Document:

exv10w1

 

Exhibit 10.1

SEVERANCE AGREEMENT AND RELEASE

     This Severance Agreement and Release (“Agreement”) is entered into as of the 19th day of
March, 2005 (the “Effective Date”). The parties to this Agreement are Hastings Entertainment, Inc.
(“Hastings” or the “Company”) and Robert Berman (“Berman”).

Recitals

     1.   Berman has been employed by Hastings as Vice President of Store Operations. Berman has
voluntarily resigned his employment with Hastings effective March 19, 2005, in order to pursue
other business opportunities.

     2.   Hastings and Berman do not anticipate that there will be any dispute between them or legal
claims arising out of Berman’s separation from the Company, but nevertheless desire to settle fully
and finally any and all differences, causes of action, claims, or disputes that might otherwise
arise out of Berman’s employment with the Company.

Agreement

     IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, IT IS AGREED AS FOLLOWS:

     1.   Temporary Continuation of Pay. Hastings will continue to pay Berman his regular salary
through March 31, 2005. These payments will be issued through the Company’s payroll less all
applicable taxes and withholding. Berman will receive his vested employee benefits (including the
bonus payable for the period ending January 31, 2005 and three (3) weeks of vacation pay).

     2.    Severance Benefits. Following his final date of employment, Hastings agrees to pay Berman
a sum equal to twelve (12) months of his current base salary plus bonus computed at his bonus
percentage for such period based upon an assumed achievement of 100%, equal to $240,000.00, payable
in one lump sum less all applicable taxes and withholding. This payment will be made on or before
April 15, 2005.

     3.   COBRA Payments. The Company will pay Berman’s (including his spouse) COBRA costs for a
period of fifteen (15) months. Hastings will pay all costs directly through its third party
administrator.

     4.   Options. Any unvested Options granted pursuant to Option Grant No’s 500, 551, 605, 606,
671, and 672 will be vested as of April 1, 2005, and all Options under such grants must be
exercised on or before June 30, 2005. Any option shares under such grants not exercised by such
date will expire. All other Options Grants remain in force as written.

			
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     5.   Return of Property. Berman agrees to return to the Company any property owned by the
Company in a timely manner.

     6.   Agreement Confidentiality. Berman represents and agrees that the existence, terms and
conditions of this Agreement shall be kept strictly and completely confidential subject only to the
following exceptions:

	 	A.  	Berman may tell, on condition of confidentiality, his immediate family,
appropriate governmental agencies, such as the Internal Revenue Service,
Bankruptcy trustee, his investment adviser, attorneys, and accountant; and any
other person he is required to tell by law or must do so to effectuate this
Agreement.
	 
	 	B.  	Berman may disclose relevant information regarding the terms and
conditions of this Agreement in response to a validly executed and served
subpoena or other court order. However, in so responding, Berman will advise
the court and all interested parties of the existence and substance of this
confidentiality agreement and will take all reasonable steps necessary to limit
his disclosure of confidential information governed by this Agreement.

     The phrase, “terms and conditions of this Agreement” means those terms and conditions that
appear on the face of the Agreement and any and all discussions, information and documentation
used, generated and/or relied upon in producing this Agreement. Except to the extent necessary to
enforce this Agreement, it is further agreed that neither this Agreement nor any part thereof is to
be used or admitted into evidence in any proceeding of any character, judicial or otherwise, now
pending or hereafter instituted.

     7.   Release. In consideration of the severance pay, severance benefits, and other promises
contained herein, and as a material inducement to Hastings to enter into this Agreement, Berman
hereby irrevocably and unconditionally releases, acquits, forever discharges, and agrees to hold
harmless Hastings and its agents, assigns, directors, officers, employees, representatives,
attorneys, divisions, subsidiaries, affiliates and all persons acting by, through, under, or in
concert with any of them (hereinafter “the releasees”), from any and all claims, causes of action,
demands or liabilities whatsoever, whether known or unknown or suspected to exist by Berman that he
ever had or may now have against the releasees, or any of them, including, without limitation, any
claims, causes of action, demands, or liabilities in connection with either Berman’s employment
with the Company or his resignation from the Company. This Agreement expressly covers, but is not
limited to, any claims that Berman may have raised under any state or federal statutory or common
law prohibiting discrimination in employment on the basis of age, gender, disability, race,
national origin, religion, “whistleblower” or on any other basis prohibited by law including claims
arising under Title VII of the Civil Rights Act of 1964, Section 21.051 of the Texas Labor Code,
and the Americans with Disabilities Act.

