Exhibit 10.1.1
COMMERCIAL PAPER DEALER AGREEMENT
4(2) PROGRAM
between
STARBUCKS CORPORATION, as Issuer
and
BANC OF AMERICA SECURITIES LLC, as Dealer
Concerning Notes to be issued pursuant to an Issuing and Paying Agency
Agreement, dated as of March 27, 2007, between the Issuer and JPMorgan Chase
Bank, National Association, as Issuing and Paying Agent
Dated as of March 27, 2007
 

 

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COMMERCIAL PAPER DEALER AGREEMENT
4(2) Program
This agreement (the “Agreement”), dated as of March 27, 2007, sets forth the
understandings between Starbucks Corporation (the “Issuer”) and Banc of America
Securities LLC (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 Dealer, 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. So long as this Agreement is in effect, 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

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      Placement Memorandum. 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.     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   In the case
of any agreement by the Dealer to purchase a Note hereunder (other than as
agent) which provides for a settlement date that is three New York Business Days
or more after the date of such agreement, the obligation of the Dealer to
purchase the Note under such agreement shall be subject to the conditions set
forth on Exhibit D.     1.7   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:

  (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.

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  (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 publicly available 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. Notwithstanding the foregoing, nothing in this Agreement or the
Private Placement Memorandum shall obligate the Issuer to provide information
which has not been previously made available to the public.     (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(d)(3),
the Issuer shall immediately notify

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      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 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 (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.

  1.8   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 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 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, and will not take, any
action that would, and has not omitted to take, and will not omit to take, any
action the absence of which 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.     (b)   The
Issuer represents and agrees that the proceeds of the sale of the Notes may 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

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      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 three (3) business days’ prior written notice to
that effect; provided, however, that no such notice shall be required of the
Issuer for purchases of securities issued by the Issuer and purchased for
immediate retirement. 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.

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  2.5   The Notes will rank pari passu with all other unsecured and
unsubordinated indebtedness of the Issuer.     2.6   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   Except as otherwise disclosed by the Issuer in the Company Information (as
defined below), 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 is reasonably likely to 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.     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) sale and 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 and time thereof, that,
both before and after giving effect to such sale and 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

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      made on and as of such date and at such time, and (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) and (iii) in the case of an issuance or sale 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 sale or 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 materially adverse 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 sale or issuance of Notes hereunder, notify the Dealer (by
telephone, confirmed in writing) of such materially adverse change, development
or occurrence.     3.3   To the extent permitted by applicable law, 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
publicly available 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.

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  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 or
sell 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 reasonable 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
reasonable costs of printing and distribution of the Private Placement
Memorandum), but not including the fees and out-of-pocket expenses of the
Dealer’s counsel.     3.8   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 publicly available information or matters
relating to the Issuer or the transactions contemplated hereby with affiliates
of the Dealer, including, but not limited to, Bank of America, N.A., and that
such affiliates may likewise share such publicly available information relating
to the Issuer or such transactions with the Dealer.

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 with
publicly available information from, the Issuer concerning the offering of Notes
and to obtain relevant additional publicly available information which the
Issuer possesses or can acquire without unreasonable effort or expense.
Notwithstanding the foregoing, nothing in this Agreement or the Private
Placement Memorandum shall obligate the Issuer to provide information which has
not been previously made available to the public.

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  4.2   The Issuer agrees to promptly furnish the Dealer with any material
public 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.

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, reasonable
fees and disbursements of counsel) or judgments of whatever kind or nature (each
a “Claim”), imposed upon, incurred by or asserted against the Indemnitees
(i) arising out of or based upon 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. The Issuer and the Dealer
agree that the Issuer shall have no liability under this section for any Claim
arising out of or based on Dealer Information.

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  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 published interim
financial statement or report prepared subsequent thereto, if not included in
item (i) above, (iii) the Issuer’s other publicly available recent reports,
including, but not limited to, any publicly available filings or reports
provided to its 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.

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  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” or “QIB” 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.

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  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.     7.8   The Issuer acknowledges and
agrees that (i) purchases and sales, or placements, of the Notes pursuant to
this Agreement, including the determination of any prices for the Notes and
Dealer compensation, are arm’s-length commercial transactions between the Issuer
and the Dealer, (ii) in connection therewith and with the process leading to
such transactions, the Dealer is acting solely as a principal and not the agent
(except to the extent explicitly set forth herein) or fiduciary of the Issuer or
any of its affiliates, (iii) the Dealer has not assumed an advisory or fiduciary
responsibility in favor of the Issuer or any of its affiliates with respect to
the offering contemplated hereby or the process leading thereto (irrespective of
whether the Dealer has advised or is currently advising the Issuer or any of its
affiliates on other matters) or any other obligation to the Issuer or any of its
affiliates except the obligations expressly set forth in this Agreement,
(iv) the Issuer is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated by this
Agreement, (v) the Dealer and its affiliates may be engaged in a broad range of
transactions that involve interests that

