Document:

EX-10.1

 

Exhibit 10.1

LABORATORY SERVICES AGREEMENT

Dated as of April 1, 2006

By and Between

MERCK & CO., INC.

And

CELL & MOLECULAR TECHNOLOGIES, INC.

 

 

Table of Contents

	 	 	 	 	 
	1.0 DEFINITIONS
	 	 	1	 
	2.0 SCOPE OF SERVICES
	 	 	5	 
	3.0 FEE FOR SERVICES
	 	 	5	 
	4.0 PAYMENTS
	 	 	5	 
	5.0 SUPPLIER’S REPRESENTATIONS, DUTIES, WARRANTIES, AND COVENANTS
	 	 	6	 
	6.0 COMPLIANCE WITH LAW
	 	 	6	 
	7.0 INDEMNIFICATION
	 	 	7	 
	8.0 CONSEQUENTIAL DAMAGES
	 	 	8	 
	9.0 AGREEMENT TERM
	 	 	8	 
	10.0 TERMINATION
	 	 	8	 
	11.0 INSURANCE
	 	 	9	 
	12.0 NON-EXCLUSIVITY/NON-COMPETE
	 	 	10	 
	13.0 AUDIT RIGHTS
	 	 	11	 
	14.0 ETHICS/CONFLICT OF INTEREST
	 	 	11	 
	15.0 INDEPENDENT CONTRACTOR
	 	 	11	 
	16.0 SCREENING FOR CONTROLLED SUBSTANCES
	 	 	12	 
	17.0 NO SMOKING POLICY
	 	 	12	 
	18.0 STANDARDS OF PERSONNEL
	 	 	12	 
	19.0 REPRESENTATIVES OF THE PARTIES
	 	 	12	 
	20.0 NOTICES
	 	 	12	 
	21.0 FORCE MAJEURE
	 	 	14	 
	22.0 GOVERNING LAW
	 	 	14	 
	23.0 ARBITRATION
	 	 	14	 
	24.0 PUBLICITY
	 	 	15	 
	25.0 ASSIGNMENT/SUBCONTRACTING
	 	 	15	 
	26.0 ENTIRE AGREEMENT/AMENDMENTS
	 	 	15	 
	27.0 SUCCESSORS AND ASSIGNS
	 	 	16	 
	28.0 SURVIVAL OF CERTAIN PROVISIONS
	 	 	16	 
	29.0 SEVERABILITY
	 	 	16	 
	30.0 HEADINGS
	 	 	16	 
	31.0 NON-WAIVER
	 	 	16	 
	32.0 FURTHER ASSURANCES
	 	 	16	 
	33.0 COUNTERPARTS
	 	 	16	 
	34.0 CUMULATIVE REMEDIES
	 	 	17	 
	35.0 ENGLISH LANGUAGE
	 	 	17	 
	36.0 REVIEW BY LEGAL COUNSEL
	 	 	17	 
	37.0 INTELLECTUAL PROPERTY
	 	 	17	 
	38.0 CONFIDENTIALITY
	 	 	17	 
	39.0 AGREEMENT OF CONFIDENTIALITY
	 	 	19	 

 

 

LABORATORY SERVICES AGREEMENT

This Laboratory Services AGREEMENT (this “AGREEMENT”), dated as of April 1, 2006, (the “EFFECTIVE
DATE”) by and between Merck & Co., Inc., a New Jersey corporation (“MERCK”), with offices at One
Merck Drive, Whitehouse Station, NJ 08889-0100 and Cell & Molecular Technologies, Inc.
(“SUPPLIER”), with offices at 445 Marshall Street, Phillipsburg, New Jersey 08865.

WHEREAS, MERCK wishes SUPPLIER to provide the SERVICES (as hereinafter defined) in accordance with
the terms and conditions set forth in this AGREEMENT; and

WHEREAS, SUPPLIER is willing to provide the SERVICES in accordance with the terms and conditions
set forth in this AGREEMENT;

NOW, THEREFORE in consideration of the mutual covenants and promises herein contained, the parties
hereto agree as follows:

1.0 DEFINITIONS

1.1 Affiliate

The term AFFILIATE, with respect to parties hereto, shall mean (1) any corporation or business
entity fifty percent (50%) or more of the voting stock or voting equity interests of which are
owned directly or indirectly; or (2) any corporation or business entity which directly or
indirectly owns fifty percent (50%) or more of the voting stock or voting equity interests of such
party; or (3) any corporation or business entity directly or indirectly controlling or under
control of a corporation or business entity as described in (1) or (2). MERCK AFFILIATES may
participate in this AGREEMENT upon notification to SUPPLIER of their agreement to be bound by the
terms and conditions hereof; provided, that any majority owned subsidiary of MERCK may participate
in this AGREEMENT without such notification.

1.2 Order

An ORDER shall mean a purchase order, assignment order, or TASK ORDER issued by MERCK (or an
AFFILIATE of MERCK) or purchase contract entered into between SUPPLIER and MERCK (or an AFFILIATE
of MERCK) under this AGREEMENT.

1.3 SERVICES

SERVICES shall have the meaning as set forth in ARTICLE 2.0.

1.4 AGREEMENT OF CONFIDENTIALITY

The term AGREEMENT OF CONFIDENTIALITY shall mean that certain agreement of confidentiality dated
April 1, 2006 by and between the parties.

1.5 BILLING RATE

The term BILLING RATE shall mean the hourly rate that SUPPLIER shall invoice MERCK, and MERCK shall
pay, for full-time employees of SUPPLIER, each month in connection with the SERVICES.

 

 

	1.5.1	 	BHWR: The term BHWR for hourly (nonsalaried) employees of SUPPLIER shall mean the
actual hourly wage rate paid by SUPPLIER to the subject individual performing the SERVICES.
The BHWR for salaried employees of SUPPLIER shall mean the base hourly wage rate payable for
each man-hour expended by the subject individual in performing the SERVICES.
	 
	1.5.2	 	DPE/DPEM/Actual DPEM: The term DPE shall mean the direct personnel expense
representing SUPPLIER]s portion of the cost of mandatory and customary contributions and
benefits related to the salaries of SUPPLIER’s employees directly engaged in the performance
of the SERVICES. DPE shall include employment taxes (such as FICA/Medicare Tax,
Federal/Unemployment Tax (FUTA), and State Unemployment Tax (SUTA), and other statutory
employee benefits including worker’s compensation insurance (net of premium discounts,
dividends or rebates), group insurance (including health, dental, life and AD&D insurance net
of employee contributions), sick pay, holidays, vacation actually earned and accrued, excused
absences, employer contributions to employee savings plan, and pension and profit sharing
costs (nondiscretionary, requiring equal distribution of benefits). DPE specifically excludes
all charges for severance pay, tuition reimbursement, employee training, employee morale
programs, employee bonuses, EXECUTIVE bonuses, and general liability, auto liability and
professional liability insurance.
	 
	 	 	The term DPEM shall mean the multiplier by which MERCK pays SUPPLIER for DPE.
	 
	 	 	The term ACTUAL DPEM shall mean the actual DPE calculated as a percent of the sum of the
actual costs of the components of DPE, as set forth above, divided by total payroll net of
sick pay, holidays (or other compensated time off), and actual vacation earned and accrued,
for the monthly invoicing period.
	 
	1.5.3	 	Overhead/Overhead Multiplier: The term OVERHEAD shall mean the cost of SUPPLIER
personnel not working directly in connection with the SERVICES, EXECUTIVE salaries, all
bonuses, association dues and fees, depreciation on all SUPPLIER equipment and assets, payroll
processing costs, corporate taxes or fees, business development costs, all home office
infrastructure costs, general administrative personnel costs, risk management costs, interest
expense, all perquisites such as car allowances, home office expenses (including without
limitation rent, utilities, telephones, faxes, postage charges, and reprographics), accounting
personnel, legal personnel, recruiting costs (even if for placement on the PROJECT), the cost
of all computer hardware and software, and computer processing CAD costs, severance pay,
employee morale programs, and all costs customarily included as overhead costs not identified
as a component of DPE and not specifically identified on SCHEDULE A.
	 
	 	 	The term OVERHEAD MULTIPLIER shall mean the multiplier by which MERCK pays SUPPLIER for
OVERHEAD.
	 
	1.5.4	 	Profit/Profit Multiplier: The term PROFIT shall mean SUPPLIER’s gain for the
performance of the SERVICES and excludes all of the costs reimbursable as DPE and OVERHEAD,
and items reimbursed under SCHEDULE A. The term PROFIT MULTIPLIER shall mean the multiplier
by which MERCK pays SUPPLIER for PROFIT.

 

 

	1.5.5	 	Quality and Schedule Incentive Multiplier: The term QUALITY MULTIPLIER shall mean the
multiplier by which MERCK pays SUPPLIER for the quality of the SERVICES delivered measured by
the agreed metrics in SCHEDULE B.
	 
	1.5.6	 	Performance in Assay Incentive Multiplier:. The term PERFORMANCE MULTIPLIER shall mean the
multiplier by which MERCK pays SUPPLIER for the performance of the SERVICES in the assay
measured by the agreed metrics in SCHEDULE B.
	 
	1.5.7	 	Overtime/Overtime Billing Rate/OTWR: The term OVERTIME shall mean those hours worked
by an employee of SUPPLIER in excess of forty (40) hours per week, pursuant to this AGREEMENT.
The term OTWR shall mean the actual OVERTIME hourly wage rate paid by SUPPLIER to the subject
individual performing the SERVICES. The term OVERTIME BILLING RATE shall mean the hourly rate
that SUPPLIER shall invoice MERCK, and MERCK shall pay, for full time employees of SUPPLIER,
each month in connection with that portion of SERVICES performed during OVERTIME hours.

2.0 SCOPE OF SERVICES

SUPPLIER hereby agrees to provide to MERCK certain laboratory services on a monthly basis (the
“SERVICES”), SCHEDULE C.

3.0 FEE FOR SERVICES

3.1 The price for all SERVICES performed by SUPPLIER for MERCK hereunder shall be determined as set
forth in SCHEDULE A (the “FEE”). MERCK will reimburse SUPPLIER for reasonable and necessary out of
pocket expenses (e.g. postage, telecommunications, and incidental travel previously approved by
MERCK in writing) actually incurred by SUPPLIER in carrying out its activities under this
AGREEMENT, upon presentation of the appropriate receipts, in accordance with MERCK’S internal
policy regarding expenses; provided, however, that MERCK shall not be obligated to reimburse
SUPPLIER for any expenses not described on SCHEDULE A.

3.2 To the extent that SERVICES to be provided hereunder are subject to any sales, use, rental,
personal property, value added or any other taxes, payment of said taxes is SUPPLIER’S
responsibility and said taxes shall be included in the cost of the SERVICES set forth in this
AGREEMENT. SUPPLIER shall be liable for any and all taxes on any and all income it receives from
MERCK under this AGREEMENT.

4.0 PAYMENTS

4.1 SUPPLIER shall submit monthly invoices in the month following that in which the SERVICES were
rendered. MERCK shall pay to SUPPLIER the FEE for SERVICE within forty-five (45) calendar days
after the date of receipt by MERCK of SUPPLIER’S invoice.

Unless otherwise specified by MERCK, all invoices shall be submitted to the following address:

 

 

     Merck & Co., Inc.

     Invoice Processing Unit

     P.O. Box 3500

Rahway, New Jersey 07065-0903

4.2 SUPPLIER shall identify each invoice with this AGREEMENT referenced.

4.3 MERCK reserves the right to initiate adjustment invoices for erroneously invoiced items and to
use such adjustment invoices as credits against subsequent invoices. However, failure of MERCK to
do so shall not prejudice any of MERCK’s rights hereunder.

4.4 MERCK reserves the right to withhold that portion of the monthly payment due SUPPLIER for
SUPPLIER’s failure to carry out the SERVICES in accordance with this AGREEMENT.

4.5 MERCK’s payment of any invoice shall not preclude MERCK from exercising its audit rights under
the terms of ARTICLE 13.0 of this AGREEMENT, and shall not be deemed a release of any potential
claims against SUPPLIER and shall not limit MERCK from pursuing any other remedy available to MERCK
under this AGREEMENT and applicable laws.

5.0 SUPPLIER’S REPRESENTATIONS, DUTIES, WARRANTIES, AND COVENANTS

5.1 SUPPLIER represents and warrants to MERCK that it is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation and that it is
authorized to do business in the State of New Jersey and where the SERVICES are provided.

5.2 SUPPLIER represents and warrants and covenants to MERCK that it is financially solvent and
experienced in and competent to perform the SERVICES contemplated by this AGREEMENT, and that it is
qualified to do the SERVICES herein; that SUPPLIER holds all licenses, permits, and other special
licenses, as required by law, to perform all aspects of the SERVICES included in this AGREEMENT.
Such representations shall be deemed to be continuing.

5.3 SUPPLIER agrees to perform the SERVICES in a professional manner, with care, skill and
diligence in accordance with applicable standards currently recognized by SUPPLIER’S profession.
SUPPLIER further agrees to be responsible for the professional quality, training, and supervision
of all SUPPLIER’S personnel providing SERVICES under this AGREEMENT.

5.4 SUPPLIER shall be solely responsible to MERCK for and have control over all means, methods,
techniques, sequences and safety procedures and for coordinating all portions of the SERVICES under
this AGREEMENT.

5.5 SUPPLIER shall specifically be responsible for performing the SERVICES as set forth in this
AGREEMENT, SCHEDULE C.

6.0 COMPLIANCE WITH LAW

6.1 Each party shall comply with and give all notices required by laws, ordinances, rules,
regulations and lawful orders of any public authority (including without limitation child labor
laws)

 

 

bearing on the performance of this AGREEMENT. Each party shall take all appropriate action
necessary to ensure compliance by itself and by its subcontractors with such laws, ordinances,
rules, applicable regulations, and each party’s safety requirements and other policies and
procedures bearing on the performance of this AGREEMENT.

6.2 Each party at all times shall observe and comply with all applicable Federal and state and
local laws, ordinances and regulations in any manner affecting the conduct of the SERVICES and all
such orders or decrees as exist at present and those which may be enacted later by bodies or
tribunals having jurisdiction or authority over the performance of this AGREEMENT and each party
shall protect, indemnify and save the other party, its AFFILIATES and their respective officers,
directors, employees, and agents harmless against any and all claims, losses, demands, causes of
action, and any and all related costs and expenses of every kind, including reasonable attorneys’
fees, costs, and expenses, suffered by the other party hereto and/or its employees against any
claim or liability arising from or based on the violation or alleged violation of any such law,
ordinance, regulation, order or decree, or any other requirements set forth in this SECTION,
whether by itself or its employees, agents, representatives, subcontractors, and consultants.

6.3 SUPPLIER warrants that all individuals who are provided by SUPPLIER to perform SERVICES under
this AGREEMENT are employed by SUPPLIER, unless otherwise authorized in writing by MERCK on an
individual-by-individual basis. SUPPLIER shall pay all of its employee salaries and expenses of
its employees and all Federal, state and local payroll taxes, FICA contribution, FUI, SUI and any
similar taxes relating to such employees of SUPPLIER. SUPPLIER shall protect, indemnify and save
MERCK, its AFFILIATES and their respective officers, directors, employees, and agents harmless
against any and all claims, losses, demands, causes of action, and any and all related costs and
expenses of every kind, including reasonable attorneys’ fees, costs, and expenses, suffered by the
parties hereto and/or their employees against any claim or liability arising from or based on the
failure of SUPPLIER to pay any of said expenses, salaries or taxes or to comply with such laws
relating to employment.

7.0 INDEMNIFICATION

7.1 Subject to the terms and conditions of this AGREEMENT, SUPPLIER shall protect, defend,
indemnify and save MERCK, its AFFILIATES and their respective officers, directors, principals,
employees, and agents harmless against any and all claims, losses, demands, causes of action, costs
and expenses including, but not limited to reasonable attorneys’ fees and costs, occurring, growing
out of, incident to, or resulting directly from SUPPLIER’s performance of this AGREEMENT or its
omission hereunder to the extent such liability is not due to MERCK’S negligence or intentional
misconduct.

