Document:

Purchase Agreement, dated January 28, 2009

 Exhibit 10.1 
 EXECUTION VERSION 
 $225,000,000 
 INERGY, L.P. 
 INERGY FINANCE CORP. 
 8 3/4% SENIOR NOTES DUE 2015 
 PURCHASE AGREEMENT

 January 28, 2009 
 J.P. MORGAN
SECURITIES INC. 
 BANC OF AMERICA SECURITIES LLC 
 WACHOVIA CAPITAL MARKETS, LLC 
 BARCLAYS CAPITAL INC. 
 BOSC, INC. 
 MITSUBISHI UFJ SECURITIES INTERNATIONAL PLC 
 SG AMERICAS SECURITIES, LLC 
 UBS SECURITIES LLC 
 c/o J.P. Morgan Securities Inc. 
 270 Park Avenue 
 New York, NY 10017 
 Ladies and Gentlemen: 
 Inergy, L.P., a Delaware limited partnership (the “Partnership”), and Inergy
Finance Corp., a Delaware corporation (“Finance Corp” and together with the Partnership, the “Issuers”), propose, upon the terms and conditions set forth herein, to issue and sell to you, as the initial purchasers
(the “Initial Purchasers”), $225,000,000 in aggregate principal amount of their 8 3/4% Senior Notes due 2015
(the “Notes”). The Notes will (i) have terms and provisions that are summarized in the Offering Memorandum (as defined below) and (ii) are to be issued pursuant to an Indenture (the “Indenture”) to be
entered into among the Issuers, the Guarantors (as defined below) and U.S. Bank National Association, as trustee (the “Trustee”). 
 The Issuers’ obligations under the Notes, including the due and punctual payment of interest on the Notes, will be guaranteed (the “Guarantees”) by Inergy Propane, LLC, a Delaware limited
liability company (the “Operating Company”), Inergy Midstream, LLC, a Delaware limited liability company (“Midstream”), Inergy Sales & Service, Inc., a Delaware corporation (“Service Sub”),
L & L Transportation, LLC, a Delaware limited liability company (“L & L Transportation”), Inergy Transportation, LLC, a Delaware limited liability company (“Inergy Transportation”), Inergy Gas
Marketing, LLC, a Delaware limited liability company (“Inergy Gas”), Stellar Propane Service, LLC, a Delaware limited liability company (“Stellar Propane”), Inergy Stagecoach II, LLC, a Delaware limited liability
company (“Stagecoach II”), Inergy Storage, Inc., a Delaware corporation (“Storage”), Central New York Oil and Gas 

 
Company, L.L.C., a New York limited liability company (“CNYOGC”), Farm & Home Retail Oil Company LLC, a Pennsylvania limited
liability company (“FHR”), Arlington Storage Company, LLC, a Delaware limited liability company (“Arlington Storage”) and US Salt, LLC, a Delaware limited liability company (“US Salt”, and together
with the Operating Company, Midstream, Service Sub, L & L Transportation, Inergy Transportation, Inergy Gas, Stellar Propane, Stagecoach II, Storage, CNYOGC, FHR and Arlington Storage, the “Guarantors”). As used herein, the term
“Notes” shall include the Guarantees, unless the context otherwise requires. The Issuers and the Guarantors are referred to as the “Inergy Parties.” 
 Inergy Holdings, L.P., a Delaware limited partnership, owns (either directly or indirectly through its wholly-owned subsidiaries) 100% of the issued and
outstanding membership interests in each of Inergy Partners, LLC, a Delaware limited liability company (the “Non-Managing General Partner”), and Inergy GP, LLC, a Delaware limited liability company (the “Managing General
Partner”) (the Managing General Partner and the Non-Managing General Partner are sometimes collectively referred to herein as the “General Partners”). 
 This is to confirm the agreement concerning the purchase of the Notes from the Issuers by the Initial Purchasers. 
 1. Certain Defined Terms. As used in this Agreement: 
 (a) “Applicable Time” means 3:30 p.m. (New York City time) on the date of this Agreement; and 
 (b) “Pricing Disclosure Supplement” means the summary of the terms of the Notes dated the date of this Agreement and attached hereto as Exhibit A. 
 2. Preliminary Offering Memorandum and Offering Memorandum. The Notes will be offered, issued and sold to the Initial Purchasers without
registration under the Securities Act of 1933, as amended (the “Act”), in reliance on an exemption pursuant to Section 4(2) under the Act. At or prior to the Applicable Time, the Issuers and the Guarantors shall have prepared a
preliminary offering memorandum dated January 28, 2009 (the “Preliminary Offering Memorandum”), and the Pricing Disclosure Supplement. Except as provided in the last sentence of this paragraph, as used herein, “Offering
Memorandum” shall mean the Preliminary Offering Memorandum as supplemented by the Pricing Disclosure Supplement. Promptly after the Applicable Time and in any event no later than the second business day following the Applicable Time, the
Issuers and the Guarantors will prepare an offering memorandum dated the date hereof (the “Final Offering Memorandum”). The Issuers and the Guarantors hereby confirm that they have authorized the use of the Preliminary Offering
Memorandum, the Pricing Disclosure Supplement and the Final Offering Memorandum in connection with the offering and resale of the Notes by the Initial Purchasers. From and after the time the Final Offering Memorandum is prepared, all references
herein to the Offering Memorandum shall be deemed to be a reference to both the Offering Memorandum and the Final Offering Memorandum. 
 Any
reference to the Preliminary Offering Memorandum or the Final Offering Memorandum shall be deemed to refer to and include any documents incorporated by reference 

  

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therein. All documents filed under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), and so deemed to be
included in the Offering Memorandum, as the case may be, or any amendment or supplement thereto, are hereinafter called the “Exchange Act Reports.” 
 It is understood and acknowledged that upon original issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Act, the Notes (and all securities issued in
exchange therefor, in substitution thereof) shall bear the following legend (along with such other legends as the Initial Purchasers and their counsel deem necessary): 
 “THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. 
 THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF INERGY, L.P. AND INERGY
FINANCE CORP. THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO AN ISSUER, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
(A) ABOVE.” 
 You have advised the Issuers that you will make offers (the “Exempt Resales”) of the Notes
purchased by you hereunder on the terms set forth in the Offering Memorandum, as amended or supplemented, solely to (i) persons whom you reasonably believe to be “qualified institutional buyers” as defined in Rule 144A under the Act
(“QIBs”) and (ii) outside the United States to certain persons in offshore transactions in reliance on Regulation S under the Act. Those persons specified in clauses (i) and (ii) are referred to herein as the
(“Eligible Purchasers”). You will offer the Notes to Eligible Purchasers initially at a price equal to 90.191% of the principal amount thereof. Such price may be changed at any time without notice. 
  

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 Holders (including subsequent transferees) of the
Notes will have the registration rights set forth in the registration rights agreement attached hereto as Exhibit B (the “Registration Rights Agreement”) among the Inergy Parties and the Initial Purchasers to be dated
February 2, 2009 (the “Closing Date”), for so long as such Notes constitute “Registrable Securities” (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Inergy
Parties will agree to file with the Commission under the circumstances set forth therein, a registration statement under the Act relating to the Issuers’ 8 3/4% Senior Notes due 2015 (the “Exchange Notes”) and the Guarantors’ Exchange Guarantees (the “Exchange Guarantees”) to be offered in exchange for the Notes
and the Guarantees. Such portion of the offering is referred to as the “Exchange Offer.” 
 3. Representations,
Warranties and Agreements of the Inergy Parties. The Inergy Parties, jointly and severally, represent, warrant and agree as follows: 
 (a) No Material Misstatements or Omissions. The Offering Memorandum, as of the Applicable Time, does not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under which they were made, not misleading, except that this representation and warranty does not apply to statements in or omissions from the Offering Memorandum made in
reliance upon and in conformity with information relating to the Initial Purchasers furnished to the Issuers in writing by or on behalf of the Initial Purchasers expressly for use therein, which information is specified in Section 13.

 (b) No Similar Class of Registered Securities. When the Notes and Guarantees are issued and delivered pursuant to this Agreement,
such Notes and Guarantees will not be of the same class (within the meaning of Rule 144A under the Act) as securities of the Issuers or the Guarantors that are listed on a national securities exchange registered under Section 6 of the Exchange
Act or that are quoted in a United States automated inter-dealer quotation system. 
 (c) Incorporated Documents. The documents
incorporated by reference in the Offering Memorandum, when filed with the Commission, conformed or will conform, as the case may be, in all material respects to the requirements of the Exchange Act, and the rules and regulations (“Rules and
Regulations”) of the United States Securities and Exchange Commission (the “Commission”) thereunder, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
 (d) No Issuer Written Communications. The Partnership (including its agents and representatives, other than the Initial Purchasers in their capacity as such) has not prepared, made, used, authorized, approved or referred to and will
not prepare, make, use, authorize, approve or refer to any written communication that constitutes an offer to sell or solicitation of an offer to buy the Notes (each such communication by the Partnership or its agents and 

  

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representatives (other than a communication referred to in clause (i) below) an “Issuer Written Communication”) other than (i) the
Offering Memorandum and (ii) any electronic road show or other written communications, in each case used in accordance with Section 6(m). Each such Issuer Written Communication, when taken together with the Offering Memorandum as of the
Applicable Time, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided that the Partnership makes no representation and warranty with respect to any statements or omissions made in each such Issuer Written Communication in reliance upon and in conformity with information relating to any
Initial Purchaser furnished to the Partnership in writing by such Initial Purchaser expressly for use in any Issuer Written Communication. 
 (e) No Solicitation or Advertisement 
 (i) Assuming that your representations and warranties in Section 4(b) are true,
the purchase and resale of the Notes pursuant hereto (including pursuant to the Exempt Resales) is exempt from the registration requirements of the Act. No form of general solicitation or general advertising within the meaning of Regulation D
(including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by
any general solicitation or general advertising) was used by the Inergy Parties or any of their respective representatives (other than you, as to whom the Inergy Parties make no representation) in connection with the offer, issuance and sale of the
Notes. 
 (ii) No form of general solicitation or general advertising was used by the Inergy Parties or any of their respective
representatives (other than you, as to whom the Inergy Parties make no representation) with respect to Notes sold outside the United States to non-U.S. persons (as defined in Rule 902 under the Act), by means of any directed selling efforts within
the meaning of Rule 902 under the Act, and the Issuers, any affiliate of the Issuers and any person acting on its or their behalf (other than you, as to whom the Issuers and the Guarantors make no representation) has complied with and will implement
the “offering restrictions” required by Rule 902. 
 (f) No Order Preventing Exempt Resales. The Preliminary Offering
Memorandum and Offering Memorandum have been prepared by the Inergy Parties for use by the Initial Purchasers in connection with the Exempt Resales. No order or decree preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any order asserting that the transactions contemplated by this Agreement are subject to the registration requirements of the Act has been issued and no proceeding for that purpose has commenced or is pending or, to the knowledge of
the Inergy Parties, is contemplated. 
 (g) Formation, Good Standing and Foreign Qualification of the Inergy Parties. Each of the
Inergy Parties and each of the General Partners has been duly organized and is validly existing in good standing under the laws of its jurisdiction of organization with all necessary power and authority to own or lease its properties and to conduct
its business, in all material respects as described in the Offering Memorandum. Each of the Inergy Parties and the General Partners is duly registered or qualified as a foreign entity for the transaction of business 

  

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under the laws of each jurisdiction in which the character of the business conducted by it or the nature or location of the properties owned or leased by it
makes such registration or qualification necessary, except where the failure so to register or qualify would not have a material adverse effect on the business, financial condition or results of operations of the Inergy Parties, taken as a whole
(“Material Adverse Effect”). 
 (h) Ownership of General Partner Interests in the Partnership. The General Partners
are the only general partners of the Partnership. The Non-Managing General Partner owns an approximate 0.9% general partner interest in the Partnership and the Managing General Partner owns a non-economic, managing general partner interest in the
Partnership; such general partner interests have been duly authorized and validly issued in accordance with the Second Amended and Restated Agreement of Limited Partnership of the Partnership, as amended (the “Partnership
Agreement”); and each General Partner owns its general partner interest free and clear of all liens, encumbrances, security interests, charges or claims (other than those securing obligations under the 5-year Credit Agreement dated as of
December 17, 2004, as amended, by and among the Partnership and the lenders therein (the “Credit Agreement”). 
 (i)
Capitalization. The issued and outstanding limited partner interests of the Partnership consist of 51,300,764 Common Units and the incentive distribution rights, as defined in the Partnership Agreement (the “Incentive Distribution
Rights”). All outstanding Common Units and Incentive Distribution Rights and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Partnership Agreement and are fully paid (to
the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in Sections 17-607 and 17-804 of the Delaware Revised Uniform Limited Partnership Act (the “Delaware
LP Act”)). 
 (j) Ownership of Finance Corp. and the Guarantors. The Partnership owns, directly or indirectly, 100% of the
issued shares of capital stock, membership interests or limited partner interests, as applicable, in each of Finance Corp. and the Guarantors; such shares of capital stock, membership interests or limited partner interests have been duly authorized
and validly issued in accordance with the bylaws, partnership agreement or limited liability company agreement of such entity (collectively, the “Organizational Documents”) and are fully paid (to the extent required under such
Organizational Documents) and nonassessable (except (i) in the case of an interest in a Delaware limited liability company, as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware Limited Liability Company Act
(the “Delaware LLC Act”) and (ii) in the case of an interest in a limited liability company formed under the laws of another domestic state, as such nonassessability may be affected by similar provisions of such state’s
limited liability company statute, as applicable); and the Partnership owns such shares of capital stock, membership interests or limited partner interests free and clear of all liens, encumbrances, security interests, charges or claims (other than
those securing obligations under Credit Agreement). 
 (k) No Other Subsidiaries. The Partnership does not own or control, directly or
indirectly, any corporation, association or other entity other than the subsidiaries listed in Exhibit 21.1 to the Partnership’s Annual Report on Form 10-K for the most recent fiscal year. Inergy Canada Company, a Nova Scotia unlimited
liability company (“Inergy Canada”), is not a significant subsidiary within the meaning of Rule 1-02(w) of Regulation S-X. Neither the 

  

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Partnership nor any of its subsidiaries own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited
liability company, joint venture, association or other entity, other than as set forth on Exhibit 21.1 to the Partnership’s Annual Report on Form 10-K for the fiscal year ended September 30, 2008. Other than its ownership of its
partnership interests in the Partnership, the Managing General Partner does not own, and at the Closing Date will not own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company,
joint venture, association or other entity. 
 (l) Authorization to Execute this Agreement. This Agreement has been duly authorized,
validly executed and delivered by each of the Inergy Parties. 
 (m) Authorization to Issue and Sell Notes. The Issuers have all
requisite corporate or partnership power and authority to issue, sell and deliver the Notes. The Notes have been duly authorized by the Issuers and, when duly executed by the Issuers in accordance with the terms of the Indenture, assuming due
authentication of the Notes by the Trustee, upon delivery to the Initial Purchasers against payment therefor in accordance with the terms hereof, will be validly issued and delivered, and will constitute valid and binding obligations of the Issuers
entitled to the benefits of the Indenture, enforceable against the Issuers in accordance with their terms, except as such enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors’ rights generally and by general equitable principles (regardless whether such enforceability is considered in a proceeding in equity or at law). 
 (n) Authorization to Issue Exchange Notes. The Issuers have all requisite corporate or partnership power and authority to issue the Exchange
Notes. The Exchange Notes have been duly and validly authorized by the Issuers and if and when duly issued, executed and authenticated by the Trustee in accordance with the terms of the Indenture and delivered in accordance with the Exchange Offer
provided for in the Registration Rights Agreement, will constitute valid and binding obligations of the Issuers entitled to the benefits of the Indenture, enforceable against the Issuers in accordance with their terms, except as such enforceability
may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights generally and by general equitable principles (regardless whether such enforceability is
considered in a proceeding in equity or at law). 
 (o) Authorization and Enforceability of Guarantees. Each Guarantor has all
requisite corporate or limited liability power and authority to issue the Guarantees. The Guarantees have been duly and validly authorized by the Guarantors and upon the due execution, authentication and delivery of the Notes in accordance with the
Indenture and the issuance of the Notes in the sale to the Initial Purchasers contemplated by this Agreement, will constitute valid and binding obligations of the Guarantors, enforceable against the Guarantors in accordance with their terms, except
as such enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights generally and by general equitable principles (regardless whether such
enforceability is considered in a proceeding in equity or at law). 
 (p) Authorization and Enforceability of Exchange Guarantees.
Each Guarantor has all requisite corporate or limited liability power and authority to issue the 

  

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Exchange Guarantees. The Exchange Guarantees have been duly and validly authorized by the Guarantors and if and when duly issued and delivered by the
Guarantors in accordance with the terms of the Indenture and upon the due execution and authentication of the Exchange Notes in accordance with the Indenture and the issuance and delivery of the Exchange Notes in the Exchange Offer contemplated by
the Registration Rights Agreement, will constitute valid and binding obligations of the Guarantors, entitled to the benefits of the Indenture, enforceable against the Guarantors in accordance with their terms, except as such enforceability may be
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights generally and by general equitable principles (regardless whether such enforceability is considered
in a proceeding in equity or at law). 
 (q) Authorization and Enforceability of the Indenture. Each of the Inergy Parties has all
requisite corporate, limited liability or partnership power and authority to enter into the Indenture. The Indenture has been duly and validly authorized by the Inergy Parties, and upon its execution and delivery by the Inergy Parties and, assuming
due authorization, execution and delivery by the Trustee, will constitute the valid and binding agreement of the Inergy Parties, enforceable against the Inergy Parties in accordance with its terms, except as such enforceability may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other laws relating to or affecting creditors’ rights generally and by general equitable principles (regardless whether such enforceability is considered in a
proceeding in equity or at law); no qualification of the Indenture under the Trust Indenture Act of 1939 (the “1939 Act”) is required in connection with the offer, issuance and sale of the Notes contemplated hereby or in connection
with the Exempt Resales. The Indenture conforms in all material respects to the requirements of the 1939 Act and the Rules and Regulations applicable to an indenture that is qualified thereunder. 
 (r) Authorization and Enforceability of the Registration Rights Agreement. Each of the Inergy Parties has all requisite corporate, limited
liability and partnership power and authority to enter into the Registration Rights Agreement. The Registration Rights Agreement has been duly authorized by the Inergy Parties and, when executed and delivered by the Inergy Parties in accordance with
the terms hereof and thereof, will be validly executed and delivered and (assuming the due authorization, execution and delivery thereof by you) will be the legally valid and binding obligation of the Inergy Parties in accordance with the terms
thereof, enforceable against the Inergy Parties in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditor’s rights
generally, by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and, as to rights of indemnification and contribution thereunder may be limited by federal or state law or by
principles of public policy. 
 (s) Accuracy of Statements. The Indenture, the Notes, the Guarantees and the Registration Rights
Agreement will or do, as applicable, conform in all material respects to the description thereof in the Offering Memorandum. 
 (t)
Enforceability of Other Agreements. At the Closing Date, each of the Organizational Documents will have been duly authorized, executed and delivered by the parties thereto and will be a valid and legally binding agreement of such party,
enforceable against such 

  

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party in accordance with its terms; provided that, the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and provided, further, that the
indemnity, contribution and exoneration provisions contained in any of such agreements may be limited by applicable laws and public policy. 
 (u) No Conflicts. None of the offering, issuance and sale of the Notes and the Guarantees by the Issuers and the Guarantors, respectively, the execution, delivery and performance of the Notes, the Guarantees, the Exchange Notes, the
Indenture, the Registration Rights Agreement, the Exchange Guarantees and this Agreement by the Inergy Parties, or the consummation by each of them of the transactions contemplated hereby (i) conflicts or will conflict with or constitutes or
will constitute a violation of the Organizational Documents, (ii) constitutes or will constitute a breach or violation of, or a default (or an event which, with notice or lapse of time or both, would constitute such a default) under, any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which any of the Inergy Parties is a party or by which any of them or any of their respective properties may be bound; (iii) violates or will violate
any law, administrative regulation or administrative or court decree applicable to the Inergy Parties, or (iv) results or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of any of the
Inergy Parties, which breaches, violations, defaults or liens, in the case of clauses (ii), (iii) or (iv) would, individually or in the aggregate, have a Material Adverse Effect. 
 (v) No Consents. No permit, consent, approval, authorization, order, registration, filing or qualification (“consent”) of or with
any court, governmental agency or body having jurisdiction over the Inergy Parties or any of their respective properties is required for the offering, issuance and sale of the Notes and the Guarantees by the Issuers in the manner contemplated herein
or in the Offering Memorandum or the execution, delivery and performance by the Inergy Parties of this Agreement, the Indenture, the Notes, the Guarantees, the Exchange Notes, the Exchange Guarantees and the Registration Rights Agreement, or the
consummation by the Inergy Parties of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations, orders and registrations or qualifications as may be required (i) under applicable state securities laws
in connection with the purchase and resale of the Notes by the Initial Purchasers and (ii) with respect to the Exchange Notes under the Act and applicable state securities laws as contemplated by the Registration Rights Agreement. 

(w) No Default. None of the Inergy Parties is (i) in violation of its Organizational Documents, or (ii) in violation of any law,
statute, ordinance, administrative or governmental rule or regulation applicable to it or of any decree of any court or governmental agency or body having jurisdiction over it or (iii) in breach, default (or an event which, with notice or lapse
of time or both, would constitute such a default) or violation in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any agreement, indenture, lease or other
instrument to which it is a party or by which it or any of its properties may be bound, which breach, default or violation in the case of clause (ii) or (iii) would, if continued, have a Material Adverse Effect or could materially impair
the ability of any of the Inergy Parties to perform their obligations under this Agreement, the Indenture, the Notes, the Guarantees, the Exchange Notes, the Exchange 

  

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Guarantees or the Registration Rights Agreement. To the knowledge of the Inergy Parties, no third party to any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which any of the Inergy Parties is a party or by which any of them is bound or to which any of their properties is subject, is in default under any such agreement, which breach, default or violation
would, if continued, have a Material Adverse Effect. 
 (x) Independent Registered Public Accounting Firm – Ernst &
Young. The accountants, Ernst & Young LLP, who have certified certain audited financial statements contained or incorporated by reference in the Offering Memorandum, are an independent registered public accounting firm with respect to
the Partnership and the General Partners as required by the Act and the applicable Rules and Regulations thereunder and the rules and regulations of the Public Company Accounting Oversight Board (the “PCAOB”). 
 (y) Financial Statements. At September 30, 2008, the Partnership would have had, on the consolidated, as adjusted basis indicated in the
Offering Memorandum, a capitalization as set forth therein. The historical financial statements (including the related notes and supporting schedules) contained or incorporated by reference in the Offering Memorandum present fairly in all material
respects the financial position, results of operations and cash flows of the entities purported to be shown thereby on the basis stated therein at the respective dates or for the respective periods to which they apply and have been prepared in
accordance with generally accepted accounting principles consistently applied throughout the periods involved, except to the extent disclosed therein. The financial information contained or incorporated by reference in the Offering Memorandum and
the selected historical information is accurately presented in all material respects and prepared on a basis consistent with the audited and unaudited historical consolidated financial statements, as applicable, from which it has been derived.

 (z) No Material Adverse Change. None of the Inergy Parties has sustained since the date of the latest audited financial statements
contained or incorporated by reference in the Offering Memorandum any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental
action, investigation, order or decree that is reasonably likely to cause a Material Adverse Effect or is otherwise set forth or contemplated in the Offering Memorandum. Except as disclosed in the Offering Memorandum, subsequent to the respective
dates as of which such information is given in the Offering Memorandum (exclusive of any amendment or supplement thereto), (i) none of the Inergy Parties has incurred any liability or obligation, indirect, direct or contingent, or entered into
any transactions, not in the ordinary course of business, that, individually or in the aggregate, would cause or result in a Material Adverse Effect, (ii) there has not been any change in the capitalization, or increase in the short-term debt
or long-term debt, of the Inergy Parties that would cause or result in a Material Adverse Effect and (iii) there has not been any adverse change, or any development involving or which may reasonably be expected to involve, individually or in
the aggregate, a prospective adverse change in or affecting the general affairs, business, prospects, properties, management, condition (financial or other), partners’ capital, stockholders’ equity, net worth or results of operations of
the Inergy Parties, taken as a whole, in each case except as could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. 
  

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 (aa) Title to Properties. The Inergy Parties have good and indefeasible title to all real property
and good title to all personal property described in the Offering Memorandum as owned by any of them, free and clear of all liens, claims, security interests or other encumbrances except (i) those created, arising under or securing the Credit
Agreement; (ii) such as are described in the Offering Memorandum or (iii) such as do not interfere with the use of such properties taken as a whole as described in the Offering Memorandum, and could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect. All real property and buildings held under lease or license by the Inergy Parties are held by such entity under valid and subsisting and enforceable leases or licenses with such exceptions as do not
interfere with the use of such properties taken as a whole as they have been used in the past and are proposed to be used in the future as described in the Offering Memorandum and could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect. 
 (bb) Permits. Each of the Inergy Parties has such permits, consents, licenses, franchises, certificates
and authorizations of governmental or regulatory authorities (“permits”) as are necessary to own its properties and to conduct its business in the manner described in the Offering Memorandum, subject to such qualifications as may be
set forth in the Offering Memorandum and except for such permits which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect; each of the Inergy Parties has fulfilled and performed all its material obligations
with respect to such permits which are due to have been fulfilled and performed by such date and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any impairment of the
rights of the holder of any such permit, except for such revocations, terminations and impairments that would not, individually or in the aggregate, have a Material Adverse Effect, subject in each case to such qualifications as may be set forth in
the Offering Memorandum; and, except as described in the Offering Memorandum, none of such permits contains any restriction that is materially burdensome to the Inergy Parties, taken as a whole. 
 (cc) Books and Records. The Partnership (i) makes and keeps books, records and accounts, which, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of assets and (ii) maintains systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and
have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurances that (A) transactions are executed in
accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Except as disclosed in each of the Offering Memorandum as of the Applicable Time, there are no material weaknesses or significant deficiencies in the Partnership’s
internal controls. 
 (dd) Disclosure Controls. The Partnership has established and maintains disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), which are designed to provide reasonable assurance that the information required 

  

 11 

 
to be disclosed by the Partnership in reports that it files under the Exchange Act is accumulated and communicated to the Partnership’s management,
including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Partnership has carried out evaluations of the effectiveness of its disclosure controls and
procedures and such disclosure controls and procedures are effective in all material respects to perform the functions for which they were established. 
 (ee) No Recent Changes to Internal Control Over Financial Reporting. Since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal
controls or in other factors that materially affected our internal control over financial reporting. 
 (ff) Sarbanes Oxley Act of
2002. There is and has been no failure on the part of the Partnership and, to the Partnership’s knowledge, any of the General Partner’s directors or officers, in their capacities as such, to comply with the provisions of the
Sarbanes-Oxley Act of 2002 and the Rules and Regulations promulgated in connection therewith. 
 (gg) Tax Returns. Each of the Inergy
Parties which are required to do so has filed (or has obtained extensions with respect to) all material federal, state and foreign income and franchise tax returns required to be filed through the date hereof, which returns are complete and correct
in all material respects, and has timely paid all taxes shown to be due, if any, pursuant to such returns, other than those (i) which are being contested in good faith or (ii) which, if not paid, would not have a Material Adverse Effect.

 (hh) Investment Company. None of the Inergy Parties is now, and after sale of the Notes to be sold by the Issuers hereunder, the
issuance of the Guarantees and application of the net proceeds from such sale as described in the Offering Memorandum under the caption “Use of proceeds,” none of the Inergy Parties will be an “investment company” or a company
“controlled by” an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 
 (ii)
No Environmental Problems. Each of the Inergy Parties (i) is in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety and the environment or
imposing liability or standards of conduct concerning any Hazardous Material (as hereinafter defined) (“Environmental Laws”), (ii) has received all permits required of it under applicable Environmental Laws to conduct its
respective businesses, (iii) are in compliance with all terms and conditions of any such permit, and (iv) to the knowledge of the Inergy Parties, does not have any liability in connection with the release into the environment of any
Hazardous Materials, except where such noncompliance with Environmental Laws, failure to receive required permits, or failure to comply with the terms and conditions of such permits or liability in connection with such releases would not,
individually or in the aggregate, have a Material Adverse Effect. The term “Hazardous Material” means (A) any “hazardous substance” as defined in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, (B) any “hazardous waste” as defined in the Resource Conservation and Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under or within the meaning of any other Environmental Law. 
  

 12 

 (jj) No Labor Dispute. No labor dispute with the employees of the Inergy Parties exists or, to the
knowledge of the Inergy Parties, is imminent which, in either case, would reasonably be expected to result in a Material Adverse Effect. 
 (kk) Insurance. The Inergy Parties maintain insurance covering their properties, operations, personnel and businesses against such losses and risks as are reasonably adequate to protect them and their businesses in a manner
consistent with other businesses similarly situated. None of the Inergy Parties has received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such
insurance, and all such insurance is outstanding and duly in force on the date hereof and will be outstanding and duly in force on the Closing Date. 
 (ll) Litigation. Except as described in the Offering Memorandum, there is (i) no action, suit or proceeding before or by any court, arbitrator or governmental agency, body or official, domestic or foreign,
now pending or, to the knowledge of the Inergy Parties, threatened, to which any of the Inergy Parties is or may be a party or to which the business or property of any of the Inergy Parties is or may be subject, (ii) no statute, rule,
regulation or order that has been enacted, adopted or issued by any governmental agency or proposed by any governmental agency and (iii) no injunction, restraining order or order of any nature issued by a federal or state court or foreign court
of competent jurisdiction to which any of the Inergy Parties is or may be subject, that, in the case of clauses (i), (ii) and (iii) above, is reasonably likely to (A) individually or in the aggregate have a Material Adverse Effect or
(B) prevent or result in the suspension of the offer, issuance or sale of the Notes. 
 (mm) Stabilization. Prior to the date
hereof, none of the Inergy Parties has taken, directly or indirectly, any action designed to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price the Notes
in violation of any law, rule or regulation. 
 (nn) No Integration. During the six-month period preceding the date of the Offering
Memorandum, none of the Issuers, the Guarantors or any other person acting on behalf of the Issuers or any Guarantor has offered or sold to any person any Notes or Guarantees, or any securities of the same or a similar class as the Notes or
Guarantees, other than Notes or Guarantees offered or sold to the Initial Purchasers hereunder. The Issuers and the Guarantors will take reasonable precautions designed to insure that any offer or sale, direct or indirect, in the United States or to
any U.S. person (as defined in Rule 902 under the Act), of any Notes or any substantially similar security issued by the Issuers or any Guarantor, within six months subsequent to the date on which the distribution of the Notes has been completed (as
notified to the Partnership by the Initial Purchasers), is made under restrictions and other circumstances reasonably designed not to affect the status of the offer, issuance and sale of the Notes in the United States and to U.S. persons
contemplated by this Agreement as transactions exempt from the registration provisions of the Act; including any sales pursuant to Rule 144A under, or Regulations D or S of, the Act. 
  

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 4. Purchase of the Notes by the Initial Purchasers, Agreements to Sell, Purchase and Resell. 

 (a) The Issuers hereby agree, on the basis of the representations, warranties and agreements of the Initial Purchasers contained herein and
subject to all the terms and conditions set forth herein, to issue and sell to the Initial Purchasers and, upon the basis of the representations, warranties and agreements of the Issuers and the Guarantors herein contained and subject to all the
terms and conditions set forth herein, each Initial Purchaser agrees, severally and not jointly, to purchase from the Issuers, at a purchase price of 88.191% of the principal amount thereof, the total principal amount of Notes set forth opposite the
name of such Initial Purchaser in Schedule I hereto. The Issuers and the Guarantors shall not be obligated to deliver any of the securities to be delivered hereunder except upon payment for all of the securities to be purchased as provided herein.

