Document:

exv10w4

 

Exhibit 10.4

Commercial Paper Dealer Agreement

4(2) PROGRAM; GUARANTEED

among

Weatherford International Ltd., as Issuer

Weatherford International, Inc., as Guarantor

and

Merrill Lynch Money Markets Inc.,

as Dealer for Notes with maturities up to 270 days;

Merrill Lynch, Pierce, Fenner & Smith Incorporated,

as Dealer for Notes with maturities over 270 days up to 397 days

Concerning Notes to be issued pursuant to an Issuing

and Paying Agency Agreement dated as of October 25, 2005

between the Issuer, the Guarantor and

JPMorgan Chase Bank, N.A.

Dated as of

October 25, 2005

 

 

Commercial Paper Dealer Agreement

4(2) Program; Guaranteed

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

The Guarantor has agreed unconditionally and irrevocably to guarantee payment in full of the
principal of and interest (if any) on all such Notes of the Issuer, pursuant to a guarantee, dated
the date hereof, in the form of Exhibit D hereto (the “Guarantee”).

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

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

	1.	 	Offers, Sales and Resales of Notes.

	 	1.1	 	While (i) the Issuer has and shall have no obligation to sell the Notes to
the Dealer or to permit the Dealer to arrange any sale of the Notes for the account of
the Issuer, and (ii) the Dealer has and shall have no obligation to purchase the Notes
from the Issuer or to arrange any sale of the Notes for the account of the Issuer, the
parties hereto agree that in any case where the Dealer purchases Notes from the
Issuer, or arranges for the sale of Notes by the Issuer, such Notes will be purchased
or sold by the Dealer in reliance on the representations, warranties, covenants and
agreements of the Issuer and the Guarantor contained herein or made pursuant hereto
and on the terms and conditions and in the manner provided herein.
	 
	 	1.2	 	So long as this Agreement shall remain in effect, and in addition to the
limitations contained in Section 1.7 hereof, neither the Issuer nor the
Guarantor shall, without the consent of the Dealer, offer, solicit or accept offers to
purchase, or sell, any Notes except (a) in transactions with one or more dealers which
may from time to time after the date hereof become dealers with respect to the Notes
by executing with the Issuer and the Guarantor one or more agreements which contain
provisions substantially identical to those contained in Section 1 of this
Agreement, of which the Issuer and the Guarantor hereby undertakes to provide the
Dealer prompt notice or (b) in transactions with the other dealers listed on the
Addendum hereto, which are executing agreements with the Issuer and the Guarantor
which contain provisions substantially identical to Section 1 of this
Agreement contemporaneously herewith. In no event shall the Issuer or the Guarantor
offer, solicit or accept offers to purchase, or sell, any Notes directly on its own
behalf in transactions with persons other than broker-dealers as specifically
permitted in this Section 1.2.
	 
	 	1.3	 	The Notes shall be in a minimum denomination of $250,000 or integral
multiples of $1,000 in excess thereof, will bear such interest rates, if interest
bearing, or will be sold at such discount from their face amounts, as shall be agreed
upon by the Dealer and the Issuer, shall have a maturity not exceeding 397 days from
the date of issuance and may have such terms as are specified in Exhibit C
hereto or

	 	 	 
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	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 2

 

 

	 	 	 	the Private Placement Memorandum. The Notes shall not contain any provision for
extension, renewal or automatic “rollover.”
	 
	 	1.4	 	The authentication and issuance of, and payment for, the Notes shall be
effected in accordance with the Issuing and Paying Agency Agreement, and the Notes
shall be either individual physical certificates or book-entry notes evidenced by one
or more master notes (each, a “Master Note”) registered in the name of The Depository
Trust Company (“DTC”) or its nominee, in the form or forms annexed to the Issuing and
Paying Agency Agreement.
	 
	 	1.5	 	If the Issuer and the Dealer shall agree on the terms of the purchase of any
Note by the Dealer or the sale of any Note arranged by the Dealer (including, but not
limited to, agreement with respect to the date of issue, purchase price, principal
amount, maturity and interest rate or interest rate index and margin (in the case of
interest-bearing Notes) or discount thereof (in the case of Notes issued on a discount
basis), and appropriate compensation for the Dealer’s services hereunder) pursuant to
this Agreement, the Issuer shall cause such Note to be issued and delivered in
accordance with the terms of the Issuing and Paying Agency Agreement and payment for
such Note shall be made by the purchaser thereof, either directly or through the
Dealer, to the Issuing and Paying Agent, for the account of the Issuer. Except as
otherwise agreed, in the event that the Dealer is acting as an agent and a purchaser
shall either fail to accept delivery of or make payment for a Note on the date fixed
for settlement, the Dealer shall promptly notify the Issuer, and if the Dealer has
theretofore paid the Issuer for the Note, the Issuer will promptly return such funds
to the Dealer (i) against its return of the Note to the Issuer, in the case of a
certificated Note, and upon notice of such failure in the case of a book-entry Note,
and (ii) upon the Dealer’s request to return such funds. If such failure occurred for
any reason other than default by the Dealer, the Issuer and the Guarantor agree,
jointly and severally, to reimburse the Dealer on a reasonable basis for the Dealer’s
loss of the use of such funds for the period such funds were credited to the Issuer’s
account.
	 
	 	1.6	 	The Dealer, the Issuer and the Guarantor hereby establish and agree to
observe the following procedures in connection with offers, sales and subsequent
resales or other transfers of the Notes:

	 	(a)	 	Offers and sales of the Notes by or through the Dealer shall
be made only to: (i) investors reasonably believed by the Dealer to be
Qualified Institutional Buyers, Institutional Accredited Investors or
Sophisticated Individual Accredited Investors and (ii) non-bank fiduciaries or
agents that will be purchasing Notes for one or more accounts, each of which
is reasonably believed by the Dealer to be an Institutional Accredited
Investor or Sophisticated Individual Accredited Investor.
	 
	 	(b)	 	Resales and other transfers of the Notes by the holders
thereof shall be made only in accordance with the restrictions in the legend
described in clause (e) below.
	 
	 	(c)	 	No general solicitation or general advertising shall be used
in connection with the offering of the Notes. Without limiting the generality
of the foregoing, without the prior written approval of the Dealer (which will

	 	 	 
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	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 3

 

 

	 	 	 	not be unreasonably withheld, delayed or conditioned), neither the Issuer
nor the Guarantor shall issue any press release, unless required by law,
regulation or rule applicable to the Issuer or the Guarantor, or place or
publish any “tombstone” or other advertisement relating to the Notes.
	 
	 	(d)	 	No sale of Notes to any one purchaser shall be for less than
$250,000 principal or face amount, and no Note shall be issued in a smaller
principal or face amount. If the purchaser is a non-bank fiduciary acting on
behalf of others, each person for whom such purchaser is acting must purchase
at least $250,000 principal or face amount of Notes.
	 
	 	(e)	 	Offers and sales of the Notes by the Issuer through the
Dealer acting as agent for the Issuer shall be made in accordance with Rule
506 under the Securities Act, and shall be subject to the restrictions
described in the legend appearing on Exhibit A hereto. A legend
substantially to the effect of such Exhibit A shall appear as part of
the Private Placement Memorandum used in connection with offers and sales of
Notes hereunder, as well as on each individual certificate representing a Note
and each Master Note representing book-entry Notes offered and sold pursuant
to this Agreement.
	 
	 	(f)	 	The Dealer shall furnish or shall have furnished to each
purchaser of Notes for which it has acted as the dealer a copy of the
then-current Private Placement Memorandum unless such purchaser has previously
received a copy of the Private Placement Memorandum as then in effect. The
Private Placement Memorandum shall expressly state that any person to whom
Notes are offered shall have an opportunity to ask questions of, and receive
information from the Issuer, the Guarantor and the Dealer and shall provide
the names, addresses and telephone numbers of the persons from whom
information regarding the Issuer and the Guarantor may be obtained.
	 
	 	(g)	 	The Issuer and the Guarantor, jointly and severally, agree
for the benefit of the Dealer and each of the holders and prospective
purchasers from time to time of the Notes that, if at any time the Issuer and
the Guarantor shall not be subject to Section 13 or 15(d) of the Exchange Act,
the Issuer and the Guarantor will furnish, upon request and at their expense,
to the Dealer and to holders and prospective purchasers of Notes information
required by Rule 144A(d)(4)(i) in compliance with Rule 144A(d).
	 
	 	(h)	 	In the event that any Note offered or to be offered by the
Dealer would be ineligible for resale under Rule 144A, the Issuer shall
immediately notify the Dealer (by telephone, confirmed in writing) of such
fact and shall promptly prepare and deliver to the Dealer an amendment or
supplement to the Private Placement Memorandum describing the Notes that are
ineligible, the reason for such ineligibility and any other relevant
information relating thereto.
	 
	 	(i)	 	The Issuer and the Guarantor represent that neither the
Issuer nor the Guarantor is currently issuing commercial paper in the United
States

	 	 	 
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	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 4

 

 

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

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

	 	(a)	 	The Issuer and the Guarantor hereby confirm to the Dealer
that (except as permitted by Section 1.6(i)) within the preceding six
months neither the Issuer nor the Guarantor nor any person other than the
Dealer or the other dealers referred to in Section 1.2 hereof acting
on behalf of the Issuer or the Guarantor has offered or sold any Notes, or any
substantially similar security of the Issuer or the Guarantor (including,
without limitation, medium-term notes issued by the Issuer or the Guarantor),
to, or solicited offers to buy any such security from, any person other than
the Dealer or the other dealers referred to in Section 1.2 hereof.
The Issuer and the Guarantor also agree that (except as permitted by
Section 1.6(i)), as long as the Notes are being offered for sale by
the Dealer and the other dealers referred to in Section 1.2 hereof as
contemplated hereby and until at least six months after the offer of Notes
hereunder has been terminated, neither the Issuer nor the Guarantor nor any
person other than the Dealer or the other dealers referred to in Section
1.2 hereof (except as contemplated by Section 1.2 hereof) will
offer the Notes or any substantially similar security of the Issuer for sale
to, or solicit offers to buy any such security from, any person other than the
Dealer or the other dealers referred to in Section 1.2 hereof, it
being understood that such agreement is made with a view to bringing the offer
and sale of the Notes within the exemption provided by Section 4(2) of the
Securities Act and Rule 506 thereunder and shall survive any termination of
this Agreement. Each of the Issuer and the Guarantor hereby represents and
warrants that it has not taken or omitted to take, and will not take or omit
to take, any action that would cause the offering and sale of Notes hereunder
to be integrated with any other offering of securities, whether such offering
is made by the Issuer or the Guarantor.
	 
	 	(b)	 	The Issuer represents and agrees that the proceeds of the
sale of the Notes are not currently contemplated to be used for the purpose of
buying, carrying or trading securities within the meaning of Regulation T and
the interpretations thereunder by the Board of Governors of the Federal
Reserve System. In the event that the Issuer determines to use

	 	 	 
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	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 5

 

 

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

	2.	 	Representations and Warranties of the Issuer and the Guarantor.
	 
	 	 	Each of the Issuer and the Guarantor represents and warrants as to itself that:

	 	2.1	 	The Issuer is an exempted company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has all the
requisite corporate power and authority to execute, deliver and perform its
obligations under the Notes, this Agreement and the Issuing and Paying Agency
Agreement.
	 
	 	2.2	 	The Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all the
requisite corporate power and authority to execute, deliver and perform its
obligations under the Guarantee, this Agreement and the Issuing and Paying Agency
Agreement.
	 
	 	2.3	 	This Agreement and the Issuing and Paying Agency Agreement have been duly
authorized, executed and delivered by the Issuer and the Guarantor and constitute
legal, valid and binding obligations of the Issuer and the Guarantor enforceable
against the Issuer and the Guarantor in accordance with their terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors’ rights
generally, and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at law).
	 
	 	2.4	 	The Notes have been duly authorized by the Issuer, and when issued and
delivered as provided in the Issuing and Paying Agency Agreement, will be duly and
validly issued and delivered by, and will constitute legal, valid and binding
obligations of, the Issuer, enforceable against the Issuer in accordance with their
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally, and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in equity or at
law).
	 
	 	2.5	 	The Guarantee has been duly authorized by the Guarantor, and when the Notes
have been issued and delivered as provided in the Issuing and Paying Agency Agreement,
will be duly executed and delivered by, and constitute the legal, valid and binding
obligation of, the Guarantor, enforceable against the Guarantor in

	 	 	 
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	 	 	 	accordance with its terms subject to applicable bankruptcy, insolvency or similar
laws affecting creditors’ rights generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
	 
	 	2.6	 	The offer and sale of the Notes and the Guarantee in the manner contemplated
hereby do not require registration of the Notes or the Guarantee under the Securities
Act, pursuant to the exemption from registration contained in Section 4(2) thereof,
and no indenture in respect of the Notes or the Guarantee is required to be qualified
under the Trust Indenture Act of 1939, as amended.
	 
	 	2.7	 	The Notes and the Guarantee will rank at least pari passu with all other
unsecured and unsubordinated indebtedness of the Issuer and the Guarantor,
respectively.
	 
	 	2.8	 	Assuming the offer and sale of the Notes in the manner contemplated hereby,
no consent or action of, or filing or registration with, any governmental or public
regulatory body or authority, including the SEC, is required to be obtained or made by
the Issuer or the Guarantor, as applicable, under any statute or regulation applicable
to either of them to authorize their respective execution, delivery or performance of
this Agreement, the Notes, the Guarantee or the Issuing and Paying Agency Agreement
except as may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Notes.
	 