7.2 SUPPLIER warrants that the provided SERVICES do not infringe, misappropriate or otherwise
violate any intellectual property rights and agrees to protect, defend, indemnify and save harmless
MERCK, its AFFILIATES and their respective officers, directors, employees and agents against any
and all claims, losses, liabilities, demands, causes of action, and any and all related costs and
expenses of every kind including, but not limited to reasonable attorneys’ fees, costs, and
expenses, incurred by them in connection with any assertion for such infringement, misappropriation
or breach.

7.3 Notwithstanding SUPPLIERS warranty in Section 7.2, MERCK warrants that the cell lines,
reagents, and MERCK specified protocols do not infringe, misappropriate or otherwise violate any
intellectual property rights and agrees to protect, defend, indemnify and save

 

 

harmless SUPPLIER, its AFFILIATES and their respective officers, directors, employees and agents
against any and all claims, losses, liabilities, demands, causes of action, and any and all related
costs and expenses of every kind including, but not limited to reasonable attorneys’ fees, costs,
and expenses, incurred by them in connection with any assertion for such infringement,
misappropriation or breach.

7.4 MERCK shall give the SUPPLIER (i) prompt written notice of any claims made for which MERCK
knows or reasonably should know the SUPPLIER may be liable under the foregoing indemnification and
(ii) the opportunity, if a third party claim, to defend, negotiate, and settle such claims, in its
sole discretion and with counsel of its own choosing. MERCK shall provide the SUPPLIER with all
information in its possession and all assistance necessary to enable the SUPPLIER to carry on the
defense of such suit. The failure to give such notice shall not relieve the SUPPLIER of its
indemnity obligation hereunder except to the extent that such failure substantially prejudices the
SUPPLIER’s rights hereunder.

7.5 Neither party shall be responsible to or bound by any settlement made without its prior written
consent, which will not be unreasonably withheld.

8.0 CONSEQUENTIAL DAMAGES

8.1 In no event shall either party including its AFFILIATES be liable to the other party for any
incidental, indirect, special or consequential losses or damages of the other party, whether based
upon contract, negligence, or other theory of law.

9.0 AGREEMENT TERM

9.1 This AGREEMENT shall commence on the EFFECTIVE DATE and shall continue in full force and
effect, unless otherwise terminated in accordance with the terms and conditions herein, through and
including March 31, 2007.

10.0 TERMINATION

10.1 If either party shall default in the performance of its obligations under this AGREEMENT, the
non-defaulting party may give written notice to the other party, specifying the nature of the
default and, if such default is not remedied within thirty (30) calendar days of such notice, then
the non-defaulting party shall have the right, in its sole discretion either to immediately
terminate this AGREEMENT or any or all ORDER(s) or suspend the performance of the same until such
default is remedied. Termination under this SECTION shall relieve and release the terminating
party from any further liabilities and obligations hereunder except any liabilities or obligations
that accrued prior to the effective date of such termination.

10.2 MERCK may terminate this AGREEMENT or any or all ORDER(s) effective immediately, upon written
notice to SUPPLIER if SUPPLIER shall become the subject of any receivership proceeding, voluntary
or involuntary, bankruptcy, insolvency, reorganization, liquidation, or assignment for the benefit
of creditors. Termination under this SECTION shall relieve and release MERCK from any further
liabilities and obligations arising under this AGREEMENT or ORDER(s), as the case may be, except
any liabilities or obligations that accrued prior to the effective date of such termination and any
non-cancelable liabilities or obligations that accrue after termination.

 

 

11.0 INSURANCE

11.1 Unless otherwise specified in this AGREEMENT, SUPPLIER shall, at its sole expense, maintain in
effect at all times during the term of this AGREEMENT insurance coverage with limits as follows:

	 	 	 	 	 
	Worker’s Compensation	 	Limits	 
	State or Federal Statutory
	 	 	*	 

 

			
	*	 	Worker’s Compensation Insurance providing for payment of benefits to and for the account of
employees in connection with the SERVICES under this AGREEMENT as required by the statutes of the
state where the work is being performed or, if applicable, Federal statutory coverage (e.g.
Longshoremen’s)

	 	 	 	 	 
	Employer Liability
	 	 	 	 
	Bodily Injury each Accident
	 	$	1,000,000	 
	Bodily Injury Disease — Policy Limit
	 	$	1,000,000	 
	Bodily Injury Disease — Each Employee
	 	$	1,000,000	 

Commercial General Liability – Occurrence Form

	 	 	 	 	 
	Combined Bodily Injury/Property Damage Per Occurrence
	 	$	1,000,000	 
	General Aggregate
	 	$	2,000,000	 
	Contractual Liability
	 	$	2,000,000	 

					
	Automobile Liability
	 	 	 	 
	Combined Single Limit Bodily Injury/Property Damage
Per Occurrence
	 	$	1,000,000	 
	Covering Owned, Non-owned or Hired Automobiles
	 	 	 	 
	 
	Professional Liability, Per Occurrence
	 	$	5,000,000	 
	 
	Excess Liability – Umbrella Form
	 	$	10,000,000	 

Providing additional coverage under Employer Liability, Commercial General Liability, Professional
Liability, and Automobile Liability policies described above.

11.2 SUPPLIER shall deliver to MERCK, prior to the execution of this AGREEMENT and prior to
commencing work, Certificates of Insurance, as evidence that policies providing such coverage and
limits of insurance are in full force and effect and with insurers with AM Best rating of A- or
better. These Certificates shall provide that not less than thirty (30) calendar days advance
notice will be given in writing to MERCK of any cancellation, termination, or material alteration
of said insurance policies. All policies, with the exception of workers’ compensation and
professional liability, shall name MERCK as an additional insured and shall waive all rights of
subrogation against MERCK.

12.0 NON-EXCLUSIVITY/NON-COMPETE

This AGREEMENT shall not be deemed to be an exclusive contract and MERCK shall be free to utilize
other companies in satisfaction of SUPPLIER’S obligations under this AGREEMENT.

 

 

SUPPLIER shall be entitled to offer and sell its services to third parties, subject to it’s
confidentiality obligations.

13.0 AUDIT RIGHTS

13.1 SUPPLIER shall prepare and maintain current such system of full and detailed accounts as may
be necessary for proper financial planning and management under this AGREEMENT, including but not
limited to records and books of accounts which substantiate or otherwise prove MERCK’S receipt of,
and SUPPLIER’S expenditure, for all costs associated with performance of this AGREEMENT, and said
system shall be satisfactory to MERCK.

13.2 SUPPLIER’S records, which shall include, but are not limited to, accounting records, written
policies and procedures, subcontractor files (including proposals of successful and unsuccessful
bidders and copies of executed agreements subject to the terms and conditions of this AGREEMENT,
original estimates, estimating files, correspondence, change order files (including documentation
covering negotiated settlements), insurance rebates and dividends, general ledger accounts, bank
statements, canceled checks, wire transfer accounts, payroll records, pension records, actuary
reports, and any other source documents and supporting evidence necessary to substantiate charges
related to this AGREEMENT (all the foregoing hereinafter referred to as “RECORDS”) shall be open to
inspection and subject to audit and/or reproduction, upon reasonable notice and during normal
working hours, by MERCK’S authorized representative to the extent necessary to adequately permit
evaluation and verification of any invoices, payments, or claims submitted by SUPPLIER or any of
its payees. Such RECORDS subject to examination shall also include, but are not limited to, those
RECORDS necessary to evaluate and verify direct and indirect costs (including Overhead allocations)
as they may apply to costs associated with this AGREEMENT. SUPPLIER shall make available all
RECORDS as listed herein to enable MERCK to audit all reimbursable items excluding the make-up of
any agreed upon fixed rates or unit prices.

13.3 MERCK shall be afforded access to the RECORDS. SUPPLIER shall preserve the RECORDS for a
period of one (1) year after the final payment to which such records apply, or for such longer
period as may be required by law.

13.4 MERCK’S authorized representative shall have access to SUPPLIER’S facilities, shall have
access to all necessary RECORDS and shall be provided adequate and appropriate work space, in order
to conduct audits in compliance with this ARTICLE. MERCK’S authorized representative shall give
auditees reasonable advance notice of intended audits. MERCK’S authorized representative shall
comply with all of the rules and regulations of SUPPLIER related to its facilities. All material
reviewed by MERCK’S authorized representative shall be considered the confidential information of
SUPPLIER and MERCK and its authorized representatives shall sign appropriate confidentiality
agreements prior to receiving access to such records.

13.5 If an audit inspection or examination conducted in accordance with this ARTICLE discloses
overpricing or overcharges (of any nature) by SUPPLIER or its Subcontractors, to MERCK, any
adjustments and/or payments to MERCK shall be made by SUPPLIER within a reasonable amount of time
not to exceed ninety (90) days from presentation of MERCK’S findings to SUPPLIER.

 

 

14.0 ETHICS/CONFLICT OF INTEREST

14.1 SUPPLIER hereby agrees that in its performance under this AGREEMENT, it shall adhere to
business practices that are in accordance with the letter and spirit of applicable laws and ethical
principles as follows:

14.1.1 SUPPLIER agrees that all transactions in connection with this AGREEMENT will be accurately
reflected in its books and records, and that no funds or other assets shall be paid directly
or indirectly to government officials or persons acting on their behalf for the purpose of
influencing government decisions or actions with respect to MERCK’S business.

14.1.2 SUPPLIER further agrees to conduct its activities hereunder and its dealings with MERCK,
subcontractors, and third parties so as to avoid loss or embarrassment to MERCK due to any
real or apparent conflict of interest, and to require that all subcontractors comply with
such policy in connection with this AGREEMENT.

14.2 MERCK shall have the right to terminate this AGREEMENT under SECTION 10.2 upon violation of
said business practices on the part of the SUPPLIER, its employees, agents, representatives,
subcontractors, consultants, or temporary contractors.

15.0 INDEPENDENT CONTRACTOR

15.1 In the performance of SUPPLIER’S obligations under this AGREEMENT, SUPPLIER shall at all times
act as and be deemed an independent contractor. Nothing in this AGREEMENT shall be construed to
render SUPPLIER or any of its employees, agents, or officers, an employee, joint venturer, agent,
or partner of MERCK. Neither party is authorized to assume or create any obligations or
responsibilities, express or implied, on behalf of or in the name of the other party. It is
understood that the employees, methods, facilities, and equipment of SUPPLIER shall at all times be
under SUPPLIER’S exclusive direction and control.

16.0 NO SMOKING POLICY

16.1 Under no circumstances shall any employee, subcontractor, worker, agent, or representative of
SUPPLIER be allowed to smoke anywhere on property owned, leased, or rented by MERCK, including
without limitation in vehicles, trailers, or open areas.

17.0 STANDARDS OF PERSONNEL

17.1 As a condition of MERCK entering into this AGREEMENT, the following standards will be required
of SUPPLIER. SUPPLIER warrants that all personnel assigned to this account will:

	 	a.	 	Demonstrate compliance with Federal, state and local laws governing US
residency or registry for employment eligibility (e.g. submission of proper
documentation confirming US citizenship or legal alien status and/or INS Form I-9).

 

 

	 	b.	 	Not have been convicted of any crime that reflects on the qualifications of the
individual to perform the job assignment at MERCK.

17.2 In addition, SUPPLIER will:

	 	a.	 	Cause all staffing to be in compliance with established Equal Employment
Opportunity standards for the affected geographic areas.
	 
	 	b.	 	Require that all assigned personnel pass a pre-employment professional
reference check performed by SUPPLIER.
	 
	 	c.	 	MERCK reserves the right to reject for any reason whatsoever any personnel
assigned to MERCK by SUPPLIER. SUPPLIER shall as soon as possible thereafter provide a
replacement satisfactory to MERCK for which approval shall not be unreasonably
withheld.
	 
	 	d.	 	The conduct of all personnel assigned hereunder shall be governed by MERCK’S
policies and procedures as shall be in effect from time to time.

18.0 REPRESENTATIVES OF THE PARTIES

18.1 MERCK’S representative is Alison Rush, who may be contacted at 267-305-1137.

18.2 SUPPLIER’s representative is Tom Livelli, who may be contacted at 908-454-7774. SUPPLIER’S
representative shall be SUPPLIER’S authorized representative for all purposes under this AGREEMENT.

19.0 NOTICES

19.1 The term “notice” as used throughout this AGREEMENT shall mean written notice, except where
specifically provided herein to the contrary. Notice shall be delivered by (i) certified mail,
return receipt requested (or the equivalent), (ii) hand delivery with receipt acknowledged, or
(iii) overnight courier service that provides a delivery receipt to the following addresses or to
such other address or person as a party may specify by notice given in accordance with this
SECTION.

If to MERCK:

Merck & Co., Inc.

Two Merck Drive

Whitehouse Station, NJ 08889-0100

Attention: Director of Corporate Services Procurement

With a copy to:

Merck & Co., Inc.

One Merck Drive

Whitehouse Station, NJ 08889-0100

Attention: Office of the Secretary

 

 

If to SUPPLIER:

Cell & Molecular Technologies, Inc.

445 Marshall Street

Phillipsburg, New Jersey 08865

Attention: Thomas J. Livelli, President & CEO

Notice given in accordance with this Section shall be deemed delivered (i) when received, or (ii)
upon refusal of receipt.

20.0 FORCE MAJEURE

20.1 No party shall be liable for a failure or delay in performing any of its obligations, except
for outstanding monetary payments at the time of FORCE MAJEURE, under this AGREEMENT if, but only
to the extent that such failure or delay is due to causes beyond the reasonable control of the
affected party, including (i) acts of God; (ii) fire, explosion, or unusually severe weather; (iii)
war, invasion, riot or other civil unrest; (iv) governmental laws, orders, restrictions, actions,
embargoes or blockages; (v) national or regional emergency; and (vi) injunctions, strikes,
lockouts, labor trouble or other industrial disturbances; provided that the party affected shall
promptly notify the other of the force majeure condition and shall exert reasonable efforts to
eliminate, cure or overcome any such causes and to resume performance of its obligations as soon as
possible.

21.0 GOVERNING LAW

21.1 This AGREEMENT shall be governed by and construed and enforced in accordance with the laws of
the State of New Jersey without reference to principles of conflicts of laws.

22.0 ARBITRATION

22.1 The parties shall attempt to amicably resolve any dispute arising out of or relating to this
AGREEMENT. In the event that said negotiations are not successful, the dispute shall be resolved
through arbitration before one (1) arbitrator. Such arbitration shall take place in New Jersey
and shall proceed in accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) and the laws of the State of New Jersey without regard to the provisions
thereof concerning conflict of laws. Within thirty (30) calendar days of either party making a
demand for arbitration, MERCK and SUPPLIER shall agree on an arbitrator from the AAA panel of
arbitrators. In the event that the parties shall fail to agree on the arbitrator within the
prescribed time period, then either party may apply to the AAA for the appointment of such
arbitrator. The determination of the arbitrator shall be binding regardless of whether one of the
parties fails or refuses to participate in the arbitration. All other costs including the
arbitrator’s cost, shall also be split equally between the parties. Either party may enter any
arbitration award in any court having jurisdiction or may make application to any such court for a
judicial acceptance of the award and order of enforcement, as the case may be. Each party
understands and agrees that any use or disclosure of information in violation of this AGREEMENT
will cause the disclosing party irreparable harm without an adequate legal remedy and shall
therefore entitle the disclosing part to injunctive relief from any court having jurisdiction.

 

 

23.0 PUBLICITY

23.1 Each Party agrees not to advertise or otherwise make known to others any information regarding
this AGREEMENT except as required by applicable laws, rules and regulations added language. Each
party further agrees not to use or reference in any advertising, sales promotion, press release or
other communication, any of the other party’s name, endorsement, direct or indirect quote, code,
drawing, logo, trademark, specification, or picture without the prior written consent of the other
party.