 (b) Each of the Initial Purchasers severally and not jointly hereby represents and warrants to and agrees with the Issuers that it will
offer the Notes for sale upon the terms and conditions set forth in this Agreement and in the Offering Memorandum. Each of the Initial Purchasers hereby represents and warrants to, and agrees with, the Issuers that such Initial Purchaser:
(i) is a QIB with such knowledge and experience in financial and business matters as are necessary in order to evaluate the merits and risks of an investment in the Notes; (ii) is purchasing the Notes pursuant to a private sale exempt from
registration under the Act; (iii) in connection with the Exempt Resales, will solicit offers to buy the Notes only from, and will offer to sell the Notes only to, the Eligible Purchasers in accordance with this Agreement and on the terms
contemplated by the Offering Memorandum; and (iv) will not offer or sell the Notes, nor has it offered or sold the Notes by, or otherwise engaged in, any form of general solicitation or general advertising (within the meaning of Regulation D,
including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by
any general solicitation or general advertising) and will not engage in any directed selling efforts within the meaning of Rule 902 under the Act, in connection with the offering of the Notes. The Initial Purchasers have advised the Issuers that
they will offer the Notes to Eligible Purchasers at a price initially equal to 90.191% of the principal amount thereof, plus accrued interest, if any, from the date of issuance of the Notes. Such price may be changed by the Initial Purchasers at any
time without notice. 
 (c) Each of the Initial Purchasers severally and not jointly hereby represents and warrants and agrees with the
Issuers that each of the Initial Purchasers and each of its affiliates (i) have only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) received by them in connection with the issue or sale of any notes in circumstances in which Section 21(1) of the FSMA does not
apply to us; and (ii) have complied and will comply with all applicable provisions of the FSMA with respect to anything done by them in relation to the notes in, from or otherwise involving the United Kingdom. 
 (d) Each of the Initial Purchasers understands that the Issuers and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Sections 7(c) and 

  

 14 

 
7(f) hereof (as set forth in the form of opinions), counsel to the Issuers and counsel to the Initial Purchasers, will rely upon the accuracy and truth of
the foregoing representations, warranties and agreements and the Initial Purchasers hereby consent to such reliance. 
 5. Delivery of the
Notes and Payment Therefor. Delivery to the Initial Purchasers of and payment for the Notes shall be made at the offices of Vinson & Elkins L.L.P., 1001 Fannin Street, 2500 First City Tower, Houston, Texas 77002-6760, at 9:00 A.M.,
central time, on the Closing Date. The place of closing for the Notes and the Closing Date may be varied by agreement between the Initial Purchasers and the Issuers. 
 The Notes will be delivered to the Trustee as custodian for The Depository Trust Company (“DTC”), against payment by or on behalf of the Initial Purchasers of the purchase price therefor by wire
transfer in immediately available funds, by causing DTC to credit the Notes to the account of the Initial Purchasers at DTC. The Notes will be evidenced by one or more global securities in definitive form (the “Global Notes”), and
will be registered in the name of Cede & Co. as nominee of DTC. 
 6. Agreements of the Inergy Parties. The Inergy Parties,
jointly and severally, agree with each of the Initial Purchasers as follows: 
 (a) The Issuers and the Guarantors will promptly furnish to
the Initial Purchasers, without charge, such number of copies of the Offering Memorandum as they may reasonably request. 
 (b) The Issuers
and the Guarantors will not make any amendment or supplement to the Offering Memorandum of which the Initial Purchasers shall not previously have been advised or to which they shall reasonably object after being so advised; provided, that
this clause shall not apply to any filing by the Partnership of any Annual Report on Form 10-K or Quarterly Report on Form 10-Q. 
 (c) If,
at any time prior to completion of the distribution of the Notes by the Initial Purchasers to Eligible Purchasers, any event occurs or information becomes known that, in the judgment of the Issuers, any of the Guarantors or in the opinion of counsel
for the Initial Purchasers, should be set forth in the Offering Memorandum so that the Offering Memorandum does not include any untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if it should be necessary to supplement or amend the Offering Memorandum as of the Applicable Time or the Final Offering Memorandum, as then amended or supplemented in
order to comply with any law, the Issuers and the Guarantors will, subject to paragraph (b) above, promptly prepare an appropriate supplement or amendment thereto, and will promptly furnish to the Initial Purchasers and dealers a reasonable
number of copies thereof. 
 (d) The Issuers and each of the Guarantors will cooperate with the Initial Purchasers and with their counsel in
connection with the qualification of the Notes for offering, issuance and sale by the Initial Purchasers and by dealers under the securities or Blue Sky laws of such jurisdictions as the Initial Purchasers may reasonably designate; provided,
that in no event shall the Issuers or any of the Guarantors be obligated to qualify to do business in any 

  

 15 

 
jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the
offering, issuance or sale of the Notes, in any jurisdiction where it is not now so subject or subject itself to taxation in any such jurisdiction if it is not otherwise so subject. 
 (e) For a period of 90 days from the date of the Offering Memorandum, the Inergy Parties agree not to, directly or indirectly, sell, offer to sell,
contract to sell, grant any option to purchase, issue any instrument convertible into or exchangeable for, or otherwise transfer or dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the
disposition in the future of), any debt securities of the Issuers, the Guarantors or any of their respective subsidiaries, except (i) in exchange for the Exchange Notes and the Exchange Guarantees in connection with the Exchange Offer or
(ii) with the prior consent of J.P. Morgan Securities Inc. 
 (f) The Issuers will make available to the holders of the Notes as soon as
practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, partners’/stockholders’ equity and cash flows of the Issuers and its consolidated subsidiaries certified by an independent
registered public accounting firm) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the date of the Offering Memorandum), will make available to its
securityholders consolidated summary financial information of the Issuers and its subsidiaries for such quarter in reasonable detail. 
 (g)
The Issuers will apply the net proceeds from the sale of the Notes to be sold by it hereunder substantially in accordance with the description set forth in the Offering Memorandum under the caption “Use of proceeds.” 
 (h) Except as stated in this Agreement and in the Offering Memorandum, neither the Issuers, the Guarantors nor any of their respective affiliates will
take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Notes. 
 (i) The Issuers and the Guarantors will use their commercially reasonable efforts to permit the
Notes to be designated Private Offerings, Resales and Trading through Automated Linkages (PORTAL) MarketSM (the “PORTAL
MarketSM”) securities in accordance with the rules and regulations adopted by the Financial Industry Regulatory Authority, Inc. relating to
trading in the PORTAL MarketSM and to permit the Notes to be eligible for clearance and settlement through DTC. 
 (j) During the period of one year after the Closing Date, the Inergy Parties will not, and will not permit any of their “affiliates” (as
defined in Rule 144 under the Act), to, resell any of the Notes that constitute “restricted securities” under Rule 144 that have been reacquired by any of them. 
 (k) The Inergy Parties agree not to sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Act) that would be integrated with the sale of the Notes in a
manner that would require the registration under the Act of the sale to the Initial Purchasers or the Eligible Purchasers of the Notes. 
  

 16 

 (l) The Inergy Parties will take such steps as shall be necessary to insure that neither the Partnership
nor any of the Partnership’s subsidiaries becomes an “investment company” within the meaning of such term under the Investment Company Act of 1940, as amended. 
 (m) Before making, preparing, using, authorizing, approving or referring to any Issuer Written Communication, the Partnership will furnish to the Initial
Purchasers and counsel for the Initial Purchasers a copy of such written communication for review and will not make, prepare, use, authorize, approve or refer to any such written communication to which the Initial Purchasers reasonably object.

 (n) The Partnership will advise the Initial Purchasers promptly, and confirm such advice in writing, (i) of the issuance by any
governmental or regulatory authority of any order preventing or suspending the use of any of the Offering Memorandum as of the Applicable Time, any Issuer Written Communication or the Final Offering Memorandum or the initiation or threatening of any
proceeding for that purpose; (ii) of the occurrence of any event at any time prior to the completion of the initial offering of the Notes as a result of which any of the Offering Memorandum as of the Applicable Time, any Issuer Written
Communication or the Final Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the
circumstances existing when such Offering Memorandum, Issuer Written Communication or the Final Offering Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt by the Partnership of any notice with respect to any
suspension of the qualification of the Notes for offer, and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Partnership will use its reasonable best efforts to prevent the issuance of any such
order preventing or suspending the use of any of the Offering Memorandum as of the Applicable Time, any Issuer Written Communication or the Final Offering Memorandum or suspending any such qualification of the Notes and, if any such order is issued,
will obtain as soon as possible the withdrawal thereof. 
 7. Conditions to Initial Purchasers’ Obligations. The respective
obligations of the Initial Purchasers hereunder are subject to the accuracy, when made and on and as of the Closing Date, of the representations and warranties of the Inergy Parties contained herein, to the performance by the Inergy Parties of their
respective obligations hereunder, and to each of the following additional conditions: 
 (a) The Initial Purchasers shall not have discovered
and disclosed to the Issuers on or prior to the Closing Date that the Offering Memorandum contained an untrue statement of a fact that, in the opinion of Baker Botts L.L.P., is material or omits to state a fact that, in the opinion of such counsel,
is material and is required to be stated therein or in the documents incorporated therein by reference or is necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 
  

 17 

 (b) All corporate proceedings and other legal matters incident to the authorization, form and validity of
this Agreement, the Notes, the Guarantees, the Exchange Notes, the Exchange Guarantees, the Registration Rights Agreement, the Indenture and the Offering Memorandum, and all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to Baker Botts L.L.P., and the Inergy Parties shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass
upon such matters. 
 (c) The Initial Purchasers shall have received from Vinson & Elkins L.L.P., counsel for the Issuers and the
Guarantors, its written opinion addressed to the Initial Purchasers and dated the Closing Date, substantially in the form of Exhibit C hereto. 
 (d) The Initial Purchasers shall have received from Laura Ozenberger, Senior Vice President—General Counsel and Secretary of the Managing General Partner, her written opinion addressed to the Initial Purchasers
and dated the Closing Date, substantially in the form of Exhibit D hereto. 
 (e) The Initial Purchasers shall have received from
Michael K. Post, in house counsel for the Partnership, his written opinion addressed to the Initial Purchasers and dated the Closing Date, substantially in the form of Exhibit E hereto. 
 (f) The Initial Purchasers shall have received from Baker Botts L.L.P., counsel for the Initial Purchasers, such opinion or opinions, dated the Closing
Date, with respect to the offer, issuance and sale of the Notes, the Offering Memorandum and other related matters as the Initial Purchasers may reasonably require, and the Issuers shall have furnished to such counsel such documents and information
as they reasonably request for the purpose of enabling them to pass upon such matters. 
 (g) The Issuers and each Guarantor shall have
furnished or caused to be furnished to the Initial Purchasers on the Closing Date certificates of officers of the Issuers and each Guarantor satisfactory to the Initial Purchasers as to the accuracy of the representations and warranties of the
Issuers and each Guarantor herein at and as of the Closing Date, as to the performance by the Issuers and each Guarantor of all of their obligations hereunder to be performed at or prior to the Closing Date and as to such other matters as J.P.
Morgan Securities Inc. may reasonably request. 
 (h) At the time of execution of this Agreement, the Initial Purchasers shall have received
from Ernst & Young LLP a letter, in form and substance satisfactory to the Initial Purchasers, addressed to the Initial Purchasers and dated the date hereof (i) confirming that such firm is an independent registered public accounting
firm within the meaning of the Act and the rules of the PCAOB and is in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Offering Memorandum, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information and (iii) covering such other matters as are ordinarily covered by accountants’ “comfort letters” to Initial Purchasers in connection with registered
public offerings. 
  

 18 

 (i) With respect to the letter of Ernst & Young LLP referred to in the preceding paragraph and
delivered to the Initial Purchasers concurrently with the execution of this Agreement (the “initial letter”), the Partnership shall have furnished to the Initial Purchasers a letter (a “bring-down letter”) of such
firm, addressed to the Initial Purchasers and dated the Closing Date (i) confirming that such firm is an independent registered public accounting firm within the meaning of the Act and the rules of the PCAOB and is in compliance with the
applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the Closing Date (or, with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Offering Memorandum, as of a date not more than five days prior to the date of the Closing Date), the conclusions and findings of such firm with respect to the financial information
and other matters covered by the initial letter and (iii) confirming in all material respects the conclusions and findings set forth in the initial letter. 
 (j) None of the Inergy Parties shall have sustained, since the date of the latest audited financial statements included or incorporated by reference in the Offering Memorandum, any material loss or interference with
its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Offering Memorandum
(exclusive of any amendment or supplement thereto); and, since such date, there shall not have been any material change in the partners’/stockholders’ equity or long-term debt of any of the Inergy Parties, or material adverse change, or
any development involving a prospective material adverse change, in or affecting the management, condition, financial or otherwise, partners’/stockholders’ equity, results of operations, business or prospects of the Inergy Parties, taken
as a whole. 
 (k) Subsequent to the execution and delivery of this Agreement (i) no downgrading shall have occurred in the rating
accorded the Issuers’ debt securities by any “nationally recognized statistical rating organization,” as that term is defined by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations 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 Issuers’ debt securities. 
 (l) The Notes shall have been designated for trading on the PORTAL MarketSM. 
 (m) The Issuers and the Guarantors have
executed and delivered the Registration Rights Agreement, and the Initial Purchasers shall have received an executed counterpart thereof, duly executed by the Issuers and the Guarantors. 
 (n) The Issuers, the Guarantors and the Trustee shall have executed and delivered an officer’s certificate relating to the issuance of the Notes
pursuant to Section 2.13 of the Indenture. 
  

 19 

 (o) There shall not have occurred any of the following: (i) trading in securities generally on the
NASDAQ National Market shall have been suspended, the settlement of such trading generally shall have been materially disrupted or minimum prices shall have been established on any such exchange or such market by the Commission, by such exchange or
by any other regulatory body or governmental authority having jurisdiction, (ii) trading in any securities of the Partnership on any exchange or in the over-the-counter market shall have been suspended, (iii) a banking moratorium shall
have been declared by federal or state authorities, (iv) the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a
national emergency or war by the United States or (v) there shall have occurred such a material adverse change in general economic, political or financial conditions or any other calamity or crisis, including, without limitation, as a result of
terrorist activities after the date hereof (or the effect of international conditions on the financial markets in the United States shall be such), as to make it, in the judgment of J.P. Morgan Securities Inc., so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or sale of the Notes being delivered on the Closing Date on the terms and in the manner contemplated by the Offering Memorandum. 
 All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions
hereof only if they are in form and substance reasonably satisfactory to counsel for the Initial Purchasers. 
 8. Indemnification and
Contribution. 
 (a) The Inergy Parties, jointly and severally, will indemnify and hold harmless each of the Initial Purchasers from and
against any losses, damages or liabilities, joint or several, to which the Initial Purchasers may become subject, under the Act, or otherwise, insofar as such losses, damages or liabilities (or actions or claims in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material fact contained in the Offering Memorandum or any Issuer Written Communication, or any amendment or supplement thereto, or arise out of or are based upon any omission or
alleged omission to state therein a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, and will reimburse each of the Initial Purchasers for any legal or other out-of-pocket
expenses incurred by such Initial Purchasers in connection with investigating, preparing, pursuing or defending against or appearing as a third party witness in connection with any such loss, damage, liability or action or claim, including, without
limitation, any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to the indemnified party, as such expenses are incurred (including such losses, damages,
liabilities or expenses to the extent of the aggregate amount paid in settlement of any such action or claim, provided that (subject to Section 8(c) hereof) any such settlement is effected with the written consent of the Partnership);
provided, however, that the Inergy Parties shall not be liable in any such case to the extent, but only to the extent, that any such loss, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in the Offering Memorandum, any Issuer Written Communication, or in any amendment or supplement thereto, in reliance upon and in conformity with written information relating to the Initial Purchasers furnished to
the Issuers by you, expressly for use in the preparation thereof, which information is specified in Section 13. 
  

 20 

 (b) Each of the Initial Purchasers, severally and not jointly, will indemnify and hold harmless the
Inergy Parties from and against any losses, damages or liabilities to which the Inergy Parties may become subject, under the Act or otherwise, insofar as such losses, damages or liabilities (or actions or claims in respect thereof) arise out of or
are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, the Offering Memorandum, any Issuer Written Communication, or in any amendment or supplement thereto, or
arise out of or are based upon any omission or alleged omission to state therein a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Preliminary Offering Memorandum, the Offering Memorandum, any Issuer Written Communication, or in any amendment or supplement thereto,
in reliance upon and in conformity with written information relating to the Initial Purchasers furnished to the Issuers by such Initial Purchaser, expressly for use in the preparation thereof (as provided in Section 13 hereof), and will
reimburse the Inergy Parties for any legal or other expenses incurred by the Inergy Parties in connection with investigating or defending any such action or claim as such expenses are incurred (including such losses, damages, liabilities or expenses
to the extent of the aggregate amount paid in settlement of any such action or claim, provided that (subject to Section 8(d) hereof) any such settlement is effected with the written consent of the Initial Purchasers). 
 (c) Promptly after receipt by an indemnified party under Section 8(a) or 8(b) hereof of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying party under Section 8(a) or 8(b) hereof, notify each such indemnifying party in writing of the commencement thereof, but the failure so to notify such indemnifying
party shall not relieve such indemnifying party from any liability it may have under Section 8(a) or 8(b) hereof except to the extent it has been materially prejudiced (through the forfeiture of substantive rights and defenses by such failure,
and such failure shall not relieve such indemnifying party from any liability it may have to any such indemnified party otherwise than under Section 8(a) or 8(b) hereof. In case any such action shall be brought against any such indemnified
party and it shall notify each indemnifying party of the commencement thereof, each such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party under
Section 8(a) or 8(b) hereof similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of such indemnified party, be counsel to such indemnifying party), and,
after notice from such indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party under Section 8(a) or 8(b) hereof for any legal expenses
of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. The indemnified party shall have the right to employ its own
counsel in any such action, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel by such indemnified party at the expense of the indemnifying party has been authorized
by the indemnifying party, (ii) the indemnified party shall have been advised by such counsel that there may be a conflict of interest between the indemnifying party and the indemnified party in the conduct of the defense, or certain aspects of
the defense, of such action (in which case the indemnifying party shall not have the right to direct the defense of such action 

  

 21 

 
with respect to those matters or aspects of the defense on which a conflict exists or may exist on behalf of the indemnified party) or (iii) the
indemnifying party shall not in fact have employed counsel reasonably satisfactory to such indemnified party to assume the defense of such action, in any of which events such fees and expenses to the extent applicable shall be borne, and shall be
paid as incurred, by the indemnifying party. If at any time such indemnified party shall have requested such indemnifying party under Section 8(a) or 8(b) hereof to reimburse such indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 8(a) or 8(b) hereof effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by
such indemnifying party of such request for reimbursement, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 45 days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such request for reimbursement prior to the date of such settlement. No such indemnifying party shall, without the written consent of such indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not such indemnified party is an
actual or potential party to such action or claim) unless such settlement, compromise or judgment (A) includes an unconditional release of such indemnified party from all liability arising out of such action or claim and (B) does not
include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any such indemnified party. In no event shall such indemnifying parties be liable for the fees and expenses of more than one counsel, including
any local counsel, for all such indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. 
 (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to indemnify or hold harmless an indemnified party under
Section 8(a) or 8(b) hereof in respect of any losses, damages or liabilities (or actions or claims in respect thereof) referred to therein, then each indemnifying party under Section 8(a) or 8(b) hereof shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, damages or liabilities (or actions or claims in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Inergy Parties on the one hand,
and the Initial Purchasers on the other hand, from the offering of the Notes. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice
required under Section 8(c) hereof and such indemnifying party was prejudiced in a material respect by such failure, then each such indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion
as is appropriate to reflect not only such relative benefits but also the relative fault, as applicable, of the Inergy Parties on the one hand, and the Initial Purchasers, on the other hand in connection with the statements or omissions that
resulted in such losses, damages or liabilities (or actions or claims in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by, as applicable, the Inergy Parties on the one hand and the Initial
Purchasers, on the other hand, shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Issuers bear to the total discounts and commissions received by the Initial
Purchasers. The relative fault, as applicable, of the Inergy Parties, on the one hand and the Initial Purchasers, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material 

  

 22 

 
fact or the omission or alleged omission to state a material fact relates to information supplied by the Inergy Parties on the one hand, or the Initial
Purchasers on the other hand and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Inergy Parties and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to above in this Section 8(d).
The amount paid or payable by such an indemnified party as a result of the losses, damages or liabilities (or actions or claims in respect thereof) referred to above in this Section 8(d) shall be deemed to include any legal or other expenses
incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8(d), no Initial Purchaser shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes purchased by it and distributed to the public were offered to the public exceeds the amount of any damages that such Initial Purchasers has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers’ obligations to contribute pursuant to this Section 8 are several in proportion to their respective purchase obligations hereunder and not joint. 
 (e) The obligations of the Inergy Parties under this Section 8 shall be in addition to any liability that the Inergy Parties may otherwise have and
shall extend, upon the same terms and conditions, to each officer, director, employee, agent or other representative of each Initial Purchaser and to each person, if any, who controls any Initial Purchaser within the meaning of the Act; and the
obligations of each of the Initial Purchasers under this Section 8 shall be in addition to any liability that the respective Initial Purchaser may otherwise have and shall extend, upon the same terms and conditions, to each officer and director
of the Issuers and the Managing General Partner and to each person, if any, who controls the Inergy Parties within the meaning of the Act. 
 9. Defaulting Initial Purchasers. If, on the Closing Date, any Initial Purchaser defaults in the performance of its obligations under this Agreement, the remaining non-defaulting Initial Purchasers shall be obligated to purchase the
Notes that the defaulting Initial Purchaser agreed but failed to purchase on the Closing Date in the respective proportions that the number of Notes set opposite the name of each remaining non-defaulting Initial Purchaser in Schedule I hereto bears
to the total number of Notes set opposite the names of all the remaining non-defaulting Initial Purchasers in Schedule I hereto; provided, however, that the remaining non-defaulting Initial Purchasers shall not be obligated to purchase
any of the Notes on the Closing Date if the total number of Notes that the defaulting Initial Purchaser or Initial Purchasers agreed but failed to purchase on such date exceeds 9.09% of the total number of Notes to be purchased on the Closing Date,
and any remaining non-defaulting Initial Purchasers shall not be obligated to purchase more than 110% of the number of Notes that it agreed to purchase on the Closing Date pursuant to the terms of Section 4. If the foregoing maximums are
exceeded, the remaining non-defaulting Initial Purchasers, or those other Initial Purchasers satisfactory to the Initial Purchasers who so agree, shall have the right, but shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Notes to be purchased on the Closing Date. If the remaining Initial Purchasers or other Initial Purchasers 

  

 23 

 
satisfactory to the Initial Purchasers do not elect to purchase the Notes that the defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase on the Closing Date, this Agreement shall terminate without liability on the part of any non-defaulting Initial Purchaser or the Inergy Parties, except that the Inergy Parties will continue to be liable for the payment of expenses to the
extent set forth in Sections 11 and 12. 
 Nothing contained herein shall relieve a defaulting Initial Purchaser of any liability it may have
to the Inergy Parties for damages caused by its default. If other Initial Purchasers are obligated or agree to purchase the Notes of a defaulting or withdrawing Initial Purchaser, either the remaining Initial Purchasers or the Issuers may postpone
the Closing Date for up to seven full business days in order to effect any changes that in the opinion of counsel for the Issuers or counsel for the Initial Purchasers may be necessary in the Offering Memorandum or in any other document or
arrangement. 
 10. Termination. The obligations of the Initial Purchasers hereunder may be terminated by the Initial Purchasers by
notice given to and received by the Issuers prior to delivery of and payment for the Notes if, prior to that time, any of the events described in Section 7(o) shall have occurred or if the Initial Purchasers shall decline to purchase the Notes
for any reason permitted under this Agreement. 
 11. Cost and Expenses. The
Partnership will bear and pay the costs and expenses incident to the offering of the Notes, including, without limitation, (a) all expenses (including stock transfer taxes) incurred in connection with the delivery to the Initial Purchasers of
the Notes, (b) the fees and expenses of the Issuers’ counsel and accountants, (c) the preparation, printing, filing, delivery and shipping of the Preliminary Offering Memorandum and the Offering Memorandum and any amendments or
supplements thereto and the printing, delivery and shipping of this Agreement, the Indenture, the Registration Rights Agreement, all Blue Sky Memoranda and all other agreements, memoranda, correspondence and other documents printed and delivered in
connection therewith and with the Exempt Resales (but not, however, legal fees and expenses of your counsel incurred in connection with any of the foregoing other than fees of such counsel plus reasonable disbursements incurred in connection with
the preparation, printing and delivery of such Blue Sky Memoranda), (d) the furnishing of copies of such documents to the Initial Purchasers, (e) the issuance and delivery by the Issuers of the Notes and by the Guarantors of the Guarantees
and any taxes payable in connection therewith, (f) the qualification of the Notes and Exchange Notes for the offer, issuance and sale under the securities or Blue Sky laws of the several states (including, without limitation, the reasonable
fees and disbursements of your counsel relating to such registration or qualification), (g) the furnishing of such copies of the Preliminary Offering Memorandum and the Offering Memorandum, and all amendments and supplements thereto, as may be
reasonably requested for use in connection with the Exempt Resales, (h) the preparation of certificates for the Notes (including, without limitation, printing and engraving thereof), (i) the application for quotation of the Notes in the
PORTAL MarketSM (including all disbursements and listing fees), (j) the approval of the Notes by DTC for “book-entry” transfer
(including fees and expenses of counsel), (k) the rating of the Notes and the Exchange Notes, (l) the obligations of the Trustee, any agent of the Trustee and the counsel for the Trustee in connection with the Indenture, the Notes, the
Guarantees, the Exchange Notes and the Exchange Guarantees, (m) the performance by the Inergy Parties of their other obligations under this Agreement, (n) all travel expenses, including one-half of the expenses relating to 

  

 24 

 
chartered aircraft and all accommodation expenses, of representatives of the Partnership in connection with the offering of the Notes, and (o) all of
the other costs and expenses incident to the performance by the Issuers of the offering of the Notes; provided, that the Initial Purchasers will bear and pay all of their own costs and expenses, including the fees and expenses of counsel, and any
advertising costs and expenses incurred by any of the Initial Purchasers incident to the offering of the Notes. 
 If this Agreement is
terminated by you in accordance with the provisions of Section 10, the Issuers shall reimburse the Initial Purchasers for all of their reasonable out-of-pocket expenses, including the reasonable fees and disbursements of counsel to the Initial
Purchasers. 
 12. Reimbursement of Initial Purchasers’ Expenses. If the Issuers fail to tender the Notes for delivery to the
Initial Purchasers by reason of any failure, refusal or inability on the part of the Inergy Parties to perform any agreement on their part to be performed, or because any other condition of the obligations hereunder required to be fulfilled by the
Inergy Parties is not fulfilled, the Inergy Parties shall reimburse the Initial Purchasers for all reasonable out-of-pocket expenses (including fees and disbursements of counsel) incurred by the Initial Purchasers in connection with this Agreement
and the proposed purchase of the Notes, and upon demand the Inergy Parties shall pay the full amount thereof to the Initial Purchasers. If this Agreement is terminated pursuant to Section 10 by reason of the default of one or more Initial
Purchasers, the Inergy Parties shall not be obligated to reimburse any defaulting Initial Purchaser on account of those expenses. 
 13.
Information Furnished by the Initial Purchasers. The statements set forth in the seventh, eighth, ninth, tenth, twelfth and thirteenth paragraphs, all under the section captioned “Plan of distribution” in the Offering Memorandum,
constitute the only information furnished by or on behalf of the Initial Purchasers through you as such information is referred to in Section 4(d) hereof. 
 14. Notices. All statements, requests, notices and agreements hereunder shall be in writing, and: 
 (a) if to any Initial Purchasers, shall be delivered or sent by hand delivery, mail, telex, overnight courier or facsimile transmission to (i) J.P. Morgan Securities Inc., 270 Park Avenue, New York, New York 10017, Attention: Lawrence
Landry (Fax: 212-270-1063); (ii) Banc of America Securities LLC, One Bryant Park, 3rd Floor, New York, New York 10036,; (iii) Barclays Capital Inc., 1271 Avenue of the Americas, 42nd Floor, New York, New York 10020, Attention: Syndicate
Registration (Fax: 646-834-8133); (iv) BOSC, Inc., BOK Plaza, 201 Robert S. Kerr, 4th Floor, Oklahoma City, Oklahoma 73102; (v) Mitsubishi UFJ Securities International plc c/o Mitsubishi UFJ Securities (USA), Inc., 1251 Avenue of the
Americas, 19th Floor, New York, New York 10020-1104, Attention: Spenser Huston; (vi) SG Americas Securities, LLC, 1221 Avenue of the Americas, New York, New York 10020; (vii) UBS Securities LLC, 667 Washington Blvd., Stamford, Connecticut
06901, Attention: Leveraged Syndicate; and (viii) Wachovia Capital Markets, LLC, One Wachovia Center, 301 South College Street, Charlotte, North Carolina 28288-0604, Attention: High Yield Capital Markets. 
  

 25 

 (b) if to the Inergy Parties, shall be delivered or sent by mail, telex, overnight courier or facsimile
transmission to Inergy, L.P., Two Brush Creek Boulevard, Kansas City, Missouri 64112, facsimile number (816) 471-3854, with a copy to Laura Ozenberger, General Counsel, Two Brush Creek Boulevard, Kansas City, Missouri 64112, facsimile number
(816) 531-4680; 
 provided, however, that any notice to an Initial Purchaser pursuant to Section 8(c) shall be
delivered or sent by hand delivery, mail, telex or facsimile transmission to such Initial Purchaser at its address set forth in its acceptance telex, overnight courier to J.P. Morgan Securities Inc., which address will be supplied to any other party
hereto by J.P. Morgan Securities Inc. upon request. Any such statements, requests, notices or agreements shall take effect at the time delivered by hand, if personally delivered; two business days after being deposited in the mail, postage prepaid,
if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery. The Issuers shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the Initial Purchasers by J.P. Morgan Securities Inc. 
 15. Persons
Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Initial Purchasers, the Inergy Parties and their respective successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (A) the representations, warranties, indemnities and agreements of the Inergy Parties contained in this Agreement shall also be deemed to be for the benefit of directors of the Initial Purchasers,
officers of the Initial Purchasers and any person or persons controlling any Initial Purchaser within the meaning of Section 15 of the Act and (B) the indemnity agreement of the Initial Purchasers contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors of the Inergy Parties, officers of the Inergy Parties and any person controlling the Inergy Parties within the meaning of Section 15 of the Act. Nothing in this Agreement is intended
or shall be construed to give any person, other than the persons referred to in this Section 15, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. 
 16. Research Independence. In addition, the Partnership acknowledges that the Initial Purchasers’ research analysts and research departments
are required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Initial Purchasers’ research analysts may hold and make statements or investment
recommendations and/or publish research reports with respect to the Partnership and/or the offering that differ from the views of its investment bankers. The Partnership hereby waives and releases, to the fullest extent permitted by law, any claims
that the Partnership may have against the Initial Purchasers with respect to any conflict of interest that may arise from the fact that the views expressed by their independent research analysts and research departments may be different from or
inconsistent with the views or advice communicated to the Partnership by such Initial Purchasers’ investment banking divisions. The Partnership acknowledges that each of the Initial Purchasers is a full service securities firm and as such from
time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short positions in debt or equity securities of the companies which may be the subject of the
transactions contemplated by this Agreement. 
  

 26 

 17. No fiduciary duty. Notwithstanding any preexisting relationship, advisory or otherwise,
between the parties or any oral representations or assurances previously or subsequently made by the Initial Purchasers, each of the Inergy Parties acknowledges and agrees that: (i) nothing herein shall create a fiduciary or agency relationship
between any of the Inergy Parties, on the one hand, and the Initial Purchasers, on the other; (ii) the Initial Purchasers are not acting as advisors, expert or otherwise, to any of the Inergy Parties in connection with this offering, the sale
of the Notes or any other services the Initial Purchasers may be deemed to be providing hereunder, including, without limitation, with respect to the public offering price of the Notes; (iii) the relationship between the Inergy Parties, on the
one hand, and the Initial Purchasers, on the other, is entirely and solely commercial, based on arms-length negotiations; (iv) any duties and obligations that the Initial Purchasers may have to any of the Inergy Parties shall be limited to
those duties and obligations specifically stated herein; and (v) notwithstanding anything in this Agreement to the contrary, the Inergy Parties acknowledge that the Initial Purchasers’ may have financial interest in the success of the
offering that are not limited to the difference between the price to the public and the purchase price paid to the Inergy Parties by the Initial Purchasers for the Notes and the Initial Purchasers have no obligation to disclose, or account to the
Inergy Parties for, any of such additional financial interests. Each of the Inergy Parties hereby waives and releases, to the fullest extent permitted by law, any claims that any of the Inergy Parties may have against the Initial Purchasers with
respect to any breach or alleged breach of fiduciary duty with respect to the transactions contemplated by this Agreement. 
 18.
Survival. The respective indemnities, representations, warranties and agreements of the Inergy Parties and the Initial Purchasers contained in this Agreement or made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Notes and shall remain in full force and effect, regardless of any investigation made by or on behalf of any of them or any person controlling any of them. 
 19. Definition of the Terms “Business Day” and “Subsidiary.” For purposes of this Agreement, (a) “business
day” means any day on which the New York Stock Exchange, Inc. is open for trading and (b) “subsidiary” has the meaning set forth in Rule 405 of the Rules and Regulations. 
 20. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York. 
 21. Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts shall together constitute one and the same instrument. 
 22.
Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. 
  

 27 

 If the foregoing correctly sets forth the agreement among the Inergy Parties and the Initial Purchasers,
please indicate your acceptance in the space provided for that purpose below. 
  

			
	Very truly yours,
	
	INERGY, L.P.
		
	By:	 	Inergy GP, LLC (its Managing General Partner)
		
	By:	 	 /s/ Laura L. Ozenberger

		 	Laura L. Ozenberger
		 	Senior Vice President, General Counsel and
		 	Secretary
	
	INERGY FINANCE CORP.
		
	By:	 	 /s/ Laura L. Ozenberger

		 	Laura L. Ozenberger
		 	Senior Vice President, General Counsel and
		 	Secretary
	
	INERGY PROPANE, LLC
	INERGY MIDSTREAM, LLC
	L & L TRANSPORTATION, LLC
	INERGY TRANSPORTATION, LLC
	INERGY STAGECOACH II, LLC
	INERGY GAS MARKETING, LLC
	INERGY STORAGE, INC
	STELLAR PROPANE SERVICE, LLC
	 CENTRAL NEW YORK OIL AND GAS COMPANY, L.L.C.

	INERGY SALES & SERVICE, INC.
	FARM & HOME RETAIL OIL COMPANY LLC
	ARLINGTON STORAGE COMPANY, LLC
	US SALT, LLC
		
	By:	 	 /s/ Laura L. Ozenberger

		 	Laura L. Ozenberger
		 	Senior Vice President, General Counsel and
		 	Secretary

  

 28 

			
	Accepted:
	
	J.P. MORGAN SECURITIES INC.
	BANC OF AMERICA SECURITIES LLC
	WACHOVIA CAPITAL MARKETS, LLC
	BARCLAYS CAPITAL INC.
	BOSC, INC.
	MITSUBISHI UFJ SECURITIES INTERNATIONAL PLC
	SG AMERICAS SECURITIES, LLC
	UBS SECURITIES LLC
		
	By:	 	 J.P. MORGAN SECURITIES INC.

		 	as Authorized Representative
		
	By:	 	 /s/ Adam Bernard

  

 29 

 SCHEDULE I 
  

				
	 Initial Purchasers
	  	Principal
Amount of
Notes
to be
Purchased
	  
	  
	  
	  
	 J.P. Morgan Securities Inc.
	  	$	75,375,000
	 Banc of America Securities LLC
	  	$	52,875,000
	 Wachovia Capital Markets, LLC
	  	$	52,875,000
	 Barclays Capital Inc.
	  	$	8,775,000
	 BOSC, Inc.
	  	$	8,775,000
	 Mitsubishi UFJ Securities International plc
	  	$	8,775,000
	 SG Americas Securities, LLC
	  	$	8,775,000
	 UBS Securities LLC
	  	$	8,775,000
		  	 	 
	 Total
	  	$	225,000,000
		  	 	 

 Exhibit A 
 Pricing Disclosure Supplement 
 [See Attached] 

					
	 Issuers:
	 	Inergy, L.P. and Inergy Finance Corp.	  	
	 Security Description:
	 	Senior Notes	  	
	 Distribution:
	 	144A/RegS w/ Registration Rights	  	
	 Face:
	 	$225,000,000	  	
	 Gross Proceeds:
	 	$202,929,750	  	
	 Coupon:
	 	8 3/4%	  	
	 Maturity:
	 	March 1, 2015	  	
	 Offering Price:
	 	90.191%	  	
	 Yield to Maturity:
	 	11.00%	  	
	 Spread to Treasury:
	 	915 basis points	  	
	 Benchmark:
	 	UST 4.00% due 2/15/2015	  	
	 Ratings:
	 	B1/B+	  	
	 Interest Pay Dates:
	 	March 1 and September 1	  	
	 Beginning:
	 	September 1, 2009	  	
	 Equity Clawback:
	 	Up to 35% at 108.75%	  	
	 Until:
	 	March 1, 2012	  	
	 Optional redemption:
	 	On or after:	  	Price:
		 	March 1, 2013	  	104.375
		 	March 1, 2014 and thereafter	  	100.000%
	 Change of control:
	 	Put @ 101% of principal plus accrued interest	  	
	 Trade Date:
	 	January 28, 2009	  	
	 Settlement Date:
	 	February 2, 2009	  	
	 CUSIP:
	 	144A: 45661TAF8	  	
		 	Reg S: U45290AD2	  	
	 ISIN:
	 	USU45290AD28	  	
	 Denominations:
	 	2,000x1,000	  	
	 Joint Book-Running Managers:
	 	J.P. Morgan Securities Inc.	  	
		 	Banc of America Securities LLC	  	
		 	Wachovia Capital Markets, LLC	  	
	 Co-Managers:
	 	Barclays Capital Inc.	  	
		 	BOSC, Inc.	  	
		 	Mitsubishi UFJ Securities International PLC	  	
		 	SG Americas Securities, LLC	  	
		 	UBS Securities LLC	  	
	 Original Issue Discount:
	 	For U.S. federal income tax purposes, the notes will be treated as having been issued with an “original issue discount” equal to the excess of the stated redemption price at
maturity of a note over its issue price.	  	