			
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	 	Page 2

 

 

     In addition and in consideration of the promises contained in this Agreement, Berman hereby
waives, releases and forever discharges, and agrees that he will not in any manner institute,
prosecute, or pursue, any complaint, claim, charge, demand, or suit, whether in law or in equity,
which asserts or could assert at common law or any statute, rule or any grounds whatsoever, any
claim or claims under the federal Age Discrimination in Employment Act, 29 U.S.C. §621 et seq.,
against any one or all of the releasees with respect to any event, matter, claim, damage, or
injury, whether known or unknown, arising out of his employment and resignation of employment with
the Company and its subsidiaries and/or the execution of this Agreement.

     8.   Letter of Recommendation. Hastings will execute a letter of recommendation on Berman’s
behalf which letter will be subject to reasonable approval by Berman. Hastings agrees to supply up
to ten original copies for Berman at his request. Any subsequent inquiry regarding Berman’s
employment and subsequent resignation will be addressed by supplying a copy of the letter of
recommendation or otherwise communicating its content.

     9.   Reasonable Assistance & Cooperation. In consideration of the severance payment and other
benefits provided to Berman in this Agreement, Berman agrees to provide reasonable assistance and
cooperation to Hastings regarding certain items and areas over which he managed or otherwise worked
on while employed at the Company, not to exceed twenty (20) hours per month or a total of 100 hours
overall. Berman acknowledges and agrees that his receipt of the severance payment and other
benefits provided for in this Agreement are contingent upon his good faith efforts to provide
reasonable assistance and cooperation during the transition period identified in paragraph 1 above
and thereafter.

     10.   COBRA. Berman hereby acknowledges that Hastings or its authorized designee has advised
him that pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) he has the
right to elect continued coverage under the Company’s group health plan at his own expense once
Hastings stops paying for his health insurance under paragraph 3. Such election must be made no
later than sixty (60) days after his resignation.

     11.   No Admission of Fault on Behalf of Hastings. This Agreement shall not in any way be
construed as an admission by Hastings, its agents, employees, directors, officers, representatives,
or assigns, or its subsidiaries, of any act of wrongdoing whatsoever against Berman or any other
person.

     12.   Complete Agreement. This Agreement sets forth the entire agreement between the parties
hereto and fully supersedes any and all prior agreements or understandings between the parties
hereto pertaining to the subject matter hereof.

     13.   Acknowledgment of Right to Seek Counsel. Berman acknowledges that he has a complete and
unequivocal right to seek legal advice and/or representation from any attorney of his choice
regarding the matters set forth in this Agreement. Berman acknowledges that he has either
consulted with counsel and is satisfied with the representation he received with respect to this
Agreement, or he acknowledges that he has knowingly and voluntarily waived his right to seek legal
representation.

			
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	 	Page 3

 

 

     14.   Choice of Forum and Venue. The terms of this Agreement shall be construed in accordance
with the laws of the State of Texas. Any proceeding brought to enforce or interpret this Agreement
shall be brought in Potter County, Texas.

     15.   Time to Sign and Revoke Agreement. In accordance with the Older Workers Benefit
Protection Act, 29 U.S.C. §626(f)(1), Berman acknowledges and agrees that he has the right to
examine the terms of this Agreement for twenty-one (21) calendar days from the date he first
received this Agreement before executing the Agreement, but has chosen to waive this right.

     Berman understands that for a period of seven (7) calendar days after he executes this
Agreement he has the right to revoke it and this Agreement shall not become effective and
enforceable until after the passage of this seven day period without Berman having revoked it.
Non-revocation shall be evidence by an executed copy of the attached Statement of Non-Revocation.
This Agreement may not be revoked after the seven day period.

     16.   Confidentiality, Non-Disclosure Following Termination and Covenant Not to Compete. Berman
acknowledges and stipulates that: 1) during the time he worked for Hastings, he was placed in a
position to become acquainted with Hastings’ Proprietary and Confidential Information (defined
below); 2) the use or disclosure of Proprietary and Confidential Information by Berman, except as
expressly authorized by Hastings, is prohibited and would seriously damage Hastings; 3) in addition
to being given access to Proprietary and Confidential Information, Berman received material
benefits as a result of his employment, including compensation and experience; and 4) in addition
to the foregoing, Berman is being given the severance benefits described in Paragraph 2, 3 and 4.
Therefore, Berman agrees as follows:

	 	A.  	Berman shall not, without the prior written consent of Hastings,
directly or indirectly:

	 	(i)  	disclose, divulge, furnish or make accessible to
any person, or copy, take or use in any manner, any of the Proprietary
and Confidential Information of Hastings;
	 
	 	(ii)  	take any action that might reasonably or
foreseeably be expected to compromise the confidentiality or proprietary
nature of any of the Proprietary and Confidential Information of
Hastings;
	 
	 	(iii)  	fail to follow the reasonable guidelines
established by Hastings from time to time regarding the confidential and
proprietary nature of the Proprietary and Confidential Information; or

			
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	 	(iv)  	divulge, furnish or make accessible to any other
employee of Hastings a copy of this Agreement, or in any other manner
divulge the contents thereof.