24.0 ASSIGNMENT/SUBCONTRACTING

24.1 Neither party may assign, transfer or otherwise dispose of this AGREEMENT or any obligation or
right with respect hereto without the prior written consent of the other party, which consent will
not be unreasonably withheld; provided, however, that MERCK may assign this AGREEMENT, in whole or
in part, to any AFFILIATE of MERCK upon notice to SUPPLIER.

24.2 SUPPLIER may not subcontract its obligations hereunder without the prior written consent of
MERCK. In the event that MERCK approves the SUPPLIER’S subcontracting of its obligations hereunder
to a third party, SUPPLIER shall ensure that such party execute the Non-Disclosure AGREEMENT in the
form set forth in Appendix A before any work may commence by the subcontractor.

25.0 ENTIRE AGREEMENT/AMENDMENTS

25.1 Neither party may, by operation of law or otherwise, assign, transfer, delegate or otherwise
dispose of this AGREEMENT or any its obligation, duties or rights with respect hereto without the
prior written consent of the other party, which consent shall not be unreasonably withheld;
provided, however, that MERCK may assign this AGREEMENT, in whole or in part, to any AFFILIAT OF
MERCK upon notice to SUPPLIER. Any attempt to make an assignment, transfer or delegation in
violation of this provision shall be a material breach under this AGREEMENT and shall be null and
void.

25.2 Notwithstanding the forgoing, the AGREEMENT of CONFIDENTIALITY dated as of April 1, 2006,
between the parties, shall remain in full force and effect as a separate agreement.

26.0 SUCCESSORS AND ASSIGNS

26.1 The terms and conditions of this AGREEMENT shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and permitted assigns.

27.0 SURVIVAL OF CERTAIN PROVISIONS

27.1 The terms, provisions, representations, and warranties contained in this AGREEMENT that by
their sense and context are intended to survive the performance thereof by either party or both
parties hereunder shall so survive the completion of performance, expiration or termination of this
AGREEMENT.

28.0 SEVERABILITY

28.1 If any provision of this AGREEMENT is found invalid or unenforceable by a court of competent
jurisdiction, the remainder of this AGREEMENT shall continue in full force and effect.

 

 

The parties shall negotiate in good faith to substitute a valid, legal, and enforceable provision
that reflects the intent of such invalid or unenforceable provision.

29.0 HEADINGS

29.1 The headings assigned to the Articles and Sections of this AGREEMENT are for convenience only
and shall not limit the scope and applicability of the Articles and Sections.

30.0 NON-WAIVER

30.1 Either party’s failure to enforce any of the terms or conditions herein or to exercise any
right or privilege, or either party’s waiver of any breach under this AGREEMENT, shall not be
construed to be a waiver of any other terms, conditions, or privileges, whether of a similar or
different type.

31.0 FURTHER ASSURANCES

31.1 Each party agrees to execute such further papers, agreements, documents, instruments and the
like as may be necessary or desirable to effect the purpose of this AGREEMENT and to carry out its
provisions.

32.0 COUNTERPARTS

32.1 This AGREEMENT may be executed in two (2) or more counterparts, each of which shall for all
purposes be deemed an original and all of which shall constitute one and the same instrument.

33.0 CUMULATIVE REMEDIES

33.1 No remedy referred to in this AGREEMENT is intended to be exclusive, but each shall be
cumulative and in addition to any other remedy referred to in this AGREEMENT or otherwise available
under law.

34.0 ENGLISH LANGUAGE

34.1 This AGREEMENT, all ORDERS, all SCHEDULES, ATTACHMENTS, and EXHIBITS hereto, and all REPORTS,
documents and notices required hereunder, referred to herein or requested by MERCK in connection
herewith shall be written in the English language. Except as otherwise required by applicable law,
the binding version of all of the foregoing shall be the English version.

35.0 REVIEW BY LEGAL COUNSEL

Each of the parties agrees that it has read and had the opportunity to review this AGREEMENT with
its legal counsel. Accordingly, the rule of construction that any ambiguity contained in this
AGREEMENT shall be construed against the drafting party shall not apply.

36.0 INTELLECTUAL PROPERTY

36.1 SUPPLIER will secure at its own expense all necessary written consents, authorizations,
approvals and releases for use of any and all material generated under this AGREEMENT worldwide.
Except where material is supplied by MERCK or in the public domain, SUPPLIER

 

 

will obtain such rights with respect to trademarks, copyrights, patents, personal or contractual
rights or other similar rights which may be necessary for the production of the materials by
SUPPLIER under this AGREEMENT, and shall present such evidence to MERCK upon request.

36.2 Neither party shall use any intellectual property owned by the other party or its AFFILIATES
without the express written consent of the other party.

36.3 For the purposes of this AGREEMENT, “SUPPLIER Intellectual Property” means SUPPLIER’s
proprietary information, which consists of methodologies, concepts, know-how, analytical
frameworks, and analytical approaches (together “Methodologies”) of SUPPLIER that are re-usable
from project to project and client to client. SUPPLIER and Merck agree that Methodologies that are
developed by SUPPLIER prior to this AGREEMENT and any improvements thereto made during the course of
this AGREEMENT belong to SUPPLIER. MERCK agrees to keep SUPPLIER Intellectual Property as is
disclosed to it confidential and not to disclose any SUPPLIER Intellectual Property to third
parties.

37.0 CONFIDENTIALITY

SUPPLIER as well as each employee or representative of SUPPLIER and all consultants provided by
SUPPLIER in connection with this AGREEMENT, will execute a separate Non-Disclosure AGREEMENT in the
form set forth in Appendix A. No payment shall be made under this AGREEMENT for work performed by
SUPPLIER employees, representatives or consultants or third parties retained by SUPPLIER that do
not sign the Non-Disclosure AGREEMENT.

IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed by their duly
authorized representatives as of the EFFECTIVE DATE.

	 	 	 	 	 	 	 
	Cell & Molecular	 	Merck & Co., Inc.	 	 
	Technologies, Inc.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By /s/ Irene Tam	 	 
	 

	 	 	 	 	 	 
	By /s/ Thomas J. Livelli

	 	Name Irene Tam	 	 
	 

	 	 	 	 	 	 
	Name Thomas J. Livelli

	 	Title Associate Director	 	 
	 

	 	 	 	 	 	 
	Title CEO & President
	 	 	 	 	 	 

 

 

AGREEMENT OF CONFIDENTIALITY

APRIL 1, 2006

This Confidentiality AGREEMENT (this “AGREEMENT”), entered into by and between MERCK & CO., INC.,
having a place of business at One Merck Drive, Whitehouse Station, New Jersey 08889-0100 (“MERCK”)
and CELL & MOLECULAR TECHNOLOGIES, having a place of business at 445 Marshall Street, Phillipsburg,
New Jersey 08865, (“SUPPLIER”), confirms the terms under which a party (“DISCLOSER”) will disclose
to other party (“RECEPIENT”) certain confidential and proprietary information for the sole purpose
of performing cell culture services as described in ATTACHMENT “A”. Each party agrees that any and
all information, know-how and data, whether oral, written or graphical, disclosed or provided by
DISCLOSER to RECEPIENT including any analysis, product or conclusions drawn or derived therefrom)
or which may be derived from or related to any visits by RECEPIENT personnel to the other party’s
locations or may be otherwise known to RECIPIENT through its contacts with DISCLOSER (hereinafter
individually and collectively referred to as “INFORMATION”) shall be disclosed by DISCLOSER and
used by RECIPIENT solely for the purpose described above and shall be provided subject to the
following terms and conditions:

	1.	 	RECIPIENT shall keep all INFORMATION in confidence and will not, without DISCLOSER’s
prior written consent, disclose said INFORMATION to any person or entity, except those
officers, employees, or agents of RECIPIENT who directly require such INFORMATION for
fulfillment of the purpose set forth herein. Each such officer, employee, or agent to
whom INFORMATION is to be disclosed shall be advised by RECIPIENT of the terms of this
AGREEMENT and shall be bound by the confidentiality and non-use obligations herein.
RECIPIENT shall take all reasonable precautions to prevent INFORMATION from being
disclosed to any unauthorized person or entity.
	 
	2.	 	RECIPIENT shall not use, either directly or indirectly, any INFORMATION disclosed to
it hereunder for any purpose other than as set forth herein without DISCLOSER’s prior
written consent.
	 
	3.	 	The obligations of confidentiality set forth herein shall not apply to any
INFORMATION that is:

(a) lawfully possessed by RECIPIENT prior to receipt, at any time, from
DISCLOSER, as evidenced by RECIPIENT’s written records;

(b) published or available to the general public otherwise than through a
breach of this AGREEMENT or other obligation of confidentiality by RECIPIENT;
or

(c) obtained by RECIPIENT from a third party with a valid right to disclose
such INFORMATION, provided that such third party is not under a
confidentiality obligation to DISCLOSER.

     Any combination of features or disclosures shall not be deemed to fall within
the foregoing exclusions merely because individual features are published or
available to the general public or in the rightful possession of RECIPIENT unless
the combination itself and principle of operation are published or available to the
general public or in the rightful possession of RECIPIENT.

 

 

	4.	 	All INFORMATION, without limitation, shall remain the property of DISCLOSER.
RECIPIENT shall not acquire any license or other intellectual property interest in any
INFORMATION. Further, disclosure of INFORMATION shall not result in any obligation to
grant RECIPIENT any right in or to such INFORMATION.

	5.	 	Any and all discoveries and/or inventions by RECIPIENT, whether or not patentable,
resulting from RECIPIENT’s use of INFORMATION shall be the sole and exclusive property
of DISCLOSER. Within thirty (30) calendar days of any discovery or invention,
RECIPIENT shall notify DISCLOSER, in writing, of the event and shall assist DISCLOSER
in protecting DISCLOSER proprietary rights to such discovery or invention.

	6.	 	Upon request by DISCLOSER, RECIPIENT shall immediately return to DISCLOSER all
INFORMATION, all notes that may have been made regarding INFORMATION, and all copies
thereof.

	7.	 	In the event that RECIPIENT is required by judicial or administrative process to
disclose any or all of the INFORMATION, RECIPIENT shall promptly notify DISCLOSER and
allow DISCLOSER a reasonable time to oppose such process before disclosing any
INFORMATION.

	8.	 	No agency or partnership relationship between MERCK and SUPPLIER, whether express or
implied, shall be created by this AGREEMENT.

	9.	 	The obligations of confidentiality and non-use created herein shall be binding upon
SUPPLIER, its successors and permitted assigns, and shall continue with respect to
each item of INFORMATION for the longest period permitted by applicable law.

	10.	 	This AGREEMENT embodies the entire understanding of the parties with respect to the
subject matter hereof and supersedes and replaces any and all prior understandings and
arrangements, oral or written, relating to the INFORMATION.

	11.	 	This AGREEMENT shall be interpreted, construed and enforced in accordance with the
laws of the State of New Jersey, without reference to any rules of conflict of laws.

	12.	 	The parties shall attempt to amicably resolve any dispute arising out of or relating
to this AGREEMENT. In the event that said negotiations are not successful, the
dispute shall be resolved through arbitration before one (1) arbitrator. Such
arbitration shall take place in New Jersey and shall proceed in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (“AAA”) and the
laws of the State of New Jersey without regard to the provisions thereof concerning
conflict of laws. Within thirty (30) calendar days of either party making a demand
for arbitration, MERCK and SUPPLIER shall agree on an arbitrator from the AAA panel of
arbitrators. In the event that the parties shall fail to agree on the arbitrator
within the prescribed time period, then either party may apply to the AAA for the
appointment of such arbitrator. The determination of the arbitrator shall be binding
regardless of whether one of the parties fails or refuses to participate in the
arbitration. All other costs including the arbitrator’s cost, shall

 

 

	 	 	also be split equally between the parties. Either party may enter any arbitration
award in any court having jurisdiction or may make application to any such court for
a judicial acceptance of the award and order of enforcement, as the case may be.
Each party understands and agrees that any use or disclosure of information in
violation of this AGREEMENT will cause the other party irreparable harm without an
adequate legal remedy and shall therefore entitle the disclosing party to injunctive
relief from any court having jurisdiction.

	13.	 	If any provision of this AGREEMENT is found invalid or unenforceable by a court of
competent jurisdiction, the remainder of this AGREEMENT shall continue in full force
and effect. The parties shall negotiate in good faith to substitute a valid, legal,
and enforceable provision that reflects the intent of such invalid or unenforceable
provision.

	14.	 	This AGREEMENT may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT as of the 1ST day
April, 2006.

	 	 	 	 	 	 	 
	Cell & Molecular	 	Merck & Co., Inc.	 	 
	Technologies, Inc.
	 	 	 	 	 	 
	 

	 	By /s/ Irene Tam	 	 
	 

	 	 	 	 	 	 
	By /s/ Thomas J. Livelli

	 	Name Irene Tam	 	 
	 

	 	 	 	 	 	 
	Name Thomas J. Livelli

	 	Title Associate Director	 	 
	 

	 	 	 	 	 	 
	Title CEO & President
	 	 	 	 	 	 

 

 

Appendix “A” - AGREEMENT OF CONFIDENTIALITY for employees of SUPPLIER working under the AGREEMENT
with Merck

In connection with your assignment to Merck & Co., Inc. (hereinafter called “MERCK”) to perform
services as an employee of SUPPLIER, you have been and will be granted access to Merck confidential
and proprietary information, knowledge and data (hereinafter “INFORMATION”). In order to
memorialize our AGREEMENT as to the INFORMATION and in consideration of MERCK having granted you
such access, it has been agreed as follows:

1. You shall keep all INFORMATION in confidence and will not, without MERCK’s prior written
consent, disclose said INFORMATION to any person or entity.

2. You shall not use, either directly or indirectly, any INFORMATION disclosed to you hereunder for
any purpose other than as set forth herein without MERCK’s prior written consent.

3. Your obligations of confidentiality set forth herein shall not apply to any INFORMATION that is:

	 	(a)	 	lawfully possessed by you prior to receipt, at any time, from MERCK, as evidenced by your
written records;
	 
	 	(b)	 	published or available to the general public otherwise than through a breach of this
AGREEMENT or other obligation of confidentiality by you; or;
	 
	or;
	 
	 	(c)	 	obtained by you from a third party with a valid right to disclose such INFORMATION,
provided that said third party is not under a confidentiality obligation to MERCK or the disclosing
party if other than MERCK.

      Any combination of features or disclosures shall not be deemed to fall within the foregoing
exclusions merely because individual features are published or available to the general public or
in your rightful possession unless the combination itself and principle of operation are published
or available to the general public or in your rightful possession.

4. All INFORMATION, without limitation, shall remain the property of MERCK. You shall not acquire
any license or other intellectual property interest in any INFORMATION disclosed to you by MERCK.
Further, disclosure of INFORMATION shall not result in any obligation to grant you any right in and
to said INFORMATION.

5. Any and all discoveries and/or inventions by you, whether or not patentable, resulting from your
use of INFORMATION provided by MERCK shall be the sole and exclusive property of MERCK. Within
thirty (30) calendar days of any discovery or invention, you shall notify MERCK, in writing, of the
event and shall assist MERCK in protecting MERCK’s proprietary rights to said discovery or
invention.

6. Upon request by MERCK, you shall immediately return to MERCK all INFORMATION, all notes which
may have been made regarding the INFORMATION, and all copies thereof.

 

 

7. In the event that you are required by judicial or administrative process to disclose any or all
of the INFORMATION, you shall promptly notify MERCK and allow MERCK a reasonable time to oppose
such process before disclosing any INFORMATION.

8. No employment or partnership relationship between MERCK and you, whether express or implied,
shall be created by this AGREEMENT.

9. This AGREEMENT and the obligations created herein shall be binding upon you and shall continue
until the earlier of (i) the occurrence of the conditions set forth in Section 3 above or (ii) the
longest period permitted by applicable law.

10. This AGREEMENT embodies the entire understanding of the parties with respect to the subject
matter hereof and supersedes and replaces any and all prior understandings and arrangements, oral
or written, relating to the INFORMATION.