	 	2.9	 	Neither the execution and delivery of this Agreement, the Guarantee and the
Issuing and Paying Agency Agreement, nor the issuance of the Notes in accordance with
the Issuing and Paying Agency Agreement, nor the fulfillment of or compliance with the
terms and provisions hereof or thereof by the Issuer or the Guarantor, will (i)
result, pursuant to the express provisions of any agreement to which it is a party, in
the creation or imposition of any consensual mortgage, lien or similar encumbrance
upon any of the properties or assets of the Issuer or the Guarantor, or (ii) violate
or result in a breach of or a default under, as the case may be, any of the terms of
the respective charter documents or by-laws or comparable governance documents of the
Issuer or the Guarantor, any contract or instrument to which the Issuer or the
Guarantor is a party or by which it or its property is bound, or any statutory law or
regulation, or any order, writ, injunction or decree of any court or government
instrumentality, to which the Issuer or the Guarantor is subject or by which it or its
property is bound, which violation, breach or default would reasonably be expected to
have a material adverse effect on the financial condition or operations of the Issuer
or the Guarantor and its consolidated subsidiaries taken as a whole or the ability of
the Issuer or the Guarantor to perform its obligations under this Agreement, the
Notes, the Guarantee or the Issuing and Paying Agency Agreement, as the case may be.
	 
	 	2.10	 	Except as disclosed in the Company Information or to the Dealer, there is no
litigation or governmental proceeding pending, or to the knowledge of the Issuer or
the Guarantor overtly threatened in writing, against or affecting the Issuer or the
Guarantor or any of its subsidiaries which would reasonably be expected to result in a
material adverse change in the financial condition or operations of the

	 	 	 
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	 	 	 	Issuer or the Guarantor and its consolidated subsidiaries taken as a whole or the
ability of the Issuer or the Guarantor to perform its obligations under this
Agreement, the Notes, the Guarantee or the Issuing and Paying Agency Agreement, as
the case may be.
	 
	 	2.11	 	Neither the Issuer nor the Guarantor is an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
	 
	 	2.12	 	Neither the Private Placement Memorandum nor the Company Information contains
any untrue statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading provided that neither the
Issuer nor the Guarantor makes any representation or warranty as to the Dealer
Information.
	 
	 	2.13	 	Each (a) issuance of Notes by the Issuer hereunder and (b) amendment or
supplement of the Private Placement Memorandum shall be deemed a representation and
warranty by each of the Issuer and the Guarantor to the Dealer, as of the date
thereof, that, both before and after giving effect to such issuance and after giving
effect to such amendment or supplement, (i) the representations and warranties given
by the Issuer and the Guarantor set forth in this Section 2 remain true and
correct on and as of such date as if made on and as of such date, (ii) in the case of
an issuance of Notes, the Notes being issued on such date have been duly and validly
issued and constitute legal, valid and binding obligations of the Issuer, enforceable
against the Issuer in accordance with their terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and are guaranteed pursuant to the
Guarantee, (iii) in the case of an issuance of Notes, since the date of the most
recent Private Placement Memorandum, there has been no material adverse change in the
financial condition or operations of the Issuer or the Guarantor and its consolidated
subsidiaries taken as a whole which has not been disclosed in Company Information and
(iv) neither the Issuer nor the Guarantor is in default of any of its obligations
hereunder or under the Notes, the Guarantee or the Issuing and Paying Agency
Agreement.

	3.	 	Covenants and Agreements of the Issuer and the Guarantor.
	 
	 	 	Each of the Issuer and the Guarantor covenants and agrees as to itself that:

	 	3.1	 	The Issuer and the Guarantor will give the Dealer prompt notice (but in any
event prior to any subsequent issuance of Notes hereunder) of any amendment to or
other modification of, or waiver with respect to, the Notes, the Guarantee or the
Issuing and Paying Agency Agreement, including a complete copy of any such amendment,
modification or waiver.
	 
	 	3.2	 	The Issuer and the Guarantor shall, whenever there shall occur any change in
the financial condition or operations of the Issuer or the Guarantor and its
consolidated subsidiaries taken as a whole or any development or occurrence involving
the Issuer or the Guarantor that would reasonably be expected to have a material
adverse effect on the Issuer or the Guarantor and its consolidated

	 	 	 
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	 	 	 	subsidiaries taken as a whole (including any downgrading or receipt of any written
notice of intended or potential downgrading or any review for potential downgrading
in the rating accorded any of the securities of the Issuer or the Guarantor by any
nationally recognized statistical rating organization which has published a rating
of the Notes), promptly, and in any event prior to any subsequent issuance of Notes
hereunder, notify the Dealer (by telephone, confirmed in writing) of such change,
development or occurrence.
	 
	 	3.3	 	The Issuer and the Guarantor shall from time to time furnish to the Dealer
such information as the Dealer may reasonably request, including, without limitation,
any press releases or material provided by the Issuer or the Guarantor to any national
securities exchange or rating agency, regarding (i) the operations and financial
condition of the Issuer or the Guarantor, (ii) the due authorization and execution of
the Notes and the Guarantee, (iii) the Issuer’s ability to pay the Notes as they
mature and (iv) the Guarantor’s ability to fulfill its obligations under the
Guarantee.
	 
	 	3.4	 	The Issuer and the Guarantor will take all such action as the Dealer may
reasonably request to ensure that each offer and each sale of the Notes will comply
with any applicable state Blue Sky laws; provided, however, that neither the Issuer
nor the Guarantor shall be obligated to file any general consent to service of process
or to qualify as a foreign corporation in any jurisdiction in which it is not so
qualified or subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
	 
	 	3.5	 	Neither the Issuer nor the Guarantor will be in default of any of its
obligations hereunder or under the Notes, the Guarantee or the Issuing and Paying
Agency Agreement, at any time that any of the Notes are outstanding.
	 
	 	3.6	 	The Issuer shall not issue Notes hereunder until the Dealer shall have
received (a) opinions of counsel to the Issuer and the Guarantor, addressed to the
Dealer, in form and substance reasonably satisfactory to the Dealer, (b) a copy of the
executed Issuing and Paying Agency Agreement as then in effect, (c) a copy of the
executed Guarantee, (d) a copy of the resolutions adopted by the Boards of Directors
of the Issuer and the Guarantor, in form and substance reasonably satisfactory to the
Dealer and certified by the Secretary or similar officer of the Issuer or the
Guarantor, as the case may be, authorizing execution and delivery by the Issuer and
the Guarantor of this Agreement, the Issuing and Paying Agency Agreement, the
Guarantee and the Notes, as the case may be, and consummation by the Issuer and the
Guarantor of the transactions contemplated hereby and thereby, (e) prior to the
issuance of any book-entry Notes represented by a Master Note registered in the name
of DTC or its nominee, a copy of the executed Letter of Representations among the
Issuer, the Guarantor, the Issuing and Paying Agent and DTC and of the executed Master
Note, (f) prior to the issuance of any Notes in physical form, a copy of such form
(unless attached to this Agreement or the Issuing and Paying Agency Agreement) and (g)
such other certificates, opinions, letters and documents as the Dealer shall have
reasonably requested.
	 
	 	3.7	 	The Issuer and the Guarantor, jointly and severally, shall reimburse the
Dealer for all of the Dealer’s reasonable out-of-pocket expenses related to this

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

The performance or compliance by the Issuer of any several obligation of the Guarantor under this
Section 3 or any other Section of this Agreement shall also be deemed to constitute
performance or compliance, as applicable, thereof by the Guarantor, and the performance or
compliance by the Guarantor of any several obligation of the Issuer under this Section 3 or
any other Section of this Agreement shall also be deemed to constitute performance or compliance,
as applicable, thereof by the Issuer.

	4.	 	Disclosure.

	 	4.1	 	The Private Placement Memorandum and its contents (other than the Dealer
Information) shall be the sole responsibility of the Issuer and the Guarantor. The
Private Placement Memorandum shall contain a statement expressly offering an
opportunity for each prospective purchaser to ask questions of, and receive answers
from, the Issuer and the Guarantor concerning the offering of Notes and to obtain
relevant additional information which the Issuer possesses or can acquire without
unreasonable effort or expense.
	 
	 	4.2	 	Each of the Issuer and the Guarantor agrees to promptly furnish the Dealer
the Company Information as it becomes available; provided, however, to the extent any
Company Information is included in materials otherwise filed by the Issuer or the
Guarantor with the SEC, such information shall be deemed to have been promptly
furnished to the Dealer on the date that such information is made available on “EDGAR”
or on the Issuer’s or the Guarantor’s, as applicable, homepage on the worldwide web
(located as listed in the notice provisions set forth in the Addendum); provided,
further, however, the Issuer or the Guarantor agrees to notify or to caused to be
notified the Dealer of each Form 8-K filed by any of them with respect to any of them,
which notification may be in any form of writing, by phone or by electronic
transmission to such email or similar address as shall be from time to time provided,
at the request of the Issuer or the Guarantor, by the Dealer to the Issuer and the
Guarantor for such purpose.
	 
	 	4.3	 	(a) Each of the Issuer and the Guarantor further agrees to notify the Dealer
promptly upon the occurrence of any event relating to or affecting the Issuer or the
Guarantor that would cause the Company Information then in existence to include an
untrue statement of a material fact or to omit to state a material fact necessary in
order to make the statements contained therein, in light of the circumstances under
which they are made, not misleading.

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

	 	 	 
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	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 10

 

 

under which they were made, not misleading, and the Issuer and the Guarantor shall
make such supplement or amendment available to the Dealer.

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

(d) Without limiting the generality of Section 4.3(a), the Issuer and the
Guarantor shall review, amend and supplement the Private Placement Memorandum on a
periodic basis, but no less than at least once annually, to incorporate current
financial information of the Issuer and the Guarantor to the extent (i) such
information is not otherwise set forth or incorporated by reference therein and
(ii) necessary to ensure that the information provided in the Private Placement
Memorandum does not contain an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading.

	5.	 	Indemnification and Contribution.

	 	5.1	 	The Issuer and the Guarantor, jointly and severally, will indemnify and hold
harmless the Dealer, each individual, corporation, partnership, trust, association or
other entity controlling the Dealer, any affiliate of the Dealer or any such
controlling entity and their respective directors, officers, employees, partners,
incorporators, shareholders, servants, trustees and agents (hereinafter the
“Indemnitees”) against any and all liabilities, penalties, suits, causes of action,
losses, damages, claims, costs and expenses (including, without limitation, reasonable
fees and disbursements of counsel) or judgments of whatever kind or nature (each a
“Claim”), imposed upon, incurred by or asserted against the Indemnitees arising out of
or based upon (i) any allegation that the Private Placement Memorandum, the Company
Information or, when taken together with all other information provided by the Issuer
or the Guarantor, as applicable, any information provided by the Issuer or the
Guarantor to the Dealer included (as of any relevant time) or includes an untrue
statement of a material fact or omitted (as of any relevant time) or omits to state
any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or (ii) arising out of or
based upon the breach by the Issuer or the Guarantor of any agreement, covenant or
representation made in or pursuant to this Agreement. This indemnification shall not
apply to the extent that the Claim arises out of or is based upon Dealer Information.
	 
	 	5.2	 	Provisions relating to claims made for indemnification under this Section
5 are set forth in Exhibit B to this Agreement.
	 
	 	5.3	 	In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in this Section 5 is held to be
unavailable or

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 11

 

 

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

	6.	 	Definitions.

	 	6.1	 	“Claim” shall have the meaning set forth in Section 5.1.
	 
	 	6.2	 	“Company Information” at any given time shall mean the Private Placement
Memorandum together with, to the extent applicable, (i) the Issuer’s and the
Guarantor’s most recent report on Form 10-K filed with the SEC and each report on Form
10-Q or 8-K filed by the Issuer or the Guarantor with the SEC since the most recent
Form 10-K,1 (ii) the Issuer’s and the Guarantor’s most recent annual
audited financial statements and each interim financial statement or report prepared
subsequent thereto, if not included in item (i) above, (iii) the Issuer’s and the
Guarantor’s and their affiliates’ other publicly available recent reports, including,
but not limited to, any publicly available filings or reports provided to their
respective shareholders, (iv) any other information or disclosure prepared pursuant to
Section 4.3 hereof and (v) any information prepared or approved by the Issuer
or the Guarantor for dissemination to investors or potential investors in the Notes.
	 
	 	6.3	 	“Dealer Information” shall mean material concerning the Dealer provided by
the Dealer in writing expressly for inclusion in the Private Placement Memorandum.
	 
	 	6.4	 	“Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as
amended.
	 
	 	6.5	 	“Indemnitee” shall have the meaning set forth in Section 5.1.
	 
	 	6.6	 	“Institutional Accredited Investor” shall mean an institutional investor that
is an accredited investor within the meaning of Rule 501 under the Securities Act and
that has such knowledge and experience in financial and business matters that it is
capable of evaluating and bearing the economic risk of an investment in the Notes,
including, but not limited to, a bank, as defined in Section 3(a)(2) of the Securities
Act, or a savings and loan association or other institution, as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity.

 

			
	1	 	In the case of a publicly reporting Issuer or
Guarantor that is a foreign entity, Section 6.2(i) should refer to Form 20-F.
Depending on the circumstances, Section 6.2(ii) may refer to the Issuer, the
Guarantor or both.

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 12

 

 

	 	6.7	 	“Issuing and Paying Agency Agreement” shall mean the issuing and paying
agency agreement described on the cover page of this Agreement, as such agreement may
be amended or supplemented from time to time.
	 
