This pricing supplement, together with the short form base shelf prospectus to which it relates, as amended or supplemented,

and each document deemed to be incorporated by

reference into the prospectus, as amended or supplemented constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale
and therein only by persons permitted to sell such securities. No securities regulatory authority in Canada has expressed an opinion about these securities and it is an offence to
claim otherwise. These securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "1933 Act"), and may not be offered, sold,
resold or delivered directly or indirectly within the United States, its territories or possessions or to, or for the account or benefit of, U.S. persons (as defined in Regulation S
under the 1933 Act). Neither these securities nor any interest therein may be owned by a U.S. person. These securities may not be offered, sold or delivered within the United
States or to a U.S. person who would, upon the completion of such sale, be a U.S. holder. These securities may be subject to United States tax law requirements.

Pricing Supplement to Short Form Base Shelf Prospectus dated June 30, 2006 (the "Prospectus")

Merrill Lynch Canada Finance Company

Merrill Lynch Japanese Equity Accelerator Securities, Series 3 (the "Securities")
$100 per Security
$7,936,800
The Securities are 20% principal protected and
include an accelerated positive return, if any, at maturity
Unconditionally guaranteed by Merrill Lynch & Co., Inc., a Delaware corporation (the "Guarantor"). Both Merrill Lynch Canada
Finance Company (the "Company") and Merrill Lynch Canada Inc. are indirect wholly-owned subsidiaries of the Guarantor.
Consequently, the Company is a "related issuer" and a "connected issuer" of Merrill Lynch Canada Inc. within the meaning of the
securities legislation of certain provinces of Canada, as more fully described at "Plan of Distribution" herein.
The Securities:

The Securities are designed for investors who are willing to forego
interest payments on the Securities for the ability to participate in a
possible increase in the level of the Reference Index (as defined
below) to the extent described herein over the term of the
Securities.
Senior unsecured securities of the Company.
The Securities are not fully principal protected.
Minimum repayment on the Maturity Date (as defined below) will
not be less than 20% of the principal amount per Security.
The Securities will not be listed on any securities exchange.
Expected settlement date: May 3, 2007.
Maturity Date: May 3, 2013, subject to a postponement if a market
disruption event occurs.

Reference Index:

The return on the Securities will be linked to the performance of

the Nikkei 225 Index (the "Reference Index").
The return on the Securities will not reflect dividends (or the
reinvestment thereof) that you would receive if you owned the
Securities included in the Reference Index.

Payment on the Maturity Date for the Securities:

On the Maturity Date, for each Security you own, we will pay you
the Redemption Amount in cash, provided, however, that in no
event will you receive less than 20% of the principal amount per
Security. If the value of the Reference Index decreases, you may
lose up to 80% of your initial investment.

We will pay the Redemption Amount for the Securities in

Canadian dollars.
Redemption Amount:

If the Reference Index Ending Value, as defined below, is greater

than the Reference Index Starting Value, as defined below, the
Redemption Amount for the Securities will be calculated using an
"Accelerated Participation Factor" of 168%. As a result, your
return on the Securities will be increased by 68% over the actual
increase in value of the Reference Index over the term of the
Securities. If the Reference Index Ending Value is equal to or less
than the Reference Index Starting Value, the Redemption Amount
will be calculated so that your return is directly proportionate to the
amount by which the Reference Index has decreased since May 1,
2007, the date on which the Securities are priced for initial sale to
the public (the "Pricing Date"), as described below. In no event
shall the Redemption Amount be less than $20.

Investing in the Securities involves risks that are described in the "Risk Factors" section beginning on page 11 of this pricing supplement.
Per Security

Public offering price .....................................................................................................................................

100.00
Agency fee(1) .................................................................................................................................................
4.00
Proceeds, before expenses, to Merrill Lynch Canada Finance Company.................................................................
96.00
(1)

Security Total

$7,936,800
$317,472
$7,619,328

Merrill Lynch Canada Inc. will also pay National Bank Financial Inc. a one-time fee equal to 0.10% of the principal amount of Securities issued and sold
hereunder for acting as independent underwriter.

Merrill Lynch Canada Inc.

The date of this pricing supplement is May 2, 2007.

The securities differ from conventional debt and fixed income investments because they do not provide holders with a return or income
stream prior to maturity and the return is not determinable prior to maturity. The Securities are not fully principal protected. Any payment
on the Securities at maturity depends on the Reference Index Ending Value (as defined herein). Investors in the Securities could lose up to
80% of their initial investment. A return, if any, is payable on the issue price of the Securities at maturity only to the extent that the
Reference Index Ending Value (as defined herein) is greater than the Reference Index Starting Value (as defined herein). There can be no
assurance that the Securities or the Reference Index will show any return. Accordingly, the Securities are suitable for investors that do not
require interest income and that can withstand a loss of 80% of their investment. The Securities are designed for investors with a long term
investment horizon who are prepared to hold the Securities to maturity and are prepared to assume risks with respect to a return tied to the
performance of the Reference Index. Prospective purchasers should take into account additional risk factors associated with this offering of
Securities. See "Risk Factors". This pricing supplement, together with the Prospectus to which it relates, constitutes a public offering of
securities offered pursuant hereto only in the jurisdictions where they may be lawfully offered for sale and therein only by persons permitted
to sell such securities.
The Guarantor is incorporated under the laws of Delaware, a foreign jurisdiction, and it resides in, and has substantial assets located in, the
United States. Although the Guarantor has appointed the Company as its agent for service of process for certain securities law purposes in
each of the provinces of Canada, it may not be possible for investors to collect from the Guarantor judgments obtained in Canadian courts.
Judgments on the Guarantee obtained in Canada may therefore have to be enforced in the United States and may be subject to additional
defences as a result. In addition, all of the Guarantor's directors and officers reside outside Canada and most of their assets are located
outside Canada. It may not be possible therefore for you to effect service of process within Canada upon the Guarantor's directors and
officers or to collect from them judgments obtained in Canadian courts.
Merrill Lynch Canada Inc. and National Bank Financial Inc., as agents, are conditionally offering the Securities subject to prior sale on a best
efforts basis, if, as and when issued by the Company and accepted by the agents in accordance with the conditions contained in the Dealer
Agreement between the Company, the Guarantor and the agents described herein and in the accompanying Prospectus.

TABLE OF CONTENTS
Pricing Supplement
Page

SUMMARY OF THE OFFERING..........................................................................................................................4

EXAMPLES OF REDEMPTION AMOUNT CALCULATIONS ............................................................................7
SUMMARY INFORMATIONQ&A ...................................................................................................................8
RISK FACTORS ..................................................................................................................................................11
DESCRIPTION OF THE SECURITIES................................................................................................................16
THE REFERENCE INDEX..................................................................................................................................21
INCOME TAX CONSIDERATIONS APPLICABLE TO CANADIAN RESIDENT INVESTORS .......................25
CIRCULAR 230...................................................................................................................................................26
ELIGIBILITY FOR INVESTMENT.....................................................................................................................26
USE OF PROCEEDS AND HEDGING ................................................................................................................27
PLAN OF DISTRIBUTION..................................................................................................................................27
DOCUMENTS INCORPORATED BY REFERENCE ..........................................................................................27
Prospectus
ELIGIBILITY FOR INVESTMENT.......................................................................................................................4
ML FINANCE........................................................................................................................................................4
ML&CO CANADA................................................................................................................................................4
THE GUARANTOR...............................................................................................................................................6
CREDIT RATINGS................................................................................................................................................6
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS ..........................................................................................7
USE OF PROCEEDS .............................................................................................................................................7
RISK FACTORS ....................................................................................................................................................8
DOCUMENTS INCORPORATED BY REFERENCE ............................................................................................9
DESCRIPTION OF THE NOTES......................................................................................................................... 13
DESCRIPTION OF GUARANTEES .................................................................................................................... 27
PLAN OF DISTRIBUTION.................................................................................................................................. 32
SELLING RESTRICTIONS ................................................................................................................................. 33
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM........................................................................ 34
REGISTRAR, TRANSFER AND PAYING AGENT ............................................................................................ 34
LEGAL MATTERS.............................................................................................................................................. 34
PURCHASERS' STATUTORY RIGHTS ............................................................................................................. 34
CERTIFICATE OF THE ISSUERS AND THE GUARANTOR .......................................................................... C-1
CERTIFICATE OF THE DEALERS .................................................................................................................. C-3

SUMMARY OF THE OFFERING

The following summary of the terms of the offering of the Securities is subject to, and should be read in
conjunction with, the more detailed information which follows in this pricing supplement and the accompanying
Prospectus. References in this pricing supplement to "dollars" or "$" are to Canadian currency unless otherwise
specified.
Issuer:

Merrill Lynch Canada Finance Company (the "Company")

Guarantor:

Merrill Lynch & Co., Inc. (the "Guarantor")

Securities:

Merrill Lynch Japanese Equity Accelerator Securities, Series 3 (the "Securities")

Issue Price:

$100 per Security

Denominations:

The Securities will be issued in denominations of $100 per Security.

Minimum Subscription:

$2,000

Pricing Date:

May 2, 2007.

Issue Date:

May 3, 2007

Valuation Date:

April 26, 2013

Maturity Date:

May 3, 2013, subject to a postponement if a market disruption event occurs.

Reference Index:

The Reference Index will be the Nikkei 225 Index.

Payment at Maturity for

Securities:

On the Maturity Date, for each Security you own, we will pay you the
Redemption Amount in cash. If the Index Level (as hereinafter defined)
decreases, you may lose a portion of your initial investment and that loss could
be significant. The Securities will not be redeemable prior to the Maturity Date
except for certain tax reasons described under the section "Description of the
Notes Redemption for Tax Reasons" in the accompanying Prospectus.

Record Date:

The fifteenth day immediately preceding the Maturity Date, whether or not a
business day, but in any event shall not be later than April 18, 2013.

Redemption Amount:

If the Reference Index Ending Value is greater than the Reference Index Starting
Value, the Redemption Amount for each Security will be equal to the product of
$100 and the Positive Performance Amount. The Securities are not fully
principal protected. If the Reference Index Ending Value is equal to or less than
the Reference Index Starting Value, the Redemption Amount for each Security
will be equal to the product of $100 and the Negative Performance Amount,
provided that in no event will the Redemption Amount be less than $20 per
Security. You could lose up to 80% of your investment.

Calculation of Positive
Performance Amount:

The Positive Performance Amount will be calculated by the Calculation Agent

by using the following formula:
1 + Accelerated Participation Factor (Xm / Xo 1)
where:
The Accelerated Participation Factor is 168%.
Xm is the Reference Index Ending Value (as defined under "Description of the
Securities Calculation and Payment of the Redemption Amount").
Xo is the Reference Index Starting Value (as defined under "Description of the
Securities Calculation and Payment of the Redemption Amount").
The Reference Index Starting Value will be 1,000. See "Description of the
Securities Calculation and Payment of the Redemption Amount" in this
pricing supplement.
4

Calculation of Negative
Performance Amount:

The Negative Performance Amount will be calculated by the Calculation Agent

by using the following formula:
Xm / Xo

Redemption Amount at Maturity

Date:

On the basis of an Accelerated Participation Factor of 168% in the positive

performance of the Reference Index, the Redemption Amount for the Securities
would be as follows:
Redemption Amount
at Maturity Date /
Redemption Date

% Return of Reference Index over

6 years {(Xm/Xo)/Xo}

($100 Invested)

(% Return)

100%

$268

168%

80%

$234.40

134.4%

60%

$200.80

100.80%

40%

$167.20

67.2%

20%

$133.60

33.6%

0%

$100

0%

-20%

$80

-20%

-40%

$60

-40%

-60%

$40

-60%

-80%

$20

-80%

-100%

$20

-80%

As a result, if the performance of the Reference Index over the term of the
Securities is positive, the return on the Securities will be increased by 68% over
the actual increase in value of the Reference Index over the term of the
Securities. If the performance of the Reference Index is 0% or negative, the
return on the Securities is directly proportionate to the performance of the
Reference Index, provided that in no event will the Redemption Amount be less
than $20 per Security.
Reference Index Values:

The "Reference Index Starting Value"

multiplying the Index Starting Value by a
1,000 and the denominator of which is the
Date. See "Description of the Securities
Redemption Amount".

will be 1,000, as determined by

fraction, the numerator of which is
Index Starting Value on the Pricing
Calculation and Payment of the

The Index Starting Value was determined on the Pricing Date to be 17,394.92.
The "Reference Index Ending Value" is the product of the Index Level on the
Valuation Date and a fraction, the numerator of which is 1,000 and the
denominator of which is the Index Starting Value on the Pricing Date. See
"Description of the Securities Calculation and Payment of the Redemption
Amount".
No Payments Before Maturity
Date:

We will not make any payments on the Securities until the Maturity Date except in
the limited circumstances described under "Description of the Securities Events
of Default and Acceleration" in this pricing supplement.

Status/Ranking:

The Securities are senior securities and will be unsecured and will rank equally
with our unsecured and unsubordinated debt.

Guarantee:

All amounts payable or deliverable under the Securities will be unconditionally

guaranteed by the Guarantor. The Guarantee is a direct and unsecured obligation
of the Guarantor and will rank pari passu with all other unsecured and
unsubordinated indebtedness of the Guarantor.

Income Tax Considerations:

Upon the redemption or payment of a Security on or prior to the Maturity Date,

the holder of a Security (the "Securityholder") will generally be required to
include in computing income the amount by which the Redemption Amount
exceeds the Issue Price. If the Redemption Amount is less than the Issue Price
and a Security is held by a Securityholder as capital property, the Securityholder
will realize a capital loss on the redemption of the Security. If a Security is held
by a Securityholder as capital property and is disposed of (other than upon the
redemption or payment of the Security on or prior to the Maturity Date), the
Securityholder should realize a capital gain (or capital loss). Prospective
purchasers of Securities should read the section entitled "Income Tax
Considerations Applicable to Canadian Resident Investors" in this pricing
supplement and consult with their own tax advisors regarding the application of
the law to their particular circumstances.

Investment Eligibility:

The Securities when issued will be qualified investments for registered

retirement savings plans, registered retirement income funds, registered
education savings plans and deferred profit sharing plans (other than a deferred
profit sharing plan to which payments are made by the Company or an employer
with which the Company does not deal at arm's length).

Currency Risk:

The performance of the Reference Index will be based solely upon the changes
to the value of the Reference Index determined in Japanese yen and thus will be
unaffected by changes in the exchange rate of Canadian dollars relative to
Japanese yen.

Risk Factors:

You should consider carefully the factors set out under "Risk Factors" in this
pricing supplement before reaching a decision to buy the Securities.

Calculation Agent:

Merrill Lynch International, as Calculation Agent, will be our agent for purposes
of calculating, among other things, the Redemption Amount.

Index Calculation Agent:

The "Index Calculation Agent" with respect to the Reference Index, will be
Nikkei Inc.

No Listing of Securities:

The Securities will not be listed on any stock exchange.

Secondary Trading of Securities:

Merrill Lynch Canada Inc. ("ML Canada") intends to buy and sell the Securities
to create a daily secondary market for holders of the Securities. However, ML
Canada will not be obligated to engage in any of these activities or continue
them once it has started.

Book-Entry Registration:

The Securities will be issued in the form of global certificates which will be held
by CDS Clearing and Depository Services Inc., also known as CDS, or its
nominee. Except in certain limited circumstances, you will not be entitled to
receive certificates evidencing the Securities in certificated form.

Dealers for the Securities:

ML Canada and National Bank Financial Inc., as agents

Dealer Fee:

4.0%

Early Sales Fee:

To the extent that you sell any Securities to ML Canada, the purchase price you
receive for those Securities will reflect the deduction of a fee as follows:
Sale Period
May 4, 2007 to May 3, 2008
May 4, 2008 to May 3, 2009
May 4, 2009 to May 3, 2010
On or after May 4, 2010
6

Fee Deduction
$3 per Security
$2 per Security
$1 per Security
Nil

EXAMPLES OF REDEMPTION AMOUNT CALCULATIONS

Below are examples of Redemption Amount calculations assuming the purchase of one Security with an
investment term equal to that of the Securities. These examples are included for purposes of illustration only
and should not be construed as a forecast or projection. No assurance can be given that the results shown in
these examples would ever be realized.
Example #1:

"Gain" Scenario

Index Starting Value

Index Ending Value

11,766.48
20,591.34

Reference Index Starting Value

1,000

Reference Index Ending Value

1,750

Accelerated Participation Factor

168%
$100 x {1 + 168% (1750/1,000 - 1)}
= $226.00
(126.00% return)

Redemption Amount (per Security)

Example #2:

"Slight Gain" Scenario

Index Starting Value

Index Ending Value

11,766.48
12,354.80

Reference Index Starting Value

1,000

Reference Index Ending Value

1,050

Accelerated Participation Factor

168%
$100 x {1 + 168% (1,050/1,000 - 1)}
= $108.40
(8.40% return)

Redemption Amount (per Security)

Example #3:

"Loss" Scenario

Index Starting Value

Index Ending Value

11,766.48
10,589.83

Reference Index Starting Value

1,000

Reference Index Ending Value

900
$100 x (900/1,000) = $90
(-10% loss)

Redemption Amount (per Security)

SUMMARY INFORMATIONQ&A
This summary includes questions and
answers that highlight selected information from this
pricing supplement and the accompanying Prospectus
to help you understand the Merrill Lynch Japanese
Equity Accelerator Securities, Series 3 due May 3,
2013 (the "Securities").

secured by collateral. The Securities will rank

equally with all of our other unsecured and
unsubordinated debt. The Securities will mature on
May 3, 2013 (the "Maturity Date"), subject to a
postponement if a Market Disruption Event (as
defined below) occurs and the Redemption Amount
(as defined below) will be paid on the Maturity Date.
We cannot redeem the Securities at an earlier date
except for certain tax reasons described under the
section "Description of the Notes Redemption for
Tax Reasons" in the accompanying Prospectus. We
will not make any payments on the Securities until
the Maturity Date or any earlier date as described
under "Description of the Securities Events of
Default and Acceleration" in this pricing supplement.

You should carefully read this pricing

supplement and the accompanying Prospectus to
fully understand the information relating to the
Company, the terms of the Securities, the
Reference Index and the tax and other
considerations that are important to you in
making a decision about whether to invest in the
Securities. You should carefully review the "Risk
Factors" section in this pricing supplement, which
highlights certain risks associated with an
investment in the Securities, to determine whether
an investment in the Securities is appropriate for
you.

Each Security represents $100 principal

amount of Securities.
You may transfer the
Securities only in whole units. You will not have the
right to receive physical certificates evidencing your
ownership except under limited circumstances.
Instead, we will issue the Securities in the form of a
global certificate, which will be held by CDS
Clearing and Depository Services Inc., also known as
CDS, or its nominee. Direct and indirect participants
in CDS will record your ownership of the Securities.
You should refer to the section entitled "Description
of the Securities Depository" in this pricing
supplement.

References in this pricing supplement to

"the Company", "we", "us" and "our" are to Merrill
Lynch Canada Finance Company and references to
"dollars" or "$" are to Canadian currency unless
otherwise specified.
Who is the Company?
The Company is an unlimited liability
company incorporated under the Companies Act
(Nova Scotia) whose business is to make loans to or
investments in, and to grant financial assistance by
way of guarantee or otherwise to, affiliates of the
Guarantor. To that effect the Company may borrow
money in whatever form and currency, issue bonds,
debentures or other debt instruments in whatever
form and in any manner whatsoever. The Company
is an indirect wholly owned subsidiary of the
Guarantor. See the section "ML Finance" in the
accompanying Prospectus.

Are there any

investment?

risks

associated

with

my

Yes, an investment in the Securities is

subject to certain risks, including the risk that you
may lose up to 80% of your initial investment.
Please refer to the section "Risk Factors" in this
pricing supplement.
What about income taxes?

Who is the Guarantor?

Upon the redemption or payment of a

Security on or prior to the Maturity Date, the holder
of the Security (the "Securityholder") will generally
be required to include in computing income the
amount by which the Redemption Amount exceeds
the Issue Price. If the Redemption Amount is less
than the Issue Price and the Security is held by a
Securityholder as capital property, a Securityholder
will realize a capital loss on the redemption of the
Security. If a Security is held by a Securityholder as
capital property and is disposed of (other than upon
the redemption or payment of a Security on or prior
to the Maturity Date), the Securityholder should
realize a capital gain (or capital loss). Prospective
purchasers of Securities should read the section
entitled "Income Tax Considerations Applicable to
Canadian Resident Investors" in this pricing
supplement and consult with their own tax advisors

The Guarantor is a holding company with

various subsidiary and affiliated companies that
provide investment, financing, insurance and related
services on a global basis. For information about the
Guarantor, see the section "The Guarantor" in the
accompanying Prospectus. You should also read the
other documents the Guarantor has filed with the
U.S. Securities and Exchange Commission (the
"SEC") and the securities regulatory authorities in
Canada, which you can find by referring to the
section "Documents Incorporated by Reference" in
this pricing supplement.
What are the Securities?
The Securities will be a series of senior
Securities issued by the Company and will not be
8

regarding the application of the law to their particular

circumstances.

Value is greater than the Reference Index Starting

Value, the Redemption Amount per Security to
which you will be entitled will be equal to the
product of $100 and the Positive Performance
Amount (as defined below). As a result, your return
on the Securities will be increased by 68% over the
actual increase in the value of the Reference Index
over the term of the Securities. If the Reference
Index Ending Value is equal to or less than the
Reference Index Starting Value, the Redemption
Amount for each Security will be equal to the product
of $100 and the Negative Performance Amount (as
defined below), provided that such Redemption
Amount will not be less than $20. The Negative
Performance Amount is calculated such that your
return is directly proportionate to the amount by
which the Reference Index has decreased as
compared to the Index Starting Value, provided that
the Redemption Amount will not be less than $20 per
Security.