 Ranking 
 The
following disclosure under “Risk factors—Payment of principal and interest on the notes will be effectively subordinated to our senior secured debt to the extent of the value of the assets securing the debt as well as to the indebtedness
of any of our subsidiaries that do not guarantee the notes” on page 15 and each other location where it appears in the preliminary offering memorandum is amended to read as follows: 
 As of September 30, 2008, on an as further adjusted basis after giving effect to this offering and the other transactions described under “Capitalization,” we would have had $1,160.3 million of total
indebtedness outstanding, $97.8 million of which would have been secured, with available borrowing capacity of $301.0 million under our secured revolving acquisition credit facility. 
 Subsidiary Guarantees 
 The following disclosure under “The offering—Subsidiary guarantees” on page 7
and each other location where it appears in the preliminary offering memorandum is amended to read as follows: 
 As of September 30, 2008, on an as
further adjusted basis giving effect to this offering and our use of proceeds therefrom and the other transactions described under “Capitalization,” the subsidiary guarantees would be effectively subordinated to $1,149.4 million of secured
indebtedness of our guarantor subsidiaries (to the extent of the value of the assets securing such indebtedness). 
 Use of Proceeds 
 The first sentence under “Use of proceeds” on page 19 and each other location where it appears in the preliminary offering memorandum is amended to read as
follows: 
 We estimate the net proceeds of this offering will be approximately $197.7 million, after deducting initial purchaser discounts and the estimated
expenses of the offering. 
 Capitalization 
 The
following disclosure under “Capitalization” on page 20 and each other location where it appears in the preliminary offering memorandum is amended to read as follows: 
  

												
	 	  	As of September 30, 2008	 
	($ in millions)	  	Historical	  	As Adjusted	 	 	As Further
Adjusted	 
	 Cash
	  	$	17.3	  	$	17.3	 	 	$	17.3	 
		  	 	 	  	 	 	 	 	 	 	 
	 Debt:
	  			  				 			
	 Revolving working capital credit facility
	  	$	65.0	  	$	83.5	(a)	 	$	83.5	 
	 Revolving acquisition credit facility
	  	 	182.0	  	 	212.0	(b)	 	 	14.3	(c)
	 6 7/8% senior notes
due 2014
	  	 	425.0	  	 	425.0	 	 	 	425.0	 
	 8 1/4% senior notes
due 2016
	  	 	400.0	  	 	400.0	 	 	 	400.0	 
	 8 3/4% senior notes
due 2015 offered hereby
	  	 	—  	  	 	—  	 	 	 	202.9	(d)
	 Fair value adjustment on senior notes
	  	 	1.9	  	 	1.9	 	 	 	1.9	 

										
	 	  	As of September 30, 2008
	($ in millions)	  	Historical	  	As Adjusted	  	As Further
Adjusted
	 Bond premium
	  	 	3.8	  	 	3.8	  	 	3.8
	 ASC credit agreement
	  	 	10.9	  	 	10.9	  	 	10.9
	 Other debt
	  	 	18.0	  	 	18.0	  	 	18.0
		  	 	 	  	 	 	  	 	 
	 Total debt
	  	 	1,106.6	  	 	1,155.1	  	 	1,160.3
	 Total partners’ capital
	  	 	637.8	  	 	637.8	  	 	637.8
		  	 	 	  	 	 	  	 	 
	 Total capitalization
	  	$	1,744.4	  	$	1,792.9	  	$	1,798.1
		  	 	 	  	 	 	  	 	 

  

	(a)	Reflects seasonal working capital borrowings incurred subsequent to September 30, 2008 of approximately $18.5 million. The effective amount of working capital borrowing
capacity available to us under the two facilities is $200 million utilizing capacity under the acquisition credit facility for working capital purposes during the winter heating season. These borrowings are subject to an annual clean down provision
within our revolving credit facilities to less than $10 million between March 1 and September 30. 

  

	(b)	Reflects additional borrowings incurred subsequent to September 30, 2008 of approximately $30.0 million used to fund our midstream capital expansion projects.

  

	(c)	Reflects the application of the net proceeds from this offering and the application of the proceeds to repay borrowings under our revolving acquisition credit facility.

  

	(d)	The $225 million of senior notes are recorded at their discounted amount, with the discount to be accrued over the life of the senior notes. 

 Exhibit B 
 Form of Registration Rights Agreement 
 [See Attached] 

 Exhibit C 
 Vinson & Elkins Opinion 
 Vinson & Elkins L.L.P. shall have furnished to the
Initial Purchasers its written opinion, as counsel to the Issuers and the Guarantors, addressed to the Initial Purchasers and dated the Closing Date, in form and substance reasonably satisfactory to J.P. Morgan Securities Inc., to the effect that:

 (i) Each of the Issuers and the Operating Company, Midstream, Service Sub, L & L Transportation, Inergy Transportation,
Inergy Gas, Stellar Propane, Stagecoach II, Storage, CNYOGC, Arlington Storage and each of the General Partners has been duly formed and is validly existing in good standing under its jurisdiction of formation with all necessary power and authority
to own or lease its properties and to conduct its business, in all material respects as described in the Offering Memorandum. Each of the Inergy Parties and the General Partners is duly registered or qualified as a foreign entity for the transaction
of business under the laws of the jurisdictions set forth on an exhibit to such counsel’s opinion. 
 (ii) The General Partners are the
only general partners of the Partnership. The Non-Managing General Partner owns of record an approximate 0.9% general partner interest in the Partnership and the Managing General Partner owns of record a non-economic, managing general partner
interest in the Partnership; such general partner interests have been duly authorized and validly issued in accordance with the Partnership Agreement; and each General Partner owns its general partner interest free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming either of such General Partners as debtors is on file in the office of the
Secretary of State of the State of Delaware or (B) otherwise known to such counsel, without independent investigation, other than those created by or arising under the Delaware LP Act (other than those created by the Credit Agreement).

 (iii) The Partnership owns, directly or indirectly, 100% of the issued shares of capital stock or membership interests, as applicable, in
Finance Corp and each of the Operating Company, Midstream, Service Sub, L & L Transportation, Inergy Transportation, Inergy Gas, Stellar Propane, Stagecoach II, Storage, CNYOGC, Arlington Storage and US Salt (the “Delaware/New
York Guarantors”); such shares of capital stock or membership interests have been duly authorized and validly issued in accordance with the Organizational Documents governing such entity and are fully paid and non-assessable (except
(i) in the case of an interest in a Delaware limited liability company, as such nonassessability may be affected by Sections 18-607 and 18-804 of the Delaware LLC Act, and (ii) in the case of an interest in a limited liability company
formed under the laws of another domestic state, as such nonassessability may be affected by similar provisions of such state’s limited liability company statute, as applicable) and the Partnership owns such shares of capital stock, membership
interests or limited partner interest free and clear of all liens, encumbrances, security interests, charges or claims (A) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming the
Partnership as debtor is on file in the office of the Secretary of State of the State of Delaware, (B) arising under the Credit Agreement or (C) otherwise known to such counsel, without independent investigation, other than those created
by or arising under the Delaware LLC Act and the New York Limited Liability Company Law. 
  

 C-1 

 (iv) To our knowledge, there are no contracts, agreements or understandings between either of the
Issuers, or any Guarantor and any person granting such person the right (other than rights that have been waived or satisfied) to require the Issuers or any Guarantor to file a registration statement under the Act with respect to any securities of
the Issuers or any Guarantor (other than the Registration Rights Agreement) owned or to be owned by such person, and which are substantially similar to the Notes, the Guarantees, or the Exchange Notes, or to require either of the Issuers or any
Guarantor to include any other securities in the securities registered pursuant to the Registration Rights Agreement. 
 (v) This Agreement
has been duly executed and delivered by each of the Issuers and the Delaware/New York Guarantors. 
 (vi) The Partnership Agreement and each
of the limited liability company agreements (except in the case of CNYOGC, the operating agreement) of the Delaware/New York Guarantors has been duly authorized and validly executed and delivered by the parties thereto. Each of the foregoing
agreements constitutes a valid and legally binding agreement of the parties thereto, enforceable against such entity in accordance with its respective terms, subject to (A) applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (B) public policy,
applicable law relating to fiduciary duties and indemnification and an implied covenant of good faith and fair dealing. 
 (vii) The Issuers
have all requisite corporate or partnership power and authority to issue, sell and deliver the Notes. The Notes have been duly authorized by the Issuers and, when duly executed by the Issuers in accordance with the terms of the Indenture, assuming
due authentication of the Notes by the Trustee, upon delivery to the Initial Purchasers against payment therefor in accordance with the terms hereof, will be validly issued and delivered, and will constitute valid and binding obligations of the
Issuers entitled to the benefits of the Indenture, enforceable against the Issuers in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and other
similar laws relating to or affecting creditors’ rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and
fair dealing. 
 (viii) The Exchange Notes have been duly and validly authorized by the Issuers and if and when duly issued and
authenticated in accordance with the terms of the Indenture and delivered in accordance with the Exchange Offer provided for in the Registration Rights Agreement, will constitute valid and binding obligations of the Issuers entitled to the benefits
of the Indenture, enforceable against the Issuers in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and other similar laws relating to or
affecting creditors’ rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing. 
  

 C-2 

 (ix) The Guarantee of each of the Delaware/New York Guarantors has been duly authorized by that
Guarantor and assuming due and valid authorization of a Guarantee by FHR, when the Notes have been duly executed by the Issuers and authenticated by the Trustee in accordance with the terms of the Indenture and delivered and paid for by the Initial
Purchasers in accordance with the terms of the Purchase Agreement, the Guarantee of each Guarantor will constitute the valid and binding obligations of that Guarantor, enforceable against that Guarantor in accordance with their terms except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and other laws relating to or affecting creditors’ rights generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing. 
 (x) The
Exchange Guarantee of each of the Delaware/New York Guarantors has been duly and validly authorized by that Guarantor and assuming due and valid authorization of an Exchange Guarantee by FHR, upon the due execution and authentication of the Exchange
Notes in accordance with the Indenture and the issuance and delivery of the Exchange Notes in the Exchange Offer contemplated by the Registration Rights Agreement, will constitute valid and binding obligations of the Guarantors, entitled to the
benefits of the Indenture, enforceable against the Guarantors in accordance with their terms except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and other similar laws relating to
or affecting creditors’ rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing. 
 (xi) The Indenture has been duly authorized, executed and delivered by each of the Issuers and the Delaware/New York Guarantors and, assuming the due
authorization, execution and delivery thereof by the Trustee and FHR, is the legally valid and binding agreement of the Inergy Parties, enforceable against the Inergy Parties in accordance with its terms, except as such enforceability may be limited
by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium, and other similar laws relating to or affecting creditors’ rights generally, by general equitable principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law) and by an implied covenant of good faith and fair dealing; no qualification of the Indenture under the 1939 Act is required in connection with the offer, issuance and sale of the Notes or in connection with the
Exempt Resales. The Indenture conforms in all material respects to the requirements of the 1939 Act and the rules and regulations of the Commission applicable to an indenture that is qualified thereunder. 
 (xii) The Registration Rights Agreement has been duly authorized, executed and delivered by the Issuers and the Delaware/New York Guarantors and,
assuming the due execution and delivery thereof by the Initial Purchasers and FHR, is the legally valid and binding agreement of the Inergy Parties, enforceable against the Inergy Parties in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditor’s rights generally, by general equitable principles (regardless of whether such enforceability is 

  

 C-3 

 
considered in a proceeding in equity or at law), by an implied covenant of good faith and fair dealing and, as to rights of indemnification and contribution
thereunder may be limited by federal or state law or by principles of public policy. 
 (xiii) The statements set forth in the Offering
Memorandum under the captions “Description of notes,” insofar as they purport to constitute a summary of the terms of the Notes, Indenture, the Guarantees and the Registration Rights Agreement and under the captions “Description of
other indebtedness—Senior notes,” and “Certain United States federal tax considerations” insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate in all material respects.
Treasury Department Circular 230 Notice—This document was not intended or written to be used, and cannot be used, by any person, for the purpose of (i) avoiding penalties that may be imposed on that person or (ii) to promote, market
or recommend any transaction or matter addressed herein. 
 (xiv) None of the offering, issuance and sale of the Notes and the Guarantees by
the Issuers and the Guarantors, the execution, delivery and performance of the Notes, the Guarantees, the Exchange Notes, the Indenture, the Registration Rights Agreement, the Exchange Guarantees and this Agreement by the Inergy Parties, or the
consummation by each of them of the transactions contemplated hereby and thereby (A) constitutes or will constitute a violation of their respective Organizational Documents (other than the Organizational Documents of FHR), (B) constitutes
or will constitute a breach or violation of, or a default (or an event which, with notice or lapse of time or both, would constitute such a default) under, any agreement filed or incorporated by reference as an exhibit to the Partnership’s
annual report on Form 10-K for the year ended September 30, 2008 or to any applicable current reports of the Partnership on Form 8-K filed with the Commission since September 30, 2008 (excluding the Credit Agreement and
Organizational Documents); (C) violates or will violate the Delaware LP Act, the Delaware LLC Act, the DGCL, the laws of the State of New York or, assuming the accuracy of the representations and warranties of the Initial Purchasers contained
in this Agreement and their compliance with their agreements set forth herein, federal law (provided, however, that such counsel need express no opinion with respect to compliance with any state securities or federal or state antifraud law except as
otherwise specifically stated in the opinion of such counsel), or (D) to our knowledge, results or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of any of the Inergy Parties, which
breaches, violations, defaults or liens, in the case of clauses (B), (C) or (D) would, individually or in the aggregate, have a Material Adverse Effect. 
 (xv) No registration under the Act of the Notes is required for the sale of the Notes to the Initial Purchasers as contemplated hereby or for the Exempt Resales, assuming (i) the accuracy of the Initial
Purchasers’ representations in this Agreement and (ii) the accuracy of the Inergy Parties’ representations contained herein. 
 (xvi) None of the Inergy Parties is now, and after the sale of the Notes to be sold by the Issuers hereunder, the issuance of the Guarantees and the application of the net proceeds from such sale as described in the Offering Memorandum
under the caption “Use of proceeds,” none of the Inergy Parties will be an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. 
  

 C-4 

 Such counsel shall also have furnished to the Initial Purchasers a written statement, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance satisfactory to the Initial Purchasers, to the effect that such counsel has participated in conferences with officers and other representatives of the Issuers and Guarantors and
the independent registered public accounting firm of the Partnership and your representatives, at which the contents of the Offering Memorandum and related matters were discussed, and although such counsel has not independently verified, is not
passing on, and is not assuming any responsibility for the accuracy, completeness or fairness of the statements contained in or incorporated by reference in, the Offering Memorandum (except to the extent specified in the foregoing opinion), based on
the foregoing, nothing has come to the attention of such counsel that causes it to believe that: 
 (a) the Final Offering Memorandum, as of
its date and as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; or 
 (b) the Preliminary Offering Memorandum and the Pricing Disclosure
Supplement, as of the Applicable Time, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading; 
 in each case other than (1) the financial statements included or incorporated by reference
therein, including the notes and schedules thereto and the auditors’ reports thereon, and (2) the other financial and accounting data included or incorporated by reference therein, as to which such counsel need express no belief.

 In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon representations of the Inergy Parties set
forth in this Agreement and upon certificates of officers and employees of the Issuers and Guarantors and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, that all
copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine, (C) state that their opinion is limited to federal laws, the Delaware LP Act, the Delaware LLC Act, and the DGCL
and the laws of the State of New York, (D) with respect to the opinions expressed in subparagraphs (i) through (vi) above as to the due qualification or registration as a foreign limited partnership, corporation or limited liability
company, as the case may be, state that such opinions are based upon certificates of foreign qualification or registration provided by the Secretary of State of the States listed on an exhibit to such opinion (each of which shall be dated as of a
date not more than fourteen days prior to the Closing Date and shall be provided to you), and (E) state that they express no opinion with respect to state or local taxes or tax statutes to which any of the limited partners of the Partnership or
any of the other Inergy Parties may be subject. 
  

 C-5 

 Exhibit D 
 Laura Ozenberger Opinion 
 Laura Ozenberger shall have furnished to the Initial Purchasers her
written opinion, addressed to the Initial Purchasers and dated the Closing Date, in form and substance reasonably satisfactory to J.P. Morgan Securities Inc., to the effect that: 
 (i) None of the offering, issuance and sale of the Notes and the Guarantees by the Issuers and the Guarantors, respectively, the execution, delivery and
performance of the Notes, the Guarantees, the Exchange Notes, the Exchange Guarantees, the Indenture, the Registration Rights Agreement and this Agreement by the Issuers and the Guarantors, or the consummation by each of them of the transactions
contemplated hereby (A) constitutes or will constitute a breach or violation of, or a default (or an event which, with notice or lapse of time or both, would constitute such a default) under, any agreement, lease or instrument known to her
(excluding any Credit Agreement or Organizational Document and any other agreement filed or incorporated by reference as an exhibit to the Annual Report on Form 10-K for the year ended September 30, 2008, as to which such counsel need not
express an opinion) to which any of the Inergy Parties or any of their properties may be bound, or (B) will result, to my knowledge, in any violation of any federal or Missouri judgment, order, decree, rule or regulation of any court or
arbitrator or governmental agency having jurisdiction over the Inergy Parties or any of their assets or properties (such opinion with respect to federal law assumes the accuracy of the representations and warranties of the Initial Purchasers
contained in the Agreement and their compliance with their agreements set forth therein) (provided, however, that such counsel need express no opinion with respect to compliance with any state securities or federal or state antifraud law except as
otherwise specifically stated in the opinion of such counsel), which breaches, violations, defaults or liens, in the case of clauses (A), or (B) would, individually or in the aggregate, have a Material Adverse Effect. 
 (ii) Except as described in the Offering Memorandum, to my knowledge there is no litigation, proceeding or governmental investigation pending or
threatened against any of the Inergy Parties or to which any of the Inergy Parties is a party or to which any of their respective properties is subject, which, if adversely determined to such Inergy Parties, is reasonably likely to have a Material
Adverse Effect. 
 Such counsel shall also have furnished to the Initial Purchasers a written statement, addressed to the Initial Purchasers
and dated the Closing Date, in form and substance satisfactory to the Initial Purchasers, to the effect that such counsel has participated in conferences with officers and other representatives of the Issuers and Guarantors and the independent
registered public accounting firm of the Partnership and your representatives, at which the contents of the Offering Memorandum and related matters were discussed, and although such counsel has not independently verified, is not passing on, and is
not assuming any responsibility for the accuracy, completeness or fairness of the statements contained in, the Offering Memorandum, based on the foregoing, nothing has come to the attention of such counsel that causes her to believe that:

 (a) the Final Offering Memorandum, as of its date and as of the Closing Date, contained or contains any untrue statement of a material fact
or omitted or omits to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; or 
  

 D-1 

 (b) the Preliminary Offering Memorandum and the Pricing Disclosure Supplement, as of the Applicable Time,
contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;

 in each case other than (1) the financial statements included or incorporated by reference therein, including the notes and schedules
thereto and the auditors’ reports thereon, and (2) the other financial and accounting data included or incorporated by reference therein, as to which such counsel need express no belief. 
 In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon representations of the Inergy Parties set forth in this
Agreement and upon certificates of officers and employees of the Inergy Parties and upon information obtained from public officials, (B) assume that all documents submitted to her as originals are authentic, that all copies submitted to her
conform to the originals thereof, and that the signatures on all documents examined by her are genuine, (C) state that her opinion is limited to the laws of the state of Missouri, and (D) state that she expresses no opinion with respect to
state or local taxes or tax statutes to which any of the limited partners of the Partnership or any of the other Inergy Parties may be subject. 
  

 D-2 

 Exhibit E 
 Michael K. Post Opinion 
 Michael K. Post shall have furnished to the Initial Purchasers his written
opinion, addressed to the Initial Purchasers and dated the Closing Date, in form and substance reasonably satisfactory to J.P. Morgan Securities Inc., to the effect that: 
 (i) None of the offering, issuance and sale of the Notes and the Guarantees by the Issuers and the Guarantors, respectively, in the manner provided in this Agreement, the Indenture and the Registration Rights
Agreement, the execution, delivery and performance of the Notes, the Guarantees, the Exchange Notes, the Exchange Guarantees, the Indenture, the Registration Rights Agreement and this Agreement by the Issuers and the Guarantors, constitutes or could
reasonably be expected to constitute a breach or violation of, or a default (or an event which, with notice or lapse of time or both, would constitute such a default) under the Credit Agreement, which breach, violation or default would, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect; and 
 (ii) The statements set forth in the Offering
Memorandum under the caption “Description of other indebtedness—Credit agreement,” insofar as they purport to describe the provisions of the Credit Agreement referred to therein, are accurate in all material respects. 
 In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon representations of the Inergy Parties set forth in this
Agreement and upon certificates of officers and employees of the Inergy Parties and upon information obtained from public officials, (B) assume that all documents submitted to such counsel as originals are authentic, that all copies submitted
to such counsel conform to the originals thereof, and that the signatures on all documents examined by such counsel are genuine, (C) state that its opinion is limited to the laws of the States of Missouri, and (D) state that such counsel
expresses no opinion with respect to state or local taxes or tax statutes to which any of the limited partners of the Partnership or any of the other Inergy Parties may be subject. 
  

 E-1Form of Registrant's Bear Market STARS linked to the iShares

Table of Contents

 Exhibit 4.1 
 BANK OF AMERICA CORPORATION 
 Medium-Term Senior Note, Series L 
 REGISTERED GLOBAL SENIOR NOTE 
 This
Note is a global security within the meaning of the Indenture dated as of January 1, 1995, as supplemented from time to time (the “Indenture”), between Bank of America Corporation and The Bank of New York Mellon Trust Company, N.A.,
as successor trustee (the “Trustee”) under the Indenture and is registered in the name of Cede & Co., as the nominee of The Depository Trust Company (the “Depository”). This Note is not exchangeable for definitive or
other Notes registered in the name of a person other than the Depository or its nominee, except in the limited circumstances described in the Indenture or in this Note, and no transfer of this Note (other than a transfer as a whole by the Depository
to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor depository or a nominee of such successor depository) may be registered
except in the limited circumstances described in the Indenture. 
 Unless this Note is presented by an authorized representative of The
Depository Trust Company (the “Depository”) (55 Water Street, New York, New York) to the Issuer or its agent for registration of transfer, exchange or payment, and this Note is registered in the name of CEDE & CO., or such other
name as requested by an authorized representative of The Depository Trust Company, and unless any payment is made to CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the
registered owner hereof, CEDE & CO., has an interest herein. 
 THIS NOTE IS NOT A SAVINGS ACCOUNT OR A DEPOSIT AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY AND IS NOT AN OBLIGATION OF OR GUARANTEED BY BANK OF AMERICA, N.A. OR ANY OTHER BANKING OR NONBANKING AFFILIATE OF BANK OF AMERICA CORPORATION. THIS DEBT IS NOT
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION’S TEMPORARY LIQUIDITY GUARANTEE PROGRAM. 
 THIS NOTE IS A DIRECT,
UNCONDITIONAL, UNSECURED AND UNSUBORDINATED GENERAL OBLIGATION OF BANK OF AMERICA CORPORATION. THE OBLIGATIONS EVIDENCED BY THIS NOTE RANK PARI PASSU WITH ALL OTHER UNSECURED AND UNSUBORDINATED OBLIGATIONS OF BANK OF AMERICA CORPORATION, EXCEPT
OBLIGATIONS THAT ARE SUBJECT TO ANY PRIORITIES OR PREFERENCES UNDER APPLICABLE LAW. 
 THIS NOTE IS SOLD IN MINIMUM DENOMINATIONS AS
NOTED HEREIN AND IN THE FINAL TERMS OR INDEXED PAYMENT RIDER ATTACHED HERETO AND CANNOT BE EXCHANGED FOR NOTES IN SMALLER DENOMINATIONS. EACH OWNER OF A BENEFICIAL INTEREST IN THIS NOTE IS REQUIRED TO HOLD A BENEFICIAL INTEREST OF A PRINCIPAL AMOUNT
OF THIS NOTE EQUAL TO THE MINIMUM AUTHORIZED DENOMINATION AT ALL TIMES. 

Table of Contents

			
	No. R-	 	Registered
	CUSIP No.: 060900149	 	Principal Amount: $77,800,000

 BANK OF AMERICA CORPORATION 
 Medium-Term Senior Note, Series L 
 BEAR MARKET STRATEGIC ACCELERATED REDEMPTION SECURITIES®, 
 LINKED TO THE iSHARES® DOW JONES U.S. REAL ESTATE INDEX FUND, 
 DUE AUGUST 3, 2010 
 REGISTERED GLOBAL SENIOR NOTE 
  

							
	 ORIGINAL ISSUE DATE:
 February 5, 2009

	  	 ̈	    	This Note is an Extendible Note at the Holder’s Option. [See attached Rider]
			
	 STATED MATURITY DATE:
 August 3, 2010

	  	 ̈	    	This Note is an Extendible Note at the Issuer’s Option. [See attached Rider]
			
	CURRENCY:	  	 ̈	    	 This Note is an Amortizing Note. [See payment schedule in attached Final Terms]

		    	 x    U.S. Dollars
  ̈     Other (specify):
	  		    
				
	 ̈	    	FIXED RATE NOTE	  		    	
				
	 ̈	    	FLOATING RATE NOTE	  	x	    	See attached Final Term Sheet dated January 29, 2009 and Product Supplement No. STR-1 dated January 2, 2009 (collectively, the “Final Terms”)
				
	x	    	INDEXED NOTE	  	  ̈
	    	 See attached Principal Repayment Amount Rider

				
		    		  	  ̈
	    	 See attached Interest Payment Amounts or Supplemental Payment Amount Rider

				
	 ̈	    	FLOATING RATE/FIXED RATE NOTE	  		    	
		
	RECORD DATES: Not Applicable	  	CALCULATION AGENT: Merrill Lynch, Pierce, Fenner & Smith Incorporated

 BANK OF AMERICA CORPORATION, a Delaware corporation (herein called the “Issuer,” which
term includes any successor corporation), for value received, hereby promises to pay to CEDE & CO., as nominee for The Depository Trust Company, or its registered assigns, the principal amount specified above and any other amounts
calculated in accordance with the provisions set forth in the Final Terms attached hereto, as adjusted in accordance with Schedule 1 hereto, on the Stated Maturity Date specified above (except to the extent redeemed or repaid prior to the Stated
Maturity Date). “Maturity,” when used herein, means the date on which the principal of this Note or an installment of principal becomes due and payable in full in accordance with the terms of this Note and of the Indenture, whether at the
Stated Maturity Date or by declaration of acceleration, call for redemption, prepayment at the holder’s option or otherwise. 
  

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 The principal or any other amounts so payable, and punctually paid or duly provided for, at Maturity will
be paid to the person in whose name this Note (or one or more predecessor Notes evidencing all or a portion of the same debt as this Note) is registered at the time of payment. Any such principal or other amounts not punctually paid or duly provided
for shall be payable as provided in this Note and in the Indenture. 
 Payment of principal of, and premium, if any, and other amounts, if
any, on, this Note due at Maturity will be made in immediately available funds upon presentation and surrender of this Note at the office of the Trustee maintained for that purpose, and in accordance with the procedures of the depository or clearing
system noted hereon; provided, that this Note is presented to the Trustee in time for the Trustee to make such payment in accordance with its normal procedures. 
 The Issuer will pay any administrative costs imposed by any bank in making payments in immediately available funds, but any tax, assessment or governmental charge imposed upon payments hereunder, including, without
limitation, any withholding tax, will be borne by the holder hereof. 
 By its
acceptance of this Note, the holder of this Note agrees, in the absence of an administrative determination or judicial ruling to the contrary, to treat this Note for all tax purposes as a callable single financial contract linked to the iShares® Dow Jones U.S. Real Estate Index Fund that (1) requires the holder of this Note to pay to the Issuer on the Original Issue Date an amount equal to the purchase price of this Note and
(2) entitles the holder of this Note to receive at the Stated Maturity Date an amount in cash linked to the value of the iShares® Dow Jones U.S. Real Estate Index Fund. 
 Reference is made to the further provisions of this Note set forth on the reverse hereof and in the Final Terms attached hereto, which shall have the
same effect as though fully set forth at this place. In the event of any conflict between the provisions contained herein or on the reverse hereof and the provisions contained in the Final Terms attached hereto, the latter shall control. References
herein to “this Note,” “hereof,” “herein” and comparable terms shall include the Final Terms attached hereto. 
 Unless the certificate of authentication hereon has been executed by the Trustee (or other authentication agent duly appointed in accordance with the Indenture), by manual signature of an authorized signatory, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 
  

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 IN WITNESS WHEREOF, Bank of America Corporation has caused this instrument to be duly executed on its
behalf, by manual or facsimile signature. 
  

											
	Dated: February 5, 2009	 		 		 	BANK OF AMERICA CORPORATION
					
	[CORPORATE SEAL]	 		 		 	By:	 	  

		 		 		 	Name:	 	
	ATTEST:	 		 		 	Title:	 	
						
	By:	 	  
	 		 		 		 	
	Title:	 	Assistant Secretary	 		 		 		 	

  

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Table of Contents

 CERTIFICATE OF AUTHENTICATION 
 This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. 
  

									
	Dated: February 5, 2009	 		 	 THE BANK OF NEW YORK MELLON TRUST
 COMPANY, N.A., as Trustee

					
		 		 		 	By:	 	  

		 		 		 		 	Authorized Signatory

  

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 [ATTACH FINAL TERMS] 
  

 6 

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 The notes are being offered by Bank of America Corporation (“BAC”). The notes will have the terms specified in
this term sheet as supplemented by the documents indicated herein under “Additional Terms” (together the “Note Prospectus”). Investing in the notes involves a number of risks. See “Risk Factors” and “Additional
Risk Factor” on page TS-6 of this term sheet and beginning on page S-10 of product supplement STR-1.  
 Unless otherwise indicated or unless
the context requires otherwise, all references in this document to “we,” “us,” “our,” or similar references are to BAC. References to “MLPF&S” are to Merrill Lynch, Pierce, Fenner & Smith
Incorporated. 
 In connection with this offering, each of MLPF&S and its broker-dealer affiliate First Republic Securities Company, LLC is acting
in its capacity as a principal. 
 None of the Securities and Exchange Commission (the “SEC”), any state securities commission, or any other
regulatory body has approved or disapproved of these securities or determined if this Note Prospectus is truthful or complete. Any representation to the contrary is a criminal offense. 
  

					
	 	  	 Per Unit
	  	 Total

	 Public offering price (1)
	  	$10.00	  	$77,800,000
	 Underwriting discount (1)
	  	  $0.15	  	  $1,167,000
	 Proceeds, before expenses, to Bank of America Corporation
	  	  $9.85	  	$76,633,000

  

	 	(1)	The public offering price and underwriting discount for any purchase of 500,000 or more units in a single transaction by an individual investor will be $9.95 per unit and
$0.10 per unit, respectively. 

 “Strategic Accelerated Redemption
Securities®” is a registered service mark of our subsidiary, Merrill Lynch & Co., Inc. 
 “iShares®” is a registered mark of Barclays Global Investors, N.A. (“BGI”). BGI has licensed certain trademarks and trade names of BGI for our use. The notes are not sponsored, endorsed,
sold, or promoted by BGI, its affiliate, Barclays Global Fund Advisors (“BGFA”), or by the iShares® Funds. Neither BGI, BGFA, nor the iShares® Funds make any representations or warranties to the owners of the
notes or any member of the public regarding the advisability of investing in the notes. Neither BGI, BGFA, nor the iShares® Funds shall have any obligation or liability in connection with the registration, operation, marketing,
trading, or sale of the notes or in connection with our use of information about the iShares® Funds. 
 Merrill Lynch & Co.

 January 29, 2009 
 Strategic Accelerated Redemption Securities® 

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 Summary 
 The Bear Market Strategic Accelerated Redemption Securities® Linked to the iShares® Dow Jones
U.S. Real Estate Index Fund, due August 3, 2010 (the “notes”), are our senior unsecured debt securities and are not guaranteed or insured by the Federal Deposit Insurance Corporation (“FDIC”) or secured by collateral. The
notes will rank equally with all of our other unsecured and unsubordinated debt, and any payments due on the notes, including any repayment of principal, will be subject to the credit risk of BAC. The notes are designed for, but not limited to,
investors who anticipate that the Observation Level of the iShares® Dow Jones U.S. Real Estate Index Fund (the “Index Fund”) on any Observation Date will be less than or equal to the Call Level. The notes provide for an
automatic call if the Observation Level of the Index Fund on any Observation Date is less than or equal to the Call Level. If the notes are called on any Observation Date, you will receive on the Call Settlement Date an amount per unit (the
“Call Amount”) equal to the $10 Original Offering Price of the notes plus the applicable Call Premium. If your notes are not called, the amount you receive on the maturity date (the “Redemption Amount”) will not be greater than
the Original Offering Price per unit and will be based on the direction of and percentage increase in the price per share of the Index Fund from the Starting Value, as determined on January 29, 2009, the pricing date, to the Ending Value, as
determined on the final Observation Date. Investors must be willing to forgo interest payments on the notes and be willing to accept a repayment that may be less, and potentially significantly less, than the Original Offering Price of the notes.
Investors also must be prepared to have their notes called by us on any Observation Date. 
 Capitalized terms used but not defined in this term sheet have the
meanings set forth in product supplement STR-1. 
 