	 	6.8	 	“Issuing and Paying Agent” shall mean the party designated as such on the
cover page of this Agreement, as issuing and paying agent under the Issuing and Paying
Agency Agreement, or any successor thereto in accordance with the Issuing and Paying
Agency Agreement.
	 
	 	6.9	 	“Non-bank fiduciary or agent” shall mean a fiduciary or agent other than (a)
a bank, as defined in Section 3(a)(2) of the Securities Act, or (b) a savings and loan
association, as defined in Section 3(a)(5)(A) of the Securities Act.
	 
	 	6.10	 	“Private Placement Memorandum” shall mean written offering materials prepared
in accordance with Section 4 (including materials referred to therein or
incorporated by reference therein, if any) provided to purchasers and prospective
purchasers of the Notes, and shall include amendments and supplements thereto which
may be prepared from time to time in accordance with this Agreement (other than any
amendment or supplement that has been completely superseded by a later amendment or
supplement).
	 
	 	6.11	 	“Qualified Institutional Buyer” shall have the meaning assigned to that term
in Rule 144A under the Securities Act.
	 
	 	6.12	 	“Rule 144A” shall mean Rule 144A under the Securities Act.
6.13 “SEC” shall mean the U.S. Securities and Exchange Commission.
6.14 “Securities Act” shall mean the U.S. Securities Act of 1933, as amended.
	 
	 	6.15	 	“Sophisticated Individual Accredited Investor” shall mean an individual who
(a) is an accredited investor within the meaning of Regulation D under the Securities
Act and (b) based on his or her pre-existing relationship with the Dealer, is
reasonably believed by the Dealer to be a sophisticated investor (i) possessing such
knowledge and experience (or represented by a fiduciary or agent possessing such
knowledge and experience) in financial and business matters that he or she is capable
of evaluating and bearing the economic risk of an investment in the Notes and (ii)
having not less than $5 million in investments (as defined, for purposes of this
section, in Rule 2a51-1 under the Investment Company Act of 1940, as amended).

	7.	 	General

	 	7.1	 	Unless otherwise expressly provided herein, all notices under this Agreement
to parties hereto shall be in writing and shall be effective when received at the
address of the respective party set forth in the Addendum to this Agreement.
	 
	 	7.2	 	This Agreement shall be governed by and construed in accordance with the laws
of the State of New York, without regard to its conflict of laws provisions.

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 13

 

 

	 	7.3	 	Each of the Issuer and the Guarantor agrees that any suit, action or
proceeding brought by the Issuer or the Guarantor against the Dealer in connection
with or arising out of this Agreement or the Notes or the offer and sale of the Notes
may be brought in the United States federal courts located in the Borough of Manhattan
or the courts of the State of New York located in the Borough of Manhattan. EACH OF
THE DEALER, THE ISSUER AND THE GUARANTOR WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY
SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
	 
	 	7.4	 	This Agreement may be terminated, at any time, by the Issuer, upon one
business day’s prior notice to such effect to the Dealer, or by the Dealer upon one
business day’s prior notice to such effect to the Issuer. Any such termination,
however, shall not affect the obligations of the Issuer and the Guarantor under
Sections 3.7, 5 and 7.3 hereof or the respective
representations, warranties, agreements, covenants, rights or responsibilities of the
parties made or arising prior to the termination of this Agreement.
	 
	 	7.5	 	This Agreement is not assignable by any party hereto without the written
consent of the other parties; provided, however, to the extent deemed necessary by the
Dealer to effectuate a transaction hereunder in accordance with the terms hereof, the
Dealer may assign its rights and obligations under this Agreement to any affiliate of
the Dealer which is reasonably selected by the Dealer and determined by the Dealer as
capable of performing and complying with all obligations of the Dealer hereunder, and
which assignee, contemporaneous with such assignment, agrees to comply with all
obligations and related provisions of this Agreement.
	 
	 	7.6	 	This Agreement may be signed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original and all of which taken together shall constitute one
and the same agreement, with the same effect as if the signatures thereto and hereto
were upon the same instrument. Delivery of an executed counterpart hereof (or
signature page thereto) by facsimile, telecopy or electronic mail shall be effective
as delivery of an original, manually executed counterpart of this Agreement.
	 
	 	7.7	 	This Agreement is for the exclusive benefit of the parties hereto, and their
respective successors and permitted assigns hereunder, and shall not be deemed to give
any legal or equitable right, remedy or claim to any other person whatsoever.

[Remainder of Page Intentionally Left Blank]

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 14

 

 

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

	 	 	 	 	 
	 	 	Weatherford International Ltd.,

as Issuer
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Burt M. Martin
	 

	 	 	 	 
	 

	 	Name:

Title:
	 	Burt M. Martin

Senior Vice President, General Counsel
and Secretary
	 
	 	 	 	 
	 	 	Weatherford International, Inc.,
	 	 	as Guarantor
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Burt M. Martin
	 

	 	 	 	 
	 

	 	Name:
	 	Burt M. Martin
	 

	 	Title:
	 	Senior Vice President, General Counsel
	 

	 	 	 	and Secretary
	 
	 	 	 	 
	 	 	Merrill Lynch Money Markets Inc.,
	 	 	as Dealer for Notes with maturities up to 270 days
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Little
	 

	 	 	 	 
	 

	 	Name:
	 	Robert J. Little
	 

	 	Title:
	 	Managing Director
	 
	 	 	 	 
	 	 	Merrill Lynch, Pierce, Fenner & Smith Incorporated,
	 	 	as Dealer for Notes with maturities over 270 days up
	 	 	to 397 days
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Little
	 

	 	 	 	 
	 

	 	Name:
	 	Robert J. Little
	 

	 	Title:
	 	Vice President

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 15

 

 

Addendum

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

1. The other dealers referred to in clause (b) of Section 1.2 of the Agreement are
as follows: (i) Goldman Sachs & Co; and (ii) J.P. Morgan Securities Inc.

2. The following Sections 2.14 through 2.18 are hereby added to the
Agreement:2

	 	2.14	 	Under the laws of Bermuda, neither the Issuer nor any of its revenues, assets
or properties has any right of immunity from service of process or from the
jurisdiction of competent courts of Bermuda or the United States or the State of New
York in connection with any suit, action or proceeding, attachment prior to judgment,
attachment in aid of execution of a judgment or execution of a judgment or from any
other legal process with respect to its obligations under this Agreement, the Issuing
and Paying Agency Agreement or the Notes.
	 
	 	2.15	 	The Issuer is permitted to make all payments under this Agreement, the
Issuing and Paying Agency Agreement and the Notes to holders of the Notes that are
non-residents of Bermuda, free and clear of and without deduction or withholding for
or on account of any taxes or other governmental charges imposed by Bermuda. There is
no stamp or documentary tax or other charge imposed by any governmental agency having
jurisdiction over the Issuer in connection with the execution, delivery, issuance,
payment, performance, enforcement or introduction into evidence in a court of Bermuda
of this Agreement, the Issuing and Paying Agency Agreement or any Note.
	 
	 	2.16	 	The choice of New York law to govern this Agreement, the Issuing and Paying
Agency Agreement and the Notes is, under the laws of Bermuda, a valid, effective and
irrevocable choice of law, and the submission by the Issuer in Section 7.3(b)
of the Agreement to the jurisdiction of the courts of the United States District Court
and the State of New York located in the Borough of Manhattan is valid and binding
upon the Guarantor under the laws of Bermuda.
	 
	 	2.17	 	Any final judgment rendered by any court referred to in Section 2.16
in an action to enforce the obligations of the Issuer under the Notes, this Agreement
or the Issuing and Paying Agency Agreement is capable of being enforced in the courts
of Bermuda.
	 
	 	2.18	 	As a condition to the admissibility in evidence of this Agreement, the
Issuing and Paying Agency Agreement or the Notes in the courts of Bermuda, it is not
necessary that this Agreement, the Issuing and Paying Agency Agreement or the Notes be
filed or recorded with any court or other authority. [All documentary evidence to be
submitted to a court in [foreign jurisdiction] must be in, or translated into, the
[foreign jurisdiction] language and certified by a duly qualified official translator
in [foreign jurisdiction]].

 

			
	2	 	For use where the Issuer or the Guarantor is a
foreign entity.

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 16

 

 

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

	 	 	 	 	 
	For the Issuer:	 	 
	 
	 	 	 	 
	 
	 	Address:	 	c/o Weatherford International, Inc.
	 
	 	 	 	515 Post Oak Blvd.
	 
	 	 	 	Houston, Texas  77027
	 
	 	 	 	Attention:  General Counsel
	 
	 	 	 	 
	 
	 	Telephone number:	 	713-693-4000
	 
	 	 	 	 
	 
	 	Fax number:	 	713-693-4484
	 
	 	 	 	 
	 
	 	Homepage:	 	www.weatherford.com
	 
	 	 	 	 
	For the Guarantor:	 	 
	 
	 	 	 	 
	 
	 	Address:	 	515 Post Oak Blvd.
	 
	 	 	 	Houston, Texas  77027
	 
	 	 	 	Attention:  General Counsel
	 
	 	 	 	 
	 
	 	Telephone number:	 	713-693-4000
	 
	 	 	 	 
	 
	 	Fax number:	 	713-693-4484
	 
	 	 	 	 
	 
	 	Homepage:	 	www.weatherford.com
	 
	 	 	 	 
	For the Dealer:	 	 
	 
	 	 	 	 
	 
	 	Address:	 	World Financial Center - North Tower
	 
	 	 	 	 
	 
	 	 	 	250 Vesey Street - 11th Floor
	 
	 	 	 	 
	 
	 	 	 	New York, New York  10080
	 
	 	 	 	 
	 
	 	 	 	Attention:   Product Management - CP
	 
	 	 	 	 
	 
	 	Telephone number:	 	(212) 449-7476
	 
	 	 	 	 
	 
	 	Fax number:	 	(212) 449-2234

4. The following Section 6.16 is hereby added to the Agreement:

	 	6.16	 	"Board of Directors” means (i) with respect to a company or corporation, the
board of directors or a duly authorized committee of the board of directors of the
company or corporation, (ii) with respect to a partnership, the board of directors or
a duly authorized committee of the board of directors of the general partner of the
partnership, and (3) with respect to any other person, the board or committee of such
person serving a similar function.

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 17

 

 

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

	 	(b)	 	Any legal action or proceeding with respect to this Agreement, the Notes, the
Guarantee and the other related documents may be brought in the Supreme Court of the
State of New York sitting in New York County or the United States District Court for
the Southern District of New York, and any appellate court from either thereof, and,
by execution and delivery of this Agreement, each party hereto irrevocably accepts for
itself and in respect of its property, unconditionally, the non exclusive jurisdiction
of the aforesaid courts with respect to any such action or proceeding. Each of the
Issuer and the Guarantor, to the extent it is not qualified to do business in New
York, hereby irrevocably designates, appoints and empowers CT Corporation System, with
offices on the date hereof at 111 Eighth Avenue, New York, New York 10011, as its
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process, summons,
notices and documents which may be served in any such action or proceeding. If for
any reason such designee, appointee and agent shall cease to be available to act as
such, each such obligor agrees to designate a new designee, appointee and agent in New
York on the terms and for the purposes of this provision satisfactory to the Dealer.
Each such obligor further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at its address
provided in Section 7.1 of the Agreement, and at its registered office, if
different. Such service to become effective thirty days after such mailing. Nothing
herein shall affect the right of any party hereto to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against any
obligor in any other jurisdiction.
	 
	 	(c)	 	Each of the Issuer and the Guarantor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement brought in
the courts referred to in clause (b) above and hereby further irrevocably waives, to
the maximum extent permitted by applicable law, and agrees not to plead or claim in
any such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
	 
	 	(d)	 	To the extent that the Issuer or any of its properties, assets or revenues
may have or may hereafter become entitled to, or have attributed to them, any right of
immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or
proceeding in connection with or arising out of this Agreement, the Guarantee or the
Notes or the offer and sale of the Notes, from the giving of any relief in any
thereof, from setoff or counterclaim, from the jurisdiction of any court, from service
of process, from attachment upon or prior to judgment, from attachment in aid of
execution of judgment, or from execution of judgment, or other legal process or
proceeding for the giving of any relief or for the enforcement of any judgment, in any
jurisdiction in which proceeding may at any time be commenced, with respect to its
obligations, liabilities or any other matter under or arising out of or in connection
with this Agreement, the Issuing and Paying Agency Agreement, the Guarantee or the
Notes, it hereby irrevocably and unconditionally waives, and agrees for the benefit of
the Dealer and any holder

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 18

 

 

	 	 	 	from time to time of the Notes not to plead or claim, any such immunity, and
consents to such relief and enforcement.