Are the Securities RRSP eligible?

Yes, the Securities are eligible for RRSPs,
RRIFs, DPSPs and RESPs.
Will I receive interest payments on the Securities?
You will not receive any interest payments
on the Securities, but will instead receive the
Redemption Amount on the Maturity Date. We have
designed the Securities for investors who are willing
to forego periodic interest payments on the
Securities, in exchange for the ability to participate in
possible increases in the value of the Reference
Index.
Who determines the value of the Reference Index
and what does the Reference Index reflect?

For more specific information about the

Redemption Amount, please see the section entitled
"Description of the Securities Calculation and
Payment of the Redemption Amount" in this pricing
supplement.

Merrill
Lynch
International
(the
"Calculation Agent") will determine the value of the
Redemption Amount which is based upon the
Reference Index as determined by Nikkei Inc.
("NKS") and as described in the section entitled "The
Reference Index" in this pricing supplement. The
Securities are designed to allow investors to
participate in changes in the value of the Reference
Index. The Reference Index is denominated in
Japanese yen. General information relating to the
Reference Index, its publisher and its composition is
included in the section entitled "The Reference
Index" in this pricing supplement.

Will the Securities be listed on a stock exchange?

The Securities will not be listed on any
securities exchange and we do not expect a trading
market for the Securities to develop, which may
affect the price that you receive for your Securities
upon any sale prior to the Maturity Date. You should
review the section entitled "Risk Factors A trading
market for the Securities is not expected to develop"
in this pricing supplement.

What is my exposure to currency risk?

What is the role of Merrill Lynch Canada Inc.?

The performance of the Reference Index

will be based solely on changes in the Reference
Index determined at all times in Japanese yen and
thus will not be directly affected by changes in the
exchange rate of Canadian dollars relative to
Japanese yen.
How has the
historically?

Reference

Index

Our affiliate, Merrill Lynch Canada Inc.

("ML Canada"), is the lead agent for the offering and
sale of the Securities. After the initial offering, ML
Canada intends to buy and sell the Securities to create
a daily secondary market for holders of the
Securities. However, ML Canada will not be
obligated to engage in any of these market activities
or continue them once it has started.

performed

We have included tables showing the

historical values of the Reference Index. We have
provided this historical information to help you
evaluate the past performance of the Reference
Index; however, this past performance is not
indicative of how the Reference Index will perform
in the future.

What are the roles of the Calculation

Agent and the Index Calculation Agent?
Merrill Lynch International will be our agent
for purposes of calculating, among other things, the
Reference Index Starting Value, the Reference Index
Ending Value and the Redemption Amount. Under
certain circumstances, these duties could result in a
conflict of interest between the status of Merrill
Lynch International as our affiliate and as a
subsidiary of the Guarantor and its responsibilities as
Calculation Agent. For purposes of calculating the

What will I receive on the Maturity Date?

On the Maturity Date, you will receive a
cash payment equal to the "Redemption Amount"
for each Security. If the Reference Index Ending
9

value for the Reference Index, our agent will be NKS

(the "Index Calculation Agent"). Under certain
circumstances, the duties of the Index Calculation
Agent and its other business activities could give rise
to conflicts of interest. Whenever the Calculation
Agent is required to act, it will do so in good faith
using its reasonable judgment.

10

RISK FACTORS
Your investment in the Securities will involve risks. You should carefully consider the following
discussion of risks and the discussion of risks included in the Prospectus before deciding whether an investment in
the Securities is appropriate for you.
An investment in the Securities entails significant risks that are not generally associated with similar
investments in conventional fixed rate or floating rate debt securities
The return on the Securities is linked to the Reference Index, which may increase or decrease over the term
of the Securities. Although the investor has the opportunity to receive a positive return, the investor risks a lower
return than conventional interest-bearing debt securities or a negative return, and an investor could lose a significant
portion of the principal amount of the Securities purchased. As such, the investment may not be suitable for persons
unfamiliar with the Reference Index, or unwilling or unable to bear the risk attendant to a debt security of this type.
Your yield may be lower than the yield on a standard debt security with a comparable term
The amount you receive on your investment may be less than the return you could earn on other
investments. Your investment may not reflect the full opportunity cost to you when you take into account factors
that affect the time value of money.
Your investment may result in a loss
We will not repay you a fixed amount of principal on the Maturity Date equal to your initial investment in
the Securities. The Redemption Amount will depend on the change in the level of the Reference Index. Because the
level of the Reference Index is subject to market fluctuations, the amount you receive on the Maturity Date may be
more or less, and possibly significantly less, than the principal amount per Security. As a result, you may lose up to
80% of your investment in the Securities.
Your return will not reflect the total return of owning the securities included in the Reference Index
The return on your Securities will not reflect the total return you would realize if you actually owned the
securities included in the Reference Index and received the income, if any, paid on those securities because the value
of the Reference Index is calculated, in part, by reference to the prices of the securities included in the Reference
Index without taking into consideration the value of dividends or other distributions paid on those securities. By
purchasing a Security, you will not be entitled to any rights with respect to any securities which comprise the
Reference Index.
Your return will not reflect the total return of an investment in the Reference Index directly
The return on the Securities is tied to the value of the Reference Index as of the Valuation Date. The
Securities are designed to provide an accelerated return to you if the Reference Index Ending Value is greater than
the Reference Index Starting Value; however, the value of the Securities will not reflect fluctuations in the value of
the Reference Index at any time prior to the Valuation Date. The Redemption Amount is based on the Reference
Index Ending Value, and you will not be entitled to the benefit of any prior increase in the value of the Reference
Index if the Reference Index Ending Value is not greater than the Reference Index Starting Value on the Valuation
Date.
Your return depends on the Reference Index Ending Value being greater than the Reference Index Starting
Value on the Valuation Date; your principal will not be protected if the Reference Index Ending Value is not
equal to or greater than the Reference Index Starting Value
The Reference Index will have an initial level of 1,000; the Reference Index Ending Value must be greater
than 1,000 in order for investors to receive a Redemption Amount greater than the principal amount of the
Securities. If the Reference Index Ending Value is equal to 1,000 on the Valuation Date, investors will receive the
principal amount of the Securities on the Maturity Date and therefore will not have earned any return on their
investment. If the Reference Index Ending Value is less than 1,000 on the Valuation Date, investors will be entitled
11

to a Redemption Amount that is less than the principal amount of the Securities (although such amount may not be
less than 20% of the principal amount per Security). As a result, you could lose up to 80% of your investment.
Your return may be affected by factors affecting the Japanese securities market
The Reference Index is computed by reference to the value of the equity securities of companies listed on
the Nikkei 225 Index. The return on the Securities will be affected by factors affecting the value of securities in this
market. The Japanese securities market may be more volatile than U.S., Canadian or other securities markets and
may be affected by market developments in different ways than U.S., Canadian or other securities markets. Direct
or indirect government intervention to stabilize that securities market and cross-shareholdings in companies on that
market may affect prices and the volume of trading on that market. Also, there is generally less publicly available
information about Japanese companies than about North American companies that are subject to the reporting
requirements of Canadian or U.S. securities regulatory authorities. Additionally, accounting, auditing and financial
reporting standards and requirements in Japan differ from one another and from those applicable to Canadian
reporting companies.
The prices and performance of securities of companies in Japan may be affected by political, economic,
financial and social factors in that region. In addition, recent or future changes in Japan's government, economic
and fiscal policies, the possible imposition of, or changes in, currency exchange laws or other laws or restrictions are
factors that could negatively affect the Japanese securities market. Moreover, the Japanese economy may differ
favourably or unfavourably from the Canadian economy in economic factors such as growth of gross national
product, rate of inflation, capital reinvestment, resources and self-sufficiency.
You must rely on your own evaluation of the merits of an investment linked to equity securities
In the ordinary course of their business, affiliates of the Company from time to time express views on
expected movements with respect to the price of certain equities. These views are sometimes communicated to
clients who participate in equity markets. However, these views, depending upon world wide economic, political
and other developments, may vary over differing time horizons and are subject to change. Moreover, other
professionals who deal in equities may at any time have significantly different views from those of our affiliates.
For reasons such as these, we believe that most investors in equities markets derive information concerning those
markets from multiple sources. In connection with your purchase of the Securities, you should investigate the equity
markets and not rely on views which may be expressed by our affiliates in the ordinary course of their businesses
with respect to futures price movements or fluctuations in the prices of certain equities.
You should make investigations as you deem appropriate as to the merits of an investment linked to equity
indices. Neither the offering of the Securities nor any views which may from time to time be expressed by our
affiliates in the ordinary course of their businesses with respect to fluctuations in equity prices constitutes a
recommendation as to the merits of an investment in the Securities.
A trading market for the Securities is not expected to develop
The Securities will not be listed on any securities exchange and we do not expect a trading market for the
Securities to develop. ML Canada intends to buy and sell the Securities to create a daily secondary market for
holders of the Securities. However, ML Canada will not be obligated to engage in any of these market activities or
continue them once it has started. ML Canada intends to bid for Securities offered for sale to it by holders of the
Securities following the issue date of the Securities, although it is not required to do so and may cease making bids
at any time. The limited trading market for your Securities may affect the price that you receive for your Securities
if you do not wish to hold your investment until the Maturity Date. In addition, if you sell your Securities between
May 4, 2007 and May 3, 2010 to ML Canada, ML Canada will deduct an early sales fee from the price paid to you
for the Securities ranging from $3 per Security to $1 per Security depending on when you sell your Securities. See
"Summary of the Offering Early Sales Fee".
The Index Calculation Agent has no obligations relating to the Securities
The Index Calculation Agent has no obligations relating to the Securities or amounts to be paid to you,
including any obligation to take the needs of the Company or of beneficial owners of the Securities into
consideration for any reason. The Index Calculation Agent will not receive any of the proceeds of the offering of
12

the Securities and is not responsible for, and has not participated in, the offering of the Securities and is not
responsible for, and will not participate in, the determination or calculation of the amount receivable by beneficial
owners of the Securities.
The Index Calculation Agent is under no obligation to continue the calculation and dissemination of the
Reference Index. The Securities are not sponsored, endorsed, sold or promoted by the Index Calculation Agent. No
inference should be drawn from the information contained in this pricing supplement or the accompanying
Prospectus that the Index Calculation Agent makes any representation or warranty, implied or express, to the
Company, the holders of the Securities or any member of the public regarding the advisability of investing in
securities generally or in the Securities in particular or the ability of the Reference Index to track general stock
market performance.
Many factors affect the trading value of the Securities; these factors interrelate in complex ways and the
effect of any one factor may offset or magnify the effect of another factor
The trading value of the Securities will be affected by factors that interrelate in complex ways. The effect
of one factor may offset the increase in the trading value of the Securities caused by another factor and the effect of
one factor may exacerbate the decrease in the trading value of the Securities caused by another factor. The
following paragraphs describe the expected impact on the trading value of the Securities given a change in a specific
factor, assuming all other conditions remain constant.
The value of the Reference Index is expected to affect the trading value of the Securities. We expect that
the trading value of the Securities will depend substantially on whether the value of the Reference Index exceeds (or
is less than) the Index Starting Value. If you choose to sell your Securities when the value of the Reference Index
exceeds the Index Starting Value, you may receive substantially less than the Redemption Amount that would be
payable on the Maturity Date based on that value because of the expectation that the value of the Reference Index
will continue to fluctuate until the Reference Index Ending Value is determined. If you choose to sell your
Securities when the value of the Reference Index is below the Index Starting Value, you may receive less than $100
per Security.
As the time remaining to the Maturity Date decreases, the "time premium" associated with the Securities
will decrease. We anticipate that before the Maturity Date, the Securities may trade at a value above that which
would be expected based on the level of interest rates and the value of the Reference Index. This difference will
reflect a "time premium" due to expectations concerning the performance of the Reference Index during the period
before the Maturity Date. However, as the time remaining to the Maturity Date decreases, we expect that this time
premium will decrease, lowering the trading value of the Securities.
Changes in the levels of interest rates may affect the trading value of the Securities. In general, if Canadian
interest rates increase, we expect that the trading value of the Securities may decrease because such Securities may
be less attractive relative to interest bearing alternative investments; and, conversely, if Canadian interest rates
decrease, we expect that the trading value of the Securities may increase. The level of interest rates in Japan may
also affect the economy in Japan and, in turn, the value of the Reference Index. Rising interest rates may lower the
value of the Reference Index and, thus, may decrease the value of the Securities. Falling interest rates may increase
the value of the Reference Index and, thus, may increase the value of the Securities.
Changes in the volatility of the Reference Index are expected to affect the trading value of the Securities.
Volatility is the term used to describe the size and frequency of price and/or market fluctuations. If the volatility, or
anticipated volatility, of the Reference Index decreases, the trading value of the Securities may be adversely
affected.
Changes in dividend yields of the stocks included in the Reference Index are expected to affect the trading
value of the Securities. In general, if dividend yields on the stocks included in the Reference Index increase, we
expect that the value of the Securities will decrease and, conversely, if dividend yields on the stocks included in the
Reference Index decrease, we expect that the value of the Securities will increase.
Changes in our credit ratings may affect the trading value of the Securities. Our credit ratings and the
credit ratings of the Guarantor are an assessment of our ability to pay our obligations. Consequently, real or
anticipated changes in our credit ratings may affect the trading value of the Securities. However, because your
13

return on your Securities is dependent upon factors in addition to our ability to pay our obligations under the
Securities, such as the performance of the Reference Index, an improvement in our credit ratings will not reduce the
other investment risks related to the Securities.
In general, assuming all relevant factors are held constant, we expect that the effect on the trading value of
the Securities of a given change in most of the factors listed above will be less if it occurs later in the term of the
Securities than if it occurs earlier in the term of the Securities. However, we expect that the effect on the trading
value of the Securities of a given increase in the value of the Reference Index will be greater if it occurs later in the
term of the Securities than if it occurs earlier in the term of the Securities.
Purchases and sales of stocks by us and our affiliates may affect your return
We and our affiliates may from time to time buy or sell the stocks included in the Reference Index for our
own accounts for business reasons or in connection with hedging our obligations under the Securities. Also, we may
issue or our affiliates may issue or underwrite other financial instruments with returns indexed to the prices of the
Reference Index. These trading and underwriting activities could affect the level of the Reference Index in a manner
that would be adverse to your investment in the Securities.
You are not entitled to any of the securities which comprise the Reference Index
While the value of the Securities is tied to the performance of the Reference Index, your purchase of the
Securities will not entitle you to any rights with respect to the securities that comprise the Reference Index.
Index Levels will not be directly affected by exchange rate changes
The performance of the Reference Index will be based solely on changes in the Reference Index
determined at all times in Japanese yen and thus will not be directly affected by changes in the exchange rate of
Canadian dollars relative to Japanese yen.
Potential conflicts
Our affiliate, Merrill Lynch International, is our agent for the purposes of calculating, among other things,
the Reference Index Starting Value, Reference Index Ending Value and the Redemption Amount. Under certain
circumstances, the role of Merrill Lynch International as our affiliate and its responsibilities as Calculation Agent for
the Securities could give rise to conflicts of interest. These conflicts could occur, for instance, in connection with
judgments that it would be required to make in the event of a discontinuance or unavailability of the Reference
Index. See "Description of the Securities Adjustments to the Reference Index" and " Discontinuance of the
Reference Index" in this pricing supplement. Merrill Lynch International is required to carry out its duties as
Calculation Agent in good faith and using its reasonable judgment. However, because we are affiliated with Merrill
Lynch International, potential conflicts of interest could arise.
We have entered into arrangements with one of our affiliates to hedge the market risks to us associated with
our obligation to pay the amounts due on the Securities. This affiliate expects to make a profit in connection with
these arrangements. We did not seek competitive bids for these arrangements from unaffiliated parties.
The Company or its affiliates may presently or from time to time engage in business with one or more of
the companies included in the Reference Index including extending loans to, making equity investments in or
providing advisory services to those companies, including merger and acquisition advisory services. In the course
of business, the Company or its affiliates may acquire non-public information relating to the companies included in
the Reference Index and, in addition, one or more affiliates of the Company may publish research reports about the
companies included in the Reference Index. The Company does not make any representation to any purchasers of
the Securities regarding any matters whatsoever relating to the companies included in the Reference Index. Any
prospective purchaser of the Securities should undertake an independent investigation of the companies included in
the Reference Index as in its judgment is appropriate to make an informed decision regarding an investment in the
Securities. The composition of the companies included in the Reference Index does not reflect any investment or
sell recommendations of the Company or its affiliates.
14

You may not be able to effect service of process or enforce judgments obtained against the Guarantor in
Canada
The Guarantor is incorporated under the laws of Delaware, a foreign jurisdiction, and resides, and its
principal assets are located, in the United States. It may not be possible therefore for you to effect service of process
within Canada upon the Guarantor in respect of actions under the Securities. Although the Guarantor has appointed
ML Canada as its agent for service of process for certain securities law purposes in each of the provinces and
territories of Canada, it may not be possible for you to collect from the Guarantor judgments obtained in Canadian
courts. Judgments against the Guarantor may therefore have to be enforced in the United States and may be subject
to additional defences as a result. In addition, all of the Guarantor's directors and officers reside outside Canada and
most of their assets are located outside Canada. It may not be possible therefore for you to effect service of process
within Canada upon the Guarantor's directors and officers or to collect from them judgments obtained in Canadian
courts.
Amounts payable on the Securities may be limited by applicable law
Under the Criminal Code (Canada), a lender is prohibited from entering into an agreement or arrangement
to receive interest at an effective annual rate of interest, calculated in accordance with generally accepted actuarial
practices and principles, exceeding 60% of the credit advanced under the agreement or arrangement. We will
promise, for the benefit of the holders of the Securities, to the extent permitted by law, not to voluntarily claim the
benefits of any laws concerning usurious rates of interest.

15

DESCRIPTION OF THE SECURITIES

Description of the Securities
The Company will issue the Securities as series of senior securities under the indenture dated as of June 30,
2006, as may be amended and supplemented from time to time (the "Indenture"). The Indenture is more fully
described in the accompanying Prospectus under the section entitled "Description of the Notes". The Securities will
mature on May 3, 2013 (the "Maturity Date"), subject to a postponement if a Market Disruption Event (as defined
below) occurs.
While on the Maturity Date a beneficial owner of a Security as of the fifteenth day immediately preceding
the Maturity Date, but in any event not later than April 18, 2013 (the "Record Date") will receive an amount equal to
the Redemption Amount, there will be no payments of interest, periodic or otherwise. See " Calculation and
Payment of the Redemption Amount" in this pricing supplement.
The Securities will not be subject to redemption by the Company or at the option of any beneficial owner
before the Maturity Date except for certain tax reasons described under the section "Description of the Notes
Redemption for Tax Reasons" in the accompanying Prospectus. If an Event of Default occurs with respect to the
Securities, holders of the Securities may accelerate the maturity of the Securities, as described under " Events of
Default and Acceleration" in this pricing supplement and "Description of the Notes Events of Default" in the
accompanying Prospectus.
The Company will issue the Securities in denominations of whole units each with a principal amount of
$100 per Security and a minimum subscription of $2,000. You may transfer the Securities only in whole units. You
will not have the right to receive physical certificates evidencing your ownership except under limited
circumstances. Instead, we will issue the Securities in the form of a global certificate, which will be held by CDS
Clearing and Depository Services Inc. ("CDS"), or its nominee. Direct and indirect participants in CDS will record
your ownership of the Securities. You should refer to the section " Depository" in this pricing supplement.
The Securities will not have the benefit of any sinking fund.
Calculation and Payment of the Redemption Amount
On the Maturity Date, a beneficial owner of a Security as of the Record Date will be entitled to receive the
Redemption Amount for each Security. The Redemption Amount to which the holder of a Security will be entitled
will be equal to the product of $100 and the Positive Performance Amount (if the Reference Index Ending Value is
greater than the Reference Index Starting Value) or the product of $100 and the Negative Performance Amount (if
the Reference Index Ending Value is equal to or less than the Reference Index Starting Value). In no event shall the
Redemption Amount be less than $20.
All determinations made by the Calculation Agent and the Index Calculation Agent will be at its sole
discretion and, absent manifest error, will be conclusive for all purposes and binding on the Company, the Guarantor
and the holders and beneficial owners of the Securities. Whenever the Calculation Agent is required to act, it will
do so in good faith using its reasonable judgment.
The Positive Performance Amount will be calculated by the Calculation Agent by using the following
formula:
1 + Accelerated Participation Factor (Xm / Xo 1).
The Negative Performance Amount will be calculated by the Calculation Agent by using the following
formula:
Xm / Xo
Where:
"Xm" means the Reference Index Ending Value; and
"Xo" means the Reference Index Starting Value.
16

