to the Supplement. In the event that a redemption option is included in any Notes, the Supplement should incorporate the mechanics of the redemption option and include any other relevant disclosure. In addition, the Issuer should be required to provide notice of any proposed redemption to the Dealer that sold the Notes.


Issuers and dealers should bear in mind, in the case of floating rate interest-bearing notes, that market conventions for the different interest rate indices (such as applicable screen pages) may change from time to time requiring modifications to Exhibit C.

Exhibit D: Exhibit D sets forth a standard form of Guarantee.

Model Opinions — General: The model opinions are provided as a starting point for the Dealer’s opinion request made to the Issuer’s counsel and the Guarantor’s counsel. Such opinions addressed to the Dealer are required by Section 3.6(a) of the Agreement. The specific details of the transaction and the circumstances of the Issuer and the Guarantor will have to be taken into account in determining the appropriate coverage of any particular opinion. All parties should also recognize that applicable local laws may require that counsel add limitations or make certain assumptions in giving these opinions, and differences in opinion practices of law firms may necessitate changes. In this connection, note in particular the discussion of paragraph 2 of the opinion below, relating to enforceability of the Agreement.

Finally, it should be noted that the form of these model opinions should not be taken to mean that all matters in the opinion need be covered by the same counsel. For example, paragraphs 6 through 8 (5 through 7 in the Guarantor’s opinion) might be covered by an in-house attorney familiar with the Issuer’s or Guarantor’s full range of operations, whereas paragraphs 2 through 5 (2 through 4 in the Guarantor’s opinion) might be covered by an outside firm retained to represent the Issuer or the Guarantor in this transaction, and paragraphs 1 and 9 through 14 (8 through 13 in the Guarantor’s opinion) (if applicable) might be covered by local counsel in the Issuer’s or Guarantor’s jurisdiction of organization.

All parties to the transaction should bear in mind that opinion negotiations, especially if not begun early in the transaction, can disrupt the transaction and take on undue significance in it. Early attention to these matters is recommended.

Parties to the transaction should also consider the circumstances under which updated legal opinions and officer’s certificates may become appropriate in the future, and incorporate those requirements into the Agreement as necessary. Such circumstances might include the addition of dealers to the program, other changes to the program or changes in relevant laws.

Model Opinions — Paragraph 2: In contrast to opinions delivered in connection with standard underwritings, the model opinions contemplate that counsel will be requested to address enforceability of the Dealer Agreement, citing the appropriate exception for the indemnification and contribution provisions. In a standard underwriting, opinions would typically not address enforceability of the underwriting agreement at all.

The enforceability opinion is requested here because of the ongoing nature of the Agreement. The Agreement contains numerous covenants, the most important of which relate to keeping the Dealer up-to-date with respect to developments that could affect disclosure to purchasers in connection with sales of Notes, and making corresponding amendments to the Private Placement Memorandum and



Company Information. The Dealer has a strong interest in knowing that these covenants will be enforceable during the life of the program. This is in contrast to a typical underwriting agreement, which normally remains executory for only the three days between execution and closing, except for the indemnification provision, which is generally stated to survive closing. In underwritten deals, most practitioners believe it better to forego the enforceability opinion altogether than to receive it with a specific carveout for the only provision that has an extended life.

Model Opinions — Paragraph 8 (Issuer); Paragraph 7 (Guarantor): See the note above relating to Section 2.11 of the Agreement, with respect to the inclusion of the phrase “or an entity controlled by an investment company.”

Model Opinions — Paragraphs 9 through 14 (Issuer); Paragraphs 8 through 13 (Guarantor):

As noted in the footnotes, these opinion paragraphs are only needed in the case of a foreign issuer or guarantor. Where they are applicable, the parties should be aware that local counsel in the jurisdiction of organization of the Issuer or the Guarantor may need to tailor the language to fit the local laws, and may also advise that there are certain local requirements that should be met in order to ensure that these statements are true.

Where a foreign issuer or guarantor is involved, the transaction in general and the opinion in particular should be discussed with local counsel in the jurisdiction of organization as early as possible in the course of the transaction. The general problems described above relating to delays in addressing opinion issues can be exacerbated by foreign law concerns which may be more difficult to resolve quickly.

[4(2) Program]

February 2004 < Commercial Paper Dealer Agreement 4(2) Program < 1


Between:

, as Issuer and

, as Dealer

Concerning Notes to be issued pursuant to an Issuing and Paying Agency Agreement dated as of ___________ between the Issuer and ____________________________, as Issuing and Paying Agent

Dated as of

Commercial Paper Dealer Agreement [4(2) Program]

This agreement (the “Agreement”) sets forth the understandings between the Issuer and the Dealer, each named on the cover page hereof, in connection with the issuance and sale by the Issuer of its short-term promissory notes (the “Notes”) through the Dealer.

Certain terms used in this Agreement are defined in Section 6 hereof.

The Addendum to this Agreement, and any Annexes or Exhibits described in this Agreement or such Addendum, are hereby incorporated into this Agreement and made fully a part hereof.

1. Offers, Sales and Resales of Notes. 1.1 While (i) the Issuer has and shall have no obligation to sell the Notes to the Dealer or to permit

the Dealer to arrange any sale of the Notes for the account of the Issuer, and (ii) the Dealer has and shall have no obligation to purchase the Notes from the Issuer or to arrange any sale of the Notes for the account of the Issuer, the parties hereto agree that in any case where the Dealer purchases Notes from the Issuer, or arranges for the sale of Notes by the Issuer, such Notes will be purchased or sold by the Dealer in reliance on the representations, warranties, covenants and agreements of the Issuer contained herein or made pursuant hereto and on the terms and conditions and in the manner provided herein.

1.2 So long as this Agreement shall remain in effect, and in addition to the limitations contained in Section 1.7 hereof, the Issuer shall not, without the consent of the Deale r, offer, solicit or accept offers to purchase, or sell, any Notes except (a) in transactions with one or more dealers which may from time to time after the date hereof become dealers with respect to the Notes by


executing with the Issuer one or more agreements which contain provisions substantially identical to those contained in Section 1 of this Agreement, of which the Issuer hereby undertakes to provide the Dealer prompt notice or (b) in transactions with the other dealers listed on the Addendum hereto, which are executing agreements with the Issuer which contain provisions substantially identical to Section 1 of this Agreement contemporaneously herewith. In no event shall the Issuer offer, solicit or accept offers to purchase, or sell, any Notes directly on its own behalf in transactions with persons other than broker-dealers as specifically permitted in this Section 1.2.

1.3 The Notes shall be in a minimum denomination of $250,000 or integral multiples of $1,000 in excess thereof, will bear such interest rates, if interest bearing, or will be sold at such discount from their face amounts, as shall be agreed upon by the Dealer and the Issuer, shall have a maturity not exceeding 397 days from the date of issuance and may have such terms as are specified in Exhibit C hereto or the Private Placement Memorandum. 1 The Notes shall not contain any provision for extension, renewal or automatic “rollover.”

1.4 The authentication and issuance of, and payment for, the Notes shall be effected in accordance with the Issuing and Paying Agency Agreement, and the Notes shall be either individual physical certificates or book-entry notes evidenced by one or more master notes (each, a “Master Note”) registered in the name of The Depository Trust Company (“DTC”) or its nominee, in the form or forms annexed to the Issuing and Paying Agency Agreement.2

1.5 If the Issuer and the Dealer shall agree on the terms of the purchase of any Note by the Dealer or the sale of any Note arranged by the Dealer (including, but not limited to, agreement with respect to the date of issue, purchase price, principal amount, maturity and interest rate or interest rate index and margin (in the case of interest-bearing Notes) or discount thereof (in the case of Notes issued on a discount basis), and appropriate compensation for the Dealer’s services hereunder) pursuant to this Agreement, the Issuer shall cause such Note to be issued and delivered in accordance with the terms of the Issuing and Paying Agency Agreement and payment for such Note shall be made by the purchaser thereof, either directly or through the Dealer, to the Issuing and Paying Agent, for the account of the Issuer. Except as otherwise agreed, in the event that the Dealer is acting as an agent and a purchaser shall either fail to accept delivery of or make payment for a Note on the date fixed for settlement, the Dealer shall promptly notify the Issuer, and if the Dealer has theretofore paid the Issuer for the Note, the Issuer will promptly return such funds to the Dealer against its return of the Note to the Issuer, in the case of a certificated Note, and upon notice of such failure in the case of a book-entry Note. If such failure occurred for any reason other than default by the Dealer, the Issuer shall reimburse the Dealer on an equitable basis for the Dealer’s loss of the use of such funds for the period such funds were credited to the Issuer’s account.

1.6 The Dealer and the Issuer hereby establish and agree to observe the following procedures in connection with offers, sales and subsequent resales or other transfers of the Notes:

1 In the event that, in order to be exempt from the definition of “investment company” under the Investment Company Act of 1940, the Issuer

must rely on Section 3(c)(1) of that Act, the mat urity of the Notes may not exceed 270 days. 2 If the form or forms of Notes are not annexed to the Issuing and Paying Agency Agreement, they should be annexed to this Agreement or

delivered to the Dealer, with appropriate certification by the Secretary of the Issuer, pursuant to section 3.6 of the Agreement.


(a) Offers and sales of the Notes by or through the Dealer shall be made only to: (i) investors reasonably believed by the Dealer to be Qualified Institutional Buyers, Institutional Accredited Investors or Sophisticated Individual Accredited Investors and (ii) non-bank fiduciaries or agents that will be purchasing Notes for one or more accounts, each of which is reasonably believed by the Dealer to be an Institutional Accredited Investor or Sophisticated Individual Accredited Investor.

(b) Resales and other transfers of the Notes by the holders thereof shall be made only in accordance with the restrictions in the legend described in clause (e) below.

(c) No general solicitation or general advertising shall be used in connection with the offering of the Notes. Without limiting the generality of the foregoing, without the prior written approval of the Dealer, the Issuer shall not issue any press release or place or publish any “tombstone” or other advertisement relating to the Notes.

(d) No sale of Notes to any one purchaser shall be for less than $250,000 principal or face amount, and no Note shall be issued in a smaller principal or face amount. If the purchaser is a non-bank fiduciary acting on behalf of others, each person for whom such purchaser is acting must purchase at least $250,000 principal or face amount of Notes.

(e) Offers and sales of the Notes by the Issuer through the Dealer acting as agent for the Issuer shall be made in accordance with Rule 506 under the Securities Act, and shall be subject to the restrictions described in the legend appearing on Exhibit A hereto. A legend substantially to the effect of such Exhibit A shall appear as part of the Private Placement Memorandum used in connection with offers and sales of Notes hereunder, as well as on each individual certificate representing a Note and each Master Note representing book-entry Notes offered and sold pursuant to this Agreement.

(f) The Dealer shall furnish or shall have furnished to each purchaser of Notes for which it has acted as the Dealer a copy of the then-current Private Placement Memorandum unless such purchaser has previously received a copy of the Private Placement Memorandum as then in effect. The Private Placement Memorandum shall expressly state that any person to whom Notes are offered shall have an opportunity to ask questions of, and receive information from, the Issuer and the Dealer and shall provide the names, addresses and telephone numbers of the persons from whom information regarding the Issuer may be obtained.

(g) The Issuer agrees, for the benefit of the Dealer and each of the holders and prospective purchasers from time to time of the Notes that, if at any time the Issuer shall not be subject to Section 13 or 15(d) of the Exchange Act, the Issuer will furnish, upon request and at its expense, to the Dealer and to holders and prospective purchasers of Notes information required by Rule 144A(d)(4)(i) in compliance with Rule 144A(d).

(h) In the event that any Note offered or to be offered by the Dealer would be ineligible for resale under Rule 144A, the Issuer shall immediately notify the Dealer (by telephone, confirmed in writing) of such fact and shall promptly prepare and deliver to the Dealer an amendment or supplement to the Private Placement Memorandum describing the Notes that


are ineligible, the reason for such ineligibility and any other relevant information relating thereto.

(i) [The Issuer represents that it is currently issuing, and expects to continue to issue, commercial paper in the United States market in reliance upon, and in compliance with, the exemption provided by Section 3(a)(3) of the Securities Act. In that connection, the Issuer agrees that]3 [The Issuer represents that it is not currently issuing commercial paper in the United States market in reliance upon the exemption provided by Section 3(a)(3) of the Securities Act. The Issuer agrees that, if it shall issue commercial paper after the date hereof in reliance upon such exemption] 4 (a) the proceeds from the sale of the Notes will be segregated from the proceeds of the sale of any such commercial paper by being placed in a separate account; (b) the Issuer will institute appropriate corporate procedures to ensure that the offers and sales of notes issued by the Issuer pursuant to the Section 3(a)(3) exemption are not integrated with offerings and sales of Notes hereunder; and (c) the Issuer will comply with each of the requirements of Section 3(a)(3) of the Securities Act in selling commercial paper or other short-term debt securities other than the Notes in the United States.

1.7 The Issuer hereby represents and warrants to the Dealer, in connection with offers, sales and resales of Notes, as follows:

(a) The Issuer hereby confirms to the Dealer that (except as permitted by Section 1.6(i)) within the preceding six months neither the Issuer nor any person other than the Dealer or the other dealers referred to in Section 1.2 hereof acting on behalf of the Issuer has offered or sold any Notes, or any substantially similar security of the Issuer (including, without limitation, medium-term notes issued by the Issuer), to, or solicited offers to buy any such security from, any person other than the Dealer or the other dealers referred to in Section 1.2 hereof. The Issuer also agrees that (except as permitted by Section 1.6(i)), as long as the Notes are being offered for sale by the Dealer and the other dealers referred to in Section 1.2 hereof as contemplated hereby and until at least six months after the offer of Notes hereunder has been terminated, neither the Issuer nor any person other than the Dealer or the other dealers referred to in Section 1.2 hereof (except as contemplated by Section 1.2 hereof) will offer the Notes or any substantially similar security of the Issuer for sale to, or solicit offers to buy any such security from, any person other than the Dealer or the other dealers referred to in Section 1.2 hereof, it being understood that such agreement is made with a view to bringing the offer and sale of the Notes within the exemption provided by Section 4(2) of the Securities Act and Rule 506 thereunder and shall survive any termination of this Agreement. The Issuer hereby represents and warrants that it has not taken or omitted to take, and will not take or omit to take, any action that would cause the offering and sale of Notes hereunder to be integrated with any other offering of securities, whether such offering is made by the Issuer or some other party or parties.

3 For use when the Issuer is also currently issuing 3(a)(3) commercial paper. 4 For use when the Issuer is not currently issuing 3(a)(3) commercial paper.


(b) The Issuer represents and agrees that the proceeds of the sale of the Notes are not currently contemplated to be used for the purpose of buying, carrying or trading securities within the meaning of Regulation T and the interpretations thereunder by the Board of Governors of the Federal Reserve System. In the event that the Issuer determines to use such proceeds for the purpose of buying, carrying or trading securities, whether in connection with an acquisition of another company or otherwise, the Issuer shall give the Dealer at least five business days’ prior written notice to that effect. The Issuer shall also give the Dealer prompt notice of the actual date that it commences to purchase securities with the proceeds of the Notes. Thereafter, in the event that the Dealer purchases Notes as principal and does not resell such Notes on the day of such purchase, to the extent necessary to comply with Regulation T and the interpretations thereunder, the Dealer will sell such Notes either (i) only to offerees it reasonably believes to be Qualified Institutional Buyers or to Qualified Institutional Buyers it reasonably believes are acting for other Qualified Institutional Buyers, in each case in accordance with Rule 144A or (ii) in a manner which would not cause a violation of Regulation T and the interpretations thereunder.

2. Representations and Warranties of Issuer. The Issuer represents and warrants that:

2.1 The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all the requisite power and authority to execute, deliver and perform its obligations under the Notes, this Agreement and the Issuing and Paying Agency Agreement.

2.2 This Agreement and the Issuing and Paying Agency Agreement have been duly authorized, executed and delivered by the Issuer and constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

2.3 The Notes have been duly authorized, and when issued as provided in the Issuing and Paying Agency Agreement, will be duly and validly issued and will constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

2.4 The offer and sale of the Notes in the manner contemplated hereby do not require registration of the Notes under the Securities Act, pursuant to the exemption from registration contained in Section 4(2) thereof, and no indenture in respect of the Notes is required to be qualified under the Trust Indenture Act of 1939, as amended.

2.5 The Notes will rank at least pari passu with all other unsecured and unsubordinated indebtedness of the Issuer.


2.6 [Except as provided in Section 1.6(j) hereof,] 5 No consent or action of, or filing or registration with, any governmental or public regulatory body or authority, including the SEC, is required to authorize, or is otherwise required in connection with the execution, delivery or performance of, this Agreement, the Notes or the Issuing and Paying Agency Agreement, except as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes.

2.7 Neither the execution and delivery of this Agreement and the Issuing and Paying Agency Agreement, nor the issuance of the Notes in accordance with the Issuing and Paying Agency Agreement, nor the fulfillment of or compliance with the terms and provisions hereof or thereof by the Issuer, will (i) result in the creation or imposition of any mortgage, lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Issuer, or (ii) violate or result in a breach or a default under any of the terms of the Issuer’s charter documents or by-laws, any contract or instrument to which the Issuer is a party or by which it or its property is bound, or any law or regulation, or any order, writ, injunction or decree of any court or government instrumentality, to which the Issuer is subject or by which it or its property is bound, which breach or default might have a material adverse effect on the condition (financial or otherwise), operations or business prospects of the Issuer or the ability of the Issuer to perform its obligations under this Agreement, the Notes or the Issuing and Paying Agency Agreement.

2.8 There is no litigation or governmental proceeding pending, or to the knowledge of the Issuer threatened, against or affecting the Issuer or any of its subsidiaries which might result in a material adverse change in the condition (financial or otherwise), operations or business prospects of the Issuer or the ability of the Issuer to perform its obligations under this Agreement, the Notes or the Issuing and Paying Agency Agreement.

2.9 The Issuer is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended.6

2.10 Neither the Private Placement Memorandum nor the Company Information contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

2.11 Each (a) issuance of Notes by the Issuer hereunder and (b) amendment or supplement of the Private Placement Memorandum shall be deemed a representation and warranty by the Issuer to the Dealer, as of the date thereof, that, both before and after giving effect to such issuance and after giving effect to such amendment or supplement, (i) the representations and warranties given by the Issuer set forth in this Section 2 remain true and correct on and as of such date as if made on and as of such da te, (ii) in the case of an issuance of Notes, the Notes being issued on such date have been duly and validly issued and constitute legal, valid and binding

5 For use where the parties wish to fully rely on the safe harbor in Rule 506. See Addendum paragraph 2. 6 The phrase “or an entity controlled by an investment company” is not included in this representation or in the related paragraph in the Model

Opinion (paragraph 8). See Guidance Note to Section 2.9 for a description of the limited circumstances where this phrase should be included.


obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and (iii) in the case of an issuance of Notes, since the date of the most recent Private Placement Memorandum, there has been no material adverse change in the condition (financial or otherwise), operations or business prospects of the Issuer which has not been disclosed to the Dealer in writing.

3. Covenants and Agreements of Issuer. The Issuer covenants and agrees that:

3.1 The Issuer will give the Dealer prompt notice (but in any event prior to any subsequent issuance of Notes hereunder) of any amendment to, modification of or waiver with respect to, the Notes or the Issuing and Paying Agency Agreement, including a complete copy of any such amendment, modification or waiver.

3.2 The Issuer shall, whenever there shall occur any change in the Issuer’s condition (financial or otherwise), operations or business prospects or any development or occurrence in relation to the Issuer that would be material to holders of the Notes or potential holders of the Notes (including any downgrading or receipt of any notice of intended or potential downgrading or any review for potential change in the rating accorded any of the Issuer’s securities by any nationally recognized statistical rating organization which has published a rating of the Notes), promptly, and in any event prior to any subsequent issuance of Notes hereunder, notify the Dealer (by telephone, confirmed in writing) of such change, development or occurrence.

3.3 The Issuer shall from time to time furnish to the Dealer such information as the Dealer may reasonably request, including, without limitation, any press releases or material provided by the Issuer to any national securities exchange or rating agency, regarding (i) the Issuer’s operations and financial condition, (ii) the due authorization and execution of the Notes and (iii) the Issuer’s ability to pay the Notes as they mature.

3.4 The Issuer will take all such action as the Dealer may reasonably request to ensure that each offer and each sale of the Notes will comply with any applicable state Blue Sky laws; provided, however, that the Issuer shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified or subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

3.5 The Issuer will not be in default of any of its obligations hereunder, under the Notes or under the Issuing and Paying Agency Agreement, at any time that any of the Notes are outstanding.

3.6 The Issuer shall not issue Notes hereunder until the Dealer shall have received (a) an opinion of counsel to the Issuer, addressed to the Dealer, satisfactory in form and substance to the Dealer, (b) a copy of the executed Issuing and Paying Agency Agreement as then in effect, (c) a copy of resolutions adopted by the Board of Directors of the Issuer, satisfactory in form and substance to


the Dealer and certified by the Secretary or similar officer of the Issuer, authorizing execution and delivery by the Issuer of this Agreement, the Issuing and Paying Agency Agreement and the Notes and consummation by the Issuer of the transactions contemplated hereby and thereby, (d) prior to the issuance of any book-entry Notes represented by a master note registered in the name of DTC or its nominee, a copy of the executed Letter of Representations among the Issuer, the Issuing and Paying Agent and DTC and of the executed master note, (e) prior to the issuance of any Notes in physical form, a copy of such form (unless attached to this Agreement or the Issuing and Paying Agency Agreement) and (f) such other certificates, opinions, letters and documents as the Dealer shall have reasonably requested.

3.7 The Issuer shall reimburse the Dealer for all of the Dealer’s out-of-pocket expenses related to this Agreement, including expenses incurred in connection with its preparation and negotiation, and the transactions contemplated hereby (including, but not limited to, the printing and distribution of the Private Placement Memorandum), and, if applicable, for the reasonable fees and out-of-pocket expenses of the Dealer’s counsel.

4. Disclosure. 4.1 The Private Placement Memorandum and its contents (other than the Dealer Information) shall

be the sole responsibility of the Issuer. The Private Placement Memorandum shall contain a statement expressly offering an opportunity for each prospective purchaser to ask questions of, and receive answers from, the Issuer concerning the offering of Notes and to obtain relevant additional information which the Issuer possesses or can acquire without unreasonable effort or expense.

4.2 The Issuer agrees to promptly furnish the Dealer the Company Information as it becomes available.

4.3 (a) The Issuer further agrees to notify the Dealer promptly upon the occurrence of any event relating to or affecting the Issuer that would cause the Company Information then in existence to include an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they are made, not misleading.

(b) In the event that the Issuer gives the Dealer notice pursuant to Section 4.3(a) and the Dealer notifies the Issuer that it then has Notes it is holding in inventory, the Issuer agrees promptly to supplement or amend the Private Placement Memorandum so that the Private Placement Memorandum, as amended or supplemented, shall not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Issuer shall make such supplement or amendment available to the Dealer.

(c) In the event that (i) the Issuer gives the Dealer notice pursuant to Section 4.3(a), (ii) the Dealer does not notify the Issuer that it is then holding Notes in inventory and (iii) the Issuer chooses not to promptly amend or supplement the Private Placement Memorandum in the manner described in clause (b) above, then all solicitations and sales of Notes shall be suspended until such time as the Issuer has so amended or supplemented the Private Placement Memorandum, and made such amendment or supplement available to the Dealer.


(d) Without limiting the generality of Section 4.3(a), the Issuer shall review, amend and supplement the Private Placement Memorandum on a periodic basis, but no less than at least once annually, to incorporate current financial information of the Issuer to the extent necessary to ensure that the information provided in the Private Placement Memorandum is accurate and complete.

5. Indemnification and Contribution. 5.1 The Issuer will indemnify and hold harmless the Dealer, each individual, corporation,

partnership, trust, association or other entity controlling the Dealer, any affiliate of the Dealer or any such controlling entity and their respective directors, officers, employees, partners, incorporators, shareholders, servants, trustees and agents (hereinafter the “Indemnitees”) against any and all liabilities, penalties, suits, causes of action, losses, damages, claims, costs and expenses (including, without limitation, fees and disbursements of counsel) or judgments of whatever kind or nature (each a “Claim”), imposed upon, incurred by or asserted against the Indemnitees arising out of or based upon (i) any allegation that the Private Placement Memorandum, the Company Information or any information provided by the Issuer to the Dealer included (as of any relevant time) or includes an untrue statement of a material fact or omitted (as of any relevant time) or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (ii) arising out of or based upon the breach by the Issuer of any agreement, covenant or representation made in or pursuant to this Agreement. This indemnification shall not apply to the extent that the Claim arises out of or is based upon Dealer Information.

5.2 Provisions relating to claims made for indemnification under this Section 5 are set forth on Exhibit B to this Agreement.

5.3 In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in this Section 5 is held to be unavailable or insufficient to hold harmless the Indemnitees, although applicable in accordance with the terms of this Section 5, the Issuer shall contribute to the aggregate costs incurred by the Dealer in connection with any Claim in the proportion of the respective economic interests of the Issuer and the Dealer; provided, however, that such contribution by the Issuer shall be in an amount such that the aggregate costs incurred by the Dealer do not exceed the aggregate of the commissions and fees earned by the Dealer hereunder with respect to the issue or issues of Notes to which such Claim relates. The respective economic interests shall be calculated by reference to the aggregate proceeds to the Issuer of the Notes issued hereunder and the aggregate commissions and fees earned by the Dealer hereunder.

6. Definitions. 6.1 “Claim” shall have the meaning set forth in Section 5.1.

6.2 “Company Information” at any given time shall mean the Private Placement Memorandum together with, to the extent applicable, (i) the Issuer’s most recent report on Form 10-K filed with the SEC and each report on Form 10-Q or 8-K filed by the Issuer with the SEC since the most recent Form 10-K, (ii) the Issuer’s most recent annual audited financial statements and


each interim financial statement or report prepared subsequent thereto, if not included in item (i) above, (iii) the Issuer’s and its affiliates’ other publicly available recent reports, including, but not limited to, any publicly available filings or reports provided to their respective shareholders, (iv) any other information or disclosure prepared pursuant to Section 4.3 hereof and (v) any information prepared or approved by the Issuer for dissemination to investors or potential investors in the Notes.

6.3 “Dealer Information” shall mean material concerning the Dealer provided by the Dealer in writing expressly for inclusion in the Private Placement Memorandum.

6.4 “Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended.

6.5 “Indemnitee” shall have the meaning set forth in Section 5.1.

6.6 “Institutional Accredited Investor” shall mean an institutional investor that is an accredited investor within the meaning of Rule 501 under the Securities Act and that has such knowledge and experience in financial and business matters that it is capable of evaluating and bearing the economic risk of an investment in the Notes, including, but not limited to, a bank, as defined in Section 3(a)(2) of the Securities Act, or a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity.

6.7 “Issuing and Paying Agency Agreement” shall mean the issuing and paying agency agreement described on the cover page of this Agreement, as such agreement may be amended or supplemented from time to time.

6.8 “Issuing and Paying Agent” shall mean the party designated as such on the cover page of this Agreement, as issuing and paying agent under the Issuing and Paying Agency Agreement, or any successor thereto in accordance with the Issuing and Paying Agency Agreement.

6.9 “Non-bank fiduciary or agent” shall mean a fiduciary or agent other than (a) a bank, as defined in Section 3(a)(2) of the Securities Act, or (b) a savings and loan association, as defined in Section 3(a)(5)(A) of the Securities Act.