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

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

7. The following Section 7.8 is hereby added to the Agreement:

	 	 	 	7.8(a) Any payments to the Dealer hereunder or to any holder from time to time of Notes
shall be in United States dollars and shall be free of all withholding and other taxes
and of all other governmental charges of any nature whatsoever imposed by the
jurisdiction in which the Issuer is located. In the event any withholding is required
by law, the Issuer agrees to (i) pay the same and (ii) pay such additional amounts to
the Dealer or any such holder which, after deduction of any such withholding, or other
taxes or governmental charges of any nature whatsoever imposed with respect to the
payment of such additional amount, shall equal the amount withheld pursuant to clause
(i). The Issuer and the Guarantor, jointly and severally, will promptly pay any stamp
duty or other taxes or governmental charges payable in connection with the execution,
delivery, payment or performance of this Agreement, the Issuing and Paying Agency
Agreement, the Guarantee or the Notes and shall indemnify and hold harmless the Dealer
and each holder of Notes from all liabilities arising from any failure to pay, or
delay in paying, such taxes or charges. Dealer agrees to complete any form or
document that may be reasonably requested by the Issuer or the Guarantor or required
in order to allow the Issuer or the Guarantor to make a payment under this Agreement
without any deduction or withholding for or on account of any taxes or other
governmental changes (or to avoid the imposition of any stamp duty or other taxes or
governmental changes), and neither the Issuer nor the Guarantor shall be obligated to
pay any additional amounts to Dealer for any taxes or other governmental charges
arising out of a failure by Dealer to complete any such form or document.
	 
	 	(b)	 	The obligation of the Issuer to make payments on any amount due hereunder or
under the Notes, and the obligation of the Guarantor to make payments due under the
Guarantee, in each case, in any currency (the “first currency”) shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment expressed
in or converted into any other currency (the “second currency”) except to the extent
to which such tender or recovery shall result in the effective receipt by the Dealer
or holders of the Notes, as the case may be, of the full amount of the first currency
payable, and accordingly the primary obligation of the Issuer or the Guarantor, as the
case may be, shall be enforceable as an alternative or additional cause of action for
the purpose of recovery in the second currency of the amount (if any) by which such
effective receipt shall fall short of the full amount of the full currency payable and
shall not be affected by a judgment being obtained for any other sum due hereunder.

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 19

 

 

Exhibit A

Form of Legend for Private Placement Memorandum and Notes

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

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 20

 

 

Exhibit B

Further Provisions Relating to Indemnification

	 	(a)	 	The Issuer and the Guarantor, jointly and severally, agree to reimburse each
Indemnitee for all expenses (including reasonable fees and disbursements of internal
and external counsel) as they are incurred by it in connection with investigating or
defending any loss, claim, damage, liability or action in respect of which
indemnification may be sought under Section 5 of the Agreement (whether or not
it is a party to any such proceedings).
	 
	 	(b)	 	Promptly after receipt by an Indemnitee of notice of the existence of a
Claim, such Indemnitee will, if a claim in respect thereof is to be made against the
Issuer or the Guarantor, notify the Issuer and the Guarantor in writing of the
existence thereof; provided that (i) the omission to so notify the Issuer or the
Guarantor will not relieve it from any liability which it may have hereunder unless
and except to the extent it did not otherwise learn of such Claim and such failure
results in the forfeiture by it of substantial rights and defenses, and (ii) the
omission to so notify the Issuer or the Guarantor will not relieve it from liability
which it may have to an Indemnitee otherwise than on account of this indemnity
agreement. In case any such Claim is made against any Indemnitee and it notifies the
Issuer or the Guarantor of the existence thereof, the Issuer and the Guarantor will be
entitled to participate therein, and to the extent that it may elect by written notice
delivered to the Indemnitee, to assume the defense thereof, with counsel reasonably
satisfactory to such Indemnitee; provided that if the defendants in any such Claim
include both the Indemnitee and either the Issuer or the Guarantor or both, and the
Indemnitee shall have concluded that there may be legal defenses available to it which
are different from or additional to those available to the Issuer or the Guarantor,
the Issuer shall not have the right to direct the defense of such Claim on behalf of
such Indemnitee, and the Indemnitee shall have the right to select separate counsel to
assert such legal defenses on behalf of such Indemnitee. Upon receipt of notice from
the Issuer to such Indemnitee of the election of the Issuer and the Guarantor to
assume the defense of such Claim and approval by the Indemnitee of counsel, the Issuer
and the Guarantor will not be liable to such Indemnitee for expenses incurred
thereafter by the Indemnitee in connection with the defense thereof (other than
reasonable costs of investigation) unless (i) the Indemnitee shall have employed
separate counsel in connection with the assertion of legal defenses in accordance with
the proviso to the next preceding sentence (it being understood, however, that neither
the Issuer nor the Guarantor shall be liable for the expenses of more than one
separate counsel (in addition to any local counsel in the jurisdiction in which any
Claim is brought), approved by the Dealer, representing the Indemnitee who is party to
such Claim), (ii) the Issuer and the Guarantor shall not have employed counsel
reasonably satisfactory to the Indemnitee to represent the Indemnitee within a
reasonable time after notice of existence of the Claim or (iii) the Issuer or the
Guarantor has authorized in writing the employment of counsel for the Indemnitee. The
indemnity, reimbursement and contribution obligations of the Issuer and the Guarantor
hereunder shall be in addition to any other liability the Issuer or the Guarantor may
otherwise have to an Indemnitee and shall be binding upon and inure to the benefit of
any successors, assigns, heirs and personal representatives of the Issuer, the
Guarantor and any

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 21

 

 

	 	 	Indemnitee. Each of the Issuer and the Guarantor agrees that without the Dealer’s
prior written consent, it will not settle, compromise or consent to the entry of
any judgment in any Claim in respect of which indemnification may be sought under
the indemnification provision of the Agreement (whether or not the Dealer or any
other Indemnitee is an actual or potential party to such Claim), unless such
settlement, compromise or consent (i) includes an unconditional release of each
Indemnitee from all liability arising out of such Claim and (ii) does not include a
statement as to or an admission of fault, culpability or failure to act, by or on
behalf of any Indemnitee.

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 22

 

 

Exhibit C

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

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

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

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

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

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

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

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

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 23

 

 

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

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

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

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

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 24

 

 

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

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

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

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

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

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

All percentages resulting from any calculation on Floating Rate Notes will be rounded to
the nearest one hundred-thousandth of a percentage point, with five-one millionths of a

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 25

 

 

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

CD Rate Notes

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

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

If such rate is not published in either H.15(519) or H.15 Daily Update by 3:00 p.m. on the
Calculation Date, the Calculation Agent will determine the CD Rate to be the arithmetic
mean of the secondary market offered rates as of 10:00 a.m. on such Interest Determination
Date of three leading nonbank dealers3 in negotiable U.S. dollar certificates of
deposit in New York City selected by the Calculation Agent for negotiable U.S. dollar
certificates of deposit of major United States money center banks of the highest credit
standing in the market for negotiable certificates of deposit with a remaining maturity
closest to the Index Maturity in the denomination of $5,000,000.

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

Commercial Paper Rate Notes

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

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

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

 

			
	 	 	3Such nonbank dealers referred to in this
Statement of Terms may include affiliates of the Dealer.

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 26

 

 

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

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

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

	 	 	 	 	 	 	 
	 

	 	D x 360	 	 	 	 
	Money Market Yield =

	 	                                        
	 	 	 	x 100
	 

	 	360 — (D x M)	 	 	 	 

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

Federal Funds Rate Notes

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

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

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

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

LIBOR Notes

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

If no rate appears, LIBOR will be determined on the basis of the rates at approximately
11:00 a.m., London time, on such Interest Determination Date at which deposits in U.S.
dollars are offered to prime banks in the London interbank market by four major banks in
such market selected by the Calculation Agent for a term equal to the Index Maturity and

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 27

 

 

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

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

Prime Rate Notes

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

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

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

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

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

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

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 28

 

 

Treasury Rate Notes

"Treasury Rate” means:

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

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

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

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

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

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

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

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

	 	 	 	 	 
	 

	 	          D x N	 	 
	Money Market Yield =

	 	                                        
	 	x 100
	 

	 	     360 — (D x M)	 	 

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

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 29

 

 

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

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

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

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

 

			
	 	 	4Unlike single payment notes, where a default
arises only at the stated maturity, interest-bearing notes with multiple
payment dates should contain a default provision permitting acceleration of the
maturity if the Issuer defaults on an interest payment.

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program § 30

 

 

Exhibit D

Form of Guarantee

GUARANTEE

GUARANTEE, dated as of ___, ___, of ___, a corporation organized under the laws
of ___(the “Guarantor”).

The Guarantor, for value received, hereby agrees as follows for the benefit of the holders from
time to time of the Notes hereinafter described:

	 	1.	 	The Guarantor irrevocably guarantees payment in full, as and when the same
becomes due and payable, of the principal of and interest, if any, on the promissory
notes (the “Notes”) issued by ___, a ___corporation and a
[wholly-owned] subsidiary of the Guarantor (the “Issuer”), from time to time pursuant
to the Issuing and Paying Agent Agreement, dated as of ___, ___, as the same
may be amended, supplemented or modified from time to time, between the Issuer [, the
Guarantor] and ___(the “Agreement”).
	 
	 	2.	 	The Guarantor’s obligations under this Guarantee shall be unconditional,
irrespective of the validity or enforceability of any provision of the Agreement or
the Notes.
	 
	 	3.	 	This Guarantee is a guaranty of the due and punctual payment (and not merely
of collection) of the principal of and interest, if any, on the Notes by the Issuer
and shall remain in full force and effect until all amounts have been validly, finally
and irrevocably paid in full, and shall not be affected in any way by any circumstance
or condition whatsoever, including without limitation (a) the absence of any action to
obtain such amounts from the Issuer, (b) any variation, extension, waiver, compromise
or release of any or all of the obligations of the Issuer under the Agreement of the
Notes or of any collateral security therefore or (c) any change in the existence or
structure of, or the bankruptcy or insolvency of, the Issuer or by any other
circumstance (other than by complete, irrevocable payment) that might otherwise
constitute a legal or equitable discharge or defense of a guarantor or surety. The
Guarantor waives all requirements as to diligence, presentment, demand for payment,
protest and notice of any kind with respect to the Agreement and the Notes.
	 
	 	4.	 	In the event of a default in payment of principal of or interest on any
Notes, the holders of such Notes, may institute legal proceedings directly against the
Guarantor to enforce this Guarantee without first proceeding against the Issuer.
	 
	 	5.	 	This Guarantee shall remain in full force and effect or shall be reinstated
(as the case may be) if at any time any payment by the Issuer of the principal of or
interest, if any, on the Notes, in whole or in part, is rescinded or must otherwise be
returned by the holder upon the insolvency, bankruptcy or reorganization of the Issuer
or otherwise, all as though such payment had not been made.

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer
Agreement 4(2) Program § 31

 

 

	 	6.	 	This Guarantee shall be governed by and construed in accordance with the laws
of the State of New York.
	 
	 	7.	 	(a) Any legal action or proceeding with respect to this Guarantee may be
brought in the Supreme Court of the State of New York sitting in New York County or
the United States District Court for the Southern District of New York, and any
appellate court from either thereof, and, by execution and delivery of this Guarantee,
the Guarantor irrevocably accepts for itself and in respect of its property,
unconditionally, the non exclusive jurisdiction of the aforesaid courts with respect
to any such action or proceeding. The Guarantor, to the extent it is not qualified to
do business in New York, hereby irrevocably designates, appoints and empowers CT
Corporation System, with offices on the date hereof at 111 Eighth Avenue, New York,
New York 10011, as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property, service of any and
all legal process, summons, notices and documents which may be served in any such
action or proceeding. If for any reason such designee, appointee and agent shall
cease to be available to act as such, the Guarantor agrees to designate a new
designee, appointee and agent in New York on the terms and for the purposes of this
provision satisfactory to the Dealer (as such term is defined in the Agreement, and as
so defined is herein so used). The Guarantor further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at its address provided in Section 7.1 of the Agreement, and at
its registered office, if different. Such service to become effective thirty days
after such mailing. Nothing herein shall affect the right of any party to the
Agreement or beneficiary of this Guarantee to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against the
Guarantor in any other jurisdiction.
	 
	 	(b)	 	The Guarantor hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Guarantee brought in the
courts referred to in clause (a) above and hereby further irrevocably waives, to
the maximum extent permitted by applicable law, and agrees not to plead or claim in
any such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
	 
	 	8.	 	To the extent that the Guarantor or any of its properties, assets or revenues
may have or may hereafter become entitled to, or have attributed to them, any right of
immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or
proceeding in connection with or arising out of this Guarantee, the Agreement or the
Notes or the offer and sale of the Notes, from the giving of any relief in any
thereof, from setoff or counterclaim, from the jurisdiction of any court, from service
of process, from attachment upon or prior to judgment, from attachment in aid of
execution of judgment, or from execution of judgment, or other legal process or
proceeding for the giving of any relief or for the enforcement of any judgment, in any
jurisdiction in which proceeding may at any time be commenced, with respect to its
obligations, liabilities or any other matter under or arising out of or in connection
with this Guarantee, the Issuing and Paying Agency Agreement (as such term is defined
in the Agreement, and as so defined

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer
Agreement 4(2) Program § 32

 

 

is herein so used), the Agreement or the Notes, it hereby irrevocably and
unconditionally waives, and agrees for the benefit of the Dealer and any holder
from time to time of the Notes not to plead or claim, any such immunity, and
consents to such relief and enforcement.

	 	9.	 	Any payments hereunder shall be in United States dollars and shall be free of
all withholding and other taxes and of all other governmental charges of any nature
whatsoever imposed by the jurisdiction in which the Guarantor is located. In the
event any withholding is required by law, the Guarantor agrees to (i) pay the same and
(ii) pay such additional amounts which, after deduction of any such withholding, or
other taxes or governmental charges of any nature whatsoever imposed with respect to
the payment of such additional amount, shall equal the amount withheld pursuant to
clause (i). The Guarantor will promptly pay any stamp duty or other taxes or
governmental charges payable in connection with the execution, delivery, payment or
performance of this Guarantee and shall indemnify and hold harmless the Dealer and
each holder of Notes from all liabilities arising from any failure to pay, or delay in
paying, such taxes or charges. Dealer agrees to complete any form or document that
may be reasonably requested by the Guarantor or required in order to allow the
Guarantor to make a payment under this Guarantee without any deduction or withholding
for or on account of any taxes or other governmental changes (or to avoid the
imposition of any stamp duty or other taxes or governmental changes), and the
Guarantor shall not be obligated to pay any additional amounts to Dealer for any taxes
or other governmental charges arising out of a failure by Dealer to complete any such
form or document.
	 