DEFINITIONS
"Accelerated Participation Factor" is 168% for the Securities.
"Index Calculation Agent" means Nikkei Inc. ("NKS").
"Index Level" means the closing level of the Reference Index as quoted on the "NKY Index" Bloomberg
page.
If the Index Level is not published on the relevant Bloomberg page referred to above, the Calculation
Agent may in its sole discretion use a successor page/publication or alternative source as it considers
appropriate.
"Index Starting Value" means 17,394.92, the Index Level on the Pricing Date.
"Pricing Date" means May 2, 2007, the date on which the Securities are priced for initial sale to the public.
"Reference Index" is the Nikkei 225 Index.
"Reference Index Ending Value" means the product of the Index Level for the Reference Index on the
Valuation Date and a fraction, the numerator of which is 1,000 and the denominator of which is the Index
Starting Value.
"Reference Index Starting Value" means the product of the Index Starting Value and a fraction, the
numerator of which is 1,000 and the denominator of which is the Index Starting Value. For greater
certainty, the Reference Index Starting Value is equal to 1,000.
"Valuation Date" means April 26, 2013.
Market Disruptions
If the Valuation Date is a Disrupted Day (as defined below), the date on which the Index Level is
determined shall be the first succeeding Scheduled Trading Day (as defined below) that is not a Disrupted Day,
unless each of the eight Scheduled Trading Days following the Valuation Date to and including the Cut-off Date is a
Disrupted Day. In that case (i) the Cut-Off Date shall be deemed to be the Valuation Date for the Reference Index,
notwithstanding the fact that such day is a Disrupted Day, and (ii) the Calculation Agent shall determine the Index
Level as of the Valuation Time (as defined below) on the Cut-Off Date in accordance with the formula for and
method of calculating the Reference Index last in effect prior to the occurrence of the first Disrupted Day using the
Exchange (as defined below) traded or quoted price as of the Valuation Time on the Cut-Off Date of each security
comprised in the Reference Index (or, if an event giving rise to a Disrupted Day has occurred in respect of the
relevant security on the Cut-Off Date, its good faith estimate of the value for the relevant security as of the
Valuation Time on the Cut-Off Date).
For the purposes of the foregoing:
"Cut-off Date" means the eighth Scheduled Trading Day immediately following the Valuation Date,
whether or not such date is a Disrupted Day.
"Disrupted Day" means any Scheduled Trading Day on which the Exchange or any Related Exchange fails
to open for trading during its regular trading session or on which a Market Disruption Event has occurred.
"Early Closure" means the closure on an Exchange Business Day of the Exchange(s) relating to securities
that comprise 20 per cent or more of the level of the Reference Index or any Related Exchange(s) prior to its
Scheduled Closing Time unless such earlier closing time is announced by such Exchange(s) or Related Exchange(s)
at least one hour prior to the earlier of (i) the actual closing time for the regular trading session on such Exchange(s)
or Related Exchange(s) on such Exchange Business Day and (ii) the submission deadline for orders to be entered
17

into the Exchange or Related Exchange system for execution at the Valuation Time on such Exchange Business
Day.
"Exchange" means in respect of each security comprising the Reference Index, the exchange or quotation
system on which such security is listed (for the avoidance of doubt, where such security has more than one listing,
"Exchange" shall mean the exchange or quotation system used by the Index Calculation Agent when calculating the
Reference Index), any successor to such exchange or quotation system or any substitute exchange or quotation
system to which trading in such security has temporarily relocated (provided that the Calculation Agent has
determined that there is comparable liquidity relative to such security on such temporary substitute exchange or
quotation system as on the original Exchange).
"Exchange Business Day" means any Scheduled Trading Day on which each Exchange and each Related
Exchange are open for trading during their respective regular trading sessions, notwithstanding such Exchange or
Related Exchange closing prior to its scheduled weekday closing time.
"Exchange Disruption" means any event (other than Early Closure) that disrupts or impairs (as determined
by the Calculation Agent) the ability of market participants in general (i) to effect transactions in, or obtain market
values for, securities that comprise 20 per cent or more of the level of the Reference Index, or (ii) to effect
transactions in, or obtain market values for, futures or options contracts relating to the Reference Index on any
relevant Related Exchange.
"Market Disruption Event" means in respect of the Reference Index, the occurrence or existence of (i) a
Trading Disruption, (ii) an Exchange Disruption, which in either case the Calculation Agent determines is material,
at any time during the one hour period that ends at the relevant Valuation Time, or (iii) an Early Closure. For the
purposes of determining whether a Market Disruption Event exists at any time, if a Market Disruption Event occurs
in respect of a security included in the Reference Index at any time, then the relevant percentage contribution of that
security to the level of the Reference Index shall be based on a comparison of (x) the portion of the level of the
Reference Index attributable to that security and (y) the overall level of the Reference Index, in each case
immediately before the occurrence of such Market Disruption Event.
"Related Exchange" means each exchange or quotation system on which options contracts and futures
contracts relating to the Reference Index are traded, any successor to such exchange or quotation system or any
substitute exchange or quotation system to which trading in futures or options contracts relating to the Reference
Index has temporarily relocated (provided that the Calculation Agent has determined that there is comparable
liquidity relative to the futures or options contracts relating to the Reference Index on such temporary substitute
exchange or quotation system as on the original Related Exchange).
"Scheduled Closing Time" means, in respect of an Exchange or Related Exchange and a Scheduled
Trading Day, the scheduled weekday closing time of such Exchange or Related Exchange on such Scheduled
Trading Day, without regard to after hours or any other trading outside of the regular trading session hours.
"Scheduled Trading Day" means any day on which each Exchange and Related Exchange are scheduled
to be open for trading for their respective regular trading sessions.
"Trading Disruption" means any suspension of, or limitation imposed on, trading by the Exchange or
Related Exchange or otherwise and whether by reason of movements in price exceeding limits permitted by the
Exchange or Related Exchange or otherwise (i) relating to securities that comprise 20 per cent or more of the level
of the Reference Index, or (ii) in futures or options contracts relating to the Reference Index on any Related
Exchange.
"Valuation Time" means in relation to each constituent of the Reference Index, the close of trading on the
Exchange on which such constituent is traded or, following a Disrupted Day, the time the Calculation Agent
considers (in its sole discretion) to be the regular close of trading on the Exchange.
Adjustments to the Reference Index
If the Reference Index is (i) not calculated and announced by the Index Calculation Agent but is calculated
and announced by a successor sponsor acceptable to the Calculation Agent, or (ii) replaced by a successor index
18

using, in the determination of the Calculation Agent, the same or a substantially similar formula for and method of
calculation as used in the calculation of the Reference Index, then in each case, that reference index (the "Successor
Index") will be deemed to be the Reference Index and the Calculation Agent shall notify the Trustee (as defined in
the accompanying Prospectus) and the Company of that determination as soon as reasonably practicable thereafter.
Discontinuance of the Reference Index
If (i) on or prior to the Valuation Date, the Index Calculation Agent announces that it will make a material
change in the formula for or the method of calculating the Reference Index or in any other way materially modifies
the Reference Index (other than a modification prescribed in that formula or method to maintain the Reference Index
in the event of changes in constituent stock and capitalization and other routine events) (an "Index Modification"),
or permanently cancels the Reference Index and no Successor Index exists (an "Index Cancellation"), or (ii) on the
Valuation Date, the Index Calculation Agent fails to calculate and announce the Reference Index (an "Index
Disruption" and, together with an Index Modification and an Index Cancellation, each an "Index Adjustment
Event"), then the Calculation Agent shall determine if such Index Adjustment Event has a material effect on the
value of the Securities and, if so, shall calculate the Index Level for the Reference Index, using in lieu of a published
level for the Reference Index, the level for the Reference Index as at the Valuation Time on the Valuation Date as
determined by the Calculation Agent in accordance with the formula for and method of calculating the Reference
Index last in effect prior to the change, failure or cancellation, but using only those securities that comprised the
Reference Index immediately prior to that Index Adjustment Event.
Events of Default and Acceleration
In case an Event of Default (as described under "Description of Notes Events of Default" in the
accompanying Prospectus) with respect to any Securities has occurred and is continuing, the amount payable to a
beneficial owner of a Security upon any acceleration permitted by the Securities, with respect to each Security, will
be equal to the Redemption Amount, calculated as though the date of acceleration were the Maturity Date of the
Securities and using such valuation date as the Calculation Agent shall determine in its sole discretion. See "
Calculation and Payment of the Redemption Amount" in this pricing supplement.
Depository
Book-Entry Only Securities
Upon issuance, the Securities will be issued in book-entry form and will be represented by fully registered
global securities ("Book Entry Securities"). Each Book Entry Security will be held by, or on behalf of, CDS or such
other entity designated in writing by the Company to act as depository. The Book Entry Securities will be registered
in the name of CDS or its nominee. Except as described below under " Exchange for Securities in Certificated
Form" in this pricing supplement, no Book Entry Security may be transferred except as a whole by the depository to
a nominee of the depository or by a nominee of the depository to the depository, or another nominee of the
depository, or by the depository or any such nominee to a successor of the depository, or a nominee of the successor.
Ownership of the Securities will be constituted through beneficial interests in the Book Entry Securities,
and will be represented through book-entry accounts of institutions, as direct and indirect participants of the
depository, acting on behalf of the beneficial owners of such Securities. Each purchaser of a Security represented by
a Book Entry Security will receive a customer confirmation of purchase from the selling agent from whom the
Securities are purchased in accordance with practices and procedures of such selling agent.
CDS Procedures
The following is based on information provided by CDS:
Upon the issuance by the Company of Book Entry Securities represented by a certificate in global form (a
"Global Security"), the depository will credit, on its book-entry registration and transfer system, the respective
principal amounts of the Book Entry Securities represented by such Global Security to the accounts of its
participants. The accounts to be credited shall be designated by the agents of such Book Entry Securities, or the
Company, if such Book Entry Securities are offered and sold directly by the Company, as the case may be.
19

Ownership of beneficial interests in a Global Security will be limited to participants or persons that hold interests
through participants. Ownership of beneficial interests in Book Entry Securities represented by a Global Security or
Global Securities will be shown on, and the transfer of that ownership will be effected only through, records
maintained by the depository (with respect to interests of participants in the depository), or by participants in the
depository or persons that may hold interests through such participants (with respect to persons other than
participants in the depository).
So long as the depository for a Global Security, or its nominee, is the registered owner of the Global
Security, the depository or its nominee, as the case may be, will be considered the sole owner or holder of the Book
Entry Securities represented by such Global Security. Except as provided below, owners of beneficial interests in
Book Entry Securities represented by such Global Security or Global Securities will not be entitled to have Book
Entry Securities represented by such Global Security registered in their names, will not receive or be entitled to
receive physical delivery of Book Entry Securities in definitive form and will not be considered the registered
owners or holders thereof.
Accordingly, each person owning a beneficial interest in a Global Security must rely on the procedures of
the depository and, if such person is not a participant, on the procedures of the participant through which such
person owns its interest, to exercise any rights of a holder under a Global Security. The Company understands that
under existing policies of the depository and industry practices, if the Company requests any action of holders or if
an owner of a beneficial interest in such a Global Security desires to give any notice or take any action which a
holder is entitled to give or take under a Global Security, the depository would authorize the participants holding the
relevant beneficial interests to give such notice or take such action. Any beneficial owner that is not a participant
must rely on the contractual arrangements it has directly, or indirectly through its financial intermediary, with a
participant to give such notice or take such action.
Payments of the Redemption Amount on the Book Entry Securities represented by a Global Security
registered in the name of the depository or its nominee will be made by the Company (or a paying agent, if specified
by the Company) to the depository or its nominee, as the case may be, as the registered owner of a Global Security.
None of the Company, the paying agent (if any) or any other agent of the Company will have any responsibility or
liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a
Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership
interests. Except in the circumstance described in the following paragraph, the Company expects that the depository
or its nominee, upon receipt of any payment of the Redemption Amount on a Global Security will immediately
credit the accounts of the related participants with payment in amounts proportionate to their respective holdings in
principal amount of beneficial interests in such Global Security as shown on the records of the depository. The
Company also expects that payments by participants to owners of beneficial interests in a Global Security will be
governed by standing customer instructions and customary practices as is now the case with securities held for the
accounts of customers in bearer form or registered in "street name" and will be the responsibility of such
participants.
Exchange for Securities in Certificated Form
If an Event of Default has occurred or if the depository is at any time unwilling or unable to continue as
depository for the Securities and a successor depository is not appointed by the Company within 60 days, the
Company will issue certificated Securities in exchange for all outstanding Global Securities. In addition, the
Company may at any time determine not to have Book Entry Securities represented by Global Securities and, in
such event, will issue certificated Securities in exchange for all Global Securities. In either instance, an owner of a
beneficial interest in a Global Security will be entitled to have certificated Securities equal in principal amount to
such beneficial interest registered in its name and will be entitled to physical delivery of such certificated Securities.
Such certificated Securities shall be registered in such name or names as the depository shall instruct the Company
or its paying agent. It is expected that such instructions may be based upon directions received by the depository
from participants with respect to beneficial interests in such Global Securities. Certificated Securities so issued will
be issued in such denominations as the Company may determine from time to time and will be issued in registered
form only. No service charge will be made for any transfer or exchange of such certificated Securities, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
20

THE REFERENCE INDEX

The Securities are designed to allow investors to participate in the movement of the value of the Reference
Index over the term of the Securities. The Reference Index is described in the section below.
The Index Calculation Agent has no obligations relating to the Securities or amounts to be paid to you,
including any obligation to take the needs of the Company or of beneficial owners of the Securities into
consideration for any reason. The Index Calculation Agent will not receive any of the proceeds of the offering of
the Securities and is not responsible for, and has not participated in, the offering of the Securities and is not
responsible for, and will not participate in, the determination or calculation of the amount receivable by beneficial
owners of the Securities.
All disclosure contained in this pricing supplement regarding the Reference Index, including, without
limitation, its make-up, method of calculation and changes in its components, unless otherwise stated, has been
derived from the Stock Market Indices Data Book published by NKS and other publicly available sources. The
information reflects the policies of NKS as stated in these sources and the policies are subject to change at the
discretion of NKS. None of the Company, the Guarantor nor the Agents assume any responsibility for the accuracy
or completeness of that information.
The Reference Index is a stock index calculated, published and disseminated by NKS that measures the
composite price performance of selected Japanese stocks. The Reference Index is currently based on 225 underlying
stocks trading on the Tokyo Stock Exchange (the "Tokyo Exchange") and represents a broad cross-section of
Japanese industry. All 225 of the stocks underlying the Reference Index are stocks listed in the First Section of the
Tokyo Exchange. Stocks listed in the First Section are among the most actively traded stocks on the Tokyo
Exchange. Futures and options contracts on the Reference Index are traded on the Singapore International Monetary
Exchange, the Osaka Securities Exchange and the Chicago Mercantile Exchange.
The Reference Index is a modified, price-weighted index. Each stock's weight in the Reference Index is
based on its price per share rather than the total market capitalization of the issuer. NKS calculates the Reference
Index by multiplying the per share price of each underlying stock by the corresponding weighting factor for that
underlying stock (a "Weight Factor"), calculating the sum of all these products and dividing that sum by a divisor.
The divisor, initially set on May 16, 1949 at 225, was 24.293 as of May 2, 2007, and is subject to periodic
adjustments as set forth below. Each Weight Factor is computed by dividing 50 by the par value of the relevant
underlying stock, so that the share price of each underlying stock when multiplied by its Weight Factor corresponds
to a share price based on a uniform par value of 50. Each Weight Factor represents the number of shares of the
related underlying stock which are included in one trading unit of the Reference Index. The stock prices used in the
calculation of the Reference Index are those reported by a primary market for the underlying stocks, which is
currently the Tokyo Exchange. The level of the Reference Index is calculated once per minute during Tokyo
Exchange trading hours. The Reference Index does not reflect a reinvestment of dividend payments on the
underlying stocks.
In order to maintain continuity in the level of the Reference Index in the event of certain changes due to
non-market factors affecting the underlying stocks, such as the addition or deletion of stocks, substitution of stocks,
stock dividends, stock splits or distributions of assets to stockholders, the divisor used in calculating the Reference
Index is adjusted in a manner designed to prevent any instantaneous change or discontinuity in the level of the
Reference Index. The divisor remains at the new value until a further adjustment is necessary as the result of
another change. As a result of each change affecting any underlying stock, the divisor is adjusted in such a way that
the sum of all share prices immediately after the change multiplied by the applicable Weight Factor and divided by
the new divisor, i.e., the level of the Reference Index immediately after the change, will equal the level of the
Reference Index immediately prior to the change.
Underlying stocks may be deleted or added by NKS. However, to maintain continuity in the Reference
Index, the policy of NKS is generally not to alter the composition of the underlying stocks except when an
underlying stock is deleted in accordance with the following criteria. Any stock becoming ineligible for listing in
the First Section of the Tokyo Exchange due to any of the following reasons will be deleted from the underlying
stocks: bankruptcy of the issuer; merger of the issuer into, or acquisition of the issuer by, another company;
delisting of the stock or transfer of the stock to the "Seiri-Post" because of excess debt of the issuer or because of
any other reason; or transfer of the stock to the Second Section of the Tokyo Exchange. Upon deletion of a stock
21

from the Reference Index, NKS will select, in accordance with certain criteria established by it, a replacement for
the deleted underlying stock. In an exceptional case, a newly listed stock in the First Section of the Tokyo Exchange
that is recognized by NKS to be representative of a market may be added to the underlying stocks. As a result, an
existing underlying stock with low trading volume and not representative of a market will be deleted.
The Tokyo Stock Exchange
The Tokyo Exchange is one of the world's largest securities exchanges in terms of market capitalization.
Trading hours are currently from 9:00 a.m. to 11:00 a.m. and from 12:30 p.m. to 3:00 p.m. (Tokyo time), Monday
through Friday.
Due to the time zone difference, on any normal trading day the Tokyo Exchange will close prior to the
opening of business in London on the same calendar day. Therefore, the closing level of the Reference Index on a
trading day will generally be available in London by the opening of business on the same calendar day.
The Tokyo Exchange has adopted certain measures, including daily price floors and ceilings on individual
stocks, intended to prevent any extreme short-term price fluctuations resulting from order imbalances. In general,
any stock listed on the Tokyo Exchange cannot be traded at a price lower than the applicable price floor or higher
than the applicable price ceiling. These price floors and ceilings are expressed in absolute Japanese yen, rather than
percentage limits based on the closing price of the stock on the previous trading day. In addition, when there is a
major order imbalance in a listed stock, the Tokyo Exchange posts a "special bid quote" or a "special asked quote"
for that stock at a specified higher or lower price level than the stock's last sale price in order to solicit counterorders and balance supply and demand for the stock. Prospective investors should also be aware that the Tokyo
Exchange may suspend the trading of individual stocks in certain limited and extraordinary circumstances,
including, for example, unusual trading activity in that stock. As a result, changes in the Reference Index may be
limited by price limitations or special quotes, or by suspension of trading, on individual stocks which comprise the
Reference Index, and these limitations may, in turn, adversely affect the value of the Securities.
The Nikkei 225 Index
The following table sets out the top ten companies, their industry sectors and respective percentage
weightings in the Nikkei 225 Index as of April 27, 2007.
Company

Percentage Weighting

Industry Sector

Fanuc Ltd.

2.79%

Industrial

Kyocera Corp.

2.76%

Industrial

Advantest Corp.

2.53%

Industrial

TDK Corp.

2.45%

Technology

Canon Inc.

2.40%

Technology

KDDI Corp.

2.23%

Communications

Tokyo Electron Ltd.

2.00%

Technology

Honda Motors Co., Ltd.

1.95%

Consumer, Cyclical

Fast Retailing Co Ltd.

1.95%

Consumer, Cyclical

Softbank Corp.

1.84%

Communications

Source: Bloomberg

22

The following table and chart set out the nine main industry sectors of companies that comprise the Nikkei
225 Index and the respective percentage weighting of each as of April 27, 2007.
Industry Sector

Percentage Weighting

Basic Material

6.32%

Communications

7.45%

Consumer, Cyclical

21.37%

Consumer, Non-cyclical

15.99%

Energy

1.03%

Finanical

9.01%

Industrial

28.31%

Technology

9.48%

Utilities

0.51%

Source: Bloomberg

Historical Data on the Reference Index

The following table sets forth the closing values of the Reference Index on the last business day of each
year from 1967 through 2006. The historical performance of the Reference Index should not be taken as an
indication of future performance and no assurance can be given that the value of the Reference Index will not
decline and thereby reduce the Redemption Amount which may be payable to you.
Year-End Closing Values of the Reference Index
Year

Closing
Value

Year

Closing
Value

1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986

1,281
1,715
2,359
1,987
2,714
5,208
4,307
3,817
4,359
4,991
4,866
6,002
6,569
7,116
7,682
8,017
9,894
11,543
13,113
18,701

1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006

21,564
30,159
38,916
23,849
22,984
16,925
17,417
19,723
19,868
19,361
15,259
13,842
18,934
13,786
10,543
8,579
10,677
11,489
16,111
17,225

23

The following table sets forth the closing value of the Reference Index at the end of each month, calculated
on a price return basis, in the period from January 1999 through April 2007. These historical data on the Reference
Index are not necessarily indicative of the future performance of the Reference Index or what the value of the
Securities may be. Any historical upward or downward trend in the level of the Reference Index during any period
set forth below is not an indication that the Reference Index is more or less likely to increase or decrease at any time
during the term of the Securities.

January...........
February.........
March.............
April...............
May................
June................
July ................
August............
September ......
October ..........
November.......
December .......

1999
14,499
14,368
15,837
16,702
16,112
17,530
17,862
17,437
17,605
17,942
18,558
18,934

2000
19,540
19,960
20,337
17,974
16,332
17,411
15,727
16,861
15,747
14,540
14,649
13,786

2001
13,844
12,884
13,000
13,934
13,262
12,969
11,861
10,714
9,775
10,366
10,697
10,543

2002
9,998
10,588
11,025
11,493
11,764
10,622
9,878
9,619
9,383
8,640
9,216
8,579

2003
8,340
8,363
7,973
7,831
8,425
9,083
9,563
10,344
10,219
10,560
10,101
10,677

2004
10,784
11,042
11,716
11,762
11,237
11,859
11,326
11,082
10,824
10,771
10,899
11,489

2005
11,388
11,741
11,669
11,009
11,277
11,584
11,900
12,414
13,574
13,606
14,872
16,111

2006
16,650
16,205
17,060
16,906
15,467
15,505
15,457
16,141
16,127
16,399
16,274
17,225

2007
17,383
17,604
17,287
17,400

The following graph sets forth the historical performance of the Reference Index presented in the preceding
table. The Reference Index is a price return index and accordingly does not include dividends or the reinvestment
thereof. Past movements of the Reference Index are not necessarily indicative of the future Reference Index values.
On May 2, 2007, the closing value of the Reference Index was 17,394.92.