	 	B.  	Berman agrees to return all documents, discs, files, software,
compilations of information, or any other materials provided or made available
to him by Hastings (including all copies of any such material) that contain
Proprietary and Confidential Information as defined by this Agreement.
	 
	 	C.  	“Proprietary and Confidential Information” means all of the data,
documents, materials, information and ideas of Hastings, including, without
limitation: any and all applicant and employee records and information, customer
and vendor records and information, operation methods and information, marketing
information and strategies, accounting and financial information, internal
publications and memoranda, goodwill, this Agreement and its contents, computer
systems, software, and other matters considered proprietary or confidential by
Hastings. Proprietary and Confidential Information shall not include: (i) any
information or material that Berman can establish has become publicly available;
(ii) any information or material required to be disclosed by order of a court of
competent jurisdiction; or (iii) any otherwise confidential information or
material that Hastings’ Board of Directors allows to be disclosed by Berman, as
evidenced by the Board’s written consent for such disclosure.
	 
	 	D.  	Covenant Not to Compete.
	 
	 	(a)  	Length of Time and Area. (1) For a period of two (2) years after
the Effective Date, Berman shall not accept any position, where the performance
of duties in that position will involve managing, controlling, participating
in, investing in, acting as consultant or advisor to, rendering services
for, or otherwise assisting any person or entity that engages in or owns
any business that derives a material portion of its revenues from the retail
multi-media entertainment business. For purposes of this Agreement, “retail
multi-media entertainment business” includes the businesses involved in any one
or more of the following: the sale of books, the sale of pre-recorded music,
the sale of pre-recorded video tapes, the sale of software, or the rental of
pre-recorded video tapes (whether any such product is new or used). A material
portion shall mean that ten percent (10%) or more of such person’s or entity’s
(including its affiliates) revenues is derived from the retail multi-media
entertainment business. This non-competition agreement is limited to any person
or entity that operates in states in which Hastings operates as of the Effective
Date.

			
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	 	(b)  	This section shall not prevent Berman from using general skills
and experience developed during employment with Hastings or other Hastings; or
from accepting a position of employment with another company, firm, or
other organization which competes with Hastings, if its business is
diversified and Berman is employed in a part of the business that is not
related to the multi-media entertainment business and provided that such
position does not require or permit the disclosure or use of Proprietary and
Confidential Information.
	 
	 	(c)  	The ownership by Berman of ten percent (10%) or less of a
publicly-traded class of securities shall not be deemed a violation of this
Section 16.
	 
	 	(d)  	Reasonableness of Limitations. Berman acknowledges and agrees
that the covenant not to compete contained this Section 16 is ancillary to or
part of this Severance Agreement and Release and that the limitations contained
in this covenant not to compete (1) are reasonable limitations as to time,
geographical area, and scope of activity to be restrained; (2) do not impose a
greater restraint than is necessary to protect the business interests of
Hastings, which, not by limitation, include the Proprietary and Confidential
Information; and (3) will not create a hardship on Berman.
	 
	 	(e)  	Partial Invalidity. If for any reason any court of competent
jurisdiction determines that the restrictions contained in this covenant not to
compete are not reasonable, that the consideration is inadequate, or that Berman
has been prevented from earning a livelihood, such restrictions should be
interpreted,
modified, or rewritten to include as much of the duration, scope, and
geographic area identified in this Section 16 as will render such
restrictions valid and enforceable.
	 
	 	(f)  	Nonsolicitation of Employees. For a period of two (2) years
following the Effective Date, Berman shall not directly solicit, encourage, or
induce any other employees of Hastings to terminate employment with Hastings or
employ or offer employment to any such other employee of Hastings.

     17.   Assignment of Intellectual Property.

	 	A.  	Berman agrees that any idea, innovation, concept, useful article,
software, program, database, system, modification to an existing system or
program, or other analytical tool he created or developed as part of his
employment with Hastings (collectively referred to as “Development”) shall be
the sole exclusive property of Hastings, and Berman agrees that he retains no
intellectual property rights in any such Development. As such, Berman expressly
assigns to Hastings all right, title and interest in any and all

			
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	 	   	Developments,
made or conceived solely or jointly by Berman, whether or not such Developments
are patentable, copyrightable, or protectable in any other manner, that relate
in any way to the business or operations of Hastings.
	 
	 	B.  	The assignment of any Development only applies to any
Development(s) created while Berman was employed by Hastings.
	 
	 	C.  	To the extent Berman claims that any Development was his own
intellectual property prior to the date he began his employment with Hastings,
Berman agrees to list such Development below, with a brief description that is
sufficient to allow the parties to easily identify what Berman claims as his
own. Berman claims the following Development(s) as his own creation prior to
the date he began his employment with Hastings, and does not assign his right,
title and interest in such Development(s) to Hastings:
	 
	 	   	

	 
	 	   	

	 
	 	   	

	 
	 	   	

	 
	 	   	

	 
	 	   	

(Write “NONE” if no prior Developments exist).
	 