6.10 “Private Placement Memorandum” shall mean offering materials prepared in accordance with Section 4 (including materials referred to therein or incorporated by reference therein, if any) provided to purchasers and prospective purchasers of the Notes, and shall include amendments and supplements thereto which may be prepared from time to time in accordance with this Agreement (other than any amendment or supplement that has been completely superseded by a later amendment or supplement).

6.11 “Qualified Institutional Buyer” shall have the meaning assigned to that term in Rule 144A under the Securities Act.

6.12 “Rule 144A” shall mean Rule 144A under the Securities Act.


6.13 “SEC” shall mean the U.S. Securities and Exchange Commission.

6.14 “Securities Act” shall mean the U.S. Securities Act of 1933, as amended.

6.15 “Sophisticated Individual Accredited Investor” shall mean an individual who (a) is an accredited investor within the meaning of Regulation D under the Securities Act and (b) based on his or her pre-existing relationship with the Dealer, is reasonably believed by the Dealer to be a sophisticated investor (i) possessing such knowledge and experience (or represented by a fiduciary or agent possessing such knowledge and experience) in financial and business matters that he or she is capable of evaluating and bearing the economic risk of an investment in the Notes and (ii) having not less than $5 million in investments (as defined, for purposes of this section, in Rule 2a51-1 under the Investment Company Act of 1940, as amended).

7. General 7.1 Unless otherwise expressly provided herein, all notices under this Agreement to parties hereto

shall be in writing and shall be effective when received at the address of the respective party set forth in the Addendum to this Agreement.

7.2 This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws provisions.

7.3 The Issuer agrees that any suit, action or proceeding brought by the Issuer against the Dealer in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes shall be brought solely in the United States federal courts located in the Borough of Manhattan or the courts of the State of New York located in the Borough of Manhattan. EACH OF THE DEALER AND THE ISSUER WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

7.4 This Agreement may be terminated, at any time, by the Issuer, upon one business day’s prior notice to such effect to the Dealer, or by the Dealer upon one business day’s prior notice to such effect to the Issuer. Any such termination, however, shall not affect the obligations of the Issuer under Sections 3.7, 5 and 7.3 hereof or the respective representations, warranties, agreements, covenants, rights or responsibilities of the parties made or arising prior to the termination of this Agreement.

7.5 This Agreement is not assignable by either party hereto without the written consent of the other party; provided, however, that the Dealer may assign its rights and obligations under this Agreement to any affiliate of the Dealer.

7.6 This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.


7.7 This Agreement is for the exclusive benefit of the parties hereto, and their respective permitted successors and assigns hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.

, as Issuer , as Dealer

By: By:

Name: Name:

Title: Title:


Addendum7

The following additional clauses shall apply to the Agreement and be deemed a part thereof.

1. The other dealers referred to in clause (b) of Section 1.2 of the Agreement are _______________________________________________________.

2. The following changes are hereby made to the Agreement:8

(a) Section 1.6(j) is hereby added to the Agreement, as follows:

(j) The Issuer hereby agrees that, not later than 15 days after the first sale of Notes as contemplated by this Agreement, it will file with the SEC a notice on Form D in accordance with Rule 503 under the Securities Act and that it will thereafter file such amendments to such notice as Rule 503 may require.

(b) Section 2.4 of the Agreement is amended by adding the words “and Regulation D thereunder” after the words “Section 4(2) thereof “ on the third line of such Section.

(c) A new Section 6.16 is hereby added to the Agreement, as follows:

6.16 “Regulation D” shall mean Regulation D (Rules 501 et seq.) under the Securities Act.

3. The following sections 2.12 through 2.16 are hereby added to the Agreement:9

2.12 Under the laws of [foreign jurisdiction], neither the Issuer nor any of its revenues, assets or properties has any right of immunity from service of process or from the jurisdiction of competent courts of [foreign jurisdiction] or the United States or the State of New York in connection with any suit, action or proceeding, attachment prior to judgment, attachment in aid of execution of a judgment or execution of a judgment or from any other legal process with respect to its obligations under this Agreement, the Issuing and Paying Agency Agreement or the Notes.

2.13 The Issuer is permitted to make all payments under this Agreement, the Issuing and Paying Agency Agreement and the Notes to holders of the Notes that are non-residents of [foreign jurisdiction], free and clear of and without deduction or withholding for or on account of any taxes or other governmental charges imposed by [foreign jurisdiction]. There is no stamp or documentary tax or other charge imposed by any governmental agency having jurisdiction over the Issuer in connection with the execution, delivery, issuance, payment, performance, enforcement or introduction into evidence in a court of [foreign jurisdiction] of this Agreement, the Issuing and Paying Agency Agreement or any Note.

7 There may be added to this Addendum any changes or additions to the model Agreement, as agreed between the parties. 8 For use where the parties wish to fully rely on the safe harbor in Rule 506. See Guidance Note relating to Section 1.6 generally. 9 For use where the Issuer is a foreign entity.


2.14 The choice of New York law to govern this Agreement, the Issuing and Paying Agency Agreement and the Notes is, under the laws of [foreign jurisdiction], a valid, effective and irrevocable choice of law, and the submission by the Issuer in Section 7.3 (b) of the Agreement to the jurisdiction of the courts of the United States District Court and the State of New York located in the Borough of Manhattan is valid and binding upon the Issuer under the laws of [foreign jurisdiction].

2.15 Any final judgment rendered by any court referred to in Section 2.14 in an action to enforce the obligations of the Issuer under this Agreement, the Issuing and Paying Agency Agreement or the Notes is capable of being enforced in the courts of [foreign jurisdiction].

2.16 As a condition to the admissibility in evidence of this Agreement, the Issuing and Paying Agency Agreement or the Notes in the courts of [foreign jurisdiction], it is not necessary that this Agreement, the Issuing and Paying Agency Agreement or the Notes be filed or recorded with any court or other authority. [All documentary evidence to be submitted to a court in [foreign jurisdiction] must be in, or translated into, the [foreign jurisdiction] language and certified by a duly qualified official translator in [foreign jurisdiction]].

4. The following Section 3.8 is hereby added to the Agreement:10

3.8 Without limiting any obligation of the Issuer pursuant to this Agreement to provide the Dealer with credit and financial information, the Issuer he reby acknowledges and agrees that the Dealer may share the Company Information and any other information or matters relating to the Issuer or the transactions contemplated hereby with affiliates of the Dealer, including, but not limited to, __________________________11 and that such affiliates may likewise share information relating to the Issuer or such transactions with the Dealer.

5. The addresses of the respective parties for purposes of notices under Section 7.1 are as follows:

For the Issuer:

Address:_______________________________________________________________

Attention:______________________________________________________________

Telephone number:_______________________________________________________

Fax number:____________________________________________________________

For the Dealer:

Address:_______________________________________________________________

10 For use where the Dealer is an affiliate of a commercial bank. 11 Insert name of Dealer’s bank affiliate.


Attention:______________________________________________________________

Telephone number:_______________________________________________________

Fax number:___________________________________________________________

6. The text appearing in the Agreement as Section 7.3 is hereby redesignated as Section 7.3(a), and the following Sections 7.3(b), (c) and (d) are hereby added to the Agreement:12

(b) The Issuer hereby irrevocably accepts and submits to the non-exclusive jurisdiction of each of the aforesaid courts in personam, generally and unconditionally, for itself and in respect of its properties, assets and revenues, with respect to any suit, action or proceeding in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes.

(c) The Issuer hereby irrevocably designates, appoints and empowers ______________, with offices at _______________, New York, New York, as its designee, appointee and agent to receive, accept and acknowledge for and on its behalf, and its properties, assets and revenues, service for any and all legal process, summons, notices and documents which may be served in any such action, suit or proceeding brought in the courts listed in Section 7.3(a) which may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such courts, with respect to any suit, action or proceeding in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes. If for any reason such designee, appointee and agent hereunder shall cease to be available to act as such, the Issuer agrees to designate a new designee, appointee and agent in The City of New York on the terms and for the purposes of this Section 7.3 satisfactory to the Dealer. The Issuer further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents out of any of the aforesaid courts in any such action, suit or proceeding by serving a copy thereof upon the agent for service of process referred to in this Section 7.3 (whether or not the appointment of such agent shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by mailing copies thereof by registered or certified airmail, postage prepaid, to it at its address specified in or designated pursuant to this Agreement. The Issuer agrees that the failure of any such designee, appointee and agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon. Nothing herein shall in any way be deemed to limit the ability of the holders of any Notes or the Dealer to serve any such legal process, summons, notices and documents in any other manner permitted by applicable law or to obtain jurisdiction over the undersigned or bring actions, suits or proceedings against the undersigned in such other jurisdictions, and in manner, as may be permitted by applicable law. The Issuer hereby irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Agreement brought in the courts listed in Section 7.3(a) and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

12 Principally for use where the Issuer is a foreign entity.


(d) To the extent that the Issuer or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes, from the giving of any relief in any thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution of judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceeding may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Agreement, the Issuing and Paying Agency Agreement or the Notes, the Issuer hereby irrevocably and unconditionally waives, and agrees for the benefit of the Dealer and any holder from time to time of the Notes not to plead or claim, any such immunity, and consents to such relief and enforcement.

7. The following language is hereby added to the end of Section 7.7 of the Agreement:13

; provided, however, that Sections 7.3(b), (c) and (d) and Section 7.8 are hereby specifically and exclusively acknowledged to also be for the benefit of the holders from time to time of the Notes, as third-party beneficiaries.


7.8(a) Any payments to the Dealer hereunder or to any holder from time to time of Notes shall be in United States dollars and shall be free of all withholding and other taxes and of all other governmental charges of any nature whatsoever imposed by the jurisdiction in which the Issuer is located. In the event any withholding is required by law, the Issuer agrees to (i) pay the same and (ii) pay such additional amounts to the Dealer or any such holder which, after deduction of any such withholding or other taxes or governmental charges of any nature whatsoever imposed with respect to the payment of such additional amount, shall equal the amount withheld pursuant to clause (i). The Issuer will promptly pay any stamp duty or other taxes or governmental charges payable in connection with the execution, delivery, payment or performance of this Agreement, the Issuing and Paying Agency Agreement or the Notes and shall indemnify and hold harmless the Dealer and each holder of Notes from all liabilities arising from any failure to pay, or delay in paying, such taxes or charges.

(b) The Issuer agrees to indemnify and hold harmless the Deale r and each holder from time to time of Notes against any loss incurred by the Dealer or such holder as a result of any judgment or order being given or made for any amount due hereunder and such judgment or order being expressed and paid in a currency (the “Judgment Currency”) other than United States dollars and as a result of any variation as between (i) the rate of exchange at which the United States dollar amount is converted into the Judgment Currency for the purpose of such judgment or order, and (ii) the rate of exchange at which the Dealer or such holder is able to

13 For use where the Issuer is a foreign entity and any or all of Sections 7.3(b) through (d) and 7.8 appearing in this Addendum are made part of

the Agreement. 14 For use where the Issuer is a foreign entity.


purchase United States dollars with the amount of Judgment Currency actually received by the Dealer or such holder. The foregoing indemnity shall constitute a separate and independent obligation of the Issuer and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, the relevant currency.


Model Opinion of Counsel to Issuer15

[Date]

[Name and Address of Dealer]

Ladies and Gentlemen:

We have acted as counsel to ________________, a _____________ corporation (the “Issuer”), in connection with the proposed offering and sale by the Issuer in the United States of commercial paper in the form of short-term promissory notes (the “Notes”).

In our capacity as such counsel, we have examined a specimen form of Note, an executed copy of the Commercia l Paper Dealer Agreement dated ____________, _____ (the “Agreement”) between the Issuer and [Name of Dealer] (the “Dealer”), and the Issuing and Paying Agency Agreement dated _____, _____ (the “Issuing and Paying Agency Agreement”) between the Issuer and _____, as issuing and paying agent (the “Issuing and Paying Agent”) as well as originals, or copies certified or otherwise identified to our satisfaction, of such other records and documents as we have deemed necessary as a basis for the opinions expressed below. In such examination, we have assumed the genuineness of all documents submitted to us as originals, and the conformity to the originals of all documents submitted to us as copies.

Capitalized terms used herein without definition are used as defined in the Agreement.

Based upon the foregoing, it is our opinion that:

1. The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the state of _________ and has all the requisite power and authority to execute, deliver and perform its obligations under the Notes, the Agreement and the Issuing and Paying Agency Agreement.

2. Each of the Agreement and the Issuing and Paying Agency Agreement has been duly authorized, executed and delivered by the Issuer and constitutes a legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law), and except as rights under the Agreement to indemnity and contribution may be limited by federal or state laws.

3. The Notes have been duly authorized, and when issued as provided in the Issuing and Paying Agency Agreement, will be duly and validly issued and will constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, subject

15 Set forth below are the operative provisions on which the Dealer will generally expect a legal opinion. Parties should recognize that there may

be additions to the Dealer’s opinion request, and variations as to the opinion language, depending on the details of the transaction and the differing opinion practices of law firms; it may also be necessary to split the opinion between two or more counsel where no one counsel is in a position to opine as to all subjects or in all relevant jurisdictions.


to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

4. The issuance and sale of Notes under the circumstances contemplated by the Agreement and the Issuing and Paying Agency Agreement do not require registration of the Notes under the Securities Act of 1933, as amended, pursuant to the exemption from registration contained in Section 4(2) thereof [and Regulation D thereunder], and do not require compliance with any provision of the Trust Indenture Act of 1939, as amended; and the Notes will rank at least pari passu with all other unsecured and unsubordinated indebtedness of the Issuer.

5. [Except as provided in Section 1.6(j) of the Agreement,].16 No consent or action of, or filing or registration with, any governmental or public regulatory body or authority, including the Securities and Exchange Commission, is required to authorize, or is otherwise required in connection with the execution, delivery or performance of, the Agreement, the Notes or the Issuing and Paying Agency Agreement, except as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes.

6. Neither the execution and delivery of the Agreement and the Issuing and Paying Agency Agreement, nor the issuance of the Notes in accordance with the Issuing and Paying Agency Agreement, nor the fulfillment of or compliance with the terms and provisions of either thereof by the Issuer, will (i) result in the creation or imposition of any mortgage, lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Issuer, or (ii) violate or result in a breach or default under any of the terms of the Issuer’s charter documents or by-laws, any contract or instrument to which the Issuer is a party or by which it or its property is bound, or any law or regulation, or any order, writ, injunction or decree of any court or government instrumentality, to which the Issuer is subject or by which it or its property is bound.

7. There is no litigation or governmental proceeding pending, or to the knowledge of the Issuer threatened, against or affecting the Issuer or any of its subsidiaries which might result in a material adverse change in the condition (financial or otherwise), operations or business prospects of the Issuer or the ability of the Issuer to perform its obligations under the Agreement, the Notes or the Issuing and Paying Agency Agreement.

8. The Issuer is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended.17

9. As a condition to the admissibility in evidence of the Agreement, the Issuing and Paying Agency Agreement or the Notes in [foreign jurisdiction], it is not necessary that the Agreement, the Issuing and Paying Agency Agreement or the Notes be filed or recorded with any court or other authority. [All documentary evidence in a foreign language to be submitted to a court in

16 To be added where the parties wish to fully rely on the safe harbor in Rule 506. See Guidance Note relating to Section 1.6 generally and

paragraph 2 in the Addendum. 17 The phrase “or an entity controlled by an investment company” is not included in this paragraph or in the representation in Section 2.9 of the

Agreement. See Guidance Note to Section 2.9 for a description of the limited circumstances where this phrase should be included.


[foreign jurisdiction] must be in, or translated into, the [foreign jurisdiction] language and certified by a duly qualified official translator in [foreign jurisdiction]].18

10. Under the laws of [foreign jurisdiction], neither the Issuer nor any of its revenues, assets or properties has any right of immunity from service of process or from the jurisdiction of competent courts of [foreign jurisdiction] or the United States or the State of New York in connection with any suit, action or proceeding, attachment prior to judgment, attachment in aid of execution of a judgment, or execution of a judgment or from any other legal process with respect to its obligations under the Agreement, the Issuing and Paying Agency Agreement or the Notes.

11. The Issuer is permitted to make all payments under the Agreement, the Issuing and Paying Agency Agreement and the Notes (to holders of the Notes that are non-residents of [foreign jurisdiction]), free and clear of and without deduction or withholding for or on account of any taxes or other governmental charges imposed by [foreign jurisdiction]. There is no stamp or documentary tax or other charge imposed by any governmental agency having jurisdiction over the Issuer in connection with the execution, delivery, issuance, payment, performance, enforcement or introduction into evidence in a court of [foreign jurisdiction] of the Agreement, the Issuing and Paying Agency Agreement or any Note.

12. The choice of New York law to govern the Agreement, the Issuing and Paying Agency Agreement and the Notes is, under the laws of [foreign jurisdiction], a valid, effective and irrevocable choice of law.

13. The submission by the Issuer, in the Agreement, to the jurisdiction of the courts of the United States District Court and the State of New York located in the Borough of Manhattan is valid and binding upon the Issuer under the laws of [foreign jurisdiction].

14. Any final judgment rendered by any Federal or State court of competent jurisdiction located in the State of New York in an action to enforce the obligations of the Issuer under the Agreement, the Issuing and Paying Agency Agreement or the Notes is capable of being enforced in the courts of [foreign jurisdiction].

This opinion may be delivered to the Issuing and Paying Agent, each holder from time to time of Notes and any nationally recognized rating agency (in connection with the rating of the Notes), each of which may rely on this opinion to the same extent as if such opinion were addressed to it.

Very truly yours,

18 Paragraphs 9 through 14 will only be necessary where the Issuer is a foreign entity.


Exhibit A

Form of Legend for Private Placement Memorandum and Notes

THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY OTHER APPLICABLE SECURITIES LAW, AND OFFERS AND SALES THEREOF MAY BE MADE ONLY IN COMPLIANCE WITH AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER WILL BE DEEMED TO REPRESENT THAT (I) IT HAS BEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THE ISSUER AND THE NOTES, (II) IT IS NOT ACQUIRING SUCH NOTE WITH A VIEW TO ANY DISTRIBUTION THEREOF AND (III) IT IS EITHER (A)(1) AN INSTITUTIONAL INVESTOR OR SOPHISTICATED INDIVIDUAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a) UNDER THE ACT AND WHICH, IN THE CASE OF AN INDIVIDUAL, (i) POSSESSES SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT HE OR SHE IS CAPABLE OF EVALUATING AND BEARING THE ECONOMIC RISK OF AN INVESTMENT IN THE NOTES AND (ii) HAS NOT LESS THAN $5 MILLION IN INVESTMENTS (AN “INSTITUTIONAL ACCREDITED INVESTOR” OR “SOPHISTICATED INDIVIDUAL ACCREDITED INVESTOR”, RESPECTIVELY) AND (2)(i) PURCHASING NOTES FOR ITS OWN ACCOUNT, (ii) A BANK (AS DEFINED IN SECTION 3(a)(2) OF THE ACT) OR A SAVINGS AND LOAN ASSOCIATION OR OTHER INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(A) OF THE ACT) ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY OR (iii) A FIDUCIARY OR AGENT (OTHER THAN A U.S. BANK OR SAVINGS AND LOAN ASSOCIATION) PURCHASING NOTES FOR ONE OR MORE ACCOUNTS EACH OF WHICH ACCOUNTS IS SUCH AN INSTITUTIONAL ACCREDITED INVESTOR OR SOPHISTICATED INDIVIDUAL ACCREDITED INVESTOR; OR (B) A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A UNDER THE ACT THAT IS ACQUIRING NOTES FOR ITS OWN ACCOUNT OR FOR ONE OR MORE ACCOUNTS, EACH OF WHICH ACCOUNTS IS A QIB; AND THE PURCHASER ACKNOWLEDGES THAT IT IS AWARE THAT THE SELLER MAY RELY UPON THE EXEMPTION FROM THE REGISTRATION PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY RULE 144A. BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER THEREOF SHALL ALSO BE DEEMED TO AGREE THAT ANY RESALE OR OTHER TRANSFER THEREOF WILL BE MADE ONLY (A) IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT, EITHER (1) TO THE ISSUER OR TO A PLACEMENT AGENT DESIGNATED BY THE ISSUER AS A PLACEMENT AGENT FOR THE NOTES (COLLECTIVELY, THE “PLACEMENT AGENTS”), NONE OF WHICH SHALL HAVE ANY OBLIGATION TO ACQUIRE SUCH NOTE, (2) THROUGH A PLACEMENT AGENT TO AN INSTITUTIONAL ACCREDITED INVESTOR, SOPHISTICATED INDIVIDUAL ACCREDITED INVESTOR OR A QIB, OR (3) TO A QIB IN A TRANSACTION THAT MEETS THE REQUIREMENTS OF RULE 144A AND (B) IN MINIMUM AMOUNTS OF $250,000.


Exhibit B

Further Provisions Relating to Indemnification

(a) The Issuer agrees to reimburse each Indemnitee for all expenses (including reasonable fees and disbursements of internal and external counsel) as they are incurred by it in connection with investigating or defending any loss, claim, damage, liability or action in respect of which indemnification may be sought under Section 5 of the Agreement (whether or not it is a party to any such proceedings).

(b) Promptly after receipt by an Indemnitee of notice of the existence of a Claim, such Indemnitee will, if a claim in respect thereof is to be made against the Issuer, notify the Issuer in writing of the existence thereof; provided that (i) the omission so to notify the Issuer will not relieve the Issuer from any liability which it may have hereunder unless and except to the extent it did not otherwise learn of such Claim and such failure results in the forfeiture by the Issuer of substantial rights and defenses, and (ii) the omission so to notify the Issuer will not relieve it from liability which it may have to an Indemnitee otherwise than on account of this indemnity agreement. In case any such Claim is made against any Indemnitee and it notifies the Issuer of the existence thereof, the Issuer will be entitled to participate therein, and to the extent that it may elect by written notice delivered to the Indemnitee, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnitee; provided that if the defendants in any such Claim include both the Indemnitee and the Issuer, and the Indemnitee shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Issuer, the Issuer shall not have the right to direct the defense of such Claim on behalf of such Indemnitee, and the Indemnitee shall have the right to select separate counsel to assert such legal defenses on behalf of such Indemnitee. Upon receipt of notice from the Issuer to such Indemnitee of the Issuer’s election so to assume the defense of such Claim and approval by the Indemnitee of counsel, the Issuer will not be liable to such Indemnitee for expenses incurred thereafter by the Indemnitee in connection with the defense thereof (other than reasonable costs of investigation) unless (i) the Indemnitee shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the Issuer shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel in the jurisdiction in which any Claim is brought), approved by the Dealer, representing the Indemnitee who is party to such Claim), (ii) the Issuer shall not have employed counsel reasonably satisfactory to the Indemnitee to represent the Indemnitee within a reasonable time after notice of existence of the Claim or (iii) the Issuer has authorized in writing the employment of counsel for the Indemnitee. The indemnity, reimbursement and contribution obligations of the Issuer hereunder shall be in addition to any other liability the Issuer may otherwise have to an Indemnitee and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Issuer and any Indemnitee. The Issuer agrees that without the Dealer’s prior written consent, it will not settle, compromise or consent to the entry of any judgment in any Claim in respect of which indemnification may be sought under the indemnification provision of the Agreement (whether or not the Dealer or any other Indemnitee is an actual or potential party to such Claim), unless such settlement, compromise or consent (i) includes an unconditional release of each Indemnitee from all liability arising out of such Claim and (ii) does not include a statement as to or an admission of fault, culpability or failure to act, by or on behalf of any Indemnitee.


Exhibit C

Statement of Terms for Interest – Bearing Commercial Paper Notes of [Name of Issuer]

THE PROVISIONS SET FORTH BELOW ARE QUALIFIED TO THE EXTENT APPLICABLE BY THE TRANSACTION SPECIFIC [PRICING] [PRIVATE PLACEMENT MEMORANDUM] SUPPLEMENT (THE “SUPPLEMENT”) (IF ANY) SENT TO EACH PURCHASER AT THE TIME OF THE TRANSACTION.

1. General. (a) The obligations of the Issuer to which these terms apply (each a “Note”) are represented by one or more Master Notes (each, a “Master Note”) issued in the name of (or of a nominee for) The Depository Trust Company (“DTC”), which Master Note includes the terms and provisions for the Issuer's Interest-Bearing Commercial Paper Notes that are set forth in this Statement of Terms, since this Statement of Terms constitutes an integral part of the Underlying Records as defined and referred to in the Master Note.

(b) “Business Day” means any day other than a Saturday or Sunday that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, executive order or regulation to be closed in New York City and, with respect to LIBOR Notes (as defined below) is also a London Business Day. “London Business Day” means, a day, other than a Saturday or Sunday, on which dealings in deposits in U.S. dollars are transacted in the London interbank market.

2. Interest. (a) Each Note will bear interest at a fixed rate (a “Fixed Rate Note”) or at a floating rate (a “Floating Rate Note”).

(b) The Supplement sent to each holder of such Note will describe the following terms: (i) whether such Note is a Fixed Rate Note or a Floating Rate Note and whether such Note is an Original Issue Discount Note (as defined below); (ii) the date on which such Note will be issued (the “Issue Date”); (iii) the Stated Maturity Date (as defined below); (iv) if such Note is a Fixed Rate Note, the rate per annum at which such Note will bear interest, if any, and the Interest Payment Dates; (v) if such Note is a Floating Rate Note, the Base Rate, the Index Maturity, the Interest Reset Dates, the Interest Payment Dates and the Spread and/or Spread Multiplier, if any (all as defined below), and any other terms relating to the particular method of calculating the interest rate for such Note; and (vi) any other terms applicable specifically to such Note. “Original Issue Discount Note” means a Note which has a stated redemption price at the Stated Maturity Date that exceeds its Issue Price by more than a specified de minimis amount and which the Supplement indicates will be an “Original Issue Discount Note”.

(c) Each Fixed Rate Note will bear interest from its Issue Date at the rate per annum specified in the Supplement until the principal amount thereof is paid or made available for payment. Interest on each Fixed Rate Note will be payable on the dates specified in the Supplement (each an “Interest Payment Date” for a Fixed Rate Note) and on the Maturity Date (as defined below). Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-day months.

If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be payable on


the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.

(d) The interest rate on each Floating Rate Note for each Interest Reset Period (as defined below) will be determined by reference to an interest rate basis (a “Base Rate”) plus or minus a number of basis points (one basis point equals one-hundredth of a percentage point) (the “Spread”), if any, and/or multiplied by a certain percentage (the “Spread Multiplier”), if any, until the principal thereof is paid or made available for payment. The Supplement will designate which of the following Base Rates is applicable to the related Floating Rate Note: (a) the CD Rate (a “CD Rate Note”), (b) the Commercial Paper Rate (a “Commercial Paper Rate Note”), (c) the Federal Funds Rate (a “Federal Funds Rate Note”), (d) LIBOR (a “LIBOR Note”), (e) the Prime Rate (a “Prime Rate Note”), (f) the Treasury Rate (a “Treasury Rate Note”) or (g) such other Base Rate as may be specified in such Supplement.