11. This AGREEMENT shall be interpreted, construed and enforced in accordance with the laws of the
State of New Jersey, without reference to any rules of conflict of laws.

12. The parties shall attempt to amicably resolve any dispute arising out of or relating to this
AGREEMENT. In the event that said negotiations are not successful, the dispute shall be resolved
through arbitration before one (1) arbitrator. Such arbitration shall take place in New Jersey and
shall proceed in accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) and the laws of the State of New Jersey without regard to the provisions
thereof concerning conflict of laws. Within thirty (30) calendar days of either
party making a demand for arbitration, parties shall agree on an arbitrator from the AAA panel of
arbitrators. In the event that the parties shall fail to agree on the arbitrator within the
prescribed time period, then either party may apply to the AAA for the appointment of such
arbitrator. The determination of the arbitrator shall be binding regardless of whether one of the
parties fails or refuses to participate in the arbitration. All other costs, including the
arbitrator’s cost, shall also be split equally between the parties. Either party may enter any
arbitration award in any court having jurisdiction or may make application to any such court for a
judicial acceptance of the award and order of enforcement, as the case may be. Notwithstanding the
foregoing, you understand and agree that any use or disclosure of INFORMATION in violation of this
AGREEMENT will cause MERCK irreparable harm without an adequate legal remedy and shall therefore
entitle MERCK to injunctive relief from any court having jurisdiction.

13. If any provision of this AGREEMENT is found invalid or unenforceable by a court of competent
jurisdiction, the remainder of this AGREEMENT shall continue in full force and effect. The parties
shall negotiate in good faith to substitute a valid, legal, and enforceable provision that reflects
the intent of such invalid or unenforceable provision.

If the foregoing represents your understanding of the treatment by you of MERCK INFORMATION
pursuant to your assignment to MERCK, please so indicate by signing and returning a copy of this
letter and retaining a copy for your own files.

Acknowledged and agree to:

 

 

	 	 	 	 	 
	Employee

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Signature
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Name
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Date
	 	 	 	 
	 

	 	 	 	 

 

 

SCHEDULE A

FEE FOR SERVICES

MERCK will utilize a dedicated staff of 6.5 FTE’s and 1 Administrative Assistant from April 2006
through June 2006 and 4.5 FTE’s and 1 Administrative Assistant from July 2006 through March 2007.
SUPPLIER will require all employees to work a 40 hour work week. Any hours billed beyond 40 hours
must be authorized by MERCK personnel. Each employee’s hourly rate will be calculated as annual
salary divided by 52 weeks/year, divided by 40 hours per week. Salaried employees are a baseline
for the contract at 8 hours per work day, less vacation, sick or holiday. Regular cell deliveries
will be scheduled Monday through Friday from 8:00AM to 5:00PM. Cell deliveries outside of this
schedule can be provided with Merck’s approval on an overtime basis. Overtime is defined as hours
worked outside of the regular cell delivery times. Overtime will be billed at the rate of 1.5X the
normal hourly rate for that employee.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Maximum Number of Cell
	Number of Cell	 	Maximum Number of	 	Maximum Number of	 	Deliveries per Half Day
	Culture Operators	 	Cell Lines
Carried      	 	Cell Lines in Screen	 	Period
	4
	 	 	16	 	 	 	8	 	 	 	8	 
	5
	 	 	20	 	 	 	10	 	 	 	10	 
	6
	 	 	24	 	 	 	12	 	 	 	12	 
	Each Additional
	 	 	4	 	 	 	2	 	 	 	2	 

DIRECT LABOR BILLING RATE = BHWR (1+DPEM+OVERHEAD MULTIPLIER+QUALITY AND SCHEDULE
INCENTIVE+PERFORMANCE IN ASSAY INCENTIVE+PROFIT)

	 	 	 	 	 	 	 	 	 
	DPEM
	 	 	 	 	 	 	0.25	 
	OVERHEAD MULTIPLIER
	 	 	 	 	 	 	1.0	 
	QUALITY MULTIPLIER
	 	 	 	 	 	 	0.20	 
	PERFORMANCE MULTIPLIER
	 	 	 	 	 	 	0.10	 
	PROFIT MULTIPLIER
	 	 	 	 	 	 	1.0	 
	SUBTOTAL
	 	 	 	 	 	 	2.55	 
	 
	DIRECT LABOR BILLING RATE
	 	 	 	 	 	 	3.55	 

MERCK will cover all variable direct and freight in costs based on the project requirements on a
monthly basis. MERCK will cover the following fixed pass through costs on a monthly basis or a
percentage of the following fixed pass through costs if the facility is not dedicated to MERCK:

Lease, North Wales 418

Lease, North Wales 422

Equipment Leases

Utilities

Waste Removal

Equipment Maintenance

Commercial Insurance Package

Workers Compensation

SEE ATTACHED SAMPLE SCHEDULE A

 

 

SCHEDULE B

METRICS

A. Implementation of Incentive Program

SUPPLIER will submit monthly invoices incorporating maximum possible incentive amounts. In the event
that CMT does not actually earn the maximum incentive, adjustments will be made to subsequent
invoices to reflect the actual incentive earned for the period under consideration.

Merck and
SUPPLIER will meet on a regular basis (at least quarterly) to review status of Incentive
awards and discuss implementation of incentive program.

B. Quality and Schedule Incentive 

This incentive will be assessed on a monthly basis

To obtain
this incentive, SUPPLIER must meet the following for 100% of cell deliveries for screens and
95% for assay development during the month under consideration:

	 	1.	 	Delivery +/-15 minutes of time requested. Delivery time agreed and confirmed in
advance in writing (by email), the receipt of which has been acknowledged. Delivery request
details (time, amount, contact person and location) need to be provided by 4:30PM Thursday
the week before for small deliveries and two (2) weeks in advance for HTS scale-up. For
the number (n) of FTEs supported by Merck, SUPPLIER will carry a maximum of nx4 cell lines. No
more than nx2 lines will be in large scale screening mode at the same time. In addition,
each FTE will be able to deliver cells a maximum of two times each half day period. Cell
deliveries requiring the harvesting of cells from 30 triple-layer flasks will be counted as
two deliveries for that half day period. SUPPLIER will provide notice of any cell delivery
scheduling conflicts 48 hours in advance, and Merck will notify
SUPPLIER of the resolution of
this scheduling conflict within 12 hours of the notice by SUPPLIER to Merck.
	 
	 	2.	 	After-hours and weekend work requested by Merck can be provided. The hourly labor cost
for such work will be increased 50% over the base hourly rate and subject to the same
multiplier.
	 
	 	3.	 	>90% cell viability, assessed by trypan blue counts
	 
	 	4.	 	Cell volume delivered meets requested amount +/- 10% (small deliveries), +/- 5% for
HTS scale
	 
	 	5.	 	Cell density +/- 20% requested amount
	 
	 	6.	 	No contamination. At time of delivery, one aliquot of prepared cells will be
transferred to a tissue culture flask and placed in incubator at Merck as QC for
contamination

SUPPLIER will provide documentation on cell viability, cell density and volume for each cell delivery.
This documentation will be signed by the Merck scientist that placed
the order with SUPPLIER. SUPPLIER

 

 

to keep one copy of signed delivery sheet on file and forward one copy to Alison Rush at Merck.
All documentation thereof furnished by SUPPLIER are and shall remain MERCK’s property. SUPPLIER
may use them only for the SERVICES for which they are produced and shall not use them for any other
purpose.

Monthly Quality and Schedule Performance summaries will be prepared by SUPPLIER and submitted to Alison
Rush at Merck.

C. Performance in Assay Incentive

This incentive will be assessed on a quarterly basis

This incentive applies only to screening-scale deliveries (not small deliveries for assay
development)

This incentive will be awarded based on Merck’s successful completion of cell based screens during
the quarter under consideration. Determination that there may have been problems that were
cell-performance related will be based solely on Merck’s assessment.

SUPPLIER will earn a percentage of the maximum possible incentive (increase of 0.1 to multiplier) based
on the number of assays with performance issues, as shown below:

	 	 	 	 	 
	# of Assays with Performance Issues	 	 
	During the Quarter Under Review	 	% of Max Incentive Earned
	0
	 	 	100	 
	1
	 	 	75	 
	2
	 	 	50	 
	3
	 	 	25	 
	4
	 	 	0	 

 

Merck will provide timely feedback to SUPPLIER on performance in assay issues.

 

 

SCHEDULE C

SCOPE OF SERVICES

	1.	 	Receive Cell Lines Transferred From Merck
	 
	 	 	All cell lines transferred from Merck to SUPPLIER must be validated as Mycoplasma free using an
independent testing company (Bionique M-250 test) using an indirect DNA-fluorochrome test
and a direct Mycoplasma test. MERCK will continue to supply SUPPLIER with validated FBS and
tissue culture antibiotics/selection reagents.
	 
	2.	 	Cell Banking

• Cell lines to be used for primary HTS will be banked at 30-40 frozen
vials at greater than or equal to 10e7 cells/ml (1ml/vial)

• Cell lines which will only be used for follow-up screens will be banked
at 10 to 20 frozen vials at greater than or equal to 10e7 cells/ml (1ml/vial).

• Cells that do not need to be passaged will not require cell banking. All
frozen cell banks will be validated using a DNA fluorochrome test and an indirect
test using an independent testing laboratory (Bionique M-250 test).

	3.	 	Assay Development Scale Cell Deliveries
	 
	 	 	Grow and provide cells as per project requirements. Cells will be delivered in AB/MRL
specified containers. Containers such as microplates, spinner flasks and other specialized
containers will be provided by Merck.
	 
	4.	 	HTS Scale Cell Deliveries
	 
	 	 	Grow and provide cells as per project requirements. Cells will be delivered in AB/MRL
specified containers. Containers such as microplates, spinner flasks and other specialized
containers will be provided by Merck.
	 
	5.	 	Miscellaneous
	 
	 	 	Miscellaneous cell-culture related services as mutually defined and agreed by Merck and SUPPLIER.
This may include but is not limited to Cell Banking.

 

 

SAMPLE SCHEDULE A

FEE FOR SERVICES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Estimated	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Average	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Monthly	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Annual	 	 	 	 	 	 	Charges	 
	Direct labor	 	 	 	 	 	 	 	 	 	 	 	 	 	Annual	 	 	Annual	 	 	Personal/Floating	 	 	Vacation, sick	 	 	 	 	 
	 	 	 	 	 	 	Month hrs.	 	 	Hourly rate	 	 	Holiday	 	 	Vacation	 	 	Sick	 	 	holiday	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Dedicated

	 	Zhong @ 50%	 	 	86.67	 	 	 	76.96	 	 	 	7.00	 	 	 	18.00	 	 	 	10.00	 	 	 	(1,795.77	)	 	 	4,874.23	 
	 
	 	Braccio	 	 	173.33	 	 	 	10.38	 	 	 	7.00	 	 	 	3.00	 	 	 	10.00	 	 	 	(138.46	)	 	 	1,661.50	 
	 
	 	Cong	 	 	173.33	 	 	 	43.27	 	 	 	7.00	 	 	 	20.00	 	 	 	10.00	 	 	 	(1,067.31	)	 	 	6,432.69	 
	 
	 	Gu	 	 	173.33	 	 	 	29.81	 	 	 	7.00	 	 	 	15.00	 	 	 	10.00	 	 	 	(635.90	)	 	 	4,530.78	 
	 
	 	Lehnoff	 	 	173.33	 	 	 	24.52	 	 	 	7.00	 	 	 	10.00	 	 	 	10.00	 	 	 	(441.35	)	 	 	3,808.65	 
	 
	 	Feng	 	 	173.33	 	 	 	33.65	 	 	 	7.00	 	 	 	5.00	 	 	 	10.00	 	 	 	(493.59	)	 	 	5,339.73	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	26,647.59	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

(hourly rate calculated as annual salary divided by 52 weeks/year, divided by 40 hours per week)

(salaried employees are a baseline for the contract at 8 hours per work day, less vacation, sick or holiday)

(Overtime rate calculated as 1.5X regular hourly rate)

	 	 	 	 	 	 	 	 	 
	DIRECT LABOR BILLING RATE = BHWR (1+DPEM+OVERHEAD MULTIPLIER+PROFIT MULTIPLIER)	 	 	 	 	 	 	 	 
	DPEM =
	 	 	0.25	 	 	 	 	 
	Overhead Multiplier=
	 	 	1	 	 	 	 	 
	Quality Multiplier=
	 	 	0.2	 	 	 	 	 
	Performance Multiplier=
	 	 	0.1	 	 	 	 	 
	Profit Multiplier=
	 	 	1	 	 	 	 	 
	Subtotal
	 	 	2.55	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Direct Labor Billing Rate
	 	 	 	 	 	 	3.55	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Direct Labor Total=
	 	 	 	 	 	 	94,598.96	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Temporary Labor
	 	 	 	 	 	 	 	 	 	 	 	 
	Subcontractors/temp
employees
	 	 	 	 	 	—	 	 	 	 	 
	Multiplied by
subcontractor rate
	 	 	 	 	 	0.30	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Direct Costs
	 	 	 	 	 	 	 	 	 	 	 	 
	Direct purchases by project
number
	 	 	 	 	 	16,798	 	 	 	 	 
	Direct purchases, general
	 	 	 	 	 	 	9,557	 	 	 	 	 
	Freight In
	 	 	 	 	 	 	1,203	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Lease, North Wales 418
	 	 	 	 	 	 	1,672	 	 	 	 	 
	Lease, North Wales 422
	 	 	 	 	 	 	1,550	 	 	 	 	 
	Equipment leases
	 	 	 	 	 	 	3,549	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Utilities
	 	 	 	 	 	 	1,250	 	 	 	 	 
	Sericycle waste removal
	 	 	 	 	 	 	4,606	 	 	 	 	 
	Equipment maintenance
	 	 	 	 	 	 	1,200	 	 	 	 	 
	Beckamn Coulter
	 	8,845/yr	 	 	737	 	 	 	 	 
	Ionics Life Sciences
	 	4,120/yr	 	 	343	 	 	 	 	 
	Micro-Clean Inc
	 	4,563/yr	 	 	380	 	 	 	 	 
	FEMTO Calibration
	 	1,1000/yr	 	 	92	 	 	 	 	 
	Chubb Package
	 	3,698/yr	 	 	308	 	 	 	 	 
	Workers compensation
	 	4,908/yr	 	 	415	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	43,660.66	 

     (actual expenses incurred from project, billed monthly on an accrual basis, subject to audit)

	 	 	 	 	 
	Grand Total
	 	 	138,259.61	 

 

 

SAMPLE SCHEDULE A

FEE FOR SERVICES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Estimated	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Average	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Monthly	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Annual	 	 	 	 	 	 	Charges	 
	Direct labor	 	 	 	 	 	 	 	 	 	 	 	 	 	Annual	 	 	Annual	 	 	Personal/Floating	 	 	Vacation, sick	 	 	 	 	 
	 	 	 	 	 	 	Month hrs.	 	 	Hourly rate	 	 	Holiday	 	 	Vacation	 	 	Sick	 	 	holiday	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Dedicated

	 	Zhong @ 50%	 	 	86.67	 	 	 	76.96	 	 	 	7.00	 	 	 	18.00	 	 	 	10.00	 	 	 	(1,795.77	)	 	 	4,874.23	 
	 
	 	Braccio	 	 	173.33	 	 	 	10.38	 	 	 	7.00	 	 	 	3.00	 	 	 	10.00	 	 	 	(138.46	)	 	 	1,661.54	 
	 
	 	Cong	 	 	173.33	 	 	 	43.27	 	 	 	7.00	 	 	 	20.00	 	 	 	10.00	 	 	 	(1,067.31	)	 	 	6,432.69	 
	 
	 	Gu	 	 	173.33	 	 	 	29.81	 	 	 	7.00	 	 	 	15.00	 	 	 	10.00	 	 	 	(635.90	)	 	 	4,530.78	 
	 
	 	Scott	 	 	173.33	 	 	 	21.63	 	 	 	7.00	 	 	 	5.00	 	 	 	10.00	 	 	 	(317.31	)	 	 	3,432.69	 
	 