  

					
	Terms of the Notes	  		  	Determining Payment for
the Notes
	 

	  		  	  
 Automatic Call Provision:

	  		  	  
 The notes will be automatically called on an Observation Date if the Observation Level
on such Observation Date is less than or equal to the applicable Call Level. If the notes are called, you will receive on the Call Settlement Date the Call Amount per unit applicable to such Observation Date, which is equal to the $10 Original
Offering Price per unit plus the Call Premium.

	  		  	  
 

	  		  	  
 Payment at Maturity:

	  		  	  
 If the notes are not called prior to the maturity date, the “Redemption
Amount” per unit, denominated in U.S. dollars, will be determined by the calculation agent and will be based on the percentage change in the price per share of the Index Fund from the Starting Value to the Ending Value: 

		  		  	  
 

  

 TS-2 
 

 

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 Hypothetical Payments 
 Set
forth below are five hypothetical examples of payment calculations reflecting: 
 1) the Starting Value of 33.40, rounded to two decimal places; 
 2) the Threshold Value of 36.74, or 110% of the Starting Value, rounded to two decimal places; 
 3) the Call Level of 33.40 (rounded to two decimal places), or 100% of the Starting Value; 
 4) the term of the notes from February 5, 2009 to
August 3, 2010; 
 5) the Call Premium of 18.90% of the $10.00 Original Offering Price per unit per annum; and 
 6) Observation Dates occurring on July 27, 2009, February 1, 2010, and July 27, 2010. 
 The Notes Are Called on One of the Observation Dates  
 The notes have not been previously called and the Observation Level on the
relevant Observation Date is less than or equal to the Call Level. Consequently, the notes will be called at the Call Amount per unit equal to $10.00 plus the applicable Call Premium. 
 Example 1 
 If the call is related to the Observation Date that falls on July 27, 2009, the Call Amount
per unit will be: 
 $10.00 plus the Call Premium of $0.945 = $10.945 per unit. 
 

 
 
 Example 2 
 If the call is related to the Observation Date that falls on February 1, 2010, the Call Amount per unit will be: 
 $10.00 plus the Call Premium of $1.890 = $11.890 per unit. 
 

 
  

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 Example 3 
 If
the call is related to the Observation Date that falls on July 27, 2010, the Call Amount per unit will be: 
 $10.00 plus the Call Premium of $2.835
= $12.835 per unit. 
 

 
 The Notes Are Not Called on Any of the Observation Dates  
 Example 4 
 The notes are not called on any of the Observation Dates and the hypothetical Ending Value
of the Index Fund on the final Observation Date is not greater than 36.74, the Threshold Value. The amount received at maturity per unit will therefore be $10.000. 
 

 
  

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 Example 5 
 The
notes are not called on any of the Observation Dates and the hypothetical Ending Value of the Index Fund on the final Observation Date is greater than 36.74, the Threshold Value. The amount received at maturity will be less, and possibly
significantly less, than the Original Offering Price of $10 per unit. 
 If the Ending Value is 37.74, or 113% of the Starting Value, the payment at
maturity will be: 
 $10 + [$10 × (36.74 – 37.74) / 33.40] =
$9.700 per unit 
 

 
 These examples have been prepared for purposes of illustration only. Your actual return will depend on the actual Observation Level on
the applicable Observation Date, the Ending Value, if applicable, and the term of your investment. 
  

							
	Summary of the Hypothetical Examples	  		  		  	
	Notes Are Called on an Observation Date	  	 Observation Date on
 July 27, 2009
	  	 Observation Date on
 February 1, 2010
	  	 Observation Date on
 July 27, 2010

				
	Starting Value	  	33.40            	  	33.40            	  	33.40            
				
	Call Level	  	33.40            	  	33.40            	  	33.40            
				
	Hypothetical Observation Level on the Observation Date	  	32.06            	  	32.73            	  	32.40            
				
	Return of the Index Fund (excluding any dividends)	  	-4.00%            	  	-2.00%            	  	-3.00%            
				
	Return of the Notes	  	9.45%            	  	18.90%            	  	28.35%            
				
	Call Amount per Unit	  	$10.945            	  	$11.890            	  	$12.835            

  

					
	Notes Are Not Called on any Observation Date	  	 Hypothetical Ending Value is
 less than the
 Threshold Value
	  	 Hypothetical Ending Value is
 greater than the
 Threshold Value

			
	 Starting Value
	  	    33.40	  	   33.40
			
	 Hypothetical Ending Value
	  	    35.07	  	   37.74
			
	 Threshold Value
	  	    36.74	  	   36.74
			
	 Is the hypothetical Ending Value greater than the Threshold Value?
	  	         No	  	     Yes
			
	 Return of the Index Fund (excluding any dividends)
	  	    5.00%	  	13.00%
			
	 Return of the Notes
	  	    0.00%	  	 -3.00%
			
	 Redemption Amount per Unit
	  	  $10.000	  	  $9.700

  

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 Risk Factors 
 An investment in the notes involves significant risks. The following is a list of certain of the risks involved in investing in the notes. You should carefully review the more detailed explanation of risks relating to the notes in the
“Risk Factors” sections included in the product supplement STR-1 and MTN prospectus supplement identified below under “Additional Terms.” We also urge you to consult your investment, legal, tax, accounting, and other advisers
before you invest in the notes. 
  

	 	§	 	 If the notes are not called, your investment may result in a loss; there is no guaranteed return of principal. 

  

	 	§	 	 Your return, if any, is limited to the Call Premium. 

  

	 	§	 	 Your yield may be less than the yield on a conventional debt security of comparable maturity. 

  

	 	§	 	 Your investment return may be less than a comparable investment directly in shares of the Index Fund. 

  

	 	§	 	 There are liquidity and management risks associated with the Index Fund. 

  

	 	§	 	 You must rely on your own evaluation of the merits of an investment linked to the Index Fund. 

  

	 	§	 	 In seeking to provide you with what we believe to be commercially reasonable terms for the notes while providing MLPF&S with compensation for its services, we have
considered the costs of developing, hedging, and distributing the notes. 

  

	 	§	 	 We cannot assure you that a trading market for your notes will ever develop or be maintained. 

  

	 	§	 	 The amount that you receive at maturity or upon a call will not be affected by all developments relating to the Index Fund. 

  

	 	§	 	 The sponsor of the Index Fund and the publisher of the Underlying Index (as defined below) may adjust the Index Fund or the Underlying Index, as applicable, in a way that
affects its value or level, as applicable, and the sponsor of the Index Fund and the publisher of the Underlying Index have no obligation to consider your interests. 

  

	 	§	 	 We cannot control actions by the investment advisor which may adjust the Index Fund in a way that could adversely affect the value of the notes and the amount payable on the
notes, and the investment adviser has no obligation to consider your interests. 

  

	 	§	 	 You will have no rights as a securityholder of the securities held by the Index Fund, and you will not be entitled to receive any of those securities or dividends or other
distributions by the issuers of those securities. 

  

	 	§	 	 We do not control any company held by the Index Fund or included in the Underlying Index, and are not responsible for any disclosure made by any such company.

  

	 	§	 	 The performance of the Index Fund and the performance of the Underlying Index may vary. 

  

	 	§	 	 Risks associated with the Underlying Index, or underlying assets of the Index Fund, will affect the share price of the Index Fund and hence, the value of the notes.

  

	 	§	 	 If you attempt to sell notes prior to maturity, their market value, if any, will be affected by various factors that interrelate in complex ways, and their market value may
be less than their Original Offering Price. 

  

	 	§	 	 Payments on the notes are subject to our credit risk, and changes in our credit ratings are expected to affect the value of the notes. 

  

	 	§	 	 Purchases and sales by us and our affiliates may affect your return. 

  

	 	§	 	 Our trading and hedging activities may create conflicts of interest with you. 

  

	 	§	 	 Our hedging activities may affect your return at maturity and the market value of the notes. 

  

	 	§	 	 Our business activities relating to the companies held by the Index Fund or included in the Underlying Index may create conflicts of interest with you.

  

	 	§	 	 There may be potential conflicts of interest involving the calculation agent. We have the right to appoint and remove the calculation agent. 

  

	 	§	 	 The U.S. federal income tax consequences of the notes are uncertain, and may be adverse to a holder of the notes. See “Certain U.S. Federal Income Taxation
Considerations” below. 

 Additional Risk Factor 
 The stocks held by the Index Fund are concentrated in one industry. 
 All of the stocks included in the Underlying Index are issued by companies
involved directly or indirectly in the U.S. real estate industry. As a result, the stocks that will determine the performance of the Index Fund and hence, the value of the notes, are concentrated in one industry. Although an investment in the notes
will not give you any ownership or other direct interests in the stocks of the Underlying Index or Index Fund, the return on an investment in the notes will be subject to certain risks associated with direct equity investments in the real estate
industry. 
  

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 Investor Considerations 
  
 You may wish to consider an investment in the notes if:

  

	§	 	 You anticipate that the price per share of the Index Fund will be less than or equal to the Call Level on any Observation Date and you seek an early exit prior to maturity at
a premium in such case. 

  

	§	 	 You are willing to receive a pre-determined return on your investment, capped at the Call Premium, in case the notes are called, regardless of the performance of the Index
Fund from the Starting Value to the date on which the notes are called. 

  

	§	 	 You are willing to accept that the notes may not be called prior to the maturity date, in which case your return on your investment will be equal to or less than the $10
Original Offering Price per unit. 

  

	§	 	 You accept that your investment may result in a loss, which could be significant, if the price per share of the Index Fund increases above the Threshold Value from the
Starting Value to the Ending Value on the final Observation Date. 

  

	§	 	 You are willing to forgo interest payments on the notes, such as fixed or floating rate interest paid on traditional interest bearing debt securities.

  

	§	 	 You want exposure to the Index Fund with no expectation of receiving distributions from the Index Fund or receiving dividends or other benefits of owning the stocks held by
the Index Fund. 

  

	§	 	 You are willing to accept that there is no assurance that the notes will be listed or remain listed on NYSE Arca. You understand that any listing does not ensure that a
trading market will develop for the notes or that there will be liquidity in any trading market. You understand that secondary market prices for the notes, if any, will be affected by various factors, including our perceived creditworthiness.

  

 The notes may not be appropriate investments for you if: 
  

	§	 	 You want to hold your notes for the full term. 

  

	§	 	 You anticipate that the price per share of the Index Fund will appreciate from the Starting Value to the Ending Value. 

  

	§	 	 You anticipate that the Observation Level will not be less than or equal to the Call Level on any Observation Date. 

  

	§	 	 You seek a return on your investment that will not be capped at the Call Premium. 

  

	§	 	 You are seeking 100% principal protection or preservation of capital. 

  

	§	 	 You seek interest payments or other current income on your investment. 

  

	§	 	 You want to receive dividends from the Index Fund or dividends paid on the stocks held by the Index Fund. 

  

	§	 	 You want assurances that there will be a liquid market if and when you want to sell the notes prior to maturity. 

  
 Other Provisions 
 We will deliver the notes against payment therefor in New York, New York on a date that is in excess of three business days following the pricing date. Under Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market
generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade notes more than three business days prior to the original issue date will be required
to specify alternative settlement arrangements to prevent a failed settlement. 
 If you place an order to purchase these offered securities, you are consenting to
each of MLPF&S and its broker-dealer affiliate First Republic Securities Company, LLC acting as a principal in effecting the transaction for your account. MLPF&S is acting as an underwriter and/or selling agent for this offering
and will receive underwriting compensation from BAC. 
 Supplement to the Plan of Distribution 
 MLPF&S and First Republic Securities Company, LLC, each a broker-dealer subsidiary of BAC, are members of the Financial Industry Regulatory Authority, Inc. (formerly the
National Association of Securities Dealers, Inc. (the “NASD”)) and will participate in distribution of the notes. Accordingly, offerings of the notes will conform to the requirements of NASD Rule 2720. In the original offering of the
notes, the notes will be sold in minimum investment amounts of 100 units. 
 MLPF&S and First Republic Securities Company, LLC may use this Note Prospectus for
offers and sales in secondary market transactions and market-making transactions in the notes but are not obligated to engage in such secondary market transactions and/or market-making transactions. MLPF&S and First Republic Securities Company,
LLC may act as principal or agent in these transactions, and any such sales will be made at prices related to prevailing market prices at the time of the sale. 
  

 TS-7 
 

 

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 The Index Fund 
 The iShares® Dow Jones U.S. Real Estate Index Fund 
 We have derived the following information from publicly available documents published by the iShares® Trust
(“iShares”), a registered investment company. We make no representation or warranty as to the accuracy or completeness of the following information. We are not affiliated with the Index Fund and the Index Fund will have no obligations with
respect to the notes. This term sheet relates only to the notes and does not relate to the shares of the Index Fund or securities in the Dow Jones U.S. Real Estate IndexSM (the “Underlying Index”). Neither we nor MLPF&S has
or will participate in the preparation of the publicly available documents described below. Neither we nor MLPF&S has made any due diligence inquiry with respect to the Index Fund in connection with the offering of the notes. There can be no
assurance that all events occurring prior to the date of this term sheet, including events that would affect the accuracy or completeness of the publicly available documents described below, that would affect the trading price of the shares of the
Index Fund have been or will be publicly disclosed. Subsequent disclosure of any events or the disclosure of or failure to disclose material future events concerning the Index Fund could affect the value of the shares of the Index Fund on the
Observation Dates and therefore could affect your Call Amount or Redemption Amount, as applicable. 
 iShares consists of numerous separate investment portfolios,
including the Index Fund. This fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Underlying Index. The Index Fund typically earns income dividends from securities included in
the Underlying Index. These amounts, net of expenses and taxes (if applicable), are passed along to the Index Fund’s shareholders as “ordinary income.” In addition, the Index Fund realizes capital gains or losses whenever it sells
securities. Net long-term capital gains are distributed to shareholders as “capital gain distributions.” However, because your notes are linked only to the share price of the Index Fund, you will not be entitled to receive income,
dividend, or capital gain distributions from the Index Fund or any equivalent payments. 
 Information provided to or filed with the SEC by iShares pursuant to the
Securities Act of 1933 and the Investment Company Act of 1940 can be located at the SEC’s facilities or through the SEC’s Website by reference to SEC file numbers 333-92935 and 811-09729, respectively. We make no representation or warranty
as to the accuracy or completeness of the information or reports. 
 The selection of the Index Fund is not a recommendation to buy or sell the shares of the Index
Fund. Neither we nor any of our affiliates make any representation to you as to the performance of the shares of the Index Fund. 
 The shares of the Index Fund trade
on the NYSE Arca under the symbol “IYR”. 
 Historical Data 
 The following graph sets forth the monthly historical performance of the Index Fund in the period from January 2003 through December 2008. This historical data on the Index Fund is not necessarily indicative of the future performance
of the Index Fund or what the value of the notes may be. Any historical upward or downward trend in the value of the Index Fund during any period set forth below is not an indication that the Index Fund is more or less likely to increase or decrease
at any time over the term of the notes. On the pricing date, the closing value of the Index was 33.40. 
 

 
 Before investing in the notes, you should consult publicly available sources for the values and trading pattern of the Index Fund. The
generally unsettled international environment and related uncertainties, including the risk of terrorism, may result in financial markets generally and the Index Fund exhibiting greater volatility than in earlier periods. 
  

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 License Agreement with BGI 
 We have entered into a non-exclusive license agreement with BGI under which BGI has licensed to us the right to use the
iShares® mark in connection with the Index Fund. 
 The Dow Jones U.S. Real Estate
IndexSM 
 All disclosure contained in this term sheet regarding the Underlying Index, including, without limitation, its make-up, method of calculation
and changes in its components has been derived from publicly available information. Such information reflects the policies of, and is subject to change by, Dow Jones & Company, Inc. (“Dow Jones”). The Underlying Index is
calculated, maintained, and published by Dow Jones. Neither we nor MLPF&S have independently verified the accuracy or completeness of that information. 
 The
Underlying Index is a float-adjusted capitalization-weighted, real-time index that measures the performance of the real estate sector of the U.S. securities market. Component companies consist of Real Estate Investment Trusts (“REITs”),
and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies. REIT prices are used as proxies for market valuations of U.S. commercial property such as hotels,
office buildings, industrial sites, shopping centers, and apartment complexes, as well as markers for changing trends in leasing rates and movements in commercial real estate valuations. 
 The Underlying Index is one of the economic sectors that make up the Dow Jones U.S. IndexSM, a broad-based but
investable measure of the U.S. stock market, which aims to represent the top 95% of U.S. companies based on float-adjusted market capitalization, excluding the very smallest and least-liquid stocks. The Dow Jones U.S. Index is part of the Dow Jones
Global Indexes, which is a benchmark family of indices that follows stocks from 46 countries as of June 2007. It is a market capitalization-weighted index, adjusted for free-float shares and calculated on a price and total return basis. 

Composition and Maintenance 
 Defining the Index Universe: The
Underlying Index component candidates must trade on the major U.S. stock exchanges and must be common shares or other securities that have the characteristics of common equities. All classes of common shares, both fully and partially paid, are
eligible. Fixed-dividend shares and securities such as convertible notes, warrants, rights, mutual funds, unit investment trusts, closed-end fund shares, and shares in limited partnerships are not eligible. Temporary issues arising from corporate
actions, such as “when-issued” shares, are considered on a case-by-case basis when necessary to maintain continuity in a company’s index membership. REITs also are eligible. Multiple classes of shares are included if each issue, on
its own merit, meets the other eligibility criteria. Securities that have had more than ten nontrading days during the past quarter are excluded. 
 Stock
Selection: The Underlying Index universe is sorted by float-adjusted market capitalization and the stocks in the top 95% are selected as components of the Dow Jones U.S. Index, skipping stocks that fall within the bottom 1% of the
universe by free-float market capitalization and within the bottom .01% of the universe by turnover. To be included in the Underlying Index, the issuer of the component securities must be classified in the Real Estate Sector of industry
classifications as maintained by the Industry Classification Benchmark (“ICB”). 
 Review Process: The Underlying Index is reviewed by Dow
Jones on a quarterly basis. Shares outstanding totals for component stocks are updated during the quarterly review. However, if the number of outstanding shares for an Underlying Index component changes by more than 10% due to a corporate action,
the shares total will be adjusted immediately after the close of trading on the date of the event. Whenever possible, Dow Jones will announce the change at least two business days prior to its implementation. Changes in shares outstanding due to
stock dividends, splits, and other corporate actions also are adjusted immediately after the close of trading on the day they become effective. Quarterly reviews are implemented during March, June, September, and December. Both component changes and
share changes become effective at the opening on the first Monday after the third Friday of the review month. Changes to the Underlying Index are implemented after the official closing values have been established. All adjustments are made before
the start of the next trading day. Constituent changes that result from the periodic review will be announced at least two business days prior to the implementation date. 
 In addition to the scheduled quarterly review, the Underlying Index is reviewed on an ongoing basis. Changes in the Underlying Index composition and related weight adjustments are necessary whenever there are extraordinary events such as
delistings, bankruptcies, mergers, or takeovers involving index components. In these cases, each event will be taken into account as soon as it is effective. Whenever possible, the changes in the Underlying Index components will be announced at
least two business days prior to their implementation date. In the event that a component no longer meets the eligibility requirements, it will be removed from the Underlying Index. 
 Background on the ICB 
 ICB, a joint classification system launched by FTSE Group and Dow Jones Indexes, is a detailed and comprehensive
structure for sector and industry analysis, facilitating the comparison of companies across four levels of classification and national boundaries. The system allocates companies to the subsector whose definition most closely describes the nature of
its business. The nature of a company’s business is determined by its source of revenue or where it constitutes the majority of revenue. As of March 2008, ICB classifies the component stocks into groups of 10 industries, 19 supersectors, 41
sectors, and 114 subsectors. The Real Estate supersector is composed of two sectors, the Real Estate Investment & Services sector and the Real Estate Investment Trusts sector, both of which contain subsectors. The Real Estate
Investment & Services sector consists of the Real Estate Holding & Development subsector, which consists of companies that invest directly or indirectly in real estate through development, investment, or ownership, excluding REITs,
and the Real Estate Services subsector, which includes companies that provide services to real estate companies but do not own properties themselves. The Real Estate Investment Trusts sector consists of the following subsectors:
Industrial & Office REITs, Retail REITs, Residential REITs, Diversified REITs, Specialty REITs, Mortgage REITs, and Hotel & Lodging REITs. 
  

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 Summary Tax Consequences 
 You should consider the U.S. federal income tax consequences of an investment in the notes, including the following: 
  

	 	•	 	 You agree with us (in the absence of an administrative determination, or judicial ruling to the contrary) to characterize and treat the notes for all tax purposes as a
callable single financial contract linked to the Index Fund that requires you to pay us at inception an amount equal to the purchase price of the notes and that entitles you to receive at maturity or upon earlier redemption an amount in cash linked
to the value of the Index Fund. 

  

	 	•	 	 Under this characterization and tax treatment of the notes, upon receipt of a cash payment at maturity or upon a sale, exchange, or redemption of the notes prior to maturity,
you generally will recognize capital gain or loss. This capital gain or loss generally will be long-term capital gain or loss if you hold the notes for more than one year. 

 Certain U.S. Federal Income Taxation Considerations 
 Set forth below is a
summary of certain U.S. federal income tax considerations relating to an investment in the notes. The following summary is not complete and is qualified in its entirety by the discussion under the section entitled “U.S. Federal Income Tax
Summary” in the accompanying product supplement STR-1, which you should carefully review prior to investing in the notes. 
 General.    Although there is no statutory, judicial, or administrative authority directly addressing the characterization of the notes, we intend to treat the notes for all tax purposes as a callable single
financial contract linked to the Index Fund that requires you to pay us at inception an amount equal to the purchase price of the notes and that entitles you to receive at maturity or upon earlier redemption an amount in cash linked to the value of
the Index Fund. Under the terms of the notes, we and every investor in the notes agree, in the absence of an administrative determination or judicial ruling to the contrary, to treat the notes as described in the preceding sentence. This discussion
assumes that the notes constitute a callable single financial contract linked to the Index Fund for U.S. federal income tax purposes. If the notes did not constitute a callable single financial contract, the tax consequences described below would be
materially different. 
 This characterization of the notes is not binding on the Internal Revenue Service (“IRS”) or the courts. No statutory, judicial, or
administrative authority directly addresses the characterization of the notes or any similar instruments for U.S. federal income tax purposes, and no ruling is being requested from the IRS with respect to their proper characterization and treatment.
Due to the absence of authorities on point, significant aspects of the U.S. federal income tax consequences of an investment in the notes are not certain, and no assurance can be given that the IRS or any court will agree with the characterization
and tax treatment described in the accompanying product supplement STR-1. Accordingly, you are urged to consult your tax advisor regarding all aspects of the U.S. federal income tax consequences of an investment in the notes, including possible
alternative characterizations. The discussion in this section and in the section entitled “U.S. Federal Income Tax Summary” in the accompanying product supplement STR-1 assume that there is a significant possibility of a significant loss
of principal on an investment in the notes. 
 Settlement at Maturity or Sale, Exchange, or Redemption Prior to Maturity.    Assuming that
the notes are properly characterized and treated as callable single financial contracts linked to the Index Fund for U.S. federal income tax purposes, upon receipt of a cash payment at maturity or upon a sale, exchange, or redemption of the notes
prior to maturity, a U.S. Holder (as defined in the accompanying product supplement STR-1) generally will recognize capital gain or loss equal to the difference between the amount realized and the U.S. Holder’s basis in the notes. This capital
gain or loss generally will be long-term capital gain or loss if the U.S. Holder holds the notes for more than one year. The deductibility of capital losses is subject to limitations. 
 Possible Future Tax Law Changes.    On December 7, 2007, the IRS released Notice 2008-2 (“Notice”) seeking comments from the public on the taxation of financial instruments currently
taxed as “prepaid forward contracts.” This Notice addresses instruments such as the notes. According to the Notice, the IRS and Treasury are considering whether a holder of an instrument such as the notes should be required to accrue
ordinary income on a current basis, regardless of whether any payments are made prior to maturity. It is not possible to determine what guidance the IRS and Treasury will ultimately issue, if any. Any such future guidance may affect the amount,
timing, and character of income, gain, or loss in respect of the notes, possibly with retroactive effect. The IRS and Treasury are also considering additional issues, including whether additional gain or loss from such instruments should be treated
as ordinary or capital, whether foreign holders of such instruments should be subject to withholding tax on any deemed income accruals, whether Section 1260 of the Internal Revenue Code of 1986, as amended, concerning certain “constructive
ownership transactions,” generally applies or should generally apply to such instruments, and whether any of these determinations depend on the nature of the underlying asset. We urge you to consult your own tax advisors concerning the impact
and the significance of the above considerations. We intend to continue treating the notes for U.S. federal income tax purposes in the manner described herein unless and until such time as we determine, or the IRS or Treasury determines, that some
other treatment is more appropriate. 
 You should consult your own tax advisor concerning the U.S. federal income tax consequences to you of acquiring, owning, and
disposing of the notes, as well as any tax consequences arising under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes in U.S. federal or other tax laws. See the discussion under the section
entitled “U.S. Federal Income Tax Summary” in the accompanying product supplement STR-1. 
  

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 Additional Terms 
 You should
read this term sheet, together with the documents listed below, which together contain the terms of the notes and supersede all prior or contemporaneous oral statements as well as any other written materials. You should carefully consider, among
other things, the matters set forth under “Risk Factors” in the sections indicated on the cover of this term sheet. The notes involve risks not associated with conventional debt securities. We urge you to consult your investment, legal,
tax, accounting, and other advisers before you invest in the notes. 
 You may access the following documents on the SEC Website at www.sec.gov as follows (or if such address has changed, by reviewing our filings for the relevant date on the SEC Website): 
  

	 	§	 	 Product supplement STR-1 dated January 
2, 2009: 

 http://www.sec.gov/Archives/edgar/data/70858/000119312509000237/d424b5.htm
  
  

	 	§	 	 Series L MTN prospectus supplement dated April 10, 2008 and prospectus dated May 5, 2006: 

 http://www.sec.gov/Archives/edgar/data/70858/000119312508079745/d424b5.htm 

 Our Central Index Key, or CIK, on the SEC Website is 70858. 
 We have
filed a registration statement (including a product supplement, a prospectus supplement, and a prospectus) with the SEC for the offering to which this term sheet relates. Before you invest, you should read the product supplement, the prospectus
supplement, and the prospectus in that registration statement, and the other documents relating to this offering that we have filed with the SEC for more complete information about us and this offering. You may get these documents without cost by
visiting EDGAR on the SEC Website at www.sec.gov. Alternatively, we, any agent or any dealer participating in this offering, will arrange to send you the Note
Prospectus if you so request by calling MLPF&S toll-free 1-866-500-5408. 
 Structured Investments Classification 
 MLPF&S classifies structured investments (the “Structured Investments”), including the notes, into four categories, each with different investment characteristics.
The description below is intended to briefly describe the four categories of Structured Investments offered: Principal Protection, Enhanced Income, Market Participation, and Enhanced Participation. A Structured Investment may, however, combine
characteristics that are relevant to one or more of the other categories. As such, a category should not be relied upon as a description of any particular Structured Investment. 
 Principal Protection: Principal Protected Structured Investments offer full or partial principal protection at maturity, while offering market exposure and the opportunity for a better return than may be available
from comparable fixed income securities. Principal protection may not be achieved if the investment is sold prior to maturity. 
 Enhanced Income:
Structured Investments offering enhanced income may offer an enhanced income stream through interim fixed or variable coupon payments. However, in exchange for receiving current income, investors may forfeit upside potential on the
underlying asset. These investments generally do not include the principal protection feature. 
 Market Participation: Market Participation Structured
Investments can offer investors exposure to specific market sectors, asset classes, and/or strategies that may not be readily available through traditional investment alternatives. Returns obtained from these investments are tied to the performance
of the underlying asset. As such, subject to certain fees, the returns will generally reflect any increases or decreases in the value of such assets. These investments are not structured to include the principal protection feature. 
 Enhanced Participation: Enhanced Participation Structured Investments may offer investors the potential to receive better than market returns on the performance of
the underlying asset. Some structures may offer leverage in exchange for a capped or limited upside potential and also in exchange for downside risk. These investments are not structured to include the principal protection feature. 
 The classification of Structured Investments is meant solely for informational purposes and is not intended to fully describe any particular Structured Investment nor guarantee
any particular performance. 
  

 TS-11 
 

 

Table of Contents

			
	 Product Supplement No. STR-1
	  	
	 (To Prospectus dated May 5, 2006
	  	
	 and Series L Prospectus Supplement dated April 10, 2008)
	  	
	 January 2, 2009
	  	

 

 
 Strategic Accelerated Redemption Securities® 
  

	 •
	 	 Strategic Accelerated Redemption Securities® (the “notes”) are unsecured senior notes issued by
Bank of America Corporation. The notes are not principal protected, and we will not pay interest on the notes. 

  

	•	 	 This product supplement describes the general terms of the notes and the general manner in which they may be offered and sold. For each offering of the notes, we
will provide you with a pricing supplement (which we may refer to as a “term sheet”) that will describe the specific terms of that offering. The term sheet will identify any additions or changes to the terms specified in this product
supplement. 

  

	•	 	 The term sheet will also identify the underlying “Market Measure,” which may be one or more equity-based or commodity-based indices, one or more exchange
traded funds, one or more equity securities, commodities, or other assets, any other statistical measure of economic or financial performance, including, but not limited to, any currency, currency index, consumer price index or mortgage index,
interest rate, or any combination of the foregoing. We also may describe the Market Measure in an additional supplement to the prospectus, which we refer to as an “index supplement.” 

  

	•	 	 The notes will be automatically called if the Observation Level (as defined below) of the applicable Market Measure on any Observation Date (as defined below) is
greater than or equal to the applicable Call Level (as defined below) for that Observation Date, all as set forth in the applicable term sheet. If the notes are called, you will receive a cash payment for each unit of notes (the “Call
Amount”) that will be set forth in the applicable term sheet. If specified in the applicable term sheet, your notes may be “bear notes,” which will be called if the Observation Level of the applicable Market Measure on any Observation
Date is less than or equal to the applicable Call Level for that Observation Date. Except where otherwise specifically provided in this product supplement, all references in this product supplement to “notes” shall be deemed to include a
reference to bear notes. 

  

	•	 	 At maturity, if the notes have not been called, for each unit of notes you own, you will receive a cash payment (the “Redemption Amount”) based on the
direction of and percentage change in the value of the applicable Market Measure from the Starting Value to the Ending Value (each as defined below), calculated as described in this product supplement. 

  

	 	•	 	 If the Ending Value is greater than or equal to (or, in the case of bear notes, less than or equal to) the “Threshold Value” specified in the applicable
term sheet, you will receive the Original Offering Price (as defined below) per unit. We will determine the Threshold Value on the pricing date of the notes, which will be the date the notes are priced for initial sale to the public.

  

	 	•	 	 If the Ending Value is less than (or, in the case of bear notes, greater than) the Threshold Value, you will lose a percentage of the principal amount of your notes
based on the percentage decline (or, in the case of bear notes, percentage increase) in the value of the Market Measure in excess of the Threshold Value, from the Starting Value to the Ending Value, multiplied by a “Leverage Factor”
specified in the applicable term sheet. The applicable Leverage Factor may be 100%. 

  

	•	 	 The notes will be issued in denominations of whole units. Each unit will have a public offering price as set forth in the applicable term sheet (the “Original
Offering Price”). The term sheet may also set forth a minimum number of units that you must purchase. 

  

	•	 	 If provided for in the applicable term sheet, we may apply to have your notes listed on a securities exchange or quotation system. If approval of such an
application is granted, your notes will be listed on the securities exchange or quotation system at the time of such approval. We make no representations, however, that your notes will be listed or, if listed, will remain listed for the entire term
of your notes. 

  

	•	 	 One or more of our affiliates, including Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), may act as our selling agents to
offer the notes. 

  
  
 The notes are unsecured and are not savings accounts, deposits, or other obligations of a bank. The notes are not guaranteed by Bank of America, N.A. or
any other bank, are not insured by the Federal Deposit Insurance Corporation or any other governmental agency and involve investment risks. Potential purchasers of the notes should consider the information in “Risk Factors
” beginning on page S-10. You may lose some or all of your investment in the notes. 
 None of the Securities and Exchange
Commission (the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved of these notes or passed upon the adequacy or accuracy of this product supplement, the prospectus supplement, or the
prospectus. Any representation to the contrary is a criminal offense. 
  
  
 Merrill Lynch & Co. 

Table of Contents

 TABLE OF CONTENTS 
  

			
	 	  	Page
		
	 SUMMARY
	  	S-3
		
	 RISK FACTORS
	  	S-10
		
	 USE OF PROCEEDS
	  	S-23
		
	 DESCRIPTION OF THE NOTES
	  	S-24
		
	 SUPPLEMENTAL PLAN OF DISTRIBUTION
	  	S-41
		
	 U.S. FEDERAL INCOME TAX SUMMARY
	  	S-41
		
	 ERISA CONSIDERATIONS
	  	S-48

  
  
 Strategic Accelerated Redemption Securities®
 is a registered service mark of our subsidiary, Merrill Lynch & Co., Inc. 
  