	 	10.	 	The obligation of the Guarantor to make payments due under this Guarantee in
any currency (the “first currency”) shall not be discharged or satisfied by any tender
or recovery pursuant to any judgment expressed in or converted into any other currency
(the “second currency”) except to the extent to which such tender or recovery shall
result in the effective receipt by the Dealer or holders of the Notes, as the case may
be, of the full amount of the first currency payable, and accordingly the primary
obligation of the Guarantor, as the case may be, shall be enforceable as an
alternative or additional cause of action for the purpose of recovery in the second
currency of the amount (if any) by which such effective receipt shall fall short of
the full amount of the full currency payable and shall not be affected by a judgment
being obtained for any other sum due hereunder.

IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed as of the day and
year first above written.

	 	 	 	 	 
	 	Name of Guarantor]

 	 
	 	By:  	________________________
 	 
	 	 	 	 
	 	 	 	 
	 

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer
Agreement 4(2) Program § 33

 

 

Model Opinion of Counsel to Issuer

[Date]

[Name and Address of Dealer]

Ladies and Gentlemen:

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

     In our capacity as such counsel, we have examined a specimen form of Note, an executed copy of
the Commercial Paper Dealer Agreement dated ___, ___(the “Agreement”) among the Issuer,
___(the “Guarantor”) and [Name of Dealer] (the “Dealer”), the Guarantee dated ___, ___(the
“Guarantee”) and the Issuing and Paying Agency Agreement dated ___, ___(the “Issuing and
Paying Agency Agreement”) between the Issuer [, the Guarantor] and ___, as issuing and paying
agent (the “Issuing and Paying Agent”) as well as originals, or copies certified or otherwise
identified to our satisfaction, of such other records, certificates and documents as we have deemed
necessary as a basis for the opinions expressed below. In such examination, we have assumed the
genuineness and completeness of all documents submitted to us as originals, the conformity to the
originals of all documents submitted to us as copies, the legal capacity of natural persons and the
genuineness of signatures. As to the questions of the facts material to the opinions expressed
herein, and as to factual matters arising in connection with our examination of the aforesaid
materials, we have relied, to the extent we deemed appropriate, upon the factual representations
and warranties contained in the Agreement, the Issuing and Paying Agency Agreement and the related
documents and in such records, certificates and documents.

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

     Based upon the foregoing, and subject to and qualified by the assumptions, qualifications,
limitations, and exceptions set forth herein, and having due regard for such legal considerations
as we deem relevant, we are of the opinion that:

	 	1.	 	The Issuer is a ___[duly formed/organized], validly existing and in
good standing under the laws of the ___of ___and has all the requisite
___power and authority to execute, deliver and perform its obligations under the
Notes, the Agreement and the Issuing and Paying Agency Agreement.
	 
	 	2.	 	Each of the Agreement and the Issuing and Paying Agency Agreement has been
duly authorized, executed and delivered by the Issuer and constitutes a legal, valid
and binding obligation of the Issuer enforceable against the Issuer in accordance with
its terms subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights generally, and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in equity or at
law), and except as rights under each of the Agreement and the Issuing and Paying
Agency Agreement to indemnity and contribution may be limited by federal or state
laws.

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer
Agreement 4(2) Program § 34

 

 

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

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

	 	5.	 	Assuming the offer and sale of the Notes in the manner contemplated by the
Agreement, no consent or action of, or filing or registration with, any governmental
or public regulatory body or authority, including the SEC, is required to be obtained
or made by the Issuer under any statute or regulation applicable to it to authorize
its execution, delivery or performance of, the Agreement, the Notes or the Issuing and
Paying Agency Agreement, except as may be required by the securities or Blue Sky laws
of the various states in connection with the offer and sale of the Notes.

	 	6.	 	Neither the execution and delivery of the Agreement, the Guarantee and the
Issuing and Paying Agency Agreement, nor the issuance of the Notes in accordance with
the Issuing and Paying Agency Agreement, nor the fulfillment of or compliance with the
terms and provisions of either thereof by the Issuer, will (i) result, pursuant to the
express provisions of any Material Agreement (as herein defined), in the creation or
imposition of any consensual mortgage, lien or similar encumbrance upon any of the
properties or assets of the Issuer, or (ii) violate or result in an event of default
under, as the case may be, any of the terms of the Issuer’s [governance documents],
any agreement or instrument binding on the Issuer which is filed as an exhibit to the
___’s Annual Report on Form 10-K for the year ended December 31, 2004 (the
“Material Agreements”), or any statutory law or regulation applicable to it, or any
order, writ, injunction or decree of any court or government instrumentality, which is
known by us to be expressly applicable to the Issuer.

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

	 	8.	 	As a condition to the admissibility in evidence of the Agreement, the Issuing
and Paying Agency Agreement or the Notes in [foreign jurisdiction], it is not
necessary that the Agreement, the Issuing and Paying Agency Agreement or the Notes be
filed or recorded with any court or other authority. [All documentary evidence in a
foreign language to be submitted to a court in [foreign jurisdiction] must be in, or
translated into, the [foreign jurisdiction] language and certified by a duly qualified
official translator in [foreign jurisdiction]].1 [NOTE: Subject

 

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

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer
Agreement 4(2) Program § 35

 

 

to applicability of the foregoing to the Issuer, and if so, to Foreign Counsel’s
review, comment and modification.]

	 	9.	 	Under the laws of [foreign jurisdiction], neither the Issuer nor any of its
revenues, assets or properties has any right of immunity from service of process or
from the jurisdiction of competent courts of [foreign jurisdiction] or the United
States or the State of New York in connection with any suit, action or proceeding,
attachment prior to judgment, attachment in aid of execution of a judgment, or
execution of a judgment or from any other legal process with respect to its
obligations under the Agreement, the Issuing and Paying Agency Agreement or the Notes.
[NOTE: Subject to applicability of the foregoing to the Issuer, and if so, to
Foreign Counsel’s review, comment and modification.]

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

	 	11.	 	The choice of New York law to govern the Agreement, the Issuing and Paying
Agency Agreement and the Notes is, under the laws of [foreign jurisdiction], a valid,
effective and irrevocable choice of law. [NOTE: Subject to applicability of the
foregoing to the Issuer, and if so, to Foreign Counsel’s review, comment and
modification.]

	 	12.	 	The submission by the Issuer, in the Agreement, to the jurisdiction of the
courts of the United States District Court and the State of New York located in the
Borough of Manhattan is valid and binding upon the Issuer under the laws of [foreign
jurisdiction]. [NOTE: Subject to applicability of the foregoing to the Issuer, and
if so, to Foreign Counsel’s review, comment and modification.]

	 	13.	 	Any final judgment rendered by any Federal or State court of competent
jurisdiction located in the State of New York in an action to enforce the obligations
of the Issuer under the Agreement, the Issuing and Paying Agency Agreement or the
Notes is capable of being enforced in the courts of [foreign jurisdiction]. [NOTE:
Subject to applicability of the foregoing to the Issuer, and if so, to Foreign
Counsel’s review, comment and modification.]

     This opinion letter may be delivered to, and is solely for the benefit of, (i) the Issuing and
Paying Agent and each holder from time to time of the Notes, in connection with the transactions
contemplated by the Agreement and the Issuing and Paying Agency Agreement and (ii) any nationally
recognized rating agency, in connection with the rating of the Notes, each of which may, as of the
date of this opinion letter, rely on this opinion letter to the same extent as if such opinion was
addressed to it. Neither this opinion letter nor any excerpt hereof (nor any

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer
Agreement 4(2) Program § 36

 

 

reproduction of any of the foregoing) may be furnished to (except in connection with a legal
or arbitral proceeding or as may be required by law, and in any such events, as shall be directed
and required incident thereto pursuant to duly issued subpoena, writ, order or other legal
process), or relied upon by, any other person or entity without the prior written consent of this
Firm. The opinions expressed herein are as of the date hereof (and not as of any other date) or,
to the extent a reference to a certificate or other document is made herein, to such date, and we
make no undertaking to amend or supplement such opinions as facts and circumstances come to our
attention or changes in the law occur which could affect such opinions.

Very truly yours,

	 	 	 
	Merrill Lynch

	 	Guaranteed Commercial Paper Dealer
Agreement 4(2) Program § 37

 

 

Model Opinion of Counsel to Guarantor

[Date]

[Name and Address of Dealer]

Ladies and Gentlemen:

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

     In our capacity as such counsel, we have examined a specimen form of Note, an executed copy of
the Commercial Paper Dealer Agreement dated                                         ,                      (the “Agreement”) among the Issuer,
[Name of Dealer] (the “Dealer”) and the Guarantor, the Guarantee dated                                         ,                      (the
“Guarantee”) and the Issuing and Paying Agency Agreement dated                     ,                      (the “Issuing and
Paying Agency Agreement”) between the Issuer [, the Guarantor] and                     , as issuing and paying
agent (the “Issuing and Paying Agent”) as well as originals, or copies certified or otherwise
identified to our satisfaction, of such other records, certificates and documents as we have deemed
necessary as a basis for the opinions expressed below. In such examination, we have assumed the
genuineness and completeness of all documents submitted to us as originals, the conformity to the
originals of all documents submitted to us as copies, the legal capacity of natural persons and the
genuineness of signatures. As to the questions of the facts material to the opinions expressed
herein, and as to factual matters arising in connection with our examination of the aforesaid
materials, we have relied, to the extent we deemed appropriate, upon the factual representations
and warranties contained in the Agreement, the Issuing and Paying Agency Agreement and the related
documents and in such records, certificates and documents.

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

     Based upon the foregoing, and subject to and qualified by the assumptions, qualifications,
limitations, and exceptions set forth herein, and having due regard for such legal considerations
as we deem relevant, we are of the opinion that:

	 	1.	 	The Guarantor is a corporation [duly organized], validly existing and in good
standing under the laws of                      and has all the requisite corporate power and
authority to execute, deliver and perform its obligations under the Agreement, the
Guarantee and the Issuing and Paying Agency Agreement.
	 
	 	2.	 	Each of the Agreement, the Guarantee and the Issuing and Paying Agency
Agreement has been duly authorized, executed and delivered by the Guarantor and
constitutes a legal, valid and binding obligation of the Guarantor, enforceable
against the Guarantor in accordance with its terms subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law), and except as rights under each of the
Agreement and the Issuing and Paying Agency Agreement to indemnity and contribution
may be limited by federal or state laws.

			
	 	 	 
	Merrill Lynch
	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program §38

 

 

	 	3.	 	The offer and sale of the Notes and the Guarantee in the manner contemplated
by the Agreement do not require registration of the Guarantee under the Securities
Act, pursuant to the exemption from registration contained in Section 4(2) thereof,
and no indenture in respect of the Guarantee is required to be qualified under the
Trust Indenture Act of 1939, as amended.
	 
	 	4.	 	Assuming the offer and sale of the Notes in the manner contemplated by the
Agreement, no consent or action of, or filing or registration with, any governmental
or public regulatory body or authority, including the SEC, is required to be obtained
or made by the Guarantor under any statute or regulation applicable to it to authorize
its execution, delivery or performance of, the Agreement, the Guarantee or the Issuing
and Paying Agency Agreement, except as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the Notes.
	 
	 	5.	 	Neither the execution and delivery of the Agreement, the Guarantee and the
Issuing and Paying Agency Agreement, nor the issuance of the Notes in accordance with
the Issuing and Paying Agency Agreement, nor the fulfillment of or compliance with the
terms and provisions of either thereof by the Guarantor, will (i) result, pursuant to
the express provisions of any Material Agreement (as herein defined), in the creation
or imposition of any consensual mortgage, lien or similar encumbrance upon any of the
properties or assets of the Guarantor, or (ii) violate or result in an event of
default under, as the case may be, any of the terms of the Guarantor’s [governance
documents], any agreement or instrument binding on the Guarantor which is filed as an
exhibit to the                                         ’s Annual Report on Form 10-K for the year ended December 31,
2004 (the “Material Agreements”), or any statutory law or regulation applicable to it,
or any order, writ, injunction or decree of any court or government instrumentality,
which is known by us to be expressly applicable to the Guarantor.
	 
	 	6.	 	The Guarantor is not an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.
	 
	 	7.	 	As a condition to the admissibility in evidence of the Agreement, the Issuing
and Paying Agency Agreement, the Notes or the Guarantee in [foreign jurisdiction], it
is not necessary that the Agreement, the Issuing and Paying Agency Agreement, the
Notes or the Guarantee be filed or recorded with any court or other authority. [All
documentary evidence in a foreign language to be submitted to a court in [foreign
jurisdiction] must be in, or translated into, the [foreign jurisdiction] language and
certified by a duly qualified official translator in [foreign
jurisdiction]].6 [NOTE: Subject to applicability of the foregoing to the
Guarantor, and if so, to Foreign Counsel’s review, comment and modification.]
	 