	 	Lehnoff	 	 	173.33	 	 	 	24.52	 	 	 	7.00	 	 	 	10.00	 	 	 	10.00	 	 	 	(441.35	)	 	 	3,808.65	 
	 
	 	Abdollahi	 	 	173.33	 	 	 	30.05	 	 	 	7.00	 	 	 	12.50	 	 	 	10.00	 	 	 	(590.95	)	 	 	4,617.39	 
	 
	 	Feng	 	 	173.33	 	 	 	33.65	 	 	 	7.00	 	 	 	5.00	 	 	 	10.00	 	 	 	(493.59	)	 	 	5,339.73	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	34,697.71	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

(hourly rate calculated as annual salary divided by 52 weeks/year, divided by 40 hours per week)

(salaried employees are a baseline for the contract at 8 hours per work day, less vacation, sick or holiday)

(Overtime rate calculated as 1.5X regular hourly rate)

	 	 	 	 	 	 	 	 	 
	DIRECT LABOR BILLING RATE = BHWR (1+DPEM+OVERHEAD MULTIPLIER+PROFIT MULTIPLIER)	 	 	 	 	 	 	 	 
	DPEM =
	 	 	0.25	 	 	 	 	 
	Overhead Multiplier=
	 	 	1	 	 	 	 	 
	Quality Multiplier=
	 	 	0.2	 	 	 	 	 
	Performance Multiplier=
	 	 	0.1	 	 	 	 	 
	Profit Multiplier=
	 	 	1	 	 	 	 	 
	Subtotal
	 	 	2.55	 	 	 	 	 
	Direct Labor Billing Rate
	 	 	 	 	 	 	3.55	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Direct Labor Total=
	 	 	 	 	 	 	123,176.88	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Temporary Labor
	 	 	 	 	 	 	 	 	 	 	 	 
	Subcontractors/temp
employees
	 	 	 	 	 	—	 	 	 	 	 
	Multiplied by
subcontractor rate
	 	 	 	 	 	0.30	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Direct Costs
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Direct purchases by
project number
	 	 	 	 	 	25,197	 	 	 	 	 
	Direct purchases,
general
	 	 	 	 	 	 	14,336	 	 	 	 	 
	Freight In
	 	 	 	 	 	 	1,804	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Lease, North Wales 418
	 	 	 	 	 	 	1,672	 	 	 	 	 
	Lease, North Wales 422
	 	 	 	 	 	 	1,550	 	 	 	 	 
	Equipment leases
	 	 	 	 	 	 	3,549	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Utilities
	 	 	 	 	 	 	1,250	 	 	 	 	 
	Sericycle waste removal
	 	 	 	 	 	 	4,606	 	 	 	 	 
	Equipment maintenance
	 	 	 	 	 	 	1,200	 	 	 	 	 
	Beckamn Coulter
	 	8,845/yr	 	 	737	 	 	 	 	 
	Ionics Life Sciences
	 	4,120/yr	 	 	343	 	 	 	 	 
	Micro-Clean Inc
	 	4,563/yr	 	 	380	 	 	 	 	 
	FEMTO Calibration
	 	1,1000/yr	 	 	92	 	 	 	 	 
	Chubb Package
	 	3,698/yr	 	 	308	 	 	 	 	 
	Workers compensation
	 	4,908/yr	 	 	415	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	57,439.74	 

     (actual expenses incurred from project, billed monthly on an accrual basis, subject to audit)

	 	 	 	 	 
	Grand Total
	 	 	180,616.62EX-10.1

 

Exhibit 10.1

EXECUTION COPY

INITIAL REMARKETING AGREEMENT

May 9, 2006

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Goldman, Sachs & Co.

J.P. Morgan Securities Inc.,

as Remarketing Agents

c/o        Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Representative

4 World Financial Center

New York, NY 10080

JPMorgan Chase Bank, N.A., as Purchase Contract Agent

4 New York Plaza, 15th Floor

New York, New York 10004

Attention: Worldwide Securities Services

Ladies and Gentlemen:

     WHEREAS, The Hartford Financial Services Group, Inc., a Delaware corporation (the
"Company”) and Goldman, Sachs & Co. entered into a remarketing agreement dated May 23, 2003 (the
"Original Remarketing Agreement”) which contemplated a remarketing of the Company’s 2.56% Senior
Notes due August 16, 2008;

     WHEREAS, the Company is entering into this Initial Remarketing Agreement dated as of May 9,
2006 (the “Agreement”) by and among the Company, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co. and J.P. Morgan Securities Inc. as remarketing agents (each a
"Remarketing Agent” and collectively, the “Remarketing Agents”), for whom Merrill Lynch, Pierce,
Fenner & Smith Incorporated is acting as Representative (the “Representative”), and JPMorgan Chase
Bank, N.A., a national banking association, not individually but solely as Purchase Contract Agent
(the “Purchase Contract Agent”) and as attorney-in-fact of the holders of Purchase Contracts (as
defined in the Purchase Contract Agreement referred to below) for purposes of effecting the Initial
Remarketing on the terms and conditions set forth herein;

 

 

     WHEREAS, this Agreement supersedes all prior agreements and understandings between the Company
and the Remarketing Agents, or any of them, with respect to the Initial Remarketing and if any
provision of this Agreement relating to the Initial Remarketing conflicts, or is inconsistent, with
the Original Remarketing Agreement, this Agreement shall control;

     WHEREAS, if the Initial Remarketing shall be deemed a Failed Remarketing, it is intended that
this Agreement shall terminate and the Original Remarketing Agreement shall remain in full force
and effect;

     NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

     Section 1 . Definitions.

     (a) Capitalized terms used and not defined in this Agreement shall have the meanings set
forth in the Purchase Contract Agreement, dated as of May 23, 2003, between the Company and
JPMorgan Chase Bank, N.A., as Purchase Contract Agent, as amended from time to time (the
“Purchase Contract Agreement”).

     (b) As used in this Agreement, the following terms have the following meanings:

     "Base Prospectus” means the prospectus included in the Registration Statement, including all
documents incorporated by reference therein as of the date of this Agreement.

     "Effective Date” means the date the Registration Statement becomes effective pursuant to Rule
430B under the Securities Act for purposes of liability under Section 11 of the Securities Act of
the Company and the Remarketing Agents.

     "Failed Remarketing” has the meaning set forth in Section 2(d).

     "Final Term Sheet” means the final term sheet, substantially in the form of Schedule II
hereto.

     "Initial Remarketing” has the meaning set forth in Section 2(b).

     "Initial Remarketing Date” has the meaning set forth in Section 2(b).

     "Preliminary Prospectus” means the Base Prospectus, as supplemented by the preliminary
prospectus supplement dated May 9, 2006 used in connection with the Remarketing, including the
documents incorporated by reference therein as of the date of such preliminary prospectus
supplement; and any reference to any amendment or supplement to such Preliminary Prospectus shall
be deemed to refer to and include any documents filed after the date of such

2

 

Preliminary
Prospectus, under the Exchange Act, and incorporated by reference in such Preliminary Prospectus.

     "Prospectus” means the Base Prospectus, as supplemented by the definitive prospectus
supplement specifically relating to the Remarketed Senior Notes, in the form filed with the
Commission pursuant to Rule 424(b), including the documents incorporated by reference therein as of
the date of such Prospectus; and any reference to any amendment or supplement to such Prospectus
shall be deemed to refer to and include any documents filed after the date of such Prospectus,
under the Exchange Act, and incorporated by reference in such Prospectus.

     "Registration Statement” means registration statement nos. 333-103915 and 333-105392 under the
Securities Act prepared by the Company covering, inter alia, the Remarketing of the
Remarketed Senior Notes pursuant to Section 5(a) hereunder, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in such registration statement, and
any post-effective amendments thereto.

     "Remarketed Senior Notes” means the Pledged Senior Notes and the Separate Senior Notes, if
any, subject to Remarketing as identified to the Remarketing Agents by the Purchase Contract Agent
and the Custodial Agent, respectively, by 11:00 a.m., New York City time, on May 10, 2006.

     "Remarketing” means the remarketing of the Remarketed Senior Notes pursuant to this
Remarketing Agreement.

     "Remarketing Fee” has the meaning set forth in Section 4.

     "Remarketing Price” has the meaning set forth in Section 2(b).

     "Remarketing Settlement Date” means May 16, 2006 or such other date as may be agreed by the
Company and the Representative.

     "Reset Rate” has the meaning set forth in Section 2(c).

     "Senior Notes” means the 2.56% senior notes due August 16, 2008 of the Company.

     "Time of Sale” means the time notified to the Company by the Representative at or prior to the
determination of the Reset Rate on May 11, 2006, which time shall be no later than one hour after
the time at which the Reset Rate is determined.

     "Time of Sale Information” means the Preliminary Prospectus and the Final Term Sheet, at the
Time of Sale, including all documents incorporated therein by reference, whether any such
incorporated document is filed before or after the document into which it is incorporated, so long
as the incorporated document is filed before the Time of Sale.

     "Transaction Documents” means this Agreement, the Purchase Contract Agreement, the Pledge
Agreement and the Indenture, in each case as amended or supplemented from time to time.

     Section 2 . Appointment and Obligations of the Remarketing Agent.

     (a) The Company hereby appoints the Remarketing Agents as the exclusive remarketing
agents with respect to the Initial Remarketing and Merrill Lynch, Pierce, Fenner & Smith
Incorporated as Representative of the Remarketing Agents. Each

3

 

Remarketing Agent appoints
the Representative to act on its behalf under this Agreement. The Representative, on behalf
of the Remarketing Agents, and subject to the terms and conditions set forth herein, hereby
accepts such appointments for the purpose of (i) remarketing the Remarketed Senior Notes on
behalf of the holders thereof, (ii) determining, in consultation with the Company, in the
manner provided for herein and in the Purchase Contract Agreement and the Indenture, the
Reset Rate for the Senior Notes, and (iii) performing such other duties as are assigned to
the Remarketing Agents in the Transaction Documents.

     (b) On May 11, 2006 (the “Initial Remarketing Date”), each of the Remarketing Agents
shall use its reasonable efforts to remarket (“Initial Remarketing”) the Remarketed Senior
Notes, at a price (the “Remarketing Price”), based on the Reset Rate, equal to approximately
100.50% (or, if the Remarketing Agents are unable to remarket the Remarketed Senior Notes at
such price, at a price below 100.50% in the discretion of the Representative, but in no event
less than 100%, net of any Remarketing Fee and any other fees and commissions) of the sum of
the Treasury Portfolio Purchase Price and the Separate Senior Notes Purchase Price.

     (c) The Remarketing Agents shall determine, in consultation with the Company, the rate
per annum, rounded to the nearest one-thousandth (0.001) of one percent per annum, that the
Senior Notes should bear (the “Reset Rate”) in order for the Senior Notes of the Normal Unit
holders to have an aggregate market value equal to the Remarketing Price and that in the sole
reasonable discretion of the Remarketing Agents will enable the Remarketing Agents to
remarket all of the Remarketed Senior Notes at the Remarketing Price in such Remarketing,
provided that such rate shall not exceed the maximum interest rate permitted by law.

     (d) If, by 4:00 p.m. (New York City time) on the Initial Remarketing Date, the
Remarketing Agents are unable to remarket all of the Remarketed Senior Notes at the
Remarketing Price pursuant to the terms and conditions hereof, a failed remarketing (“Failed
Remarketing”) shall be deemed to have
occurred, and the Representative shall advise, by telephone, the Depositary, the
Purchase Contract Agent and the Company, and return the Remarketed Senior Notes to the
Collateral Agent or the Custodial Agent, as the case may be. Whether or not there has been a
Failed Remarketing will be determined in the sole reasonable discretion of the
Representative.

     (e) In the event of a Successful Remarketing, by approximately 4:30 p.m. (New York City
time) on the Initial Remarketing Date, the Representative shall advise, by telephone:

     (i) the Depositary, the Purchase Contract Agent, the Indenture Trustee and the
Company of the Reset Rate determined by the Remarketing Agents in such Remarketing and
the aggregate principal amount of Remarketed Senior Notes sold in such Remarketing;

4

 

     (ii) each purchaser (or the Depositary Participant thereof) of Remarketed Senior
Notes of the Reset Rate and the aggregate principal amount of Remarketed Senior Notes
such purchaser is to purchase; and

     (iii) each such purchaser to give instructions to its Depositary Participant to
pay the purchase price on the date on which such Remarketing is to be settled, which
shall be no later than the Remarketing Settlement Date, in same day funds against
delivery of the Remarketed Senior Notes purchased through the facilities of the
Depositary.

     (iv) if the Company purchases any Remarketed Senior Notes in the Initial
Remarketing, the Company agrees to pay to the Representative, on behalf of the several
Remarketing Agents, the purchase price for such Remarketed Senior Notes on the
Remarketing Settlement Date, in same day funds, against delivery of Remarketed Senior
Notes so purchased.

     (f) After deducting any fees specified in Section 4 below, the proceeds from a
Successful Remarketing (i) with respect to the Pledged Senior Notes, shall be paid to the
Collateral Agent in accordance with Section 7.06 of the Pledge Agreement and Section
5.02(a)(i) of the Purchase Contract Agreement and (ii) with respect to any Separate Senior
Notes included in the Remarketing, shall be paid to the Custodial Agent for payment to the
holders of such Separate Senior Notes in accordance with Section 5.02(a)(i) of the Purchase
Contract Agreement and Section 5.07(c) and Section 7.06 of the Pledge Agreement.

     (g) The right of each holder of Separate Senior Notes or Normal Units to have Remarketed
Senior Notes remarketed and sold on the Initial Remarketing Date shall be subject to the
conditions that (i) the Remarketing Agents are able to find a purchaser or purchasers for
Remarketed Senior Notes at the Remarketing Price based on the Reset Rate, (ii) such purchaser
or purchasers deliver the purchase price therefor to the Remarketing Agents as and when
required and (iii) the Remarketing is settled in accordance with this Agreement.

     (h) It is understood and agreed that the Remarketing Agents shall not have any
obligation whatsoever to purchase any Remarketed Senior Notes, whether in the Remarketing or
otherwise, and shall in no way be obligated to provide funds to make payment upon tender of
Remarketed Senior Notes for Remarketing or to otherwise expend or risk its or their own funds
or incur or to be exposed to financial liability in the performance of its or their duties
under this Agreement. Subject to Section 2(e)(iv) above, neither the Company nor the
Remarketing Agents shall be obligated in any case to provide funds to make payment upon
tender of the Remarketed Senior Notes for Remarketing.

5

 

     Section 3 . Representations and Warranties of the Company.

     The Company represents and warrants (i) as of the Time of Sale and (ii) on and as of the
Remarketing Settlement Date, that each of the representations and warranties of the Company as set
forth herein, is true and correct as if made on each of the dates specified above:

     (a) The Company and each subsidiary of the Company which meets the definition of a
significant subsidiary as defined in Regulation S-X (collectively referred to herein as the
“Significant Subsidiaries” and individually as a “Significant Subsidiary”) has been duly
incorporated and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and authority to own its
properties and conduct its business; and to the Company’s knowledge, all of the issued shares
of capital stock of each Significant Subsidiary are owned directly, or indirectly through
wholly-owned subsidiaries, by the Company, free and clear of all material liens,
encumbrances, equities or claims.

     (b) The Company’s authorized share capital is as set forth in the Time of Sale
Information and the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and non assessable.

     (c) The Remarketed Senior Notes have been duly and validly authorized, executed and
delivered by the Company and, assuming the Remarketed Senior Notes have been duly
authenticated by the Trustee in accordance with the provisions of the Indenture, constitute
valid and legally binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws now or hereafter in effect affecting creditors’ rights generally and (ii) general
principles of equity (regardless of whether enforceability is considered in a proceeding in
law or equity); and the Remarketed Senior Notes will conform in all material respects to the
descriptions thereof in the Time of Sale Information and the Prospectus.