The rate of interest on each Floating Rate Note will be reset daily, weekly, monthly, quarterly or semi-annually (the “Interest Reset Period”). The date or dates on which interest will be reset (each an “Interest Reset Date”) will be, unless otherwise specified in the Supplement, in the case of Floating Rate Notes which reset daily, each Business Day, in the case of Floating Rate Notes (other than Treasury Rate Notes) that reset weekly, the Wednesday of each week; in the case of Treasury Rate Notes that reset weekly, the Tuesday of each week; in the case of Floating Rate Notes that reset monthly, the third Wednesday of each month; in the case of Floating Rate Notes that reset quarterly, the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes that reset semiannually, the third Wednesday of the two months specified in the Supplement. If any Interest Reset Date for any Floating Rate Note is not a Business Day, such Interest Reset Date will be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Interest on each Floating Rate Note will be payable monthly, quarterly or semiannually (the “Interest Payment Period”) and on the Maturity Date. Unless otherwise specified in the Supplement, and except as provided below, the date or dates on which interest will be payable (each an “Interest Payment Date” for a Floating Rate Note) will be, in the case of Floating Rate Notes with a monthly Interest Payment Period, on the third Wednesday of each month; in the case of Floating Rate Notes with a quarterly Interest Payment Period, on the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes with a semiannual Interest Payment Period, on the third Wednesday of the two months specified in the Supplement. In addition, the Maturity Date will also be an Interest Payment Date.

If any Interest Payment Date for any Floating Rate Note (other than an Interest Payment Date occurring on the Maturity Date) would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. If the Maturity Date of a Floating Rate Note falls on a day that is not a Business Day, the payment of principal and interest will be made on the next succeeding Business Day, and no interest on such payment shall accrue for the period from and after such maturity.


Interest payments on each Interest Payment Date for Floating Rate Notes will include accrued interest from and including the Issue Date or from and including the last date in respect of which interest has been paid, as the case may be, to, but excluding, such Interest Payment Date. On the Maturity Date, the interest payable on a Floating Rate Note will include interest accrued to, but excluding, the Maturity Date. Accrued interest will be calculated by multiplying the principal amount of a Floating Rate Note by an accrued interest factor. This accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal) for each such day will be computed by dividing the interest rate applicable to such day by 360, in the cases where the Base Rate is the CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR or Prime Rate, or by the actual number of days in the year, in the case where the Base Rate is the Treasury Rate. The interest rate in effect on each day will be (i) if such day is an Interest Reset Date, the interest rate with respect to the Interest Determination Date (as defined below) pertaining to such Interest Reset Date, or (ii) if such day is not an Interest Reset Date, the interest rate with respect to the Interest Determination Date pertaining to the next preceding Interest Reset Date, subject in either case to any adjustment by a Spread and/or a Spread Multiplier.

The “Interest Determination Date” where the Base Rate is the CD Rate or the Commercial Paper Rate will be the second Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Federal Funds Rate or the Prime Rate will be the Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is LIBOR will be the second London Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Treasury Rate will be the day of the week in which such Interest Reset Date falls when Treasury Bills are normally auctioned. Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is held on the following Tuesday or the preceding Friday. If an auction is so held on the preceding Friday, such Friday will be the Interest Determination Date pertaining to the Interest Reset Date occurring in the next succeeding week.

The “Index Maturity” is the period to maturity of the instrument or obligation from which the applicable Base Rate is calculated.

The “Calculation Date,” where applicable, shall be the earlier of (i) the tenth calendar day following the applicable Interest Determination Date or (ii) the Business Day preceding the applicable Interest Payment Date or Maturity Date.

All times referred to herein reflect New York City time, unless otherwise specified.

The Issuer shall specify in writing to the Issuing and Paying Agent which party will be the calculation agent (the “Calculation Agent”) with respect to the Floating Rate Notes. The Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate which will become effective on the next Interest Reset Date with respect to such Floating Rate Note to the Issuing and Paying Agent as soon as the interest rate with respect to such Floating Rate Note has been determined and as soon as practicable after any change in such interest rate.


All percentages resulting from any calculation on Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five-one millionths of a percentage point rounded upwards. For example, 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655). All dollar amounts used in or resulting from any calculation on Floating Rate Notes will be rounded, in the case of U.S. dollars, to the nearest cent or, in the case of a foreign currency, to the nearest unit (with one-half cent or unit being rounded upwards).

CD Rate Notes

“CD Rate” means the rate on any Interest Determination Date for negotiable certificates of deposit having the Index Maturity as published by the Board of Governors of the Federal Reserve System (the “FRB”) in “Statistical Release H.15(519), Selected Interest Rates” or any successor publication of the FRB (“H.15(519)”) under the heading “CDs (Secondary Market)”.

If the above rate is not published in H.15(519) by 3:00 p.m. on the Calculation Date, the CD Rate will be the rate on such Interest Determination Date set forth in the daily update of H.15(519), available through the world wide website of the FRB at http://www.federalreserve.gov/releases/h15/Update, or any successor site or publication or other recognized electronic source used for the purpose of displaying the applicable rate (“H.15 Daily Update”) under the caption “CDs (Secondary Market)”.

If such rate is not published in either H.15(519) or H.15 Daily Update by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the CD Rate to be the arithmetic mean of the secondary market offered rates as of 10:00 a.m. on such Interest Determination Date of three leading nonbank dealers19 in negotiable U.S. dollar certificates of deposit in New York City selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing in the market for negotiable certificates of deposit with a remaining maturity closest to the Index Maturity in the denomination of $5,000,000.

If the dealers selected by the Calculation Agent are not quoting as set forth above, the CD Rate will remain the CD Rate then in effect on such Interest Determination Date.

Commercial Paper Rate Notes

“Commercial Paper Rate” means the Money Market Yield (calculated as described below) of the rate on any Interest Determination Date for commercial paper having the Index Maturity, as published in H.15(519) under the heading “Commercial Paper-Nonfinancia l”.

If the above rate is not published in H.15(519) by 3:00 p.m. on the Calculation Date, then the Commercial Paper Rate will be the Money Market Yield of the rate on such Interest Determination Date for commercial paper of the Index Maturity as published in H.15 Daily Update under the heading “Commercial Paper-Nonfinancial”.

If by 3:00 p.m. on such Calculation Date such rate is not published in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Commercial Paper Rate to be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m. on such Interest

19 Such nonbank dealers referred to in this Statement of Terms may include affiliates of the Dealer.


Determination Date of three leading dealers of U.S. dollar commercial paper in New York City selected by the Calculation Agent for commercial paper of the Index Maturity placed for an industrial issuer whose bond rating is “AA,” or the equivalent, from a nationally recognized statistical rating organization.

If the dealers selected by the Calculation Agent are not quoting as mentioned above, the Commercial Paper Rate with respect to such Interest Determination Date will remain the Commercial Paper Rate then in effect on such Interest Determination Date.

“Money Market Yield” will be a yield calculated in accordance with the following formula:

D x 360 Money Market Yield = x 100 360 - (D x M)

where “D” refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and “M” refers to the actual number of days in the interest period for which interest is being calculated.

Federal Funds Rate Notes

“Federal Funds Rate” means the rate on any Interest Determination Date for federal funds as published in H.15(519) under the heading “Federal Funds (Effective)” and displayed on Moneyline Telerate (or any successor service) on page 120 (or any other page as may replace the specified page on that service) (“Telerate Page 120”).

If the above rate does not appear on Telerate Page 120 or is not so published by 3:00 p.m. on the Calculation Date, the Federal Funds Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update under the heading “Federal Funds/(Effective)”.

If such rate is not published as described above by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Federal Funds Rate to be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by each of three leading brokers of Federal Funds transactions in New York City selected by the Calculation Agent prior to 9:00 a.m. on such Interest Determination Date.

If the brokers selected by the Calculation Agent are not quoting as mentioned above, the Federal Funds Rate will remain the Federal Funds Rate then in effect on such Interest Determination Date.

LIBOR Notes

The London Interbank offered rate (“LIBOR”) means, with respect to any Interest Determination Date, the rate for deposits in U.S. dollars having the Index Maturity that appears on the Designated LIBOR Page as of 11:00 a.m., London time, on such Interest Determination Date.

If no rate appears, LIBOR will be determined on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in U.S. dollars are offered to


prime banks in the London interbank market by four major banks in such market selected by the Calculation Agent for a term equal to the Index Maturity and in principal amount equal to an amount that in the Calculation Agent’s judgment is representative for a single transaction in U.S. dollars in such market at such time (a “Representative Amount”). The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such interest period will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in New York City, on such Interest Determination Date by three major banks in New York City, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks, for a term equal to the Index Maturity and in a Representative Amount; provided, however, that if fewer than three banks so selected by the Calculation Agent are providing such quotations, the then existing LIBOR rate will remain in effect for such Interest Payment Period.

“Designated LIBOR Page” means the display designated as page “3750” on Moneyline Telerate (or such other page as may replace the 3750 page on that service or such other service or services as may be nominated by the British Bankers’ Association for the purposes of displaying London interbank offered rates for U.S. dollar deposits).

Prime Rate Notes

“Prime Rate” means the rate on any Interest Determination Date as published in H.15(519) under the heading “Bank Prime Loan”.

If the above rate is not published in H.15(519) prior to 3:00 p.m. on the Calculation Date, then the Prime Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update opposite the caption “Bank Prime Loan”.

If the rate is not published prior to 3:00 p.m. on the Calculation Date in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME1 Page (as defined below) as such bank’s prime rate or base lending rate as of 11:00 a.m., on that Interest Determination Date.

If fewer than four such rates referred to above are so published by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on such Interest Determination Date by three major banks in New York City selected by the Calculation Agent.

If the banks selected are not quoting as mentioned above, the Prime Rate will remain the Prime Rate in effect on such Interest Determination Date.

“Reuters Screen US PRIME1 Page” means the display designated as page “US PRIME1” on the Reuters Monitor Money Rates Service (or such other page as may replace the US PRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks).


Treasury Rate Notes

“Treasury Rate” means:

(1) the rate from the auction held on the Interest Determination Date (the “Auction”) of direct obligations of the United States (“Treasury Bills”) having the Index Maturity specified in the Supplement under the caption “INVESTMENT RATE” on the display on Moneyline Telerate (or any successor service) on page 56 (or any other page as may replace that page on that service) (“Telerate Page 56”) or page 57 (or any other page as may replace that page on that service) (“Telerate Page 57”), or

(2) if the rate referred to in clause (1) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, under the caption “U.S. Government Securities/Treasury Bills/Auction High”, or

(3) if the rate referred to in clause (2) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury, or

(4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”, or

(5) if the rate referred to in clause (4) not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”, or

(6) if the rate referred to in clause (5) is not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m. on that Interest Determination Date, of three primary United States government securities dealers selected by the Calculation Agent, for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified in the Supplement, or

(7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date.

“Bond Equivalent Yield” means a yield (expressed as a percentage) calculated in accordance with the following formula:

D x N Bond Equivalent Yield = x 100 360 - (D x M)


where “D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, “N” refers to 365 or 366, as the case may be, and “M” refers to the actual number of days in the applicable Interest Reset Period.

3. Final Maturity. The Stated Maturity Date for any Note will be the date so specified in the Supplement, which shall be no later than 397 days from the date of issuance. On its Stated Maturity Date, or any date prior to the Stated Maturity Date on which the particular Note becomes due and payable by the declaration of acceleration, each such date being referred to as a Maturity Date, the principal amount of each Note, together with accrued and unpaid interest thereon, will be immediately due and payable.

4. Events of Default. The occurrence of any of the following shall constitute an “Event of Default” with respect to a Note: (i) default in any payment of principal of or interest on such Note (including on a redemption thereof); (ii) the Issuer makes any compromise arrangement with its creditors generally including the entering into any form of moratorium with its creditors generally; (iii) a court having jurisdiction shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or there shall be appointed a receiver, administrator, liquidator, custodian, trustee or sequestrator (or similar officer) with respect to the whole or substantially the whole of the assets of the Issuer and any such decree, order or appointment is not removed, discharged or withdrawn within 60 days thereafter; or (iv) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, administrator, liquidator, assignee, custodian, trustee or sequestrator (or similar official), with respect to the whole or substantially the whole of the assets of the Issuer or make any general assignment for the benefit of creditors. Upon the occurrence of an Event of Default, the principal of each obligation evidenced by such Note (together with interest accrued and unpaid thereon) shall become, without any notice or demand, immediately due and payable.20

5. Obligation Absolute. No provision of the Issuing and Paying Agency Agreement under which the Notes are issued shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on each Note at the times, place and rate, and in the coin or currency, herein prescribed.

6. Supplement. Any term contained in the Supplement shall supercede any conflicting term contained herein.

20 Unlike single payment notes, where a default arises only at the stated maturity, interest -bearing notes with multiple payment dates should

contain a default provision permitting acceleration of the maturity if the Issuer defaults on an interest payment.


Model Certificate as to Resolutions 21

[Name of Issuer]

I, ____________, the [Assistant] Secretary of _______________, a _____________ corporation (the “Issuer”), do hereby certify, in connection with the issuance and sale of short-term promissory notes under the Commercial Paper Dealer Agreement dated ____________, ____ (the “Agreement”, the terms defined therein being used herein as therein defined) between the Issuer and _______________ (the “Dealer”), that:

1. The following resolution was duly adopted by the Board of Directors of the Issuer [by unanimous written consent dated _____, ____] [at a meeting thereof duly called and held on _______, _____, at which meeting a quorum was present and acting throughout], and such resolution has not been amended, modified or revoked and is in full force and effect on the date hereof:

RESOLVED, that the Chairman of the Board, the President, the Executive Vice President, any Vice President and the Treasurer of the Issuer be, and each of them hereby is, individually authorized to: (i) borrow for the use and benefit of the Issuer from time to time through the issuance of commercial paper notes;22 (ii) execute such commercial paper notes in the name and on behalf of the Issuer and issue such notes in accordance with the Issuing and Paying Agency Agreement referred to below; (iii) execute and deliver (A) a Commercial Paper Dealer Agreement between the Issuer and _____________, as Deale r, providing, among other things, for the sale of commercial paper notes on behalf of the Issuer and the indemnification of the Dealer in connection therewith, (B) an Issuing and Paying Agency Agreement between the Issuer and _____________, as issuing and paying agent, and (C) a Letter of Representations addressed to The Depository Trust Company; (iv) execute and file with the Securities and Exchange Commission Form D and any and all amendments thereto, as required by Section 1.6(j) of the Agreement;23 (v) delegate to any other officers or employees of the Issuer authority to give instructions to the Dealer pursuant to the Agreement; and (vi) do such acts and execute such other instruments and documents as may be necessary and proper to effect the transactions contemplated hereby including (a) amending documents referred to herein and (b) appointing additional dealers and successors to any of the parties named.

2. Each of the Agreement and the Issuing and Paying Agency Agreement, as executed and delivered by the Issuer, is substantially in the form thereof approved by the Board of Directors and referred to in the resolution set forth in paragraph 1 hereof.

21 This model certificate will serve as a guide for resolutions adopted by the Issuer. Any resolutions actually adopted, regardless of form, should

cover all the substantive matters covered in this model, and a certificate substantially to the effect of this model is required to be delivered to the Dealer under Section 3.6(c) of the Agreement.

22 The reference to a specific dollar amount was removed in order to provide issuers flexibility with respect to the total amount of commercial

paper issued without having to update the Resolutions. 23 Clause (iv) may be deleted if Section 1.6(j) is not part of the Agreement. See paragraph 2 of the Addendum and the Guidance Note relating to

Section 1.6 generally.


IN WITNESS WHEREOF, I have signed this certificate the _____ day of _______, ________.

_____________________________ [Assistant] Secretary


Guidance Notes [3(a)(3) Program; Guaranteed]

The Bond Market Association (“the Association”) is publishing a guaranteed form of Model Commercial Paper Dealer Agreement (the “Agreement”) for use by issuers and dealers in establishing guaranteed commercial paper programs which are exempt from registration under the U.S. Securities Act of 1933, as amended (the “1933 Act”), pursuant to the exemption contained in Section 3(a)(3) of the 1933 Act.

A separate model agreement is being published contemporaneously herewith, for use in establishing guaranteed commercial paper programs which are exempt from 1933 Act registration pursuant to the exemption contained in Section 4(2) of the 1933 Act.

After consideration by representatives of market participants, it was decided that a guaranteed form of model commercial paper agreement would be useful in providing guidance to market participants and would also provide increased consistency and precision in documenting the relationship among issuers, guarantors and dealers of commercial paper.

As with other Association model agreements, use of this Agreement is not intended to be mandatory, and indeed even the firms that participated in its preparation may vary its terms from transaction to transaction. However, it is hoped that market participants will become comfortable with most of the Agreement’s provisions, thereby limiting negotiation in any particular case to a relatively small number of provisions.

To assist users of the Agreement, the Association has prepared the following Guidance Notes that explain certain sections of the Agreement. They are aimed principally at issuers and guarantors and their counsels, who may be unfamiliar with this model agreement and the reasons behind certain of its provisions. In many cases the notes highlight the differences between the 3(a)(3) and the 4(2) model agreements, to explain why it may be inappropriate to have the two agreements identical in certain contexts. However, in many cases the differences between the Agreements arise because the availability of the 4(2) exemption requires covenants, representations and other statements to be made, for which there are no analogous statements in the 3(a)(3) version of the Agreement. As a result, many of the differences are discussed in the Guidance Notes for the 4(2) version. Reference is made to those discussions in the 4(2) Guidance Notes.

These Guidance Notes should not be relied upon by any party to determine, without appropriate legal or other relevant professional advice, whether any provision of the Agreement, or the Agreement as a whole, is suitable to that party’s particular circumstances and needs.

Capitalized terms not otherwise defined have the meanings given to them in the Agreement.

The Bond Market Association is the trade association representing securities firms and banks that underwrite, trade and sell debt securities and money market instruments, including investment grade and non-investment grade corporate debt securities, commercial paper and mortgage and other asset-backed securities.

May 2004 Guaranteed Commercial Paper Dealer Agreement 3a(3) Guidance Notes 1

Section 2.10: In most cases, the phrase "or an entity controlled by an investment company" will not be included following the language “Neither the Issuer nor the Guarantor is an ‘investment company’” in the representation in Section 2.10 of the Agreement and in the Model Opinions. However, where both the Issuer [or the Guarantor] and its parent are U.S. domiciled companies, 25% or more of the voting securities of the Issuer [or the Guarantor] are owned by a company (a “Control Person”) and (i) material transactions (e.g., material purchases or sales of goods or services, or material lending or borrowing arrangements) exist between such issuer and an "affiliated person" of the Control Person, or (ii) the proceeds of the securities are to be used to acquire some or all of the securities of an investment company, insurance company, broker/dealer, underwriter or investment adviser, the phrase should be included. In cases where it is contemplated that the phrase will be included, the Issuer and the Guarantor should discuss the inclusion of such language with counsel.

Section 2.11: This representation covers both the Offering Materials and the Company Information, even though the latter is defined to include the former as well as additional material. Since the Dealer distributes to potential purchasers only the more abbreviated Offering Materials in making offers and sales, however, the Dealer needs to have the Issuer’s and the Guarantor’s confirmation of the statements made in this Section both as to the narrower contents of the Offering Materials (the material the Dealer is actually delivering to purchasers and potential purchasers) and as to the broader universe of all available Company Information.

Section 3.5: The covenant requiring that proceeds from sales of the Notes will be used for “current transactions” is one of the statements required to ensure availability of the 3(a)(3) exemption. In addition to the “current transactions” requirement, Notes must also be of prime quality (see the representation to that effect in Section 2.6 of the Agreement) and have a maturity of nine months or less (see the statement to that effect in Section 1.3 of the Agreement). Issuers are advised to discuss with their counsel the specific requirements to ensure the continuing availability of the 3(a)(3) exemption, and establish appropriate internal procedures and controls.

Section 4.3: This Section requires the Issuer and the Guarantor to notify the Dealer when an event occurs that would render the Offering Materials incomplete or inaccurate. It does not necessarily require the Issuer or the Guarantor to give the Dealer or anyone else specific information about the event, and only requires the Issuer and the Guarantor to promptly update the Offering Materials if the Dealer is then holding Notes in inventory. If the Issuer and the Guarantor do not update in that instance, the Dealer would be unable to resell the Notes held in inventory, since current Offering Materials would not be available. Positioning of Notes in inventory by the Dealer enhances the Notes’ liquidity, thereby creating an important benefit for the Issuer.

Section 5.1: The indemnification provision covers both Company Information and the Offering Materials for the same reason that both are covered under the representation in Section 2.11 (see note above with respect to that Section).


Section 6.2: The defined term “Company Information” includes a large amount of Guarantor-related information beyond that which is included in the Offering Materials. In light of the brevity of materials formally distributed in commercial paper programs (and the trend toward even briefer sales notices), investors are presumed to be basing investment decisions on the Guarantor’s publicly available information, including reports and other documents filed pursuant to the Securities Exchange Act of 1934, as amended.

Sections 7.2 and 7.3: If the Dealer is not located in New York City, appropriate changes may be made in these sections to reflect another governing law and jurisdiction where lawsuits may be brought.

Agreement — General: The Internal Revenue Service (“IRS”) has issued regulations that require the disclosure to the IRS of certain transactions classified as “reportable transactions.” One class of reportable transactions are transactions where one or more of the parties are subject to explicit or implicit confidentiality or nondisclosure restrictions that are applicable to the tax treatment or tax structure of the transaction, and the tax consequences of the transaction are discussed in the transaction documents. There is no confidentiality or nondisclosure requirement in the Agreement nor is one intended to be implied with respect to the tax treatment or tax structure of the transaction. An issuer concerned about this issue may wish, however, to consider adding tax confidentiality waiver language to avoid any question as to whether the transaction would be required to be disclosed as a “reportable transaction.”

Addendum — General: As indicated by the first footnote to the Addendum, its purpose is to provide a method for the parties to alter the model Agreement language in ways that reflect the particular details of the transaction or other negotiated matters. As a starting point, the Addendum provides model language for provisions that will be appropriate only in certain cases, as indicated in the respective footnotes.

The Addendum can also be used to tailor the model Agreement to the transaction. Parties to each transaction where the model Agreement is used will need to determine how to tailor it to their needs: whether by actually amending certain provisions; by using the model Agreement as if it were a printed form and describing all additions and deletions to the model language on the Addendum; or by other means.

Exhibit A: The provisions in Exhibit A lay out the procedural arrangements that would apply in any case where indemnification is sought.

Exhibit B: Exhibit B sets forth a standard form of Statement of Terms for interest-bearing commercial paper notes that can be delivered to purchasers in the increasing number of cases where interest-bearing notes are issued.

Although provisions for optional redemption are not provided in Exhibit B, issuers and dealers may consider adding such provisions to the Supplement. In the event that a redemption option is included in any Notes, the Supplement should incorporate the mechanics of the redemption option


and include any other relevant disclosure. In addition, the Issuer should be required to provide notice of any proposed redemption to the Dealer that sold the Notes.

Issuers and dealers should bear in mind, in the case of floating rate interest-bearing notes, that market conventions for the different interest rate indices (such as applicable screen pages) may change from time to time requiring modifications to Exhibit B.

Exhibit C: Exhibit C sets forth a standard form of Guarantee.

Model Opinions — General: The model opinions are provided as a starting point for the Dealer’s opinion request made to the Issuer’s counsel and the Guarantor’s counsel. Such opinions addressed to the Dealer are required by Section 3.7(a) of the Agreement. The specific details of the transaction and the circumstances of the Issuer and the Guarantor will have to be taken into account in determining the appropriate coverage of any particular opinion. All parties should also recognize that applicable local laws may require that counsel add limitations or make certain assumptions in giving these opinions, and differences in opinion practices of law firms may necessitate changes. In this connection, note in particular the discussion of paragraph 2 of the opinion below, relating to enforceability of the Agreement.

Finally, it should be noted that the form of these model opinions should not be taken to mean that all matters in the opinion need be covered by the same counsel. For example, paragraphs 6 through 8 (5 through 7 in the Guarantor’s opinion) might be covered by an in-house attorney familiar with the Issuer’s or Guarantor’s full range of operations, whereas paragraphs 2 through 5 (2 through 4 in the Guarantor’s opinion) might be covered by an outside firm retained to represent the Issuer or the Guarantor in this transaction, and paragraphs 1 and 9 through 14 (8 through 13 in the Guarantor’s opinion) (if applicable) might be covered by local counsel in the Issuer’s or Guarantor’s jurisdiction of organization.

All parties to the transaction should bear in mind that opinion negotiations, especially if not begun early in the transaction, can disrupt the transaction and take on undue significance in it. Early attention to these matters is recommended.

Parties to the transaction should also consider the circumstances under which updated legal opinions and officer’s certificates may become appropriate in the future, and incorporate those requirements into the Agreement as necessary. Such circumstances might include the addition of dealers to the program, other changes to the program or changes in relevant laws.

Model Opinions — Paragraph 2: In contrast to opinions delivered in connection with standard underwritings, the model opinions contemplate that counsel will be requested to address enforceability of the Dealer Agreement, citing the appropriate exception for the indemnification and contribution provisions. In a standard underwriting, opinions would typically not address enforceability of the underwriting agreement at all.

The enforceability opinion is requested here because of the ongoing nature of the Agreement. The Agreement contains numerous covenants, the most important of which relate to keeping the Dealer up-to-date with respect to developments that could affect disclosure to purchasers in connection with sales of Notes, and making corresponding amendments to the Offering Materials and



Company Information. The Dealer has a strong interest in knowing that these covenants will be enforceable during the life of the program. This is in contrast to a typical underwriting agreement, which normally remains executory for only the three days between execution and closing, except for the indemnification provision, which is generally stated to survive closing. In underwritten deals, most practitioners believe it better to forego the enforceability opinion altogether than to receive it with a specific carveout for the only provision that has an extended life.

Model Opinions — Paragraph 8 (Issuer); Paragraph 7 (Guarantor): See the note above relating to Section 2.10 of the Agreement, with respect to the inclusion of the phrase “or an entity controlled by an investment company.”

Model Opinions — Paragraphs 9 through 14 (Issuer); Paragraphs 8 through 13 (Guarantor):

As noted in the footnotes, these opinion paragraphs are only needed in the case of a foreign issuer or guarantor. Where they are applicable, the parties should be aware that local counsel in the jurisdiction of organization of the Issuer or the Guarantor may need to tailor the language to fit the local laws, and may also advise that there are certain local requirements that should be met in order to ensure that these statements are true.

Where a foreign issuer or guarantor is involved, the transaction in general and the opinion in particular should be discussed with local counsel in the jurisdiction of organization as early as possible in the course of the transaction. The general problems described above relating to delays in addressing opinion issues can be exacerbated by foreign law concerns which may be more difficult to resolve quickly.

February 2004 < Commercial Paper Dealer Agreement 3(a)3 Program < 1

Model Commercial Paper Dealer Agreement [3(a)3 Program]

Between:

____________________________________________________________, as Issuer and

___________________________________________________________, as Dealer

Concerning Notes to be issued pursuant to an Issuing and Paying Agency Agreement dated as of ___________ between the Issuer and ____________________________, as Issuing and Paying Agent

Dated as of

__________________________________

Commercial Paper Dealer Agreement [3(a)(3) Program]

This agreement (the “Agreement”) sets forth the understandings between the Issuer and the Dealer, each named on the cover page hereof, in connection with the issuance and sale by the Issuer of its short-term promissory notes (the “Notes”) through the Dealer.

Certain terms used in this Agreement are defined in Section 6 hereof.

The Addendum to this Agreement, and any Annexes or Exhibits described in this Agreement or such Addendum, are hereby incorporated into this Agreement and made fully a part hereof.