25,000
20,000
15,000
10,000
5,000

Jan-99
Apr-99
Jul-99
Oct-99
Jan-00
Apr-00
Jul-00
Oct-00
Jan-01
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07

Source: Bloomberg
License Agreement
NKS and the Company have entered into a non-exclusive license agreement providing for the license to the
Company, in exchange for a fee, of a right to use indices owned and published by NKS in connection with some
securities, including the Securities.
NKS is under no obligation to continue the calculation and dissemination of the Reference Index. The
Securities are not sponsored, endorsed, sold or promoted by NKS. No inference should be drawn from the
information contained in this pricing supplement that NKS makes any representation or warranty, implied or
express, to the Company, the holder of the Securities or any member of the public regarding the advisability of
24

investing in securities generally or in the Securities in particular or the ability of the Securities to track general stock
market performance. NKS has no obligation to take the needs of the Company or the holders of the Securities into
consideration in determining, composing or calculating the Reference Index. NKS is not responsible for, and has
not participated in the determination of the timing of, prices for, or quantities of, the Securities to be issued or in the
determination or calculation of the equation by which the Securities are to be settled in cash. NKS has no obligation
or liability in connection with the administration or marketing of the Securities.
The use of and reference to the Reference Index in connection with the Securities have been consented to
by NKS, the publisher of the Reference Index.
None of the Company, the Calculation Agent and NKS accepts any responsibility for the calculation,
maintenance or publication of the Reference Index or any successor index. NKS disclaims all responsibility for any
errors or omissions in the calculation and dissemination of the Reference Index or the manner in which the
Reference Index is applied in determining the Reference Index Starting Value, the Reference Index Ending Value or
any Redemption Amount.
INCOME TAX CONSIDERATIONS APPLICABLE TO CANADIAN RESIDENT INVESTORS
In the opinion of Davies Ward Phillips & Vineberg LLP, the following is, as of the date hereof, a summary
of the principal Canadian federal income tax considerations generally applicable to the acquisition, holding and
disposition of Securities by a Securityholder pursuant to this offering. This summary is applicable to a
Securityholder who is an individual (other than a trust) and who, for the purposes of the Income Tax Act (Canada)
(the "Act"), is a resident of Canada and deals at arm's length with and is not affiliated with the Company. This
summary further assumes that the Securityholder does not hold the Securities in the course of carrying on a business
and that the Securities are acquired by the Securityholder without the intention or secondary intention of selling
them prior to the Maturity Date and that the Securities are therefore capital property to the Securityholder. A
Securityholder who is not a trader or dealer in securities may consider making a one-time election to treat the
Securities, and all other Canadian securities, as defined in the Act, owned by the Securityholder in that or
subsequent taxation years, as capital property.
This summary is based on the current provisions of the Act and the regulations thereunder, the published
administrative practices of the Canada Revenue Agency ("CRA"), and all specific proposals to amend the Act and
regulations thereunder publicly announced by the Minister of Finance (Canada) prior to the date hereof (such
proposals referred to as the "Tax Proposals"). This summary does not otherwise take into account or anticipate any
changes in law or CRA's administrative practices, whether by legislative, governmental or judicial action, nor does it
take into account provincial, territorial or foreign income tax legislation or considerations.
This summary is not exhaustive of all possible Canadian federal income tax considerations applicable to an
investment in Securities. Accordingly, this summary is of a general nature only and is not intended to be legal or tax
advice to any Securityholder. Securityholders are urged to consult their own tax advisors for advice with respect to
the potential income tax consequences to them of an investment in Securities, having regard to their particular
circumstances and the uncertainties with respect to the operation of the Act as noted below.
Holding Securities
No interest is stipulated to be payable in respect of the Securities and the amount payable in respect of the
Securities will depend on the Redemption Amount at the Maturity Date. Accordingly, the Securities will be
prescribed debt obligations ("PDOs") for purposes of the rules in the Act. These rules potentially require a holder
thereof to include in the holder's income for each taxation year during which the holder holds the PDO an amount of
notional interest which is deemed to accrue on the PDO. However, a Securityholder should generally be able to take
the position in applying the prescribed debt obligation rules that the Securityholder's entitlement to interest or any
other amount at all times prior to the Valuation Date is indeterminate and therefore that it is not possible to compute
any maximum interest or other amount payable to the Securityholder in respect of any particular taxation year as
required under the rules. Accordingly, a Securityholder should generally be able to take the position that no amount
of notional interest is required to be included in computing income under the rules for any taxation year during
which the Securityholder holds, and has not disposed of, the Security.

25

Payment of the Redemption Amount

Upon the redemption or payment of a Security on or prior to the Maturity Date, the Securityholder will be
required to include in computing income for the taxation year of redemption or payment, the amount by which the
Redemption Amount exceeds the Issue Price. If the Redemption Amount is less than the Issue Price and the
Security is held by the Securityholder as capital property, the Securityholder will realize a capital loss on the
redemption or payment of the Security. See below under this section entitled "Disposition of Securities Prior to
Maturity" for the discussion of the tax consequences of a capital loss.
Disposition of Securities Prior to Maturity
The CRA has not expressed any opinion on whether amounts received by a Securityholder on a sale or
other disposition of a Security prior to the Maturity Date would be considered to be on capital account or income
account. However, if a Security is held as capital property as assumed above, on the disposition or deemed
disposition of the Security (other than upon the redemption or payment of the Security on or prior to the Maturity
Date, the Securityholder should realize a capital gain (or capital loss) equal to the amount by which the proceeds of
disposition determined for tax purposes net of any reasonable costs of disposition exceed (or are exceeded by) the
adjusted cost base of the Security to the Securityholder. Securityholders who dispose of a Security prior to the
Maturity Date should consult their own tax advisors with respect to such disposition.
One-half of any capital gain (a "taxable capital gain") realized on a disposition of a Security will be
included in the Securityholder's income and one-half of any capital loss (an "allowable capital loss") realized on a
disposition of a Security may be deducted from taxable capital gains in accordance with the provisions of the Act.
Capital gains realized by an individual may give rise to alternative minimum tax under the Act.
FIE Legislation
A Security will not constitute a "participating interest" as defined for the purposes of the Tax Proposals
relating to foreign investment entities (the "FIE Legislation"). As such, the FIE Legislation will not be applicable to
a Securityholder in respect of the Securityholder's investment in a Security.
CIRCULAR 230
Any discussions of United States federal income tax matters contained in this pricing supplement or the
accompanying short form base shelf prospectus (a) were not intended or written to be legal or tax advice to any
person and were not intended or written to be used, and they cannot be used, by any person for the purpose of
avoiding any tax-related penalties that may be imposed on such person, and (b) were written to support the
promotion or marketing of the Securities by the Company and the Agents. Each person considering an investment
in the Securities should seek advice based on their particular circumstances from an independent tax advisor.
In addition to the foregoing, notwithstanding anything to the contrary contained herein, a prospective
investor (and each employee, representative, or other agent of a prospective investor) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of the Securities and all materials of any
kind that are provided to the prospective investor relating to such tax treatment and tax structure (as such terms are
defined in Treasury Regulation section 1.6011-4). This authorization of tax disclosure is retroactively effective to
the commencement of discussions between either the Company or the Agents or their respective representatives and
any prospective investor regarding an investment in the Securities.
ELIGIBILITY FOR INVESTMENT
In the opinion of Davies Ward Phillips & Vineberg LLP, the Securities when issued will be qualified
investments for trusts governed by registered retirement savings plans, registered retirement income funds,
registered education savings plans and deferred profit sharing plans within the meaning of the Income Tax Act
(Canada) (other than a deferred profit sharing plan to which payments are made by the Company or an employer
with which the Company does not deal at arm's length).

26

USE OF PROCEEDS AND HEDGING

The net proceeds from the sale of the Securities will be used as described under "Use of Proceeds" in the
accompanying Prospectus and to hedge market risks of the Company associated with its obligation to pay the
Redemption Amount.
PLAN OF DISTRIBUTION
The Securities are being offered by ML Canada and National Bank Financial Inc. (collectively, the
"Agents") under an agreement (the "Dealer Agreement") dated June 30, 2006, as the same may be amended and
supplemented from time to time. See "Plan of Distribution" in the accompanying Prospectus. The Agents have
agreed to offer the Securities for sale in Canada, as agents of the Company, on a best efforts basis, if, as and when
issued by the Company. National Bank Financial Inc. will receive an agency fee equal to $4.00 for each Security
sold. In addition, upon completion of the issuance and sale by the Company of the Securities, ML Canada will pay
National Bank Financial Inc. a one-time fee equal to 0.10% of the principal amount of Securities issued and sold
hereunder for acting as independent underwriter. ML Canada will not receive a fee in connection with its acting as
an Agent for the distribution of the Securities. The Agents will be reimbursed for out-of-pocket expenses incurred
by them. The Agents may form a selling group including other qualified investment dealers and determine the fee
payable to the members of that group, which fee will be paid out of the Agents' fees. While the Agents have agreed
to use their best efforts to sell the Securities offered hereby, the Agents will not be obligated to purchase Securities
which are not sold.
From time to time, the Company may issue and sell other securities described in the accompanying
Prospectus, and the amount of Securities that the Company may offer and sell under this pricing supplement may be
reduced as a result of those sales.
ML Canada intends to buy and sell the Securities to create a daily secondary market for the holders of the
Securities. However, ML Canada will not be obligated to engage in any of those market activities or continue them
once it has started. Neither the Company nor the Agents make any representation or prediction as to the direction or
magnitude of any effect that the transactions described above may have on the price of the Securities. In addition,
neither the Company nor the Agents make any representation that the Agents will engage in any of those
transactions or that those transactions, once commenced, will not be discontinued without notice.
ML Canada was involved in the decision to distribute Securities hereunder. ML Canada is an affiliate of
the Company and both ML Canada and the Company are indirect wholly-owned subsidiaries of the Guarantor.
Consequently, the Company is a "related issuer" and is also a "connected issuer" of ML Canada within the meaning
of the securities legislation of each of the provinces of Canada in connection with the offering of Securities under
this pricing supplement and accompanying Prospectus. National Bank Financial Inc., the independent Agent, has
performed due diligence in connection with the offering of the Securities and participated, together with ML
Canada, in the structuring and pricing of the Securities.
The Agents propose to offer the Securities initially at the offering price specified on the cover page of this
pricing supplement. After the Agents have made a reasonable effort to sell all of the Securities at the price specified
on the cover page, the offering price may be decreased and may be further changed from time to time to an amount
not greater than that set out on the cover page.
DOCUMENTS INCORPORATED BY REFERENCE
This pricing supplement is deemed to be incorporated by reference into the Prospectus as of May 1, 2007
and only for the purposes of the Securities issued hereunder. Subject to the MRRS Decisions, under the Mutual
Reliance Review System, referred to in the accompanying Prospectus (which exempt the Company from
incorporating by reference herein certain documents incorporated by reference into or attached as exhibits to the
documents listed below), the following documents (which are not specifically listed in the Prospectus or any
amendment or supplement delivered therewith) filed by the Guarantor or the Company, as applicable, with the
securities commission or similar regulatory authority in each of the provinces of Canada since the date of the
Prospectus (other than information in the documents that is deemed under applicable law not to be filed) are
specifically incorporated by reference into, and form an integral part of, the Prospectus:
27

(a)

the annual report on Form 10-K of the Guarantor for the year ended December 29, 2006;

(b)

the 2007 Proxy Statement of the Guarantor dated March 16, 2007;

(c)

the current report on Form 8-K of the Guarantor dated April 19, 2007 announcing its results of
operations for the three-month period ended March 30, 2007;

(d)

the current report on Form 8-K of the Guarantor dated April 25, 2007 announcing that it, through
its subsidiary Merrill Lynch Japan Finance Co., Ltd., agreed to purchase 350 billion
(approximately U.S. $3.0 billion) in perpetual convertible preferred shares of its investment
banking client Resona Holdings, Inc.;

(e)

the current report on Form 8-K of the Guarantor dated April 30, 2007 announcing that its board of
directors has authorized the repurchase of up to U.S.$6 billion of the Guarantor's outstanding
common shares;

(f)

the material change report of the Company dated February 23, 2007 announcing the issuance of
Cdn. $823,100 aggregate principal amount of Merrill Lynch LPX Listed Private Equity Principal
Protected (CAD) Notes, Series 1, US$1,469,000 aggregate principal amount of Merrill Lynch
LPX Listed Private Equity Principal Protected (USD) Notes, Series 1, Cdn. $6,769,300 aggregate
principal amount of Global Equity Optimization Principal Protected Notes, Series 1, Cdn.
$7,444,200 aggregate principal amount of Merrill Lynch Global Equity Accelerator (CAD)
Securities, Series 5 and US$6,190,200 aggregate principal amount of Merrill Lynch Global Equity
Accelerator (USD) Securities, Series 5;

(g)

the material change report of the Company dated March 22, 2007 announcing the issuance of
Cdn. $9,772,000 aggregate principal amount of Merrill Lynch Global Equity Accelerator
Securities, Series C-1; and

(h)

the material change report of the Company dated April 2, 2007 announcing the issuance of
Cdn.$7,482,600 aggregate principal amount of Merrill Lynch Claymore International
Fundamental Index Accelerator (CAD) Securities, Series 2 and US$2,627,500 aggregate principal
amount of Merrill Lynch Claymore International Fundamental Index Accelerator (USD)
Securities, Series 2.

28

Merrill Lynch Canada Finance Company

Merrill Lynch Japanese Equity Accelerator Securities, Series 3
due May 3, 2013
$100 per Security

PRICING SUPPLEMENT

Merrill Lynch Canada Inc.

May 2, 2007

29

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.
This short form base shelf prospectus has been filed under legislation in each of the provinces of Canada that permits certain information about
these securities to be determined after this prospectus has become final and that permits the omission from this prospectus of that information.
The legislation requires the delivery to purchasers of a prospectus supplement containing the omitted information within a specified period of
time after agreeing to purchase any of these securities.
This short form base shelf prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully
offered for sale and therein only by persons permitted to sell such securities. The securities to be offered hereunder have not been and will not be
registered under the United States Securities Act of 1933, as amended (the "1933 Act"), and may not be offered, sold or delivered within the
United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the 1933 Act). See "Selling Restrictions".
Information has been incorporated by reference in this short form base shelf prospectus from documents filed with securities commissions or
similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the
Secretary, Merrill Lynch Canada Finance Company or from the Secretary, Merrill Lynch & Co., Canada Ltd., each at BCE Place, Suite 400,
181 Bay Street, Toronto, Ontario M5J 2V8, telephone (416) 369-3907, and are also available electronically at www.sedar.com. For the purpose
of the Province of Qubec, this simplified prospectus contains information to be completed by consulting the permanent information record. A
copy of the permanent information record may be obtained from the Secretary, Merrill Lynch Canada Finance Company or from the Secretary,
Merrill Lynch & Co., Canada Ltd. at the above-mentioned address and telephone number and is also available electronically at www.sedar.com.
Short Form Base Shelf Prospectus
New Issue

June 30, 2006

Merrill Lynch Canada Finance Company

and
Merrill Lynch & Co., Canada Ltd.
Cdn. $5,000,000,000
Medium Term Notes
(Unsecured)
Unconditionally guaranteed as to payment of
all amounts payable thereunder by
Merrill Lynch & Co., Inc.
Merrill Lynch Canada Finance Company ("ML Finance") has its registered and head office at Suite 800, 1959 Upper Water Street, Halifax, Nova
Scotia B3J 2X2, and its principal place of business is BCE Place, Suite 400, 181 Bay Street, Toronto, Ontario M5J 2V8. Merrill Lynch & Co.,
Canada Ltd. ("ML&Co Canada", and together with ML Finance the "Issuers") has its registered office, head office and principal place of business
at BCE Place, Suite 400, 181 Bay Street, Toronto, Ontario M5J 2V8. The Issuers may offer to the public from time to time, during the 25-month
period that this short form base shelf prospectus, including any amendments hereto, (the "Prospectus") remains valid up to Cdn. $5,000,000,000
aggregate principal amount, or the equivalent thereof in one or more non-Canadian currencies or currency units, of their medium term notes (the
"Notes"). The Notes of an Issuer will be issued in one or more tranches of one or more series of debt securities under an indenture dated as of
June 30, 2006, as the same may be amended and supplemented from time to time (the "Indenture" of such Issuer and, together with the Indenture
of the other Issuer, the "Indentures"), between such Issuer, Merrill Lynch & Co., Inc. (the "Guarantor") and CIBC Mellon Trust Company, as
trustee (including any successor with respect to one or more series of Notes pursuant to the terms of the relevant Indenture, the "Trustee"). The
Indenture of ML Finance is substantially similar to the Indenture of ML&Co Canada. As used in this Prospectus, "Issuer" means ML Finance or
ML&Co Canada, as the case may be, as issuer of the relevant Notes offered pursuant to an applicable pricing supplement. Each Note will mature
on a day 12 months or more from the date of issue, as specified in the applicable pricing supplement. Each Note may be subject to redemption at
the option of the Issuer, in whole or in part, prior to its stated maturity date, as specified in the applicable pricing supplement. The Notes will be
issued under the Indenture as either direct, unsecured and unsubordinated senior indebtedness of the Issuer ranking pari passu with all other
present and future unsecured and unsubordinated indebtedness of the Issuer (the "Senior Notes"), or as direct, unsecured and subordinated
indebtedness of the Issuer that is subordinated as described below to all existing and future indebtedness of the Issuer for money borrowed,
except for such indebtedness that is by its terms subordinated to or ranks pari passu with such notes (the "Subordinate Notes"). Unless otherwise
specifically stated to the contrary in a pricing supplement, an Issuer shall have no liability or obligation with respect to any Notes issued by the
other Issuer. The Issuer's payment obligations under the Notes will be unconditionally guaranteed by the Guarantor, a Delaware corporation,

when and as the same become payable (the "Guarantee"). The obligations of the Guarantor under the Guarantee of the Senior Notes will rank pari
passu with all other present and future unsecured and unsubordinated indebtedness of the Guarantor. The obligations of the Guarantor under the
Guarantee of the Subordinate Notes will be subordinated, to the extent provided below, in right of payment to the prior payment in full of all
senior indebtedness of the Guarantor. See "Description of the Guarantees".
The specific variable terms of the Notes to be offered and sold hereunder will be set out in pricing supplements which will be delivered to
purchasers together with this Prospectus in conjunction with the sale of the Notes. The Issuers reserve the right to set forth in a pricing
supplement specific variable terms that are not within the options and parameters set forth herein. Unless otherwise specified in the applicable
pricing supplement, there is no market through which these securities may be sold and purchasers may not be able to resell securities purchased
under this Prospectus. This may affect the pricing of securities in the secondary market, the transparency and availability of trading prices, the
liquidity of the Notes, and the extent of issuer regulation. See "Risk Factors".
In the opinion of Canadian counsel, the Notes offered hereby, if issued on the date of this Prospectus, would qualify as eligible investments and
would not be precluded as investments pursuant to certain Canadian statutes set out under "Eligibility for Investment".

Rates on Application

The Notes may be offered by Merrill Lynch Canada Inc. ("ML Canada") and by one or more of BMO Nesbitt Burns Inc., Canaccord Capital
Corporation, CIBC World Markets Inc., Desjardins Securities Inc., Edward Jones, HSBC Securities (Canada) Inc., Laurentian Bank Securities
Inc., National Bank Financial Inc., RBC Dominion Securities Inc., Scotia Capital Inc., and TD Securities Inc. pursuant to the Dealer Agreement
referred to under "Plan of Distribution", or by such other investment dealers as may be selected from time to time by the Issuers (collectively, the
"Dealers" or, individually, a "Dealer"). The Dealers shall act as an Issuer's agents or as principals, as the case may be, subject to confirmation by
the Issuer pursuant to the Dealer Agreement. The Notes may be offered at par or at a discount or premium. The rate of commission payable in
connection with sales of the Notes by an Issuer through the Dealers acting as agents will be determined pursuant to the Dealer Agreement. An
Issuer may also sell Notes to any Dealer, as principal, at such prices and with such commissions as may be agreed upon by the Issuers and such
Dealer, for resale to the public at prices to be negotiated by the Dealer with each purchaser. Such resale prices may vary during the distribution
period and as between purchasers. The Notes may also be offered directly by an Issuer to purchasers pursuant to applicable statutory exemptions
at such prices and on such terms as may be negotiated by the Issuer with any purchaser. No commission will be payable on Notes sold directly to
purchasers by the Issuer.
Each of the Issuers and ML Canada are indirect wholly-owned subsidiaries of the Guarantor. Consequently, each of the Issuers is a
"connected issuer" and a "related issuer" of ML Canada within the meaning of the securities legislation of each of the provinces of
Canada in connection with the offering of Notes under this Prospectus. See "Plan of Distribution".
JURISDICTION OF THE GUARANTOR
The Guarantor is incorporated under the laws of Delaware, a foreign jurisdiction, and it resides in, and has substantial assets located in, the
United States. Although the Guarantor has appointed the Issuers as its agents for service of process for certain securities law purposes in each of
the provinces of Canada, it may not be possible for investors to collect from the Guarantor judgments obtained in Canadian courts predicated on
the civil liability provisions of securities legislation or on the Guarantee. Judgments against the Guarantor may therefore have to be enforced in
the United States and may be subject to additional defences as a result.
The Issuers are not member institutions of the Canada Deposit Insurance Corporation and are not regulated as financial institutions in Canada. An
investment in the Notes is not a deposit.
The offering is subject to approval of certain legal matters on behalf of the Issuers by Davies Ward Phillips & Vineberg LLP, Toronto, on behalf
of the Guarantor by Sidley Austin LLP, New York, and on behalf of the Dealers by McMillan Binch Mendelsohn LLP, Toronto.