 S-2 

Table of Contents

 SUMMARY 
 This product supplement relates only to the notes and does not relate to any underlying asset that comprises the Market Measure described in any term
sheet. This summary includes questions and answers that highlight selected information from the prospectus, prospectus supplement, and this product supplement to help you understand the notes. You should read carefully the entire prospectus,
prospectus supplement, and product supplement, together with the applicable term sheet and any applicable index supplement, to understand fully the terms of your notes, as well as the tax and other considerations important to you in making a
decision about whether to invest in any notes. In particular, you should review carefully the section in this product supplement entitled “Risk Factors,” which highlights a number of risks of an investment in the notes, to determine
whether an investment in the notes is appropriate for you. If information in this product supplement is inconsistent with the prospectus or prospectus supplement, this product supplement will supersede those documents. However, if information in any
term sheet or index supplement is inconsistent with this product supplement, that term sheet or index supplement will supersede this product supplement. 
 Certain capitalized terms used and not defined in this product supplement have the meanings ascribed to them in the prospectus supplement and prospectus. 
 In light of the complexity of the transactions described in this product supplement, you are urged to consult with your own attorneys and business and
tax advisors before making a decision to purchase any notes. 
 The information in this “Summary” section is qualified in its
entirety by the more detailed explanation set forth elsewhere in this product supplement, the prospectus supplement, and prospectus, as well as the applicable term sheet and any index supplement. You should rely only on the information contained in
those documents. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Neither we nor any selling agent is making an offer to
sell the notes in any jurisdiction where the offer or sale is not permitted. You should assume that the information in this product supplement, the prospectus supplement, and prospectus, together with the term sheet and any index supplement, is
accurate only as of the date on their respective front covers. 
 What are the notes? 
 The notes are senior debt securities issued by Bank of America Corporation, and are not secured by collateral. The notes will rank equally with all of
our other unsecured senior indebtedness from time to time outstanding, and any payments due on the notes, including any repayment of principal, will be subject to our credit risk. Each series of notes will mature on the date set forth in the
applicable term sheet, unless we call the notes on an earlier date, as described in this product supplement and in the applicable term sheet. The notes are not principal protected. 
 The notes are designed for investors who seek an early exit prior to maturity at a premium if the value of the applicable Market Measure (such as the
level of an index or the price of a share of an exchange traded fund) is at or above (or, in the case of bear notes, at or below) its applicable Call Level on the relevant Observation Date. You should be willing to lose some or all of your principal
if the notes are not called prior to their maturity, and the applicable Market Measure has declined below (or, in the case of bear notes, has increased above) the Threshold Value on the final Observation Date shortly before the maturity date. The
notes may or may not pay periodic interest. Unless specified in the applicable term sheet, your notes will not pay interest. You must be willing to forgo interest payments on your investment (such as fixed or floating interest rates paid on
conventional non-callable debt securities) if the 
 S-3 

  

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notes are non-interest bearing, accept a return that will not exceed the Call Amount, and bear the risk of loss of all or substantially all of your
investment. You should also be aware that the automatic call feature may shorten the term of an investment in the notes, and be willing to accept that your notes may be called on any Observation Date. The Call Level, Observation Dates, Threshold
Value, and Call Amount will be set forth in the applicable term sheet. 
 Are the notes equity or debt securities? 
 The notes are our senior debt securities. However, the notes will differ from traditional debt securities in that their return is linked to the
performance of the underlying Market Measure, they will not be principal protected, and unless otherwise specified in the applicable term sheet, you will not receive interest payments. 
 If the notes are called prior to the maturity date, the total cash amount that you will receive as payment on the notes will equal the Call Amount
specified in the applicable term sheet. If the notes are not called prior to the maturity date, you may receive an amount that is less than the Original Offering Price, depending upon the performance of the Market Measure over the term of the notes.
We describe below how this amount at maturity is determined. 
 Will you receive interest on the notes? 
 Unless otherwise specified in the applicable term sheet, you will not receive any interest payments on the notes. If the applicable term sheet provides
for the payment of interest on the notes, the applicable term sheet will indicate the relevant terms on which you will receive interest payments. See “Description of the Notes—Interest.” 
 Is it possible for you to lose some or all of your investment in the notes? 
 Yes. Unless the applicable term sheet provides for the payment of interest on the notes, you will only earn a positive return on your notes if they are automatically called prior to their maturity date, as described
in this product supplement and the applicable term sheet. If your notes are not called prior to maturity, your investment in the notes will not yield a positive return. 
 Further, if the Ending Value is less than (or, in the case of bear notes, greater than) the applicable Threshold Value on the final Observation Date shortly before the maturity date, then you will receive at maturity
a cash amount that is less than the Original Offering Price of your notes. 
 As a result, you may lose all or a substantial portion of the
amount that you invested to purchase the notes. Further, if you sell the notes prior to maturity, you may find that the market value per unit is less than the Original Offering Price. 
 What is the Market Measure? 
 The Market Measure may consist of one or more of the following:

  

	 	•	 	 U.S. broad-based equity indices; 

  

	 	•	 	 U.S. sector or style-based equity indices; 

  

	 	•	 	 non-U.S. or global equity indices; 

  

	 	•	 	 commodity-based indices; 

 S-4

  

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	 	•	 	 exchange traded funds; 

  

	 	•	 	 the value of one or more commodities, equity securities, or other assets; 

  

	 	•	 	 any other statistical measure of U.S. or non-U.S. economic or financial performance, including, but not limited to, any currency or currency index, consumer price
index, mortgage index, or interest rate; or 

  

	 	•	 	 any combination of any of the above. 

 The Market Measure may consist of a group, or “Basket,” of the foregoing. We refer to each component included in any Basket as a “Basket Component.” If the Market Measure to which your notes are linked is a Basket, the
Basket Components will be set forth in the applicable term sheet. 
 The applicable term sheet or index supplement will set forth information
as to the specific Market Measure, including information as to the historical values of the Market Measure. However, historical values of the Market Measure are not indicative of the future performance of the Market Measure or the performance of
your notes. 
 Under what circumstances will the notes be called? 
 The notes will automatically be called on an Observation Date if the Observation Level of the Market Measure on that Observation Date is greater than or equal to (or, in the case of bear notes, is less than or equal
to) the applicable Call Level set forth in the applicable term sheet. We cannot otherwise redeem the notes at any earlier date. 
 What will you receive
if we call the notes? 
 If your notes are called, you will receive the Call Amount applicable to such Observation Date. The Call Amount
will be equal to the Original Offering Price per unit plus the Call Premium. The “Call Premium” will be a percentage of the Original Offering Price that will be set forth in the applicable term sheet. If the notes are automatically called
on an Observation Date other than the final Observation Date, we will redeem each note and pay the applicable Call Amount on the fifth Banking Business Day (as defined below) after the applicable Observation Date, subject to postponement as
described in the section entitled “Description of the Notes—Automatic Call.” If the Notes are called on the final Observation Date, we will redeem each Note and pay the Call Amount on the maturity date. 
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 How is the payment at maturity calculated? 
 If your notes are not called, then at maturity, subject to our credit risk as issuer of the notes, and unless the applicable term sheet provides
otherwise, you will receive the Redemption Amount per unit of notes that you hold, denominated in U.S. dollars. The Redemption Amount will be calculated as follows: 
  

	 	•	 	 If the Ending Value is equal to or greater than the Threshold Value, then the Redemption Amount will equal the Original Offering Price per unit; or

  

	 	•	 	 If the Ending Value is less than the Threshold Value, then the Redemption Amount will equal: 

  

																			
		 	Original Offering Price +	 	(  
	 	Original Offering Price x	 	(  
	 	Ending Value - Threshold Value	 	)  
	 	x Leverage Factor	 	 )
  
	 	
	 	 	 	 	 	Starting Value	 	 	 	 	

 In the case of bear notes, the Redemption Amount will be calculated as follows: 
  

	 	•	 	 If the Ending Value is equal to or less than the Threshold Value, then the Redemption Amount will equal the Original Offering Price; or

  

	 	•	 	 If the Ending Value is greater than the Threshold Value, then the Redemption Amount will equal: 

  

																			
		 	Original Offering Price +	 	(  
	 	Original Offering Price x	 	(  
	 	Threshold Value - Ending Value	 	)  
	 	x Leverage Factor	 	 )
  
	 	
	 	 	 	 	 	Starting Value	 	 	 	 	

 The “Threshold Value” will represent a percentage of the Starting Value, and will be
determined on the pricing date and set forth in the applicable term sheet. If the Threshold Value is equal to 100% of the Starting Value, then the Redemption Amount for each note will be less than the Original Offering Price if there is any decrease
(or, in the case of bear notes, increase) in the value of the Market Measure from the Starting Value to the Ending Value. 
 The
“Leverage Factor” represents a percentage of any decline (or, in the case of bear notes, an increase) beyond the Threshold Value that will be reflected in the Redemption Amount, and will be set forth in the applicable term sheet. The
Leverage Factor may equal 100%, but will not be greater than a number that, considering the Threshold Value, could cause you to lose more than your entire investment in the notes. 
 Unlike ordinary debt securities, the notes are not principal protected, and you may receive a Redemption Amount that is less than the Original Offering
Price of your notes. In either case, in no event will the Redemption Amount be less than zero. 
 How will the Starting Value, Ending Value, and
Observation Level be determined? 
 Unless otherwise specified in the applicable term sheet, the “Starting Value” will be:

  

	 	•	 	 as to Market Measures other than exchange traded funds, the closing value of the Market Measure or a percentage of the closing value of the Market Measure on the
pricing date (or on such date or dates other than the pricing date as specified in the applicable term sheet) as determined by the calculation agent; provided, however, that if the Market Measure is linked to one or more commodities or commodity

 S-6 

  

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indices, and a Market Disruption Event (as defined below) occurs on the pricing date, then the calculation agent will establish the Starting Value as set
forth in the section “Description of the Notes—Determining the Observation Level, the Starting Value, and the Ending Value”; and 

  

	 	•	 	 as to exchange traded fund Market Measures, the volume weighted average price, which is, absent a determination of manifest error, the price shown on page
“AQR” on Bloomberg L.P. for trading in shares of the Market Measure taking place between approximately 9:30 a.m. to 4:02 p.m. on all U.S. exchanges on the pricing date, or on such date or dates other than the pricing date as specified in
the applicable term sheet. 

 If the Market Measure consists of a Basket, the “Starting Value” will be equal to
100. We will assign each Basket Component a weighting (the “Initial Component Weight”) so that each Basket Component represents a percentage of the Starting Value on the pricing date. We may assign the Basket Components equal Initial
Component Weights, or we may assign the Basket Components unequal Initial Component Weights. The Initial Component Weight for each Basket Component will be set forth in the applicable term sheet. See “Description of the Notes—Basket Market
Measures.” 
 Unless otherwise specified in the applicable term sheet, the “Ending Value” will be: 
  

	 	•	 	 as to Market Measures other than exchange traded funds, the closing value of the Market Measure on the final Observation Date; and 

  

	 	•	 	 as to exchange traded fund Market Measures, the Closing Market Price (as defined below) of the Market Measure on the final Observation Date multiplied by the Price
Multiplier (as defined below). 

 Unless otherwise specified in the applicable term sheet, the “Observation
Level” will be: 
  

	 	•	 	 as to Market Measures other than exchange traded funds, the closing value of the Market Measure on any Observation Date; and 

  

	 	•	 	 as to exchange traded fund Market Measures, the Closing Market Price of the Market Measure on any Observation Date multiplied by the Price Multiplier.

 See “Description of the Notes—Determining the Observation Level, the Starting Value, and the Ending
Value.” 
 Is the return on the notes limited in any way? 
 Yes. Unless the applicable term sheet provides for the payment of interest on the notes, you will only receive a positive return on the notes if your notes are called. Even if the notes are called, unless otherwise
provided in the applicable term sheet, your return on the notes will be limited to the Original Offering Price plus the applicable Call Premium. As a result, your participation in any upside potential (or, in the case of bear notes, downside
potential) of the Market Measure underlying your notes will not be greater than the Call Premium. Each term sheet will set forth examples of hypothetical Ending Values, Call Levels, and Threshold Values, and the impact of the call feature on your
notes. 
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 Who will determine the amounts payable on notes? 
 The calculation agent will make all the calculations associated with the notes, such as determining the Observation Level, the Starting Value, the Ending
Value, the Threshold Value, the Call Level, and the Redemption Amount. Unless otherwise set forth in the applicable term sheet, we will appoint our affiliate, MLPF&S, or one of our other affiliates, to act as calculation agent for the notes. See
the section entitled “Description of the Notes—Role of the Calculation Agent.” 
 Will you have an ownership interest in the securities,
commodities, or other assets that are represented by the Market Measure? 
 No. An investment in the notes does not entitle you to any
ownership interest, including any voting rights, dividends paid, interest payments, or other distributions, in the securities of any of the companies included in an equity-based Market Measure or in an exchange traded fund Market Measure, or in any
futures contract for a commodity included in the Market Measure. If the Market Measure is not an exchange traded fund Market Measure, or is not equity-based or commodity-based, you similarly will not have any right to receive the relevant asset
underlying the Market Measure. The notes will be payable only in U.S. dollars. 
 Who are the selling agents for the notes? 
 One or more of our affiliates, including MLPF&S, will act as our selling agents in connection with each offering of the notes and will receive a
commission or underwriting discount based on the number of units of the notes sold. None of the selling agents is your fiduciary or advisor, and you should not rely upon any communication from it in connection with the notes as investment advice or
a recommendation to purchase the notes. You should make your own investment decision regarding the notes after consulting with your legal, tax, and other advisors. 
 How are the notes being offered? 
 We have registered the notes with the SEC in the United States. However, we will not
register the notes for public distribution in any jurisdiction other than the United States. The selling agents may solicit offers to purchase the notes from non-U.S. investors in reliance on available private placement exemptions. See the section
entitled “Supplemental Plan of Distribution—Selling Restrictions” in the prospectus supplement. 
 Will the notes be listed on an exchange?

 If provided for in the applicable term sheet, we will apply to have your notes listed on a securities exchange or quotation system. If
approval of such an application is granted, your notes will be listed on the securities exchange or quotation system at the time of such approval. We make no representations, however, that your notes will be listed or, if listed, will remain listed
for the entire term of your notes. 
 Can the maturity date be postponed if a Market Disruption Event occurs? 
 No. See the section entitled “Description of the Notes—Market Disruption Events.” 
 Does ERISA impose any limitations on purchases of the notes? 
 Yes. An employee benefit plan subject to the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974, as amended (commonly referred to as 
 S-8 

  

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“ERISA”), or a plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as amended, or the “Code,” including
individual retirement accounts, individual retirement annuities, or Keogh plans, or any entity the assets of which are deemed to be “plan assets” under the ERISA regulations, should not purchase, hold, or dispose of the notes unless that
plan or entity has determined that its purchase, holding, or disposition of the notes will not constitute a prohibited transaction under ERISA or Section 4975 of the Code. 
 Any plan or entity purchasing the notes will be deemed to be representing that it has made that determination, or that a prohibited transaction class
exemption (“PTCE”) or other statutory or administrative exemption exists and can be relied upon by such plan or entity. See the section entitled “ERISA Considerations.” 
 Are there any risks associated with your investment? 
 Yes. An investment in the notes is subject to risk. The notes are not principal protected. Please refer to the section entitled “Risk Factors” beginning on page S-10 of this product supplement and page S-4 of the prospectus
supplement. If the applicable term sheet or index supplement sets forth any additional risk factors, you should read those carefully before purchasing any notes. 
 S-9 

  

Table of Contents

 RISK FACTORS 
 Your investment in the notes entails significant risks. Your decision to purchase the notes should be made only after carefully considering the risks
of an investment in the notes, including those discussed below, with your advisors in light of your particular circumstances. The notes are not an appropriate investment for you if you are not knowledgeable about significant elements of the notes or
financial matters in general. 
 General Risks Relating to the Notes 
 If the notes are not called, your investment may result in a loss; there is no guaranteed return of principal. The notes are not principal
protected. The notes differ from ordinary debt securities in that we will not pay you a fixed amount at maturity. Our payout to you will depend on whether your notes are called prior to the maturity date, and the direction of and percentage change
in the value of the Market Measure on the relevant Observation Dates. If your notes are not called, you will receive on the maturity date a Redemption Amount that may be less than or equal to, but will not be greater than, the Original Offering
Price of your notes. As a result, you may lose all or a substantial portion of your investment. 
 If your notes are not called, and the
Ending Value is below (or, in the case of bear notes, above) the Threshold Value on the final Observation Date, the Redemption Amount will be reduced by an amount equal to the percentage decrease below the Threshold Value (or, in the case of bear
notes, the percentage increase above the Threshold Value) relative to the Starting Value, multiplied by the Leverage Factor. As a result, you may receive less, and possibly substantially less, than the Original Offering Price. The Leverage Factor
may equal 100% (in which case the downside would be unleveraged), and will not be greater than a number that, considering the Threshold Value, could cause you to lose more than your entire investment in the notes. 
 Your return, if any, is limited to the Call Premium plus any interest paid on the notes. If the Observation Level of the Market Measure on any of
the Observation Dates is greater than or equal to (or, in the case of bear notes, less than or equal to) the Call Level, the notes will be automatically called by us on that Observation Date. If the notes are automatically called, the amount payable
on the notes will be the Call Amount, which is equal to the Original Offering Price plus the Call Premium applicable to the relevant Observation Date on which the notes are called (in addition to any accrued and unpaid interest in the case of
interest bearing notes), regardless of the appreciation (or, in the case of bear notes, depreciation) of the Market Measure. In other words, unless the applicable term sheet provides that we will pay interest on your notes, your return is capped at
the Call Premium. 
 Your yield may be less than the yield on a conventional debt security of comparable maturity. Any yield that you
receive on the notes, which could be negative, may be less than the return you would earn if you purchased a conventional debt security with the same maturity date. As a result, your investment in the notes may not reflect the full opportunity cost
to you when you consider factors that affect the time value of money. 
 Your investment return may be less than a comparable investment
directly in the Market Measure, or the components included in the Market Measure. Your return on the notes, if any, will not exceed the applicable Call Amount plus any interest paid on the notes. In contrast, a direct investment in the Market
Measure or the components of the Market Measure would allow you to receive the full benefit of any appreciation in the value of those components. Similarly, in the case of bear notes, a strategy such as a short sale could allow you to receive the
full benefit of any depreciation in the applicable value of the Market Measure or components of the Market Measure. Your return on the notes, if any, also will not reflect the return you would realize if you actually owned those securities or
commodities underlying the 

  

 S-10 

Table of Contents

 
Market Measure and received the dividends paid or distributions made on them because, unless otherwise set forth in the applicable term sheet, the
Observation Level on various Observation Dates, and the Ending Value, will be calculated without taking into consideration the value of dividends paid or distributions made on those underlying components, or any other rights with respect to the
components of the Market Measure. 
 In addition, in certain instances, the Market Measure may consist of or include one or more equity
indices that are traded in a non-U.S. currency, such as the euro or the Japanese yen. In such instances, if the value of that currency increases against the U.S. dollar during the term of your notes, you may not obtain the benefit of that increase,
which you would have received if you had owned the securities included in the applicable index or indices. In contrast, in the case of bear notes, you may not receive the benefit of any decreases in the value of the applicable currency. 

You must rely on your own evaluation of the merits of an investment linked to the applicable Market Measure. In the ordinary course of their
businesses, our affiliates may express views on expected movements in a Market Measure, the components of a Market Measure, or an index underlying an exchange traded fund Market Measure (the “Underlying Index”), as the case may be, and may
do so at present or in the future. These views or reports may be communicated to our clients and clients of our affiliates. However, these views are subject to change from time to time. Moreover, other professionals who deal in markets relating to a
Market Measure may at any time have significantly different views from those of our affiliates. For these reasons, you are encouraged to derive information concerning a Market Measure, its components, and any applicable Underlying Index from
multiple sources, and you should not rely on the views expressed by our affiliates. 
 In seeking to provide you with what we believe to
be commercially reasonable terms for the notes while providing MLPF&S or any other selling agents with compensation for its services, we have considered the costs of developing, hedging, and distributing the notes. In determining the
economic terms of the notes, and consequently the potential return on the notes to you, a number of factors are taken into account. Among these factors are certain costs associated with creating, hedging, and offering the notes. In structuring the
economic terms of the notes, we seek to provide you with what we believe to be commercially reasonable terms and to provide MLPF&S or any other applicable selling agent with compensation for its services in developing the securities. The price,
if any, at which you could sell your notes in a secondary market transaction is expected to be affected by the factors that we considered in setting the economic terms of the notes, namely the selling agent commissions or underwriting discount paid
in respect of the notes and other costs associated with the notes, and compensation for developing and hedging the product. The quoted price of any of our affiliates for the notes, or the listed price in the case of listed notes, could be higher or
lower than the Original Offering Price. 
 Assuming there is no change in the value of the Market Measure to which your notes are linked and
no change in market conditions or any other relevant factors, the price, if any, at which MLPF&S or another purchaser might be willing to purchase your notes in a secondary market transaction is expected to be lower than the Original Offering
Price. This is due to, among other things, the fact that the Original Offering Price included, and secondary market prices are likely to exclude, selling agent commissions or underwriting discounts paid with respect to, and the developing and
hedging costs associated with, the notes. 
 We cannot assure you that a trading market for your notes will ever develop or be maintained.
Unless otherwise set forth in the applicable term sheet, we will not list the notes on any securities exchange. Even if an application were made to list your notes, we cannot assure you that the application will be approved or that your notes
will be listed and, if listed, that it will remain listed for the entire term of the notes. We cannot predict how the notes will 

  

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trade in any secondary market, or whether that market will be liquid or illiquid. You should be aware that the listing of the notes on any securities
exchange will not necessarily ensure that a trading market will develop for the notes, and if a trading market does develop, that there will be liquidity in the trading market. 
 The development of a trading market for the notes will depend on our financial performance and other factors, including changes in the value of the
Market Measure. The number of potential buyers of your notes in any secondary market may be limited. We anticipate that one or more of the selling agents will act as a market-maker for the notes that it offers, but it is not required to do so. Any
such selling agent may discontinue its market-making activities as to any series of notes at any time. To the extent that a selling agent engages in any market-making activities, it may bid for or offer any series of the notes. Any price at which
the selling agent may bid for, offer, purchase, or sell any notes may differ from the values determined by pricing models that may be used by that selling agent, whether as a result of dealer discounts, mark-ups, or other transaction costs. These
bids, offers, or completed transactions may affect the prices, if any, at which those notes might otherwise trade in the market. 
 In
addition, if at any time the applicable selling agent were to cease acting as a market-maker as to any series of the notes, it is likely that there would be significantly less liquidity in the secondary market. In such a case, the price at which
those notes could be sold likely would be lower than if an active market existed. 
 The amount that you receive at maturity or upon a
call will not be affected by all developments relating to the Market Measure. The values of the Market Measure during the term of the notes other than on the Observation Dates will not be reflected in the amount that you receive at maturity or
upon a call. The calculation agent will calculate the amount to be paid at maturity or upon a call solely by reference to the value of the Market Measure on the applicable Observation Dates. No other values of the Market Measure will be taken into
account. As a result, your notes may not be called, and you may receive at maturity less than the Original Offering Price of your notes, even if the value of the Market Measure has increased (or in the case of bear notes, decreased) at certain times
during their term before decreasing to a value below the applicable Call Level and Threshold Value (or, in the case of bear notes, increasing to a value above the Call Level or Threshold Value) on the applicable Observation Dates. 
 If the Market Measure to which your notes are linked is a Basket, changes in the value of one or more Basket Components may be offset by changes in
the value of one or more other Basket Components. The Market Measure of your notes may consist of a Basket. In such a case, a change in the value of one or more of the Basket Components may not correlate with changes in the value of one or more
of the other Basket Components. The value of one or more Basket Components may increase while the value of one or more of the other Basket Components may not increase as much, or may even decrease. The opposite changes may occur in the case of bear
notes. Therefore, in calculating the Market Measure on any Observation Date, increases (or in the case of bear notes, decreases) in the value of one Basket Component may be moderated, or wholly offset, by lesser increases or decreases (or in the
case of bear notes, lesser decreases or increases) in the value of one or more of the other Basket Components. If the weightings of the applicable Basket Components are not equal, changes in the value of the Basket Components which are more heavily
weighted could have a disproportionately adverse impact upon your notes. 
 The respective publishers of the Market Measures, or the
sponsors or publishers of exchange traded fund Market Measures or the Underlying Index (each a “Market Measure Publisher”), may adjust such Market Measures, any component of a Market Measure, or the Underlying Index in a way that affects
its value, and these respective Market 

  

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Measure Publishers have no obligation to consider your interests. The Market Measure Publishers can add, delete, or substitute the components included
in a Market Measure or Underlying Index or make other methodological changes that could change the value of such Market Measure or Underlying Index. You should realize that the changing of companies, commodities, or other components included in a
Market Measure or Underlying Index may affect such Market Measure or Underlying Index, as a newly added component may perform significantly better or worse than the component it replaces. Additionally, a Market Measure Publisher may alter,
discontinue, or suspend calculation or dissemination of its Market Measure or Underlying Index. Any of these actions could adversely affect the value of the notes. In the case of an exchange traded fund Market Measure, this could result in the early
redemption of your notes. See “Description of the Notes—Anti-Dilution and Discontinuance Adjustments for Exchange Traded Fund Linked Notes—Discontinuance of the Index Fund.” The Market Measure Publishers will have no obligation
to consider your interests in calculating or revising the Market Measure or Underlying Index. 
 Exchange rate movements may impact the
value of the notes. The notes will be denominated in U.S. dollars. If the value of a Market Measure, or any component of the Market Measure or an Underlying Index, is traded in a currency other than U.S. dollars and, for purposes of the Market
Measure or the Underlying Index, is converted into U.S. dollars or another currency, then the amount payable on the notes on the maturity date or upon a call may depend in part on the relevant exchange rates. If the value of the U.S. dollar
increases (or, in the case of bear notes, decreases) against the currencies of the Market Measure, its components, or the Underlying Index, the value of the Market Measure, its underlying components, or the Underlying Index may be adversely
affected. In such a case, the value of the applicable Market Measure may not reach the Call Level as of any Observation Date, your notes therefore will not be called, and any Redemption Payment that you receive based upon the Ending Value on the
final Observation Date may be less than the Original Offering Price of the notes. 
 Unless otherwise stated in the applicable term sheet,
the payment at maturity, or upon an automatic call of the notes, will not be adjusted as a result of changes in the applicable exchange rates between those currencies and the U.S. dollar. Exchange rate movements may be particularly impacted by
existing and expected rates of inflation, existing and expected interest rate levels, the balance of payments, and the extent of governmental surpluses or deficits in the countries relevant to the Market Measure and its components, or the Underlying
Index, and the United States. All of these factors are in turn sensitive to the monetary, fiscal, and trade policies pursued by the governments of various countries and the United States and other countries important to international trade and
finance. 
 If you attempt to sell notes prior to maturity, their market value, if any, will be affected by various factors that
interrelate in complex ways, and their market value may be less than their Original Offering Price. Unlike savings accounts, certificates of deposit, and other similar investment products, you have no right to have your notes redeemed prior to
maturity. If you wish to liquidate your investment in the notes prior to maturity, your only option would be to sell them. At that time, there may be an illiquid market for your notes, or no market at all. Even if you were able to sell your notes,
there are many factors outside of our control that may affect their market value, some of which, but not all, are stated below. Some of these factors are interrelated in complex ways. As a result, the effect of any one factor may be offset or
magnified by the effect of another factor. The following paragraphs describe the expected impact on the market value of the notes from a change in a specific factor, assuming all other conditions remain constant. 
  

	 	•	 	 Value of the Market Measure. Whether or not your notes will be called prior to the maturity date and, if not called, the Redemption Amount, is determined by
reference to the value of the Market Measure on the applicable Observation Dates. 

  

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Consequently, the market value of the notes at any time will depend substantially on the value of the Market Measure. The value of the Market Measure will be
influenced by complex and interrelated political, economic, financial, and other factors that affect the capital markets generally, the markets on which the securities or commodities of the Market Measure and, in the case of exchange traded fund
Market Measures, the components of the Underlying Index, are traded, and the market segments of which these securities or commodities are a part. Even if the value of the Market Measure increases (or in the case of bear notes, decreases) after the
applicable pricing date, if you are able to sell your notes before their maturity date, you may receive substantially less than the amount that would be payable upon an automatic redemption or at maturity based on that value because of the
anticipation that the value of the Market Measure will continue to fluctuate until the Observation Level or Ending Value, as applicable, is determined. If you sell your notes when the value of the Market Measure is less than, or not sufficiently
above the applicable Call Level (or in the case of bear notes is more than, or not sufficiently less than the Call Level), then you may receive less than the Original Offering Price of your notes. In general, the market value of the notes will
decrease as the value of the Market Measure decreases, and increase as the value of the Market Measure increases, while the reverse will be the case as to bear notes. However, as the value of the Market Measure increases or decreases, the market
value of the notes is not expected to increase or decrease at the same rate. In addition, because the amount payable on the notes upon an automatic redemption will not exceed the applicable Call Amount, we do not expect that the notes will trade in
the secondary market above that Call Amount. Similarly, if the notes are not automatically called on any Observation Date, your return will be limited to the Original Offering Price, 

  

	 	•	 	 Volatility of the Market Measure. Volatility is the term used to describe the size and frequency of market fluctuations. The volatility of the Market Measure
during the term of the notes may vary. In addition, an unsettled international environment and related uncertainties may result in greater market volatility, which may continue over the term of notes. Increases or decreases in the volatility of the
Market Measure may have an adverse impact on the market value of the notes. 

  

	 	•	 	 Economic and Other Conditions Generally. The general economic conditions of the capital markets in the United States, as well as geopolitical conditions and
other financial, political, regulatory, and judicial events that affect stock markets and commodities markets generally, may affect the value of the Market Measure and the value of the notes. If the Market Measure includes one or more indices or
commodities that have returns that are calculated based upon prices in one or more non-U.S. markets (a “non-U.S. Market Measure”), the value of your notes may also be affected by similar events in those markets.

  

	 	•	 	 Interest Rates. We expect that changes in interest rates will affect the market value of notes. In general, if U.S. interest rates increase, we expect that
the market value of the notes will decrease, and, conversely, if U.S. interest rates decrease, we expect that the market value of the notes will increase. The level of prevailing interest rates also may affect the U.S. economy and any applicable
market outside of the United States, and, in turn, the value of the Market Measure. If the Market Measure is, or any components of any Market Measure are, traded in currencies other than the U.S. dollar, the level of interest rates in the relevant
foreign countries may also affect their economies and in turn the value of the related Market Measure or component, and, thus, the market value of the notes may be adversely affected. 

  

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	 	•	 	 Dividend Yields. In general for equity-based Market Measures, if dividend yields on the securities included in the Market Measure increase, we anticipate
that the market value of the notes will decrease; conversely, if those dividend yields decrease, we anticipate that the market value of your notes will increase. We anticipate the opposite to apply with respect to bear notes.

  

	 	•	 	 Exchange Rate Movements and Volatility. Foreign currency exchange rates represent the number of units of one currency (an “underlying currency”)
for which one unit of another currency can be exchanged (a “base currency”). An exchange rate increases when the value of an underlying currency decreases relative to the applicable base currency, and decreases when the value of the
underlying currency increases relative to that base currency. If the Market Measure of your notes includes any non-U.S. Market Measure, changes in, and the volatility of, the exchange rates between the U.S. dollar and the relevant non-U.S. currency
or currencies could have a negative impact on the value on your notes. The amount payable on the notes on the maturity date, and whether your notes will be automatically called on any Observation Date, may depend in part on the relevant exchange
rates. 

  

	 	•	 	 Relationship Between Exchange Rates and the Market Measure. The correlation between the relevant currency exchange rate and any applicable non-U.S. Market
Measure reflects the extent to which a percentage change in that exchange rate corresponds to a percentage change in the applicable non-U.S. Market Measure. If the Market Measure of your notes includes a non-U.S. Market Measure, changes in these
correlations may have a negative impact on the value of your notes. 

 In general, assuming all relevant factors are held
constant, we anticipate that the effect on the market value of any series of the notes based on a given change in most of the factors listed above will be less if it occurs later in the term of the notes than if it occurs earlier in their term.
However, we expect that the effect on the market value of the notes of a given change in the value of the Market Measure will be greater if it occurs closer to an Observation Date than if it occurs at other points in the term of the notes.

 Payments on the notes are subject to our credit risk, and changes in our credit ratings are expected to affect the value of the
notes. The notes are our senior unsecured debt securities. As a result, your receipt of the amount payable to you upon an automatic call of the notes or at maturity is dependent upon our ability to repay our obligations on the
applicable redemption date or the maturity date. This will be the case even if the value of the Market Measure increases (or, in the case of bear notes, decreases) after the pricing date. No assurance can be given as to what our financial condition
will be on the applicable redemption date or maturity date. 
 In addition, our credit ratings are an assessment by ratings agencies of our
ability to pay our obligations. Consequently, our perceived creditworthiness and actual or anticipated changes in our credit ratings prior to the maturity date may affect the market value of the notes. However, because your return on the notes
depends upon factors in addition to our ability to pay our obligations, such as the value of the Market Measure, an improvement in our credit ratings will not reduce the other investment risks related to the notes. 
 Purchases and sales by us and our affiliates may affect your return. We and our affiliates may from time to time buy or sell the Market Measures,
components of Market Measures or an Underlying Index, or futures or options contracts on Market Measures or components of the Market Measures or an Underlying Index for our own accounts for business reasons. We also expect to enter into these
transactions in connection with hedging our 

  

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obligations under the notes. These transactions could affect the value of these components and, in turn, the value of a Market Measure or Underlying Index in
a manner that could be adverse to your investment in the notes. Any purchases or sales by us, our affiliates, or others on our behalf on or before the pricing date of the notes may temporarily increase or decrease the values of a Market Measure, an
Underlying Index, or a component of a Market Measure or an Underlying Index. Temporary increases or decreases in the market values of the Market Measure or a component of a Market Measure may also occur as a result of the purchasing activities of
other market participants. Consequently, the values of such Market Measure or component may change subsequent to the pricing date of an issue of notes, affecting the value of the Market Measure and therefore the market value of the notes.

 Our trading and hedging activities may create conflicts of interest with you. We or one or more of our affiliates, including
MLPF&S, may engage in trading activities related to the Market Measure and the securities, commodities, or other assets represented by the Market Measure that are not for your account or on your behalf. We and our affiliates from time to time
may buy or sell securities, commodities, or other assets represented by the Market Measure or futures or options contracts on the applicable indices or commodities for our own accounts, for business reasons, or in connection with hedging our
obligations under notes. We also may issue, or our affiliates may underwrite, other financial instruments with returns based upon the applicable Market Measure. These trading and underwriting activities could affect the Market Measure in a manner
that would be adverse to your investment in the notes. 
 We expect to enter into one or more arrangements to hedge the market risks
associated with our obligation to pay the amounts due under notes. We may seek competitive terms in entering into the hedging arrangements for the notes, but are not required to do so, and we may enter into such hedging arrangements with one of our
subsidiaries or affiliates. Such hedging activity is expected to result in a profit to those engaging in the hedging activity, which could be more or less than initially expected, but which could also result in a loss for the hedging counterparty.