	 	D.  	Excluded from Berman’s assignment of his Developments are the
following, which Berman cannot assign to Hastings because of a prior agreement
with ___, which is effective until ___.
	 
	 	   	

	 
	 	   	

	 
	 	   	

	 
	 	   	

	 
	 	   	

	 
	 	   	

	 
	 	   	(Write “NONE” if no prior agreements exist).
	 
	 	E.  	Hastings and its licensees are not required to designate Berman
as the author or creator of any Development assigned in this paragraph 15 when
distributing the Development publicly or otherwise. To the extent Berman writes
any article in any publication or trade journal referencing or relating to any
Development, the article shall be considered a joint work of Hastings and
Berman, shall recognize both Hastings and Berman as joint authors, and shall
include information identifying Berman as an employee of Hastings.

			
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     18.   Right to Injunctive Relief and Other Remedies. If it is determined that Berman has
breached any of the covenants contained in paragraphs 14, 16, or 17, Hastings may obtain an
injunction prohibiting such breach. Berman expressly stipulates and agrees that his obligations
under this Agreement are specifically enforceable by temporary and permanent injunctive relief.
Berman further agrees that Hastings shall not be required to post a bond in order to obtain
injunctive relief against Berman for violating any of the covenants contained in paragraphs 4, 14,
or 15, or if a bond is required by law or by any court of competent jurisdiction, Berman hereby
agrees to a bond in the lowest amount permitted by law. Nothing in this paragraph shall be deemed
to deny Hastings the right to seek damages, or any other remedy that may be available, in addition
to the injunctive provided herein.

     19.   Notices. All communications and notices between the parties hereto shall be given at the
following addresses:

Hastings Entertainment, Inc.

c/o Dave Moffatt, Vice-President Human Resources

3601 Plains Blvd.

Amarillo, Texas 79102

Robert Berman

___________________

Amarillo, Texas 79109

Notice under this Agreement will be considered to have been accomplished on the date the party
deposits in the United States Mail a copy of the notice at issue, which must be properly addressed
using the addresses identified in this paragraph, postage prepaid with adequate postage thereon.

     20.   INDEMNITY. BERMAN AGREES TO INDEMNIFY, RELEASE, DEFEND AND HOLD HARMLESS HASTINGS AND ITS
EMPLOYEES, AFFILIATES, AND ASSIGNS FROM ANY AND ALL LIABILITY, CLAIMS, LOSSES, COSTS, ATTORNEYS’
FEES AND/OR DAMAGES OF ANY SORT THAT ARISE OR RESULT FROM THE BREACH OF ANY WARRANTIES OR
REPRESENTATIONS MADE IN THIS AGREEMENT.

     HASTINGS AGREES TO INDEMNIFY, RELEASE, DEFEND AND HOLD HARMLESS BERMAN FROM ANY AND ALL
LIABILITY, CLAIMS, LOSSES, COSTS, ATTORNEYS’ FEES AND/OR DAMAGES OF ANY SORT THAT ARISE OR RESULT
FROM THE PERFORMANCE OF BERMAN’S DUTIES CONDUCTED IN GOOD FAITH WHILE ACTING ON HASTINGS’ BEHALF OR
THE BREACH OF ANY WARRANTIES OR REPRESENTATIONS MADE BY IT IN THIS AGREEMENT.

			
	SEVERANCE AGREEMENT AND RELEASE
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     BY SIGNING BELOW, Berman ACKNOWLEDGES THAT HE HAS READ AND CAREFULLY CONSIDERED THIS AGREEMENT
AND UNDERSTANDS THAT IT IS A FULL RELEASE OF ALL CLAIMS KNOWN OR UNKNOWN. Berman ACKNOWLEDGES AND
AFFIRMS THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS CONCERNING THIS AGREEMENT AND HE HAS HAD
HIS QUESTIONS ANSWERED TO HIS COMPLETE SATISFACTION. Berman ACKNOWLEDGES THAT HE IS SIGNING THIS
AGREEMENT FREELY AND VOLUNTARILY.

	 	 	 	 	 
	 	HASTINGS ENTERTAINMENT, INC.,

a Texas Corporation

 	 
	 	By:  	 	 
	 	 	 	 
	 	Title:  	 	 
	 	  	on Behalf of the Corporation	 
	 

	 	 	 	 	 
	 	

EMPLOYEE

Robert Berman

Date

 	 
	 	 	 
	 	 	 
	 	 	 
	 

			
	SEVERANCE AGREEMENT AND RELEASE
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STATEMENT OF NON-REVOCATION

     By signing below, I hereby verify that I have chosen not to revoke my Agreement to and
execution of the “Severance Agreement and Release” dated ___between myself and
HASTINGS ENTERTAINMENT, INC. My signature below confirms my continued agreement to the terms of
that Agreement in all its particulars including my release and waiver of any and all claims
relating to my employment and voluntary resignation of employment with HASTINGS ENTERTAINMENT, INC.