	 	8.	 	Under the laws of [foreign jurisdiction], neither the Guarantor nor any of
its revenues, assets or properties has any right of immunity from service of process
or from the jurisdiction of competent courts of [foreign jurisdiction] or the United

 

			
	6	 	Paragraphs 8 through 13 will only be necessary where the Guarantor is a foreign entity.

			
	 	 	 
	Merrill Lynch
	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program §39

 

 

	 	 	 	States or the State of New York in connection with any suit, action or proceeding,
attachment prior to judgment, attachment in aid of execution of a judgment, or
execution of a judgment or from any other legal process with respect to its
obligations under the Agreement, the Issuing and Paying Agency Agreement or the
Guarantee. [NOTE: Subject to applicability of the foregoing to the Guarantor, and if
so, to Foreign Counsel’s review, comment and modification.]
	 
	 	9.	 	The Guarantor is permitted to make all payments under the Agreement, the
Issuing and Paying Agency Agreement and the Guarantee (to holders of the Notes that
are non-residents of [foreign jurisdiction]), free and clear of and without deduction
or withholding for or on account of any taxes or other governmental charges imposed by
[foreign jurisdiction]. There is no stamp or documentary tax or other charge imposed
by any governmental agency having jurisdiction over the Guarantor in connection with
the execution, delivery, issuance, payment, performance, enforcement or introduction
into evidence in a court of [foreign jurisdiction] of the Agreement, the Issuing and
Paying Agency Agreement, the Notes or the Guarantee. [NOTE: Subject to applicability
of the foregoing to the Guarantor, and if so, to Foreign Counsel’s review, comment and
modification.]
	 
	 	10.	 	The choice of New York law to govern the Agreement, the Issuing and Paying
Agency Agreement, the Notes and the Guarantee is, under the laws of [foreign
jurisdiction], a valid, effective and irrevocable choice of law. [NOTE: Subject to
applicability of the foregoing to the Guarantor, and if so, to Foreign Counsel’s
review, comment and modification.]
	 
	 	11.	 	The submission by the Guarantor, in the Agreement and the Guarantee, to the
jurisdiction of the courts of the United States District Court and the State of New
York located in the Borough of Manhattan is valid and binding upon the Guarantor under
the laws of [foreign jurisdiction]. [NOTE: Subject to applicability of the foregoing
to the Guarantor, and if so, to Foreign Counsel’s review, comment and modification.]
	 
	 	12.	 	Any final judgment rendered by any Federal or State court of competent
jurisdiction located in the State of New York in an action to enforce the obligations
of the Guarantor under the Agreement, the Issuing and Paying Agency Agreement, the
Notes or the Guarantee is capable of being enforced in the courts of [foreign
jurisdiction]. [NOTE: Subject to applicability of the foregoing to the Guarantor,
and if so, to Foreign Counsel’s review, comment and modification.]

     This opinion letter may be delivered to, and is solely for the benefit of, (i) the Issuing and
Paying Agent and each holder from time to time of the Notes, in connection with the transactions
contemplated by the Agreement and the Issuing and Paying Agency Agreement and (ii) any nationally
recognized rating agency, in connection with the rating of the Notes, each of which may, as of the
date of this opinion letter, rely on this opinion letter to the same extent as if such opinion was
addressed to it. Neither this opinion letter nor any excerpt hereof (nor any
reproduction of any of the foregoing) may be furnished to (except in connection with a legal
or arbitral proceeding or as may be required by law, and in any such events, as shall be directed
and required incident thereto pursuant to duly issued subpoena, writ, order or other legal
process), or

			
	 	 	 
	Merrill Lynch
	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program §40

 

 

relied upon by, any other person or entity without the prior written consent of this
Firm. The opinions expressed herein are as of the date hereof (and not as of any other date) or,
to the extent a reference to a certificate or other document is made herein, to such date, and we
make no undertaking to amend or supplement such opinions as facts and circumstances come to our
attention or changes in the law occur which could affect such opinions.

Very truly yours,

			
	 	 	 
	Merrill Lynch
	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program §41

 

 

Model Certificate as to Resolutions

[Name of Issuer]

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

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

[RESOLUTION TO COME FROM ISSUER]

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

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

	 	 	 	 	 
	 

	 	[Assistant] Secretary	 	 

			
	 	 	 
	Merrill Lynch
	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program §42

 

 

Model Certificate as to Resolutions

[Name of Guarantor]

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

	 	1.	 	The following resolution was duly adopted by the Board of Directors of the
Guarantor [by unanimous written consent dated                     ,                     ] [at a meeting thereof duly
called and held on                     ,                     , at which meeting a quorum was present and acting
throughout], and such resolution has not been amended, modified or revoked and is in
full force and effect on the date hereof:
	 
	 	 	 	[RESOLUTION TO COME FROM GUARANTOR]
	 
	 	2.	 	Each of the Agreement, the Guarantee and the Issuing and Paying Agency
Agreement, as executed and delivered by the Guarantor, is substantially in the form
thereof approved by the Board of Directors and referred to in the resolution set forth
in paragraph 1 hereof.

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

	 	 	 	 	 
	 

	 	[Assistant] Secretary	 	 

			
	 	 	 
	Merrill Lynch
	 	Guaranteed Commercial Paper Dealer Agreement 4(2) Program §43exv10w1

 

Exhibit 10.1

DIGENE CORPORATION

AMENDED AND RESTATED DIRECTORS’ EQUITY COMPENSATION PLAN

ARTICLE 1

PURPOSE; EFFECTIVE DATE; DEFINITIONS

     1.1 Purpose. This Digene Corporation Directors’ Equity Compensation Plan (the
“Plan”) is intended to secure for Digene Corporation (the “Company”) and its
stockholders the benefits of the incentive inherent in common stock ownership by the directors of
the Company and to afford such persons the opportunity to obtain or increase their proprietary
interest in the Company on a favorable basis and thereby have an opportunity to share in its
success.

     1.2 Effective Date. This Plan shall be effective on and after September 6, 1996.

     1.3 Definitions. Throughout this Plan, the following terms shall have the meanings
indicated:

          (a) “Award” shall mean an award under the Plan of Options, Restricted Stock Units or
Restricted Stock.

          (b) “Board” shall mean the Board of Directors of the Company.

          (c) “Change of Control” shall mean (a) the reorganization, consolidation or merger of
the Company or any of its subsidiaries holding or controlling a majority of the assets relating to
the business of the Company, with or into any third party (other than a subsidiary); (b) the
assignment, sale, transfer, lease or other disposition of all or substantially all, but at least
40%, of the assets of the Company and its subsidiaries taken as a whole (measured by gross fair
market value without regard to liabilities); or (c) the acquisition by any third party or group of
third parties acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended)
of shares of voting stock of the Company, the result of which in the case of any transaction
described in clauses (a), (b) and (c) above is that immediately after the transaction the
stockholders of the Company immediately before the transaction, other than the acquiror, own less
than fifty percent (50%) of the combined voting power of the outstanding voting securities entitled
to vote generally in the election of directors of the surviving or resulting corporation in a
transaction specified in clause (a) above, the acquiror in a transaction specified in clause (b)
above, or the Company or the acquiror in a transaction specified in clause (c) above.

          (d) “Code” shall mean the Internal Revenue Code of 1986, as amended, any successor
revenue laws of the United States, and the rules and regulations promulgated thereunder.

          (e) “Common Stock” shall mean the common stock, par value $.01 per share, of the
Company.

 

 

          (f) “Company” shall mean Digene Corporation, a Delaware corporation.

          (g) “Director” shall mean any person who is a member of the Board.

          (h) “Disability” shall mean the inability of a Participant to engage in any
substantial gainful activity by reason of any medically-determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period of not
less than twelve months.

          (i) “Employee” shall mean any person engaged or proposed to be engaged as an officer
or employee of the Company or one of its subsidiaries.

          (j) “Fair Market Value” shall mean with respect to the Common Stock on any day, (i)
the closing sales price on the immediately preceding business day of a share of Common Stock as
reported on the principal securities exchange on which shares of Common Stock are then listed or
admitted to trading, or (ii) if not so reported, the closing sales price on the immediately
preceding business day of a share of Common Stock as published in the NASDAQ National Market Issues
report in the Eastern Edition of The Wall Street Journal, or (iii) if not so reported, the average
of the closing bid and asked prices on the immediately preceding business day as reported on the
NASDAQ National Market System, or (iv) if not so reported, as furnished by any member of the
National Association of Securities Dealers, Inc. selected by the Board. In the event that the
price of a share of Common Stock shall not be so reported or furnished, the Fair Market Value of a
share of Common Stock shall be determined by the Board in good faith. “Fair Market Value” shall
mean, with respect to an Option granted under the Plan on any day the Fair Market Value of the
underlying Common Stock, determined as aforesaid, less the exercise price of the Option. A
“business day” is any day, other than Saturday or Sunday, on which the relevant market is open for
trading.

          (k) “Non-Employee Director” shall mean a member of the Board who is not an Employee.

          (l) “Option” shall mean an option to purchase shares of Common Stock granted by the
Board pursuant to this Plan.

          (m) “Option Agreement” shall mean the certificate evidencing an Option grant.

          (n) “Option Shares” shall mean the shares of Common Stock purchased upon exercise of
an Option.

          (o) “Participant” shall mean a Director to whom an Award has been granted.

          (p) “Plan” shall mean this Digene Corporation Directors’ Equity Compensation Plan, as
the same may be amended from time to time.

          (q) “Restricted Stock” shall mean an Award of Common Stock pursuant to Article VI
hereof, subject to such restrictions as the Board may determine, as evidenced in a Restricted Stock
Agreement. Shares of Common Stock shall cease to be Restricted Stock when,

2

 

in accordance with the terms of the Restricted Stock Agreement, they become transferable and
free of risk of forfeiture.

          (r) “Restricted Stock Agreement” shall mean the agreement evidencing the Award of
Restricted Stock pursuant to this Plan.

          (s) “Restricted Stock Award” shall mean an Award of Restricted Stock pursuant to this
Plan.

          (t) “Restricted Stock Unit” shall mean a right to receive, without payment to the
Company, a number of shares of Common Stock as of a future date, subject to such restrictions as
the Board may determine, as evidenced by a Restricted Stock Unit Agreement. A Restricted Stock
Unit does not represent or entitle the recipient to any equity securities of the Company until such
future date.

          (u) “Restricted Stock Unit Agreement” shall mean the agreement evidencing the Award of
Restricted Stock pursuant to this Plan.

ARTICLE 2

ADMINISTRATION

     2.1 Administration. This Plan and the Awards granted hereunder shall be interpreted,
construed and administered by the Board in its sole discretion. A Director eligible under the Plan
may appeal to the Board in writing any decision or action of the Board with respect to the Plan
that adversely affects the Director. Upon review of such appeal and in any other case where the
Board has acted with respect to the Plan, the interpretation and construction by the Board of any
provisions of this Plan or of any Award shall be conclusive and binding on all parties.

     2.2 Board Action. A majority of the entire Board shall constitute a quorum, and the
action of a majority of the members present at any meeting at which a quorum is present shall be
deemed the action of the Board. In addition, any decision or determination reduced to writing and
signed by all of the members of the Board shall be fully as effective as if it had been made by a
majority vote at a meeting duly called and held. Subject to the provisions of this Plan and the
Company’s bylaws, the Board may make such additional rules and regulations for the conduct of its
business as it shall deem advisable.

     2.3 Board Powers. The Board shall have authority to grant Awards with such terms (not
inconsistent with the provisions of this Plan) as the Board may consider appropriate. Such terms
shall include, without limitation, as applicable, the number of shares, the term of each Award, any
vesting requirements, any restrictions, any forfeiture provisions, the Option price and the medium
and time of payment and may include conditions (in addition to those contained in this Plan) on the
exercisability of all or any part of an Option. Notwithstanding any such conditions, the Board
may, in its discretion, accelerate the time at which any Option may be exercised, any Restricted
Stock Unit vests or when restrictions are lifted on Restricted Stock. In addition, the Board shall
have complete discretionary authority to prescribe the forms of Option Agreement, Restricted Stock
Unit Agreement and Restricted Stock Agreement; to

3

 

adopt, amend and rescind rules and regulations pertaining to the administration of the Plan;
and to make all other determinations necessary or advisable for the administration of this Plan.
The express grant in the Plan of any specific power to the Board shall not be construed as limiting
any power or authority of the Board. All expenses of administering this Plan shall be borne by the
Company.

     2.4 Good Faith Determinations. No member of the Board shall be liable for any action
or determination made in good faith with respect to this Plan or any Award granted hereunder.

ARTICLE 3

ELIGIBILITY; TYPES OF BENEFITS; SHARES SUBJECT TO PLAN

     3.1 Eligibility. The Board shall from time to time determine and designate the
Directors to receive Awards under this Plan and the number of Awards to be awarded to each such
Director or the formula or other basis on which such Awards shall be awarded to Directors. In
making any such award, the Board may take into account such factors as it considers relevant.