 We or our affiliates may enter into these transactions on or prior to each pricing date, in order to hedge some or all of our anticipated
obligations under the notes. This hedging activity could increase (or in the case of bear notes, decrease) the value of the Market Measure on the applicable pricing date. 
 In addition, from time to time during the term of each series of notes and in connection with the determination of the Ending Value, or upon a call, we or our affiliates may enter into additional hedging transactions
or adjust or close out existing hedging transactions. We or our affiliates also may enter into hedging transactions relating to other notes or instruments that we issue, some of which may have returns calculated in a manner related to that of
particular notes. We or our affiliates will price these hedging transactions with the intent to realize a profit, considering the risks inherent in these hedging activities, whether the value of notes increases or decreases. However, these hedging
activities may result in a profit that is more or less than initially expected, or could result in a loss. 
 These trading activities may
present a conflict of interest between your interest in your notes and the interests we and our affiliates may have in our proprietary accounts, in facilitating transactions, including block trades, for our other customers, and in accounts under our
management. These trading activities, if they influence the Market Measure or secondary trading in the notes, could be adverse to your interests as a beneficial owner of the notes. 
 Our hedging activities may affect your return at maturity and the market value of notes. One or more of our affiliates, including MLPF&S, may
engage in hedging activities that may affect the value of the Market Measure. Accordingly, our hedging activities may increase 

  

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or decrease the market value of the notes prior to maturity, including on any Observation Date, and the payment that you may receive at maturity. In
addition, we or one or more of our affiliates, including MLPF&S, may purchase or otherwise acquire a long or short position in notes. We or one of our affiliates, including MLPF&S, may hold or resell notes. Although we have no reason to
believe that any of those activities will have a material impact on the value of the Market Measure, we cannot assure you that these activities will not affect that value and the market value of the notes prior to maturity, the amount you may
receive at maturity, the Redemption Amount, or whether the notes will be called. 
 There may be potential conflicts of interest involving
the calculation agent. We have the right to appoint and remove the calculation agent. One of our affiliates will be the calculation agent for the notes and, as such, will determine each Observation Level, the Starting Value, the Threshold Value,
the Ending Value, the Call Amount, and the Redemption Amount. Under some circumstances, these duties could result in a conflict of interest between our affiliate’s status as our affiliate and its responsibilities as calculation agent. These
conflicts could occur, for instance, in connection with the calculation agent’s determination as to whether a “Market Disruption Event” has occurred, or in connection with judgments that it would be required to make if the publication
of an index is discontinued. See the sections entitled “Description of the Notes — Market Disruption Events,” “—Anti-Dilution and Discontinuance, Adjustments for Exchange Traded Fund Linked Notes,”
“—Adjustments to a Market Measure” and “—Discontinuance of a Non-Exchange Traded Fund Market Measure.” The calculation agent will be required to carry out its duties in good faith and using its reasonable judgment.
However, because we expect to control the calculation agent, potential conflicts of interest could arise. 
 The U.S. federal income tax
consequences of the notes are uncertain, and may be adverse to a holder of the notes. No statutory, judicial, or administrative authority directly addresses the characterization of the notes or securities similar to the notes for U.S. federal
income tax purposes. As a result, significant aspects of the U.S. federal income tax consequences of an investment in the notes are not certain. If the notes do not provide for the payment of interest, then under the terms of the notes, you will
have agreed with us to treat the notes as a callable single financial contract, as described under “U.S. Federal Income Tax Summary—General.” If the Internal Revenue Service (the “IRS”) were successful in asserting an
alternative characterization for the notes, the timing and character of income or loss with respect to the notes may differ. No ruling will be requested from the IRS with respect to the notes and no assurance can be given that the IRS will agree
with the statements made in the section entitled “U.S. Federal Income Tax Summary.” 
 You are urged to consult with your own tax
advisor regarding all aspects of the U.S. federal income tax consequences of investing in the notes. 
 Risks Relating to Equity-Based
Market Measures 
 If the Market Measure to which your notes are linked is equity-based, you will have no rights as a securityholder,
you will have no rights to receive any of the securities represented by the Market Measure, and you will not be entitled to dividends or other distributions by the issuers of those securities. The notes are our debt securities. They are not
equity instruments, shares of stock, or securities of any other issuer. Investing in the notes will not make you a holder of any of the securities represented by the Market Measure. You will not have any voting rights, any rights to receive
dividends or other distributions, or any other rights with respect to those securities. As a result, the return on your notes upon any automatic call or at maturity may not reflect the return you would realize if you actually owned those securities
and received the dividends paid or other distributions made in connection with them. This is because the calculation agent will calculate the amount payable to you upon any automatic call or on the maturity date by reference to the Observation

  

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Level of the Market Measure on the applicable Observation Date. Additionally, the values of certain equity based indices reflect only the prices of the
common stocks included in the Market Measure or its components and do not take into consideration the value of dividends paid on those stocks. Your notes will be paid in cash and you have no right to receive delivery of any of these securities.

 If the Market Measure to which your notes are linked includes stocks traded on foreign exchanges, your return may be affected by
factors affecting international securities markets. Equity-based Market Measures that include stocks traded on foreign exchanges are computed by reference to the value of the equity securities of companies listed on a foreign exchange or
exchanges. Therefore, the return on the notes will be affected by factors affecting the value of securities in the relevant non-U.S. markets. The relevant foreign securities markets may be more volatile than U.S. or other securities markets and may
be affected by market developments in different ways than U.S. or other securities markets. Direct or indirect government intervention to stabilize a particular securities market and cross-shareholdings in companies in the relevant foreign markets
may affect prices and the volume of trading in those markets. Also, there is generally less publicly available information about foreign companies than about U.S. companies that are subject to the reporting requirements of the SEC. Additionally,
accounting, auditing, and financial reporting standards and requirements in foreign countries differ from those applicable to U.S. reporting companies. 
 The prices and performance of securities of companies in foreign countries may be affected by political, economic, financial, and social factors in those regions. In addition, recent or future changes in government,
economic, and fiscal policies in the relevant jurisdictions, the possible imposition of, or changes in, currency exchange laws, or other laws or restrictions, and possible fluctuations in the rate of exchange between currencies, are factors that
could negatively affect the relevant securities markets. Moreover, the relevant foreign economies may differ favorably or unfavorably from the U.S. economy in economic factors such as growth of gross national product, rate of inflation, capital
reinvestment, resources, and self-sufficiency. 
 Unless otherwise set forth in the applicable term sheet, we do not control any company
included in an equity-based Market Measure and are not responsible for any disclosure made by any other company. We currently, or in the future, may engage in business with companies represented by an equity-based Market Measure. However,
neither we nor any of our affiliates, including MLPF&S, have the ability to control the actions of any of these companies or assume any responsibility for the adequacy or accuracy of any publicly available information about any of these
companies, unless (and only to the extent that) our securities or the securities of our affiliates are represented by that Market Measure. In addition, neither we nor any of our affiliates are responsible for the calculation of any index represented
by a Market Measure. You should make your own investigation into the Market Measure and the companies represented by the applicable constituent securities. 
 Unless otherwise set forth in the applicable term sheet, none of the Market Measure Publishers, their affiliates, nor any company included in the Market Measure will be involved in any offering of the notes or will
have any obligation of any sort with respect to the notes. As a result, none of those companies will have any obligation to take your interests as holders of the notes into consideration for any reason, including taking any corporate actions that
might affect the value of the securities represented by the Market Measure or the value of the notes. 
 Our business activities relating
to the companies represented by an equity-based Market Measure may create conflicts of interest with you. We and our affiliates, including the MLPF&S, at the time of any offering of the notes or in the future, may engage in business with the
companies represented by an equity-based Market Measure, including making loans to, equity investments in, or providing investment banking, asset management, or other services to those companies, their affiliates, and their competitors. In
connection with these 

  

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activities, we may receive information about those companies that we will not divulge to you or other third parties. One or more of our affiliates have
published, and in the future may publish, research reports on one or more of these companies. This research is modified from time to time without notice and may express opinions or provide recommendations that are inconsistent with purchasing or
holding your notes. Any of these activities may affect the market value of your notes. We, or any of our affiliates, do not make any representation to any purchasers of the notes regarding any matters whatsoever relating to the issuers of the stocks
included in an equity-based Market Measure. Any prospective purchaser of the notes should undertake an independent investigation of the companies included in an equity-based Market Measure as in its judgment is appropriate to make an informed
decision regarding an investment in the notes. The composition of those companies does not reflect any investment recommendations from us or our affiliates. 
 Risks Relating to Commodity-Based Market Measures 
 If the Market Measure to which your notes are
linked is commodity-based, ownership of the notes will not entitle you to any rights with respect to any futures contracts or commodities included in or tracked by the Market Measure. If the Market Measure to which your notes are linked is
commodity-based, you will not own or have any beneficial or other legal interest in, and will not be entitled to any rights with respect to, any of the commodities or commodity futures included in such Market Measure. We will not invest in any of
the commodities or commodity futures contracts included in such Market Measure on behalf or for the benefit of holders of the notes. 
 The prices of commodities included in a commodity-based Market Measure may change unpredictably, affecting the value of your notes in unforeseeable ways. Trading in commodities is speculative and can be extremely volatile. Market
prices of the commodities may fluctuate rapidly based on numerous factors, including: changes in supply and demand relationships; weather; agriculture; trade; fiscal, monetary, and exchange control programs; domestic and foreign political and
economic events and policies; disease; technological developments; and changes in interest rates. These factors may affect the value of a commodity-based Market Measure and the value of the notes in varying ways, and different factors may cause the
value of the commodities, and the volatilities of their prices, to move in inconsistent directions at inconsistent rates. Additionally, certain commodity-based Market Measures may be concentrated in only a few, or even a single industry (e.g.,
energy). These Market Measures are likely to be more volatile than those comprised of a variety of commodities. 
 With respect to a
commodity-based Market Measure, suspension or disruptions of market trading in the applicable commodities and related futures markets may adversely affect the value of the notes. The commodity markets are subject to disruptions due to various
factors, including the lack of liquidity in the markets and government regulation and intervention. In addition, U.S. futures exchanges and some foreign exchanges have regulations that limit the amount of fluctuation in futures contract prices that
may occur during a single business day. These limits are generally referred to as “daily price fluctuation limits” and the maximum or minimum price of a contract on any given day as a result of these limits is referred to as a “limit
price.” Once the limit price has been reached in a particular contract, no trades may be made at a different price. Limit prices have the effect of precluding trading in a particular contract or forcing the liquidation of contracts at
disadvantageous times or prices. There can be no assurance that any such disruption or any other force majeure (such as an act of God, fire, flood, severe weather conditions, act of governmental authority, labor difficulty, etc.) will not have an
adverse affect on the value of or trading in the Market Measure, or the manner in which it is calculated, and therefore, the value of the notes. 
  

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 Notes linked to a commodity-based Market Measure will not be regulated by the U.S. Commodity Futures
Trading Commission (the “CFTC”). Unlike an investment in the notes linked to a commodity-based Market Measure, an investment in a collective investment vehicle that invests in futures contracts on behalf of its participants may be
regulated as a commodity pool and its operator may be required to be registered with and regulated by the CFTC as a “commodity pool operator” (a “CPO”). Because notes linked to a commodity-based Market Measure will not be
interests in a commodity pool, such notes will not be regulated by the CFTC as a commodity pool, we will not be registered with the CFTC as a CPO and you will not benefit from the CFTC’s or any non-U.S. regulatory authority’s regulatory
protections afforded to persons who trade in futures contracts or who invest in regulated commodity pools. Notes linked to a commodity-based Market Measure will not constitute investments by you or by us on your behalf in futures contracts traded on
regulated futures exchanges, which may only be transacted through a person registered with the CFTC as a “futures commission merchant” (“FCM”). We are not registered with the CFTC as an FCM and you will not benefit from the
CFTC’s or any other non-U.S. regulatory authority’s regulatory protections afforded to persons who trade in futures contracts on a regulated futures exchange through a registered FCM. 
 A commodity-based Market Measure may include futures contracts on foreign exchanges that are less regulated than U.S. markets. A commodity-based
Market Measure may include futures contracts on physical commodities on exchanges located outside the U.S. The regulations of the CFTC do not apply to trading on foreign exchanges, and trading on foreign exchanges may involve different and greater
risks than trading on U.S. exchanges. Certain foreign markets may be more susceptible to disruption than U.S. exchanges due to the lack of a government-regulated clearinghouse system. Trading on foreign exchanges also involves certain other risks
that are not applicable to trading on U.S. exchanges. Those risks include: (a) exchange rate risk relative to the U.S. dollar; (b) exchange controls; (c) expropriation; (d) burdensome or confiscatory taxation; and
(e) moratoriums, and political or diplomatic events. It will also likely be more costly and difficult for participants in these markets to enforce the laws or regulations of a foreign country or exchange, and it is possible that the foreign
country or exchange may not have laws or regulations which adequately protect the rights and interests of investors in the Market Measure. 
 Risks Relating to Exchange Traded Fund Market Measures 
 If the Market Measure to which your notes are linked is an
exchange traded fund, there are liquidity and management risks associated with the Market Measure. Although shares of the Market Measure will be listed for trading on a securities exchange and a number of similar products have been traded on
various exchanges for varying periods of time, there is no assurance that an active trading market will continue for the shares of the Market Measure or that there will be liquidity in the trading market. 
 The Market Measure is subject to management risk, which is the risk that the investment adviser’s investment strategy, the implementation of which
is subject to a number of constraints, may not produce the intended results. 
 With respect to exchange traded fund Market Measures, we
cannot control actions by the investment adviser which may adjust the Market Measure in a way that could adversely affect the value of the notes and the amount payable on the notes, and the investment adviser has no obligation to consider your
interests. The policies of the investment adviser concerning the calculation of the Market Measure’s net asset value, additions, deletions, or substitutions of securities or other investments held by the Market Measure and the manner in
which changes affecting the Underlying Index are reflected in the Market Measure could affect the market price per share of the Market Measure and, therefore, the amount payable on the notes upon automatic call or on the maturity date and the market

  

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value of the notes and before maturity or automatic call. The amount payable on your notes and its value could also be affected if the investment adviser
changes these policies, for example, by changing the manner in which it calculates the Market Measure’s net asset value, or if the investment adviser discontinues or suspends calculation or publication of the Market Measure’s net asset
value, in which case it may become difficult to determine the value of your note. If events such as these occur or if the closing price per share of the Market Measure is not available on an Observation Date, the calculation agent may determine the
closing price per share of the Market Measure on such Observation Date; as a result, the calculation agent would determine whether the notes will be called on any Observation Date, and/or the Redemption Amount payable on the maturity date, in a
manner it considers appropriate, in its sole discretion. 
 If the Market Measure to which your notes are linked is an exchange traded
fund, the performance of the Market Measure and the performance of the Underlying Index may vary. The performance of the Market Measure and that of its Underlying Index generally will vary due to transaction costs, certain corporate actions, and
timing variances. If the Market Measure maintains a “representative sampling” strategy as to the Underlying Index, the performance of the Market Measure will differ to some degree from that of the Underlying Index. 
 In addition, because the shares of the Market Measure are traded on a securities exchange and are subject to market supply and investor demand, the
market value of one share of the Market Measure may differ from its net asset value per share; shares of the Market Measure may trade at, above, or below their net asset value per share. 
 For the foregoing reasons, the performance of the Market Measure may not match the performance of its Underlying Index over the same period. Because of
this variance, the return on the notes to the extent dependent on the return of the Market Measure may not be the same as an investment directly in the securities or other investments included in the Underlying Index or the same as a debt security
with a payment at maturity linked to the performance of the Underlying Index. 
 If the Market Measure to which your notes are linked is
an exchange traded fund, time zone differences between the cities where the Underlying Index and Market Measure trade may create discrepancies in trading levels. As a result of the time zone difference, if applicable, between the cities where
the securities comprising the Underlying Index trade and where the shares of the Market Measure trade, there may be discrepancies between the values of the Underlying Index and the trading prices of the notes. In addition, there may be periods when
the foreign securities markets are closed for trading (for example during holidays in a country other than the United States) that may result in the values of the Underlying Index remaining unchanged for multiple trading days in the city where the
shares of the Market Measure trade. Conversely, there may be periods in which the foreign securities markets are open, but the securities market on which the Market Measure trades is closed. 
 If the Market Measure to which your notes are linked is an exchange traded fund, risks associated with the Underlying Index, or underlying assets of
the exchange traded fund, will affect the share price of the Market Measure and hence, the value of the notes. Exchange traded funds are funds which may hold a variety of underlying assets, including stocks or bonds, and which performance may be
designed to track the performance of an Underlying Index. While the notes are linked to the exchange traded fund Market Measure and not to its underlying assets or Underlying Index, risks associated with the underlying assets or Underlying Index
will affect the share price of the Market Measure and hence the value of the notes. Some of the risks that relate to an Underlying Index include those discussed above in this product supplement in relation to equity based- and commodity-based Market
Measures, which you should review before investing in the notes. 
  

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 Other Risk Factors Relating to the Applicable Market Measure 
 The applicable term sheet or index supplement may set forth additional risk factors as to the Market Measure that you should review prior to purchasing
the notes. 
  

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 USE OF PROCEEDS 
 We will use the net proceeds we receive from the sale of notes for the purposes described in the accompanying prospectus under “Use of
Proceeds.” In addition, we expect that we or our affiliates may use a portion of the net proceeds to hedge our obligations under notes. 
  

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 DESCRIPTION OF THE NOTES 
 General 
 Each series of notes will be part of a
series of medium-term notes entitled “Medium-Term Notes, Series L” that will be issued under the Senior Indenture, as amended and supplemented from time to time. The Senior Indenture is described more fully in the prospectus and prospectus
supplement. The following description of the notes supplements the description of the general terms and provisions of the notes and debt securities set forth under the headings “Description of the Notes” in the prospectus supplement and
“Description of Debt Securities” in the prospectus. These documents should be read in connection with the applicable term sheet. 
 The aggregate principal amount of each series of notes will be set forth in the applicable term sheet. 
 The notes are not
principal protected. 
 Unless automatically called prior to the maturity date according to its terms, the notes will mature on the maturity
date set forth in the applicable term sheet. We cannot otherwise redeem the notes on any earlier date, except as described below under “—Anti-Dilution and Discontinuance Adjustments for Exchange Traded Fund Linked Notes—Discontinuance
of the Index Fund.” 
 The notes are not subject to any sinking fund. 
 We will issue the notes in the denominations of whole units, each with a specified Original Offering Price. The CUSIP number for each series of notes
will be set forth in the applicable term sheet. You may transfer notes only in whole units. 
 Interest 
 Unless otherwise specified in the applicable term sheet, the notes will not bear interest. If the notes provide for the payment of interest, the
applicable term sheet will set forth the relevant terms on which you will receive interest payments, including, but not limited to, (a) whether the interest rate will be fixed or variable, and if fixed, the rate or rates per annum, (b) the
method or basis for determining any variable interest rates, (c) the interest payment dates and record dates, (d) the interest reset dates for variable interest rates, (e) any contingencies relating to such interest becoming payable
to holders of the notes, and (f) the business day convention. 
 Automatic Call 
 The notes will be called, in whole but not in part, if the Observation Level of the Market Measure on any Observation Date is greater than or equal to
(or, in the case of bear notes, less than or equal to) the Call Level set forth in the applicable term sheet. The “Call Level” is the value of the Market Measure which will trigger an automatic call on an Observation Date. 
 If the notes are called, for each unit of notes that you own on the relevant Observation Date, we will pay you the Call Amount. The “Call
Amount” will be equal to the Original Offering Price per unit plus the Call Premium per unit. The “Call Premium” will be a percentage of the Original Offering Price. 
  

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 The Observation Dates and the related Call Amounts and Call Premium will be specified in the applicable
term sheet. 
 Unless otherwise specified in the applicable term sheet, if the notes are automatically called on an Observation Date other
than the final Observation Date, we will redeem the notes and pay the applicable Call Amount on the fifth Banking Business Day after the applicable Observation Date, subject to postponement as described below. If the notes are called on the final
Observation Date, we will redeem the notes and pay the Call Amount on the maturity date. 
 Unless otherwise indicated in the applicable term
sheet, if an Observation Date (other than a final Observation Date) is not a Market Measure Business Day (as defined below), or a trading day in the case of notes linked to an exchange traded fund, or if there is a Market Disruption Event on such
day, the applicable Observation Date will be the immediately succeeding Market Measure Business Day or trading day, as applicable, during which no Market Disruption Event shall have occurred or is continuing; provided that the Observation Level will
not be determined on a date later than the tenth scheduled Market Measure Business Day after the scheduled Observation Date, and if such day is not a Market Measure Business Day, or if there is a Market Disruption Event on such date, the calculation
agent will determine the Observation Level (or, if not determinable, estimate) in a manner which is considered commercially reasonable under the circumstances on such tenth scheduled Market Measure Business Day. 
 If the final Observation Date is not a Market Measure Business Day (or, if the Market Measure is based on an exchange traded fund, a trading day) or if
there is a Market Disruption Event on such day, the final Observation Date will be the immediately succeeding Market Measure Business Day (or, if the Market Measure is based on an exchange traded fund, the immediately succeeding trading day) during
which no Market Disruption Event shall have occurred or is continuing; provided that the closing value of the Market Measure will be determined (or, if not determinable, estimated) by the calculation agent in a manner which is considered
commercially reasonable under the circumstances on a date no later than the second scheduled Market Measure Business Day prior to the maturity date, regardless of the occurrence of a Market Disruption Event on that scheduled Market Measure Business
Day. In such an event, for commodity-based Market Measures, the value of the Market Measure will be determined using the “Market Disruption Calculation” described below under “—Market Disruption Events—Commodity-Based Market
Measures”. 
 If, due to a Market Disruption Event or otherwise, an Observation Date (other than the final Observation Date) is
postponed, the date on which the Call Amount for such Observation Date will be paid, if applicable, will be the fifth Banking Business Day following the Observation Date as postponed, unless otherwise specified in the applicable term sheet.

 Unless otherwise specified in the applicable term sheet, a “Banking Business Day” is any day other than a day on which banking
institutions in New York, New York are authorized or required by law, regulation, or executive order to close or a day on which transactions in U.S. dollars are not conducted. 
 Unless otherwise specified in the applicable term sheet, a “Market Measure Business Day” means a day on which (1) the New York Stock
Exchange (the “NYSE”) and The NASDAQ Stock Market (the “NASDAQ”), or their successors, are open for trading and (2) the Market Measure or any successor thereto is calculated and published. 
 Unless otherwise specified in the applicable term sheet, a “trading day” is a day, as determined by the calculation agent, on which trading is
generally conducted (or was scheduled to have been generally conducted, but for the occurrence of a Market Disruption 

  

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Event) on the NYSE, the NASDAQ, the Chicago Mercantile Exchange, the Chicago Board Options Exchange, and in the over-the-counter market for equity securities
in the United States, or any successor exchange or market, or in the case of a security traded on one or more non-U.S. securities exchanges or markets, on the principal non-U.S. securities exchange or market for such security. 
 Payment on the Maturity Date 
 If the notes (other
than bear notes) are not called prior to the maturity date, then subject to our credit risk as issuer of the notes, and unless the applicable term sheet provides otherwise, you will receive a Redemption Amount per unit of notes that you hold,
denominated in U.S. dollars. The Redemption Amount will be calculated as follows: 
  

	 	•	 	 If the Ending Value is equal to or greater than the Threshold Value, then the Redemption Amount will equal the Original Offering Price per unit; or

  

	 	•	 	 If the Ending Value is less than the Threshold Value, then the Redemption Amount will equal: 

  

																			
		 	Original Offering Price +	 	(  
	 	Original Offering Price x	 	(  
	 	Ending Value - Threshold Value	 	)  
	 	x Leverage Factor	 	)  
	 	
	 	 	 	 	 	Starting Value	 	 	 	 	

 If the notes are bear notes and they are not called prior to the maturity date, then the
Redemption Amount will be calculated as follows: 
  

	 	•	 	 If the Ending Value is equal to or less than the Threshold Value, then the Redemption Amount will equal the Original Offering Price per unit; or

  

	 	•	 	 If the Ending Value is greater than the Threshold Value, then the Redemption Amount will equal: 

  

																			
		 	Original Offering Price +	 	(  
	 	Original Offering Price x	 	(  
	 	Threshold Value - Ending Value	 	)  
	 	x Leverage Factor	 	)  
	 	
	 	 	 	 	 	Starting Value	 	 	 	 	

 The “Threshold Value” represents a percentage of the Starting Value and will be
determined on the pricing date and set forth in the applicable term sheet. 
 The “Leverage Factor” represents a percentage of any
decline (or, in the case of bear notes, any increase) beyond the Threshold Value and will be set forth in the applicable term sheet. The Leverage Factor may equal 100% and will not be greater than a number that, considering the Threshold Value,
could cause you to lose more than your entire investment in the notes. 
 Unlike ordinary debt securities, the notes are not principal
protected, and you may receive a Redemption Amount at maturity that is less than the principal amount of your notes. In no event will the Redemption Amount be less than zero. 
  

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 Determining the Observation Level, the Starting Value, and the Ending Value 
 Market Measures Other than Exchange Traded Funds 
 Unless otherwise specified in the applicable term sheet, the following definitions will apply, except if the Market Measure is an exchange traded fund. 
 The “Observation Level” will equal the closing value of the Market Measure on any Observation Date. 
 The “Starting Value” will equal the closing value of the Market Measure or a percentage of the closing value of the Market Measure on the
pricing date (or on such date or dates other than the pricing date, as specified in the applicable term sheet), as determined by the calculation agent in this product supplement. 
 If the Market Measure is a commodity-based index and a Market Disruption Event (as defined below) occurs on the pricing date, the calculation agent will
establish an initial value for the Market Measure (the “Initial Market Measure Level”) and the “Starting Value” using the following procedures: 
  

	 	(1)	With respect to each commodity or futures contract, the value of which is tracked by the Market Measure and which is not affected by a Market Disruption Event (an “Unaffected
Commodity Component”), both the Initial Market Measure Level and the Starting Value will be based on the exchange published settlement price of such Unaffected Commodity Component on the pricing date. 

  

	 	(2)	With respect to each commodity or futures contract, the value of which is tracked by the Market Measure and which is affected by a Market Disruption Event (an “Affected
Commodity Component”): 

  

	 	a.	the calculation agent will establish the Initial Market Measure Level on the pricing date based on (i) the above-referenced settlement price of each Unaffected Commodity
Component and (ii) the last exchange published settlement price for each Affected Commodity Component on the pricing date; 

  

	 	b.	the calculation agent will adjust the Initial Market Measure Level for purposes of determining the Starting Value based on the exchange published settlement price of each Affected
Commodity Component on the first Market Measure Business Day following the pricing date on which no Market Disruption Event occurs with respect to such Affected Commodity Component. In the event that a Market Disruption Event has occurred with
respect to any Affected Commodity Component on each Market Measure Business Day to, and including, the third scheduled Market Measure Business Day following the pricing date, the calculation agent (not later than the fourth scheduled Market Measure
Business Day) will estimate the price of such Affected Commodity Component used to determine the Starting Value in a manner that the calculation agent considers commercially reasonable under the circumstances; and 

  

	 	c.	 the final term sheet will set forth the Initial Market Measure Level, a brief statement of the facts relating to the establishment of the Initial Market 

  

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Measure Level (including a description of the relevant Market Disruption Event(s)), and the Starting Value. 

  

	 	(3)	The calculation agent will determine the Market Measure Level by reference to the exchange published settlement prices or other prices determined in clauses (1) and
(2) above using the then current method for calculating the Market Measure. The exchange on which a futures contract included in the Market Measure is traded for purposes of the above definition means the exchange used to value such futures
contract for the calculation of the Market Measure. 

 The “Ending Value” means the closing value of the Market
Measure on the final Observation Date. 
 Exchange Traded Fund Market Measures 
 Unless otherwise specified in the applicable term sheet, the following definitions will apply if the Market Measure is an exchange traded fund.

 The “Observation Level” will equal the Closing Market Price of the Market Measure on any Observation Date multiplied by the
Price Multiplier. The “Price Multiplier” will be set forth in the applicable term sheet and will be subject to adjustment for certain corporate events relating to the Market Measure described below under “—Anti-Dilution and
Discontinuance Adjustments for Exchange Traded Fund Linked Notes.” 
 The “Starting Value” will be equal to the volume
weighted average price, which is, absent a determination of manifest error, the price shown on page “AQR” on Bloomberg L.P. for trading in shares of the Market Measure taking place between approximately 9:30 a.m. to 4:02 p.m. on all U.S.
exchanges on the pricing date, or on such date or dates other than the pricing date as specified in the applicable term sheet. 
 The
“Ending Value” will equal the Closing Market Price of the Market Measure on the final Observation Date multiplied by the Price Multiplier. 
 The “Closing Market Price” means: 
  

	 	(A)	If the Market Measure is listed or admitted to trading on a national securities exchange in the United States registered under the Securities Exchange Act of 1934 (“registered
national securities exchange”), is included in the OTC Bulletin Board Service (the “OTC Bulletin Board”) operated by the Financial Industry Regulatory Authority, Inc., or is quoted on a United States quotation medium or inter-dealer
quotation system (e.g., the Pink-Sheets), then the Closing Market Price for any date of determination on any trading day means for one share of the Market Measure (or any other security underlying a Market Measure for which a Closing Market Price
must be determined for purposes of the notes): 

  

	 	a.	the last reported sale price, regular way, on that day on the principal registered national securities exchange on which that security is listed or admitted to trading (without
taking into account any extended or after-hours trading session); 

  

	 	b.	 if the last reported sale price is not obtainable on a registered national securities exchange, then the last reported sale price on the over-the-counter-market as
reported on the OTC Bulletin Board or, if not available on the OTC Bulletin Board, then the last reported sale price on any other 

  

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United States quotation medium or inter-dealer quotation system on that day (without taking into account any extended or after-hours trading session); or

  

	 	c.	if the last reported sale price is not available for any reason on a registered national securities exchange, on the OTC Bulletin Board, or any other United States quotation medium
or inter-dealer quotation system, including, without limitation, due to the occurrence of a Market Disruption Event, as described below, then the mean of the last reported bid and offer price of the principal trading session on the registered
national securities exchange, or if there were no bids and offers on such exchange, then the mean of the last reported bid and offer on the over-the-counter market as reported on the OTC Bulletin Board or, if there were no bids and offers on the OTC
Bulletin Board, then the mean of the last reported bid and offer on any other United States quotation medium or inter-dealer quotation system on that day as determined by the calculation agent or from as many dealers in that security, but not
exceeding three, as have made the bid prices available to the calculation agent after 3:00 p.m., local time in the principal market of the shares of the Market Measure (or any other security underlying the Market Measure for which a Closing Market
Price must be determined for purposes of the notes) on that date (without taking into account any extended or after-hours trading session). 

  

	 	(B)	If the Market Measure is not listed on a registered national securities exchange, is not included in the OTC Bulletin Board, or is not quoted on any other United States quotation
medium or inter-dealer system, then the Closing Market Price for any date of determination on any trading day means for one share of the Market Measure the U.S. dollar equivalent of the last reported sale price (as determined by the calculation
agent in its sole discretion and reasonable judgment) on that day on a foreign securities exchange on which that security is listed or admitted to trading with the greatest volume of trading for the calendar month preceding that trading day as
determined by the calculation agent; provided that if the last reported sale price is for a transaction which occurred more than four hours prior to the close of that foreign exchange, then the Closing Market Price will mean the U.S. dollar
equivalent (as determined by the calculation agent in its sole discretion and reasonable judgment) of the average of the last available bid and offer price on that foreign exchange. 

  

	 	(C)	If the Market Measure is not listed on a registered national securities exchange, is not included in the OTC Bulletin Board, is not quoted on any other United States quotation
medium or inter-dealer quotation system, is not listed or admitted to trading on any foreign securities exchange, or if the last reported sale price or bid and offer are not obtainable, then the Closing Market Price will mean the average of the U.S.
dollar value (as determined by the calculation agent in its sole discretion) of the last available purchase and sale prices in the market of the three dealers which have the highest volume of transactions in that security in the immediately
preceding calendar month as determined by the calculation agent based on information that is reasonably available to it. 

 Market
Disruption Events 
 Equity-Based Market Measures 
 For equity-based Market Measures, “Market Disruption Event” means one or more of the following events, as determined by the calculation agent: 
  

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	 	(A)	the suspension of or material limitation on trading, in each case, for more than two hours of trading, or during the one-half hour period preceding the close of trading, on the
primary exchange where component stocks of a Market Measure trade as determined by the calculation agent (without taking into account any extended or after-hours trading session), in 20% or more of the stocks which then comprise Market Measure or
any successor market measure; or 

  

	 	(B)	the suspension of or material limitation on trading, in each case, for more than two hours of trading, or during the one-half hour period preceding the close of trading, on the
primary exchange that trades options contracts or futures contracts related to the Market Measure as determined by the calculation agent (without taking into account any extended or after-hours trading session), whether by reason of movements in
price otherwise exceeding levels permitted by the relevant exchange or otherwise, in options contracts or futures contracts related to the Market Measure, or any successor market measure. 

 For the purpose of determining whether a Market Disruption Event has occurred: 
  

	 	(1)	a limitation on the hours in a trading day and/or number of days of trading will not constitute a Market Disruption Event if it results from an announced change in the regular
business hours of the relevant exchange; 

  

	 	(2)	a decision to permanently discontinue trading in the relevant futures or options contracts related to the Market Measure, or any successor market measure, will not constitute a
Market Disruption Event; 

  

	 	(3)	a suspension in trading in a futures or options contract on the Market Measure, or any successor market measure, by a major securities market by reason of (a) a price change
violating limits set by that securities market, (b) an imbalance of orders relating to those contracts, or (c) a disparity in bid and ask quotes relating to those contracts will constitute a suspension of or material limitation on trading
in futures or options contracts related to the Market Measure; 

  

	 	(4)	a suspension of or material limitation on trading on the relevant exchange will not include any time when that exchange is closed for trading under ordinary circumstances; and

  

	 	(5)	if applicable to equity-based Market Measures with component stocks listed on the NYSE, for the purpose of clause (A) above, any limitations on trading during significant
market fluctuations under NYSE Rule 80B, or any applicable rule or regulation enacted or promulgated by the NYSE or any other self regulatory organization or the SEC of similar scope as determined by the calculation agent, will be considered
“material.” 