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TABLE OF CONTENTS
ELIGIBILITY FOR INVESTMENT.......................................................................................................................4
ML FINANCE........................................................................................................................................................4
ML&CO CANADA................................................................................................................................................4
THE GUARANTOR...............................................................................................................................................6
CREDIT RATINGS................................................................................................................................................6
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS ..........................................................................................7
USE OF PROCEEDS .............................................................................................................................................7
RISK FACTORS ....................................................................................................................................................8
DOCUMENTS INCORPORATED BY REFERENCE ............................................................................................9
DESCRIPTION OF THE NOTES.........................................................................................................................13
DESCRIPTION OF THE GUARANTEES............................................................................................................27
PLAN OF DISTRIBUTION..................................................................................................................................32
SELLING RESTRICTIONS .................................................................................................................................33
CIRCULAR 230 NOTICE ....................................................................................................................................34
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM........................................................................34
REGISTRAR, TRANSFER AND PAYING AGENT ............................................................................................34
LEGAL MATTERS..............................................................................................................................................34
PURCHASERS' STATUTORY RIGHTS .............................................................................................................34
CERTIFICATE OF THE ISSUERS AND THE GUARANTOR ..........................................................................C-1
CERTIFICATE OF THE DEALERS ..................................................................................................................C-3

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ELIGIBILITY FOR INVESTMENT

In the opinion of Davies Ward Phillips & Vineberg LLP, Toronto, counsel to the Issuers, and McMillan
Binch Mendelsohn LLP, Toronto, counsel to the Dealers, the Notes offered hereby, if issued on the date hereof,
would constitute eligible investments, without resort to the so-called "basket" provisions, or their purchase would
not be prohibited, in each case subject to general investment provisions, and in certain cases subject to prudent
investment requirements and to additional requirements relating to investment or lending policies or goals, under or
by the following statutes (and, where applicable, the regulations thereunder):
Insurance Companies Act (Canada)

an Act respecting insurance (Qubec)

(for an insurer, as defined therein, incorporated under
the laws of the Province of Qubec, other than a
guarantee fund)

Trust and Loan Companies Act (Canada)

Pension Benefits Standards Act, 1985
(Canada)
Loan and Trust Corporations Act (Ontario)

Supplemental Pension Plans Act (Qubec)

Pension Benefits Act (Ontario)

an Act respecting trust companies and savings

companies (Qubec) (for a trust company, as defined
therein, which invests its funds and funds received as
deposits, and a savings company, as defined therein,
investing its funds)

Trustee Act (Ontario)

The Pension Benefits Act (Manitoba)
The Pension Benefits Act, 1992
(Saskatchewan)

In the opinion of such counsel, the Notes offered hereby, if issued on the date hereof and if certain
minimum investment and distribution requirements were met and unless otherwise specified in the applicable
pricing supplement, would be qualified investments under the Income Tax Act (Canada) for a trust governed by a
registered retirement savings plan, a registered retirement income fund, a deferred profit sharing plan or a registered
education savings plan under the Income Tax Act (Canada) (other than a trust governed by a deferred profit sharing
plan to which contributions are made by the Issuer or an employer that does not deal at arm's length with the Issuer).
The Issuer will ensure that the investment and distribution requirements referred to above are met at all relevant
times. The Notes will be prohibited investments for a registered pension plan of the Issuer or of an employer
connected with the Issuer, or with which the Issuer does not deal at arm's length.
ML FINANCE
ML Finance is an unlimited liability company incorporated under the Companies Act (Nova Scotia). ML
Finance was incorporated on August 25, 1999 and has its registered office at Suite 800, 1959 Upper Water Street,
Halifax, Nova Scotia B3J 2X2 and its principal place of business at BCE Place, Suite 400, 181 Bay Street, Toronto,
Ontario M5J 2V8. ML Finance is an indirect wholly-owned subsidiary of the Guarantor.
The business of ML Finance is to make loans to or investments in, and to grant financial assistance by way
of guarantee or otherwise to, affiliates of the Guarantor. To that effect, ML Finance may borrow money in whatever
form and currency, issue bonds, debentures, commercial paper or other debt instruments in whatever form and in
any manner whatsoever, and it may secure any of its borrowings by pledging or granting a security interest in all or
any of its property or income. ML Finance has only minimal operations that are independent of the Guarantor.
ML&CO CANADA
ML&Co Canada was incorporated under the laws of Canada on December 22, 1953 and continued under
the laws of the Province of Ontario on December 28, 1983. ML&Co Canada is an indirect wholly-owned subsidiary
of the Guarantor. The registered and head office and principal place of business of ML&Co Canada is located at
Suite 400, 181 Bay Street, Toronto, Ontario M5J 2V8. The outstanding non-voting exchangeable shares of ML&Co
Canada are listed on the Toronto Stock Exchange under the symbol "MLC".

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ML&Co Canada is a holding company which holds directly or indirectly all of the voting securities of
Merrill Lynch Capital Canada Inc., a provider of third-party loans and credit, and Merrill Lynch Financial Assets
Inc. (formerly known as BULLS Offering Corporation), an issuer of asset backed securities. ML&Co Canada and its
parent company Merrill Lynch Canada Holdings Company own directly and indirectly all of the voting securities of
ML Canada. ML&Co Canada has only minimal operations that are independent of the Guarantor.
The Issuers raise funds under an unsecured and unsubordinated commercial paper program, guaranteed by
the Guarantor. The proceeds of the commercial paper issued by an Issuer are used for the Issuer's working capital
requirements (including on-lending of funds to ML Canada) and for general corporate purposes.
The following simplified organizational chart indicates the jurisdiction of the incorporation (or
amalgamation) or organization of, and the intercorporate relationships between, the Guarantor, the Issuers, ML
Canada and certain other subsidiaries of the Guarantor.

Merrill Lynch & Co., Inc.

(Delaware)
100%

Merrill Lynch Group, Inc.

(Delaware)
100%

Merrill Lynch Canada Holdings Company

(Nova Scotia)
100%

100%

Merrill Lynch & Co.,

Canada Ltd.
(Ontario)

75%
(direct
and
indirect)

Merrill Lynch Canada

Finance Company
(Nova Scotia)

25%
(indirect)

Merrill Lynch
Canada Inc.
(Canada)

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THE GUARANTOR
The Guarantor is a holding company that, through its subsidiaries and affiliates, provides investment,
financing, insurance and related services to individuals and institutions on a global basis through its broker dealer,
insurance and other financial services subsidiaries. Its principal subsidiaries include Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Merrill Lynch International, Merrill Lynch Capital Markets Bank Limited, Merrill Lynch
Government Securities, Inc., Merrill Lynch Capital Services, Inc., Merrill Lynch Investment Managers, L.P., Merrill
Lynch Investment Managers Limited, Merrill Lynch Bank USA, Merrill Lynch Bank & Trust Co., Merrill Lynch
International Bank Limited, Merrill Lynch Mortgage Capital Inc., Merrill Lynch Japan Securities Co., Ltd., Merrill
Lynch Life Insurance Company, ML Life Insurance Company of New York, Merrill Lynch Derivative Products AG
and ML IBK Positions, Inc. The services the Guarantor and its principal subsidiaries provide include:

Securities brokerage, trading, and underwriting;

Investment banking, strategic advisory services (including mergers and acquisitions) and other corporate
finance activities;

Wealth management products and services, including financial, retirement and generational planning;

Asset management and investment advisory and related record-keeping services;

Origination, brokerage, dealer and related activities in swaps, options, forwards, exchange-traded futures,
other derivatives, commodities and foreign exchange products;

Securities clearance, settlement financing services and prime brokerage;

Private equity and other principal investing activities;

Proprietary trading of securities, derivatives and loans;

Banking, trust and lending services, including deposit-taking, consumer and commercial lending, including
mortgage loans, and related services;

Insurance and annuities sales; and

Research across the following disciplines: global equity strategy and economics, global fixed income and
equity-linked research, global fundamental equity research and global wealth management strategy.
The Guarantor's principal executive office is located at 4 World Financial Center, New York, New York

10080.
CREDIT RATINGS
The Senior Notes issued under the Canadian medium term note program (the "MTN Program") of each
Issuer have been rated AA(low) by Dominion Bond Rating Service Limited ("DBRS"), A+ by Standard & Poor's
Rating Services, a division of The McGraw-Hill Companies, Inc. ("S&P"), Aa3 by Moody's Investors Service, Inc.
("Moody's") and AA by Fitch Ratings Ltd. ("Fitch") (each a "Rating Agency"). An AA(low) rated note by DBRS is
of superior credit quality, and protection of interest and principal is considered high. Notes with an A+ rating by
S&P have strong financial security characteristics, but are somewhat more likely to be affected by adverse business
conditions than are notes with higher ratings. An Aa3 rated note by Moody's is judged to be of high quality by all
standards. An AA rated note by Fitch is considered to be of investment quality and is considered to have a very
low expectation of credit risk. The Subordinate Notes issued under the MTN Program have been rated A(high) by

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DBRS, A by S&P, A1 by Moody's and A+ by Fitch. An A(high) rating by DBRS denotes long term debt of
satisfactory credit quality. Notes with an A rating by S&P have strong financial security characteristics, but are
somewhat more likely to be affected by adverse business conditions than are notes with higher ratings. The "A1"
rating assigned by Moody's is the third highest rating of Moody's nine rating categories, which range from Aaa to C.
An A+ rating by Fitch denotes a low expectation of credit risk. These ratings do not reflect outlooks that may be
expressed by the Rating Agencies from time to time.
Credit ratings are intended to provide investors with an independent measure of the credit quality of an
issue of securities. Ratings for debt instruments range from AAA (DBRS, S&P and Fitch) or Aaa (Moody's), which
represent the highest quality of securities, to C (DBRS and Moody's) or D (S&P and Fitch), which represents the
lowest quality of securities rated. The Rating Agencies use a (high or low) or (+ or ) or (1, 2 or 3) designation after
the rating category to indicate the relative strength within such rating category.
The credit ratings accorded the MTN Program by the Rating Agencies are not recommendations to
purchase, hold or sell the Notes offered hereunder inasmuch as such ratings do not comment as to market price or
suitability for particular investors. There is no assurance that any rating will remain in effect for any given period of
time or that any rating will not be revised or withdrawn entirely by a Rating Agency in the future if in its judgment
circumstances so warrant.
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS
TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Guarantor's ratio of earnings to fixed charges and ratio of earnings to
combined fixed charges and preferred stock dividends for the periods indicated:
Year Ended Last Friday in December
2001

For the Three

Months Ended
March 31, 2006

2002

2003

2004

2005

Ratio of earnings to fixed charges ..............................99

1.23

1.61

1.51

1.31

1.07

Ratio of earnings to combined fixed charges and

preferred stock dividends ...........................................98

1.22

1.60

1.50

1.30

1.06

For the purpose of calculating the ratio of earnings to fixed charges, "earnings" consist of earnings from
continuing operations before income taxes, excluding undistributed earnings (loss) from equity investees, and fixed
charges, excluding amortization of capitalized interest and preferred security dividend requirements. "Fixed
charges" consist of interest costs, the interest factor in rentals, amortization of debt issuance costs, preferred security
dividend requirements of subsidiaries and capitalized interest.
For the 2001 fiscal year, earnings were insufficient to cover fixed charges and fixed charges and preferred
dividend requirements by $235 million and $289 million, respectively.
The ratio of earnings to fixed charges and ratio of earnings to combined fixed charges and preferred stock
dividends is included as an exhibit to the annual report of the Guarantor on Form 10-K and an exhibit to the
quarterly report on Form 10-Q and is deemed to be incorporated by reference in this Prospectus. Upon the filing of
a new annual report on Form 10-K by the Guarantor, the ratio of earnings to fixed charges and ratio of earnings to
combined fixed charges and preferred stock dividends provided herein will be modified and superseded. See
"Documents Incorporated by Reference".
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be loaned to or otherwise invested in affiliates of the Issuer
of such Notes or used to repay the Issuer's other indebtedness. Such affiliates intend to use the proceeds for general
corporate purposes, including the funding of investments in, and/or extensions of credit to, other affiliates, the

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funding of assets of affiliates, the lengthening of the average maturity of borrowings and the financing of
acquisitions. The net proceeds cannot be estimated as the amount thereof will depend on the extent to which the
Notes are issued hereunder. The Issuers expect that they will, on a recurrent basis, issue debt instruments and incur
additional indebtedness otherwise than through the issue of Notes pursuant to this Prospectus as the need arises and
to finance the growth of their affiliates' operations or to lengthen the average maturity of the Issuers' borrowings and
those of their affiliates. To the extent that Notes being purchased for resale by ML Canada are not resold, the
aggregate proceeds available to the Issuer and its affiliates on a consolidated basis would be reduced.
RISK FACTORS
Your investment in the Notes involves certain risks. In consultation with your own financial and legal
advisers, you should carefully consider, among other matters, the following discussion of risks before deciding
whether an investment in the Notes is suitable for you. The Notes are not a suitable investment for you if you do not
understand their terms or the risks involved in holding the Notes. Risks relating to the business of the Guarantor are
described in the Guarantor's annual report on Form 10-K and quarterly reports on Form 10-Q under the heading
"Risk Factors That Could Affect our Business". See "Documents Incorporated by Reference".
Uncertain Trading Market for Your Notes; Many Factors Affect the Trading Value of Your Notes
Unless otherwise specified in a pricing supplement relating to the Notes, the Notes will not be listed on any
securities exchange, and we cannot assure you that a trading market for your Notes will ever develop or be
maintained. Many factors independent of our creditworthiness may affect the trading market of your Notes. These
factors include:

the complexity and volatility of the index or formula applicable to the Notes if they are indexed to one or
more interest rate, currency or other indices or formulas;

the method of calculating the amount payable at maturity, premium and interest in respect of the Notes;

the time remaining to the maturity of the Notes;

the outstanding amount of the Notes;

the redemption features of the Notes;

the amount of other securities linked to the index or formula applicable to the Notes; and

the level, direction and volatility of market interest rates generally.

In addition, because some Notes are designed for specific investment objectives or strategies, these Notes will have
a more limited trading market and may experience more price volatility. There may be a more limited number of
buyers for these Notes. This may affect the price you receive for these Notes or your ability to sell these Notes at all.
You should not purchase Notes unless you understand and know you can bear the related investment risks.
Guarantor's Credit Ratings May Not Reflect All Risks of an Investment in the Notes
The credit ratings assigned to the Notes are an assessment of the Guarantor's ability to pay its obligations.
Consequently, real or anticipated changes in the Guarantor's credit ratings will generally affect the market value of
the Notes. The Guarantor's credit ratings, however, may not reflect the potential impact of risks related to structure,
market or other factors discussed herein on the value of your Notes.
Risks Relating to Unsecured Nature of the Notes
The Notes will not be secured by any of the assets of the Issuers or the Guarantor. Therefore, holders of
secured indebtedness of an Issuer and the Guarantor would have a claim on the assets securing such indebtedness
that ranks prior to your claim on such assets. To the extent that the pledged assets do not satisfy such secured
indebtedness, the creditor would have a claim that ranks pari passu with the claims of the holders of unsecured and
unsubordinated indebtedness (including holders of Senior Notes).

-8-

The Notes will be Senior Notes or Subordinate Notes of an Issuer, as described in the applicable pricing
supplement. Senior Notes will rank pari passu with all other unsecured and unsubordinated indebtedness of the
Issuer, from time to time issued and outstanding. The Subordinate Notes will be subordinated to all existing and
future indebtedness of the Issuer for money borrowed, except for such indebtedness that is by its terms subordinated
to or ranks pari passu with the Subordinate Notes. The obligations of the Guarantor under the Guarantee of the
Subordinate Notes will be subordinated, to the extent provided below, in right of payment to the payment in full of
all senior indebtedness of the Guarantor.
Principal Assets of Guarantor in United States
The Guarantor is incorporated under the laws of Delaware and it resides in, and has substantial assets
located in, the United States. Although the Guarantor has appointed the Issuers as its agents for service of process
for certain securities law purposes in each of the provinces of Canada, it may not be possible for investors to collect
from the Guarantor judgments obtained in Canadian courts. Judgments on the Guarantee obtained in Canada may
therefore have to be enforced in the United States and may be subject to additional defences as a result. In addition,
all of the Guarantor's directors and officers reside outside Canada and most of their assets are located outside
Canada. It may not be possible therefore for you to effect service of process within Canada upon the Guarantor's
directors and officers or to collect from them judgments obtained in Canadian courts.
Structural Risks of Notes Indexed to Interest Rate, Currency or Other Indices or Formulas
If you invest in Notes indexed to one or more interest rate, currency or other indices or formulas, there will
be significant risks not associated with a conventional fixed rate or floating rate debt security. These risks include
fluctuation of the indices or formulas and the possibility (depending on the terms of the Notes) that you will receive
a lower, or could receive no, amount of principal, premium or interest, or that you may receive such payments at
different times than you expected. We have no control over a number of matters, including economic, financial and
political events, that are important in determining the existence, magnitude and longevity of these risks and their
results. In addition, if an index or formula used to determine any amounts payable in respect of the Notes contains a
multiplier or leverage factor, the effect of any change in that index or formula will be magnified. In recent years,
values of certain indices and formulas have been volatile, and volatility in those and other indices and formulas may
be expected in the future. However, past experience is not necessarily indicative of what may occur in the future.
Redemption May Adversely Affect Your Return on the Notes
If your Notes are redeemable at our option or are otherwise subject to mandatory redemption, your Notes
may be redeemed at times when prevailing interest rates may be relatively low. In such case, you generally would
not be able to reinvest the redemption proceeds at a comparable effective interest rate.
Risks Relating to Notes in Foreign Currencies
Notes denominated or payable in foreign currencies may entail significant risks. These risks include,
without limitation, the possibility of significant fluctuations in the foreign currency markets, the imposition or
modification of foreign exchange controls and potential illiquidity in the secondary markets. In addition, a judgment
by a U.S. court will not be in Canadian currency and may not be based on the exchange rate in existence on the date
of the judgment. These risks will vary depending upon the currency or currencies involved and will be more fully
described in the applicable pricing supplement.
DOCUMENTS INCORPORATED BY REFERENCE
ML Finance has obtained a decision document, dated June 28, 2004 (as amended on July 12, 2005) and
ML&Co Canada has obtained decision documents dated February 14, 2006 and June 21, 2006 (collectively, the
"MRRS Decisions") under the Mutual Reliance Review System for Exemptive Relief Applications as to their
satisfaction of continuous disclosure requirements and exempting the Issuers from the requirement to include certain
materials in this Prospectus. A copy of the MRRS Decisions can be obtained from the Ontario Securities
Commission website at www.osc.gov.on.ca.

-9-

The securities commissions and other securities regulatory authorities in each of the provinces of Canada
(the "Canadian securities regulatory authorities") allow the Issuers to incorporate by reference the information they
file with them, which means:

incorporated documents are considered part of the Prospectus;

the Issuers can disclose important information to you by referring you to those documents; and

information that the Issuers and the Guarantor file with the Canadian securities regulatory
authorities and that is incorporated by reference will automatically update and supersede this
incorporated information.