     3.2 Shares Subject to this Plan. Subject to the provisions of Section 3.4 (relating
to adjustment for changes in Common Stock), the maximum number of shares that may be issued under
this Plan shall not exceed in the aggregate 500,000 shares of Common Stock, provided that any grant
of Restricted Stock or Restricted Stock Units under the Plan on or after October 26, 2005 will be
counted against the maximum aggregate number of shares issuable under the Plan as two shares of
Common Stock for every one share of Common Stock subject thereto. If any Options granted under
this Plan shall for any reason terminate or expire or be surrendered without having been exercised
in full, then the shares not purchased under such Options shall be available again for grant
hereunder. Further, if any Restricted Stock Units or shares of Restricted Stock are forfeited, the
shares subject to the portion of such Award forfeited shall again be available under the Plan;
provided that, to the extent that a share of Common Stock that was subject to an Award that counted
as two shares against the maximum aggregate number of shares issuable under the Plan is recycled
back into the Plan, the Plan will be credited with two shares. Notwithstanding anything in this
Subsection to the contrary, (i) should the exercise price of an Option be paid with shares of
Common Stock or other outstanding Options or (ii) should shares of Common Stock otherwise issuable
under the Plan be paid in cash or withheld by the Company in satisfaction of the withholding taxes
incurred in connection with the exercise of an Option or the vesting of an Award, then the number
of shares of Common Stock available for issuance under the Plan shall be reduced by the gross
number of shares for which the Option is exercised or which vest under the Award, and not by the
net number of shares of Common Stock issued to the holder of such Option or Award.

     3.3 Individual Limit. Anything in this Plan to the contrary notwithstanding, in no
event shall any Director receive in any calendar year Awards under this Plan involving more than
50,000 shares of Common Stock (subject to adjustment as provided in Section 3.4).

     3.4 Changes. Subject to any required action by the stockholders of the Company, the
maximum number of shares of Common Stock that may be issued under this Plan pursuant

4

 

to Section 3.2 above, the maximum number of shares of Common Stock with respect to which
Awards may be granted to any individual in any calendar year pursuant to Section 3.3 above, the
number of shares of Common Stock covered by each outstanding Award, the kind of shares subject to
outstanding Awards and the per share exercise price under each outstanding Option shall be
adjusted, in each case, to the extent and in the manner the Board deems appropriate for any
increase or decrease in the number of issued shares of Common Stock resulting from a
reorganization, recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, rights offering, subdivision or consolidation of shares or the payment of a stock
dividend (but only on the Common Stock) or any other change in the corporate structure or state of
the Company. In the event of a change in the Common Stock as presently constituted, which change
is limited to a change of all of the authorized shares with par value into the same number of
shares with a different par value or without par value, the shares resulting from any such change
shall be deemed to be the Common Stock within the meaning of this Plan.

ARTICLE 4

STOCK OPTIONS

     4.1 Grant; Terms and Conditions. The Board, in its discretion, may from time to time
grant Options to any Director eligible to receive Options under this Plan. Each Director who is
granted an Option shall receive an Option Agreement from the Company in a form specified by the
Board and containing such provisions, consistent with this Plan, as the Board, in its sole
discretion, shall determine at the time the Option is granted.

          (a) Type of Options. All Options granted under the Plan will be non-qualified options
and are not intended to be incentive stock options (as defined in Section 422 of the Code).

          (b) Number of Shares. Each Option Agreement shall state the number of shares of
Common Stock to which it pertains.

          (c) Option Price. Each Option Agreement shall state the Option exercise price, which
shall not be less than 100% of the Fair Market Value per share of Common Stock on the date of grant
of the Option. The date of the grant of an Option shall be the date specified by the Board in its
grant of the Option.

          (d) Medium and Time of Payment. Upon the exercise of an Option, the Option exercise
price shall be payable in United States dollars, in cash (including by check) or (unless the Board
otherwise prescribes) in shares of Common Stock owned by the optionee, in Options granted to the
optionee under the Plan which are then exercisable or options granted to the optionee under any of
the Company’s other stock option plans which are then exercisable, or in a combination of cash,
Common Stock and options. If all or any portion of the Option exercise price is paid in Common
Stock owned by the optionee, then that stock shall be valued at its Fair Market Value as of the
date the Option is exercised. If all or any portion of the Option exercise price is paid in
Options or in options granted to the optionee under any of the Company’s other stock option plans,
then such options shall be valued at their Fair Market Value as of the date the Option is
exercised.

5

 

          (e) Term and Exercise of Options. The term of each Option shall be determined by the
Board at the time the Option is granted; provided that the term of an Option shall in no event be
more than ten years from the date of grant for Options granted prior to September 20, 2005 and
shall in no event be more than seven years from the date of grant for Options granted on or after
September 20, 2005. Not less than one hundred shares may be purchased at any one time unless the
number purchased is the total number at the time purchasable under the Option.

          (f) Change of Control. Notwithstanding the provisions of Section 3.4, in the event of
a Change of Control, all outstanding Options shall immediately become fully exercisable, and upon
payment by the Participant of the exercise price (and, if requested, delivery of the representation
described in Section 7.18), a stock certificate representing the Common Stock covered thereby shall
be issued and delivered to the Participant. Any Option not exercised immediately prior to such
transaction shall pertain to and apply to the securities that a holder of the number of shares of
Common Stock subject to the Option would have been entitled to receive in the transaction.

          (g) Merger and Other Fundamental Transactions. Subject to any action that may be
required on the part of the stockholders of the Company, if the Company is the surviving
corporation in any merger, consolidation, sale, transfer, acquisition, tender offer or exchange
offer which does not result in a Change of Control, other than such transaction effected for the
purpose of changing the Company’s domicile, then each outstanding Option shall pertain to and apply
to the securities or other consideration that a holder of the number of shares of Common Stock
subject to the Option would have been entitled to receive in such transaction.

          In the case of a merger, consolidation, sale, transfer, acquisition, tender offer or exchange
offer effected for the purpose of changing the Company’s domicile, each outstanding Option shall
continue in effect in accordance with its terms and shall apply or relate to the same number of
shares of common stock of such surviving corporation as the number of shares of Common Stock to
which it applied or related immediately prior to such transaction, adjusted for any increase or
decrease in the number of outstanding shares of common stock of the surviving corporation effected
without receipt of consideration.

          A dissolution or liquidation of the Company shall cause each outstanding Option to terminate,
provided that each holder shall, in such event, have the right immediately prior to such
dissolution or liquidation to exercise his or her Option in whole or in part without regard to any
vesting schedule contained in his or her Agreement.

          (h) Rights as a Stockholder. Subject to Section 7.9 of this Plan regarding
uncertificated shares, an optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any shares covered by his or her Option until the date of the issuance
of a stock certificate to him or her for those shares upon payment of the exercise price. No
adjustments shall be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 3.4.

6

 

          (i) Modification, Extension and Renewal of Options. Subject to the terms and
conditions and within the limitations of this Plan, the Board may modify, extend or renew
outstanding Options granted under this Plan or accept the surrender of outstanding Options (to the
extent not theretofore exercised) and authorize the granting of new Options in substitution
therefor (to the extent not theretofore exercised); provided, however, that (1) no modification of
an Option shall, without the consent of the optionee, alter or impair any rights or obligations
under any Option theretofore granted under this Plan; and (2) except as otherwise provided in
Section 3.4 hereof, the Board shall not reduce the exercise price of Options previously awarded to
any optionee, whether through amendment, cancellation and replacement grant, or any other means,
without prior stockholder approval.

          (j) Exercisability and Term of Options. Unless earlier terminated, Options granted
pursuant to this Plan shall be exercisable at any time on or after the dates of exercisability and
before the expiration date set forth in the Option Agreement. Notwithstanding the foregoing, an
Option shall terminate and may not be exercised if the Director to whom it is granted ceases to be
a member of the Board, except that: (1) unless the Board shall determine that the Director was
removed from the Board for conduct that in the judgment of the Board involves dishonesty or action
by the Director that is detrimental to the best interest of the Company, the Director may at any
time within three months after ceasing to be a member of the Board exercise his or her Option but
only to the extent the Option was exercisable by him or her on the date he or she ceased to be a
member of the Board; (2) if such Director ceases to be a member of the Board on account of a
Disability, then the Director may at any time within one year after ceasing to be a member of the
Board exercise his or her Option but only to the extent that the Option was exercisable on the date
he or she ceased to be a member of the Board; and (3) if such Director dies while a member of the
Board, or within the three or twelve month period after ceasing to be a member of the Board as
described in clause (1) or (2) above, then his or her Option may be exercised at any time within
twelve months following his or her death by the person specified in Section 4.1(d), but only to the
extent that such Option was exercisable by him or her on the date he or she ceased to be a member
of the Board. The Board may, in its discretion, provide in any Option Agreement or determine at
any time after the date of grant that the exercisability of an Option will be accelerated, in whole
or in part, in the event of a Director’s retirement, death or Disability. The Board may, in its
discretion, extend the post-termination exercise periods set forth in this subsection, but not
beyond the expiration date of the Option. Notwithstanding anything to the contrary in this
subsection, an Option may not be exercised by anyone after the expiration of its term.

          (k) Termination. Notwithstanding anything to the contrary in the Plan, in no event
shall any Option be exercisable after the date of termination of the exercise period of such
Option.

     4.2 Other Terms and Conditions. Through the Option Agreements authorized under this
Plan, the Board may impose such other terms and conditions, not inconsistent with the terms hereof,
on the grant or exercise of Options, as it deems advisable.

     4.3 Non-Employee Director Options. Immediately following the Company’s Annual Meeting
of Stockholders each year during the term of this Plan, beginning with the Company’s 2005 Annual
Meeting of Stockholders, each Non-Employee Director will

7

 

automatically be granted an Option for 5,000 shares of Common Stock (subject to adjustment as
provided in Section 3.4); provided, however, that a Non-Employee Director who ceases to be a member
of the Board at such Annual Meeting of Stockholders shall not be granted any such automatic Option
on that date. The Option exercise price for such Options will be equal to the Fair Market Value of
a share of Common Stock on the date the Option is granted. All Options granted under this Section
4.3 shall be immediately exercisable and shall expire on the seventh anniversary of the date of
grant. In all other respects, the Options granted pursuant to this Section 4.3 shall be subject to
the provisions of Section 4.1 (including subsection 4.1(j)).

ARTICLE 5

RESTRICTED STOCK UNITS

     5.1 Award; Terms and Conditions. The Board, in its discretion, may from time to time
award Restricted Stock Units to any Director eligible to receive Restricted Stock Units under this
Plan. Each Director who is awarded Restricted Stock Units shall receive a Restricted Stock Unit
Agreement from the Company in the form specified by the Board and containing such provisions,
consistent with this Plan, as the Board, in its sole discretion, shall determine at the time the
Restricted Stock Units are awarded.

          (a) Number of Shares and Forfeiture. Each Restricted Stock Unit Agreement shall
specify the number of shares of Common Stock subject to the Award and the time or times within
which such Restricted Stock Units are subject to forfeiture.

          (b) Vesting Period. Subject to the provisions of the Plan and the Restricted Stock
Unit Agreement, Restricted Stock Units will be forfeited to the Company in the event that the
Participant to whom such Restricted Stock Units are awarded ceases to be a member of the Board
during a period (not to exceed five years) set by the Board commencing with the date of such Award
(the “Restricted Unit Vesting Period”). Subject to the provisions of the Plan, the Board, in its
sole discretion, may provide for vesting in installments or early vesting, in whole or in part, at
any time, based on such factors as the Board shall deem appropriate in its sole discretion.

          (c) Termination. Subject to Section 7.10, and the terms of each Award, if the
Participant to whom Restricted Stock Units are awarded ceases to be a member of the Board prior to
the expiration of the Restricted Unit Vesting Period, then he or she shall forfeit all of his or
her Restricted Stock Units with respect to which the Restricted Unit Vesting Period has not yet
expired; provided however that if such Participant ceases to be a member of the Board on account of
death or Disability during the Restricted Unit Vesting Period, then all restrictions on outstanding
Restricted Stock Units shall lapse.

          (d) Changes. Subject to any action that may be required on the part of the
stockholders of the Company, if any change is made in the Common Stock by reason of any merger,
consolidation, reorganization, recapitalization, stock dividend, split up, combination of shares,
exchange of shares, change in corporate structure, or otherwise, then any outstanding Restricted
Stock Units immediately prior to the scheduled effectiveness of such transaction shall

8

 

pertain to and apply to the securities or other consideration that a holder of the number of
shares of Common Stock underlying the Restricted Stock Units would have been entitled to receive in
the transaction.

          (e) Change of Control. In the event of a Change of Control, all restrictions on
outstanding Restricted Stock Units shall lapse immediately.

          (f) Payment of Restricted Stock Units. Payment of vested Restricted Stock Units shall
be made in shares of Common Stock. The number of shares delivered shall be equal to the number of
Restricted Stock Units vested. The holder may elect to reduce this amount by the number of shares
of Common Stock which have, on the date the Restricted Stock Units vest, a Fair Market Value equal
to the estimated applicable federal, state and local income tax due on the receipt of the Common
Stock, which amount shall be paid promptly to the holder in cash.

          (g) Common Stock Ownership. A Participant shall not be deemed to be the holder of
Common Stock, or to have any of the rights of a holder of Common Stock, with respect to the shares
of Common Stock subject to the Restricted Stock Units, unless and until the vesting of such
Restricted Stock Units and a stock certificate representing such shares of Common Stock is issued
to the Participant.

     5.2 Non-Employee Director Restricted Stock Units. Immediately following the Company’s
Annual Meeting of Stockholders each year during the term of this Plan, beginning with the Company’s
2005 Annual Meeting of Stockholders, each Non-Employee Director will automatically be awarded
Restricted Stock Units representing the number of shares of Common Stock having Fair Market Value
equal to $45,000 on the date of award; provided, however, that a Non-Employee Director who ceases
to be a member of the Board at such Annual Meeting of Stockholders shall not be automatically
awarded any such Restricted Stock Units on that date. All Restricted Stock Units awarded under
this Section 5.2 shall have a vesting period that commences on the date of award and vests on the
earlier of the date of the Company’s next Annual Meeting of Stockholders or one year from the date
of award. In all other respects, the Restricted Stock Units awarded pursuant to this Section 5.2
shall be subject to the provisions of Section 5.1.