1. Offers, Sales and Resales of Notes.

1.1 While (i) the Issuer has and shall have no obligation to sell the Notes to the Dealer or to permit the Dealer to arrange any sale of the Notes for the account of the Issuer, and (ii) the Dealer has and shall have no obligation to purchase the Notes from the Issuer or to arrange any sale of the Notes for the account of the Issuer, the parties hereto agree that in any case where the Dealer purchases Notes from the Issuer, or arranges for the sale of Notes by the Issuer, such Notes will be purchased or sold by the Dealer in reliance on the representations, warranties, covenants and agreements of the Issuer contained herein or made pursuant hereto and on the terms and conditions and in the manner provided herein.


1.2 So long as this Agreement shall remain in effect, the Issuer shall not, without the consent of the Dealer, offer, solicit or accept offers to purchase, or sell, any Notes or notes substantially similar to the Notes in reliance upon the exemption from registration under the Securities Act contained in Section 3(a)(3) thereof, except (a) in transactions with one or more dealers which may from time to time after the date hereof become dealers with respect to the Notes by executing with the Issuer one or more agreements, of which the Issuer hereby undertakes to provide the Dealer prompt notice, (b) in transactions with the other dealers listed on the Addendum hereto, which are executing agreements with the Issuer contemporaneously herewith, or (c) directly on its own behalf in transactions with persons other than broker-dealers with respect to which no commission is payable.

1.3 The Notes shall be in a minimum denomination of $100,000 or integral multiples of $1,000 in excess thereof, will bear such interest rates, if interest bearing, or will be sold at such discount from their face amounts, as shall be agreed upon by the Dealer and the Issuer; shall have a maturity not exceeding 270 days from the date of issuance (exclusive of days of grace); and may have such terms as are specified in Exhibit B hereto or the Offering Materials. The Notes shall not contain any provision for extension, renewal or automatic “rollover.” The Notes shall be issued in the ordinary course of the Issuer’s business.

1.4 The authentication and issuance of, and payment for, the Notes shall be effected in accordance with the Issuing and Paying Agency Agreement, and the Notes shall be either individual physical certificates or book-entry notes evidenced by one or more Master Notes (each, a “Master Note”) registered in the name of The Depository Trust Company (“DTC”) or its nominee, in the form or forms annexed to the Issuing and Paying Agency Agreement.1

1.5 If the Issuer and the Dealer shall agree on the terms of the purchase of any Note by the Dealer or the sale of any Note arranged by the Dealer (including, but not limited to, agreement with respect to the date of issue, purchase price, principal amount, maturity and interest rate or interest rate index and margin (in the case of interest-bearing Notes) or discount thereof (in the case of Notes issued on a discount basis), and appropr iate compensation for the Dealer’s services hereunder) pursuant to this Agreement, the Issuer shall cause such Note to be issued and delivered in accordance with the terms of the Issuing and Paying Agency Agreement and payment for such Note shall be made by the purchaser thereof, either directly or through the Dealer, to the Issuing and Paying Agent, for the account of the Issuer. Except as otherwise agreed, in the event that the Dealer is acting as an agent and a purchaser shall either fail to accept delivery of or make payment for a Note on the date fixed for settlement, the Dealer shall promptly notify the Issuer, and if the Dealer has theretofore paid the Issuer for the Note, the Issuer will promptly return such funds to the Dealer against its return of the Note to the Issuer, in the case of a certificated Note, and upon notice of such failure in the case of a book-entry Note. If such failure occurred for any reason other than default by the Dealer, the Issuer shall reimburse the Dealer on an equitable basis for the Dealer’s loss of the use of such funds for the period such funds were credited to the Issuer’s account.

1 If the form or forms of Notes are not annexed to the Issuing and Paying Agency Agreement, they should be annexed to this Agreement or

delivered to the Dealer, with appropriate certification by the Secretary of the Issuer, pursuant to section 3.7 of the Agreement.


2. Representations and Warranties of Issuer. The Issuer represents and warrants that:

2.1 The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all the requisite power and authority to execute, deliver and perform its obligations under the Notes, this Agreement and the Issuing and Paying Agency Agreement.

2.2 This Agreement and the Issuing and Paying Agency Agreement have been duly authorized, executed and delivered by the Issuer and constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

2.3 The Notes have been duly authorized, and when issued as provided in the Issuing and Paying Agency Agreement, will be duly and validly issued and will constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

2.4 The Notes are not required to be registered under the Securities Act, pursuant to the exemption from registration contained in Section 3(a)(3) thereof, and no indenture in respect of the Notes is required to be qualified under the Trust Indenture Act of 1939, as amended; and the Notes are and will be rated as “prime quality” commercial paper by at least one nationally recognized statistical rating organization and will rank at least pari passu with all other unsecured and unsubordinated indebtedness of the Issuer.

2.5 No consent or action of, or filing or registration with, any governmental or public regulatory body or authority, including the SEC, is required to authorize, or is otherwise required in connection with the execution, delivery or performance of, this Agreement, the Notes or the Issuing and Paying Agency Agreement, except as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes.

2.6 Neither the execution and delivery of this Agreement and the Issuing and Paying Agency Agreement, nor the issuance of the Notes in accordance with the Issuing and Paying Agency Agreement, nor the fulfillment of or compliance with the terms and provisions hereof or thereof by the Issuer, will (i) result in the creation or imposition of any mortgage, lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Issuer, or (ii) violate or result in a breach or a default under any of the terms of the Issuer’s charter documents or by-laws, any contract or instrument to which the Issuer is a party or by which it or its property is bound, or any law or regulation, or any order, writ, injunction or decree of any court or government instrumentality, to which the Issuer is subject or by which it or its property is bound, which breach or default might have a material adverse effect on the condition (financial or otherwise), operations or business prospects of the Issuer or the ability


of the Issuer to perform its obligations under this Agreement, the Notes or the Issuing and Paying Agency Agreement.

2.7 There is no litigation or governmental proceeding pending, or to the knowledge of the Issuer threatened, against or affecting the Issuer or any of its subsidiaries which might result in a material adverse change in the condition (financial or otherwise), operations or business prospects of the Issuer or the ability of the Issuer to perform its obligations under this Agreement, the Notes or the Issuing and Paying Agency Agreement.

2.8 The Issuer is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended.2

2.9 Neither the Offering Materials nor the Company Information contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

2.10 Each (a) issuance of Notes by the Issuer hereunder and (b) amendment or supplement of the Offering Materials shall be deemed a representation and warranty by the Issuer to the Dealer, as of the date thereof, that, both before and after giving effect to such issuance, and after giving effect to such amendment or supplement, (i) the representations and warranties given by the Issuer set forth above in this Section 2 remain true and correct on and as of such date as if made on and as of such date, (ii) in the case of an issuance of Notes, the Notes being issued on such date have been duly and validly issued and constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law), (iii) in the case of an issuance of Notes, since the date of the most recent Offering Materials, there has been no material adverse change in the condition (financial or otherwise), operations or business prospects of the Issuer which has not been disclosed to the Dealer in writing and (iv) the Issuer is not in default of any of its obligations hereunder, under the Notes or under the Issuing and Paying Agency Agreement.

3. Covenants and Agreements of Issuer. The Issuer covenants and agrees that:

3.1 The Issuer will give the Dealer prompt notice (but in any event prior to any subsequent issuance of Notes hereunder) of any amendment to, modification of or waiver with respect to, the Notes or the Issuing and Paying Agency Agreement, including a complete copy of any such amendment, modification or waiver.

3.2 The Issuer shall, whenever there shall occur any change in the Issuer’s condition (financial or otherwise), operations or business prospects or any development or occurrence in relation to

2 The phrase “or an entity controlled by an investment company” is not included in this representation or in the related paragraph in the Model

Opinion (paragraph 8). See Guidance Note to Section 2.8 for a description of the limited circumstances where this phrase should be included.


the Issuer that would be material to holders of the Notes or potential holders of the Notes (including any downgrading or receipt of any notice of intended or potential downgrading or any review for potential change in the rating accorded any of the Issuer’s securities by any nationally recognized statistical rating organization which has published a rating of the Notes), promptly, and in any event prior to any subsequent issuance of Notes hereunder, notify the Dealer (by telephone, confirmed in writing) of such change, development or occurrence.

3.3 The Issuer shall from time to time furnish to the Dealer such information as the Dealer may reasonably request, including, without limitation, any press releases or material provided by the Issuer to any national securities exchange or rating agency, regarding (i) the Issuer’s operations and financial condition, (ii) the due authorization and execution of the Notes and (iii) the Issuer’s ability to pay the Notes as they mature.

3.4 The Issuer will take all such action as the Dealer may reasonably request to ensure that each offer and each sale of the Notes will comply with any applicable state Blue Sky laws; provided, however, that the Issuer shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation in any jurisdiction in which it is not so qualified or subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

3.5 The Issuer will use the proceeds of the sale of the Notes for “current transactions” within the meaning of Section 3(a)(3) of the Securities Act.

3.6 The Issuer will not be in default of any of its obligations hereunder, under the Notes or under the Issuing and Paying Agency Agreement, at any time that any of the Notes are outstanding.

3.7 The Issuer shall not issue Notes hereunder until the Dealer shall have received (a) an opinion of counsel to the Issuer, addressed to the Dealer, satisfactory in form and substance to the Dealer, (b) a copy of the executed Issuing and Paying Agency Agreement as then in effect, (c) a copy of resolutions adopted by the Board of Directors of the Issuer, satisfactory in form and substance to the Dealer and certified by the Secretary or similar officer of the Issuer authorizing execution and delivery by the Issuer of this Agreement, the Issuing and Paying Agency Agreement and the Notes and consummation by the Issuer of the transactions contemplated hereby and thereby, (d) prior to the issuance of any book-entry Notes represented by a master note registered in the name of DTC or its nominee, a copy of the executed Letter of Representations among the Issuer, the Issuing and Paying Agent and DTC and of the executed master note, (e) prior to the issuance of any Notes in physical form, a copy of such form (unless attached to this Agreement or the Issuing and Paying Agency Agreement) and (f) such other certificates, opinions, letters and documents as the Dealer shall have reasonably requested.

3.8 The Issuer shall reimburse the Dealer for all of the Dealer’s out-of-pocket expenses related to this Agreement, including expenses incurred in connection with its preparation and negotiation, and the transactions contemplated hereby (including, but not limited to, the printing and distribution of the Offering Materials and any advertising expense), and, if applicable, for the reasonable fees and out-of-pocket expenses of the Dealer’s counsel.


4. Disclosure. 4.1 Offering Materials which may be provided to purchasers and prospective purchasers of the

Notes shall be prepared for use in connection with the transactions contemplated by this Agreement. The Offering Materials and their contents (other than the Dealer Information) shall be the sole responsibility of the Issuer. The Issuer authorizes the Dealer to distribute the Offering Materials as determined by the Dealer.

4.2 The Issuer agrees to promptly furnish the Dealer the Company Information as it becomes available.

4.3 (a) The Issuer further agrees to notify the Dealer promptly upon the occurrence of any event relating to or affecting the Issuer that would cause the Company Information then in existence to include an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they are made, not misleading.

(b) In the event that the Issuer gives the Dealer notice pursuant to Section 4.3(a) and the Dealer notifies the Issuer that it then has Notes it is holding in inventory, the Issuer agrees promptly to supplement or amend the Offering Materials so that the Offering Materials, as amended or supplemented, shall not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Issuer shall make such supplement or amendment available to the Dealer.

(c) In the event that (i) the Issuer gives the Dealer notice pursuant to Section 4.3(a), (ii) the Dealer does not notify the Issuer that it is then holding Notes in inventory and (iii) the Issuer chooses not to promptly amend or supplement the Offering Materials in the manner described in clause (b) above, then all solicitations and sales of Notes shall be suspended until such time as the Issuer has so amended or supplemented the Offering Materials, and made such amendment or supplement available to the Dealer.

5. Indemnification and Contribution. 5.1 The Issuer will indemnify and hold harmless the Dealer, each individual, corporation,

partnership, trust, association or other entity controlling the Dealer, any affiliate of the Dealer or any such controlling entity and their respective directors, officers, employees, partners, incorporators, shareholders, servants, trustees and agents (hereinafter the “Indemnitees”) against any and all liabilities, penalties, suits, causes of action, losses, damages, claims, costs and expenses (including, without limitation, fees and disbursements of counsel) or judgments of whatever kind or nature (each a “Claim”), imposed upon, incurred by or asserted against the Indemnitees arising out of or based upon (i) any allegation that the Offering Materials, the Company Information or any information provided by the Issuer to the Dealer included (as of any relevant time) or includes an untrue statement of a material fact or omitted (as of any relevant time) or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (ii) arising out of or based upon the breach by the Issuer of any agreement, covenant or representation made in or


pursuant to this Agreement. This indemnification shall not apply to the extent that the Claim arises out of or is based upon Dealer Information.

5.2 Provisions relating to claims made for indemnification under this Section 5 are set forth on Exhibit A to this Agreement.

5.3 In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in this Section 5 is held to be unavailable or insufficient to hold harmless the Indemnitees, although applicable in accordance with the terms of this Section 5, the Issuer shall contribute to the aggregate costs incurred by the Dealer in connection with any Claim in the proportion of the respective economic interests of the Issuer and the Dealer; provided, however, such contribution by the Issuer shall be in an amount such that the aggregate costs incurred by the Dealer do not exceed the aggregate of the commissions and fees earned by the Dealer hereunder with respect to the issue or issues of Notes to which such Claim relates. The respective economic interests shall be calculated by reference to the aggregate proceeds to the Issuer of the Notes issued hereunder and the aggregate commissions and fees earned by the Dealer hereunder.

6. Definitions. 6.1 “Claim” shall have the meaning set forth in Section 5.1.

6.2 “Company Information” at any given time shall mean the Offering Materials together with, to the extent applicable, (i) the Issuer’s most recent report on Form 10-K filed with the SEC and each report on Form 10-Q or 8-K filed by the Issuer with the SEC since the most recent Form 10-K, (ii) the Issuer’s most recent annual audited financial statements and each interim financial statement or report prepared subsequent thereto, if not included in item (i) above, (iii) the Issuer’s and its affiliates’ other publicly available recent reports, including, but not limited to, any publicly available filings or reports provided to their respective shareholders, (iv) any other information or disclosure prepared pursuant to Section 4.3 hereof and (v) any information prepared or approved by the Issuer for dissemination to investors or potential investors in the Notes.

6.3 “Dealer Information” shall mean material concerning the Dealer provided by the Dealer in writing expressly for inclusion in the Offering Materials.

6.4 “Indemnitee” shall have the meaning set forth in Section 5.1.

6.5 “Issuing and Paying Agency Agreement” shall mean the issuing and paying agency agreement described on the cover page of this Agreement, as such agreement may be amended or supplemented from time to time.

6.6 “Issuing and Paying Agent” shall mean the party designated as such on the cover page of this Agreement, as issuing and paying agent under the Issuing and Paying Agency Agreement, or any successor thereto in accordance with the Issuing and Paying Agency Agreement.


6.7 “Offering Materials” shall mean offering materials prepared in accordance with Section 4 (including materials referred to therein or incorporated by reference therein, if any) which may be provided to purchasers and prospective purchasers of the Notes, and shall include amendments and supplements thereto which may be prepared from time to time in accordance with this Agreement (other than any amendment or supplement that has been completely superseded by a later amendment or supplement).

6.8 “SEC” shall mean the U.S. Securities and Exchange Commission.

6.9 “Securities Act” shall mean the U.S. Securities Act of 1933, as amended.

7. General. 7.1 Unless otherwise expressly provided herein, all notices under this Agreement to parties hereto

shall be in writing and shall be effective when received at the address of the respective party set forth in the Addendum to this Agreement.

7.2 This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws provisions.

7.3 The Issuer agrees that any suit, action or proceeding brought by the Issuer against the Dealer in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes shall be brought solely in the United States federal courts located in the Borough of Manhattan or the courts of the State of New York located in the Borough of Manhattan. EACH OF THE DEALER AND THE ISSUER WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

7.4 This Agreement may be terminated, at any time, by the Issuer, upon one business day’s prior notice to such effect to the Dealer, or by the Dealer upon one business day’s prior notice to such effect to the Issuer. Any such termination, however, shall not affect the obligations of the Issuer under Sections 3.8, 5 and 7.3 hereof or the respective representations, warranties, agreements, covenants, rights or responsibilities of the parties made or arising prior to the termination of this Agreement.

7.5 This Agreement is not assignable by either party hereto without the written consent of the other party; provided, however, that the Dealer may assign its rights and obligations under this Agreement to any affiliate of the Dealer.

7.6 This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

7.7 This Agreement is for the exclusive benefit of the parties hereto, and their respective permitted successors and assigns hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever.


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.

, as Issuer , as Dealer

By: By:

Name: Name:

Title: Title:


Addendum3

The following additional clauses shall apply to the Agreement and be deemed a part thereof.

1. The other dealers referred to in clause (b) of Section 1.2 of the Agreement are _______________________________________________________.

2. The following sections 2.11 through 2.15 are hereby added to the Agreement:4

2.11 Under the laws of [foreign jurisdiction], neither the Issuer nor any of its revenues, assets or properties has any right of immunity from service of process or from the jurisdiction of competent courts of [foreign jurisdiction] or the United States or the State of New York in connection with any suit, action or proceeding, attachment prior to judgment, attachment in aid of execution of a judgment or execution of a judgment or from any other legal process with respect to its obligations under this Agreement, the Issuing and Paying Agency Agreement or the Notes.

2.12 The Issuer is permitted to make all payments under this Agreement, the Issuing and Paying Agency Agreement and the Notes to holders of the Notes that are non-residents of [foreign jurisdiction], free and clear of and without deduction or withholding for or on account of any taxes or other governmental charges imposed by [foreign jurisdiction]. There is no stamp or documentary tax or other charge imposed by any governmental agency having jurisdiction over the Issuer in connection with the execution, delivery, issuance, payment, performance, enforcement or introduction into evidence in a court of [foreign jurisdiction] of this Agreement, the Issuing and Paying Agency Agreement or any Note.

2.13 The choice of New York law to govern this Agreement, the Issuing and Paying Agency Agreement and the Notes is, under the laws of [foreign jurisdiction], a valid, effective and irrevocable choice of law, and the submission by the Issuer in Section 7.3 (b) of the Agreement to the jurisdiction of the courts of the United States District Court and the State of New York located in the Borough of Manhattan is valid and binding upon the Issuer under the laws of [foreign jurisdiction].

2.14 Any final judgment rendered by any court referred to in Section 2.13 in an action to enforce the obligations of the Issuer under this Agreement, the Issuing and Paying Agency Agreement or the Notes is capable of being enforced in the courts of [foreign jurisdiction].

2.15 As a condition to the admissibility in evidence of this Agreement, the Issuing and Paying Agency Agreement or the Notes in the courts of [foreign jurisdiction], it is not necessary that this Agreement, the Issuing and Paying Agency Agreement or the Notes be filed or recorded with any court or other authority. [All documentary evidence to be submitted to a court in

3 There may be added to this Addendum any changes or additions to the model Agreement, as agreed between the parties. 4 For use where the Issuer is a foreign entity.


[foreign jurisdiction] must be in, or translated into, the [foreign jurisdiction] language and certified by a duly qualified official translator in [foreign jurisdiction]].


3.9 Without limiting any obligation of the Issuer pursuant to this Agreement to provide the Dealer with credit and financial information, the Issuer hereby acknowledges and agrees that the Dealer may share the Company Information and any other information or matters relating to the Issuer or the transactions contemplated hereby with affiliates of the Dealer, including, but not limited to, _____________6 and that such affiliates may likewise share information relating to the Issuer or such transactions with the Dealer.

4. The addresses of the respective parties for purposes of notices under Section 7.1 are as follows:

For the Issuer:

Address:

Attention:

Telephone number:

Fax number:

For the Dealer:

Address:

Attention:

Telephone number:

Fax number:

5. The text appearing in the Agreement as Section 7.3 is hereby redesignated as Section 7.3(a), and the following Sections 7.3(b), (c) and (d) are hereby added to the Agreement:7

(b) The Issuer hereby irrevocably accepts and submits to the non-exclusive jurisdiction of each of the aforesaid courts in personam, generally and unconditionally, for itself and in respect of its properties, assets and revenues, with respect to any suit, action or proceeding in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes.

(c) The Issuer hereby irrevocably designates, appoints and empowers ________________, with offices at _____________________, New York, New York, as its designee, appointee and

5 For use where the Dealer is an affiliate of a commercial bank. 6 Insert name of Dealer’s bank affiliate. 7 Principally for use where the Issuer is a foreign entity.


agent to receive, accept and acknowledge for and on its behalf, and its properties, assets and revenues, service for any and all legal process, summons, notices and documents which may be served in any such action, suit or proceeding brought in the courts listed in Section 7.3(a) which may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such courts, with respect to any suit, action or proceeding in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes. If for any reason such designee, appointee and agent hereunder shall cease to be available to act as such, the Issuer agrees to designate a new designee, appointee and agent in The City of New York on the terms and for the purposes of this Section 7.3 satisfactory to the Dealer. The Issuer further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents out of any of the aforesaid courts in any such action, suit or proceeding by serving a copy thereof upon the agent for service of process referred to in this Section 7.3 (whether or not the appointment of such agent shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by mailing copies thereof by registered or certified airmail, postage prepaid, to it at its address specified in or designated pursuant to this Agreement. The Issuer agrees that the failure of any such designee, appointee and agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon. Nothing herein shall in any way be deemed to limit the ability of the holders of any Notes or the Dealer to serve any such legal process, summons, notices and documents in any other manner permitted by applicable law or to obtain jurisdiction over the undersigned or bring actions, suits or proceedings against the undersigned in such other jurisdictions, and in manner, as may be permitted by applicable law. The Issuer hereby irrevocably and unconditionally waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Agreement brought in the courts listed in Section 7.3(a) and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

(d) To the extent that the Issuer or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding in connection with or arising out of this Agreement or the Notes or the offer and sale of the Notes, from the giving of any relief in any thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution of judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceeding may at any time be commenced, with respect to its obligations, liabilities or any other matter under or arising out of or in connection with this Agreement, the Issuing and Paying Agency Agreement or the Notes, the Issuer hereby irrevocably and unconditionally waives, and agrees for the benefit of the Dealer and any holder from time to time of the Notes not to plead or claim, any such immunity, and consents to such relief and enforcement.


6. The following language is hereby added to the end of Section 7.7 of the Agreement:8

; provided, however, that Sections 7.3(b), (c) and (d) and Section 7.8 are hereby specifically and exclusively acknowledged to also be for the benefit of the holders from time to time of the Notes, as third-party beneficiaries.


7.8 (a) Any payments to the Dealer hereunder or to any holder from time to time of Notes shall be in United States dollars and shall be free of all withholding and other taxes and of all other governmental charges of any nature whatsoever imposed by the jurisdiction in which the Issuer is located. In the event any withholding is required by law, the Issuer agrees to (i) pay the same and (ii) pay such additional amounts to the Dealer or any such holder which, after deduction of any such withholding, stamp or other taxes or governmental charges of any nature whatsoever imposed with respect to the payment of such additional amount, shall equal the amount withheld pursuant to clause (i). The Issuer will promptly pay any stamp duty or other taxes or governmental charges payable in connection with the execution, delivery, payment or performance of this Agreement, the Issuing and Paying Agency Agreement or the Notes and shall indemnify and hold harmless the Dealer and each holder of Notes from all liabilities arising from any failure to pay, or delay in paying, such taxes or charges.

(b) The Issuer agrees to indemnify and hold harmless the Dealer and each holder from time to time of Notes against any loss incurred by the Dealer or such holder as a result of any judgment or order being given or made for any amount due hereunder and such judgment or order being expressed and paid in a currency (the “Judgment Currency”) other than United States dollars and as a result of any variation as between (i) the rate of exchange at which the United States dollar amount is converted into the Judgment Currency for the purpose of such judgment or order, and (ii) the rate of exchange at which the Dealer or such holder is able to purchase United States dollars with the amount of Judgment Currency actually received by the Dealer or such holder. The foregoing indemnity shall constitute a separate and independent obligation of the Issuer and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, the relevant currency.

8 For use where the Issuer is a foreign entity and any or all of Sections 7.3(b)-(d) and 7.8 appearing in this Addendum are made part of the

Agreement. 9 For use where the Issuer is a foreign entity.


Model Opinion of Counsel to Issuer10

[Date]

[Name and Address of Dealer]

Ladies and Gentlemen:

We have acted as counsel to ________________, a _____________ corporation (the “Issuer”), in connection with the proposed offering and sale by the Issuer in the United States of commercial paper in the form of short-term promissory notes (the “Notes”).

In our capacity as such counsel, we have examined a specimen form of Note, an executed copy of the Commercial Paper Dealer Agreement dated ____________, ____ (the “Agreement”) between the Issuer and [Name of Dealer] (the “Dealer”), and the Issuing and Paying Agency Agreement dated _____, ____ (the “Issuing and Paying Agency Agreement”) between the Issuer and _____, as issuing and paying agent (the “Issuing and Paying Agent”) as well as originals, or copies certified or otherwise identified to our satisfaction, of such other records and documents as we have deemed necessary as a basis for the opinions expressed below. In such examination, we have assumed the genuineness of all documents submitted to us as originals, and the conformity to the originals of all documents submitted to us as copies.

We have advised the Company with respect to the uses of the proceeds from the sale of the Notes that would constitute “current transactions” within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”). We have received and relied upon a statement of an [executive] officer of the Company setting forth the proposed uses of the proceeds.

Capitalized terms used herein without definition are used as defined in the Agreement.

Based upon the foregoing, it is our opinion that:

1. The Issuer is a corporation duly organized, validly existing and in good standing under the laws of the state of _________ and has all the requisite power and authority to execute, deliver and perform its obligations under the Notes, the Agreement and the Issuing and Paying Agency Agreement.

2. Each of the Agreement and the Issuing and Paying Agency Agreement has been duly authorized, executed and delivered by the Issuer and constitutes a legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a

10 Set forth below are the operative provisions on which the Dealer will generally expect a legal opinion. Parties should recognize that there may

be additions to the Dealer’s opinion request, and variations as to the opinion language, depending on the details of the transaction and the differing opinion practices of law firms; it may also be necessary to split the opinion between two or more counsel where no one counsel is in a position to opine as to all subjects or in all relevant jurisdictions.


proceeding in equity or at law), and except as rights under the Agreement to indemnity and contribution may be limited by federal or state laws.

3. The Notes have been duly authorized, and when issued as provided in the Issuing and Paying Agency Agreement, will be duly and validly issued and will constitute legal, valid and binding obligations of the Issuer enforceable against the Issuer in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

4. The issuance and sale of Notes under the circumstances contemplated by the Agreement and the Issuing and Paying Agency Agreement do not require registration of the Notes under the Securities Act of 1933, as amended, pursuant to the exemption from registration contained in Section 3(a)(3) thereof, and do not require compliance with any provision of the Trust Indenture Act of 1939, as amended; and the Notes will rank at least pari passu with all other unsecured and unsubordinated indebtedness of the Issuer.

5. No consent or action of, or filing or registration with, any governmental or public regulatory body or authority, including the Securities and Exchange Commission, is required to authorize, or is otherwise required in connection with the execution, delivery or performance of, the Agreement, the Notes or the Issuing and Paying Agency Agreement, except as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes.

6. Neither the execution and delivery of the Agreement and the Issuing and Paying Agency Agreement, nor the issuance of the Notes in accordance with the Issuing and Paying Agency Agreement, nor the fulfillment of or compliance with the terms and provisions of either thereof by the Issuer, will (i) result in the creation or impos ition of any mortgage, lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Issuer, or (ii) violate or result in a breach or default under any of the terms of the Issuer’s charter documents or by-laws, any contract or instrument to which the Issuer is a party or by which it or its property is bound, or any law or regulation, or any order, writ, injunction or decree of any court or government instrumentality, to which the Issuer is subject or by which it or its property is bound.