	 	 	 
	Robert Berman

	 	Date
	 
	 	 
	ACCEPTED BY:
	 	 
	 

	 	 
	

	 	Date
	 
	 	 
	Print Name & Title:
	 	 
	 
	 	 

	   	NOTICE: DO NOT SIGN, DATE OR RETURN THIS DOCUMENT UNTIL EIGHT (8) DAYS AFTER YOU SIGN THE
“SEVERANCE AGREEMENT AND RELEASE.”

			
	SEVERANCE AGREEMENT AND RELEASE
	 	Page 10exv10w20

 

Exhibit 10.20

Commercial Paper Dealer Agreement

4(2) PROGRAM

between

Oracle Corporation, as Issuer

and

[Dealer], as Dealer

Concerning Notes to be issued pursuant to an Issuing and Paying
Agency Agreement dated as of March 23, 2005 between the Issuer and
JPMorgan Chase Bank, National Association, as Issuing and Paying
Agent

Dated as of

[Date]

 

 

COMMERCIAL PAPER DEALER AGREEMENT

4(2) Program

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

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

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

Section 1. Offers, Sales and Resales of Notes

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

     1.2 So long as this Agreement shall remain in effect, and in addition to the limitations
contained in Section 1.7 hereof, the Issuer shall not, without the consent of the Dealer, offer,
solicit or accept offers to purchase, or sell, any Notes except (a) in transactions with one or
more dealers which may from time to time after the date hereof become dealers with respect to the
Notes by executing with the Issuer one or more agreements which contain provisions substantially
identical to Section 1 of this Agreement, of which the Issuer hereby undertakes to provide the
Dealer prompt notice or (b) in transactions with the other dealers listed on the Addendum hereto,
which are executing agreements with the Issuer which contain provisions substantially identical to
Section 1 of this Agreement contemporaneously herewith. In no event shall the Issuer offer,
solicit or accept offers to purchase, or sell, any Notes directly on its own behalf in transactions
with persons other than broker-dealers as specifically permitted in this Section 1.2.

     1.3 The Notes shall be in a minimum denomination or minimum amount, whichever is applicable,
of $250,000 or integral multiples of $1,000 in excess thereof, will bear such interest rates, if
interest bearing, or will be sold at such discount from their face amounts, as shall be agreed upon
by the Dealer and the Issuer, shall have a maturity not exceeding 365 days from the date of
issuance (exclusive of days of grace) and may have such terms as attached as Exhibit C hereto and
as specified in the Private Placement Memorandum and shall not contain any provision for extension,
renewal or automatic “rollover.”

     1.4 The authentication, delivery and payment of the Notes shall be effected in accordance with
the Issuing and Paying Agency Agreement and the Notes shall be either individual physical
certificates or represented by book-entry Notes registered in the name of DTC or its nominee in the
form or forms annexed to the Issuing and Paying Agency Agreement.

     1.5 If the Issuer and the Dealer shall agree on the terms of the purchase of any Note by the
Dealer or the sale of any Note arranged by the Dealer (including, but not limited to, agreement
with respect to the date of issue, purchase price, principal amount, maturity and interest rate (in
the case of interest-bearing Notes) or discount thereof (in the case of Notes issued on a discount
basis), and appropriate compensation for the Dealer’s services hereunder) pursuant to this
Agreement, the Issuer shall cause such Note to be issued and delivered in accordance with the terms
of the Issuing and Paying Agency Agreement

 

 

and payment for such Note shall be made by the purchaser thereof, either directly or through the
Dealer, to the Issuing and Paying Agent, for the account of the Issuer. Except as otherwise
agreed, in the event that the Dealer is acting as an agent and a purchaser shall either fail to
accept delivery of or make payment for a Note on the date fixed for settlement, the Dealer shall
promptly notify the Issuer, and if the Dealer has theretofore paid the Issuer for the Note, the
Issuer will promptly return such funds to the Dealer against its return of the Note to the Issuer,
in the case of a certificated Note, and upon notice of such failure in the case of a book-entry
Note.

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

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

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

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

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

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

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

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

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

2

 

supplement to the Private Placement Memorandum describing the Notes that are ineligible,
the reason for such ineligibility and any other relevant information relating thereto.

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

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

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

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

3

 

Section 2. Representations and Warranties of Issuer

The Issuer represents and warrants that:

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

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

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

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

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

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

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

     2.8 Except as disclosed by the Issuer in the Company Information, there is no litigation or
governmental proceeding pending, or to the knowledge of the Issuer threatened, against or affecting
the Issuer or any of its subsidiaries which is reasonably likely to result in a material adverse
effect on the ability of the Issuer to perform its obligations under this Agreement, the Notes or
the Issuing and Paying Agency Agreement.