The following documents which were filed with the Canadian securities regulatory authorities (other than
information in the documents that is deemed under applicable law not to be filed) are incorporated by reference into
this Prospectus:
(a) the annual report on Form 10-K of the Guarantor dated February 27, 2006 for the year ended December 30,
2005 filed with the Securities and Exchange Commission (the "SEC") pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), including exhibits relating to the consolidated financial
information of the Guarantor, the computation of the ratio of earnings to fixed charges, the condensed
financial information of the Guarantor and all other exhibits that are not Non-Incorporated Exhibits (as
defined below);
(b) the quarterly report on Form 10-Q of the Guarantor dated May 5, 2006 for the quarter ended March 31,
2006;
(c) the 2006 Proxy Statement of the Guarantor dated March 10, 2006;
(d) the current report on Form 8-K of the Guarantor dated January 19, 2006 announcing its results of
operations for the three-month period and year ended December 30, 2005;
(e) the current report on Form 8-K of the Guarantor dated February 15, 2006 announcing the agreement to
merge Merrill Lynch Investment Managers and BlackRock Inc.;
(f) the current report on Form 8-K of the Guarantor dated February 17, 2006 announcing agreements in
principle to settle twenty-three class actions related to the Guarantor's research coverage of securities of
Internet companies;
(g) the current report on Form 8-K of the Guarantor dated February 27, 2006 announcing the authorization by
the board of directors of the Guarantor for the Guarantor to repurchase up to US$6 billion of its outstanding
common shares;
(h) the current report on Form 8-K of the Guarantor dated April 3, 2006 announcing the adoption of the
provisions of SFAS No. 123 (revised 2004), Share-Based Payment, a revision of SFAS No. 123,
Accounting for Stock-Based Compensation in the first quarter of 2006;
(i) the current report on Form 8-K of the Guarantor dated April 18, 2006 announcing its results of operations
for the three-month period ended March 31, 2006;
(j) the current report on Form 8-K of the Guarantor dated May 1, 2006 announcing the resignation of a
director of the Guarantor;
(k) the material change report of ML Finance dated February 22, 2006 announcing the issuance of
Cdn.$26,661,000 aggregate principal amount of S&P 500 Reverse Participation Notes, Series 2 and

- 10 -

Cdn.$17,500,000 aggregate principal amount of Step-up Extendible Monthly Pay Medium Term Notes,
Series C;
(l) the material change report of ML Finance dated February 24, 2006 announcing the issuance of
Cdn.$10,402,800 aggregate principal amount of Asia Pacific Redeemable Principal Protected Notes, Series
2;
(m) the material change report of ML Finance dated February 27, 2006 announcing the issuance of
Cdn.$8,691,300 aggregate principal amount of International Equity Principal Protected Notes, Series 1,
Cdn.$12,965,800 aggregate principal amount of Merrill Lynch Global Equity Accelerator (CAD)
Securities, Series 3 and US$8,060,900 aggregate principal amount of Merrill Lynch Global Equity
Accelerator (USD) Securities, Series 3;
(n) the material change report of ML Finance dated May 4, 2006 announcing the issuance of Cdn.$25,000,000
aggregate principal amount of S&P 500 Reverse Participation Notes, Series 3;
(o) the material change report of ML Finance dated May 5, 2006 announcing the issuance of Cdn.$13,636,700
aggregate principal amount of Merrill Lynch International Equity Accelerator (CAD) Securities, Series 1
and issuance of U.S. $6,232,600 aggregate principal amount of Merrill Lynch International Equity
Accelerator (USD) Securities, Series 1;
(p) the amended material change report of ML Finance dated May 31, 2006 announcing the issuance of Cdn.
$10,417,300 aggregate principal amount of Nikkei 225 Redeemable Principal Protected Notes, Series 1,
Cdn. $4,563,300 aggregate principal amount of The International Equity Principal Protected Notes, Series 2
and Cdn. $18,931,800 aggregate principal amount of Merrill Lynch Commodity Principal Protected Notes,
Series 1;
(q) the material change report of ML Finance dated June 19, 2006 announcing the issuance of Cdn. $9,023,000
aggregate principal amount of S&P 500 Reverse Participation Notes, Series 4;
(r) the material change report of ML Finance dated June 27, 2006 announcing the issuance of Cdn. $5,285,100
aggregate principal amount of Merrill Lynch Global Equity Accelerator (CAD) Securities, Series 4 and
U.S. $1,180,100 aggregate principal amount of Merrill Lynch Global Equity Accelerator (USD) Securities,
Series 4; and
(s) the material change report of ML Finance dated June 28, 2006 announcing the issuance of Cdn.
$12,000,000 aggregate principal amount of Step-Up Extendible Semi-Annual Medium Term Notes, Series
C.
Subject to the MRRS Decisions (which exempt us from incorporating by reference certain documents
incorporated by reference into or attached as exhibits to the documents listed herein), each of the following
documents that the Issuers and the Guarantor will file with the Canadian securities regulatory authorities after the
date of this Prospectus until this offering is completed (other than information in the documents that is deemed not
to be filed) is incorporated by reference into this Prospectus:

annual reports on Form 10-K of the Guarantor, including exhibits relating to the consolidated
financial information of the Guarantor, the computation of the ratio of earnings to fixed charges
and the condensed financial information of the Guarantor and all other exhibits that are not NonIncorporated Exhibits (as defined below);

quarterly reports on Form 10-Q of the Guarantor;

definitive proxy or information statements filed under section 14 of the Exchange Act in
connection with any subsequent stockholders' meeting;

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current reports on Form 8-K of the Guarantor relating to the financial condition of, or disclosing a
material change in the affairs of, the Guarantor; and

any material change reports of the Issuers.

The MRRS Decisions permit the Issuers and the Guarantor to exclude from the documents incorporated by
reference the following (the "Non-Incorporated Exhibits"):

contracts not made in the ordinary course of business that are material to the Guarantor, limited
partnership agreements, indemnification and severance agreements, deferred compensation plans,
stock unit and stock option plans and other stock option or award plans, and all amendments,
supplements and restatements thereto and any underwriting agreements or voting trust agreements
of the Guarantor and all amendments, supplements and restatements thereto;

plans of acquisition, reorganization, arrangement, liquidation or succession;

articles of incorporation (or instruments corresponding thereto) and by-laws of the Guarantor and
any amendments or restatements thereof;

instruments defining the rights of security holders, including deposit agreements, rights
agreements and any supplements to and amendments or restatements thereof;

charters of committees of the Guarantor's board of directors, other than the audit committee
charter;

opinions of: (a) legal counsel as to the legality of securities being registered in the U.S. indicating
whether such securities will, when sold, be legally issued, fully paid and non-assessable and, if
debt securities, whether they will be binding obligations of the Guarantor; and (b) legal counsel or
an independent or public certified accountant, or revenue rulings from the United States Internal
Revenue Service (the "IRS"), supporting the description of tax matters and consequences to the
shareholders in certain filings of the Guarantor;

published reports regarding matters submitted to security holders which are required to be filed
with the SEC;

manually signed powers of attorney filed with the SEC if any name is signed to a registration
statement or report of the Guarantor pursuant to a power of attorney;

indentures and supplemental indentures relating to the issuance of debt securities and forms of
certificates and depositary receipts relating to securities of the Guarantor;

current reports on Form 8-K of the Guarantor other than current reports on Form 8-K of the
Guarantor relating to the financial condition of or disclosing a material change in the affairs of the
Guarantor (which would exclude, for greater certainty, any exhibits to such current reports on
Form 8-K that would otherwise constitute a Non-Incorporated Exhibit); and

codes of ethics that the Guarantor voluntarily files as exhibits to its annual report on Form 10-K
and also posts on its website.

The full text of the MRRS Decisions, In the Matter of Merrill Lynch & Co., Ltd. et al (2004) 27 OSCB
6271, In the Matter of Merrill Lynch & Co., Ltd. et al (2005) 28 OSCB 6854 and In the Matter of Merrill Lynch &
Co., Ltd. et al (2006) 29 OSCB 1455, is available at www.osc.gov.on.ca.
Any statement contained in this Prospectus or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a

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statement contained herein, or in any other subsequently filed document which also is incorporated or is deemed to
be incorporated by reference herein, modifies or supersedes such statement. The modifying or superseding statement
need not state that it has modified or superseded a prior statement or include any other information set forth in the
document that it modifies or supersedes. The making of a modifying or superseding statement is not to be deemed
an admission for any purpose that the modified or superseded statement, when made, constituted a
misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be
stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.
Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
Upon a new annual report on Form 10-K of the Guarantor being filed by the Guarantor with and, where
required, accepted by, the Canadian securities regulatory authorities during the currency of this Prospectus, the
previous annual report on Form 10-K and the annual consolidated financial statements contained therein, quarterly
reports on Form 10-Q and current reports on Form 8-K of the Guarantor and material change reports of the Issuers
filed prior to the commencement of the financial year of the Guarantor in which the annual report is filed shall be
deemed no longer to be incorporated by reference in this Prospectus for purposes of future offers and sales of Notes
hereunder.
A copy of each of the filings referred to above (excluding exhibits not specifically incorporated by
reference into the filing) may be obtained from the website maintained by Canadian securities regulatory authorities
at www.sedar.com.
A pricing supplement containing the specific variable terms for an issue of Notes and any other additional
or updated information that the Issuer elects to include therein will be delivered with this Prospectus to purchasers of
such Notes and will be deemed to be incorporated into this Prospectus as of the date of such pricing supplement only
for the purposes of the offering of the Notes covered by such pricing supplement.
Separate continuous disclosure information relating to the Issuers, other than material change reports, will
not be incorporated by reference herein nor will such information be provided to purchasers of Notes.
You should assume that the information appearing in this Prospectus is accurate as of the date of this
Prospectus only. The business, financial condition and results of operations of the Issuers and the Guarantor may
have changed since that date.
You should rely only on the information contained or incorporated by reference or deemed to be
incorporated by reference in this Prospectus or in a pricing supplement related to an offering prepared by or on
behalf of an Issuer. We have not, and the Dealers have not, authorized anyone else to provide you with different or
additional information. You should not rely on any other information or representations. The Issuers' and the
Guarantor's affairs may change after this Prospectus and any related pricing supplement are conveyed. You should
not assume that the information in this Prospectus and any related pricing supplement is accurate as of any date
other than the dates indicated in those documents. You should read this Prospectus, the applicable pricing
supplement and all of the documents incorporated by reference herein or deemed to be incorporated by reference
herein. We are not, and the Dealers are not, making an offer to sell these Notes in any jurisdiction where the offer or
sale of the Notes is not permitted.
DESCRIPTION OF THE NOTES
The Notes will be issued from time to time during the 25-month period that this Prospectus remains valid in
an aggregate principal amount not to exceed Cdn. $5,000,000,000 or the equivalent thereof if the Notes are issued in
currencies or currency units other than Canadian dollars. The Indentures do not limit the aggregate principal amount
of Notes that may be issued thereunder. The following summary of the material provisions of the Notes and of the
Indentures is not complete and is qualified in its entirety by reference to the Indentures. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indentures and the Notes. The Indenture of ML
Finance is substantially similar to the Indenture of ML&Co Canada.

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The Notes have not been, and will not be, registered under the 1933 Act and may not be offered, sold or
delivered within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S
under the 1933 Act).
The following description of Notes will apply unless otherwise specified in an applicable pricing
supplement.
Terms of the Notes
The applicable pricing supplement will identify the Issuer and will state whether the Notes issued
thereunder are Senior Notes or Subordinate Notes. The Senior Notes to be issued under the Indenture will be
unsecured and unsubordinated general obligations of the Issuer that will rank equally with all other unsecured and
unsubordinated indebtedness of the Issuer from time to time outstanding. The Subordinate Notes to be issued under
the Indenture will be unsecured and will be subordinated to all existing and future indebtedness of the Issuer for
money borrowed, except for such indebtedness that is by its terms subordinated to or ranks pari passu with the
Subordinate Notes. Unless otherwise specifically stated to the contrary in a pricing supplement, an Issuer shall have
no liability or obligation with respect to any Notes issued by the other Issuer. Because the Guarantor is a holding
company, the right of the Guarantor and its creditors, including the holders of Notes, to participate in any
distribution of the assets of any subsidiary upon its liquidation or reorganization or otherwise is necessarily subject
to the prior claims of creditors of the subsidiary, except to the extent that a bankruptcy court may recognize the
claims of the Guarantor itself as a creditor of the subsidiary. In addition, dividends, loans and advances from certain
subsidiaries to the Guarantor are restricted by net capital requirements under the Exchange Act and under rules of
certain exchanges and other regulatory bodies.
The Notes will be offered on a continuous basis and will mature on a day 12 months or more from the date
of issue, as specified in the applicable pricing supplement. Unless otherwise specified in the applicable pricing
supplement, the Notes of each series will be issuable in minimum denominations of Cdn. $1,000 and integral
multiples thereof. The Notes may be interest bearing or non-interest bearing. Interest bearing Notes will bear interest
at either fixed or floating rates as specified in the applicable pricing supplement.
Unless otherwise indicated in a Note and in the applicable pricing supplement, the Notes will be
denominated in Canadian dollars and the Issuer will pay amounts payable on the Notes in Canadian dollars
(including any amounts payable at maturity, and any amounts payable in respect of premium and interest). Unless
otherwise specified in the applicable Note and pricing supplement, the Issuer will pay money upon payment of the
discharge of the Notes of a series when due or upon redemption. If the applicable Note and pricing supplement so
specifies, the Issuer will deliver securities or a combination of money, securities and/or other property, in either case
payable or deliverable upon payment of the discharge of the Notes of a series, when due or upon redemption. The
securities, amount of money, or combination of money, securities and/or other property to be payable or deliverable
to holders of the Notes upon payment of the discharge of the Notes is referred to as the "Maturity Consideration" for
such Notes.
If the maturity date of a Note or any Interest Payment Date falls on a day that is not a business day, the
related payment of principal of, and premium and interest, if any, on such Note, will be made on the next succeeding
business day as if made on the date the applicable payment was due and no interest will accrue on the amount
payable for the period from and after the Interest Payment Date or maturity date, as the case may be, unless
otherwise indicated in the applicable Note and in the applicable pricing supplement.
The Notes may be issued from time to time at such rates of interest and at par, at a premium or at a
discount, the amount of which payable at maturity may be determined by reference to the price, yield or value of an
underlying security, commodity or index representing a statistical measure of economic or financial performance or
to any other item or index or any combination thereof, the amounts of principal and interest may be payable in
instalments over the term of the Notes, and the Notes of any series may be subject to redemption or repayment prior
to maturity, in each case as specified in the applicable pricing supplement.

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Tranches and Series of Notes

An Issuer may issue Notes in one or more tranches of one or more series upon the satisfaction of certain
conditions, including delivery to the Trustee of a resolution of the board of directors of the Issuer and an officer's
certificate or a supplemental indenture establishing the principal terms of the particular Notes being issued, which
shall include the following, to the extent applicable:
(a)

whether the Notes being issued are Senior Notes or Subordinate Notes;

(b)

the title of such Notes and the series in which such Notes will be included;

(c)

any limit upon the aggregate principal amount of the Notes of such title or the Notes of such series
which may be authenticated and delivered under the Indenture (except for Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes of the series
pursuant to the Indenture);

(d)

whether Notes of the series are to be issuable in fully certificated form or as book-entry Notes and,
if in certificated form, whether such Notes are to be issuable initially in global form and, if so, (i)
whether beneficial owners of interests in any such Note in global form may exchange such
interests for Notes of such series and of like tenor of any authorized form and denomination and
the circumstances under which any such exchanges may occur, if other than in the manner
specified in the Indenture and (ii) the name of the clearing agency as the case may be, with respect
to any book-entry Note or temporary global form of Note;

(e)

the date as of which any book-entry Note or temporary global Note representing outstanding
Notes of the series will be dated if other than the original issue date of the first such Note of the
series to be issued;

(f)

the date or dates on which the Maturity Consideration for such Notes is payable;

(g)

whether Notes will: (i) bear interest and, if so, the rate or rates at which such Notes will bear
interest and, if applicable, the Interest Rate Basis, or any method by which such rate or rates will
be determined, the date or dates from which such interest will accrue, the Interest Payment Dates
on which such interest will be payable and the Regular Record Date for the interest payable on
such Notes on any Interest Payment Date, whether any interest will be paid on Defaulted Interest,
and the basis upon which interest shall be calculated, if other than that of a 365-day year or 366day year, as applicable; (ii) be issued for a price less than the amount to be due and payable at
maturity; or (iii) be Linked Notes (as defined below);

(h)

the place or places, if any, in addition to or other than the places of payment specified in the
Indenture, where the Maturity Consideration and/or interest on or Additional Amounts (as defined
below), if any, payable in respect of such Notes will be payable, where Notes of such series may
be surrendered for registration or transfer, where Notes of such series may be surrendered for
exchange and where demand to or upon the Issuer or the Guarantor in respect of such Notes and
the Indenture may be served;

(i)

the period or periods within which, the price or prices at which and the terms and conditions upon
which such Notes may be redeemed, in whole or in part, at the option of the Issuer;

(j)

the right or obligation, if any, of the Issuer to redeem or purchase such Notes and the period or
periods within which, the price or prices at which and the terms and conditions upon which such
Notes will be redeemed or purchased, in whole or in part, pursuant to such obligation, and any
provisions for the remarketing of such Notes;

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(k)

the denominations in which Notes of such series shall be issuable if other than denominations of
Cdn. $1,000 and any integral multiple thereof;

(l)

the type of Maturity Consideration to be delivered to the holders of the Notes upon payment of the
discharge of the Notes of such series when due or upon redemption, if the Maturity Consideration
is to be other than money;

(m)

if other than the principal amount thereof, the portion of the principal amount of such Notes which
will be payable upon declaration of acceleration of the maturity thereof pursuant to the Indenture;

(n)

if other than Canadian dollars as at the time of payment is legal tender for payment of public or
private debts, the currency (the "Specified Currency") in which payment of the principal of and
interest, if any, on such Notes will be payable;

(o)

if the principal of or other amount payable at maturity, (and premium, if any) and interest, if any,
on such Notes are to be payable, at the election of the Issuer or a holder thereof, in a coin or
currency, including composite currencies, other than the Specified Currency, the period or periods
within which, and the terms and conditions upon which, such election may be made;

(p)

if the amount of payments of principal of or other amount payable at maturity, and interest, if any,
in respect of such Notes may be determined with reference to an index, formula or other method or
based on a coin or currency other than the Specified Currency in which the Notes are stated to be
payable, the manner in which such amounts will be determined and the calculation agent, if any,
with respect thereto;

(q)

if Notes of such series are to be issuable in fully certificated form (whether upon original issue or
upon exchange of a temporary Note of such series) only upon receipt of certain certificates or
other documents or satisfaction of other conditions, then the form and terms of such certificates,
documents or conditions;

(r)

any additional terms and provisions with respect to, and any additional conditions, representations,
covenants and Events of Default (as defined below), if any, for such Notes;

(s)

any modification or elimination of any of the definitions, representations, covenants, conditions,

Events of Default or other terms and provisions of the Indenture to be applicable to such Notes;

(t)

any other provisions, requirements, conditions, indemnities, enhancements or other matters of any
nature or kind whatsoever relating to such Notes, including any terms which may be required by,
or advisable under, the legislation governing the Trustee with respect to the Indenture or any other
applicable law or any rules, procedures or requirements of any securities exchange on which any
of the Notes are, or are proposed to be, listed or of any over-the-counter market in which any of
the Notes are, or are proposed to be, traded or which may be advisable in connection with the
marketing of such Notes; and

(u)

any other terms of such Notes (which terms will not be inconsistent with the provisions of the
Indenture).

The provisions of each Indenture permit the relevant Issuer, without the consent of holders of any Notes, to
issue additional Notes with terms different from those of Notes previously issued and to reopen a previous series of
Notes and issue additional Notes of that series. Prior to the issuance of a new series of Notes, the principal terms of
such Notes will be established pursuant to a resolution of the board of directors of the Issuer of the series of Notes
and set forth in an officer's certificate or in a supplemental indenture in the manner described above. All Notes of
any one series will be substantially identical except as to terms such as the date from which interest, if any, will
accrue and except as may otherwise be provided in or pursuant to any such board resolution or supplemental
indenture.

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Interest
Interest rates, interest rate formulas and other variable terms of the Notes are subject to change by an Issuer
from time to time, but no change will affect any Note already issued or as to which the Issuer has accepted an offer
to purchase without the holder's consent. Interest rates with respect to Notes offered by an Issuer may differ
depending upon, among other things, the aggregate principal amount of Notes purchased in any transaction. An
Issuer may offer Notes with similar variable terms but different interest rates concurrently at any time. An Issuer
may also concurrently offer Notes having different variable terms to different investors.
Each interest bearing Note will bear interest from the date of issue at the rate per annum or, in the case of a
floating rate, exchange rate or other Note in which the interest is determined by reference to a formula, pursuant to
the interest rate formula, in each case as stated in the applicable Note and in the applicable pricing supplement, until
the Maturity Consideration of the Note is paid or made available for payment. Interest will be payable in arrears on
each Interest Payment Date specified in the applicable pricing supplement on which an instalment of interest is due
and payable and at maturity. Unless otherwise indicated in the applicable pricing supplement, ML Canada will be
the calculation agent. The first payment of interest on any Note originally issued between a Regular Record Date
and the related Interest Payment Date will be made on the Interest Payment Date immediately following the next
succeeding Regular Record Date to the registered holder on the next succeeding Regular Record Date. The Regular
Record Date will be set out in the applicable pricing supplement.
Fixed Rate Notes
Interest on fixed rate Notes will be payable at the rate and in the manner set out in the applicable Note and
in the applicable pricing supplement to the holder of such Note on the applicable record date, on such dates as are
specified in the applicable Note and in the applicable pricing supplement and at maturity or upon earlier redemption
or repayment. Unless otherwise specified in the applicable pricing supplement, interest on fixed rate Notes will be
computed on the basis of a 365-day or 366-day year, as applicable.
Floating Rate Notes
Each applicable pricing supplement will specify the terms of the floating rate Note being delivered. The
rate of interest on each floating rate Note will be reset on the dates specified in such Note. If an interest reset date is
not a business day, such interest reset date will be postponed to the next day that is a business day unless otherwise
indicated in the applicable Note and in the applicable pricing supplement. Interest on floating rate Notes will be
determined by reference to the applicable interest rate formula that is specified in the applicable pricing supplement.
Upon the request of the holder of any floating rate Note, the Issuer will cause the calculation agent to provide the
interest rate then in effect and, if determined, the interest rate that will become effective as a result of a
determination made for the next interest reset date with respect to that floating rate Note.
Linked Notes
An Issuer may from time to time offer notes ("Linked Notes") in respect of which the Maturity
Consideration or any other payment will be determined by reference to:
(a)

one or more equity or debt securities, including, but not limited to, the price or yield of such
securities;

(b)

any statistical measure of economic or financial performance, including, but not limited to, any
currency, consumer price or mortgage index; or

(c)

the price or value of any commodity or any other item or index or any combination.