7. There is no litigation or governmental proceeding pending, or to the knowledge of the Issuer threatened, against or affecting the Issuer or any of its subsidiaries which might result in a material adverse change in the condition (financial or otherwise), operations or business prospects of the Issuer or the ability of the Issuer to perform its obligations under the Agreement, the Notes or the Issuing and Paying Agency Agreement.

8. The Issuer is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended.11

11 The phrase “or an entity controlled by an investment company” is not included in this paragraph or in the representation in Section 2.8 of the

Agreement. See Guidance Note to Section 2.8 for a description of the limited circumstances where this phrase should be included.


9. As a condition to the admissibility in evidence of the Agreement, the Issuing and Paying Agency Agreement or the Notes in [foreign jurisdiction], it is not necessary that the Agreement, the Issuing and Paying Agency Agreement or the Notes be filed or recorded with any court or other authority. [All documentary evidence in a foreign language to be submitted to a court in [foreign jurisdiction] must be in, or translated into, the [foreign jurisdiction] language and certified by a duly qualified official translator in [foreign jurisdiction]].12

10. Under the laws of [foreign jurisdiction], neither the Issuer nor any of its revenues, assets or properties has any right of immunity from service of process or from the jurisdiction of competent courts of [foreign jurisdiction] or the United Sates or the State of New York in connection with any suit, action or proceeding, attachment prior to judgment, attachment in aid of execution of a judgment, or execution of a judgment or from any other legal process with respect to its obligations under the Agreement, the Issuing and Paying Agency Agreement or the Notes.

11. The Issuer is permitted to make all payments under the Agreement, the Issuing and Paying Agency Agreement and the Notes (to holders of the Notes that are non-residents of [foreign jurisdiction], free and clear of and without deduction or withholding for or on account of any taxes or other governmental charges imposed by [foreign jurisdiction]). There is no stamp or documentary tax or other charge imposed by any governmental agency having jurisdiction over the Issuer in connection with the execution, delivery, issuance, payment, performance, enforcement or introduction into evidence in a court of [foreign jurisdiction] of the Agreement, the Issuing and Paying Agency Agreement or any Note.

12. The choice of New York law to govern the Agreement, the Issuing and Paying Agency Agreement and the Notes is, under the laws of [foreign jurisdiction], a valid, effective and irrevocable choice of law.

13. The submission by the Issuer, in the Agreement, to the jurisdiction of the courts of the United States District Court and the State of New York located in the Borough of Manhattan is valid and binding upon the Issuer under the laws of [foreign jurisdiction].

14. Any final judgment rendered by any Federal or State court of competent jurisdiction located in the State of New York in an action to enforce the obligations of the Issuer under the Agreement, the Issuing and Paying Agency Agreement or the Notes is capable of being enforced in the courts of [foreign jurisdiction].

This opinion may be delivered to the Issuing and Paying Agent, each holder from time to time of Notes and any nationally recognized rating agency (in connection with the rating of the Notes), each of which may rely on this opinion to the same extent as if such opinion were addressed to it.

Very truly yours,

12 Paragraphs 9 through 14 will only be necessary where the Issuer is a foreign entity.


Exhibit A

Further Provisions Relating to Indemnification

(a) The Issuer agrees to reimburse each Indemnitee for all expenses (including reasonable fees and disbursements of internal and external counsel) as they are incurred by it in connection with investigating or defending any loss, claim, damage, liability or action in respect of which indemnification may be sought under Section 5 of the Agreement (whether or not it is a party to any such proceedings).

(b) Promptly after receipt by an Indemnitee of notice of the existence of a Claim, such Indemnitee will, if a claim in respect thereof is to be made against the Issuer, notify the Issuer in writing of the existence thereof; provided that (i) the omission so to notify the Issuer will not relieve the Issuer from any liability which it may have hereunder unless and except to the extent it did not otherwise learn of such Claim and such failure results in the forfeiture by the Issuer of substantial rights and defenses, and (ii) the omission so to notify the Issuer will not relieve it from liability which it may have to an Indemnitee otherwise than on account of this indemnity agreement. In case any such Claim is made against any Indemnitee and it notifies the Issuer of the existence thereof, the Issuer will be entitled to participate therein, and to the extent that it may elect by written notice delivered to the Indemnitee, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnitee; provided that if the defendants in any such Claim include both the Indemnitee and the Issuer, and the Indemnitee shall have concluded that there may be legal defenses available to it which are different from or additional to those available to the Issuer, the Issuer shall not have the right to direct the defense of such Claim on behalf of such Indemnitee, and the Indemnitee shall have the right to select separate counsel to assert such legal defenses on behalf of such Indemnitee. Upon receipt of notice from the Issuer to such Indemnitee of the Issuer’s election so to assume the defense of such Claim and approval by the Indemnitee of counsel, the Issuer will not be liable to such Indemnitee for expenses incurred thereafter by the Indemnitee in connection with the defense thereof (other than reasonable costs of investigation) unless (i) the Indemnitee shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the Issuer shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel in the jurisdiction in which any Cla im is brought), approved by the Dealer, representing the Indemnitee who is party to such Claim), (ii) the Issuer shall not have employed counsel reasonably satisfactory to the Indemnitee to represent the Indemnitee within a reasonable time after notice of existence of the Claim or (iii) the Issuer has authorized in writing the employment of counsel for the Indemnitee. The indemnity, reimbursement and contribution obligations of the Issuer hereunder shall be in addition to any other liability the Issuer may otherwise have to an Indemnitee and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Issuer and any Indemnitee. The Issuer agrees that without the Dealer’s prior written consent, it will not settle, compromise or consent to the entry of any judgment in any Claim in respect of which indemnification may be sought under the indemnification provision of the Agreement (whether or not the Dealer or any other Indemnitee is an actual or potential party to such Claim), unless such settlement, compromise or consent (i) includes an unconditional release of each Indemnitee from all liability arising out of such Claim, and (ii) does not include a statement as to or an admission of fault, culpability or failure to act, by or on behalf of any Indemnitee.


Exhibit B

Statement of Terms for Interest – Bearing Commercial Paper Notes of [Name of Issuer]

THE PROVISIONS SET FORTH BELOW ARE QUALIFIED TO THE EXTENT APPLICABLE BY THE TRANSACTION SPECIFIC PRICING SUPPLEMENT (THE “SUPPLEMENT”) (IF ANY) SENT TO EACH PURCHASER AT THE TIME OF THE TRANSACTION.

1. General. (a) The obligations of the Issuer to which these terms apply (each a “Note”) are represented by one or more Master Notes (each, a “Master Note”) issued in the name of (or of a nominee for) The Depository Trust Company (“DTC”), which Master Note includes the terms and provisions for the Issuer's Interest-Bearing Commercial Paper Notes that are set forth in this Statement of Terms, since this Statement of Terms constitutes an integral part of the Underlying Records as defined and referred to in the Master Note.

(b) “Business Day” means any day other than a Saturday or Sunday that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, executive order or regulation to be closed in New York City and, with respect to LIBOR Notes (as defined below) is also a London Business Day. “London Business Day” means, a day, other than a Saturday or Sunday, on which dealings in deposits in U.S. dollars are transacted in the London interbank market.

2. Interest. (a) Each Note will bear interest at a fixed rate (a “Fixed Rate Note”) or at a floating rate (a “Floating Rate Note”).

(b) The Supplement sent to each holder of such Note will describe the following terms: (i) whether such Note is a Fixed Rate Note or a Floating Rate Note and whether such Note is an Original Issue Discount Note (as defined below); (ii) the date on which such Note will be issued (the “Issue Date”); (iii) the Stated Maturity Date (as defined below); (iv) if such Note is a Fixed Rate Note, the rate per annum at which such Note will bear interest, if any, and the Interest Payment Dates; (v) if such Note is a Floating Rate Note, the Base Rate, the Index Maturity, the Interest Reset Dates, the Interest Payment Dates and the Spread and/or Spread Multiplier, if any (all as defined below), and any other terms relating to the particular method of calculating the interest rate for such Note; and (vi) any other terms applicable specifically to such Note. “Original Issue Discount Note” means a Note which has a stated redemption price at the Stated Maturity Date that exceeds its Issue Price by more than a specified de minimis amount and which the Supplement indicates will be an “Original Issue Discount Note”.

(c) Each Fixed Rate Note will bear interest from its Issue Date at the rate per annum specified in the Supplement until the principal amount thereof is paid or made available for payment. Interest on each Fixed Rate Note will be payable on the dates specified in the Supplement (each an “Interest Payment Date” for a Fixed Rate Note) and on the Maturity Date (as defined below). Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of twelve 30-day months.

If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be payable on


the next succeeding Business Day, and no additional interest will accrue in respect of the payment made on that next succeeding Business Day.

(d) The interest rate on each Floating Rate Note for each Interest Reset Period (as defined below) will be determined by reference to an interest rate basis (a “Base Rate”) plus or minus a number of basis points (one basis point equals one-hundredth of a percentage point) (the “Spread”), if any, and/or multiplied by a certain percentage (the “Spread Multiplier”), if any, until the principal thereof is paid or made available for payment. The Supplement will designate which of the following Base Rates is applicable to the related Floating Rate Note: (a) the CD Rate (a “CD Rate Note”), (b) the Commercial Paper Rate (a “Commercial Paper Rate Note”), (c) the Federal Funds Rate (a “Federal Funds Rate Note”), (d) LIBOR (a “LIBOR Note”), (e) the Prime Rate (a “Prime Rate Note”), (f) the Treasury Rate (a “Treasury Rate Note”) or (g) such other Base Rate as may be specified in such Supplement.

The rate of interest on each Floating Rate Note will be reset daily, weekly, monthly, quarterly or semi-annually (the “Interest Reset Period”). The date or dates on which interest will be reset (each an “Interest Reset Date”) will be, unless otherwise specified in the Supplement, in the case of Floating Rate Notes which reset daily, each Business Day, in the case of Floating Rate Notes (other than Treasury Rate Notes) that reset weekly, the Wednesday of each week; in the case of Treasury Rate Notes that reset weekly, the Tuesday of each week; in the case of Floating Rate Notes that reset monthly, the third Wednesday of each month; in the case of Floating Rate Notes that reset quarterly, the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes that reset semiannually, the third Wednesday of the two months specified in the Supplement. If any Interest Reset Date for any Floating Rate Note is not a Business Day, such Interest Reset Date will be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Interest on each Floating Rate Note will be payable monthly, quarterly or semiannually (the “Interest Payment Period”) and on the Maturity Date. Unless otherwise specified in the Supplement, and except as provided below, the date or dates on which interest will be payable (each an “Interest Payment Date” for a Floating Rate Note) will be, in the case of Floating Rate Notes with a monthly Interest Payment Period, on the third Wednesday of each month; in the case of Floating Rate Notes with a quarterly Interest Payment Period, on the third Wednesday of March, June, September and December; and in the case of Floating Rate Notes with a semiannual Interest Payment Period, on the third Wednesday of the two months specified in the Supplement. In addition, the Maturity Date will also be an Interest Payment Date.

If any Interest Payment Date for any Floating Rate Note (other than an Interest Payment Date occurring on the Maturity Date) would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day is in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. If the Maturity Date of a Floating Rate Note falls on a day that is not a Business Day, the payment of principal and interest will be made on the next succeeding Business Day, and no interest on such payment shall accrue for the period from and after such maturity.


Interest payments on each Interest Payment Date for Floating Rate Notes will include accrued interest from and including the Issue Date or from and including the last date in respect of which interest has been paid, as the case may be, to, but excluding, such Interest Payment Date. On the Maturity Date, the interest payable on a Floating Rate Note will include interest accrued to, but excluding, the Maturity Date. Accrued interest will be calculated by multiplying the principal amount of a Floating Rate Note by an accrued interest factor. This accrued interest factor will be computed by adding the interest factors calculated for each day in the period for which accrued interest is being calculated. The interest factor (expressed as a decimal) for each such day will be computed by dividing the interest rate applicable to such day by 360, in the cases where the Base Rate is the CD Rate, Commercial Paper Rate, Federal Funds Rate, LIBOR or Prime Rate, or by the actual number of days in the year, in the case where the Base Rate is the Treasury Rate. The interest rate in effect on each day will be (i) if such day is an Interest Reset Date, the interest rate with respect to the Interest Determination Date (as defined below) pertaining to such Interest Reset Date, or (ii) if such day is not an Interest Reset Date, the interest rate with respect to the Interest Determination Date pertaining to the next preceding Interest Reset Date, subject in either case to any adjustment by a Spread and/or a Spread Multiplier.

The “Interest Determination Date” where the Base Rate is the CD Rate or the Commercial Paper Rate will be the second Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Federal Funds Rate or the Prime Rate will be the Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is LIBOR will be the second London Business Day next preceding an Interest Reset Date. The Interest Determination Date where the Base Rate is the Treasury Rate will be the day of the week in which such Interest Reset Date falls when Treasury Bills are normally auctioned. Treasury Bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is held on the following Tuesday or the preceding Friday. If an auction is so held on the preceding Friday, such Friday will be the Interest Determination Date pertaining to the Interest Reset Date occurring in the next succeeding week.

The “Index Maturity” is the period to maturity of the instrument or obligation from which the applicable Base Rate is calculated.

The “Calculation Date,” where applicable, shall be the earlier of (i) the tenth calendar day following the applicable Interest Determination Date or (ii) the Business Day preceding the applicable Interest Payment Date or Maturity Date.

All times referred to herein reflect New York City time, unless otherwise specified.

The Issuer shall specify in writing to the Issuing and Paying Agent which party will be the calculation agent (the “Calculation Agent”) with respect to the Floating Rate Notes. The Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate which will become effective on the next Interest Reset Date with respect to such Floating Rate Note to the Issuing and Paying Agent as soon as the interest rate with respect to such Floating Rate Note has been determined and as soon as practicable after any change in such interest rate.


All percentages resulting from any calculation on Floating Rate Notes will be rounded to the nearest one hundred-thousandth of a percentage point, with five-one millionths of a percentage point rounded upwards. For example, 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655). All dollar amounts used in or resulting from any calculation on Floating Rate Notes will be rounded, in the case of U.S. dollars, to the nearest cent or, in the case of a foreign currency, to the nearest unit (with one-half cent or unit being rounded upwards).

CD Rate Notes

“CD Rate” means the rate on any Interest Determination Date for negotiable certificates of deposit having the Index Maturity as published by the Board of Governors of the Federal Reserve System (the “FRB”) in “Statistical Release H.15(519), Selected Interest Rates” or any successor publication of the FRB (“H.15(519)”) under the heading “CDs (Secondary Market)”.

If the above rate is not published in H.15(519) by 3:00 p.m. on the Calculation Date, the CD Rate will be the rate on such Interest Determination Date set forth in the daily update of H.15(519), available through the world wide website of the FRB at http://www.federalreserve.gov/releases/h15/Update, or any successor site or publication or other recognized electronic source used for the purpose of displaying the applicable rate (“H.15 Daily Update”) under the caption “CDs (Secondary Market)”.

If such rate is not published in either H.15(519) or H.15 Daily Update by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the CD Rate to be the arithmetic mean of the secondary market offered rates as of 10:00 a.m. on such Interest Determination Date of three leading nonbank dealers13 in negotiable U.S. dollar certificates of deposit in New York City selected by the Calculation Agent for negotiable U.S. dollar certificates of deposit of major United States money center banks of the highest credit standing in the market for negotiable certificates of deposit with a remaining maturity closest to the Index Maturity in the denomination of $5,000,000.

If the dealers selected by the Calculation Agent are not quoting as set forth above, the CD Rate will remain the CD Rate then in effect on such Interest Determination Date.

Commercial Paper Rate Notes

“Commercial Paper Rate” means the Money Market Yield (calculated as described below) of the rate on any Interest Determination Date for commercial paper having the Index Maturity, as published in H.15(519) under the heading “Commercial Paper-Nonfinancial”.

If the above rate is not published in H.15(519) by 3:00 p.m. on the Calculation Date, then the Commercial Paper Rate will be the Money Market Yield of the rate on such Interest Determination Date for commercial paper of the Index Maturity as published in H.15 Daily Update under the heading “Commercial Paper-Nonfinancial”.

If by 3:00 p.m. on such Calculation Date such rate is not published in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Commercial Paper Rate to be the Money

13 Such nonbank dealers referred to in this Statement of Terms may include affiliates of the Dealer.


Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m. on such Interest Determination Date of three leading dealers of U.S. dollar commercial paper in New York City selected by the Calculation Agent for commercial paper of the Index Maturity placed for an industrial issuer whose bond rating is “AA,” or the equivalent, from a nationally recognized statistical rating organization.

If the dealers selected by the Calculation Agent are not quoting as mentioned above, the Commercial Paper Rate with respect to such Interest Determination Date will remain the Commercial Paper Rate then in effect on such Interest Determination Date.

“Money Market Yield” will be a yield calculated in accordance with the following formula:

D x 360 Money Market Yield = x 100

360 - (D x M)

where “D” refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal and “M” refers to the actual number of days in the interest period for which interest is being calculated.

Federal Funds Rate Notes

“Federal Funds Rate” means the rate on any Interest Determination Date for federal funds as published in H.15(519) under the heading “Federal Funds (Effective)” and displayed on Moneyline Telerate. (or any successor service) on page 120 (or any other page as may replace the specified page on that service) (“Telerate Page 120”).

If the above rate does not appear on Telerate Page 120 or is not so published by 3:00 p.m. on the Calculation Date, the Federal Funds Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update under the heading “Federal Funds/(Effective)”.

If such rate is not published as described above by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Federal Funds Rate to be the arithmetic mean of the rates for the last transaction in overnight U.S. dollar federal funds arranged by each of three leading brokers of Federal Funds transactions in New York City selected by the Calculation Agent prior to 9:00 a.m. on such Interest Determination Date.

If the brokers selected by the Calculation Agent are not quoting as mentioned above, the Federal Funds Rate will remain the Federal Funds Rate then in effect on such Interest Determination Date.

LIBOR Notes

The London Interbank offered rate (“LIBOR”) means, with respect to any Interest Determination Date, the rate for deposits in U.S. dollars having the Index Maturity that appears on the Designated LIBOR Page as of 11:00 a.m., London time, on such Interest Determination Date.


If no rate appears, LIBOR will be determined on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in U.S. dollars are offered to prime banks in the London interbank market by four major banks in such market selected by the Calculation Agent for a term equal to the Index Maturity and in principal amount equal to an amount that in the Calculation Agent’s judgment is representative for a single transaction in U.S. dollars in such market at such time (a “Representative Amount”). The Calculation Agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR for such interest period will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in New York City, on such Interest Determination Date by three major banks in New York City, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks, for a term equal to the Index Maturity and in a Representative Amount; provided, however, that if fewer than three banks so selected by the Calculation Agent are providing such quotations, the then existing LIBOR rate will remain in effect for such Interest Payment Period.

“Designated LIBOR Page” means the display designated as page “3750” on Moneyline Telerate. (or such other page as may replace the 3750 page on that service or such other service or services as may be nominated by the British Bankers’ Association for the purposes of displaying London interbank offered rates for U.S. dollar deposits).

Prime Rate Notes

“Prime Rate” means the rate on any Interest Determination Date as published in H.15(519) under the heading “Bank Prime Loan”.

If the above rate is not published in H.15(519) prior to 3:00 p.m. on the Calculation Date, then the Prime Rate will be the rate on such Interest Determination Date as published in H.15 Daily Update opposite the caption “Bank Prime Loan”.

If the rate is not published prior to 3:00 p.m. on the Calculation Date in either H.15(519) or H.15 Daily Update, then the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME1 Page (as defined below) as such bank’s prime rate or base lending rate as of 11:00 a.m., on that Interest Determination Date.

If fewer than four such rates referred to above are so published by 3:00 p.m. on the Calculation Date, the Calculation Agent will determine the Prime Rate to be the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on such Interest Determination Date by three major banks in New York City selected by the Calculation Agent.

If the banks selected are not quoting as mentioned above, the Prime Rate will remain the Prime Rate in effect on such Interest Determination Date.

“Reuters Screen US PRIME1 Page” means the display designated as page “US PRIME1” on the Reuters Monitor Money Rates Service (or such other page as may replace the US PRIME1 page on


that service for the purpose of displaying prime rates or base lending rates of major United States banks).

Treasury Rate Notes

“Treasury Rate” means:

(1) the rate from the auction held on the Interest Determination Date (the “Auction”) of direct obligations of the United States (“Treasury Bills”) having the Index Maturity specified in the Supplement under the caption “INVESTMENT RATE” on the display on Moneyline Telerate. (or any successor service) on page 56 (or any other page as may replace that page on that service) (“Telerate Page 56”) or page 57 (or any other page as may replace that page on that service) (“Telerate Page 57”), or

(2) if the rate referred to in clause (1) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury Bills as published in H.15 Daily Update, under the caption “U.S. Government Securities/Treasury Bills/Auction High”, or

(3) if the rate referred to in clause (2) is not so published by 3:00 p.m. on the related Calculation Date, the Bond Equivalent Yield of the auction rate of the applicable Treasury Bills as announced by the United States Department of the Treasury, or

(4) if the rate referred to in clause (3) is not so announced by the United States Department of the Treasury, or if the Auction is not held, the Bond Equivalent Yield of the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15(519) under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”, or

(5) if the rate referred to in clause (4) not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date of the applicable Treasury Bills as published in H.15 Daily Update, under the caption “U.S. Government Securities/Treasury Bills/Secondary Market”, or

(6) if the rate referred to in clause (5) is not so published by 3:00 p.m. on the related Calculation Date, the rate on the particular Interest Determination Date calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m. on that Interest Determination Date, of three primary United States government securities dealers selected by the Calculation Agent, for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity specified in the Supplement, or

(7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause (6), the Treasury Rate in effect on the particular Interest Determination Date.


“Bond Equivalent Yield” means a yield (expressed as a percentage) calculated in accordance with the following formula:

D x N Bond Equivalent Yield = x 100 360 - (D x M)

where “D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal, “N” refers to 270, as the case may be, and “M” refers to the actual number of days in the applicable Interest Reset Period.

3. Final Maturity. The Stated Maturity Date for any Note will be the date so specified in the Supplement, which shall be no later than 270 days from the date of issuance (exclusive of days of grace). On its Stated Maturity Date, or any date prior to the Stated Maturity Date on which the particular Note becomes due and payable by the declaration of acceleration, each such date being referred to as a Maturity Date, the principal amount of each Note, together with accrued and unpaid interest thereon, will be immediately due and payable.

4. Events of Default. The occurrence of any of the following shall constitute an “Event of Default” with respect to a Note: (i) default in any payment of principal of or interest on such Note (including on a redemption thereof); (ii) the Issuer makes any compromise arrangement with its creditors generally including the entering into any form of moratorium with its creditors generally; (iii) a court having jurisdiction shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or there shall be appointed a receiver, administrator, liquidator, custodian, trustee or sequestrator (or similar officer) with respect to the whole or substantially the whole of the assets of the Issuer and any such decree, order or appointment is not removed, discharged or withdrawn within 60 days thereafter; or (iv) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, administrator, liquidator, assignee, custodian, trustee or sequestrator (or similar official), with respect to the whole or substantially the whole of the assets of the Issuer or make any general assignment for the benefit of creditors. Upon the occurrence of an Event of Default, the principal of each obligation evidenced by such Note (together with interest accrued and unpaid thereon) shall become, without any notice or demand, immediately due and payable.14

5. Obligation Absolute. No provision of the Issuing and Paying Agency Agreement under which the Notes are issued shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on each Note at the times, place and rate, and in the coin or currency, herein prescribed.

6. Supplement. Any term contained in the Supplement shall supercede any conflicting term contained herein.

14 Unlike single payment notes, where a default arises only at the stated maturity, interest -bearing notes with multiple payment dates should

contain a default provision permitting acceleration of the maturity if the Issuer defaults on an interest payment.


Model Certificate as to Resolutions 15 [Name of Issuer]

I, ____________, the [Assistant] Secretary of _______________, a _____________ corporation (the “Issuer”), do hereby certify, in connection with the issuance and sale of short-term promissory notes under the Commercial Paper Dealer Agreement dated ____________, ____ (the “Agreement”, the terms defined therein being used herein as therein defined) between the Issuer and _______________ (the “Dealer”), that:

1. The following resolution was duly adopted by the Board of Directors of the Issuer [by unanimous written consent dated _____, ____] [at a meeting thereof duly called and held on _______, ____, at which meeting a quorum was present and acting throughout], and such resolution has not been amended, modified or revoked and is in full force and effect on the date hereof:

RESOLVED, that the Chairman of the Board, the President, the Executive Vice President, any Vice President and the Treasurer of the Issuer be, and each of them hereby is, individually authorized to: (i) borrow for the use and benefit of the Issuer from time to time up to an aggregate of $___________ at any one time outstanding through the issuance of commercial paper notes; (ii) execute such commercial paper notes in the name and on behalf of the Issuer and issue such notes in accordance with the Issuing and Paying Agency Agreement referred to below; (iii) execute and deliver (A) a Commercial Paper Dealer Agreement between the Issuer and _____________, as Dealer, providing, among other things, for the sale of commercial paper notes on behalf of the Issuer and the indemnification of the Dealer in connection therewith, (B) an Issuing and Paying Agency Agreement between the Issuer and _____________, as issuing and paying agent, and (C) a Letter of Representations addressed to The Depository Trust Company; (iv) delegate to any other officers or employees of the Issuer authority to give instructions to the Dealer pursuant to the Agreement; and (v) do such acts and execute such other instruments and documents as may be necessary and proper to effect the transactions contemplated hereby including (a) amending documents referred to herein and (b) appointing additional dealers and successors to any of the parties named.

2. Each of the Agreement and the Issuing and Paying Agency Agreement, as executed and delivered by the Issuer, is substantially in the form thereof approved by the Board of Directors and referred to in the resolution set forth in paragraph 1 hereof.

IN WITNESS WHEREOF, I have signed this certificate the _____ day of __________, _______.

___________________________

[Assistant] Secretary

15 This model certificate will serve as a guide for resolutions adopted by the Issuer. Any resolutions actually adopted, regardless of form, should

cover all the substantive matters covered in this model, and a certificate substantially to the effect of this model is required to be delivered to the Dealer under Section 3.7(c) of the Agreement.

Model Global Commercial Paper Dealer AgreementGuidance Notes

The Bond Market Association (the “Association”) is publishing its Model GlobalCommercial Paper Dealer Agreement (the “Agreement”). The Agreement is designed foruse by issuers and dealers in documenting commercial paper programs where issuance ofcommercial paper may take place in both the United States and the European markets.These programs are referred to in these Guidance Notes as “global commercial paperprograms.” The Agreement is intended to cover global commercial paper programs thatare exempt from registration under the U.S. Securities Act of 1933, as amended (the“Act”), pursuant to the exemptions contained in Sections 3(a)(3) and 4(2) of the Act forU.S. commercial paper and Regulation S for Euro commercial paper.