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

4

 

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

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

Section 3. Covenants and Agreements of Issuer

The Issuer covenants and agrees that:

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

     3.2 During the term of this Agreement, the Issuer shall, whenever there shall occur any change
in the condition (financial or otherwise) or operations of the Issuer and its subsidiaries, taken
as a whole, or any development or occurrence in relation to the Issuer that would be material to
holders of the Notes or potential holder of the Notes (including any downgrading or receipt of any
notice of intended or potential downgrading or any review for potential change in the rating
accorded any of the Issuer’s securities by any nationally recognized statistical rating
organization which has published a rating of the Notes), upon actual knowledge thereof, and in any
event prior to any subsequent issuance of Notes hereunder, notify the Dealer (by telephone,
confirmed in writing) of such change, development, or occurrence; provided that, for the avoidance
of doubt, the parties hereto acknowledge and agree that the Issuer shall not be required to give
such notice if such disclosure to the Dealer would require public disclosure of such information
under Regulation FD.

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

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

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

5

 

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

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

Section 4. Disclosure

     4.1 The Private Placement Memorandum which shall be provided to purchasers and prospective
purchasers of the Notes shall be prepared for use in connection with the transactions contemplated
by this Agreement. The Private Placement Memorandum and its contents (other than the Dealer
Information) shall be the sole responsibility of the Issuer. The Private Placement Memorandum
shall contain a statement expressly offering an opportunity for each prospective purchaser to ask
questions of, and receive answers from, the Issuer concerning the offering of Notes and to obtain
relevant additional information which the Issuer possesses or can acquire without unreasonable
effort or expense.

     4.2 The Issuer agrees promptly to furnish by way of filing with the SEC or otherwise the
Dealer the Company Information as it becomes available.

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

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

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

Section 5. Indemnification and Contribution

     5.1 The Issuer will indemnify and hold harmless the Dealer, each individual, corporation,
partnership, trust, association or other entity controlling the Dealer, any affiliate of the Dealer
or any such controlling entity and their respective directors, officers, employees, partners,
incorporators, shareholders,

6

 

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

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

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

Section 6. Definitions

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

     6.2 “Company Information” at any given time shall mean the Private Placement Memorandum
together with, to the extent applicable, (i) the Issuer’s most recent annual audited financial
statements and each interim financial statement or report prepared subsequent thereto, if not
included in the Issuer’s SEC filings described in Section 6.13(i) below and (ii) any information
prepared or approved by the Issuer for dissemination to investors or potential investors in the
Notes.

     6.3 “Dealer” shall mean [Dealer].

     6.4 “Dealer Information” shall mean material concerning the Dealer and provided by the Dealer
in writing expressly for inclusion in the Private Placement Memorandum or any amendment or
supplement thereto.

     6.5 “DTC” shall mean The Depository Trust Company.

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

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

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

7

 

     6.9 “Issuer” shall mean Oracle Corporation, a Delaware Corporation.

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

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

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

     6.13 “Private Placement Memorandum” shall mean offering materials prepared in accordance with
Section 4 (including (i) the Issuer’s most recent report on Form 10-K filed with the SEC and each
report on Form 10-Q or 8-K filed by the Issuer with the SEC since the most recent Form 10-K and
(ii) other material specifically incorporated by reference therein) provided to purchasers and
prospective purchasers of the Notes, and shall include amendments and supplements thereto which may
be prepared from time to time in accordance with this Agreement (other than any amendment or
supplement that has been completely superseded by a later amendment or supplement).

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

     6.15 “Regulation FD” shall mean Regulation FD promulgated by the SEC.

     6.16 “Qualified Institutional Buyer” shall have the meaning assigned to that term in Rule
144A.

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

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

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

Section 7. General

     7.1 Unless otherwise expressly provided herein, all notices under this Agreement to parties
hereto shall be in writing and shall be effective when received at the address of the respective
party set forth in the Addendum to this Agreement.

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

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

     7.4 This Agreement may be terminated, at any time, by the Issuer, upon one business day’s
prior notice to such effect to the Dealer, or by the Dealer upon one business day’s prior notice to
such effect to the Issuer. Any such termination, however, shall not affect the obligations of the
Issuer under Sections 3.7, 5 and 7.3 hereof or the obligations of the Dealer under Section 7.3
hereof or the respective

8

 

representations, warranties, agreements, covenants, rights or responsibilities of the parties made
or arising prior to the termination of this Agreement.