     (d) The sale of the Remarketed Senior Notes and the compliance by the Company with all
the provisions of the Transaction Documents and the consummation of the transactions therein
contemplated have not conflicted with or resulted in a breach or violation of any of the
terms or provisions of, or constituted a default under, and will not conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound or to which any of the property
or assets of the Company is subject, except for such breaches, conflicts, violations or
defaults which would not have, individually or in the aggregate with such other breaches,
conflicts, violations and defaults, a material adverse effect on the financial position,
stockholders’ equity or results of operations of the Company and its subsidiaries, considered
as a whole, and which will not affect the

6

 

validity, performance or consummation of the
transactions contemplated by the Transaction Documents, and have not resulted and will not
result in any violation of the provisions of the Certificate of Incorporation or By laws of
the Company or any statute, rule or regulation, or any order or decree of any court or
regulatory authority or other governmental agency or body having jurisdiction over the
Company or any of its properties; and no consent, approval, authorization, license, order,
registration or qualification of or with any such court, regulatory authority or other
governmental agency or body is required for the sale of the Remarketed Senior Notes or the
consummation by the Company of the transactions contemplated by the Transaction
Documents, except those which have been, or will have been prior to the Remarketing
Settlement Date, obtained under the Act and the Exchange Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under state or foreign
securities or state insurance securities laws in connection with the distribution of the
Remarketed Senior Notes by the Remarketing Agents, and except for such consents, approvals,
authorizations, licenses, orders, registrations or qualifications which the failure to make,
obtain or comply with would not have, individually or in the aggregate with such other
failures, a material adverse effect on the financial position, stockholders’ equity or
results of operations of the Company and its subsidiaries, considered as a whole, and which
will not affect the validity, performance or consummation of the transactions contemplated by
the Transaction Documents.

     (e) Except as described in the Time of Sale Information and the Prospectus, there is no
action, suit or proceeding pending, nor to the knowledge of the Company, is there any action,
suit or proceeding threatened, which might reasonably be expected to result in a material
adverse change in the financial condition, results of operations or business of the Company
and its subsidiaries considered as a whole or which is required to be disclosed in the
Registration Statement.

     (f) The Purchase Contract Agreement and the Pledge Agreement have each been duly
authorized, executed and delivered by the Company, and each is a valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or hereafter in effect affecting
creditors’ rights generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding in law or equity); provided, however, that upon
the occurrence of a Termination Event (as defined in the Purchase Contract Agreement), the
Bankruptcy Code (11 U.S.C. §§ 101-1330, as amended) should not substantively limit the
provisions of Sections 3.15 and 5.06 of the Purchase Contract Agreement or Section 5.04 of
the Pledge Agreement that require termination of the Purchase Contracts and release of the
Collateral Agent’s security interest in (1) the Senior Notes, (2) the Treasury Securities (as
defined in the Purchase Contract Agreement) or (3) the applicable ownership interest in the
Treasury Portfolio (as defined in the Purchase Contract Agreement), as applicable, and the
transfer of such securities to the Purchase Contract Agent, for the benefit of the Holders of
the Units; provided further, however, the Company makes no representation as to whether a
court exercising bankruptcy jurisdiction might issue a temporary restraining order or provide

7

 

other interim relief that would delay the exercise of such termination right for a
period of time pending final adjudication of any challenge to the exercise of such right
during a bankruptcy case involving the Company.

     (g) To the extent the Time of Sale Information and the Prospectus describe certain
provisions of this Agreement, such provisions of this Agreement will conform in all material
respects to the descriptions thereof.

     (h) The Indenture has been duly authorized and duly qualified under the Trust Indenture
Act. The Third Supplemental Indenture has been duly authorized, executed and delivered by
the Company and, assuming due execution and delivery of the Third Supplemental Indenture by
the Trustee, constitutes a valid and binding instrument of the Company, enforceable against
the Company in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws of general applicability relating to
or affecting creditors’ rights and to general equity principles. The Indenture will conform
in all material respects to the descriptions thereof in the Time of Sale Information and the
Prospectus.

     (i) The financial statements included or incorporated by reference in the Registration
Statement, the Time of Sale Information or the Prospectus present fairly in all material
respects the financial position of the Company and its consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the periods shown, and,
except as otherwise disclosed in the Time of Sale Information and the Prospectus, such
financial statements have been prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis; any schedules included in the
Registration Statement present fairly the information required to be stated therein.

     (j) There are no contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be described in the Registration
Statement, the Time of Sale Information or the Prospectus which are not filed or described
as required.

     (k) As of the date of this Agreement, the Company is a “well-known seasoned issuer,”
and is not an “ineligible issuer,” both terms as defined in Rule 405 under the Securities
Act.

     (l) The Registration Statement has been declared effective by the Commission or became
effective upon filing; and no stop order preventing or suspending the use of the
Registration Statement or the Time of Sale Information has been issued and no proceeding for
that purpose or pursuant to Section 8A of the Securities Act has been initiated or
threatened by the Commission.

     (m) The documents incorporated by reference in the Time of Sale Information and the
Prospectus, when they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the rules and regulations of the

8

 

Commission thereunder, and none of such documents as of its time of filing contained an
untrue statement of a material fact or omitted 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; and any further documents so filed and
incorporated by reference in the Time of Sale Information or the Prospectus or any further
amendment or supplement thereto, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and will not contain an untrue statement of a
material fact or omit 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; provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information relating to
the Remarketing Agents furnished in writing to the Company by or on behalf of the
Remarketing Agents through the Representative expressly for use in the Time of Sale
Information or the Prospectus.

     (n) The Registration Statement when it was filed and became effective conformed, and
the Prospectus and any further amendments or supplements thereto, when filed with the
Commission will conform, in all material respects to the requirements of the Securities Act
and the rules and regulations promulgated thereunder; the Registration Statement as of the
Effective Date, the Time of Sale Information as of the Time of Sale and the Prospectus as of
the date of the prospectus supplement comprising part of such Prospectus will not contain
any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; provided that no
representation and warranty is made as to any statement of eligibility on Form T-1 filed or
incorporated by reference as part of the Registration Statement, the Time of Sale
Information or the Prospectus, or as to information relating to the Remarketing Agents
contained in or omitted from the Registration Statement, Time of Sale Information or the
Prospectus in reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Remarketing Agents through the Representative specifically
for inclusion therein.

     (o) Except as disclosed in or contemplated by the Time of Sale Information and the
Prospectus, there has not been any material adverse change in, or any adverse development
which materially affects, the business, properties, financial condition or results of
operations of the Company and its subsidiaries taken as a whole from the dates as of which
information is given in the Time of Sale Information and the Prospectus.

     (p) This Agreement has been duly authorized, executed and delivered by the Company.

     (q) The Company and its consolidated subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (1) transactions are
executed in accordance with management’s general or specific authorization; (2) transactions
are recorded as necessary to permit preparation of financial statements in conformity with
accounting principles generally accepted in the United

9

 

States (“GAAP”) and to maintain accountability for assets; (3) access to assets is
permitted only in accordance with management’s general or specific authorization; and (4)
the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Except as
described in the Time of Sale Information, since the end of the Company’s most recent
audited fiscal year, there has been (I) no material weakness identified by management, or by
the Company’s auditors and communicated to management, in the Company’s internal control
over financial reporting (whether or not remediated) and (II) no change in the Company’s
internal control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial reporting.

     (r) The Company and its consolidated subsidiaries employ disclosure controls and
procedures that are designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the 1934 Act is recorded, processed,
summarized and reported, within the time periods specified in the Commission’s rules and
forms, and is accumulated and communicated to the Company’s management, including its
principal executive and principal financial officer or officers, as appropriate, to allow
timely decisions regarding disclosure.

     Section 4 . Fees.

     (a) If the Initial Remarketing of the Remarketed Senior Notes is a Successful
Remarketing, the Representative shall retain, for itself and the other Remarketing Agents,
as a remarketing fee (the “Remarketing Fee”) an amount equal to the lesser of (i) 25 basis
points (0.25%) of the sum of the Treasury Portfolio Purchase Price and the Separate Senior
Note Purchase Price and (ii) the amount of the proceeds of such Remarketing in excess of the
sum of the Treasury Portfolio Purchase Price and the Separate Senior Notes Purchase Price.

     (b) Each Remarketing Agent shall be entitled to the percentage of the Remarketing Fee
set forth opposite its name in Schedule I hereto.

     Section 5.
Covenants of the Company.

     The Company covenants and agrees as follows:

     (a) to prepare the Preliminary Prospectus and the Prospectus, each in a form approved
by the Remarketing Agents, and to file any such Preliminary Prospectus and Prospectus
pursuant to the Securities Act within the period required by the Securities Act and the
rules and regulations thereunder;

     (b) to prepare a Final Term Sheet and to file such Final Term Sheet with the Commission
in compliance with Rule 433(d) under the Securities Act;

10

 

     (c) to file promptly with the Commission any amendment to the Registration Statement,
the Preliminary Prospectus, the Final Term Sheet, or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the Representative, be
required by the Securities Act or requested by the Commission;

     (d) to advise the Representative, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes effective or
any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the
Remarketing Agents with copies thereof;

     (e) to file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a Prospectus is required in connection with the offering or sale of the
Remarketed Senior Notes;

     (f) to advise the Representative, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or suspending the
use of the Time of Sale Information or the Prospectus, of the suspension of the
qualification of any of the Remarketed Senior Notes for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the Registration
Statement, the Time of Sale Information or the Prospectus or for additional information,
and, in the event of the issuance of any stop order or of any order preventing or suspending
the use of any Time of Sale Information or Prospectus or suspending any such qualification,
to use promptly its best efforts to obtain its withdrawal;

     (g) to furnish promptly to the Remarketing Agents such copies of the following
documents as the Remarketing Agents shall reasonably request: (A) conformed copies of the
Registration Statement as originally filed with the Commission and each amendment thereto
(in each case excluding exhibits); (B) the Preliminary Prospectus and any amended or
supplemented Preliminary Prospectus, (C) the Prospectus and any amended or supplemented
Prospectus; (D) the Final Term Sheet; (E) any issuer free writing prospectus referred to in
Section 6; and (F) any document incorporated by reference in the Prospectus (excluding
exhibits thereto); and, if at any time when delivery of a prospectus is required in
connection with the Remarketing, any event shall have occurred as a result of which the Time
of Sale Information or the Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made
when such Time of Sale Information or Prospectus is delivered, not misleading, or if for any
other reason it shall be necessary during such same period to amend or supplement the Time
of Sale Information or the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Securities Act or
the Exchange Act, to notify the Representative and, upon its request, to file such document
and to prepare and furnish without charge to the Remarketing Agents and to any dealer in
securities as many copies

11

 

as the Remarketing Agents may from time to time reasonably request of amended or
supplemented Time of Sale Information or Prospectus that will correct such statement or
omission or effect such compliance;

     (h) prior to filing with the Commission (A) any amendment to the Registration Statement
or supplement to the Prospectus or (B) any Prospectus pursuant to Rule 424 under the
Securities Act, to furnish a copy thereof to the Representative and counsel to the
Remarketing Agents; and not to file any such amendment or supplement that shall be
reasonably disapproved by the Representative promptly after reasonable notice;

     (i) as soon as practicable, but in any event not later than August 10, 2007, to make
“generally available to its security holders” an “earnings statement” of the Company and its
subsidiaries complying with (which need not be audited) Section 11(a) of the Securities Act
and the rules and regulations thereunder (including, at the option of the Company, Rule
158). The terms “generally available to its security holders” and “earnings statement”
shall have the meanings set forth in Rule 158; and

     (j) to take such action as the Representative may reasonably request in order to
qualify the Remarketed Senior Notes for offer and sale under the securities or “blue sky”
laws of such jurisdictions as the Representative may reasonably request; provided that in no
event shall the Company be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction; and provided further that the Company
shall not be required to qualify the Remarketed Senior Notes in any jurisdiction if such
qualification would result in any obligation on the part of the Company to make filings with
any governmental entity in such jurisdiction after the completion of the Remarketing.

     (k) to pay: (1) the costs incident to the preparation and printing of the Registration
Statement, any Time of Sale Information, the Prospectus and any amendments or supplements
thereto; (2) the costs of distributing the Registration Statement, any Time of Sale
Information, the Prospectus and any amendments or supplements thereto; (3) any fees and
expenses of qualifying the Remarketed Senior Notes under the securities laws of the several
jurisdictions as provided in Section 5(j) and of preparing, printing and distributing a Blue
Sky Memorandum, if any (including any related fees and expenses of counsel to the
Remarketing Agents); (4) all other costs and expenses incident to the performance of the
obligations of the Company hereunder and the Remarketing Agents hereunder; and (5) the
reasonable fees and expenses of counsel to the Remarketing Agents in connection with their
duties hereunder.

     (l) to furnish the Remarketing Agents with such information and documents as the
Remarketing Agents may reasonably request in connection with the transactions contemplated
hereby, and to make reasonably available to the Remarketing Agents and any accountant,
attorney or other advisor retained by the Remarketing Agents such information that parties
would customarily require in connection with a due diligence investigation conducted in
accordance with applicable securities laws and to cause the Company’s officers, directors,
employees and accountants to participate in all such

12

 

discussions and to supply all such information reasonably requested by any such Person
in connection with such investigation.

     Section 6 . Free Writing Prospectuses.

     (a) Subject to Section 5(b), the Company represents and agrees that, unless it obtains
the prior consent of the Representative, and each Remarketing Agent represents and agrees
that, unless it obtains the prior consent of the Company and the Representative, it has not
made and will not make any offer relating to the Remarketing or the Remarketed Senior Notes
that would constitute an “issuer free writing prospectus” as defined in Rule 433 under the
Securities Act, or that would otherwise constitute a “free writing prospectus” as defined in
Rule 405 under the Securities Act; provided however, that prior to the preparation of the
Final Term Sheet in accordance with Section 5(b) of this Agreement, the Remarketing Agents
are authorized to use preliminary terms of the Remarketed Senior Notes in communications
conveying information relating to the Remarketing to investors. Each of the Final Term
Sheet and any such free writing prospectus consented to by the Company and the
Representative is referred to as a “Permitted Free Writing Prospectus.”

     (b) The Company represents that it has treated or agrees that it will treat each
Permitted Free Writing Prospectus as an “issuer free writing prospectus” as defined in Rule
433 under the Securities Act, and has complied and will comply with the requirements of Rule
433 applicable to any Permitted Free Writing Prospectus, including timely filing with the
Commission where required, legending and record keeping.

     Section 7 . Delivery and Payment.

     (a) In the case of a Successful Initial Remarketing as determined in accordance with
Section 8, payment for the Remarketed Senior Notes by the purchasers thereof identified by
the Representative shall be made on the Remarketing Settlement Date by 10:00 a.m. New York
City time. Delivery of the Remarketed Senior Notes shall be made to the Representative
against payment by the respective purchasers of the Remarketed Senior Notes of the
consideration therefor as specified herein. After deducting the Remarketing Fee, the
Representative shall transfer any proceeds of the Remarketing in excess of the Remarketing
Fee to the Collateral Agent or the Custodial Agent, as the case may be, in immediately
available funds by wire transfer to an account or accounts designated by the Collateral
Agent or Custodial Agent, as the case may be. The documents to be delivered on the
Remarketing Settlement Date by or on behalf of the parties hereto pursuant to Section 8
hereof will be delivered at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New
York, NY 10017.

     (b) The Remarketed Senior Notes will be represented by one or more definitive Global
Certificates in book-entry form which will be deposited with The Depository Trust Company or
its designated custodian not less than one full Business Day in advance of the Remarketing
Settlement Date, and the Company, the Collateral Agent and the registered holder or holders
thereof agree to have the copies of certificates representing

13

 

the Global Certificates available for inspection by the Representative in New York, New
York not later than 12:00 noon on the Business Day prior to the Remarketing Settlement Date.

     Section 8 . Determination of Successful Initial Remarketing.