The Agreement is based on two existing models. The first is the Model CommercialPaper Dealer Agreement of the Association, which has been widely used in the U.S.market for a number of years to document commercial paper programs in which issuancetakes place only in the U.S. market. The second is a form of commercial paper dealeragreement developed by the Euro-Commercial Paper Association (now the Euro-Commercial Paper Committee of the International Primary Markets Association), whichhas commonly been the basis for documenting commercial paper programs in whichissuance takes place in the European market. The Euro-Commercial Paper Committeecomprises a group of international securities firms that are active in the internationalmoney markets. Most of the firms that are members of this Committee are also membersof The Bond Market Association. Allen & Overy advised the Association in thepreparation of this form; Clifford Chance also provided valuable comments andsuggestions during the course of the Agreement’s development.

The Agreement is being published with the intent to provide consistency in thedocumenting of global commercial paper programs and to streamline the documentationprocess by reducing and focusing the negotiation of terms. As with other Associationmodel agreements, use of this Agreement is not intended to be mandatory. Even thefirms that participated in its preparation may vary its terms from transaction totransaction. The Association anticipates that the Agreement is sufficiently balanced andcomprehensive to garner widespread acceptance of most of its provisions, therebylimiting negotiation in any particular case to a relatively small number of provisions.

To assist users of the Agreement, the Association has prepared these Guidance Notes,which explain certain sections of the Agreement. These Notes are aimed principally atissuers and their counsel, who may be unfamiliar with the Agreement and the reasonsbehind certain of its provisions. However, these Notes should not be relied upon by anyparty to determine, without appropriate legal or other relevant professional advice,whether any provision of the Agreement, or the Agreement as a whole, is suitable to thatparty’s particular circumstances and needs.

Capitalized terms not otherwise defined have the meanings given to them in theAgreement.

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The Association represents securities firms and banks that underwrite, trade and sell debtsecurities, both domestically and internationally.

General Observations

Consistent with the approach that is generally taken in the European market, theAgreement provides for a particular dealer to act in an administrative capacity as theArranger under the Agreement. In addition, the Agreement is formatted for execution bymultiple ECP Dealers and USCP Dealers, thereby covering all Dealers involved in acommercial paper program for an Issuer with the same terms and conditions. TheAgreement also contains mechanisms for adding additional dealers without re-executionof the entire Agreement.

The Agreement may be complemented by other arrangements providing for creditsupport by a third party of the Issuer’s obligations under the Agreement. For example,dealers may require the delivery of a guarantee by the parent company of the Issuer.

Optional Provisions

Currency of the ECP Notes: The Agreement contains options regarding the currency inwhich the ECP Notes are to be denominated, in clause 1.5 and elsewhere.

Clause 1.1

The language in the first paragraph that “the Issuer may issue and sell Notes to or throughthe Dealer(s)” is intended to convey that both agency and principal arrangements for thesale of commercial paper through the Dealers are covered by the Agreement.

Clause 1.2.2

This provision contemplates that compensation to Dealers is to be deducted from theproceeds of issuance. Compensation arrangements are conventionally agreed betweenthe Issuer and Dealers pursuant to arrangements separate from the Agreement.

Clause 2.1.7

Alternative language relating to financial statements of the Issuer (“present fairly”/”givea true and fair view of”) is provided, depending on whether the Issuer is a U.S. or Englishcorporation, respectively.

Clause 2.1.12

Issuers are advised to discuss with U.S. counsel the applicability of the exemptions undereither Section 3(a)(3) or 4(2) of the Securities Act, the specific requirements to ensure the

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continuing availability of either exemption, and the appropriate internal procedures andcontrols in connection with such exemption.

Clauses 2.1.13, 2.1.14, 2.1.15, 2.1.16, 2.1.17 and 2.1.18

Issuers are advised to discuss with U.S. counsel the applicability of the InvestmentCompany Act of 1940, Regulations S and D under the Securities Act, integration rulesunder the Securities Act, the impact on the Section 3(a)(3) exemption of listing on anational securities exchange or quoting on an automated inter-dealer quotation system inthe United States, and Regulation T of the Board of Governors of the Federal ReserveSystem. The same guidance applies to undertakings in analogous provisions in clause 3.

Clause 3.1

This provision requires the Issuer to notify the Dealers when an event occurs that wouldrender any of the representations and warranties in Clause 2.1 untrue or incorrect. If aDealer is holding Notes in inventory, the Issuer would be required either to confirm thatthe representation and warranty in clause 2.1.6 is true and accurate or to amend theInformation Memorandum so that such representation and warranty is true and accurate.If the Issuer does not so confirm or amend, the Dealer would be unable to resell the Notesheld in inventory because the representation and warranty in clause 2.1.6 would not betrue and accurate [on a Trade Date]. Positioning of Notes in inventory by a Dealerenhances the Notes’ liquidity, thereby creating an important benefit for the Issuer.

Clause 3.3

The indemnification provision in the Agreement is inserted as one possible suggestion,based on current practice in the European and U.S. markets. Indemnification provisionsand practices may vary, and the parties to any transaction may alter the suggested form oruse a different form.

Clause 3.16

Issuers are advised to discuss with U.K. counsel the applicability to them of Section 19 ofthe U.K. Financial Services and Markets Act 2000.

Clause 8.1

This provision concerning governing law for the Agreement sets forth an option to selecteither New York law or English law. The choice of the governing law for the Agreementis a business decision based on a variety of factors. The basis for such decision mightinclude the location of the Issuer, the Dealers and the investor base for the Notes, theIssuer’s level of familiarity and previous experience with New York law or English law,and prior course of dealings between the Issuer and the Dealers. New York law would, inany case, govern the USCP Notes.

Section 9.1, definition of “Disclosure Documents”

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The term “Disclosure Documents” has been defined broadly to include a large amount ofIssuer-related information. Investors in commercial paper are presumed to be basinginvestment decisions on the Issuer’s publicly available information, including reports andother documents filed under the Exchange Act. The references to forms filed with theSEC should be tailored based on whether the Issuer is a U.S. company or a non-U.S.company.

Schedule 2

A statement of selling restrictions has conventionally been a part of commercial paperdealer agreements in the London market. This schedule sets forth restrictions applying tothe manner in which commercial paper is sold in various major jurisdictions in order tocomply with certain laws and regulations in those jurisdictions relating to the offer andsale of securities.

THIS AGREEMENT is made on [DATE]

Between:

(1) [ISSUER] (the "Issuer");

(2) [ARRANGER] as arranger (in such capacity, the "Arranger");

(3) [ECP DEALERS] as dealers for the ECP Notes to be issued under the Programme; and

(4) [USCP DEALERS] as dealers for the USCP Notes to be issued under the Programme.

This agreement ("Agreement") sets forth the understandings between the Issuer, the Arranger and each Dealersin connection with any issuance and sale by the Issuer of Notes by or through a Dealer.

Certain terms used in this Agreement are defined in Clause 9 hereof.

1. Issue

1.1 Subject to the terms hereof, the Issuer may issue and sell Notes to or through the Dealer(s) from time totime at such prices and upon such terms as the Issuer and the relevant Dealer may agree, provided thatthe Issuer has, and shall have, no obligation to sell Notes to any Dealer or permit any dealer to arrangeany sale of Notes for the account of the Issuer, except as agreed, and each Dealer has, and shall have,no obligation to purchase Notes from the Issuer or to arrange any sales of Notes for the account of theIssuer, except as agreed, and provided further that only ECP Dealers may purchase or arrange for thepurchase of ECP Notes and only USCP Dealers may purchase or arrange for the purchase of USCPNotes.

The parties hereto agree that in any case where any Dealer purchases Notes from the Issuer, such Noteswill be purchased or sold by the Dealer in reliance on the representations, warranties, covenants, andagreements of the Issuer contained herein or made pursuant hereto and on the terms and conditions andin the manner provided herein.

The Issuer acknowledges that the Dealer(s) may resell Notes purchased by such Dealer(s). The tenorof each Note shall not be less than the Minimum Term specified in the Programme Summary (or suchshorter term as may be practicable and as the Issuer and the relevant Dealer(s) may agree) nor greaterthan the Maximum Term specified in the Programme Summary, calculated from and including the dateof issue of such Note to but excluding the maturity date thereof. Notes shall be issued in denominationsof at least the Minimum Denomination(s) specified in the Programme Summary.

Each issue of ECP Notes having the same issue date, maturity date, currency, denomination, yield andredemption basis will be represented by an ECP Global Note having the aggregate nominal amount ofsuch issue, as agreed between the Issuer and the relevant ECP Dealer. Each issue of USCP Notes willbe represented by a DTC Master Note and will have such aggregate nominal amount as may be agreedbetween the Issuer and the relevant USCP Dealer.

1.2 If the Issuer and any Dealer shall agree on the terms of the purchase of any Note by such Dealer or thesale of any Note arranged by such Dealer (including agreement with respect to the Issue Date, maturitydate, currency, denomination, yield, redemption basis, aggregate nominal amount and purchase priceand appropriate compensation for such Dealer's services hereunder), then:

1.2.1 the Issuer shall instruct the relevant Agent to issue such Note and deliver it in accordance withthe terms of the relevant Agency Agreement;

1.2.2 the purchaser of such Note shall make payment of the purchase price of such Note on theIssue Date, either directly or through the relevant Dealer, less any compensation for theDealer:

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(a) in the case of an ECP Note denominated in Dollars, by transfer of funds settledthrough the New York Clearing House Interbank Payments System (or such othersame-day value funds as at the time shall be customary for the settlement inNew York City of international banking transactions denominated in Dollars) to suchaccount in New York City denominated in Dollars as the ECP Agent shall from timeto time have specified for this purpose (or in such other manner as may be agreedupon from time to time by the Issuer, the ECP Agent and the relevant Dealer); or

(b) in the case of an ECP Note, by transfer of funds settled through the Trans-EuropeanAutomated Real-Time Gross Settlement Express Transfer (TARGET) System to suchaccount of the ECP Agent denominated in euro as the ECP Agent shall havespecified for this purpose (or in such other manner as may be agreed upon from timeto time by the Issuer, the ECP Agent and the relevant Dealer); or

(c) in the case of a USCP Note, by transfer of funds to the account of the USCP Agentsettled in accordance with the USCP Agency Agreement; or

(d) in all other cases in relation to an issue of ECP Notes, by transfer of freelytransferable and immediately available funds in the relevant currency to such accountof the ECP Agent at such bank in the principal domestic financial centre for suchcurrency as the ECP Agent shall have specified for this purpose (or in such othermanner as may be agreed upon from time to time by the Issuer, the ECP Agent andthe relevant Dealer); and

(e) the relevant Dealer shall notify the relevant Agent and the Issuer of the payment anddelivery instructions applicable to such Note or Notes [by fax or by electronictransmission through the ECP Agent's l system], such notification to be received insufficient time and in any event no later than: (i) for ECP (x) 10.00 a.m. (Londontime) one business day in London prior to the proposed Issue Date (in the case ofNotes denominated in Dollars, euro and Canadian Dollars); or (y) 5.00 p.m. (Londontime) two business days in London prior to the proposed Issue Date (in the case ofNotes denominated in currencies other than Dollars, euro and Canadian Dollars); or(ii) for USCP, such later time or date as may be provided in the USCP AgencyAgreement; or (iii) such other time as may be agreed between the relevant Agent andthe relevant Dealer to enable the relevant Agent to deliver such Note or Notes ascontemplated in the relevant Agency Agreement on its Issue Date.

1.3 If for any reason (including, without limitation, the failure of the relevant trade) a Note agreed to beissued pursuant to Clause 1.1 is not to be issued, each of the Issuer and the relevant Dealer shallimmediately notify the relevant Agent thereof.

1.4 Except as otherwise agreed, in the event any Dealer is acting as an agent and a purchaser shall eitherfail to accept delivery of or make pay the purchase price of a Note (or a portion thereof) on the IssueDate, the Dealer shall promptly notify the Issuer, and if the Dealer has theretofore paid the Issuer forthe Note, the Issuer will promptly return such funds to the Dealer against its return of the Note to theIssuer, in the case of a definitive Note, or upon notice of such failure in the case of a global Note. Ifsuch failure occurred for any reason other than default by the Dealer, the Issuer shall reimburse theDealer on an equitable basis for the Dealer's loss of the use of such funds for the period such fundswere credited to the Issuer's account.

1.5 For the purposes of calculating the Maximum Amount, the nominal amount of any outstanding Notedenominated in any currency other than [Dollars][euro] shall be taken as the [Dollar][Euro] Equivalentof such nominal amount as at the date of the agreement for the issue of the Note or Notes then to beissued provided that in calculating the nominal amount of Notes outstanding on any date there shall bedisregarded Notes which mature on such date.

The Issuer may increase the Maximum Amount by the Issuer giving at least ten London and New Yorkbusiness days' notice in writing, substantially in the form set out in Schedule 4, to each of the Dealers

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and the Agents. Issues after such increase will not take effect until the Dealers have received from theIssuer the documents listed in such letter (if required by the Dealers), in each case in form andsubstance acceptable to each Dealer.

1.6 The following provisions of this Clause 1.6 apply only to Index Linked Notes.

1.6.1 If Index Linked Notes are to be issued, the Issuer will at its sole option (unless otherwiseagreed between the Issuer and the relevant Dealer at or prior to the time that the agreement toissue such Notes is made) appoint either the relevant Dealer or an ECP Agent (subject to theconsent of the relevant Dealer or ECP Agent thereto) or some other person to be thecalculation agent in respect of such Index Linked Notes.

1.6.2 If a Dealer is to be the calculation agent, its appointment as such shall be on the terms of theform of agreement set out in Schedule 6, and the Dealer will be deemed to have entered intoan agreement in such form for a particular calculation if it is named as calculation agent in theredemption calculation attached to or endorsed on the relevant Note.

1.6.3 If an ECP Agent is to be the calculation agent, its appointment as such shall be on the termsset out in the ECP Agency Agreement.

1.6.4 If the calculation agent is not a Dealer or an ECP Agent, that person shall execute (if it has notalready done so) an agreement substantially in the form of the agreement set out in Schedule 6and the appointment of that person shall be on the terms of that agreement.

1.6.5 The parties hereto acknowledge that only ECP Notes can be issued as Index Linked Notes.

1.7 It is a condition of the issue of any Notes denominated in a currency in respect of which particularlaws, guidelines, regulations, restrictions or reporting requirements apply that:

(i) such Notes are only issued in circumstances which comply with such laws, guidelines,regulations, restrictions or reporting requirements from time to time; and

(ii) each issue of Notes will also be conditional upon the relevant currency being freelytransferable and freely convertible into [Dollars][euro], and any appropriate amendmentsrequired by the relevant Dealer or the Issuer having been made to this Agreement and/or theECP Agency Agreement.

1.8 The parties acknowledge that the ECP Dealers may from time to time propose to the Issuer the issue ofIndex Linked Notes, or Notes denominated in currencies other than those mentioned in the InformationMemorandum, subject always to Clause 1.7.

1.9 The parties acknowledge that the ECP Notes may be denominated in any currency, subject tocompliance with all applicable legal and regulatory requirements. USCP Notes issued under theProgramme may only be denominated in Dollars.

1.10 In relation to ECP Notes, the parties acknowledge that ECP Definitive Notes will be issued only in thecircumstances contemplated by the ECP Global Notes.

2. Representations and Warranties

2.1 The Issuer represents and warrants to each Dealer on:

(i) the date of this Agreement;

(ii) each date upon which the Maximum Amount is increased;

(iii) each date upon which the Information Memorandum is amended or supplemented;

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(iv) each Trade Date; and

(v) each date upon which Notes are, or are to be, issued and delivered,

that:

2.1.1 each of:

(a) the establishment of the Programme and the execution, delivery and performance bythe Issuer of the Agreements to which it is party and any Notes issued by it;

(b) the entering into and performance by the Issuer of any agreement for the sale ofNotes reached pursuant to Clause 1.1; and

(c) the issue and sale of Notes by the Issuer,

has been duly authorised by all necessary action and the same constitute, or, in the case ofNotes, will, when issued in accordance with the relevant Agency Agreement, constitute, validand binding obligations of the Issuer enforceable against it in accordance with their respectiveterms subject to the laws of bankruptcy, insolvency and other similar laws affecting the rightsof creditors generally and subject, as to enforceability, to general principles of equity, and thesame will not infringe any of the provisions of the [constitutional documents] of the Issuerand will not contravene any law or regulation to which the Issuer or any of its assets is subject,nor will the same contravene any order, writ, injunction, decree or judgment to which theIssuer or any of its assets is subject or result in the breach of any term of, or cause a defaultunder, any contract or instrument to which the Issuer is a party or by which the Issuer or anyof its assets may be bound nor result in the imposition of any mortgage, charge, pledge, lien orother security interest over the property, assets or business of the Issuer except where suchinfringement, contravention, breach, default or imposition would both (i) not reasonably beexpected to be material in the context of an issue of Notes and (ii) not affect the ability orobligation of the Issuer to perform its obligations under the Notes or any Agreement;

2.1.2 The Issuer is duly incorporated and validly existing [and in good standing] under the laws ofits jurisdiction of incorporation, has full corporate power and capacity to execute and delivereach of the Agreements to which it is a party and to undertake and to perform the obligationsexpressed to be assumed by it therein, and has taken all necessary corporate action to approveand authorise the same;

2.1.3 all Notes will on issue constitute direct, unconditional, unsubordinated and unsecuredobligations of the Issuer and will on issue rank without any preference amongst themselvesand at least pari passu with all other present and future unsecured and unsubordinatedobligations of the Issuer, other than any obligation preferred by mandatory provisions ofapplicable law;

2.1.4 all consents, authorisations, licences or approvals of and registrations and filings with anygovernmental or regulatory authority required to be obtained by the Issuer in connection withthe issue, offer or sale of Notes and/or the execution, delivery or performance of itsobligations under the Agreements and/or any Notes have been obtained and are in full forceand effect or, in the case of an issue of Notes, will be obtained and will be in full force andeffect on the Issue Date of such Notes, and copies thereof have been supplied or, in the case ofan issue of Notes, will have been supplied to the relevant Dealer on or prior to the Issue Dateof such Notes;

2.1.5 (i) the information relating to the Issuer contained in the Disclosure Documents is true andaccurate in all material respects and not misleading in any material respect, and (ii) theDisclosure Documents do not contain any untrue statement of a material fact or omit to state amaterial fact required to be stated therein or necessary to make the statements containedtherein, in the light of the circumstances under which they were made, not misleading;

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2.1.6 the most recently published audited annual consolidated financial statements of the Issuerwere prepared in accordance with the requirements of law and with accounting principlesgenerally accepted in [Issuer's jurisdiction of incorporation] consistently applied and they[present fairly - to adjust to local GAAP test] the financial condition of the Issuer and theGroup as at the date to which they were prepared (the "relevant date") and of the results ofthe operations of the Issuer and the Group for the financial year ended on the relevant date andthat there has been no material adverse change in the condition or prospects (financial orotherwise) of the Issuer or the Group since the relevant the date;

2.1.7 [except as disclosed in any Disclosure Document,] (a) there is no litigation, arbitration orgovernmental proceeding pending or, to the knowledge of the Issuer, threatened against oraffecting the Issuer or any of its Subsidiaries which either (i) might result in a material adversechange in the condition (financial or otherwise), operations or business prospects of the Issueror (ii) might adversely affect the ability of the Issuer to perform its obligations under theNotes, the Agreements and the transactions contemplated thereby, and (b) the Issuer is not indefault in respect of any indebtedness for borrowed money or any obligation having a similarcommercial effect where such default has remained unremedied for the duration of anyapplicable grace period(s);

2.1.8 except where already communicated in writing to the relevant address for notices given by therelevant Dealer(s) (provided that, in the case of the representations and warranties madepursuant to Clauses 2.1(iv) and (v) above, such disclosure has been so made prior to therelevant Trade Date), there has been no downgrading, nor any notice to the Issuer of anyintended downgrading, in the [short term] rating accorded to the Issuer by [Standard andPoor's Rating Services, a Division of the McGraw-Hill Companies Inc., and/or Moody'sInvestors Services [Inc./Limited]] and/or any other internationally recognised rating agencywhich has issued a [short term] rating in connection with, or with any [short term] securityissued by, the Issuer. The Issuer is not aware that any such rating is listed on "Creditwatch" orhas been announced to be under formal review by any relevant rating agency;

2.1.9 the outstanding nominal amount of all Notes on the date of issue of any Note does not and willnot exceed the Maximum Amount set out in the Programme Summary (as increased from timeto time pursuant to Clause 1.5);

2.1.10 the Issuer is not required by any law or regulation or any relevant taxing authority in anyrelevant jurisdiction to make any deduction or withholding from any payment due under anyof the Agreements or any Notes for or on account of any income, registration, transfer orturnover taxes, customs or other charges, duties or taxes of any kind;

2.1.11 [the offer and sale of the USCP Notes in the manner contemplated by this Agreement do notrequire registration of the Notes under the Securities Act, pursuant to the exemption fromregistration contained in Section 4(2) thereof, and no indenture in respect of the Notes isrequired to be qualified under the Trust Indenture Act, assuming that the offer and sale of theUSCP Notes are made by the USCP Dealers in accordance with the restrictions of Part II ofSchedule 2 hereto;]1 [the USCP Notes are not required to be registered under the SecuritiesAct, pursuant to the exemption from registration contained in Section 3(a)(3) thereof, noindenture in respect of the Notes is required to be qualified under the Trust Indenture Act, andthe Notes are and will be rated as "prime quality" commercial paper by at least one "nationallyrecognized statistical rating organization" as defined in Rule 436(g)(2) under the SecuritiesAct;]2

1 Only applicable to Section 4(2) Notes.

2 Only applicable to Section 3(a)(3) Notes.

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2.1.12 the Issuer is not, and as a result of any issue of Notes or the receipt or application of theproceeds thereof the Issuer will not be, or be required to register as, an investment companywithin the meaning of the United States Investment Company Act of 1940;

2.1.13 neither the Issuer nor any of its affiliates, nor any person acting on their behalf has engaged inany directed selling efforts with respect to the ECP Notes, and each of them has complied withthe offering restrictions requirement of Regulation S (terms used in this sub-Clause have themeanings given to them by Regulation S under the Securities Act);

2.1.14 [neither the Issuer nor its affiliates, nor any person acting on their behalf have engaged in anyform of general solicitation or general advertising (within the meaning of Regulation D underthe Securities Act) in connection with any offer or sale of the USCP Notes in the UnitedStates];1

2.1.15 neither the Issuer nor its affiliates (as defined in Rule 501 under the Securities Act) nor anyperson acting on their behalf (other than the Dealers) has taken any action that would [result inthe integration of the Notes with any other offering of securities or would] 1 require theregistration of the ECP Notes or the USCP Notes under the Securities Act;

2.1.16 [no securities of the same class (within the meaning of Rule 144A(d)(3) under the SecuritiesAct) as the USCP Notes are or, as of the date of their issuance, will be (i) listed on a nationalsecurities exchange in the United States which is registered under the Exchange Act, or (ii)quoted in any automated inter-dealer quotation system in the United States;]1

2.1.17 the proceeds of the sale of the USCP Notes are not currently contemplated to be used for thepurpose of buying, carrying or trading securities within the meaning of Regulation T and theinterpretations thereunder by the Board of Governors of the Federal Reserve System[;and/.]

2.1.18 2.1.18 [(i) except as permitted by Clause 2.2, within the preceding six months neither theIssuer nor any person other than a Dealer acting on behalf of the Issuer has offered or sold anyNotes, or any substantially similar security of the Issuer (including, without limitation,medium-term notes issued by the Issuer), to, or solicited offers to buy any such security from,any person other than a Dealer, and (ii) it has not taken or omitted to take any action thatwould cause the offering and sale of Notes hereunder to be integrated with any other offeringof securities, whether such offering is made by the Issuer or some other party or parties.]1

2.2 The Issuer agrees that (a) the proceeds from the sale of any commercial paper issued in reliance upon,and in compliance with, the exemption provided by Section 3(a)(3) of the Securities Act will besegregated from the proceeds of the sale of any Notes issued by the Issuer in reliance upon theexemption provided by Section 4(2) of the Securities Act and Rule 506 thereunder by being placed in aseparate account; (b) the Issuer will institute appropriate corporate procedures to ensure that the offersand sales of commercial paper issued by the Issuer pursuant to the Section 3(a)(3) exemption will notbe integrated with offerings and sales of Notes issued by it pursuant to the Section 4(2) exemption and(c) that the Issuer will comply with each of the requirements of Section 3(a)(3) of the Securities Act inselling commercial paper or other short-term debt securities other than the Notes in the United States.]1

2.3 The Issuer agrees that (except as permitted by Clause 2.2), as long as the Notes are being offered forsale by the Dealers as contemplated hereby and until at least six months after the offer of Noteshereunder has been terminated, neither the Issuer nor any person other than a Dealer will offer theNotes or any substantially similar security of the Issuer for sale to, or solicit offers to buy any such



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security from, any person other than a Dealer, it being understood that such agreement is made with aview to bringing the offer and sale of the Notes within the exemption provided by Section 4(2) of theSecurities Act and Rule 506 thereunder and shall survive any termination of this Agreement.]1

3. Undertakings of the Issuer

3.1 If, prior to the time a Note is issued and delivered to or for the account of the relevant Dealer, an eventoccurs which would render any of the representations and warranties set out in Clause 2.1 immediately,or with the lapse of time, untrue or incorrect or otherwise would be material to holders of Notes, theIssuer will inform the relevant Dealer in writing as soon as practicable of the occurrence of such event.In either case, the relevant Dealer shall inform the Issuer in writing without any undue delay whether itwishes to continue or discontinue the issuance and delivery of the respective Notes. In the event thatany of the Dealers notifies the Issuer that it has Notes it is holding in inventory, the Issuer shallpromptly either confirm to the relevant Dealer that the representation and warranty contained in sub-clause 2.1.5 is true and accurate on the date of such confirmation or supplement or amend theInformation Memorandum so that the representation and warranty contained in sub-clause 2.1.5 is trueand accurate as at the date such supplement or amendment is delivered to the Dealers and the Issuershall make such supplement or amendment available to the Dealers.

3.2 The Issuer covenants and agrees that whenever the Issuer shall publish or make available to itsshareholders or to the public (by filing with any regulatory authority, securities exchange or otherwise)any information which could reasonably be expected to be material in the context of this Agreementand the transactions contemplated hereby, the Issuer shall notify the Dealer(s) as to the nature of suchinformation, shall make a reasonable number of copies of such information available to the Dealer(s)upon request to permit distribution to investors and prospective investors and the Issuer shall take suchaction (if any) as may be necessary to ensure that the representation and warranty contained in sub-clause 2.1.5 is true and accurate on the dates contemplated by such sub-Clause.

3.3 The Issuer undertakes that it shall indemnify and hold harmless on demand each Indemnitee againsteach Claim, imposed upon, incurred by or asserted against the Indemnitees arising out of or basedupon:

(a) any allegation that the Disclosure Documents included (as of any relevant time) or includes anuntrue statement of a material fact or omitted (as of any relevant time) or omits to state anymaterial fact necessary to make the statements therein, in light of the circumstances underwhich they were made, not misleading; or

(b) arising out of or based upon the breach by the Issuer of any agreement, covenant orrepresentation made in or pursuant to this Agreement; or

(c) Notes not being issued for any reason, other than as a result of the failure of any Dealer to payfor Notes it had agreed to purchase as principal after an agreement for the sale of such Noteshas been made.

The Issuer agrees to reimburse each Indemnitee for all expenses (including reasonable fees anddisbursements of internal and external counsel) as they are incurred by it in connection withinvestigating or defending any Claim in respect of which such indemnification may be sought (whetheror not it is a party to any such proceedings).