 Commodity-Based Market Measures 
 For commodity-based Market Measures, “Market Disruption Event” means one or more of the following events, as determined by the calculation
agent: 
  

	 	(1)	a material limitation, suspension, or disruption of trading in one or more Market Measure components which results in a failure by the exchange on which each applicable Market
Measure component is traded to report an exchange published settlement price for such contract on the day on which such event occurs or any succeeding day on which it continues; 

  

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	 	(2)	the exchange published settlement price for any Market Measure component is a “limit price,” which means that the exchange published settlement price for such contract for
a day has increased or decreased from the previous day’s exchange published settlement price by the maximum amount permitted under applicable exchange rules; 

  

	 	(3)	failure by the applicable exchange or other price source to announce or publish the exchange published settlement price for any Market Measure component; 

 

	 	(4)	a suspension of trading in one or more Market Measure components, for which the trading does not resume at least ten minutes prior to the scheduled or rescheduled closing time; or

  

	 	(5)	any other event, if the calculation agent determines in its sole discretion that the event materially interferes with our ability or the ability of any of our affiliates to unwind
all or a material portion of a hedge that we or our affiliates have effected or may effect as to the applicable notes; 

 provided that, for
any Observation Date, other than the final Observation Date, a Market Disruption Event shall be deemed to occur and, such Observation Date shall be postponed as provided above under “—Automatic Call”, only if such Market Disruption
Event, in the sole discretion of the calculation agent, materially interferes with the ability of the calculation agent to obtain a closing value for the Market Measure. 
 For notes linked to a commodity-based Market Measure, in the event a Market Disruption Event has occurred on the final Observation Date, the Ending Value will be determined by the calculation agent using the following
“Market Disruption Calculation”: 
  

	 	(1)	With respect to each Market Measure component which is not affected by the Market Disruption Event, the Market Measure value will be based on the exchange published settlement price
on the final Observation Date. 

  

	 	(2)	With respect to each Market Measure component which is affected by the Market Disruption Event, the Market Measure value will be based on the exchange published settlement price of
each such contract on the first day following the final Observation Date on which no Market Disruption Event occurs with respect to such contract. In the event that a Market Disruption Event occurs with respect to any contract included in the Market
Measure on the final Observation Date and on each day to and including the second scheduled Market Measure Business Day prior to maturity (the “Cut-Off Date”), the price of such contract used to determine the Ending Value will be estimated
by the calculation agent in a manner which the calculation agent considers commercially reasonable under the circumstances. 

  

	 	(3)	The calculation agent shall determine the Market Measure value by reference to the exchange published settlement prices or other prices determined in clauses (1) and (2),
above, using the then current method for calculating the Market Measure. The exchange on which a futures contract included in the Market Measure is traded for purposes of the foregoing definition means the exchange used to value such futures
contract for the calculation of the Market Measure. 

 Exchange Traded Fund Market Measures 
 For exchange traded fund Market Measures, a “Market Disruption Event” means any of the following events as determined by the calculation agent
in its sole discretion: 
  

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	 	(1)  (A)	the suspension of or material limitation of trading, in each case, for more than two hours of trading, or during the one-half hour period preceding the close of trading, of the
shares of the Market Measure (or the successor to the Market Measure) on the primary exchange where such shares trade, as determined by the calculation agent (without taking into account any extended or after-hours trading session); or

  

	 	       (B)	the suspension of or material limitation of trading, in each case, for more than two hours of trading, or during the one-half hour preceding the close of trading, on the primary
exchange that trades options contracts or futures contracts related to the shares of such Market Measure (or successor to the Market Measure) as determined by the calculation agent (without taking into account any extended or after-hours trading
session), whether by reason of movements in price otherwise exceeding levels permitted by the relevant exchange or otherwise, in options contracts or futures contracts related to the shares of the Market Measure; or 

  

	 	(2)  (A)	the suspension of or material limitation on trading, in each case, for more than two hours of trading, or during the one-half hour period preceding the close of trading, on the
primary exchange where component stocks of an Underlying Index trade, as determined by the calculation agent (without taking into account any extended or after-hours trading session), in 20% or more of the stocks which then comprise the Underlying
Index or any successor underlying index; or 

  

	 	       (B)	the suspension of or material limitation on trading, in each case, for more than two hours of trading, or during the one-half hour period preceding the close of trading, on the
primary exchange that trades options contracts or futures contracts related to the Underlying Index as determined by the calculation agent (without taking into account any extended or after-hours trading session), whether by reason of movements in
price otherwise exceeding levels permitted by the relevant exchange or otherwise, in options contracts or futures contracts related to the Underlying Index, or any successor underlying index; or 

  

	 	(3)	the determination that a scheduled Observation Date is not a Market Measure Business Day or, in the case of notes linked to exchange traded fund Market Measures, a trading day, by
reason of an event, occurrence, declaration, or otherwise. 

 For the purpose of determining whether a Market Disruption Event
has occurred: 
  

	 	(i)	a limitation on the hours in a trading day and/or number of days of trading will not constitute a Market Disruption Event if it results from an announced change in the regular
business hours of the relevant exchange; 

  

	 	(ii)	a decision to permanently discontinue trading in the relevant futures or options contracts related to the Underlying Index (or any successor underlying index) or shares of such
Market Measure (or such successor to the Market Measure), will not constitute a Market Disruption Event; 

  

	 	(iii)	a suspension in trading in a futures or options contract on the Underlying Index (or the underlying index related to the Market Measure) or shares of such Market Measure (or such
successor index fund or such other security), by a major securities market by reason of (a) a price change violating limits set by that securities market, (b) an imbalance of orders relating to those contracts or (c) a disparity in
bid and ask quotes relating to those contracts, will each constitute a suspension of or material limitation on trading in futures or options contracts related to the Market Measure; 

  

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	 	(iv)	subject to paragraph (3) above, a suspension of or material limitation on trading on the relevant exchange will not include any time when that exchange is closed for trading
under ordinary circumstances; and 

  

	 	(v)	if applicable to Market Measures or Underlying Indices with component stocks listed on the NYSE, for the purpose of clauses (1)(A) and (2)(A) above, any limitations on
trading during significant market fluctuations under NYSE Rule 80B, or any applicable rule or regulation enacted or promulgated by the NYSE or any other self regulatory organization or the SEC of similar scope as determined by the calculation agent,
will be considered “material”. 

 Other Market Measures 
 If the Market Measure is not equity-based or commodity-based, or is not an exchange traded fund, the applicable term sheet will set forth the definition
of “Market Disruption Event,” and include additional related terms. 
 Determinations by the Calculation Agent 

All determinations made by the calculation agent, absent a determination of a manifest error, will be conclusive for all purposes and binding on us
and the holders and beneficial owners of the notes. 
 Anti-Dilution and Discontinuance Adjustments for Exchange Traded Fund Linked Notes 

If the notes are linked to an exchange traded fund Market Measure (for purposes of this section, an “Index Fund”), the calculation agent, in
it sole discretion, may adjust the Price Multiplier, and hence each Observation Level, the Threshold Value, and the Ending Value, as applicable, if an event described below occurs on or before the final Observation Date and the calculation agent
determines that such an event has a diluting or concentrative effect on the theoretical value of the shares of the Index Fund or a successor exchange traded fund (as defined below). The Price Multiplier resulting from any of the adjustments
specified below will be rounded to the eighth decimal place with five one-billionths being rounded upward. 
 No adjustments to the Price
Multiplier will be required unless the Price Multiplier adjustment would require a change of at least 0.1% in the Price Multiplier then in effect. Any adjustment that would require a change of less than 0.1% in the Price Multiplier and that is not
applied at the time of the occurrence of the event that requires an adjustment may be taken into account and aggregated at the time of any subsequent adjustment that would require a change of the Price Multiplier then in effect. 
 No adjustments to the Price Multiplier will be required other than those specified below. However, the calculation agent may, at its sole discretion,
make additional adjustments to the Price Multiplier to reflect changes occurring in relation to the component stocks of the Index Fund, the terms of the Index Fund or any other security received in a reorganization event in other circumstances where
the calculation agent determines that it is appropriate to reflect those changes to ensure an equitable result. The required adjustments specified below do not cover all events that could affect the Closing Market Price per share of the Index Fund.

 The calculation agent will be solely responsible for the determination and calculation of any adjustments to the Price Multiplier and of
any related determinations and calculations with respect to any distributions of stock, other securities, or other property or assets, including cash, in connection with any corporate event described below; its determinations and calculations will
be conclusive absent a determination of a manifest error. 
  

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 We will provide, within ten Banking Business Days following the occurrence of an event that requires an
adjustment to the Price Multiplier, or, if later, within ten Banking Business Days following the date on which we become aware of this occurrence, written notice to the trustee, which will provide notice to the holders of the notes of the occurrence
of this event and a statement in reasonable detail setting forth the adjusted Price Multiplier. 
 Dilution Adjustments 
 The calculation agent, in its sole discretion and as it deems reasonable, may adjust the Price Multiplier, and hence each Observation Level, the
Threshold Value, and the Ending Value, as applicable, as a result of certain events related to the Index Fund or any successor exchange trade fund, as applicable, which include, but is not limited to, the following: 
 Stock Splits and Reverse Stock Splits. If the Index Fund is subject to a stock split or reverse stock split, then once any split has become
effective, the Price Multiplier will be adjusted such that the new Price Multiplier will equal the product of: 
  

	 	•	 	 the prior Price Multiplier; and 

  

	 	•	 	 the number of shares which a holder of one share of the Index Fund before the effective date of such stock split or reverse stock split would have owned or been
entitled to receive immediately following the applicable effective date. 

 Stock Dividends. If the Index Fund is
subject to a (i) stock dividend (i.e., issuance of additional shares by the Index Fund) that is given ratably to all holders of record of shares of the Index Fund or (ii) distribution of shares of the Index Fund, then once the dividend has
become effective and the shares of the Index Fund is trading ex-dividend, the Price Multiplier will be adjusted on the ex-dividend date such that the new Price Multiplier will equal the product of: 
  

	 	•	 	 the prior Price Multiplier; and 

  

	 	•	 	 the number of shares of the Index Fund which a holder of one share of the Index Fund before the date the dividend became effective and the shares of the Index Fund
traded ex-dividend would have owned or been entitled to receive immediately following that date; 

 provided that no adjustment will be
made for a stock dividend for which the number of shares of the Index Fund paid or distributed is based on a fixed cash equivalent value, unless such distribution is an Extraordinary Dividend (as defined below). 
 Extraordinary Dividends. There will be no adjustments to the Price Multiplier to reflect any cash dividends or cash distributions paid with
respect to the shares of the Index Fund other than Extraordinary Dividends, as described below, and distributions described under the section entitled “—Other Distributions” and “—Reorganization Events” below.

 An “Extraordinary Dividend” means, with respect to a cash dividend or other distribution with respect to the shares of the Index
Fund, a dividend or other distribution that the calculation agent determines, in its sole discretion, is not declared or otherwise made according to the Index Fund’s then-existing policy or practice of paying such dividends on a quarterly or
other regular basis. If an Extraordinary Dividend occurs with respect to the Index Fund, the Price Multiplier will be adjusted on the ex-dividend date with respect to the Extraordinary Dividend so that the new Price Multiplier will equal the product
of: 
  

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	 	•	 	 the prior Price Multiplier; and 

  

	 	•	 	 a fraction, the numerator of which is the Closing Market Price per share of the Index Fund on the trading day preceding the ex-dividend date, and the denominator of
which is the amount by which the Closing Market Price per share of the Index Fund on the trading day preceding the ex-dividend date exceeds the Extraordinary Dividend Amount. 

 The “Extraordinary Dividend Amount” with respect to an Extraordinary Dividend for the shares of the Index Fund will equal: 
  

	 	•	 	 in the case of cash dividends or other distributions that constitute regular dividends, the amount per share of the Index Fund of that Extraordinary Dividend minus
the amount per share of the immediately preceding non-Extraordinary Dividend for that share of the Index Fund; or 

  

	 	•	 	 in the case of cash dividends or other distributions that do not constitute regular dividends, the amount per share of the Index Fund of that Extraordinary
Dividend. 

 To the extent an Extraordinary Dividend is not paid in cash, the value of the non-cash component will be
determined by the calculation agent, whose determination will be conclusive. A distribution on the shares of the Index Fund described under the sections entitled “—Reorganization Events” and “—Other Distributions” below
that also constitute an Extraordinary Dividend will only cause an adjustment pursuant to those respective sections. 
 Other
Distributions. If the Index Fund, after the pricing date, declares or makes a distribution to all holders of the shares of the Index Fund of any class of its capital stock, evidences of its indebtedness or other non-cash assets, including, but
not limited to, transferable rights and warrants, then, in each of these cases, the Price Multiplier will be adjusted such that the new Price Multiplier will equal the product of: 
  

	 	•	 	 the prior Price Multiplier; and 

  

	 	•	 	 a fraction, the numerator of which will be the Closing Market Price per share of the Index Fund, and the denominator of which will be the Closing Market Price per
share of the Index Fund, less the fair market value, as determined by the calculation agent, as of the time the adjustment is effected of the portion of the capital shares, assets, evidences of indebtedness, rights or warrants so distributed or
issued applicable to one share of the Index Fund. 

 Reorganization Events 
 If prior to the maturity date of the notes, the Index Fund, or any successor to the Index Fund, has been subject to a merger, combination, consolidation,
or statutory exchange of securities with another exchange traded index fund, and the Index Fund is not the surviving entity, then, on or after the date of such event, the calculation agent shall, in its sole discretion, make an adjustment to the
Price Multiplier or to the method of determining the amount payable on each note or any other terms of the notes as the calculation agent, in its sole discretion, determines appropriate to account for the economic effect on the notes of such event
(including adjustments to account for changes in volatility, expected dividends, stock loan rate, or liquidity relevant to the Market Measure, the Underlying Index, or to the notes), and determine the effective date of that adjustment. If the
calculation agent determines that no adjustment that it could make will produce a commercially reasonable result, then the calculation agent may deem the Index Fund to be de-listed, liquidated, discontinued, or 

  

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otherwise terminated, treatment of which is described below under “—Discontinuation of the Index Fund.” 
 Discontinuance of the Index Fund 
 If
the Market Measure to which the notes are linked is an exchange traded fund, and such exchange traded fund (or a successor exchange traded index fund (as defined herein)) is de-listed from its primary securities exchange (or any other relevant
exchange), liquidated, or otherwise terminated, the calculation agent will substitute a Market Measure that the calculation agent determines, in its sole discretion, is comparable to the discontinued Index Fund, which may be, but is not limited to,
an exchange traded fund comparable to the Index Fund (such exchange traded fund being referred to herein as a “successor index fund”), the Underlying Index or a successor to the Underlying Index. In such event, the calculation agent will
adjust the Price Multiplier, as necessary, such that the substitute Market Measure closely replicates the performance of the Index Fund. 
 If the Market Measure (or a successor index fund) is de-listed, liquidated, or otherwise terminated and the calculation agent determines that no adequate substitute for the Index Fund is available, then the calculation agent will, in its
sole discretion, calculate the Closing Market Price of the shares of such Market Measure (or a successor index fund) by a computation methodology that the calculation agent determines will as closely as reasonably possible replicate such Market
Measure (or a successor index fund). 
 If a successor index fund is selected or the calculation agent calculates the Closing Market Price by
a computation methodology that the calculation agent determines will as closely as reasonably possible replicate such Market Measure (or a successor index fund), that successor index fund or substitute computation methodology, as applicable, will be
substituted for such Market Measure (or such successor index fund) for all purposes of the notes. 
 Upon any selection by the calculation
agent of any successor index fund, the calculation agent will cause written notice thereof to be promptly furnished to the trustee, to us, and to the holders of the notes. The calculation agent will provide information as to the method of
calculating the Closing Market Price of the shares of the Market Measure (or such successor index fund) upon your written request. 
 If at
any time: 
  

	 	•	 	 an Underlying Index (or the underlying index related to a successor index fund) is changed in a material respect, or 

  

	 	•	 	 a Market Measure (or a successor index fund) in any other way is modified so that it does not, in the opinion of the calculation agent, fairly represent the price
per share of such Market Measure (or such successor index fund) had those changes or modifications not been made, 

 then, from and after
that time, the calculation agent will make those calculations and adjustments that, in the good faith judgment of the calculation agent, may be necessary in order to arrive at a Closing Market Price of such Market Measure (or such successor index
fund) as if those changes or modifications had not been made. The calculation agent also may determine that no adjustment is required. 
 The
calculation agent will be solely responsible for the method of calculating the Closing Market Price of the shares of the Index Fund (or any successor index fund) and of any related 

  

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determinations and calculations, and its determinations and calculations with respect thereto will be conclusive in the absence of manifest error.

 Notwithstanding these alternative arrangements, any modification or discontinuance of the Index Fund to which your notes are linked may
adversely affect trading in the notes. 
 If the calculation agent determines that no adjustment that it could make will produce a
commercially reasonable result, then the calculation agent, in its discretion, may cause the notes to be accelerated to the fifth Banking Business Day following the date of that determination and the Redemption Amount payable to you will be
calculated as though the date of early repayment were the stated maturity date of the notes and as though the final Observation Date were five Market Measure Business Days prior to the date of acceleration. Additionally, if the notes are
accelerated, you will not be entitled to any Call Premium or any accrued and unpaid interest, in the case of interest bearing notes, that would have accrued had the notes not been accelerated. Accordingly, in such a case, the amount you will receive
on the notes will be limited to the Original Offering Price per unit of the notes. 
 Adjustments to a Market Measure 
 If at any time a Market Measure Publisher makes a material change in the formula for or the method of calculating a Market Measure, or Market Measure
component in the case of a Basket, or in any other way materially modifies that Market Measure so that the Market Measure does not, in the opinion of the calculation agent, fairly represent the value of the Market Measure had those changes or
modifications not been made, then, from and after that time, the calculation agent will, at the close of business in New York, New York, on each date that the closing value of the Market Measure is to be calculated, make any adjustments as, in the
good faith judgment of the calculation agent, may be necessary in order to arrive at a calculation of a value of the Market Measure as if those changes or modifications had not been made, and calculate the closing value with reference to the Market
Measure, as so adjusted. Accordingly, if the method of calculating a Market Measure is modified so that the value of the Market Measure is a fraction or a multiple of what it would have been if it had not been modified, then the calculation agent
will adjust the Market Measure in order to arrive at a value of the Market Measure as if it had not been modified. 
 Discontinuance of a Non-Exchange
Traded Fund Market Measure 
 If a Market Measure Publisher discontinues publication of a Market Measure to which an issue of notes is
linked other than an exchange traded fund Market Measure, or one or more components of a Market Measure in the case of a Basket, and such Market Measure Publisher or another entity publishes a successor or substitute market measure that the
calculation agent determines, in its sole discretion, to be comparable to that Market Measure (a “successor market measure”), then, upon the calculation agent’s notification of that determination to the trustee and us, the calculation
agent will substitute the successor market measure as calculated by the relevant Market Measure Publisher or any other entity and calculate the closing value on any Observation Date (and therefore whether a mandatory call has occurred) and/or the
Ending Value as described above under “—Payment on the Maturity Date”. Upon any selection by the calculation agent of a successor market measure, we will cause notice to be given to holders of the notes. 
 In the event that a Market Measure Publisher discontinues publication of a Market Measure and: 
  

	 	•	 	 the calculation agent does not select a successor market measure; or 

  

	 	•	 	 the successor market measure is not published on an applicable Observation Date, 

  

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 the calculation agent will compute a substitute value for the Market Measure in accordance with the procedures last used
to calculate the Market Measure before any discontinuance. If a successor market measure is selected or the calculation agent calculates a value as a substitute for a Market Measure as described below, the successor market measure or value will be
used as a substitute for that Market Measure for all purposes, including for the purpose of determining whether a Market Disruption Event exists. 
 If a Market Measure Publisher discontinues publication of the Market Measure before an applicable Observation Date and the calculation agent determines that no successor market measure is available at that time, then on each day that would
otherwise be an Observation Date, until the earlier to occur of: 
  

	 	•	 	 the occurrence of a mandatory call; or 

  

	 	•	 	 the determination of the Ending Value; or 

  

	 	•	 	 a determination by the calculation agent that a successor market measure is available, 

 the calculation agent will determine the value that would be used in determining whether a mandatory call has occurred, computing the Call Amount or the Redemption
Amount, as applicable, as described in the preceding paragraph as if that day were an Observation Date. The calculation agent will make available to holders of the notes information as to each such value; such information may be disseminated by
means of Bloomberg, Reuters, a website, or any other means selected by the calculation agent in its reasonable discretion. 
 Notwithstanding
these alternative arrangements, discontinuance of the publication of the specific Market Measure to which your notes are linked may adversely affect trading in the notes. 
 Basket Market Measures 
 If the Market Measure to which your notes are linked is a Basket, the Basket
Components will be set forth in the applicable term sheet. We will assign each Basket Component with an Initial Component Weight so that each Basket Component represents a percentage of the Starting Value of the Basket on the applicable pricing
date. We may assign the Basket Components equal Initial Component Weights, or we may assign the Basket Components unequal Initial Component Weights. The Initial Component Weight for each Basket Component will be set forth in the applicable term
sheet. 
 Determination of the Component Ratio for Each Basket Component 
 We will set a fixed factor (the “Component Ratio”) for each Basket Component, based upon the weighting of that Basket Component. The Component
Ratio for each Basket Component will be calculated on the pricing date and will equal: 
  

	 	•	 	 the Initial Component Weight (expressed as a percentage) for that Basket Component, multiplied by 100; divided by  

  

	 	•	 	 the closing value of that Basket Component on the pricing date. 

 Each Component Ratio will be rounded to eight decimal places. 
  

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 The Component Ratios will be calculated in this way so that the Starting Value of the Basket will equal
100 on the pricing date. The Component Ratios will not be revised subsequent to their determination on the pricing date, except that the calculation agent may in its good faith judgment adjust the Component Ratio of any Basket Component in the event
that Basket Component is materially changed or modified in a manner that does not, in the opinion of the calculation agent, fairly represent the value of that Basket Component had those material changes or modifications not been made. 
 Computation of the Basket 
 The
calculation agent will calculate the value of the Basket by summing the products of the closing value for each Basket Component on the applicable Observation Day and the Component Ratio applicable to each Basket Component. The value of the Basket
will vary based on the increase or decrease in the value of each Basket Component. Any increase in the value of a Basket Component (assuming no change in the value of the other Basket Component or Basket Components) will result in an increase in the
value of the Basket. Conversely, any decrease in the value of a Basket Component (assuming no change in the value of the other Basket Component or Basket Components) will result in a decrease in the value of the Basket. 
 The following tables are for illustration purposes only, and do not reflect the actual composition, Initial Component Weights, or Component Ratios, which
will be set forth in the applicable term sheet. 
 Example 1: The hypothetical Basket Components are Index ABC and Index XYZ, each
weighted equally on a hypothetical pricing date: 
  

									
	 Basket Component
	  	Initial
Component
Weighting	 	Hypothetical
Closing
Value(1)	  	Hypothetical
Component
Ratio(2)	  	Initial Basket
Value
Contribution
					
	 Index ABC
	  	50.00%	 	    500.00	  	0.10000000	  	  50.00
					
	 Index XYZ
	  	50.00%	 	3,500.00	  	0.01428571	  	  50.00
					
	                         Starting Value
	  		 		  		  	100.00

 Example 2: The hypothetical Basket Components are Index ABC, Index XYZ, and Index RST, with
their initial weightings being 50.00%, 25.00% and 25.00%, respectively, on a hypothetical pricing date: 
  

									
	 Basket Component
	  	Initial
Component
Weighting	 	Hypothetical
Closing
Value(1)	  	Hypothetical
Component
Ratio(2)	  	Initial Basket
Value
Contribution
					
	 Index ABC
	  	50.00%	 	    500.00	  	0.10000000	  	  50.00
					
	 Index XYZ
	  	25.00%	 	2,420.00	  	0.01033058	  	  25.00
					
	 Index RST
	  	25.00%	 	1,014.00	  	0.02465483	  	  25.00
					
	                         Starting Value
	  		 		  		  	100.00

  
  
  

	(1)	This column sets forth the hypothetical closing value of each Basket Component on the hypothetical pricing date. 

  

	(2)	 The hypothetical Component Ratio equals the Initial Component Weight (expressed as a 

  

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percentage) of the Basket Component multiplied by 100, and then divided by the closing value of that Basket Component Index on the hypothetical
pricing date, with the result rounded to eight decimal places. 

 Role of the Calculation Agent 
 The calculation agent has the sole discretion to make all determinations regarding the notes as described in this product supplement, including
determinations regarding the Starting Value, the Observation Level of the Market Measure on any Observation Date, the Threshold Value, the Ending Value, the Price Multiplier, any Market Disruption Events, any successor Market Measure, business days,
Banking Business Days, Market Measure Business Days, trading days, and the amounts payable at maturity or upon a call of the notes. Absent manifest error, all determinations of the calculation agent will be final and binding on you and us, without
any liability on the part of the calculation agent. 
 We expect to appoint MLPF&S or one of our other affiliates as the calculation
agent for each series of notes. However, we may change the calculation agent at any time without notifying you. The identity of the calculation agent will be set forth in the applicable term sheet. 
 Same-Day Settlement and Payment 
 The notes will be
delivered in book-entry form only through The Depository Trust Company against payment by purchasers of notes in immediately available funds. We will pay the Call Amount or the Redemption Amount, as applicable, in immediately available funds so long
as the notes are maintained in book-entry form. 
 Events of Default and Acceleration 
 Unless otherwise set forth in the applicable term sheet, if an event of default, as defined in the Senior Indenture, with respect to any series of notes
occurs and is continuing, the amount payable to a holder of notes upon any acceleration permitted under the Senior Indenture will be equal to the Redemption Amount described under the caption “—Payment on the Maturity Date,”
calculated as though the date of acceleration were the maturity date of the notes and as though the final Observation Date were five Market Measure Business Days prior to the date of acceleration. If the notes are accelerated in this manner, you
will not be entitled to any Call Premium. If a bankruptcy proceeding is commenced in respect of us, your claim may be limited, under the United States Bankruptcy Code, to the Original Offering Price of your notes plus, if your notes bear interest,
an additional amount of contingent interest calculated as if the date of commencement of the proceeding were the maturity date of notes. In case of a default in payment of notes, whether at their maturity or upon acceleration, they will not bear a
default interest rate. 
 Listing 
 If
provided for in the applicable term sheet, we may apply to have your notes listed on a securities exchange or quotation system. If approval of such an application is granted, your notes will be listed on the securities exchange or quotation system
at the time of such approval. We make no representations, however, that your notes will be listed or will remain listed for the entire term of your notes. 
  

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 SUPPLEMENTAL PLAN OF DISTRIBUTION 
 One or more of our affiliates, including MLPF&S, may act as our selling agent for any offering of the notes. Without limiting the foregoing, our
affiliates First Republic Securities Company, LLC, Banc of America Securities LLC, and Banc of America Investment Services, Inc. may act as a selling agent. The selling agents may act on either a principal basis or an agency basis, as set forth in
the applicable term sheet. Each selling agent will be a party to the Distribution Agreement described in the “Supplemental Plan of Distribution” on page S-13 of the accompanying prospectus supplement. 
 Each selling agent will receive an underwriting discount or commission that is a percentage of the aggregate Original Offering Price of the notes sold
through its efforts, which will be set forth in the applicable term sheet. You must have an account with the applicable selling agent in order to purchase notes. 
 No selling agent is acting as your fiduciary or advisor, and you should not rely upon any communication from it in connection with the notes as investment advice or a recommendation to purchase any notes. You should
make your own investment decision regarding notes after consulting with your legal, tax, and other advisors. 
 MLPF&S and any of our
other affiliates and subsidiaries may use this product supplement, the prospectus supplement, and the prospectus, together with the applicable term sheet and any applicable index supplement, in a market-making transaction for any notes after their
initial sale. 
 U.S. FEDERAL INCOME TAX SUMMARY 
 The following is a summary of the material U.S. federal income tax considerations of the acquisition, ownership, and disposition of the notes. The
following discussion is not exhaustive of all possible tax considerations. This summary is based upon the Code, regulations promulgated under the Code by the U.S. Treasury Department (“Treasury”) (including proposed and temporary
regulations), rulings, current administrative interpretations and official pronouncements of the IRS, and judicial decisions, all as currently in effect and all of which are subject to differing interpretations or to change, possibly with
retroactive effect. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. 
 This summary is for general information only, and does not purport to discuss all aspects of U.S. federal income taxation that may be important to a
particular holder in light of its investment or tax circumstances or to holders subject to special tax rules, such as partnerships, subchapter S corporations, or other pass-through entities, banks, financial institutions, tax-exempt entities,
insurance companies, regulated investment companies, real estate investment trusts, trusts and estates, dealers in securities or currencies, traders in securities that have elected to use the mark-to-market method of accounting for their securities,
persons holding the notes as part of an integrated investment, including a “straddle,” “hedge,” “constructive sale,” or “conversion transaction,” persons (other than Non-U.S. Holders, as defined below) whose
functional currency for tax purposes is not the U.S. dollar, persons holding the notes in a tax-deferred or tax-advantaged account, and persons subject to the alternative minimum tax provisions of the Code. This summary does not include any
description of the tax laws of any state or local governments, or of any foreign government, that may be applicable to a particular holder. If the tax consequences associated with the notes are different than those described below, they will be
described in the applicable term sheet. 
  

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 This summary is directed solely to holders that, except as otherwise specifically noted, will purchase
the notes upon original issuance and will hold the notes as capital assets within the meaning of Section 1221 of the Code, which generally means property held for investment. 
 You should consult your own tax advisor concerning the U.S. federal income tax consequences to you of acquiring, owning, and disposing of the
notes, as well as any tax consequences arising under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes in U.S. federal or other tax laws. 
 As used in this product supplement, the term “U.S. Holder” means a beneficial owner of a note that is for U.S. federal income tax purposes:

  

	 	•	 	 a citizen or resident of the U.S.; 

  

	 	•	 	 a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S. or of any
state of the U.S. or the District of Columbia; 

  

	 	•	 	 an estate the income of which is subject to U.S. federal income taxation regardless of its source; or 

  

	 	•	 	 any trust if a court within the U.S. is able to exercise primary supervision over the administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. 

 Notwithstanding the preceding paragraph, to the extent
provided in Treasury regulations, some trusts in existence on August 20, 1996, and treated as United States persons prior to that date, that elect to continue to be treated as United States persons also are U.S. Holders. As used in this product
supplement, the term “Non-U.S. Holder” means a holder that is not a U.S. Holder. 
 If an entity or arrangement treated as a
partnership for U.S. federal income tax purposes holds a note, the U.S. federal income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership and, accordingly, this summary does not
apply to partnerships. A partner of a partnership holding a note should consult its own tax advisor regarding the U.S. federal income tax consequences to the partner of the acquisition, ownership, and disposition by the partnership of a note.

 The following discussion of the U.S. federal income tax consequences of an investment in the notes applies solely to notes that do not
provide for the payment of interest. If notes are issued which provide for the payment of interest, the U.S. federal income tax consequences of an investment in such notes (including the U.S. federal income tax treatment of the interest payments)
will be set forth in the applicable term sheet. 
 General 
 Although there is no statutory, judicial, or administrative authority directly addressing the characterization of the notes, we intend to treat the notes for all tax purposes as a callable single financial contract
linked to the Market Measure that requires the investor to pay us at inception an amount equal to the purchase price of the notes and that entitles the investor to receive at maturity or upon earlier redemption an amount in cash linked to the value
of the Market Measure. Under the terms of the notes, we and every investor in the notes agree, in the absence of an administrative determination or judicial ruling to the contrary, to treat the notes as described in the preceding sentence. This
discussion assumes that the notes constitute a 

  

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callable single financial contract linked to the Market Measure for U.S. federal income tax purposes. If the notes did not constitute a callable single
financial contract, the tax consequences described below would be materially different. 
 This characterization of the notes is not
binding on the IRS or the courts. No statutory, judicial, or administrative authority directly addresses the characterization of the notes or any similar instruments for U.S. federal income tax purposes, and no ruling is being requested from the IRS
with respect to their proper characterization and treatment. Due to the absence of authorities on point, significant aspects of the U.S. federal income tax consequences of an investment in the notes are not certain, and no assurance can be given
that the IRS or any court will agree with the characterization and tax treatment described in this product supplement. Accordingly, you are urged to consult your tax advisor regarding all aspects of the U.S. federal income tax consequences of
an investment in the notes, including possible alternative characterizations. 
 On December 7, 2007, the IRS released Notice 2008-2
(“Notice”) seeking comments from the public on the taxation of financial instruments currently taxed as “prepaid forward contracts.” This Notice addresses instruments such as the notes. According to the Notice, the IRS and
Treasury are considering whether a holder of an instrument such as the notes should be required to accrue ordinary income on a current basis, regardless of whether any payments are made prior to maturity. It is not possible to determine what
guidance the IRS and Treasury will ultimately issue, if any. Any such future guidance may affect the amount, timing and character of income, gain, or loss in respect of the notes, possibly with retroactive effect. 
 The IRS and Treasury are also considering additional issues, including whether additional gain or loss from such instruments should be treated as
ordinary or capital, whether foreign holders of such instruments should be subject to withholding tax on any deemed income accruals, whether Section 1260 of the Code, concerning certain “constructive ownership transactions,” generally
applies or should generally apply to such instruments, and whether any of these determinations depend on the nature of the underlying asset. 
 In addition, in late 2007, legislation was introduced in the U.S. Congress which, if enacted, would also impact the taxation of the notes. Under the proposed legislation, a U.S. Holder that acquires an instrument such as the notes after the
date of enactment of the legislation would be required to include income in respect of the notes on a current basis. It is not possible to predict whether the legislation will be enacted in its proposed form or whether any other legislative action
may be taken in the future that may adversely affect the taxation of instruments such as the notes. Further, it is possible that any such legislation, if enacted, may apply on a retroactive basis. 
 We urge you to consult your own tax advisors concerning the impact and the significance of the above considerations. We intend to continue treating the
notes for U.S. federal income tax purposes in the manner described in this product supplement unless and until such time as we determine, or the IRS or Treasury determines, that some other treatment is more appropriate. 
 Unless otherwise stated, the following discussion is based on the characterization described above. The discussion in this section assumes that there is
a significant possibility of a significant loss of principal on an investment in the notes. 
 U.S. Holders – Income Tax Considerations

 We will not attempt to ascertain whether the shares of any particular Market Measure or any interest underlying any particular Market
Measure would be treated as a “passive foreign investment company” (“PFIC”), within the meaning of Section 1297 of the Code. If the 

  

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shares of a particular Market Measure or one or more interests underlying a particular Market Measure to which the notes are linked were so treated, certain
adverse U.S. federal income tax consequences could possibly apply to a U.S. Holder. You should refer to information filed with the SEC by each Market Measure and issuers of interests, as appropriate, underlying each Market Measure and consult your
tax advisor regarding the possible consequences to you, if any, if a particular Market Measure or an issuer of interests underlying a particular Market Measure is or becomes a PFIC. 
 Tax Basis 
 A U.S. Holder’s tax
basis in the notes will equal the amount paid by that holder to acquire them. 
 Settlement at Maturity or Sale, Exchange, or Redemption
Prior to Maturity 
 Upon receipt of a cash payment at maturity or upon a sale, exchange, or redemption of the notes prior to maturity, a
U.S. Holder generally will recognize capital gain or loss equal to the difference between the amount realized and the U.S. Holder’s basis in the notes. Subject to the discussion below concerning the potential application of the
“constructive ownership” rules under Section 1260 of the Code, this capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder held the notes for more than one year. The deductibility of capital losses is
subject to limitations. 
 Possible Application of Section 1260 of the Code 
 If the Market Measure is or includes the type of financial asset described under Section 1260 of the Code (including, among others, any equity
interest in pass-thru entities such as exchange traded funds, regulated investment companies, real estate investment trusts, partnerships, and passive foreign investment companies, each a “Section 1260 Financial Asset”), while the matter
is not entirely clear, there may exist a risk that an investment in the notes will be treated, in whole or in part, as a “constructive ownership transaction” to which Section 1260 of the Code applies. If Section 1260 of the Code
applies, all or a portion of any long-term capital gain recognized by a U.S. Holder in respect of the notes will be recharacterized as ordinary income (the “Excess Gain”). In addition, an interest charge will also apply to any deemed
underpayment of tax in respect of any Excess Gain to the extent such gain would have resulted in gross income inclusion for the U.S. Holder in taxable years prior to the taxable year of the sale, exchange, or settlement (assuming such income accrued
at a constant rate equal to the applicable federal rate as of the date of sale, exchange, or settlement). 
 If an investment in the notes is
treated as a constructive ownership transaction, it is not clear to what extent any long-term capital gain of a U.S. Holder in respect of the notes will be recharacterized as ordinary income. It is possible, for example, that the amount of the
Excess Gain (if any) that would be recharacterized as ordinary income in respect of the notes will equal the excess of (i) any long-term capital gain recognized by the U.S. Holder in respect of the notes and attributable to Section 1260
Financial Assets, over (ii) the “net underlying long-term capital gain” (as defined in Section 1260 of the Code) such U.S. Holder would have had if such U.S. Holder had acquired an amount of the corresponding Section 1260
Financial Assets at fair market value on the original issue date for an amount equal to the portion of the issue price of the notes attributable to the corresponding Section 1260 Financial Assets and sold such amount of Section 1260
Financial Assets upon the date of sale, exchange, or settlement of the notes at fair market value. Alternatively, the IRS may contend that the Excess Gain should not be limited to amounts attributable to a Section 1260 Financial Asset, but
should instead apply to the entire Market Measure. U.S. Holders should consult their tax advisors regarding the potential application of Section 1260 of the Code to an investment in the notes. 
  