The terms of and any additional considerations, including any material tax consequences and certain risk factors,
relating to any Linked Notes will be described in the applicable pricing supplement. The Issuers have filed an
undertaking with the Canadian securities regulatory authorities that they will not distribute Linked Notes, that, at the

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time of distribution, are novel or that are linked to investment funds without pre-clearing with the Canadian
securities regulatory authorities the disclosure to be contained in the applicable pricing supplement pertaining to the
distribution of these types of Linked Notes.
Payments
In the case of Notes in certificated form, the Issuer will make payment of Maturity Consideration at the
maturity of each Note in immediately available funds, when cash is due, upon presentation and surrender of the Note
and, in the case of any repayment on an optional repayment date, upon submission of a duly completed election
form if and as required by the provisions described below, at or from the place or places of payment designated in
the applicable resolution of the board of directors of the Issuer. Payment of interest due at maturity will be made to
the person to whom payment of Maturity Consideration of the Note in certificated form will be made. Unless
otherwise specified in the applicable pricing supplement, payment of interest, if any, due on Notes in any series in
certificated form other than at maturity will be made by the Trustee either by a cheque dated the applicable Interest
Payment Date and sent by prepaid regular mail to the holders of such securities as of the Regular Record Date for
such interest three Business Days before the Interest Payment Date or by wire transfer of immediately available
funds, if appropriate wire transfer instructions have been received in writing by the Trustee not less than 15 days
prior to the applicable Interest Payment Date. Any wire instructions received by the Trustee shall remain in effect
until revoked by the holder.
The Issuer will make payments of principal or Maturity Consideration of, and premium and interest, if any,
on, Notes in book-entry form through the Trustee or, if the Trustee is unable to act in connection with the payment
of certain Maturity Consideration other than money, through another designated Paying Agent, to the depository or
its nominee. See " Depository Book-Entry Only Notes".
If as a result of changes in or amendments to the laws of the United States, ML Finance or the Guarantor is
required to deduct or withhold on any payments on the Notes, the Issuer will pay Additional Amounts (as defined
below) provided the investor does not fit into one of the exceptions referred to in the sections entitled " Certain
United States Federal Income Tax Matters Additional Amounts".
Form of the Notes and Transfer
The Notes of each series will be issued in fully registered form only and will be either in fully certificated
form or as book-entry Notes transferable only through The Canadian Depository for Securities Limited ("CDS") or
any other depository specified in the applicable pricing supplement. Unless otherwise specified in an applicable
pricing supplement, all Notes will be issued in fully registered book-entry form only. See " Depository BookEntry Only Notes".
Registers showing the registered holders of all Notes (including any global certificates for book-entry
Notes) will be kept at the principal transfer office of the Trustee in Toronto, or at any other place as the Issuer may
designate. Any registered holder of a Note of any series in certificated form may transfer the Note by executing the
form of transfer provided on the reverse side of the Note in person or by attorney duly appointed in writing and
forwarding the Note to the Trustee at the principal transfer office of the Trustee in Toronto, or at any other place as
the Issuer may designate, for issuance of a new Note payable to and registered in the name of the transferee. The
Notes issued upon any such transfer will be of the same series and have the same terms and conditions as the Notes
submitted for transfer, including the same principal amount, rate or method of calculating interest, if any, and
maturity date. Such transfer will be effected upon the Issuer or the Trustee, as the case may be, being satisfied with
the documents of title, subject to the provisions of the Indenture relating to transfers and such other reasonable
regulations as the Issuer may from time to time agree upon with the Trustee, transfer agent and registrar. During the
period from the relevant record date to a date fixed for payment of interest or Maturity Consideration, as applicable,
the Trustee shall not be required to register the transfer of a Note. Notes in book-entry form may be transferred or
exchanged only through a participating member of CDS, or any other depository as is identified in an applicable
pricing supplement. See " Depository Book-Entry Only Notes". There will be no service charge for any
registration of transfer or exchange of Notes, but the Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection with any transfer or exchange, other than exchanges pursuant to
the Indenture not involving any transfer.

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Redemption at the Option of the Issuer

The Notes will not be subject to any sinking fund. The Issuer may redeem the Notes of any series at its
option prior to their stated maturity only if an initial redemption date is specified in the applicable Notes and in the
applicable pricing supplement. If so indicated in the applicable pricing supplement, the Issuer may redeem the Notes
of such series at its option on any date on and after the applicable initial redemption date specified in the applicable
pricing supplement. The Issuer may redeem any such Notes of a series at any time in whole or from time to time in
part at its option at the applicable redemption price specified in the applicable pricing supplement, together with any
accrued interest on the principal of the applicable Note (and any Additional Amounts) payable to the redemption
date, on notice given to the holders of the Notes of such series at least 30 but not more than 60 days before the
redemption date unless a shorter period is specified in the applicable pricing supplement. The Issuer and the Trustee
shall not be required to issue, register the transfer of or exchange any Notes of a series during a period of 15 days
prior to the mailing of a notice of redemption of Notes of that series. If redeemed in part, the Issuer will redeem the
Notes in increments equal to the authorized denomination, provided that any remaining principal amount will be an
authorized denomination of the applicable Note.
Repayment at the Option of the Holder
If so indicated in an applicable pricing supplement, the Issuer will repay the Notes of any series in whole or
in part at the option of the holders of the Notes of such series on any optional repayment date specified in the
applicable pricing supplement. If no optional repayment date is indicated with respect to the Notes of such series,
such Notes will not be repayable at the option of the holders before their stated maturity. Any repayment in part will
be in an amount equal to the authorized denomination or integral multiples thereof, provided that any remaining
principal amount will be an authorized denomination of such Notes. The repurchase price for any Notes so
repurchased will be 100% of the principal amount to be repaid, together with interest on the principal of such Notes
(if such Notes are interest bearing Notes) payable to the date of repayment, unless such Notes were issued at a
discount, in which case the applicable pricing supplement will specify the amount payable upon such repurchase.
For any Notes to be repaid, the Trustee must receive, at its principal office in Toronto not more than 60 nor less than
30 days before the optional repayment date:

in the case of a Note in certificated form, the Note and any duly completed redemption form as may be
specified by the Issuer; or

in the case of a Note in book-entry form, instructions to that effect from the applicable beneficial owner of
the Notes to the participant through which such owner owns its interest and forwarded by such participant
to the depository and by the depository to the Trustee.

Notices of elections from a holder to exercise the repayment option must be received by the Trustee by 5:00 p.m.
(Toronto time) on the last day for giving such notice. Exercise of the repayment option by the holder of a Note will
be irrevocable.
Only the depository may exercise the repayment option in respect of Notes in book-entry form.
Accordingly, beneficial owners of book-entry Notes that desire to have all or any portion of such Notes repaid must
instruct the participant through which they own their interest to direct the depository to exercise the repayment
option on their behalf by forwarding the repayment instructions to the Trustee as discussed above. In order to ensure
that the instructions are received by the Trustee on a particular day, the applicable beneficial owner must so instruct
the participant through which it owns its interest before that participant's deadline for accepting instructions for that
day. Different firms may have different deadlines for accepting instructions from their customers. Accordingly,
beneficial owners of Notes in book-entry form should consult the participants through which they own their interest
for the respective deadlines. All instructions given to participants from beneficial owners of Notes in book-entry
form relating to the option to elect repayment will be irrevocable. In addition, at the time instructions are given, each
beneficial owner will cause the participant through which it owns its interest to tender its interest in the Notes in
book-entry form, on the depository's records, to the Trustee for repayment. See " Depository Book-Entry Only
Notes".

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Unless otherwise stated in the terms of a Note, the Issuer may at any time purchase Notes at any price or
prices in the open market or otherwise. Notes so purchased by the Issuer may, at the discretion of the Issuer, be held,
resold or surrendered to the Trustee for cancellation.
Redemption for Tax Reasons
ML Finance may redeem Notes of any series as a whole but not in part at any time if ML Finance or the
Guarantor determines, based upon a written opinion of independent counsel selected by ML Finance or the
Guarantor, that, on the occasion of the next payment of interest or Maturity Consideration, as applicable, due in
respect of the Notes, (i) ML Finance would be required to pay an Additional Amount, or (ii) the Guarantor would be
unable to procure ML Finance to make payment and, in making such payment itself under the Guarantee, the
Guarantor would be required to pay an Additional Amount. The redemption price will be 100% of the principal
amount of the Note to be redeemed unless otherwise specified in the applicable pricing supplement.
Limitation Upon Creation of Liens on Voting Stock of Certain Subsidiaries in Connection with Senior Notes
The Guarantor will not, and it will not permit any Subsidiary (as defined below) at any time directly or
indirectly to, create, assume or incur any indebtedness for borrowed money secured by a pledge of, lien on or
security interest in (any pledge, lien or security interest being referred to herein as a "lien") the Voting Stock (as
defined below) of any Significant Subsidiary (as defined below), without making effective provision whereby the
outstanding Senior Notes (and, if the Guarantor so elects, any other indebtedness ranking on a parity with the Senior
Notes), shall be secured equally and ratably with such secured indebtedness so long as such other indebtedness is so
secured; provided, however, that the foregoing covenant shall not be applicable to liens for taxes or assessments or
governmental charges or levies not then due and delinquent or the validity of which is being contested in good faith
or which are less than U.S. $5,000,000, liens created by or resulting from any litigation or legal proceeding which is
currently being contested in good faith by appropriate proceedings or which involve claims of less than U.S.
$5,000,000 or deposits to secure (or in lieu of) surety, stay, appeal or customs bonds; provided, further, that the
foregoing shall not be applicable to indebtedness for borrowed money secured by a lien on any shares of the Voting
Stock of any Person existing at the time such Person becomes a Significant Subsidiary, including extensions,
renewals and replacements of such indebtedness without increase in the amount thereof.
"Voting Stock" is defined in the Indenture as stock of the class or classes having general voting power
under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a Person,
provided that, for the purposes of the Indenture, stock that carries only the right to vote conditionally on the
happening of an event is not considered voting stock, whether or not the event has happened. "Subsidiary" is
defined in the Indenture to mean any Person of which at the time of determination the Guarantor and/or one or more
Subsidiaries owns or controls directly or indirectly more than 50% of the Voting Stock. "Person" is defined in the
Indenture to mean any individual, corporation, unlimited liability company, partnership, joint venture, association,
limited liability company, joint-stock company, trust, unincorporated organization or government or any agency or
political subdivision thereof. "Significant Subsidiary" is defined in the Indenture to mean any Subsidiary the
Consolidated Net Worth of which constituted at least 15% of the Consolidated Net Worth of the Guarantor as of the
most recently completed fiscal year. "Consolidated Net Worth" is defined in the Indenture to mean consolidated
assets minus consolidated liabilities as calculated in accordance with generally accepted accounting principles in the
United States.
Special Terms Relating to the Subordinate Notes and Guarantees Relating to the Subordinate Notes
Upon any distribution of assets of an Issuer or the Guarantor resulting from any dissolution, winding-up,
liquidation or reorganization, payments on Subordinate Notes, or guarantees of payments on Subordinate Notes, are
subordinated to the extent provided in the Indenture or guarantees of Subordinate Notes, as applicable, in right of
payment to the prior payment in full of all senior indebtedness of the Issuer or Guarantor, as applicable, but the
obligation of the Issuer or Guarantor to make payments on the Subordinate Notes will not otherwise be affected. The
Issuer or Guarantor may not make any payment on Subordinate Notes at any time when there is a default in the
payment or delivery of any amounts due on their respective senior indebtedness, including payment of any sinking
fund. Because the Subordinate Notes are subordinated in right of payment to any senior indebtedness, in the event of
a distribution of assets upon insolvency, some creditors of the Issuer or Guarantor may recover more, ratably, than

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holders of Subordinate Notes. Holders of Subordinate Notes will be subrogated to the rights of holders of senior
indebtedness of the Issuer or Guarantor, as applicable, to the extent of payments made on senior indebtedness of the
Issuer or Guarantor, as applicable, upon any distribution of assets in any proceedings in respect of Subordinate
Notes or Guarantees relating to Subordinate Notes.
As of December 30, 2005, ML&Co Canada had no senior indebtedness, a total of approximately Cdn.
$2,086,243,700 of ML Finance's indebtedness was senior indebtedness and a total of approximately Cdn.
$135,146,459,500 of the Guarantor's indebtedness was senior indebtedness (during 2005, based on the relevant 2005
noon buying rates in New York City for cable transfers in Canadian dollars, as certified for customs purposes by the
Federal Reserve Bank of New York, the average exchange rate was US$1.00 = C$1.2115).
Consolidation and Merger
Each of the Issuers and the Guarantor may consolidate or merge with, or into any other Person and each of
the Issuers and the Guarantor may sell, lease or convey all or substantially all of its assets to any other Person,
provided that:

in the case of ML Finance, either (i) the consolidation or merger is an amalgamation pursuant to the
Companies Act (Nova Scotia) (or other legislation governing ML Finance at the time) or other
amalgamation where the amalgamated Person is by operation of law the successor to the obligations of ML
Finance under the Notes and the Indenture, (ii) ML Finance is the continuing Person, or (iii) the successor
Person is a Person organized and existing under the laws of Canada or a province thereof and such Person
expressly assumes the due and punctual payment of all amounts payable with respect to the Notes,
according to their tenor, and the due and punctual performance and observation of all of the covenants and
conditions of the Notes and the Indenture to be performed by ML Finance by a supplemental indenture
satisfactory to the Trustee executed by such successor Person and delivered to the Trustee;

in the case of ML&Co Canada, either (i) the consolidation or merger is an amalgamation pursuant to the
Business Corporations Act (Ontario) (or other legislation governing ML&Co Canada at the time) or other
amalgamation where the amalgamated Person is by operation of law the successor to the obligations of
ML&Co Canada under the Notes and the Indenture, (ii) ML&Co Canada is the continuing Person, or (iii)
the successor Person is a Person organized and existing under the laws of Canada or a province thereof and
such Person expressly assumes the due and punctual payment of all amounts payable with respect to the
Notes, according to their tenor, and the due and punctual performance and observation of all of the
covenants and conditions of the Notes and the Indenture to be performed by ML&Co Canada by a
supplemental indenture satisfactory to the Trustee executed by such successor Person and delivered to the
Trustee;

in the case of the Guarantor, the resulting Person, if other than the Guarantor, is a Person organized and
existing under the laws of the United States or any U.S. state and assumes all of the Guarantor's obligations
under its Guarantee and the Indenture by way of a supplemental indenture satisfactory to the Trustee; and

in the case of the Issuers, the Guarantor or any such successor Person, the Issuers, the Guarantor or such
successor Person, as the case may be, is not, immediately after any such consolidation or merger, in default
in the performance of any covenant or condition in the Indenture.

Modification and Waiver

An Indenture or the Guarantee in respect of Notes of an Issuer may be modified and amended by the
respective Issuer, the Guarantor and the Trustee with the consent of holders of at least 66 % in principal amount of
the outstanding Notes of each series affected by such amendment or modification. However, without the consent of
the holder of each outstanding Note affected thereby, no amendment or modification to the Indenture or the
Guarantee may:

change the stated maturity of the Maturity Consideration of or any instalment of interest on, any Note, or
any premium payable on redemption, or change the redemption price thereof or change the obligation of
the Issuer to pay Additional Amounts;

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reduce the Maturity Consideration of, or the interest payable on, any Note or reduce the amount of principal
which could be declared due and payable before the stated maturity thereof;

change the place or currency of any delivery or payment of Maturity Consideration of, or any premium or
interest on, any Note;

impair the right to institute suit for the enforcement of any payment on any Note on or after the stated
maturity thereof;

change the obligation of the Guarantor pursuant to the Guarantee;

reduce the percentage in principal amount of the outstanding Notes of any series, the consent of whose
holders is required to modify or amend the Indenture or the Guarantee;

modify any of the foregoing requirements or the percentage in principal amount of the outstanding Notes of
any series necessary to waive any past default, except to increase any such percentages; or

provide that certain other provisions of the Indenture cannot be modified or waived without the consent of
the holder of each outstanding Note affected thereby.

The holders of not less than a majority in principal amount of the outstanding Notes of any series of an
Issuer may waive past defaults under the Indenture of that Issuer and waive compliance by the Issuer with certain
provisions of the Indenture, except as described under " Events of Default".
Under the Indenture, for purposes of determining whether holders of the requisite principal amount of
outstanding Notes of any series have given any request, demand, authorization, direction, notice, consent or waiver
under the Indenture or are present at a meeting of holders of Notes for quorum purposes, Notes owned beneficially
by the Issuer or the Guarantor or any affiliate of the Issuer or the Guarantor, other than Notes purchased in
connection with the distribution or trading thereof, will be disregarded and deemed not to be outstanding.
Any renewal or extension of the time of payment of any senior indebtedness of an Issuer (including the
Senior Notes) or the exercise by the holders of such senior indebtedness of any of their rights under any instrument
creating or evidencing such senior indebtedness, including without limitation the waiver of default thereunder, may
be made or done all without notice to or assent from Holders of the Subordinate Notes or the Trustee on behalf of
the Holders of the Subordinate Notes or the Subordinate Trustee, as applicable.
No compromise, alteration, amendment, modification, extension, renewal or other change of, or waiver,
consent or other action in respect of, any liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any senior indebtedness of an Issuer is
outstanding or of such senior indebtedness, whether or not such release is in accordance with the provisions of any
applicable document, shall in any way alter or affect any of the provisions of the Indenture or of the Subordinate
Notes dealing with the subordination and subrogation of the Subordinate Notes.
Events of Default
Each of the following will be an "Event of Default" with respect to Notes of any series issued under the
Indenture:

default in the payment of any interest (including Additional Amounts) of any Note of that series when due,
and continuing for 30 days;

default in the payment of any Maturity Consideration of any Note of that series when due;

default in the performance of any other obligation of the Issuer or the Guarantor contained in the Indenture,
other than an obligation which has been expressly included in the Indenture for the benefit of one or more
series of Notes other than such series, and the continuance of such default for 60 days after written notice
thereof has been given as provided in the Indenture; and

specified events in bankruptcy, insolvency or reorganization of the Issuer or the Guarantor.

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If an Event of Default occurs and is continuing for Notes of any series, the Trustee or the holders of not less
than 25% in principal amount of the outstanding Notes of that series may declare all amounts, or any lesser amount
provided for in the Notes of that series, to be immediately due and payable. At any time after the Trustee or the
holders have made such a declaration of acceleration with respect to the Notes of any series but before the Trustee
has obtained a judgment or decree for payment of money due, the holders of a majority in principal amount of the
outstanding Notes of that series may rescind any such declaration of acceleration and its consequences, provided that
all payments due, other than those due as a result of acceleration, have been made and all Events of Default with
respect to the Notes of that series, other than the non-payment of the principal of the Notes of that series which has
become due solely by such declaration of acceleration, have been remedied or waived.
The holders of a majority in principal amount of the outstanding Notes of any series may waive an Event of
Default, on behalf of the holders of all the Notes of such series, except a default:

in the payment of any amounts due and payable under the Notes of such series; or

in respect of an obligation of the Issuer or the Guarantor contained in, or a provision of, the Indenture
which cannot be modified under the terms of the Indenture without the consent of the holder of each
outstanding Note of the series affected.

The holders of a majority in principal amount of the outstanding Notes of any series may direct the time,
method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Notes, provided that such direction does not conflict with any
applicable law or the Indenture, the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction and such direction is not unduly prejudicial to the rights of other holders of Notes of
such series. Subject to the provisions of the Indenture relating to the duties of the Trustee, before proceeding to
exercise any right or power under the Indenture at the direction of the holders, the Trustee is entitled to receive from
those holders reasonable funding and indemnity against the costs, expenses and liabilities which might be incurred
by it in complying with any direction.
The Notes issued under the Indenture will not have the benefit of any cross-default provisions of Notes of
other series issued under the Indenture or with other indebtedness of the Issuers.
Each Issuer will be required to furnish to the Trustee annually a statement as to the fulfilment by the Issuer
of all of its obligations under the Indenture.
Removal or Resignation of the Trustee
The Trustee may be removed at any time with respect to the Notes of any series by an act of the holders of
a majority in principal amount of the outstanding Notes of such series, delivered to the Trustee and to the Issuer and
the Guarantor. In addition, except during the continuance of an Event of Default, the Issuer may remove the Trustee
with respect to the Notes of any series, for such cause as shall be determined in the sole discretion of the Issuer, by
the Issuer filing with the Trustee an instrument to such effect signed by an officer of the Issuer and delivered to the
Trustee not less than 60 days prior to the effective date of the removal.
The Trustee is entitled to resign at any time with respect to the Notes of an Issuer by giving written notice
thereof to the relevant Issuer. If the instrument of acceptance by a successor Trustee or successor Trustees (where
different Trustees may be required for Senior Notes and for Subordinate Notes) required by the Indenture shall not
have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of one or more successor Trustees with
respect to the Notes in respect of which the Trustee has given written notice of its registration to the Issuer(s).
Notwithstanding the provisions relating to the removal or the resignation of the Trustee in the Indenture
described in the preceding paragraphs, there must at all times be a Trustee under the Indenture that is a corporation
authorized and qualified to carry on the business of a trust company in the Province of Ontario and every other
jurisdiction where such authorization or qualification is necessary to enable it to act as trustee under the Indenture in

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accordance with applicable laws. No resignation or removal of the Trustee shall become effective until the
acceptance of a successor Trustee in accordance with the terms of the Indenture.
Governing Law
The Notes will be governed by and construed in accordance with the laws of the Province of Ontario and
the laws of Canada applicable therein.
Certain United States Federal Income Tax Matters
Residents of Canada That Are Not U.S. Holders
Because of uncertainty in the application of the Canada-United States Income Tax Convention to the Notes
issued by ML Finance, a purchaser of Notes issued by ML Finance that is a resident of Canada for purposes of the
Income Tax Act (Canada) (the "Act") will have to satisfy the requirements set out below in order to avoid the
potential application of United States federal income tax rules (including the imposition of United States
withholding tax):
(a)

The purchaser has provided identification information establishing that it is not a U.S. Holder.
Each of the Dealers has represented that it has procedures in place to determine whether its clients
are U.S. Holders. However, the purchaser is ultimately responsible for establishing this
requirement.