In order to provide for just and equitable contribution in circumstances in which the indemnificationprovided for in this Clause is held to be unavailable or insufficient to hold harmless each Indemnitee,although applicable in accordance with the terms of this Clause, the Issuer shall contribute to theaggregate costs incurred by the relevant Dealer in connection with any Claim in the proportion of therespective economic interests of the Issuer, on the one hand, and the relevant Dealer on the other;provided, however, that such contribution by the Issuer shall be in an amount such that the aggregatecosts incurred by the relevant Dealer do not exceed the aggregate of the commissions and fees earnedby the relevant Dealer hereunder with respect to the issue or issues of Notes to which such Claimsrelates. The respective economic interests shall be calculated by reference to the proceeds to the Issuer

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of the Notes issued hereunder and the aggregate commissions and fees earned by the relevant Dealerhereunder.

[Promptly after receipt by an Indemnitee of notice of the existence of a Claim, such Indemnitee will, ifa claim in respect thereof is to be made against the Issuer, notify the Issuer in writing of the existencethereof; provided that (i) the omission so to notify the Issuer will not relieve the Issuer from anyliability which it may have hereunder unless and except to the extent it did not otherwise learn of suchClaim and such failure results in the forfeiture by the Issuer of substantial rights and defences, and (ii)the omission to notify the Issuer will not relieve it from liability which it may have to an Indemniteeotherwise than on account of this Clause.

In the event that any such Claim is made against any Indemnitee and it notifies the Issuer of theexistence thereof, the Issuer will be entitled to participate therein, and to the extent that it may elect bywritten notice delivered to the Indemnitee, to assume the defence thereof, with counsel reasonablysatisfactory to such Indemnitee; provided that if the defendants in any such Claim include both theIndemnitee and the Issuer, and the Indemnitee shall have concluded that there may be legal defencesavailable to it which are different from or additional to those available to the Issuer, the Issuer shallnot have the right to direct the defence of such Claim on behalf of such Indemnitee, and the Indemniteeshall have the right to select separate counsel to assert such legal defences on behalf of suchIndemnitee.

Upon receipt of notice from the Issuer to such Indemnitee of the Issuer's election so to assume thedefence of such Claim and approval by the Indemnitee of counsel, the Issuer will not be liable to suchIndemnitee for expenses incurred thereafter by the Indemnitee in connection with the defence thereof(other than reasonable costs of investigation) unless (i) the Indemnitee shall have employed separatecounsel in connection with the assertion of legal defences in accordance with the proviso to the nextpreceding sentence (it being understood, however, that the Issuer shall not be liable for the expenses ofmore than one separate counsel (in addition to any local counsel in the jurisdiction in which any Claimis brought), approved by the relevant Dealer, representing the Indemnitee who is party to such Claim),(ii) the Issuer shall not have employed counsel reasonably satisfactory to the Indemnitee to representthe Indemnitee within a reasonable time after notice of existence of the Claim, or (iii) the Issuer hasauthorised in writing the employment of counsel for the Indemnitee.

The indemnity, reimbursement and contribution obligations of the Issuer hereunder shall be in additionto any other liability the Issuer may otherwise have to an Indemnitee and shall be binding upon andinure to the benefit of any successors, assigns, heirs and personal representatives of the Issuer and anyIndemnitee.

The Issuer agrees that without the relevant Dealer's prior written consent, it will not settle,compromise or consent to the entry of any judgment in any Claim in respect of which indemnificationmay be sought under the indemnification provision of this Agreement (whether or not the Dealer or anyother Indemnitee is an actual or potential party to such Claim), unless such settlement, compromise orconsent includes an unconditional release of each Indemnitee from all liability arising out of suchClaim.]

3.4 The Issuer undertakes that it shall:

(a) pay, or reimburse the Arranger for, out-of-pocket costs and expenses (including value addedtax and any other similar taxes or duties thereon and fees and disbursements of counsel to theArranger) as and when incurred by the Arranger in connection with the preparation,negotiation, printing, execution and delivery of this Agreement and all documentscontemplated by this Agreement;

(b) pay, or reimburse each Dealer for, out-of-pocket costs and expenses (including value addedtax and any other similar taxes or duties thereon and fees and disbursements of counsel tosuch Dealer) as and when incurred by such Dealer in connection with the enforcement after abreach by the Issuer or reasonable protection (in circumstances where a breach would

9

otherwise occur) of such Dealer's rights under this Agreement and all documentscontemplated by this Agreement; and

(c) pay all stamp, registration and other similar taxes and duties (including any interest thereon orin connection therewith) which may be payable in any relevant jurisdiction upon or inconnection with the creation and issue of any Notes and the execution, delivery andperformance of any of the Agreements.

3.5 The Issuer undertakes that it shall notify each Dealer of any change in the identity of or the offices ofan Agent, not later than ten days prior to the making of any such change

3.6 The Issuer will give each Dealer prompt notice (but in any event prior to the Trade Date for anysubsequent issue of Notes) of any amendment to, modification of or waiver with respect to, the Notesor any Agreement, including a complete copy of any such amendment, modification or waiver.

3.7 The Issuer shall take such steps as are required of it to ensure that any laws and regulations orrequirements of any governmental agency, authority or institution which may from time to time beapplicable to the Issuer in respect of any Note shall be observed and complied with in all materialrespects.

3.8 The Issuer undertakes that neither the Issuer, nor any of its affiliates, nor any person acting on theirbehalf will engage in any directed selling efforts with respect to the ECP Notes, and each of them willcomply with the offering restrictions requirement of Regulation S. Terms used in this Clause have themeanings given to them by Regulation S under the Securities Act.

3.9 The Issuer undertakes that neither the Issuer nor any of its affiliates, nor any person acting on theirbehalf will, directly or indirectly, make offers or sales of any security, or solicit offers to buy anysecurity, under circumstances that would require the registration of the ECP Notes or the USCP Notesunder the Securities Act.

3.10 The Issuer undertakes that it will use the proceeds of the sale of the Notes for "current transactions"within the meaning of Section 3(a)(3) of the Securities Act.]2

3.11 So long as any USCP Notes are "restricted securities" within the meaning of Rule 144(a)(3) under theSecurities Act and the Issuer is not subject to and in compliance with the reporting requirements ofSection 13 or 15(d) of the Exchange Act or exempt from such reporting pursuant to Rule 12g3-2(b)thereunder, the Issuer will furnish to each holder or beneficial owner of USCP Notes and to anyprospective purchaser of such USCP Notes, upon the request of such holder, beneficial owner orprospective purchaser, any information required to be provided by Rule 144A(d)(4) under theSecurities Act.]1

3.12 The Issuer will qualify any USCP Notes for offer and sale under the applicable securities or "blue sky"laws of any State of the United States as the USCP Dealers shall reasonably request provided that theIssuer shall not be obligated to file any general consent to service of process or to qualify as a foreigncorporation in any U.S. jurisdiction in which it is not so qualified or subject itself to taxation in respectof doing business in any U.S. jurisdiction in which it is not otherwise so subject.

3.13 The Issuer undertakes to conduct its affairs in such a manner as will ensure that it does not becomerequired to register as an "investment company" (within the meaning of the United States InvestmentCompany Act of 1940).

2 Only applicable to Section 3(a)(3) Notes.

1 Only applicable to 4(2) Notes.

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3.14 In the event that the Issuer determines to use the proceeds of the sale of USCP Notes for the purpose ofbuying, carrying or trading securities, whether in connection with an acquisition of another company orotherwise, the Issuer shall give the USCP Dealers at least five business days' prior written notice to thateffect. The Issuer shall also give the USCP Dealers prompt notice of the actual date that the Issuercommences to purchase securities with the proceeds of the USCP Notes.

3.15 In the event that any Note offered or to be offered by a Dealer would be ineligible for resale under Rule144A, the Issuer shall immediately notify the relevant Dealer (by telephone, confirmed in writing) ofsuch fact and shall promptly (but in any event not later than the Trade Date of any further Notes)prepare and deliver to the relevant Dealer an amendment or supplement to the InformationMemorandum describing the Notes that are ineligible, the reason for such ineligibility and any otherrelevant information relating thereto. ] 1

3.16 If the issue of the Notes would otherwise constitute a contravention of Section 19 of the FSMA, theIssuer will issue such Notes only if the following conditions apply:

(a) the relevant Dealer represents, warrants and covenants in the terms set out in Section 3(c) ofPart I of Schedule 2; and

(b) the redemption value of each such Note is not less than £100,000 (or an amount of equivalentvalue denominated wholly or partly in a currency other than Sterling), and no part of any Notemay be transferred unless the redemption value of that part is not less than £100,000 (or suchequivalent amount).]3

3.17 The Issuer hereby agrees that any payments in respect of USCP Notes to any USCP Dealer hereunderor to any holder from time to time of USCP Notes shall be in United States Dollars and shall be free ofall withholding, stamp and other similar taxes and of all other governmental charges of whatsoevernature imposed by the jurisdiction in which the Issuer is located. In the event that any withholding isrequired by law, the Issuer agrees to (i) pay the same and (ii) pay such additional amounts to therelevant USCP Dealer or any such holder which, after deduction of any such withholding, stamp orother taxes or governmental charges of any nature whatsoever imposed with respect to the payment ofsuch additional amount, shall equal the amount withheld pursuant to sub-Clause (i) above.

3.18 The Issuer agrees to indemnify each USCP Dealer and each holder from time to time of Notes againstany loss incurred by such USCP Dealer as a result of any judgment or order being given or made forany amount due hereunder and such judgment or order being expressed and paid in a currency (the"Judgment Currency") other than United States Dollars and as a result of any variation as between (i)the rate of exchange at which the United States Dollar amount is converted into the Judgment Currencyfor the purpose of such judgment or order, and (ii) the rate of exchange at which such USCP Dealer isable to purchase United States Dollars with the amount of Judgment Currency actually received bysuch USCP Dealer. The foregoing indemnity shall constitute a separate and independent obligation ofthe Issuer and shall continue in full force and effect notwithstanding any such judgment or order asaforesaid. The term "rate of exchange" shall include any premiums and costs of exchange payable inconnection with the purchase of, or conversion into, the relevant currency.

3.19 The Issuer represents, warrants and undertakes on the terms set out in Part II of Schedule 2 hereto.]1


3 Not applicable to an Issuer which is an authorised person permitted to accept deposits under theFSMA/an exempt person under the FSMA.

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4. Dealers' Undertakings

4.1 Each ECP Dealer represents, warrants and undertakes on the terms set out in [Part I] of Schedule 2hereto. [Each USCP Dealer undertakes on the terms set out in Part II of Schedule 2 hereto.]

4.2 The obligations of each Dealer contained in this Agreement are several.

[4.3 After receipt by the USCP Dealers of a notice from the Issuer pursuant to Clause 3.14 confirming thatit has commenced to purchase securities with the proceeds of the USCP Notes, in the event that anyUSCP Dealer purchases USCP Notes as principal and does not resell such USCP Notes on the day ofsuch purchase, to the extent necessary to comply with Regulation T and the interpretations thereunder,such USCP Dealer will sell such USCP Notes either (i) only to offerees it reasonably believes to beQIBs or to QIBs it reasonably believes are acting for other QIBs, in each case in accordance with Rule144A or (ii) in a manner which would not cause a violation of Regulation T and the interpretationsthereunder.]1

[4.4 Each USCP Dealer shall furnish or shall have furnished to each purchaser of USCP Notes for which ithas acted as the USCP Dealer a copy of the then-current Information Memorandum unless suchpurchaser has previously received a copy of the Information Memorandum as then in effect.]1

5. Authority to Distribute Documents

Subject to Clause 4.1 above, the Issuer hereby authorises each Dealer to circulate copies of theDisclosure Documents, and to make oral statements consistent with the Disclosure Documents and/orinformation received from an appropriate employee of the Issuer, to purchasers or potential purchasersof Notes unless and until the appointment of such Dealer is terminated in accordance with Clause 7.1.

6. Conditions Precedent

6.1 The Issuer agrees to deliver to each Dealer, or the relevant Agent, as the case may be, prior to the firstissue of Notes under the Programme, each of the documents set out in Schedule 1 in form, substanceand number satisfactory to the relevant Dealer.

6.2 In relation to each issue of Notes, it shall be a condition precedent to the issue and sale thereof by theIssuer:

(a) the representations and warranties of the Issuer contained in Clause 2 above are true andcorrect on each Trade Date and on the date on which such Notes are issued and delivered;

(b) there is no breach of the Issuer's obligations under any of the Agreements or the Notes; and

(c) the aggregate nominal amount of the Notes to be issued, when added to the aggregate nominalamount of all Notes outstanding under the Programme on the proposed Issue Date (excludingfor this purpose any Notes due to be redeemed on such Issue Date) shall not exceed theMaximum Amount.

7. Termination and Appointment

7.1 The Issuer may terminate the appointment of any Dealer, and any Dealer may resign, on not less thanone day's written notice to the relevant Dealer or the Issuer, as the case may be. The Issuer shallpromptly inform the other Dealers and the Agents of any such termination or resignation. Terminationas aforesaid shall not affect any rights or obligations (including but not limited to those arising underClause 4.2) which have accrued at the time of termination or which accrue thereafter in relation to anyact or omission which occurred prior to such time.


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7.2 Nothing in this Agreement shall prevent the Issuer, from appointing one or more additional Dealers(either for a particular issue of Notes or as a Dealer to the Programme) upon the terms of thisAgreement provided that any additional Dealer shall have first confirmed acceptance of its appointmentupon such terms in writing to the Issuer in substantially the form of the letter set out in Schedule 5,whereupon it shall become a party to this Agreement vested with all the authority, rights, powers,duties and obligations as if originally named as a Dealer hereunder as set out in such letter. The Issuershall promptly inform the other Dealers (except in the case of the appointment of Dealer for a particularissue of Notes only), and the Agents of any such appointment. The Issuer hereby agrees to supply tosuch additional Dealer, upon such appointment, copies of the condition precedent documents specifiedin Schedule 1 (if requested by such additional Dealer) including, if necessary, reliance letters in respectof opinion of counsel.

8. Law and Jurisdiction

8.1 This Agreement, any agreement reached pursuant to Clause 1.1 and the [ECP] Notes are governed by,and shall be construed in accordance with, [New York/English] law. [The USCP Notes shall begoverned by and construed in accordance with the laws of the State of New York.]

8.2 The Issuer irrevocably agrees that the courts of [England and (to the extent to which Proceedings orDisputes (as defined below) involve USCP Notes or USCP Dealers)] the United States federal courts orthe courts of the State of New York sitting in the Borough of Manhattan are to have jurisdiction tosettle any disputes or determine any proceedings (respectively, "Disputes" and "Proceedings") whichmay arise out of or in connection with this Agreement, any agreement reached pursuant to Clause 1.1or any Notes and that accordingly any Proceeding or Dispute so arising may be brought in such courts.Nothing herein contained shall limit the right of any Dealer to take Proceedings in any other court ofcompetent jurisdiction; nor shall the taking of Proceedings in any one or more jurisdictions precludethe taking of Proceedings in any other jurisdiction, whether concurrently or not, if and to the extentpermitted by law.

8.3 The Issuer irrevocably waives any objection which it might now or hereafter have to the courts of[England or (to the extent provided above) the courts of] New York being nominated as the forum tohear and determine any Proceedings and to settle any Disputes, and agrees not to claim that any suchcourt is not a convenient or appropriate forum.

8.4 [The Issuer agrees that the process by which any Proceedings in England are begun may be served on itby being delivered to [Insert name and address of agent for service of process], or, if different, itsregistered office for the time being. If such person is not or ceases to be effectively appointed to acceptservice of process on behalf of the Issuer, the Issuer shall appoint a further person in England to acceptservice of process on its behalf and, failing such appointment within 15 days, any Dealer shall beentitled to appoint such a person by written notice to the Issuer. Nothing in this paragraph shall affectthe right of any Dealer to serve process in any other manner permitted by law.]

8.5 The Issuer agrees that the process by which any Proceedings in the State of New York are begun maybe served on it by being delivered to [Insert name and address of agent for service of process]. If suchperson is not or ceases to be effectively appointed to accept service of process on behalf of the Issuer,the Issuer shall appoint a further person in the Borough of Manhattan in The City of New York in theState of New York to accept service of process on its behalf and, failing such appointment within 15days, any USCP Dealer shall be entitled to appoint such a person by written notice to the Issuer.Nothing in this paragraph shall affect the right of any Dealer to serve process in any other mannerpermitted by law.

8.6 To the extent that the Issuer or any of its properties, assets or revenues may have or may hereafterbecome entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty orotherwise, from any legal action, suit or proceeding in connection with or arising out of thisAgreement, any agreement reached pursuant to Clause 1.1 or any Notes, from the giving of any reliefin any thereof, from set off or counterclaim, from the jurisdiction of any court, from service of process,from attachment upon or prior to judgment, from attachment in aid of execution of judgment, or fromexecution of judgment, or other legal process or proceeding for the giving of any relief or for the

13

enforcement of any judgment, in any jurisdiction in which any Proceeding may at any time becommenced, with respect to its obligations, liabilities or any other matter under or arising out of or inconnection with this Agreement, any agreement reached pursuant to Clause 1.1 or any Notes, theIssuer hereby irrevocably and unconditionally waives, and agrees for the benefit of the Dealers, andany holder from time to time of the Notes, not to plead or claim, any such immunity, and consents tosuch relief and enforcement.

9. Definitions and Interpretation

9.1 In this Agreement:

"Agency Agreements" means the ECP Agency Agreement and the USCP Agency Agreement;

"Agents" means the ECP Agent and the USCP Agent and each of them an "Agent";

"Agreements" means this Agreement, any agreement reached pursuant to Clause 2.1[, the Deed ofCovenant-English law only] and the Agency Agreements;

"Claim" means any and all liabilities, penalties, suits, causes of action, losses, damages, claims, costsand expenses (including, without limitation, fees and disbursements of counsel) or judgments ofwhatever kind of nature;

"Clearstream, Luxembourg" means Clearstream Banking, société anonyme;

"Dealers" means the ECP Dealers and the USCP Dealers;

["Deed of Covenant" means the deed of covenant dated l executed by the Issuer in respect of the ECPGlobal Notes - English law only;]

"Disclosure Documents" means, at any particular date, the Information Memorandum, together with,to the extent applicable, [(a)] the Issuer's most recent annual report on Form [10-K/20-F] filed with theSEC and each report on Form [10-Q or 8-K/6-K] filed by the Issuer with the SEC since the date of suchForm [10-K/20-F], (b) the most recently published audited consolidated financial statements of theIssuer covering two fiscal years, and each interim financial statement or report prepared subsequentthereto, if not included in item (a) above, (c) the Issuer's other publicly available recent reports,including, but not limited to, any publicly available filings or reports provided to shareholders, and (d)any other document (each an "Authorised Document") delivered by the Issuer to the Dealers whichthe Issuer has expressly authorised to be distributed to actual or potential purchasers of Notes save thatany Authorised Document which is superseded by any subsequent Authorised Document shallthereupon, to the extent so superseded, cease to be an Authorised Document, and provided that forpurposes of the representations and warranties made pursuant to Clauses 2.1(iv) and (v), the DisclosureDocuments means the Disclosure Documents as of the Trade Date (including any supplements oramendments made on or prior to that date) and not including any subsequent revision, supplement oramendment to, or incorporation of information in, the Disclosure Documents;

"[Dollar] [Euro] Equivalent" means on any day:

(a) in relation to any [Dollar] [euro] Note, the nominal amount of such Note; and

(b) in relation to any Note denominated or to be denominated in any other currency, the amount in[Dollars][euro] which would be required to purchase the nominal amount of such Note asexpressed in such other currency at the spot rate of exchange for the purchase of such othercurrency with [Dollars][euro] quoted by the ECP Agent at or about 11.00 a.m. (London time)on such day;

"Dollar Note" means a Note denominated in Dollars;

"Dollars" or "U.S.$" denotes United States Dollars;

14

"DTC" means The Depository Trust Company;

"DTC Master Note" means a master note registered in the name of DTC or its nominee representingUSCP Notes issued in book-entry form through the facilities of DTC;

"ECP Agency Agreement" means the issuing and paying agency agreement in respect of ECP Notesdated l, between the Issuer and the ECP Agent, providing for the issuance of and payment on the ECPNotes;

"ECP Agent" means l acting as issuing and paying agent for ECP Notes and any successor oradditional agent appointed by the Issuer in accordance with the ECP Agency Agreement;

"ECP Dealer" means each institution specified as an ECP Dealer in the Programme Summary togetherwith any additional institution or institutions appointed as such pursuant to Clause 7.2 but excluding ineach case any institution or institutions whose appointment as such has been terminated, or whoseresignation has become effective, pursuant to Clause 7.1;

"ECP Definitive Note" means a security printed ECP Note issued by the Issuer in definitive bearerform;

"ECP Global Note" means an ECP Note in global form, representing an issue of promissory notes of alike maturity issued by the Issuer from time to time pursuant to the ECP Agency Agreement;

"ECP Note" means a Note issued pursuant to the ECP Agency Agreement and sold outside the UnitedStates pursuant to Regulation S;

"euro", "EUR" or "ε" denotes the single currency of those Member States of the European Unionparticipating in European economic and monetary union pursuant to the Treaty establishing theEuropean Community, as amended;

"Euroclear" means Euroclear Bank S.A./N.V. as operator of the Euroclear System;

"Exchange Act" means the United States Securities Exchange Act of 1934;

"FSMA" means the United Kingdom Financial Services and Markets Act 2000;

"Group" means the Issuer and its Subsidiaries;

"Indemnitee" means each Dealer, each individual, corporation, partnership, trust, associations or otherentity which controls (within the meaning of Section 15 of the Securities Act) such Dealer, any affiliateof such Dealer or any such controlling entity and their respective directors, officers, employees,partners, incorporators, shareholders, servants, trustees and agents;

"Index Linked Note" means an ECP Note which is not a regular floating rate Note and the redemptionor coupon amount of which is not fixed at the time of issue, but is to be calculated in accordance withsuch formula or other arrangement as is agreed between the Issuer and the relevant Dealer at the timeof reaching agreement under Clause 1.1;

"Information Memorandum" means the most recent information memorandum, as the same may beamended or supplemented from time to time (including such other documents as are from time to timereferred to therein as being documents which should be read in conjunction therewith), containinginformation about the Issuer, and the Programme, the text of which has been prepared by or on behalfof the Issuer for use by the Dealers in connection with the transactions contemplated by thisAgreement;

"Institutional Accredited Investor" means an institutional investor that is an accredited investorwithin the meaning of Rule 501 under the Securities Act and that has such knowledge and experiencein financial and business matters that it is capable of evaluating and bearing the economic risk of an

15

investment in the Notes, including, but not limited to, a bank, as defined in Section 3(a)(2) of theSecurities Act, or a savings and loan association or other institution, as defined in Section 3(a)(5)(A) ofthe Securities Act, whether acting in its individual or fiduciary capacity;

"Issue Date" means, in respect of any Note, the date upon which such Note is issued;

"Letter of Representations" means the letter of representations of the Issuer in respect of USCPNotes, executed and delivered by the Issuer, the USCP Agent and DTC;

"Maximum Amount" means the total amount of Notes issued pursuant to both the ECP AgencyAgreement and the USCP Agency Agreement permitted to be outstanding under the Programme at anyone time as may be increased in accordance with Clause 1.5;

"Note" means a note of the Issuer issued under a transaction contemplated by this Agreement, indefinitive or global or master form, substantially in the relevant form scheduled to the relevant AgencyAgreement or such other form as may be agreed from time to time between the Issuer, the relevantDealer and the relevant Agent and, unless the context otherwise requires, includes the promissory notesrepresented by the ECP Global Notes or the DTC Master Notes;

"Programme" means the global commercial paper programme established by this Agreement;

"Programme Summary" means the summary of the particulars of the Programme as set out inSchedule 3, as such summary may be amended or superseded from time to time;

["QIB" means a qualified institutional buyer within the meaning of Rule 144A under the SecuritiesAct;]1

["Regulation D" means Regulation D under the Securities Act;]1

"Regulation S" means Regulation S under the Securities Act;

"Regulation T" means Regulation T under the Exchange Act;

"Rule 144A" means Rule 144A under the Securities Act;

"SEC" means the United States Securities and Exchange Commission;

"Securities Act" means the United States Securities Act of 1933;

"Sterling" and "£" denotes pounds sterling of the United Kingdom;

["Subsidiary" means, [insert definition(s) appropriate to Issuer's jurisdiction of incorporation]];

"Trade Date" means, in respect of any Note, the date on which agreement is reached for the issue andsale of such Note as contemplated in Clause 1.1;

"Trust Indenture Act" means the United States Trust Indenture Act of 1939;

"USCP Agency Agreement" means the issuing and paying agency agreement in respect of USCPNotes, dated l between the Issuer and the USCP Agent, providing for the issuance of and payment onthe USCP Notes;

"USCP Agent" means l acting as issuing and paying agent for USCP Notes and any successor oradditional agent appointed by the Issuer in accordance with the USCP Agency Agreement;


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"USCP Dealer" means each institution specified as a USCP Dealer in the Programme Summarytogether with any additional institution or institutions appointed as such pursuant to Clause 7.2 butexcluding in each case any institution or institutions whose appointment as such has been terminated,or whose resignation has become effective, pursuant to Clause 7.1;and

"USCP Note" means a book-entry Note of the Issuer represented by a DTC Master Note issuedpursuant to the USCP Agency Agreement and [sold pursuant to Section 4(2) of the Securities Act witha maximum term of not more than 365 days] [or][sold pursuant to Section 3(a)(3) of the Securities Actwith a maximum term of not more than 270 days from its Issue Date and containing no provision forextension, renewal or automatic rollover] [delete as applicable].

9.2 Terms not expressly defined herein shall have the meanings set out in the Programme Summary.

9.3 Any reference in this Agreement to an agreement or a deed or any provision thereof or to a statute, anyprovision thereof or any statutory instrument, order or regulation made thereunder shall be construed asa reference to such agreement, deed, statute, provision, statutory instrument, order or regulation as thesame may have been, or may from time to time be, amended, supplemented, novated or re-enacted.

9.4 Any reference in this Agreement to a Clause, sub-Clause or a Schedule is, unless otherwise stated, to aClause or sub-Clause hereof or a schedule hereto.

9.5 Headings and sub-headings are for ease of reference only and shall not affect the construction of thisAgreement.

10. General

10.1 Notices: All notices and other communications hereunder shall, save as otherwise provided in thisAgreement, be made in writing and in English (by letter or fax) and shall be sent to the intendedrecipient at the address or fax number and marked for the attention of the person (if any) from time totime designated by that party to the other parties hereto for such purpose. The initial address and faxnumber so designated by each party are set out in the Programme Summary.

Any communication from any party to any other under this Agreement shall be effective upon receiptby the addressee, provided that any such notice or other communication which would otherwise takeeffect after 4.00 p.m. on any particular day shall not take effect until 10.00 a.m. (London time) on theimmediately succeeding business day in the place of the addressee.

10.2 Status of the Arranger: Each of the Dealers agrees that the Arranger has only acted in an administrativecapacity to facilitate the establishment and/or maintenance of the Programme and has no responsibilityto it for (a) the adequacy, accuracy, completeness or reasonableness of any representation, warranty,undertaking, agreement, statement or information in the Disclosure Documents or this Agreement or(b) the nature and suitability to it of all legal, tax and accounting matters and all documentation inconnection with the Programme or any Notes.

10.3 Assignment: The Issuer may not assign or transfer its obligations under this Agreement, in whole or inpart, without the prior written consent of the Dealers and any purported assignment or transfer withoutsuch consent shall be void.