ARTICLE 6

RESTRICTED STOCK AWARDS

     6.1 Award; Terms and Conditions. The Board, in its discretion, may from time to time
award Restricted Stock to any Director eligible to receive Restricted Stock under this Plan. Each
Director who is awarded a Restricted Stock Award shall receive a Restricted Stock Agreement from
the Company in the form specified by the Board and containing such provisions, consistent with this
Plan, as the Board, in its sole discretion, shall determine at the time the Restricted Stock Award
is awarded.

          (a) Number of Shares and Forfeiture. Each Restricted Stock Agreement shall specify
the number of shares of Common Stock subject to the Award and the time or times within which such
Restricted Stock is subject to forfeiture.

9

 

          (b) Stock Certificate. Subject to Section 7.9, the Company will hold in escrow, until
the restrictions applicable to a Restricted Stock Award, or any portion thereof, lapse, the stock
certificate representing the number of shares of Common Stock issued pursuant to such Restricted
Stock Award, or portion thereof. After the lapse of such restrictions, the Company shall release
such stock certificate to the Participant. A Participant shall be the holder of the shares of
Restricted Stock subject to the Award as of the date of issuance of the Restricted Stock Award.

          (c) Restriction Period. Subject to the provisions of the Plan and the Restricted
Stock Agreement, shares of Restricted Stock will be forfeited to the Company in the event that the
Participant to whom such Restricted Stock is awarded ceases to be a member of the Board during a
period (not to exceed five years) established by the Board commencing with the date of such Award
(the “Restriction Period”). Subject to the provisions of the Plan, the Board, in its sole
discretion, may provide for the lapse of such restrictions in installments and may waive such
restrictions, in whole or in part, at any time, based on such factors as the Board shall deem
appropriate in its sole discretion.

          (d) Termination. Subject to Section 7.10, if the Participant to whom a Restricted
Stock Award is awarded ceases to be a member of the Board prior to the expiration of the
Restriction Period, then he or she shall forfeit all of his or her Restricted Stock with respect to
which the Restriction Period has not yet expired; provided however that if such Participant ceases
to be a member of the Board on account of death or Disability that occurs during the Restriction
Period, then the forfeiture restrictions on outstanding Restricted Stock Awards shall lapse.

          (e) Changes. If any change is made in the Common Stock by reason of any merger,
consolidation, reorganization, recapitalization, stock dividend, split up, combination of shares,
exchange of shares, change in corporate structure, or otherwise, then any shares or other
securities of the Company or succeeding, resulting or other company to be received by the
Participant under the Restricted Stock Agreement shall be subject to the same restrictions
applicable to the Restricted Stock.

          (f) Change of Control. In the event of a Change of Control, all restrictions on
outstanding Restricted Stock Awards shall lapse immediately.

ARTICLE 7

MISCELLANEOUS

     7.1 Withholding Taxes. A Director granted Awards under this Plan shall be
conclusively deemed to have authorized the Company to withhold from the compensation of such
Director funds in amounts or property (including Common Stock) in value equal to any federal, state
and local income, employment or other withholding taxes applicable to the income recognized by such
Director and attributable to the Awards as, when and to the extent, if any, required by law;
provided, however, that, in lieu of the withholding of federal, state and local taxes as herein
provided, the Company may require that the Director (or in the case of an Option, other person
exercising such Option) pay the Company an amount equal to the federal,

10

 

state and local withholding taxes on such income at the time such withholding is required or
such other time as shall be satisfactory to the Company.

     7.2 Amendment, Suspension, Discontinuance or Termination of Plan. The Board may from
time to time amend, suspend or discontinue this Plan or revise it in any respect whatsoever for the
purpose of maintaining or improving the effectiveness of this Plan as an incentive device, for the
purpose of conforming this Plan to applicable governmental regulations or to any change in
applicable law or regulations or for any other purpose permitted by law; provided, however, that no
such action by the Board shall adversely affect any Award theretofore granted under this Plan
without the consent of the holder so affected. Unless sooner terminated by the Board, this Plan
will terminate on October 26, 2015.

     7.3 Governing Law. This Plan shall be governed by, and construed in accordance with,
the laws of the State of Delaware (without giving effect to principles of conflict of laws).

     7.4 Designation. This Plan may be referred to in other documents and instruments as
the “Digene Corporation Directors’ Equity Compensation Plan.”

     7.5 Indemnification. In addition to such other rights of indemnification as they may
have as members of the Board, Directors shall be indemnified by the Company against the reasonable
expenses, including attorneys’ fees, actually and necessarily incurred in connection with the
defense of any investigation, action, suit or proceeding, or in connection with any appeal
therefrom, to which they or any of them may be a party by reason of any action taken or failure to
act under or in connection with this Plan or any Award, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in or dismissal or other discontinuance
of any such investigation, action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such investigation, action, suit or proceeding that such Director is liable
for negligence or misconduct in the performance of his or her duties; provided that, within 60 days
after institution of any such investigation, action, suit or proceeding, a Director shall in
writing offer the Company the opportunity, at its own expense, to handle and defend the same.

     7.6 Reservation of Shares. The Company shall at all times during the term of this
Plan, and so long as any Award shall be outstanding, reserve and keep available (and will seek or
obtain from any regulatory body having jurisdiction any requisite authority in order to issue) such
number of shares of its Common Stock as shall be sufficient to satisfy the requirements of this
Plan. Inability of the Company to obtain from any regulatory body of appropriate jurisdiction
authority considered by the Company to be necessary or desirable to the lawful issuance of any
shares of its Common Stock hereunder shall relieve the Company of any liability in respect of the
nonissuance or sale of such Common Stock as to which such requisite authority shall not have been
obtained.

     7.7 Application of Funds. The proceeds received by the Company from the sale of
Common Stock pursuant to the exercise of Options will be used for general corporate purposes.

11

 

     7.8 No Obligation to Exercise. The granting of a Option shall impose no obligation
upon the holder to exercise or otherwise realize the value of that Option.

     7.9 Uncertificated Shares. Each Director who exercises an Option to acquire Common
Stock, is issued Common Stock upon the vesting of Restricted Stock Units or is awarded Restricted
Stock may, but need not, be issued a stock certificate in respect of the Common Stock so acquired.
A “book entry” (i.e., a computerized or manual entry) shall be made in the records of the
Company to evidence the issuance of shares of Common Stock to a Director where no certificate is
issued in the name of the Director. Such Company records, absent manifest error, shall be binding
on Directors. In all instances where the date of issuance of shares may be deemed significant but
no certificate is issued in accordance with this Section 7.9, the date of the book entry shall be
the relevant date for such purposes.

     7.10 Forfeiture for Competition. If a Participant in this Plan provides services to a
competitor of the Company or any of its subsidiaries, whether as an employee, officer, director,
independent contractor, consultant, agent or otherwise, such services being of a nature that can
reasonably be expected to involve the skills and experience used or developed by the participant
while a Director, then that Participant’s rights to any Awards hereunder that are unvested or
subject to forfeiture restrictions shall automatically be forfeited, subject to a determination to
the contrary by the Board.

     7.11 Adjustments. Except as expressly provided for in Sections 3.4, 4.1(f), 4.1(g),
5.1(d) or 6.1(e) of the Plan, the holder of an Award shall have no rights by reason of (i) any
subdivision or consolidation of shares of any class, (ii) any stock dividend, (iii) any other
increase or decrease in the number of shares of stock of any class, (iv) any dissolution,
liquidation, merger or consolidation or spin-off, split-off or split-up of assets of the Company or
stock of another corporation or (v) any issuance by the Company of shares of stock of any class or
securities convertible into shares of stock of any class. Moreover, except as expressly provided
in 3.4, 4.1(f), 4.1(g), 5.1(d) and 6.1(e), the occurrence of one or more of such events shall not
affect, and no adjustment by reason thereof shall be made with respect to, the number or, if
applicable, price of shares of Common Stock subject to the Award. Any adjustments pursuant to
sections 3.4, 4.1(f), 4.1(g), 5.1(d) and 6.1(e) shall be made by the Board, whose determination
shall be final, binding and conclusive.

     7.12 Rights of Company. The grant of an Award pursuant to this Plan shall not affect
in any way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge or to consolidate or to
dissolve, liquidate, sell or otherwise transfer all or any part of its business or assets.

     7.13 Successors. This Plan shall be binding upon any and all successors of the
Company.

     7.14 Nonassignment. Except as the Board may otherwise determine from time to time:
(i) no Award and no right under any Award shall be assignable, alienable, saleable or transferable
by a Participant otherwise than by will or by the laws of descent and distribution; provided,
however, that a Participant may, by written notification delivered to the Board prior to the
Participant’s death, designate a beneficiary to exercise the rights of the Participant, and to

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receive any property distributable, with respect to any Award upon the death of the
Participant; (ii) each Award, and each right under any Award, shall be exercisable during the
Participant’s lifetime only by the Participant or, if permissible under applicable law, by the
Participant’s guardian or legal representative; and (iii) no Award and no right under any such
Award, may be pledged, alienated, attached, or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company.
The provisions of this paragraph shall not apply to any Award which has been fully exercised,
earned or paid, as the case may be, and shall not preclude forfeiture of an Award in accordance
with the terms thereof.

     7.15 Board Service. Nothing in this Plan or in any Option Agreement, Restricted Stock
Unit Agreement or Restricted Stock Agreement shall confer on any Director any right to continue to
serve as a member of the Board, nor is there any implied agreement or understanding that such
Director will be nominated for reelection to the Board.

     7.16 Other Actions. Nothing contained in the Plan shall be construed to limit the
authority of the Company to exercise its corporate rights and powers, including, but not by way of
limitation, the right of the Company to grant options or other equity-based compensation for proper
corporate purposes other than under the Plan with respect to any employee or other person, firm,
corporation or association.

     7.17 Tax Treatment and Characterization. Neither the Company nor any other person
represents or warrants to any Plan participant that favorable or desirable tax treatment or
characterization will be applicable in respect of any Award.

     7.18 Legend. The Board may require each person acquiring shares pursuant to an Award
to represent to and agree with the Company in writing that he or she is acquiring the shares for
investment purposes and without a view to distribution thereof. In addition to any legend required
by this Plan, the stock certificates representing such shares may include any legend which the
Board deems appropriate to reflect any restrictions on transfer.

     All certificates representing shares of Common Stock delivered under the Plan shall be subject
to such stock transfer orders and other restrictions as the Board may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Common Stock is then listed, any applicable federal or state securities
law, and any applicable corporate law, and the Board may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.

     7.19 Listing and Other Conditions.

          (a) If the Common Stock is listed on a national securities exchange or the NASDAQ Stock
Market, the issuance of any shares of Common Stock pursuant to an Award shall be conditioned upon
such shares being listed on such exchange or the NASDAQ Stock Market. The Company shall have no
obligation to issue any shares of Common Stock unless and until such shares are so listed, and the
right to exercise any Option or vest in any Restricted Stock Unit shall be suspended until such
listing has been effected.

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          (b) If at any time counsel to the Company shall be of the opinion that any sale or delivery of
shares of Common Stock pursuant to an Award is or may in the circumstances be unlawful or result in
the imposition of excise taxes under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any
application or to effect or to maintain any qualification or registration under the Securities Act
of 1933, as amended, or otherwise with respect to shares of Common Stock or Awards, and the right
to exercise any Option or vest in any Restricted Stock Unit shall be suspended until, in the
opinion of such counsel, such sale or delivery shall be lawful or shall not result in the
imposition of excise taxes.

          (c) Upon termination of any period of suspension under this Section 7.19, any Award affected
by such suspension which shall not then have expired or terminated shall be reinstated as to all
shares available before such suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such suspension shall extend the term of any
Award.

As revised by the Board at its meeting held September 10, 1998 — the last two sentences of
Section 4.1(d) were added and subsection (3) of the second sentence of Section 4.1(h) was revised.

As amended and restated by the Board at its meeting held October 26, 2000 — adding and clarifying
the definition “Change of Control” to Section 1.3(b), amending and restating Section 4.1(e) with
new provisions regarding the treatment of Options in the event of a Change of Control transaction
and adding Section 4.3 regarding automatic Option grants to certain Non-Employee Directors.

As revised by the Board at its meeting held September 12, 2002 – the first sentence of Section 4.3
was revised.

As revised by the Board at its meeting held October 23, 2002 –Section 4.3 was revised.

As revised by the Board by unanimous written consent dated September 20, 2005 to require
stockholder approval of any reduction of the exercise price of outstanding Options, to limit the
term of Options granted on or after September 20, 2005 to a maximum of seven years, to require that
the exercise price of any Options granted under the Plan be no less than 100% of the Fair Market
Value of the Common Stock on the date of grant, to clarify that the number of shares of common
stock available for issuance under the Plan will be reduced by the gross, not net, number of shares
of common stock subject to Awards, to change the governing law of the Plan to Delaware law and to
make certain technical amendments to the Plan to comply with Section 409A of the Code.

As revised by the Board by unanimous written consent dated September 20, 2005 and approved by the
stockholders at the Annual Meeting held on October 26, 2005 to include provisions for the award of
Restricted Stock and Restricted Stock Units, to extend the termination date of the Plan to October
26, 2015, to revise Section 4.3 and to make conforming changes throughout the Plan.

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