          A Successful Initial Remarketing shall be subject to a determination by the Remarketing Agents
that the following conditions have been satisfied:

     (a) The Preliminary Prospectus, the Prospectus and the Final Term Sheet shall have been
timely filed with the Commission; no stop order preventing or suspending the use of the
Registration Statement or any part thereof or any Time of Sale Information shall have been
issued and no proceeding for that purpose or pursuant to Section 8A of the Securities Act
shall have been initiated or threatened by the Commission; and any request of the Commission
for inclusion of additional information in the Registration Statement, the Time of Sale
Information or the Prospectus or otherwise shall have been complied with.

     (b) (1) Trading generally shall not have been suspended or materially limited on the
New York Stock Exchange or the Nasdaq National Market, (2) trading of any securities of the
Company shall not have been materially suspended or limited on the New York Stock Exchange
or any other exchange or over-the-counter market, (3) a material disruption in securities
settlement, payment or clearance services in the United States shall not have occurred, (4)
a general moratorium on commercial banking activities in New York shall not have been
declared by either Federal or New York State authorities, or (5) there shall not have
occurred a material adverse change in the financial markets, any outbreak or escalation of
hostilities involving the United States or the declaration by the United States of a
national emergency or war or other calamity or crisis, if the effect of any such event
specified in this clause (5) in the judgment of the Representative makes it impracticable or
inadvisable to proceed with the Remarketing or the delivery of the Remarketed Senior Notes
on the terms and in the manner contemplated in the Transaction Documents.

     (c) The representations and warranties of the Company contained herein shall be true
and correct in all material respects on and as of the Remarketing Settlement Date, and the
Company, the Purchase Contract Agent and the Collateral Agent shall have performed in all
material respects all covenants and agreements contained herein or in the Purchase Contract
Agreement or Pledge Agreement to be performed on their part at or prior to such Remarketing
Settlement Date.

     (d) On the Remarketing Settlement Date, the Company shall have furnished to the
Remarketing Agents a certificate, dated the Remarketing Settlement Date, of the Chief
Executive Officer or Chief Financial Officer and the Treasurer satisfactory to the
Remarketing Agents stating that: (1) no order preventing or suspending the use of the
Registration Statement or any Time of Sale Information or prohibiting the sale of the

14

 

Remarketed Senior Notes is in effect, and no proceedings for such purpose or pursuant
to Section 8A of the Securities Act are pending before or, to the knowledge of such
officers, threatened by the Commission; (2) the representations and warranties of the
Company contained in Section 3 are true and correct on and as of the Remarketing Settlement
Date and the Company has performed in all material respects all covenants and agreements
contained herein to be performed on its part at or prior to such Remarketing Settlement
Date; and (3) the Registration Statement, as of the Effective Date, and the Time of Sale
Information as of the Time of Sale did not contain any untrue statement of a material fact
and did not omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and the Prospectus as of the date of the
prospectus supplement comprising part of such Prospectus and as of the Remarketing
Settlement Date did not or does not contain any untrue statement of material fact or omit 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.

     (e) On the Initial Remarketing Date and on the Remarketing Settlement Date, the
Remarketing Agents shall have received a letter addressed to the Remarketing Agents and
dated such respective dates, in form and substance satisfactory to the Remarketing Agents,
of Deloitte & Touche LLP, the independent accountants of the Company, containing statements
and information of the type ordinarily included in accountants’ “comfort letters” with
respect to certain financial information contained or incorporated by reference in the Time
of Sale Information and the Prospectus.

     (f) On the Remarketing Settlement Date, each of (1) counsel for the Company and (2)
General Counsel to the Company, shall have furnished to the Remarketing Agents its opinion,
addressed to the Remarketing Agents and dated the Remarketing Settlement Date, in form and
substance reasonably satisfactory to the Remarketing Agents addressing such matters as are
set forth in Annex A hereto.

     (g) On the Remarketing Settlement Date, Davis Polk & Wardwell, counsel for the
Remarketing Agents, shall have furnished to the Remarketing Agents its opinion, addressed to
the Remarketing Agents and dated the Remarketing Settlement Date, in form and substance
satisfactory to the Remarketing Agents.

     (h) Subsequent to the Time of Sale, there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential downgrading or of any review
for a possible change that does not indicate an improvement, in the rating accorded any of
the Company’s securities by any “nationally recognized statistical rating organization,” as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act.

          If the Remarketing Agents determine that the foregoing conditions have not been satisfied, a
Failed Remarketing shall be deemed to have occurred.

15

 

     Section 9 . Indemnification.

     (a) The Company will indemnify and hold harmless each Remarketing Agent, the partners,
directors and officers of each Remarketing Agent and each person, if any, who controls such
Remarketing Agent within the meaning of Section 15 of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which the Remarketing Agents or
any of them may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, the Preliminary Prospectus, the Time of Sale Information, the
Prospectus, or any amendments or supplement thereto or any Permitted Free Writing
Prospectus, or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Remarketing Agents for any legal or other
expenses reasonably incurred by the Remarketing Agents in connection with investigating or
defending any such losses, claims, damages, liabilities or action as such expenses are
incurred; provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission from any of
such documents in reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Remarketing Agent through the Representative specifically for
use therein.

     (b) Each Remarketing Agent, severally and not jointly, will indemnify and hold harmless
the Company, its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, against any losses, claims, damages
or liabilities to which the Company may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Preliminary Prospectus, the Time
of Sale Information, the Prospectus or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein 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 reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Remarketing Agent
through the Representative specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are incurred.

     (c) Promptly after receipt by an indemnified party under this section of notice of the
commencement of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under subsection (a) or (b) above, notify the
indemnifying party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may

16

 

have to any indemnified party otherwise than under subsection (a) or (b) above. In the
case of parties indemnified pursuant to subsection (a) above, counsel to the indemnified
parties shall be selected by the Representative. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel) separate from
their own counsel for all 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. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this Section 9 or Section 10
hereof (whether or not the indemnified parties are actual or potential parties thereto),
unless such settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.

     Section 10 . Contribution.

     (a) If the indemnification provided for in Section 9 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect of any
losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party, in lieu of such indemnification, shall contribute to the aggregate amount of such
losses, liabilities, claims, damages or expenses as incurred (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one hand and the
Remarketing Agents on the other hand from the offering of the Remarketed Senior Notes or
(ii) if the allocation provided by clause (i) is not permitted by applicable law, in such
proportions as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one hand and the
Remarketing Agents on the other hand in connection with the statements of omissions which
resulted in such losses, claims, damages or liabilities as well as any relevant equitable
considerations. The relative benefits received by the Company on one hand and the
Remarketing Agents on the other hand in connection with the Remarketing shall be deemed to
be in the same proportions as the aggregate principal amount of the Remarketed Senior Notes
less the fee paid to the Remarketing Agents on the one hand and the fee paid to the
Remarketing Agents on the other hand bear to the aggregate principal amount of the
Remarketed Senior Notes. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Company on
the one hand or the Remarketing Agents on the other hand and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or
omission. The Company and the Remarketing Agents agree that it would not be just and
equitable if

17

 

contribution pursuant to this subsection (a) were determined by pro rata allocation or
by any other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (a). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (a) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
subsection (a), no Remarketing Agent shall be required to contribute any amount in excess of
the amount by which the fees received by it under Section 4 exceeds the amount of any
damages which such Remarketing Agent 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 Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.

     (b) The obligations of the Company under this Section 10 shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of each Remarketing Agent and to each person, if
any, who controls any Remarketing Agent within the meaning of the Securities Act; and the
obligations of each Remarketing Agent under this Section 8 shall be in addition to any
liability which such Remarketing Agent may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the Company who
signed the Registration Statement and to each person, if any, who controls the Company
within the meaning of the Securities Act.

     (c) The indemnity and contribution provisions contained in Section 9 and this Section
10 and the representations, warranties and other statements of the Company contained in this
Agreement shall remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Remarketing Agent or any
person controlling any Remarketing Agent, or the Company, its officers or directors or any
controlling person of the Company, and the completion of the Remarketing.

     Section 11 . Dealing in Securities.

     Each Remarketing Agent, when acting as a Remarketing Agent or in its individual or any other
capacity, may, to the extent permitted by law, buy, sell, hold and deal in any of the Remarketed
Senior Notes, Normal Units, Stripped Units or any of the securities of the Company (together, the
"Securities”). Each Remarketing Agent may exercise any vote or join in any action which any
beneficial owner of such Securities may be entitled to exercise or take pursuant to the Indenture
with like effect as if it did not act in any capacity hereunder. Each Remarketing Agent, in its
individual capacity, either as principal or agent, may also engage in or have an interest in any
financial or other transaction with the Company as freely as if it did not act in any capacity
hereunder.

18

 

     Section 12 . Remarketing Agents’ Performance; Duty of Care; No Fiduciary Relationship.

     (a) The duties and obligations of the Remarketing Agents shall be determined solely by
the express provisions of this Agreement and the Transaction Documents. No implied
covenants or obligations of or against any Remarketing Agent shall be read into this
Agreement or any of the Transaction Documents. In the absence of bad faith on the part of
the Remarketing Agents, a Remarketing Agent may conclusively rely upon any document
furnished to it, as to the truth of the statements expressed in any of such documents. Each
Remarketing Agent shall be protected in acting upon any document or communication reasonably
believed by it to have been signed, presented or made by the proper party or parties except
as otherwise set forth herein. Any Remarketing Agent, acting under this Agreement, shall
incur no liability to the Company or to any holder of Remarketed Senior Notes in its
individual capacity or as Remarketing Agent for any action or failure to act, on its part in
connection with a Remarketing or otherwise, except if such liability is judicially
determined to have resulted from its failure to comply with the material terms of this
Agreement or the gross negligence or willful misconduct on its part. The provisions of this
Section 12 shall survive the termination of this Agreement.

     (b) The Company acknowledges and agrees that (i) the Remarketing, including the
determination of the Remarketing Price and the Remarketing Fee, is an arm’s-length
commercial transaction between the Company, on the one hand, and the several Remarketing
Agents, on the other hand, (ii) in connection with the Remarketing contemplated hereby and
the process leading to such transaction, each Remarketing Agent is and has been acting
solely as Remarketing Agent hereunder and is not a fiduciary of the Company, or its
stockholders, creditors, employees or any other party, (iii) no Remarketing Agent has
assumed or will assume an advisory or fiduciary responsibility in favor of the Company with
respect to the Remarketing contemplated hereby and the process leading thereto (irrespective
of whether such Remarketing Agent has advised or is currently advising the Company on other
matters) and no Remarketing Agent has any obligation to the Company with respect to the
Initial Remarketing, except the obligations expressly set forth in this Agreement, (iv) the
Remarketing Agents and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company, and (v) the
Remarketing Agents have not provided any legal, accounting, regulatory or tax advice with
respect to the Remarketing contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed appropriate.

     Section 13 . Termination.

     (a) If this Agreement is terminated, except as otherwise provided herein, the Company
shall not be under any liability to any Remarketing Agent and no Remarketing Agent shall be
under any liability to the Company, except that if this Agreement is terminated by the
Remarketing Agents because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, the Company will
reimburse each Remarketing Agent for all of its out-of-pocket

19

 

expenses (including the fees and disbursements of its counsel) reasonably incurred by
it. Sections 9, 10 and 12 hereof shall survive the termination of this Agreement.

     (b) In the event of a Failed Remarketing, this Agreement shall terminate and the
Original Remarketing Agreement shall be deemed to be of full force and effect. Sections 9,
10 and 12 hereof shall survive the termination of this Agreement.

     Section 14 . Notices.

     All statements, requests, notices and agreements hereunder shall be in writing, and:

     (a) if to the Remarketing Agents, shall be delivered or sent by mail, telex or
facsimile transmission to Merrill Lynch, Pierce, Fenner & Smith Incorporated, 4 World
Financial Center, New York, New York, 10080, Attention: Global Origination Counsel (Fax:
212-446-3207);

     (b) if to the Company, shall be delivered or sent by mail, telex or facsimile
transmission to The Hartford Financial Services Group, Inc., Hartford Plaza, Hartford,
Connecticut 06115-1900, Attention: General Counsel (Fax: 860-547-5714); and

     (c) if to the Purchase Contract Agent, shall be delivered or sent by mail, telex or
facsimile transmission to JPMorgan Chase Bank, N.A., 227 W. Monroe Street, Suite 2600,
Chicago, Illinois 60606, Attention: Worldwide Securities Services (Fax: 312-267-5201).

     Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof.

     Section 15 . Persons Entitled to Benefit of Agreement.

     This Agreement shall inure to the benefit of and be binding upon each party hereto and its
respective successors. This Agreement and the terms and provisions hereof are for the sole benefit
of only those persons, except that (x) the representations, warranties, indemnities and agreements
of the Company contained in this Agreement shall also be deemed to be for the benefit of each
Remarketing Agent and the person or persons, if any, who control such Remarketing Agent within the
meaning of Section 15 of the Securities Act and (y) the indemnity agreement of the several
Remarketing Agents contained in Section 9(b) of this Agreement shall be deemed to be for the
benefit of the Company’s directors and officers who sign the Registration Statement, if any, and
any person controlling the Company within the meaning of Section 15 of the Securities Act. Nothing
contained in this Agreement is intended or shall be construed to give any person, other than the
persons referred to herein, any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision contained herein.

20

 

     Section 16 . Survival.

     The respective indemnities, representations, warranties and agreements of the Company and the
several Remarketing Agents contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive any Remarketing 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.

     Section 17 . Governing Law.

     This Agreement shall be governed by, and construed in accordance with, the laws of New York,
without regard to conflicts of laws principles.

     Section 18 . Judicial Proceedings.

     (a) Each party hereto expressly accepts and irrevocably submits to the non-exclusive
jurisdiction of the United States Federal or New York State court sitting in the Borough of
Manhattan, The City of New York, New York, over any suit, action or proceeding arising out
of or relating to this Agreement or the Remarketed Senior Notes. To the fullest extent it
may effectively do so under applicable law, each party hereto irrevocably waives and agrees
not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject
to the jurisdiction of any such court, any objection that it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding brought in any such court and
any claim that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.

     (b) Each party hereto agrees, to the fullest extent that it may effectively do so under
applicable law, that a judgment in any suit, action or proceeding of the nature referred to
in Section 18(a) brought in any such court shall be conclusive and binding upon such party,
subject to rights of appeal and may be enforced in the courts of the United States of
America or the State of New York (or any other court the jurisdiction to which the Company
is or may be subject) by a suit upon such judgment.

     Section 19 . 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.

     Section 20 . 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.

21

 

     Section 21 . Severability.

     If any provision of this Agreement shall be held or deemed to be or shall, in fact, be
invalid, inoperative or unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provisions of any constitution, statute, rule or public policy or for
any other reason, then, to the extent permitted by law, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or unenforceable in any other
case, circumstance or jurisdiction, or of rendering any other provision or provisions of this
Agreement invalid, inoperative or unenforceable to any extent whatsoever.

     Section 22 . Prior Agreements; Amendments.

     This Agreement supersedes all prior agreements and understandings between the Company and the
Remarketing Agents, or any of them, with respect to the Initial Remarketing and if any provision of
this Agreement relating to the Initial Remarketing conflicts, or is inconsistent, with the Original
Remarketing Agreement, this Agreement shall control.

     This Agreement may be amended by an instrument in writing signed by the parties hereto. Each
of the Company and the Purchase Contract Agent agrees that it will not enter into, cause or permit
any amendment or modification of the Transaction Documents or any other instruments or agreements
relating to the Senior Notes or the Normal Units that would in any way adversely affect the rights,
duties and obligations of any Remarketing Agent, without the prior written consent of each
Remarketing Agent.

     Section 23 . Successors and Assigns.

     The rights and obligations of the Company hereunder may not be assigned or delegated to any
other Person without the prior written consent of the Remarketing Agents. The rights and
obligations of the Remarketing Agents hereunder may not be assigned or delegated to any other
Person (other than an affiliate of a Remarketing Agent) without the prior written consent of the
Company.

     If the foregoing correctly sets forth the agreement by and between the Company, the
Remarketing Agents and the Purchase Contract Agent, please indicate your acceptance in the space
provided for that purpose below.