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 As described above, the IRS, as indicated in the Notice, is considering whether Section 1260 of the
Code generally applies or should apply to the notes, including in situations where the Market Measure is not the type of financial asset described under Section 1260 of the Code. 
 Possible Alternative Tax Treatments of an Investment in the Notes 
 Due to the absence of authorities that directly address the proper tax treatment of the notes, prospective investors are urged to consult their tax advisors regarding all possible alternative tax treatments of an
investment in the notes. In particular, the IRS could seek to subject the notes to the Treasury regulations governing contingent payment debt instruments (the “Contingent Payment Regulations”). If the IRS were successful in that regard,
the timing and character of income on the notes would be affected significantly. Among other things, a U.S. Holder would be required to accrue original issue discount every year at a “comparable yield” determined at the time of issuance.
In addition, any gain realized by a U.S. Holder at maturity, or upon a sale or other disposition of the notes generally would be treated as ordinary income, and any loss realized at maturity would be treated as ordinary loss to the extent of the
U.S. Holder’s prior accruals of original issue discount, and as capital loss thereafter. 
 Even if the Contingent Payment Regulations
do not apply to the notes, other alternative U.S. federal income tax characterizations of the notes are possible which, if applied, also could affect the timing and the character of a U.S. Holder’s income or loss. It is possible, for example,
that the notes could be treated as a unit consisting of a loan and a forward contract, in which case a U.S. Holder would be required to accrue interest income or original issue discount on a current basis. 
 Proposed Treasury regulations require the accrual of income on a current basis for contingent payments made under certain notional principal contracts.
The preamble to the regulations states that the “wait and see” method of accounting does not properly reflect the economic accrual of income on those contracts, and requires current accrual of income for some contracts already in
existence. While the proposed regulations do not apply to prepaid forward contracts, the preamble to the proposed regulations expresses the view that similar timing issues exist in the case of prepaid forward contracts. If the IRS or Treasury
publishes future guidance requiring current economic accrual for contingent payments on prepaid forward contracts, it is possible that you could be required to accrue income over the term of the notes. 
 Further, if the Market Measure consists of a single currency, the principles of, or principles similar to those of, Revenue Ruling 2008-1
(“Ruling”) may apply to the notes, depending on their terms. In the Ruling, the IRS held that a three year instrument linked to the euro-U.S. dollar exchange rate should be treated as a euro-denominated debt instrument for U.S. federal
income tax purposes in effect because it was principal protected in euros. If principles such as those apply to the notes, the notes may be treated as non-U.S. dollar denominated debt instruments for U.S. federal income tax purposes and may result
in adverse consequences for U.S. holders. For example, all or a portion of the return on such notes may be treated as ordinary income and U.S. holders may be forced to recognize all or a portion of such income on a current basis over the term of the
notes. 
 Unrelated Business Taxable Income 
 Section 511 of the Code generally imposes a tax, at regular corporate or trust income tax rates, on the “unrelated business taxable income” of certain tax-exempt organizations, including qualified
pension and profit sharing plan trusts and individual retirement accounts. As discussed above, the U.S. federal income tax characterization and treatment of the notes is 

  

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uncertain. Nevertheless, in general, if the notes are held for investment purposes, the amount of income or gain, if any, realized on the maturity date or
upon a sale, exchange or redemption of a note prior to the maturity date, or any income that would accrue to a holder of a note if the notes were characterized as contingent payment debt instruments (as discussed above), should not constitute
unrelated business taxable income. However, if a note constitutes debt-financed property (as defined in Section 514(b) of the Code) by reason of indebtedness incurred by a holder of a note to purchase or carry the note, all or a portion of any
income or gain realized with respect to such note may be classified as unrelated business taxable income pursuant to Section 514 of the Code. Moreover, prospective investors in the notes should be aware that whether or not any income or gain
realized with respect to a note which is owned by an organization that is generally exempt from U.S. federal income taxation constitutes unrelated business taxable income will depend upon the specific facts and circumstances applicable to such
organization. Accordingly, any potential investors in the notes that are generally exempt from U.S. federal income taxation should consult with their own tax advisors concerning the U.S. federal income tax consequences to them of investing in the
notes. 
 Non-U.S. Holders – Income Tax Considerations 
 U.S. Federal Income and Withholding Tax 
 We will not attempt to ascertain whether the shares of any
particular Market Measure or any interest underlying any particular Market Measure would be treated as a United States real property interest, within the meaning of Section 897(c)(1) of the Code. If the shares of a particular Market Measure or
one or more interests underlying a particular Market Measure to which the notes are linked were so treated, certain adverse U.S. federal income tax consequences could possibly apply to a non-U.S. Holder. You should refer to information filed with
the SEC by each Market Measure and issuers of interests, as appropriate, underlying each Market Measure and consult your tax advisor regarding the possible consequences to you, if any, if a particular Market Measure or an issuer of interests
underlying a particular Market Measure is or becomes a United States real property holding corporation. 
 A Non-U.S. Holder will not be
subject to U.S. federal income or withholding tax for amounts paid in respect of the notes, provided that the Non-U.S. Holder complies with applicable certification requirements and that the payment is not effectively connected with the conduct by
the Non-U.S. Holder of a U.S. trade or business. Notwithstanding the foregoing, gain from the sale or exchange of the notes or their settlement at maturity may be subject to U.S. federal income tax if that Non-U.S. Holder is a non-resident alien
individual and is present in the U.S. for 183 days or more during the taxable year of the sale, exchange, or retirement and certain other conditions are satisfied. 
 If a Non-U.S. Holder of the notes is engaged in the conduct of a trade or business within the U.S. and if gain realized on the sale, exchange, or settlement of the notes, is effectively connected with the conduct of
such trade or business (and, if certain tax treaties apply, is attributable to a permanent establishment maintained by the Non-U.S. Holder in the U.S.), the Non-U.S. Holder, although exempt from U.S. federal withholding tax, generally will be
subject to U.S. federal income tax on such gain on a net income basis in the same manner as if it were a U.S. Holder. Such Non-U.S. Holders should read the material under the heading “—U.S. Holders—Income Tax Considerations,” for
a description of the U.S. federal income tax consequences of acquiring, owning, and disposing of the notes. In addition, if such Non-U.S. Holder is a foreign corporation, it may also be subject to a branch profits tax equal to 30% (or such lower
rate provided by any applicable tax treaty) of a portion of its earnings and profits for the taxable year that are effectively connected with its conduct of a trade or business in the U.S., subject to certain adjustments. 
  

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 As discussed above, alternative characterizations of the notes for U.S. federal income tax purposes are
possible. Should an alternative characterization, by reason of change or clarification of the law, by regulation or otherwise, cause payments as to the notes to become subject to withholding tax, we will withhold tax at the applicable statutory
rate. As discussed above, the IRS has indicated in the Notice that it is considering whether income in respect of instruments such as the notes should be subject to withholding tax. Prospective Non-U.S. Holders of the notes should consult their own
tax advisors in this regard. 
 U.S. Federal Estate Tax 
 Under current law, while the matter is not entirely clear, individual Non-U.S. Holders, and entities whose property is potentially includible in those individuals’ gross estates for U.S. federal estate tax
purposes (for example, a trust funded by such an individual and with respect to which the individual has retained certain interests or powers), should note that, absent an applicable treaty benefit, a note is likely to be treated as U.S. situs
property, subject to U.S. federal estate tax. These individuals and entities should consult their own tax advisors regarding the U.S. federal estate tax consequences of investing in a note. 
 Backup Withholding and Information Reporting 
 In
general, backup withholding may apply in respect of the amounts paid to a U.S. Holder, unless such U.S. Holder provides proof of an applicable exemption or a correct taxpayer identification number, or otherwise complies with applicable requirements
of the backup withholding rules. In addition, information returns will be filed with the IRS in connection with payments on the notes as well as in connection with the proceeds from a sale, exchange, or other disposition of the notes, unless the
U.S. Holder provides proof of an applicable exemption from the information reporting rules. 
 In general, backup withholding may apply in
respect of the amounts paid to a Non-U.S. Holder, unless such Non-U.S. Holder provides the required certification that it is not a United States person, or the Non-U.S. Holder otherwise establishes an exemption, provided that the payor or
withholding agent does not have actual knowledge that the holder is a United States person, or that the conditions of any exemption are not satisfied. In addition, information returns may be filed with the IRS in connection with payments on the
notes as well as in connection with the proceeds from a sale, exchange or other disposition of the notes. 
 Any amounts withheld under the
backup withholding rules will be allowed as a refund or a credit against a holder’s U.S. federal income tax liability provided the required information is furnished to the IRS. 
 Reportable Transactions 
 Applicable Treasury regulations require taxpayers that participate in
“reportable transactions” to disclose their participation to the IRS by attaching Form 8886 to their U.S. federal tax returns and to retain a copy of all documents and records related to the transaction. In addition, “material
advisors” with respect to such a transaction may be required to file returns and maintain records, including lists identifying investors in the transactions, and to furnish those records to the IRS upon demand. A transaction may be a
“reportable transaction” based on any of several criteria, one or more of which may be present with respect to an investment in the notes. Whether an investment in the notes constitutes a “reportable transaction” for any investor
depends on the investor’s particular circumstances. The Treasury regulations provide that, in addition to certain other transactions, a “loss transaction” constitutes a “reportable transaction.” A “loss
transaction” is any transaction resulting in the taxpayer claiming a loss under Section 165 of the Code, in an amount equal to or in excess of certain threshold amounts, subject to certain exceptions. Investors should consult their own

  

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tax advisors concerning any possible disclosure obligation they may have with respect to their investment in the securities that we are offering and should
be aware that, should any “material advisor” determine that the return filing or investor list maintenance requirements apply to such a transaction, they would be required to comply with these requirements. 
 ERISA CONSIDERATIONS 
 Each fiduciary of a pension, profit-sharing, or other employee benefit plan subject to ERISA (a “Plan”), should consider the fiduciary standards of ERISA in the context of the Plan’s particular
circumstances before authorizing an investment in the notes. Accordingly, among other factors, the fiduciary should consider whether the investment would satisfy the prudence and diversification requirements of ERISA and would be consistent with the
documents and instruments governing the Plan. 
 In addition, we and certain of our subsidiaries and affiliates may be each considered a
party in interest (within the meaning of ERISA) or a disqualified person (within the meaning of the Code), with respect to many Plans, as well as many individual retirement accounts and Keogh plans (also “Plans”). Prohibited transactions
within the meaning of ERISA or the Code would likely arise, for example, if the notes are acquired by or with the assets of a Plan with respect to which we or any of our affiliates is a party in interest or disqualified person, unless the notes are
acquired under an exemption from the prohibited transaction rules. A violation of these prohibited transaction rules could result in an excise tax or other liabilities under ERISA and/or Section 4975 of the Code for such persons, unless
exemptive relief is available under an applicable statutory, regulatory, or administrative exemption. 
 Under ERISA and various PTCEs issued
by the U.S. Department of Labor, exemptive relief may be available for direct or indirect prohibited transactions resulting from the purchase, holding, or disposition of the notes. Those exemptions include PTCE 96-23 (for certain transactions
determined by in-house asset managers), PTCE 95-60 (for certain transactions involving insurance company general accounts), PTCE 91-38 (for certain transactions involving bank collective investment funds), PTCE 90-1 (for certain transactions
involving insurance company separate accounts), and PTCE 84-14 (for certain transactions determined by independent qualified asset managers). 
 In addition, Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code provide statutory exemptive relief for certain arm’s-length transactions with a person that is a party in interest solely by reason of providing
services to Plans or being an affiliate of such a service provider (the “Service Provider Exemption”). The Service Provider Exemption is generally applicable for otherwise-prohibited transactions between a Plan and a person or entity that
is a party in interest or disqualified person with respect to such Plan solely by reason of providing services to the Plan (other than a party in interest that is a fiduciary, or its affiliate, that has or exercises discretionary authority or
control or renders investment advice with respect to the assets of the Plan involved in the transaction), provided, that there is “adequate consideration” for the transaction. Any Plan fiduciary relying on the Service Provider Exemption
and purchasing the notes on behalf of a Plan must initially make a determination that (x) the Plan is paying no more than, and is receiving no less than, “adequate consideration” in connection with the transaction and (y) neither
we nor any of our affiliates directly or indirectly exercises any discretionary authority or control or renders investment advice with respect to the assets of the Plan which such fiduciary is using to purchase the notes, both of which are necessary
preconditions to reliance on the Service Provider Exemption. If we or any of our affiliates provide fiduciary investment management services with respect to a Plan, the Service Provider Exemption may not be available, and other exemptive relief
would be required as precondition for purchasing the notes. Where the notes are traded on a generally-recognized market, the adequate consideration determination is based on the prevailing price for the notes on the relevant national exchange or, in
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exchange, the current independently-quoted offering price, in both instances taking into account the size of the transaction and the marketability of the
notes. For notes that are not traded on a generally-recognized market, the adequate consideration determination is to be made by the fiduciary in good faith in accordance with regulations to be issued by the U.S. Department of Labor. Any Plan
fiduciary considering reliance on the Service Provider Exemption is encouraged to consult with counsel regarding the availability of the exemption. 
 Because we may be considered a party in interest with respect to many Plans, the notes may not be purchased, held, or disposed of by any Plan, any entity whose underlying assets include plan assets by reason of any Plan’s investment in
the entity (a “Plan Asset Entity”) or any person investing plan assets of any Plan, unless such purchase, holding, or disposition is eligible for exemptive relief, including relief available under PTCE 96-23, 95-60, 91-38, 90-1, or 84-14
or the Service Provider Exemption, or such purchase, holding, or disposition is otherwise not prohibited. Any purchaser, including any fiduciary purchasing on behalf of a Plan, transferee or holder of the notes will be deemed to have represented, in
its corporate and its fiduciary capacity, by its purchase and holding of the notes that either (a) it is not a Plan or a Plan Asset Entity and is not purchasing such notes on behalf of or with plan assets of any Plan or with any assets of a
governmental, church, or foreign plan that is subject to any federal, state, local, or foreign law that is substantially similar to the provisions of Section 406 of ERISA or Section 4975 of the Code or (b) its purchase, holding, and
disposition are eligible for exemptive relief or such purchase, holding, and disposition are not prohibited by ERISA or Section 4975 of the Code (or in the case of a governmental, church, or foreign plan, any substantially similar federal,
state, local, or foreign law). 
 Under ERISA, assets of a Plan may include assets held in the general account of an insurance company which
has issued an insurance policy to such plan or assets of an entity in which the Plan has invested. Accordingly, insurance company general accounts that include assets of a Plan must ensure that one of the foregoing exemptions is available. Due to
the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries or other persons considering purchasing the notes on behalf of a Plan or
with “plan assets” of any Plan consult with their counsel regarding the availability of exemptive relief. 
 The fiduciary
investment considerations summarized above generally apply to employee benefit plans maintained by private-sector employers and to individual retirement accounts and other arrangements subject to Section 4975 of the Code, but generally do not
apply to governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA), and foreign plans (as described in Section 4(b)(4) of ERISA). However, these other plans may be subject
to similar provisions under applicable federal, state, local, foreign, or other regulations, rules, or laws (“similar laws”). The fiduciaries of plans subject to similar laws should also consider the foregoing issues in general terms as
well as any further issues arising under the applicable similar laws. 
 Purchasers of the notes have exclusive responsibility for ensuring
that their purchase, holding, and disposition of the notes do not violate the prohibited transaction rules of ERISA or the Code or any similar laws, as described above. 
 This discussion is a general summary of some of the rules which apply to benefit plans and their related investment vehicles. This summary does not include all of the investment considerations relevant to Plans and
other benefit plan investors such as governmental, church, and foreign plans and should not be construed as legal advice or a legal opinion. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in
non-exempt prohibited transactions, it is particularly important that fiduciaries or other persons considering purchasing the notes on behalf of or with “plan assets” of any Plan or 

  

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other benefit plan investor consult with their legal counsel prior to directing any such purchase. 
  

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 [Reverse of Note] 
 BANK OF AMERICA CORPORATION 
 Medium-Term Senior Note, Series L 
 REGISTERED GLOBAL SENIOR NOTE 
 SECTION 1. General. This Note is one of a duly authorized issue of senior notes of the Issuer to be issued in one or more series under the Indenture dated January 1, 1995, as supplemented from time to time (the
“Indenture”), between Bank of America Corporation (the “Issuer”) and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the “Trustee”), and to which Indenture reference is hereby made for a statement
of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer and the Trustee and the holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. The term Trustee
shall include any additional or successor trustee appointed in such capacity by the Issuer in accordance with the terms of the Indenture. 
 This Note is also one of the Notes issued pursuant to the Prospectus Supplement dated April 10, 2008 to the Prospectus dated May 5, 2006 (referred to collectively herein as the “Prospectus”) for the offer and sale of the
Issuer’s senior and subordinated medium-term notes, Series L (the “Notes”). The Notes may have different issue and maturity dates, bear interest at different rates and vary in such other ways as provided in the Indenture and described
in the Prospectus. The specific terms of each issuance of Notes will be described in the Final Terms. 
 The Issuer has initially appointed
the Trustee to act as the U.S. Issuing and Paying Agent, Security Registrar and Transfer Agent for the Notes. This Note may be presented or surrendered for payment, and notices, designations or requests in respect of payments with respect to this
Note may be served, at the corporate trust office of the Trustee, located at 101 Barclay Street, New York, New York, 10286, or such other location as may be specified by the Trustee and notified to the Issuer and the registered holder of this Note.

 Unless specified otherwise in the Final Terms, this Note will not be subject to a sinking fund. 
 SECTION 2. Interest Provisions. 
 [Intentionally Omitted] 
 SECTION 3. Amortizing Notes. 
 [Intentionally Omitted] 
 SECTION 4.
Optional Redemption. 
 [Intentionally Omitted] 
  

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 SECTION 5. Optional Repayment. 
 [Intentionally Omitted] 
 SECTION 6.
Additional Amounts.  
 [Intentionally Omitted] 
 SECTION 7. Redemption for Tax Reasons. 
 [Intentionally Omitted] 
 SECTION 8. Modification and Waivers. The Indenture permits, with certain exceptions as
therein provided, the amendment of the Indenture and the modification of the rights and obligations of the Issuer and the rights of the holders of the Notes under the Indenture at any time by the Issuer with the consent of the holders of not less
than 66 2/3% in aggregate principal amount of the series of Notes of which this Note is a part then outstanding and all other
Securities (as defined in the Indenture) then outstanding under the Indenture and affected by such amendment and modification. The Indenture also contains provisions permitting the holders of a majority in aggregate principal amount of the series of
Notes of which this Note is a part then outstanding and all other Securities then outstanding under the Indenture and affected thereby, on behalf of the holders of all such Securities, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the holder of this Note shall be conclusive and binding upon such holder and upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The determination of whether particular Securities are “outstanding” will be made
in accordance with the Indenture. 
 Any action by the holder of this Note shall bind all future holders of this Note, and of any Note
issued in exchange or substitution hereof or in place hereof, in respect of anything done or permitted by the Issuer or by the Trustee in pursuance of such action. 
 New Notes authenticated and delivered after the execution of any agreement modifying, amending or supplementing this Note may bear a notation in a form approved by the Issuer as to any matter provided for in such
modification, amendment or supplement to the Indenture or the Notes. New Notes so modified as to conform, in the opinion of the Issuer, to any provisions contained in any such modification, amendment or supplement may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for this Note. 
 SECTION 9. Obligations Unconditional. No reference herein to
the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal, premium, if any, and interest on this Note at the times, place and rate,
and in the coin or currency, herein prescribed. 
  

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 SECTION 10. Successor to Issuer. The Issuer may not consolidate or merge with or into any other
person, or convey, transfer or lease its properties and assets substantially as an entirety to any person, unless (i) the resulting or acquiring entity, if other than the Issuer, is organized and validly existing under the laws of the United
States, any state thereof or the District of Columbia, and shall expressly assume all the Issuer’s obligations under the Indenture; and (ii) immediately after giving effect to such transaction, the Issuer (or any resulting or acquiring
entity, if other than the Issuer) is not in default in the performance of any covenant or condition under the Indenture. 
 Upon
consolidation, merger, sale or transfer as described above, the resulting or acquiring entity shall be substituted for the Issuer in the Indenture with the same effect as if it had been an original party to the Indenture, and the successor entity
may exercise the Issuer’s right and powers under the Indenture. 
 SECTION 11. Authorized Denominations. This Note, and any Note
issued in exchange or substitution herefor or in place hereof, or upon registration of transfer, exchange or partial redemption or repayment of this Note, may be issued only in an Authorized Denomination as specified in the Final Terms, or if no
Authorized Denomination is so specified, in minimum denominations of U.S.$1,000 and any integral multiple of U.S.$1,000 in excess thereof (or equivalent denominations in other currencies, subject to any other statutory or regulatory minimums).

 SECTION 12. Registration of Transfer. As provided in the Indenture and subject to certain limitations as therein set forth, the
transfer of this Note is registrable in the register maintained by the Security Registrar, upon surrender of this Note for registration of transfer at the office or agency of the Issuer designated by it pursuant to the Indenture, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Trustee or the Security Registrar requiring such written instrument of transfer duly executed by, the registered holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of this series, of Authorized Denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
 This Note may be exchanged in whole, but not in part, for security-printed definitive Notes, only under the circumstances described in the Indenture and
(a) if this Note is a global note clearing initially through The Depository Trust Company (“DTC”), DTC notifies the Issuer that it is unwilling or unable to continue as depository for the DTC global note or DTC ceases to be a clearing
agency registered under the United States Securities Exchange Act of 1934, as amended, if so required by applicable law or regulation, and, in either case, a successor depository is not appointed by the Issuer within 90 days after receiving such
notice or becoming aware that DTC is no longer so registered; or (b) in the case of any other registered global note, if the Issuer is notified that any clearing system through which this Note is cleared and settled has been closed for business
for a continuous period of 14 days (other than by reason of holidays, whether statutory or otherwise) after the original issuance of the relevant notes or has announced an intention to cease business permanently or has in fact done so and no
alternative clearance system approved by the applicable noteholders is available; or (c) the Issuer, in its sole discretion, elects to issue definitive registered notes; or (d) after the occurrence of an Event of Default with respect to
this Note, beneficial owners representing a majority in principal amount of the Notes represented by this Note advise the relevant clearing system through its participants to cease acting as a depository for this Note. 
  

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 In any such instance, an owner of a beneficial interest in this Note will be entitled to physical
delivery in definitive form of Notes equal in principal amount to such beneficial interest and to have such Notes registered in its name. Unless otherwise set forth above, Notes so issued in definitive form will be issued in Authorized Denominations
only and will be issued in registered form only, without coupons. 
 Subject to the terms of the Indenture, if the Notes are held in
definitive form, a holder may exchange its Notes for other Notes of the same series in an equal aggregate principal amount and in Authorized Denominations. 
 Notes in definitive form may be presented for registration of transfer at the office of the Security Registrar or at the office of any transfer agent that the Issuer may designate and maintain. The Security Registrar
or the transfer agent will make the transfer or registration only if it is satisfied with the documents of title and identity of the person making the request. The Issuer may change the Security Registrar or the transfer agent or approve a change in
the location through which the Security Registrar or transfer agent acts at any time, except that the Issuer will be required to maintain a security registrar and transfer agent in each place of payment for the Notes of this series. At any time, the
Issuer may designate additional transfer agents for the Notes of this series. 
 The Issuer will not be required to (a) issue, exchange,
or register the transfer of this Note if it has exercised its right to redeem the Notes of the series of which this Note is a part for a period of 15 calendar days before the redemption date, or (b) exchange or register the transfer of any
Notes of the series of which this Note is a part that were selected, called, or are being called for redemption, except the unredeemed portion of the Notes of the series of which this Note is a part, if being redeemed in part. 
 No service charge shall be made for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. 
 Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee, and any agent of the Issuer or the Trustee may treat the person in whose name this Note is registered as the owner hereof for all purposes, whether not this Note be overdue, and neither the Issuer, the Trustee, nor any such
agent shall be affected by notice to the contrary, except as required by applicable law. 
 SECTION 13. Events of Default. If an Event
of Default (defined in the Indenture as (a) the Issuer’s failure to pay the principal or premium, if any, on the Notes; (b) the Issuer’s failure to pay interest on the Notes within 30 calendar days after the same becomes due;
(c) the Issuer’s breach of its other covenants contained in this Note or in the Indenture, which breach is not cured within 90 calendar days after written notice by the Trustee or the holders of at least 25% in outstanding 

  

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principal amount of all Securities issued under the Indenture and affected thereby; and (d) certain events involving the bankruptcy, insolvency or
liquidation of the Issuer) shall occur with respect to this Note, the principal of this Note may be declared due and payable in the manner and with the effect provided in the Indenture. 
 SECTION 14. Defeasance. Unless otherwise specified in the Final Terms, the provisions of Article Fourteen of the Indenture do not apply to this
Note. 
 SECTION 15. Specified Currency. 
 [Intentionally Omitted] 
 SECTION 16. Original Issue Discount Note. 
 [Intentionally Omitted] 
 SECTION 17. Dual
Currency Note. 
 [Intentionally Omitted] 
 SECTION 18. Mutilated, Defaced, Destroyed, Lost or Stolen Notes. In case this Note shall at any time become mutilated, defaced, destroyed, lost or stolen, and this Note or evidence of the loss, theft or
destruction hereof satisfactory to the Issuer and the Security Registrar and such other documents or proof as may be required by the Issuer and the Security Registrar shall be delivered to the Security Registrar, the Security Registrar shall issue a
new Note of like tenor and principal amount, having a serial number not contemporaneously outstanding, in exchange and substitution for the mutilated or defaced Note or in lieu of the Note destroyed, lost or stolen but, in the case of any destroyed,
lost or stolen Note, only upon receipt of evidence satisfactory to the Issuer and the Security Registrar that this Note was destroyed, stolen or lost, and, if required, upon receipt of indemnity satisfactory to the Issuer and the Security Registrar.
Upon the issuance of any substituted Note, the Issuer may require the payment of a sum sufficient to cover all expenses and reasonable charges connected with the preparation and delivery of a new Note. If any Note which has matured or has been
redeemed or repaid or is about to mature or to be redeemed or repaid shall become mutilated, defaced, destroyed, lost or stolen, the Issuer may, instead of issuing a substitute Note, pay or authorize the payment of the same (without surrender
thereof except in the case of a mutilated or defaced Note) upon compliance by the holder with the provisions of this paragraph. 
 SECTION
19. Miscellaneous. No recourse shall be had for the payment of principal of (and premium, if any) or interest on, this Note for any claim based hereon, or otherwise in respect hereof, against any shareholder, employee, agent, officer or
director, as such, past, present or future, of the Issuer or of any successor organization, either directly or through the Issuer or any successor organization, whether by virtue of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. 
  

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 SECTION 20. Defined Terms. All terms used in this Note which are defined in the Indenture or the
Prospectus and are not otherwise defined in this Note shall have the meanings assigned to them in the Indenture or the Prospectus, as applicable. 
 Unless specified otherwise in the Final Terms, “Business Day” means, a day that meets all the following requirements: 
 (a) for all Notes, is any weekday that is not a legal holiday in New York City or Charlotte, North Carolina, or any other place of payment of the applicable Note, and is not a date on which banking institutions in
those cities are authorized or required by law or regulation to be closed; 
 (b) for any Note where the base rate is LIBOR,
also is a day on which commercial banks are open for business (including dealings in the Index Currency specified in the Final Terms) in London, England; 
 (c) for any Note denominated in euro or any Note where the base rate is EURIBOR, also is a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System or any successor is operating (a
“Target Settlement Date”); and 
 (d) for any Note that has a Specified Currency other than U.S. dollars or euro,
also is not a day on which banking institutions generally are authorized or obligated by law, regulation, or executive order to close in the Principal Financial Center of the country of the Specified Currency. 
 Unless specified otherwise in the Final Terms, “Principal Financial Center” means (i) the capital city of the country issuing the
Specified Currency, except that with respect to U.S. Dollars, Australian dollars, Canadian dollars, South African rand and Swiss francs, the “Principal Financial Center” shall be New York City, Sydney and Melbourne, Toronto, Johannesburg,
and Zurich, respectively; and (ii) the capital city of the country to which the Index Currency relates, except that with respect to U.S. Dollars, Australian dollars, Canadian dollars, South African rand and Swiss francs, the “Principal
Financial Center” shall be New York City, Sydney, Toronto, Johannesburg and Zurich, respectively. 
 SECTION 21. GOVERNING LAW.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, NOTWITHSTANDING ANY OTHERWISE APPLICABLE CONFLICTS OF LAWS PROVISIONS AND ALL APPLICABLE UNITED STATES FEDERAL LAWS AND REGULATIONS. 
  

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 ABBREVIATIONS 
 The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: 
  

					
	TEN COM	  	—	  	as tenants in common
	TEN ENT	  	—	  	as tenants by the entireties
	JT TEN	  	—	  	as joint tenants with right of survivorship and not as tenants in common

  

							
	UNIF GIFT MIN ACT —	  	_______________________	  	as Custodian for	  	______________________________
		  	                (Cust)	  		  	(Minor)
		  	                Under Uniform Gifts to Minors Act
		
		  	                __________________________________________
		  		  	(State)	  	
	
	Additional abbreviations may also be used though not in the above list.
	
	____________________
	
	
		  	 FOR VALUE RECEIVED, the undersigned hereby
 sell(s), assign(s) and transfer(s) unto

 PLEASE INSERT SOCIAL SECURITY OR OTHER 
 IDENTIFYING NUMBER OF ASSIGNEE 
  

					
	        /        /        	  		  	                                       
                                         
                                         
                                         
  
		  		  	Please print or type name and address, including zip code of assignee
	
	                                       
                                         
                                         
                                         
                                         
 
	the within Note of BANK OF AMERICA CORPORATION and all rights thereunder and does hereby irrevocably constitute and appoint
	
	                                       
                                         
                                         
                                         
                                         
 
		  		  	                                       
                      Attorney    
	to transfer the said Note on the books of the within-named Issuer, with full power of substitution in the premises

 Dated:
                     
  

			
	SIGNATURE GUARANTEED:	  	                                       
                                         
                            
		  	NOTICE: The signature to this assignment must correspond
		  	with the name as it appears upon the face of this Note

  

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 Schedule 1  
 SCHEDULE OF TRANSFERS, EXCHANGES AND EXTENSIONS 
 The following increases and decreases in the principal amount of
this Note have been made: 
  

							
	 Date of Transfer,
 Redemption,
 Repayment
or
 Extension, as
 Applicable
	  	 Increase (Decrease) in Principal
Amount of
 this Note Due to
 Transfer Among

 Global Notes or
 Redemption,
 Repayment or
 Non-Election of Extension
 of Maturity Date of a
 Portion of Global
 Note, as
Applicable
	  	 Principal
 Amount of this Note
 After Transfer,
 Redemption,
 Repayment
or
 Extension, as
 Applicable
	  	 Notation made
 by or on
 behalf of the Issuer

				
	  
	  	  
	  	  
	  	  

				
	  
	  	  
	  	  
	  	  

				
	  
	  	  
	  	  
	  	  

				
	  
	  	  
	  	  
	  	  

  

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