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

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

9

 

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

	 	 	 	 	 	 
	 	 	Oracle Corporation,

as Issuer
	 
	 	 	 	 
	

	 	By:
	 	 
	

	 	 	 	 
	 	 	Name:
	 	 	Title:
	 
	 	 	 	 
	 	 	[Dealer]
	 
	 	 	 	 
	

	 	By:
	 	 
	

	 	 	 	 
	 	 	Name:
	 	 	Title:

10

 

ADDENDUM

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

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

For the Issuer:

With copies to:

For the Dealer:

Address:

 

Telephone number:

Fax number:

 

 

EXHIBIT A

FORM OF LEGEND FOR

PRIVATE PLACEMENT MEMORANDUM AND NOTES

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

2

 

EXHIBIT B

FURTHER PROVISIONS RELATING

TO INDEMNIFICATION

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

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

 

 

EXHIBIT C

STATEMENT OF TERMS FOR INTEREST – BEARING COMMERCIAL PAPER NOTES OF

ORACLE CORPORATION

     The provisions set forth below are qualified to the extent applicable by the transaction
specific Private Placement Memorandum Supplement (the “Supplement”), if any, send to each Purchaser
at the time of the transactions.

	 	1.  	General. (a) The obligations of the Issuer to which these terms apply (each
a “Note”) are represented by one or more Master Notes (each, a “Master Note”) issued in the
name of (or of a nominee for) The Depository Trust Company (“DTC”), which Master Note
includes the terms and provisions for the Issuer’s Interest-Bearing Commercial Paper Notes
that are set forth in this Statement of Terms, since this Statement of Terms constitutes an
integral part of the Underlying Records as defined and referred to in the Master Note.
	 
	 	  	(b) “Business Day” means any day other than a Saturday or Sunday that is neither a legal
holiday nor a day on which banking institutions are authorized or required by law, executive
order or regulation to be closed in New York City and, with respect to LIBOR Notes (as
defined below) is also a London Business Day. “London Business Day” means, a day, other than
a Saturday or Sunday, on which dealings in deposits in U.S. dollars are transacted in the
London interbank market.
	 
	 	2.  	Interest. (a) Each Note will bear interest at a fixed rate (a “Fixed Rate
Note”) or at a floating rate (a “Floating Rate Note”).
	 
	 	  	(b) The Supplement sent to each holder of such Note will describe the following terms: (i)
whether such Note is a Fixed Rate Note or a Floating Rate Note and whether such Note is an
Original Issue Discount Note (as defined below); (ii) the date on which such Note will be
issued (the “Issue Date”); (iii) the Stated Maturity Date (as defined below); (iv) if such
Note is a Fixed Rate Note, the rate per annum at which such Note will bear interest, if any,
and the Interest Payment Dates; (v) if such Note is a Floating Rate Note, the Base Rate, the
Index Maturity, the Interest Reset Dates, the Interest Payment Dates and the Spread and/or
Spread Multiplier, if any (all as defined below), and any other terms relating to the
particular method of calculating the interest rate for such Note; and (vi) any other terms
applicable specifically to such Note. “Original Issue Discount Note” means a Note which has
a stated redemption price at the Stated Maturity Date that exceeds its Issue Price by more
than a specified de minimis amount and which the Supplement indicates will be an “Original
Issue Discount Note”.
	 
	 	  	(c) Each Fixed Rate Note will bear interest from its Issue Date at the rate per annum
specified in the Supplement until the principal amount thereof is paid or made available for
payment. Interest on each Fixed Rate Note will be payable on the dates specified in the
Supplement (each an “Interest Payment Date” for a Fixed Rate Note) and on the Maturity Date
(as defined below). Interest on Fixed Rate Notes will be computed on the basis of a 360-day
year of twelve 30-day months.

 

 

If any Interest Payment Date or the Maturity Date of a Fixed Rate Note falls on a day that is not a
Business Day, the required payment of principal, premium, if any, and/or interest will be payable
on the next succeeding Business Day, and no additional interest will accrue in respect of the
payment made on that next succeeding Business Day.

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

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

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

Interest payments on each Interest Payment Date for Floating Rate Notes will include accrued
interest from and including the Issue Date or from and including the last date in respect of which
interest has been paid,

2

 

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

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

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

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

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

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

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

3

 

U.S. dollars, to the nearest cent or, in the case of a foreign currency, to the nearest unit (with
one-half cent or unit being rounded upwards).

CD Rate Notes

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

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

If such rate is not published in either H.15(519) or H.15 Daily Update by 3:00 p.m. on the
Calculation Date, the Calculation Agent will determine the CD Rate to be the arithmetic mean of
the secondary market offered rates as of 10:00 a.m. on such Interest Determination Date of
three leading nonbank dealers1 in negotiable U.S. dollar certificates of deposit in
New York City selected by the Calculation Agent for negotiable U.S. dollar certificates of
deposit of major United States money center banks of the highest credit standing in the market
for negotiable certificates of deposit with a remaining maturity closest to the Index Maturity
in the denomination of $5,000,000.