No Dealer may assign any of its rights or delegate or transfer any of its obligations under thisAgreement, in whole or in part, without the prior written consent of the Issuer and any purportedassignment or transfer without such consent shall be void:

10.3.1 except for an assignment and transfer of all of a Dealer's rights and obligations under thisAgreement in whatever form such Dealer determines may be appropriate to a partnership,corporation, trust or other organisation in whatever form that may succeed to, or to which theDealer transfers, all or substantially all of such Dealers' assets and business and that assumessuch obligations by contract, operation of law or otherwise; and

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10.3.2 provided, however, that if, at any time, a Dealer shall transfer all or substantially all of its ECPand/or USCP business, as the case may be, to any affiliate then, on the date such transferbecomes effective, such affiliate shall become the successor to such Dealer under thisAgreement without the execution or filing of any paper or any further act on the part of theparties hereto such that the Issuer and such affiliate shall acquire and become subject to thesame rights and obligations between themselves as if they had entered into an agreement inthe form (the relevant changes having been made) of this Agreement.

Upon any such transfer and assumption of obligations, such Dealer shall be relieved of and fullydischarged from all obligations under this Agreement, whether such obligations arose before or aftersuch transfer and assumption. The Dealer shall, as soon as reasonably possible, give notice of any suchtransfer to the Issuer.

In this Clause 10.3, "affiliate" means, in relation to any person, any entity controlled, directly orindirectly, by such person, any entity that controls, directly or indirectly, such person, or any entityunder common control with such person. For this purpose "control" of any entity or person meansownership of a majority of the voting power of the entity or person.

10.4 Counterparts: This Agreement may be signed in any number of counterparts, all of which when takentogether shall constitute a single agreement.

[10.5 Rights of Third Parties: Save as provided in Clauses 3.3, 3.17 and 3.18 above, a person who is not aparty to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforceany term of this Agreement, but this does not affect any right or remedy of a third party which exists oris available apart from that Act. The parties to this Agreement do not require the consent of any personnot a party to this Agreement to rescind or vary this Agreement at any time.] [English law only]

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SCHEDULE 1

Condition Precedent Documents

1. Certified copies of the [constitutional documents] of the Issuer, together with English translations(where applicable).

2. Certified copies of all documents evidencing the internal authorisations and approvals required to begranted by the Issuer in connection with the Programme, together with English translations (whereapplicable).

3. Certified copies of any governmental or other consents and any filings required in connection with theProgramme, together with English translations (where applicable).

4. Certified or conformed copies of:

(a) the Dealer Agreement, as executed; [and]

(b) the Agency Agreements, as executed[; and/.]

[(c) the Deed of Covenant, as executed. - English law only]

5. Copies of:

(a) the confirmation of acceptance of appointment from the agents for service of process; [and]

[(b) confirmation from the ECP Agent that the relevant forms of ECP Global Note have beenprepared ,executed and delivered to the ECP Agent and confirmation from the USCP Agentthat the relevant forms of the DTC Master Note have been prepared , executed and deliveredto the USCP [; and/.]

[(c) confirmation from the ECP Agent that a duly executed engrossment of the Deed of Covenanthas been delivered to the ECP Agent. - English law only]

6. Legal opinions from:

[(a) l, counsel to l as to [New York and United States federal] law; [and]

[(b) l, counsel tol as to English law; and]

[(c) l, counsel to the Issuer as to [jurisdiction of incorporation law.

7. The Information Memorandum.

8. A list of the names, titles and specimen signatures of the persons authorised on behalf of the Issuer:

(a) to sign the Agreements and any Notes issued by it;

(b) to sign all notices and other documents to be delivered in connection therewith; and

(c) to take any other action on behalf of the Issuer in relation to the Programme.

9. Confirmation that [Standard and Poor's Rating Services, a Division of the McGraw-Hill CompaniesInc. and Moody's Investors Services [Inc./Limited], respectively,] have granted ratings for theProgramme.

10. Letter of Representations signed by DTC, the USCP Agent and the Issuer.

19

SCHEDULE 2

[Part I]

Selling Restrictions - ECP

1. General

1.1 No action has been or will be taken in any jurisdiction by the Issuer, the Arranger or the ECP Dealersthat would permit a public offering of Notes, or possession or distribution of the InformationMemorandum or any other offering material, in any country or jurisdiction where action for thatpurpose is required.

Each ECP Dealer represents, warrants and undertakes that it will observe all applicable laws andregulations in any jurisdiction in which it may offer, purchase, sell, or deliver ECP Notes and that itwill not directly or indirectly offer, sell, resell, reoffer or deliver ECP Notes or distribute anyDisclosure Document, circular, advertisement or other offering material in any country or jurisdictionexcept in circumstances that will result, to the best of its knowledge and belief, in compliance with allapplicable laws and regulations.

1.2 Without prejudice to the provisions of Sections 2 to 6 of this Schedule 2, the Issuer, the Arranger andthe other Dealers shall have no responsibility for, and each ECP Dealer undertakes that it will, obtainany consent, approval or permission which is, to the best of its knowledge and belief, required by it for,the subscription, offer or sale by it of any ECP Notes or possession or distribution by it of theInformation Memorandum or any other offering material under the laws and regulations in force in anyjurisdiction to which it is subject on in or from which it makes any subscription, offer or sale, in allcases at its own expense.

1.3 The Issuer does not represent that ECP Notes may at any time lawfully be offered or sold incompliance with any applicable registration or other requirements in any jurisdiction, or pursuant toany exemption available thereunder, or assumes any responsibility for facilitating such offer or sale.

1.4 With regard to each issue of Notes, the relevant Dealer will be required to comply with such otheradditional restrictions as the Issuer and the relevant Dealer shall agree in writing from time to time.

2. The United States of America

The ECP Notes have not been and will not be registered under the Securities Act and the ECP Notesmay not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons.Each ECP Dealer represents, warrants and agrees that it has offered and sold, and will offer and sell,ECP Notes, only outside the United States to non-U.S. persons in accordance with Rule 903 ofRegulation S under the Securities Act. Accordingly, each ECP Dealer represents, warrants and agreesthat neither it, its affiliates nor any persons acting on its or their behalf have engaged or will engage inany directed selling efforts with respect to the ECP Notes and that it and they have complied and willcomply with the offering restrictions requirement of Regulation S. Each ECP Dealer also agrees that, ator prior to confirmation of sale of ECP Notes it will have sent to each distributor, dealer or personreceiving a selling concession, fee or other remuneration that purchases from it ECP Notes, aconfirmation or notice to substantially the following effect:

"The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, asamended (the "Securities Act") and may not be offered or sold within the United States or to, or for theaccount or benefit of, U.S. persons. Terms used above have the meanings given to them by RegulationS under the Securities Act."

Terms used in this paragraph 2.1 have the meanings given to them by Regulation S under the SecuritiesAct.

20

3. The United Kingdom

Each ECP Dealer represents, warrants and agrees with the Issuer that:

[3.1 in relation to any Notes which have a maturity of 365 days, it has not offered or sold and, priorto the expiry of the period of six months from the issue date of such Notes, will not offer orsell any such Notes to persons in the United Kingdom except to persons whose ordinaryactivities involve them in acquiring, holding, managing or disposing of investments (asprincipal or agent), for the purposes of their businesses or otherwise in circumstances whichhave not resulted and will not result in an offer to the public in the United Kingdom within themeaning of the Public Offers of Securities Regulations 1995;]

3.2 it has complied and will comply with all applicable provisions of the FSMA with respect toanything done by it in relation to any Notes in, from or otherwise involving the UnitedKingdom; [and]

[3.3 in relation to any Notes which have a maturity of less than one year, (i) it is a person whoseordinary activities involve it in acquiring, holding, managing or disposing of investments (asprincipal or agent) for the purposes of its business and (ii) it has not offered or sold and willnot offer or sell any Notes other than to persons whose ordinary activities involve them inacquiring, holding, managing or disposing of investments (as principal or as agent) for thepurposes of their businesses or who it is reasonable to expect will acquire, hold, manage ordispose of investments (as principal or agent) for the purposes of their businesses where theissue of the Notes would otherwise constitute a contravention of Section 19 of the FSMA bythe Issuer; and]1

3.4 it will only communicate or cause to be communicated any invitation or inducement to engagein investment activity (within the meaning of Section 21 of the FSMA) received by it inconnection with the issue or sale of any Notes in circumstances in which Section 21(1) of theFSMA [does not apply to the Issuer]/[does not, or, in the case of the Issuer would not, if itwere not an "authorised person", apply to the Issuer].

4. Japan

The Notes have not been and will not be registered under the Securities and Exchange Law of Japan(the "Securities and Exchange Law") and, accordingly, each ECP Dealer undertakes that it will notoffer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit of any Japanese Person orto others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person exceptpursuant to an exemption from the registration requirements of and otherwise in compliance with theSecurities and Exchange Law and all other applicable laws, regulations and guidelines promulgated bythe relevant Japanese governmental and regulatory authorities and in effect at the relevant time. For thepurposes of this paragraph, "Japanese Person" shall mean any person resident in Japan, including anycorporation or other entity organised under the laws of Japan.

5. [Jurisdiction of Issuer]

[add any other applicable selling restrictions.]

1 Not applicable to an Issuer which is an authorised person permitted to accept deposits under theFSMA/an exempt person under the FSMA

21

SCHEDULE 2

[Part II]

Selling Restrictions - USCP

[Provisions applicable to USCP Notes issued under Section 4(2)]

The Dealers and the Issuer hereby establish and agree to observe the following procedures in connection withoffers, sales and subsequent resales or other transfers of the Notes:

(a) Offers and sales of the Notes by or through a Dealer shall be made only to: (i) investors reasonablybelieved by the relevant Dealer to be QIBs or Institutional Accredited Investors and (ii) non-bankfiduciaries or agents that will be purchasing Notes for one or more accounts, each of which isreasonably believed by the relevant Dealer to be an Institutional Accredited Investor.

(b) Resales and other transfers of the Notes by the holders thereof shall be made only in accordance withthe restrictions in the legend described in paragraph (e) below.

(c) No general solicitation or general advertising shall be used in connection with the offering of the Notes.Without limiting the generality of the foregoing, without the prior written approval of the Dealer, theIssuer shall not issue any press release or place or publish any "tombstone" or other advertisementrelating to the Notes.

(d) No sale of Notes to any one purchaser shall be for less than $[250],000 (or its equivalent in anothercurrency)principal or face amount, and no Note shall be issued in a smaller principal or face amount.If the purchaser is a non-bank fiduciary acting on behalf of others, each person for whom suchpurchaser is acting must purchase at least $[250],000 (or its equivalent in another currency) principal orface amount of Notes.

(e) Offers and sales of the Notes shall be subject to the restrictions described in the following legend. Alegend substantially to the effect of such legend shall appear as part of the Information Memorandumused in connection with offers and sales of Notes hereunder, as well as on each individual certificaterepresenting a Note and each Master Note representing book-entry Notes offered and sold pursuant tothis Agreement:

THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, ASAMENDED (THE "ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW, AND OFFERSAND SALES THEREOF MAY BE MADE ONLY IN COMPLIANCE WITH AN APPLICABLEEXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND ANYAPPLICABLE STATE SECURITIES LAWS. BY ITS ACCEPTANCE OF A NOTE, THEPURCHASER WILL BE DEEMED TO REPRESENT, WARRANT AND AGREE THAT IT HASBEEN AFFORDED AN OPPORTUNITY TO INVESTIGATE MATTERS RELATING TO THEISSUER AND THE NOTES, THAT IT IS NOT ACQUIRING SUCH NOTE WITH A VIEW TOANY DISTRIBUTION THEREOF AND THAT IT IS EITHER (A) AN INSTITUTIONALINVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE501(a)(1), (2), (3), or (7) UNDER THE ACT (AN "INSTITUTIONAL ACCREDITEDINVESTOR") AND THAT IT IS EITHER PURCHASING THE NOTES FOR ITS OWNACCOUNT, IS A U.S. BANK (AS DEFINED IN SECTION 3(a)(2) OF THE ACT) OR A SAVINGSAND LOAN ASSOCIATION OR OTHER INSTITUTION (AS DEFINED IN SECTION 3(a)(5)(A)OF THE ACT) ACTING IN ITS INDIVIDUAL OR FIDUCIARY CAPACITY OR IS A FIDUCIARYOR AGENT (OTHER THAN A U.S. BANK OR SAVINGS AND LOAN ASSOCIATION)PURCHASING NOTES FOR ONE OR MORE ACCOUNTS EACH OF WHICH IS SUCH ANINSTITUTIONAL ACCREDITED INVESTOR WITH RESPECT TO WHICH SUCH PURCHASERHAS SOLE INVESTMENT DISCRETION, OR (B) A QUALIFIED INSTITUTIONAL BUYER("QIB") WITHIN THE MEANING OF RULE 144A UNDER THE ACT ("RULE 144A") WHICH ISACQUIRING NOTES FOR ITS OWN ACCOUNT OR FOR ONE OR MORE ACCOUNTS, EACHOF WHICH IS A QIB AND WITH RESPECT TO EACH OF WHICH THE PURCHASER HAS

22

SOLE INVESTMENT DISCRETION; AND THE PURCHASER ACKNOWLEDGES THAT IT ISAWARE THAT THE SELLER MAY RELY UPON THE EXEMPTION FROM THEREGISTRATION PROVISIONS OF SECTION 5 OF THE ACT PROVIDED BY RULE 144A. BYITS ACCEPTANCE OF A NOTE, THE PURCHASER THEREOF SHALL ALSO BE DEEMED TOAGREE THAT ANY RESALE OR OTHER TRANSFER THEREOF WILL BE MADE ONLY (A) INA TRANSACTION EXEMPT FROM REGISTRATION UNDER THE ACT, EITHER (i) TO THEISSUER OR TO ANY DEALER, NONE OF WHICH SHALL HAVE ANY OBLIGATION TOACQUIRE SUCH NOTE, (ii) THROUGH ANY NOTE DEALER TO AN INSTITUTIONALACCREDITED INVESTOR OR A QIB, OR (iii) TO A QIB IN A TRANSACTION THAT MEETSTHE REQUIREMENTS OF RULE 144A AND (B) IN MINIMUM AMOUNTS OF U.S.$[250],000.]

23

SCHEDULE 3

Programme Summary

THE ISSUER

l[Address]

Tel: lFax: l

Contact: l

THE ARRANGER

l[Address]

Tel: lFax: l

Contact: l

THE ECP DEALERS

l[Address]

Tel: lFax: l

Contact: l

l[Address]

Tel: lFax: l

Contact: l

THE USCP DEALERS

l[Address]

Tel: lFax: l

Contact: l

l[Address]

Tel: lFax: l

Contact: l

THE ECP AGENT THE USCP AGENT

l, London[Address]

Tel: lFax: l

Contact: l

l, New York[Address]

Tel: lFax: l

Contact: l

24

Maximum Amount

l

Governing Law

Agreements: [New York/English/l] law

Notes: The [ECP] Notes will be governed by[English law. The USCP Notes will begoverned by] the laws of the State of NewYork.

Minimum Term

1 day for ECP Notes and 1 day for USCPNotes, in each case from the relevant IssueDate.

Maximum Term

[365] days, [or 270 days in the case of USCPNotes][Section 3(a)(3) Notes only] in eachcase from the relevant Issue Date.

Minimum Denominations

ECP Notes:

[U.S.$100,000 or U.S.$500,000]

[€500,000][£100,000][¥100,000,000]

(or other conventionally accepteddenominations in other currencies)

USCP Notes:

U.S.$[250],000

The minimum redemption value of the ECPNotes shall be £100,000 or its equivalent inother currencies.

ECP Selling Restrictions

[Jurisdiction of Issuer]

Japan

United Kingdom

United States of America

[other]

25

SCHEDULE 4

Increase of Maximum Amount

[Date]

To: [Name of Dealers]l (as ECP Agent)l (as USCP Agent)

Dear Sirs,

[ISSUER] (the "Issuer")Global Commercial Paper Programme

We refer to a dealer agreement dated as of l (as amended, supplemented and/or restated from time to time, the"Dealer Agreement") between the Issuer, the Arranger and the Dealers party thereto relating to a GlobalCommercial Paper Programme (the "Programme"). Terms used in the Dealer Agreement shall have the samemeaning in this letter.

In accordance with Clause1.5 of the Dealer Agreement, we hereby notify each of the addressees listed abovethat the Maximum Amount of the Programme is to be increased from l to l with effect from [date], subject todelivery to the Arranger, the Dealers and the ECP and USCP Agents of the following documents:

[(a) a new Information Memorandum;]

(b) certified copies of all documents evidencing the internal authorisations and approvals required to begranted by the Issuer for such increase in the Maximum Amount;

(c) certified copies of [specify any governmental or other consents required by the Issuer for suchincrease];

(d) legal opinions from legal advisors acceptable to the Dealers qualified in (i) the law of the jurisdiction ofincorporation of the Issuer, [and] (ii) [England and Wales and (iii)] New York, relating to suchincrease;

(e) a list of names, titles and specimen signatures of the persons authorised to sign on behalf of the Issuerall notices and other documents to be delivered in connection with such an increase in the MaximumAmount; and

(f) written confirmation that [Standard and Poor's Ratings Services, a Division of the McGraw-HillCompanies Inc., and Moody's Investors Services, [Inc./Limited]] are maintaining their current ratingsfor the Programme.

Any documents delivered pursuant to this letter will be deemed to be in the form and substance acceptable toeach Dealer unless such Dealer notifies the Issuer to the contrary not less than ten London and New Yorkbusiness days after receipt thereof.

Upon the increase in the Maximum Amount becoming effective in accordance with Clause 1.5 of the DealerAgreement, all references in the Dealer Agreement to the Maximum Amount or the amount of the Programmeshall be construed as references to the increased Maximum Amount as specified herein.

Yours faithfully,

………………………….for and on behalf of[ISSUER]

26

SCHEDULE 5

Appointment of New Dealer

[Date]

To: [Name of new Dealer]cc: l, London (as ECP Agent)

l, New York (as USCP Agent)

Dear Sirs

[ISSUER] (the "Issuer")Global Commercial Paper Programme (the "Programme")[[Description of the issue] (the "Notes")]*

We refer to a dealer agreement dated as of l (as amended, supplemented and/or restated from time to time, the"Dealer Agreement") between the Issuer, the Arranger and the Dealers party thereto relating to the Programme.Terms used in the Dealer Agreement shall have the same meaning in this letter.

In accordance with Clause 7.2 of the Dealer Agreement, we hereby appoint you as an additional [USCP/ECP]Dealer for [the Programme/the issue of the Notes]* upon the terms of the Dealer Agreement with [immediateeffect/effect from [date]]. Please confirm acceptance of your appointment upon such terms by signing andreturning to us the enclosed copy of this letter, whereupon you will, in accordance with Clause 7.2 of the DealerAgreement, become a party to the Dealer Agreement vested with all the authority, rights, powers, duties andobligations as if originally named as a Dealer thereunder [subject to the understanding that such accession isonly for the purposes of the aforementioned issue of Notes]*.

Yours faithfully,

............................

for and on behalf of[ISSUER]

[On copy]

We hereby confirm acceptance of our appointment as a Dealer [for the Programme/the issue of the Notes]* uponthe terms of the Dealer Agreement referred to above. For the purposes of Clause 10 of the Dealer Agreement,our contact details are as follows:

[Name of Dealer]Address:Telephone: Fax:Contact:

Signed: ………........................ Dated: ........………….............for Name of new Dealer

* Delete where the new Dealer is appointed for the Programme.

27

SCHEDULE 6

Form of Calculation Agency Agreement

THIS AGREEMENT is made on [date]

BETWEEN

(1) [ISSUER] (the "Issuer"); and

(2) [CALCULATION AGENT], as the calculation agent appointed pursuant to Clause 6 hereof (the"Calculation Agent", which expression shall include any successor thereto).

WHEREAS:

(A) Under a dealer agreement (as amended, supplemented and/or restated from time to time, the "DealerAgreement") dated as of l and made between the Issuer, the Arranger and the Dealers referred totherein and an ECP note agency agreement (as amended, supplemented and/or restated from time totime, the "ECP Agency Agreement") dated as of l and made between the Issuer and the agentreferred to therein, the Issuer established a Global Commercial Paper Programme (the "Programme").

(B) The Dealer Agreement contemplates, inter alia, the issue under the Programme of Index Linked Notesand provides for the appointment of calculation agents in relation to each such issue. Each suchcalculation agent's appointment shall be on substantially the terms and subject to the conditions of thisAgreement.

IT IS AGREED as follows:

1. Interpretation

1.1 Terms not expressly defined herein shall have the meanings given to them in the Dealer Agreement orthe ECP Agency Agreement.

1.2 "Relevant Index Linked Notes" means such Index Linked Notes in respect of which the CalculationAgent is appointed hereunder details of which are set out in the Annex hereto.

2. Appointment of Calculation Agent

The Issuer appoint the Calculation Agent as its agent for the purpose of calculating the redemptionamount and/or, if applicable, the amount of interest in respect of the Relevant Index Linked Notes uponthe terms and subject to the conditions of this Agreement. The Calculation Agent accepts suchappointment.

3. Determination and Notification

3.1 The Calculation Agent shall determine the redemption amount of, and/or, if applicable, the amount ofinterest payable on, each Relevant Index Linked Note in accordance with the redemption calculationapplicable thereto.

3.2 The Calculation Agent shall as soon as it has made its determination as provided for in Clause 3.1above (and, in any event, no later than the close of business on the date on which the determination ismade) notify the Issuer and the relevant Agent (if other than the Calculation Agent) of the redemptionamount and/or, if applicable, the amount of interest so payable.

28

4. Stamp Duties

The Issuer will pay all stamp, registration and other taxes and duties (including any interest andpenalties thereon or in connection therewith) payable in connection with the execution, delivery andperformance of this Agreement.

5. Indemnity and Liability

5.1 The Issuer shall indemnify and hold harmless on demand the Calculation Agent against any claim,demand, action, liability, damages, cost, loss or expense (including, without limitation, reasonable legalfees and any applicable value added tax) which it may incur arising out of, in connection with or basedupon the exercise of its powers and duties as Calculation Agent under this Agreement, except such asmay result from its own gross negligence or bad faith or that of its officers, employees or agents.

5.2 The Calculation Agent may consult as to legal matters with lawyers selected by it, who may beemployees of, or lawyers to, the Issuer. If such consultation is made, the Calculation Agent shall beprotected and shall incur no liability for action taken or not taken by it as Calculation Agent or sufferedto be taken with respect to such matters in good faith, without negligence and in accordance with theopinion of such lawyers.

6. Conditions of Appointment

The Calculation Agent, and the Issuer agree that its appointment will be subject to the followingconditions:

(i) in acting under this Agreement, the Calculation Agent shall act as an independent expert andshall not assume any obligations towards or relationship of agency or trust for the Issuer or theowner or holder of any of the Relevant Index Linked Notes or any interest therein;

(ii) unless otherwise specifically provided in this Agreement, any order, certificate, notice,request, direction or other communication from the Issuer made or given under any provisionof this Agreement shall be sufficient if signed or purported to be signed by a duly authorisedemployee of the Issuer;

(iii) the Calculation Agent shall be obliged to perform only those duties which are set out in thisAgreement and in the redemption calculation relating to the Relevant Index Linked Notes;

(iv) the Calculation Agent and its officers and employees, in its individual or any other capacity,may become the owner of, or acquire any interest in, any Relevant Index Linked Notes withthe same rights that the Calculation Agent would have if it were not the Calculation Agenthereunder; and

(v) all calculations and determinations made pursuant to this Agreement by the Calculation Agentshall (save in the case of manifest error) be binding on the Issuer, the Calculation Agent and(if other than the Calculation Agent) the holder(s) of the Relevant Index Linked Notes and noliability to such holder(s) shall attach to the Calculation Agent in connection with the exerciseby the Calculation Agent of its powers, duties or discretion under or in respect of the RelevantIndex Linked Notes in accordance with the provisions of this Agreement.

7. Alternative Appointment

If, for any reason, the Calculation Agent ceases to act as such or fails to comply with its obligationsunder Clause 3, the Issuer shall appoint the ECP Agent as calculation agent in respect of the RelevantIndex Linked Notes.

8. Notices

Clause 10.1 of the Dealer Agreement shall apply to this Agreement mutatis mutandis.

29

9. Law and Jurisdiction

9.1 This Agreement shall be governed by, and construed in accordance with, [ ] law.

9.2 For the benefit of the Calculation Agent, the Issuer agrees that the courts of [ ] are to havejurisdiction to hear and determine any suit, action or proceedings, and to settle any disputes, which mayarise out of or in connection with this Agreement or the Relevant Index Linked Notes (respectively,"Proceedings" and "Disputes") and, for such purpose, in each case each of them irrevocably submitsto the jurisdiction of the courts.

9.3 The Issuer irrevocably waives any objection which it might now or hereafter have to the courts of[ ] being nominated as the forum to hear and determine any Proceedings and to settle anyDisputes and in each case each of them agrees not to claim that any such court is not a convenient orappropriate forum.

9.4 The Issuer agrees that the process by which any Proceedings in [ ] are begun may beserved on it by being delivered to [Insert name and address for Agent of service of process] or at itsregistered office for the time being with a copy of any document delivered on such service being alsosent to the Issuer. If such person is not, or ceases to be, effectively appointed to accept service ofprocess on behalf of the Issuer, the Issuer shall appoint a further person in [ ] to accept service ofprocess on their behalf in [ ]. Nothing in this sub-Clause shall affect the right to serveprocess in any other manner permitted by law.

9.5 The submission to the jurisdiction of the courts of [ ] shall not (and shall not be construedso as to) limit the right of the Calculation Agent to take Proceedings in any other court of competentjurisdiction, nor shall the taking of Proceedings in any one or more jurisdictions preclude the taking ofProceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted bylaw.

9.6 To the extent that the Issuer or any of its properties, assets or revenues may have or may hereafterbecome entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty orotherwise, from any legal action, suit or proceeding in connection with or arising out of thisAgreement, from the giving of any relief in any thereof, from setoff or counterclaim, from thejurisdiction of any court, from service of process, from attachment upon or prior to judgment, fromattachment in aid of execution of judgment, or from execution of judgment, or other legal process orproceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction inwhich any Proceeding may at any time be commenced, with respect to its obligations, liabilities or anyother matter under or arising out of or in connection with this Agreement, the Issuer hereby irrevocablyand unconditionally waives, and agrees for the benefit of the Calculation Agent, not to plead or claim,any such immunity, and consents to such relief and enforcement.

[10. Rights of Third Parties

A person who is not a party to this Agreement has no right under the Contracts (Rights of ThirdParties) Act 1999 to enforce any term of this Agreement, but this does not affect any right or remedy ofa third party which exists or is available apart from that Act. - English law only]

11. Counterparts

This Agreement may be signed in any number of counterparts, all of which when taken together shallconstitute a single agreement.

IN WITNESS whereof the parties hereto have executed this Agreement on the date which appears first on page1 of this Agreement.

ISSUER [NAME OF CALCULATION AGENT]

By: ……………………… By: ..................................

30

Signature Page

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first above written.

The Issuer

l

By:

The Arranger

l

By:

The ECP Dealers

l

l

By:

The USCP Dealers

l

l

By:

ICM:593676.1

Dated l

[ISSUER]

as Issuer

[ARRANGER]

as Arranger

[ECP DEALERS]

as ECP Dealers

[USCP DEALERS]

as USCP Dealers

DEALER AGREEMENTrelating to a [AMOUNT]

Global Commercial Paper Programme