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      differ from those of the Issuer and that the Dealer has no obligation to
disclose any of those interests by virtue of any advisory or fiduciary
relationship, (vi) the Dealer has not provided any legal, accounting, regulatory
or tax advice with respect to the transactions contemplated hereby, and
(vii) the Issuer has consulted its own legal and financial advisors to the
extent it deemed appropriate. The Issuer agrees that it will not claim that the
Dealer has rendered advisory services of any nature or respect, or owes a
fiduciary or similar duty to the Issuer in connection with such transactions or
the process leading thereto. Any review by the Dealer of the Issuer, the
transactions contemplated hereby or other matters relating to such transactions
shall be performed solely for the benefit of the Dealer and shall not be on
behalf of the Issuer. The Issuer hereby waives and releases, to the fullest
extent permitted by law, any claims the Issuer may have against the Dealer with
respect to any breach or alleged breach of fiduciary duty arising out of the
offer and sale of the Notes.     7.9   This Agreement supersedes all prior
agreements and understandings (whether written or oral) between the Issuer and
the Dealer with respect to the subject matter hereof.

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

                  STARBUCKS CORPORATION,                 as Issuer    
 
           
 
  By:        
 
           
 
  Name:        
 
  Title:        
 
                BANC OF AMERICA SECURITIES LLC,                 as Dealer    
 
           
 
  By:        
 
           
 
  Name:             Title: Authorized signatory    

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

1.   The other dealer(s) referred to in clause (b) of Section 1.2 of the
Agreement are Goldman, Sachs & Co.

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

     
For the Issuer:
   
 
   
Address:
  Starbucks Corporation
 
  2401 Utah Avenue South
 
  Seattle, Washington 98134
 
   
Attention:
  Richard Lautch, treasurer
 
   
Telephone number:
  (206) 318-4438
 
   
Fax number:
  (206) 903-2820
 
   
For the Dealer:
   
 
   
Address:
  Banc of America Securities LLC
 
  600 Montgomery St., 15th Floor
 
  CA5-801-15-31
 
  San Francisco CA 94111
 
   
Attention:
  Money Market Origination, Manager
 
   
Telephone number:
  (415) 913-3689
 
   
Fax number:
  (415) 913-6288

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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.

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Exhibit B
Further Provisions Relating to Indemnification

(a)   The Issuer agrees to reimburse each Indemnitee for all expenses (including
reasonable fees and disbursements of 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), selected by such Indemnitees,
representing the Indemnitees who are party to such Claim; provided, further,
that if the defendants in any such Claim include multiple Indemnitees, all such
Indemnitees shall be entitled to select only one counsel to serve as separate
counsel for all of the Indemnitees, unless such Indemnitees have concluded that
there may be legal defenses available to an Indemnitee which are different from
or additional to those available to any other Indemnitee, in which case any such
Indemnitee with different or additional legal defenses shall have the right to
select separate counsel from any other Indemnitees to assert such legal defenses
on behalf of such Indemnitee), (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

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    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.

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Exhibit C
Statement of Terms for Interest – Bearing Commercial Paper Notes of Starbucks
Corporation
THE PROVISIONS SET FORTH BELOW ARE QUALIFIED TO THE EXTENT APPLICABLE BY THE
TRANSACTION SPECIFIC 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

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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,

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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.

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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 dealers1 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
 

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

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“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 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:

         
Money Market Yield =
  D x 360   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

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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

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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) is 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

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(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:

         
Bond Equivalent Yield =
  D x N   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

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    obligation evidenced by such Note (together with interest accrued and unpaid
thereon) shall become, without any notice or demand, immediately due and
payable.2   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.

 

2   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.

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Exhibit D
          In the case of any agreement by the Dealer to purchase a Note
hereunder (other than as agent) which provides for a settlement date that is
three New York Business Days or more after the date of such agreement, the
obligation of the Dealer to purchase the Note under such agreement shall be
subject to the following conditions:

  (a)   the representations and warranties given by the Issuer set forth above
in Section 1.7 and Section 2 shall be true and correct on and as of the
settlement date as if made on and as of such date, and the Issuer shall have
performed all of its obligations hereunder to be performed as of such date,    
(b)   since the date of the most recent Private Placement Memorandum, there
shall have been no material adverse change in the condition (financial or
otherwise), operations or business prospects of the Issuer (whether occurring
before or after such agreement was entered into) which was not disclosed to the
Dealer in writing prior to the time such agreement was entered into,     (c)  
the Issuer shall not be in default of any of its obligations hereunder, under
the Notes or under the Issuing and Paying Agency Agreement,     (d)   on or
after the date of such agreement there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Issuer’s securities on the New York Stock Exchange;
(iii) a general moratorium on commercial banking activities declared by either
Federal or New York State authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United States;
(iv) the outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war or (v) the
occurrence of any other calamity or crisis or any change in financial, political
or economic conditions in the United States or elsewhere, if the effect of any
such event specified in clause (iv) or (v) in the judgment of the Dealer makes
it impracticable or inadvisable to proceed with the offering or the delivery of
the Note on the terms and in the manner contemplated in the Private Placement
Memorandum, and     (e)   on or after the date of such agreement, (i) no
downgrading shall have occurred in the rating accorded the Issuer’s debt
securities by any nationally recognized statistical rating organization and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Issuer’s debt securities.

“New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.

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