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

Commercial Paper Rate Notes

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

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

If by 3:00 p.m. on such Calculation Date such rate is not published in either H.15(519) or H.15
Daily Update, then the Calculation Agent will determine the Commercial Paper Rate to be the
Money Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m. on such
Interest Determination Date of three leading dealers of U.S. dollar commercial paper in New
York City selected by the Calculation Agent for commercial paper of the Index Maturity placed
for an industrial issuer whose bond rating is “AA,” or the equivalent, from a nationally
recognized statistical rating organization.

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

4

 

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

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

	 	 	 	 	 
	

	 	     D x 360	 	 
	Money Market Yield =

	 	

	 	x 100
	

	 	360 - (D x M)	 	 

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

Federal Funds Rate Notes

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

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

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

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

LIBOR Notes

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

If no rate appears, LIBOR will be determined on the basis of the rates at approximately 11:00
a.m., London time, on such Interest Determination Date at which deposits in U.S. dollars are
offered to prime banks in the London interbank market by four major banks in such market
selected by the Calculation Agent for a term equal to the Index Maturity and in principal
amount equal to an amount that in the Calculation Agent’s judgment is representative for a
single transaction in U.S. dollars in such market at such time (a “Representative Amount”).
The Calculation Agent will request the principal London office of each of such banks to provide
a quotation of its rate. If at least two such quotations

5

 

are provided, LIBOR will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR for such interest period will be the arithmetic mean of the
rates quoted at approximately 11:00 a.m., in New York City, on such Interest Determination Date
by three major banks in New York City, selected by the Calculation Agent, for loans in U.S.
dollars to leading European banks, for a term equal to the Index Maturity and in a
Representative Amount; provided, however, that if fewer than three banks so selected by the
Calculation Agent are providing such quotations, the then existing LIBOR rate will remain in
effect for such Interest Payment Period.

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

Prime Rate Notes

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

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

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

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

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

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

Treasury Rate Notes

“Treasury Rate” means:

(1) the rate from the auction held on the Interest Determination Date (the “Auction”) of direct
obligations of the United States (“Treasury Bills”) having the Index Maturity specified in the

6

 

Supplement under the caption “INVESTMENT RATE” on the display on Moneyline Telerate (or any
successor service) on page 56 (or any other page as may replace that page on that service)
(“Telerate Page 56”) or page 57 (or any other page as may replace that page on that service)
(“Telerate Page 57”), or

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

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

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

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

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

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

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

	 	 	 	 	 
	

	 	D x N	 	 
	Bond Equivalent Yield =

	 	

	 	x 100
	

	 	360 - (D x M)	 	 

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

	3.  	Final Maturity. The Stated Maturity Date for any Note will be the date so
specified in the Supplement, which shall be no later than 397 days from the date of issuance.
On its Stated Maturity Date, or any date prior to the Stated Maturity Date on which the
particular Note becomes due and payable by the

7

 

	   	declaration of acceleration, each such date being referred to as a Maturity Date, the principal
amount of each Note, together with accrued and unpaid interest thereon, will be immediately due
and payable.
	 
	4.  	Events of Default. The occurrence of any of the following shall constitute an
“Event of Default” with respect to a Note: (i) default in any payment of principal of or
interest on such Note (including on a redemption thereof); (ii) the Issuer makes any
compromise arrangement with its creditors generally including the entering into any form of
moratorium with its creditors generally; (iii) a court having jurisdiction shall enter a
decree or order for relief in respect of the Issuer in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or there
shall be appointed a receiver, administrator, liquidator, custodian, trustee or sequestrator
(or similar officer) with respect to the whole or substantially the whole of the assets of the
Issuer and any such decree, order or appointment is not removed, discharged or withdrawn
within 60 days thereafter; or (iv) the Issuer shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent
to the entry of an order for relief in an involuntary case under any such law, or consent to
the appointment of or taking possession by a receiver, administrator, liquidator, assignee,
custodian, trustee or sequestrator (or similar official), with respect to the whole or
substantially the whole of the assets of the Issuer or make any general assignment for the
benefit of creditors. Upon the occurrence of an Event of Default, the principal of each
obligation evidenced by such Note (together with interest accrued and unpaid thereon) shall
become, without any notice or demand, immediately due and payable. 2
	 
	5.  	Obligation Absolute. No provision of the Issuing and Paying Agency Agreement
under which the Notes are issued shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on each Note at the times,
place and rate, and in the coin or currency, herein prescribed.
	 
	6.  	Supplement. Any term contained in the Supplement shall supercede any conflicting
term contained herein.

 

 

	2	 	Unlike single payment notes, where a default arises only at the stated maturity, interest-bearing notes with
multiple payment dates should contain a default provision permitting acceleration of the maturity if the Issuer defaults on an interest payment.

8

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