[SIGNATURES ON THE FOLLOWING PAGE]

22

 

	 	 	 	 	 
	 	Very truly yours,

THE HARTFORD FINANCIAL SERVICES GROUP, INC.

 	 
	 	By:  	/s/
John N. Giamalis	 
	 	 	Name:  John N. Giamalis	 	 
	 	 	Title:  Senior Vice
President and Treasurer	 	 
	 

CONFIRMED AND ACCEPTED:

Merrill Lynch, Pierce, Fenner & Smith Incorporated 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Richard M. Baio	 	 	 	 
	 	 	 	 	 
	 

	 	Name:  Richard M.
Baio	 	 	 	 
	 

	 	Title:  Vice
President	 	 	 	 
	 
	 	 	 	 	 	 
	Goldman, Sachs & Co.	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ Goldman,
Sachs & Co.	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	J.P. Morgan Securities Inc.	 	 
	 
	 	 	 	 	 	 
	By:
	 	/s/ Robert Bottamedi	 	 	 	 
	 	 	 	 	 
	 

	 	Name:  Robert
Bottamedi	 	 	 	 
	 

	 	Title:  Vice
President	 	 	 	 

 

 

JPMORGAN CHASE BANK, N.A.,

not individually but solely as Purchase Contract Agent

and as attorney-in-fact for the Holders of the Units

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 /s/ R. Tarnas	 	 	 	 
	 	 	 	 	 
	 

	 	Name:  R. Tarnas	 	 	 	 
	 

	 	Title:  Authorized Officer	 	 	 	 

 

 

SCHEDULE I

	 	 	 
	Remarketing Agents	 	Percentage of Total Remarketing Fees
	Merrill Lynch, Pierce, Fenner & Smith Incorporated
	 	33.34%
	Goldman, Sachs & Co.
	 	33.33%
	J.P. Morgan Securities Inc.
	 	33.33%
	 
	 	 
	Total
	 	100.00%

 

 

SCHEDULE II

[Form of Final Term Sheet]

$

The Hartford Financial Services Group, Inc.

% Senior Notes due August 16, 2008

	 	 	 	 	 	 	 
	Issuer:	 	The Hartford Financial Services Group, Inc.	 	 	 	 
	Remarketed Amount:
	 	$	 	 	 	 
	Maturity Date:
	 	August 16, 2008	 	 	 	 
	First Interest Payment Date after the Remarketing:
	 	August 16, 2006	 	 	 	 
	Interest Payment Dates:	 	February 16, May 16, August 16 and
November 16 of each year	 	 	 	 
	Interest Rate:
	 	%	 	 	 	 
	Trade Date:
	 	May 11, 2006	 	 	 	 
	Settlement Date:	 	May 16, 2006	 	 	Trade date + 3 days
	Remarketing Price:
	 	%	 	 	 	 
	Remarketing Fee:
	 	$           	 	 	 	 
	Ranking:	 	Senior unsecured and unsubordinated obligations
	[Proceeds to Separate Senior Note holders participating in the Remarketing:
	 	$     per Senior Note]	 	 	 	 
	[Proceeds to Normal Unit holders:
	 	$     per Normal Unit]	 	 	 	 
	[Aggregate principal amount of Senior Notes purchased by the Issuer
	 	$            ]	 	 	 	 
	[Ratings (Moody’s/S&P/Fitch):
	 	Moody's:	S&P:	 	Fitch:]
	Format:
	 	SEC Registered	 	 	 	 
	Denomination:	 	$1,000 principal amount and integral multiples thereof
	CUSIP:
	 	 	 	 	 	 

The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
EDGAR on the SEC web site at www.sec.gov. Alternatively, the issuer, any remarketing agent or any
dealer participating in the offering will arrange to send you the prospectus if you request it by
calling: Merrill Lynch: 1-866-500-5408.

 

 

ANNEX A-1

Form of Opinion of Debevoise & Plimpton

to be delivered pursuant to Section 8(f)(1) of the Agreement

     1. Each of the Purchase Contract Agreement and the Pledge Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect affecting creditors’ rights generally and (ii)
general principles of equity (regardless of whether enforceability is considered in a proceeding in
law or equity); provided, however, that upon the occurrence of a Termination Event (as defined in
the Purchase Contract Agreement), the Bankruptcy Code (11 U.S.C. §§ 101-1330, as amended) should
not substantively limit the provisions of Sections 3.15 and 5.06 of the Purchase Contract Agreement
or Section 5.04 of the Pledge Agreement that require termination of the purchase contracts and
release of the Collateral Agent’s security interest in (1) the Ownership Interests and the related
Senior Notes, (2) the Treasury Securities (as defined in the Purchase Contract Agreement) or (3)
the Applicable Ownership Interests in the Treasury Portfolio (as specified in clause (i) of such
term as defined in the Purchase Contract Agreement), as applicable, and the transfer of such
securities to the Purchase Contract Agent for the benefit of the Holders (as defined in the
Purchase Contract Agreement) of the Units (as defined in the Purchase Contract Agreement), provided
further, however, that no opinion is expressed as to whether a court exercising bankruptcy
jurisdiction might issue a temporary restraining order or provide other interim relief that would
delay the exercise of such termination right for a period of time pending final adjudication of any
challenge to the exercise of such right during a bankruptcy case involving the Company. In
addition, applicable state laws and interpretations may affect the validity or enforceability of
certain remedies provided for in the Pledge Agreement, but such limitations do not, in our opinion,
make the remedies provided for therein inadequate for the practical realization of the rights and
benefits intended to be provided thereby (subject to the other qualifications expressed in this
letter).

     2. The Senior Notes have been duly authorized, executed and delivered by the Company and,
assuming the Senior Notes have been duly authenticated by the Trustee, are entitled to the benefits
of the Indenture and are valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now
or hereafter in effect affecting creditors’ rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding in law or equity).

     3. The Base Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended. The Indenture has been duly authorized, executed and delivered by the

A-1

 

Company and, assuming the Indenture has been duly executed and delivered by the Trustee, is a
valid and binding agreement of the Company, enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect
affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding in law or equity).

     4. The Initial Remarketing Agreement has been duly authorized, executed and delivered by the
Company and, assuming the Initial Remarketing Agreement has been duly executed and delivered by the
Remarketing Agents and by JPMorgan Chase Bank, N.A. as Purchase Contract Agent and as
attorney-in-fact for Holders of Purchase Contracts, is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect affecting creditors’ rights generally
and (ii) general principles of equity (regardless of whether enforceability is considered in a
proceeding in law or equity).

     5. The statements made in the Preliminary Prospectus and the Prospectus under the captions
“Description of the Remarketed Senior Notes” and “Description of the Debt Securities”, together
with, in the case of the Preliminary Prospectus, the information in the Final Term Sheet, insofar
as such statements purport to summarize certain provisions in the Indenture, the Senior Notes or
legal matters referred to therein, are accurate in all material respects.

     6. The discussion under the caption “Certain United States Federal Income Tax Consequences” in
the Preliminary Prospectus and the Prospectus, insofar as such discussion purports to summarize
certain United States federal income tax consequences of the purchase, ownership, and disposition
of the Remarketed Senior Notes, or state legal conclusions with respect thereto, is accurate in all
material respects.

     The opinions set forth above are subject to the following additional limitations and
qualifications:

     (a) Our opinions are subject to the effects of (1) an implied covenant of good faith,
reasonableness and fair dealing and (2) limitations with respect to enforceability of
provisions providing for indemnification or contribution arising under applicable law
(including court decisions) or public policy.

     (b) We express no opinion as to (1) the priority status under the Bankruptcy Code (11
U.S.C. §§ 101 — 1330, as amended) of the Senior Notes or (2) the perfection or priority of
the security interests purported to be created by the Pledge Agreement.

A-2

 

     (c) Without limiting the foregoing, we express no opinion as to the validity, binding
effect or enforceability of any provision of the Purchase Contract Agreement, the Pledge
Agreement, the Indenture or the Senior Notes that purports to (i) waive, release or vary any
defense, right or privilege of, or any duties owing to, any party to the extent that such
waiver, release or variation may be limited by applicable law, (ii) constitute a waiver of
inconvenient forum or improper venue, (iii) relate to the subject matter jurisdiction of a
court to adjudicate any controversy. In addition, the enforceability of any provision in
the Purchase Contract Agreement, the Pledge Agreement, the Indenture or the Senior Notes to
the effect that (x) the terms thereof may not be waived or modified except in
writing, (y) the express terms thereof supersede any inconsistent course of dealing,
performance or usage or (z) certain determinations made by one party shall have
conclusive effect, may be limited under certain circumstances.

     (d) We express no opinion as to whether a United States Federal court would accept
jurisdiction in any dispute, action, suit or proceeding arising out of or relating to any of
the Transaction Documents or the transactions contemplated thereby.

          We express no opinion as to the laws of any jurisdiction other than the laws of the State of
New York and the Federal laws of the United States of America, as currently in effect, in each case
that in our experience are normally applicable to transactions of the type contemplated by the
Purchase Contract Agreement, the Pledge Agreement, the Initial Remarketing Agreement and the
Indenture without regard to the particular nature of the business conducted by the Company.

          The opinions expressed herein are solely for your benefit and, without our prior written
consent, neither our opinions nor this opinion letter may be disclosed to or relied upon by any
other person. This opinion letter is limited to, and no opinion is implied or may be inferred
beyond, the matters expressly stated herein. The opinions expressed herein are rendered only as of
the date hereof, and we assume no responsibility to advise you of facts, circumstances, changes in
law, or other events or developments that hereafter may occur or be brought to our attention and
that may alter, affect or modify the opinions expressed herein.

A-3

 

ANNEX A-2

Form of Opinion of General Counsel to the Company

to be delivered pursuant to Section 8(f)(2) of the Agreement

     Neal S. Wolin, Esq., Executive Vice President and General Counsel to the Company, shall have
furnished to you his written opinion, dated the Remarketing Settlement Date, in form and substance
satisfactory to you, to the effect that:

	 	1.	 	The Company is validly existing and in good standing under the laws of the
State of Delaware, with the corporate power and authority to own its properties and
conduct its business as described in the Preliminary Prospectus and the Prospectus.
	 
	 	2.	 	The Company’s authorized share capital is as set forth in the Base Prospectus
under the heading “Description of Capital Stock of The Hartford Financial Services
Group, Inc. —Authorized and Outstanding Capital Stock”.
	 
	 	3.	 	All of the issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable.
	 
	 	4.	 	Except as described in the Preliminary Prospectus and the Prospectus, there is
no action, suit or proceeding pending, nor, to the best of my knowledge, is there any
action, suit or proceeding threatened against the Company that (a) might
reasonably be expected to have a material adverse effect on the financial condition,
results of operations or business of the Company and its subsidiaries, considered as a
whole (a “Material Adverse Effect”), or (b) is required to be disclosed
in the Registration Statement.
	 
	 	5.	 	The Initial Remarketing Agreement has been duly authorized, executed and
delivered by or on behalf of the Company.
	 
	 	6.	 	The sale of the Remarketed Senior Notes in accordance with the terms of the
Initial Remarketing Agreement and the performance by the Company of its obligations in
accordance with the terms of the Initial Remarketing Agreement (i) will not result in a
breach or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to me to which the Company is a party or by which the Company is bound
or to which any of the property or assets of the Company is subject, nor will such
actions result in any violation of the provisions of (ii) the Amended and
Restated Certificate of Incorporation or Amended and Restated By-laws of the Company or
(iii) any statute or any order, rule or regulation known to me having
jurisdiction over the Company or any of its properties; except, in the case of clauses
(i) and (iii), for such violations that would not have a Material
Adverse Effect; provided that I express no opinion in this paragraph (6) with respect
to state securities laws or the antifraud provisions of the United States Federal
securities laws.
	 
	 	7.	 	No consent or authorization of, approval by, notice to or filing with any court
or governmental authority is required to be obtained or made on or prior to the date
hereof by the Company for the sale of the Remarketed Senior Notes or the

A-4

 

	 	 	 	performance by the Company of its obligations in accordance with the terms of the
Transaction Documents, except for any consents, authorizations, approvals, notices
and filings that have been obtained or made and are in full force and effect and
those consents, authorizations, approvals, notices and filings that individually or
in the aggregate, if not made, obtained or done would not have a Material Adverse
Effect ; provided that I express no opinion in this paragraph (7) with respect to
state securities laws or the antifraud provisions of the United States Federal
securities laws.

In rendering the opinion set forth in paragraph (3), I have assumed that the consideration required
by the resolutions of the board of directors of the Company authorizing the issuance of all of the
issued shares of capital stock of the Company has been received in full by the Company.

The opinions set forth in paragraphs (6) and (7) as to the performance by the Company of its
obligations in accordance with the Transaction Documents are based solely upon the facts and
circumstances as they exist on the date hereof and are rendered as if the Company had performed
such obligations on the date hereof.

I am a member of the bar of the State of Connecticut and I do not hold myself out as conversant
with, or express any opinion herein concerning, the laws of any jurisdiction other than the laws of
the State of Connecticut, the DGCL and the Federal laws of the United States of America.

The opinions expressed herein are solely for your benefit and, without my prior written consent,
neither my opinions nor this opinion letter may be disclosed to or relied upon by any other person.
This opinion letter is limited to, and no opinion is implied or may be inferred beyond, the
matters expressly stated herein. The opinions expressed herein are rendered only as of the date
hereof, and I assume no responsibility to advise you of facts, circumstances, changes of law, or
other events or developments that hereafter may occur or be brought to my attention and that may
alter or modify the opinions expressed herein.

In rendering such opinion, such counsel may state that he expresses no opinion as to the laws of
any jurisdiction outside the United States and in respect of matters of fact such counsel may rely
upon certificates of officers of the Company and its subsidiaries; provided that such counsel shall
state he believes that both you and he are justified in relying upon such certificates and copies
of such certificates are made available to you.

     In addition, Mr. Wolin shall provide a separate letter stating that, based upon specified
participation of such counsel in connection with the preparation of such documents:

(1) Each of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005,
the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006,
and each other document filed by the Company under the Exchange Act with the Commission
since the filing of such Annual Report on Form 10-K and incorporated by reference in the
Preliminary Prospectus and the Prospectus, in each case when such document was filed with
the Commission, appeared to me on its face to be appropriately responsive in all material
respects to the requirements as to form of the Exchange Act and the applicable rules and
regulations of the Commission thereunder; and nothing has come to my attention that has
caused me to believe that any such

A-5

 

document, as of the date it was filed, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such document was filed not
misleading; except that in each case I express no belief as to (1) the financial
statements, the related notes and schedules, and other financial information contained in
any such document or (2) Regulation S-T.

(2) Each of the Registration Statement, as of the Effective Date, and the Prospectus, as of
the date of the prospectus supplement comprising part of such Prospectus, appeared to me on
its face to be appropriately responsive in all material respects to the requirements as to
form of the 1933 Act and the applicable rules and regulations of the Commission thereunder
and nothing has come to my attention that has caused me to believe (a) that
(i) the Registration Statement or the Prospectus, as of the Effective Date,
contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not misleading;
(ii) the Time of Sale Information, as of the Time of Sale, contained any untrue
statement of a material fact or omitted 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 (iii) the Prospectus, as of its date of the Prospectus
Supplement and as of the Remarketing Settlement Date, contained or contains any untrue
statement of a material fact or omitted or omits 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 (b) that any amendment to the Registration Statement
required to be filed or any contract or document of a character required to be filed as an
exhibit to the Registration Statement or required to be described in the Registration
Statement are not so filed or described as required; except that in each case I express no
belief as to (x) the financial statements, the related notes and schedules, and
other financial information contained in the Registration Statement, the Time of Sale
Information or the Prospectus; or (y) the statement of eligibility of the Trustee
under the Indenture, or (z) Regulation S-T.

     It is understood that such counsel may state that he has not independently verified factual
statements in the Registration Statement, Time of Sale Information or the Prospectus.

A-6

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