(b)

The Notes are held through a non-U.S. office of a bank, securities dealer or similar intermediary
that has signed an agreement with the IRS concerning withholding tax procedures (a "qualified
intermediary"). Each of the Dealers has represented that it is a qualified intermediary.

(c)

In the taxable year of the disposition of the Notes (including on retirement), the purchaser is not
present in the United States for 183 days or more and certain other conditions are met.

(d)

The Notes are not connected to a trade or business conducted by the purchaser in the United
States.

If a purchaser of Notes is not certain whether (i) the institution where the purchaser will hold the
Notes has determined that the purchaser is not a U.S. Holder, or (ii) the institution is a qualified
intermediary, the purchaser should consult with the institution. Failure to do so may result in the imposition
of United States tax.
Upon the death of a purchaser who is not a U.S. Holder, United States estate tax rules will not apply to
include the Notes in the estate of such person unless at the time of death payments in respect of the Notes would
have been effectively connected with the conduct by such person of a trade or business in the United States.
Definition of U.S. Holder
The term "U.S. Holder" means a beneficial owner of Notes that is for United States federal income tax
purposes:
(a)

a citizen or resident of the United States who is a natural person;

(b)

a corporation or partnership (or a limited liability company or other entity treated as a corporation
or partnership for federal income tax purposes) created or organized in or under the laws of the
United States or of any State thereof or the District of Columbia (other than a partnership that is
not treated as a United States person under applicable Treasury Regulations, the term United
States person being used herein with the meaning given to such term in the United States Internal

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Revenue Code of 1986, as amended (the "Code") and applicable Treasury Regulations
thereunder);
(c)

an estate whose income is subject to United States federal income tax regardless of its source; or

(d)

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

Moreover, certain trusts in existence on August 20, 1996, and treated as United States persons for the purposes of
the Code and applicable Treasury Regulations prior to such date, that elect to continue to be treated as United States
persons under the Code or applicable Treasury Regulations will also be U.S. Holders.
Backup Withholding and Information Reporting Consequences to U.S. Holders
A purchaser of Notes issued by ML Finance that is not a U.S. Holder (a "Non-U.S. Holder") and provides
identification information pursuant to the procedures referred to above in the section titled "Residents of Canada
Who are Not U.S. Holders" which establishes that the purchaser is a Non-U.S. Holder will generally be exempt from
"backup withholding". However, if a purchaser (i) fails to provide identifying information, and (ii) the purchaser is
not a corporation or other "exempt recipient", backup withholding may apply to payments made in respect of such
Notes. In the case of a U.S. Holder, this identifying information will generally be a taxpayer identification number,
or an IRS Form W-9. The maximum rate of backup withholding is currently 28%. Backup withholding tax, to the
extent imposed, may be claimed by a U.S. Holder that is a beneficial owner as a refund or a credit against such
beneficial owner's United States federal income tax, provided certain information is furnished to the IRS.
Interest paid on the Notes issued by ML Finance to U.S. Holders generally will be reported to such
purchasers and the IRS annually on IRS Form 1099. Gross proceeds received on the disposition or maturity of the
Notes issued by ML Finance also may be subject to reporting on IRS Form 1099.
Additional Amounts
If, as a result of any change in or amendment to the laws (or any regulations or rulings promulgated
thereunder) of the United States or of any political subdivision or taxing authority thereof, or any change in
application or official interpretation thereof, ML Finance or the Guarantor is required to deduct or withhold a tax,
assessment or other governmental charge imposed by the United States or any political subdivision or taxing
authority thereof from any payment on the Notes of any series, ML Finance or the Guarantor, as the case may be,
will pay to a holder of the Notes that is a Non-U.S. Holder such additional amounts ("Additional Amounts") as may
be necessary so that every payment on the Notes after such deduction or withholding will not be less than the
amount provided for in such Notes. As described in detail in the Indenture, no such Additional Amounts will be
payable by ML Finance or the Guarantor to a holder of the Notes to the extent that the deduction or withholding (i)
arises from any present or former connection between the holder of the Notes and the United States, (ii) arises from
any present or former status for United States federal income tax purposes of the holder of the Notes as a person
other than a resident of Canada or a country other than the United States, such as the holder's status for purposes of
the Code as a "controlled foreign corporation", "passive foreign investment company" or "foreign tax exempt
organization", (iii) is the result of a late claim for payment by the holder of the Notes, (iv) relates to taxes other than
income taxes and taxes payable otherwise than by withholding, (v) is imposed as a result of (A) such holder's past or
present status as the actual or constructive owner of 10% or more of the total combined voting power of all classes
of Voting Stock of ML Finance or the Guarantor, or (B) such holder's status, with respect to such Note, as a bank
that is described in section 881(c)(3)(A) of the Code, or (vi) is a consequence of a failure to comply with
documentation requirements.
Other Provisions; Addenda
Any provisions with respect to an issue of Notes of any series, including the determination of one or more
interest rate bases, the specification of one or more interest rate bases, the calculation of the interest rate applicable

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to a floating rate Note, the applicable Interest Payment Dates, the stated maturity date, any redemption or repayment
provisions or any other matter relating to the applicable Notes may be modified by the terms as specified under
"Other Provisions" on the face of the applicable Notes or in an addendum relating to the applicable Notes, if so
specified on the face of the applicable Notes and in the applicable pricing supplement.
Depository
Book-Entry Only Notes
Unless otherwise specified in the applicable pricing supplement, upon issuance, the Notes will be issued in
book-entry form and will be represented by fully registered global notes ("Book Entry Notes"). Each Book Entry
Note will be held by, or on behalf of, CDS or such other entity designated in writing by the Issuer to act as
depository. The Book Entry Notes will be registered in the name of CDS or its nominee. Except as described below
under " Exchange for Notes in Certificated Form", no Book Entry Note may be transferred except as a whole by
the depository to a nominee of the depository or by a nominee of the depository to the depository, or another
nominee of the depository, or by the depository or any such nominee to a successor of the depository, or a nominee
of the successor.
Ownership of the Notes will be constituted through beneficial interests in the Book Entry Notes, and will
be represented through book-entry accounts of institutions, as direct and indirect participants of the depository,
acting on behalf of the beneficial owners of such Notes. Each purchaser of a Note represented by a Book Entry Note
will receive a customer confirmation of purchase from the selling agent from whom the Notes are purchased in
accordance with practices and procedures of such selling agent.
CDS Procedures
The following is based on information provided by CDS:
Upon the issuance by the Issuer of Book-Entry Notes represented by a Global Note, the depository will
credit, on its book-entry registration and transfer system, the respective principal amounts of the Book-Entry Notes
represented by such Global Note to the accounts of its participants. The accounts to be credited shall be designated
by the Dealers of such Book-Entry Notes, or the Issuer, if such Book-Entry Notes are offered and sold directly by
the Issuer, as the case may be. Ownership of beneficial interests in a Global Note will be limited to participants or
persons that hold interests through participants. Ownership of beneficial interests in Book-Entry Notes represented
by a Global Note or Global Notes will be shown on, and the transfer of that ownership will be effected only through,
records maintained by the depository (with respect to interests of participants in the depository), or by participants in
the depository or persons that may hold interests through such participants (with respect to persons other than
participants in the depository).
So long as the depository for a Global Note, or its nominee, is the registered owner of the Global Note, the
depository or its nominee, as the case may be, will be considered the sole owner or holder of the Book-Entry Notes
represented by such Global Note. Except as provided below, owners of beneficial interests in Book-Entry Notes
represented by such Global Note or Global Notes will not be entitled to have Book-Entry Notes represented by such
Global Note registered in their names, will not receive or be entitled to receive physical delivery of Book-Entry
Notes in definitive form and will not be considered the registered owners or holders thereof.
Accordingly, each person owning a beneficial interest in a Global Note must rely on the procedures of the
depository and, if such person is not a participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a holder under a Global Note. The Issuer understands that under existing
policies of the depository and industry practices, if the Issuer requests any action of holders or if an owner of a
beneficial interest in such a Global Note desires to give any notice or take any action which a holder is entitled to
give or take under a Global Note, the depository would authorize the participants holding the relevant beneficial
interests to give such notice or take such action. Any beneficial owner that is not a participant must rely on the
contractual arrangements it has directly, or indirectly through its financial intermediary, with a participant to give
such notice or take such action.

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Payments of principal or Maturity Consideration of, premium, if any, and interest, if any, on, the BookEntry Notes represented by a Global Note registered in the name of the depository or its nominee will be made by
the Issuer (or a paying agent, if specified by the Issuer) to the depository or its nominee, as the case may be, as the
registered owner of a Global Note. None of the Issuer, the paying agent (if any) or any other agent of the Issuer will
have any responsibility or liability for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Note or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. Except in the circumstance described in the following paragraph, the Issuer
expects that the depository or its nominee, upon receipt of any payment of principal or Maturity Consideration of,
premium, if any, or interest, if any, on, a Global Note, will immediately credit the accounts of the related
participants with payment in amounts proportionate to their respective holdings in principal amount of beneficial
interests in such Global Note as shown on the records of the depository. The Issuer also expects that payments by
participants to owners of beneficial interests in a Global Note will be governed by standing customer instructions
and customary practices as is now the case with securities held for the accounts of customers in bearer form or
registered in "street name" and will be the responsibility of such participants.
Unless otherwise specified in the applicable pricing supplement, a beneficial owner of Book-Entry Notes
that are denominated in a Specified Currency, other than Canadian or U.S. dollars, electing to receive payments of
principal or any premium or interest in that Specified Currency must, on or before the date specified in the
applicable pricing supplement, notify the participant of the depository through which its interest is held of the
beneficial owner's election to receive all or a portion of any payment in a Specified Currency. The participant must
notify the depository of any election on or before the third Business Day after the Regular Record Date. The
depository will notify the paying agent of the election on or before the fifth Business Day after the Regular Record
Date. If complete instructions as specified in the applicable pricing supplement are received by the participant and
forwarded to the depository, and forwarded by the depository to the paying agent, on or before the relevant dates,
the beneficial owner of the Book-Entry Notes will receive payments in that Specified Currency.
Exchange for Notes in Certificated Form
If the depository is at any time unwilling or unable to continue as depository for the Notes of any series and
a successor depository is not appointed by the Issuer within 60 days, the Issuer will issue certificated Notes in
exchange for all outstanding Global Notes. In addition, the Issuer may at any time determine not to have Book-Entry
Notes represented by Global Notes and, in such event, will issue certificated Notes in exchange for all Global Notes.
In either instance, an owner of a beneficial interest in a Global Note will be entitled to have certificated Notes equal
in principal amount to such beneficial interest registered in its name and will be entitled to physical delivery of such
certificated Notes. Such certificated Notes shall be registered in such name or names as the depository shall instruct
the Issuer or its registrar and transfer agent. It is expected that such instructions may be based upon directions
received by the depository from participants with respect to beneficial interests in such Global Notes. Certificated
Notes so issued will be issued in such denominations as the Issuer may determine from time to time and will be
issued in registered form only, without coupons. No service charge will be made for any transfer or exchange of
such certificated Notes, but the Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
DESCRIPTION OF THE GUARANTEES
All amounts payable under the Notes and the Indenture will be fully and unconditionally guaranteed by the
Guarantor. The applicable Guarantee endorsed by the Guarantor in relation to the Senior Notes will be a direct and
unsecured obligation of the Guarantor and will rank pari passu with all other unsecured and unsubordinated
indebtedness of the Guarantor. The applicable Guarantee endorsed by the Guarantor in relation to the Subordinate
Notes will be a direct and unsecured obligation of the Guarantor and will be subordinated, to the extent provided
below, in right of payment to the prior payment in full of all senior indebtedness of the Guarantor. However, since
the Guarantor is a holding company, the right of the Guarantor, and hence the right of creditors of the Guarantor
(including the holders of Notes), to participate in any distribution of the assets of any subsidiary upon its liquidation
or reorganization or otherwise is necessarily subject to the prior claims of creditors of the subsidiary, except to the
extent that claims of the Guarantor itself as a creditor of the subsidiary may be recognized. In addition, dividends,
loans and advances from certain subsidiaries to the Guarantor are restricted by net capital requirements under the
Exchange Act and under the rules of certain exchanges and other regulatory bodies.

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Notwithstanding the foregoing, any obligations of the Guarantor or under the applicable Guarantee that are
payable in securities, property or any form other than cash may, in the sole discretion of the Guarantor, be
discharged in respect of the Guarantee by payment of a cash settlement based on a valuation of the non-cash
obligation. The Guarantor will have sole discretion in determining what would constitute a commercially reasonable
valuation of the non-cash obligation.
The Guarantee will be governed by the laws of the State of New York. The Guarantor has submitted in the
Indentures to the non-exclusive jurisdiction of the courts of the Province of Ontario for all purposes of or in
connection with the Notes and the Indentures. The Guarantor has appointed the Issuers as its agents for service of
process for certain securities law purposes. Holders of Notes should be aware, however, that the principal assets of
the Guarantor are located in the United States and judgments on the Guarantee obtained in the Province of Ontario
may have to be enforced in the United States and may be subject to additional defences as a result.
In connection with the issue of Senior Notes under an Indenture, the Guarantor will issue a guarantee for
the obligations of the applicable Issuer under such Senior Notes. The guarantee with respect to the Senior Notes will
be issued substantially in the following form:
"FOR VALUE RECEIVED, receipt of which is hereby acknowledged, MERRILL LYNCH & CO., INC., a
corporation duly organized and existing under the laws of the State of Delaware (the "Guarantor"), hereby
unconditionally and irrevocably guarantees (the "Guarantee") to CIBC Mellon Trust Company, as trustee
(including any successor pursuant to the terms of the Indenture (as defined below), the "Trustee") for itself
and on behalf of the holders (the "Holders") of the senior medium term notes (the "Senior Notes") issued by
n [Merrill Lynch Canada Finance Company, a Nova Scotia unlimited liability company or Merrill Lynch
& Co., Canada Ltd., an Ontario corporation, as applicable] (the "Issuer"), under the terms of the indenture
dated as of June 30, 2006 (as the same may be amended and supplemented in accordance with the terms
thereof, the "Indenture"), among the Issuer, the Guarantor and the Trustee, the due and punctual payment
by the Issuer of all amounts payable by the Issuer under the Senior Notes and the Indenture, when and as
the same shall become due and payable, pursuant to the provisions set out in the Senior Notes and the
Indenture. In case of the failure of the Issuer punctually to make any such payment, the Guarantor hereby
agrees to make such payment, or cause such payment to be made, promptly and, in any event, within 15
days of receiving notice of any such failure and demand for payment; such notice and demand must be
made by the Trustee or by Holders by the giving of written notice of such demand to the Guarantor at 4
World Financial Center, New York, New York 10080, U.S.A. (Attention: Treasury Department). Delay in
making such demand shall in no event affect the Guarantor's obligations under this Guarantee. This
Guarantee shall remain in full force and effect or shall be reinstated (as the case may be) if at any time any
payment guaranteed hereunder, in whole or in part, is rescinded or must otherwise be returned by the
Holders upon the insolvency, bankruptcy or reorganization of the Issuer or otherwise, all as though such
payment had not been made.
The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the
invalidity, regularity or enforceability of the Senior Notes; the absence of any action to enforce the same;
any waiver or consent by the Holders concerning any provisions thereof; the rendering of any judgment
against the Issuer or any action to enforce the same; or any other circumstances that might otherwise
constitute a legal or equitable discharge of a guarantor or a defense of a guarantor. The Guarantor
covenants that this Guarantee will not be discharged except by complete payment of the amounts payable
under the Senior Notes and the Indenture. This Guarantee shall continue to be effective if the Issuer merges
or consolidates with or into another entity, loses its separate legal identity or ceases to exist.
Anything to the contrary in this Guarantee notwithstanding, any obligations of the Guarantor to make
payments with respect to the Senior Notes in a form other than cash may, in the sole discretion of the
Guarantor, be discharged in respect of the Guarantee by payment of a cash amount based on a valuation of
the non-cash obligation. The Guarantor shall have sole discretion in determining what would constitute a
commercially reasonable valuation of the non-cash obligation.
The Guarantor hereby waives diligence, presentment, protest, notice of protest, acceleration and dishonor,
filing of claims with any court in the event of insolvency or bankruptcy of the Issuer, all demands

- 28 -

whatsoever, except as noted in the first paragraph hereof, and any right to require a proceeding first against
the Issuer.
The Guarantor hereby certifies and warrants that this Guarantee constitutes the valid obligation of the
Guarantor and complies with all applicable laws.
The Guarantor shall be subrogated to all of the rights of the Holders against the Issuer in respect of any
amount paid by the Guarantor pursuant to this Guarantee; provided, however, that the Guarantor shall not
be entitled to enforce, or to receive any payments arising out of or based upon such rights of subrogation
until all amounts payable on the Senior Notes issued under the Indenture shall have been paid in full.
The obligations of the Guarantor under this Guarantee are unconditional and irrevocable obligations of the
Guarantor ranking pari passu with all other present and future unsecured and unsubordinated obligations of
the Guarantor.
This Guarantee shall not be valid or become obligatory for any purpose with respect to any Senior Note
until such Senior Note shall have been authenticated on behalf of the Trustee as provided in the Indenture.
This Guarantee shall be governed by, and construed in accordance with, the laws of the State of New York
applicable to agreements made and to be performed in such State.
Capitalized terms used herein and not defined herein shall have the meanings given to them in the
Indenture.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed in its corporate name
by its duly authorized representative.
MERRILL LYNCH & CO., INC."
In connection with the issue of Subordinate Notes under an Indenture, the Guarantor will issue a guarantee
for the obligations of the applicable Issuer under such Subordinate Notes. The guarantee with respect to the
Subordinate Notes will be issued substantially in the following form:
"FOR VALUE RECEIVED, receipt of which is hereby acknowledged, MERRILL LYNCH & CO., INC., a
corporation duly organized and existing under the laws of the State of Delaware, (the "Guarantor") hereby
unconditionally and irrevocably guarantees (the "Guarantee") to CIBC Mellon Trust Company, as trustee
(including any successor pursuant to the terms of the Indenture (as defined below), the "Trustee") for itself
and on behalf of the holders (the "Holders") of the subordinate medium term notes (the "Subordinate
Notes") issued by n [Merrill Lynch Canada Finance Company, a Nova Scotia unlimited liability company
or Merrill Lynch & Co., Canada Ltd., an Ontario corporation, as applicable] (the "Issuer"), under the terms
of the indenture dated as of June 30, 2006 (as the same may be amended and supplemented in accordance
with the terms thereof, the "Indenture"), among the Issuer, the Guarantor and the Trustee, the due and
punctual payment by the Issuer of all amounts payable by the Issuer under the Subordinate Notes and the
Indenture, when and as the same shall become due and payable, pursuant to the provisions set out in the
Subordinate Notes and the Indenture, subject to the subordination provision set forth below and pursuant to
the provisions set out in the Subordinate Notes and the Indenture. In case of the failure of the Issuer
punctually to make any such payment, the Guarantor hereby agrees to make such payment, or cause such
payment to be made, promptly and, in any event, within 15 days of receiving notice of any such failure and
demand for payment; such notice and demand must be made by the Trustee or by Holders by the giving of
written notice of such demand to the Guarantor at 4 World Financial Center, New York, New York 10080,
U.S.A. (Attention: Treasury Department). Delay in making such demand shall in no event affect the
Guarantor's obligations under this Guarantee. This Guarantee shall remain in full force and effect or shall
be reinstated (as the case may be) if at any time any payment guaranteed hereunder, in whole or in part, is
rescinded or must otherwise be returned by the Holders upon the insolvency, bankruptcy or reorganization
of the Issuer or otherwise, all as though such payment had not been made.

- 29 -

The Guarantor's obligations under this Guarantee to make any payment with respect to the Subordinate
Notes are expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment
to the prior payment in full of all Guarantor Senior Indebtedness (as defined below). Anything in this
Guarantee to the contrary notwithstanding, upon any distribution of assets of the Guarantor upon any
dissolution, winding-up, liquidation or reorganization of the Guarantor, whether in bankruptcy, insolvency,
reorganization or receivership proceedings or upon an assignment for the benefit of creditors or any other
marshalling of the assets and liabilities of the Guarantor or otherwise (subject to the power of a court of
competent jurisdiction to make other equitable provision reflecting the rights conferred in this Guarantee
upon the Guarantor Senior Indebtedness and the holders thereof with respect to payments in respect of this
Guarantee and the Holders by a lawful plan or reorganization under applicable bankruptcy law),
(a)

the holders of all Guarantor Senior Indebtedness shall be entitled to receive payment in full of any
principal thereof, premium, if any, interest or any other amount payable, and any interest thereon,
due thereon before the Holders of the Subordinate Notes are entitled to receive any payment
pursuant to this Guarantee in respect of the principal, premium, interest or any other amount
payable of or on the Subordinate Notes or interest on overdue amounts thereof; and

(b)

any payment or distribution of assets of the Guarantor of any kind or character, whether in cash,
property or securities, to which the Holders of the Subordinate Notes or the Trustee would be
entitled except for the provisions of this paragraph shall be paid by the liquidating trustee or agent
or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to the holders of Guarantor Senior Indebtedness or
their representative or representatives or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Guarantor Senior Indebtedness may have been issued,
ratably according to the aggregate amounts remaining unpaid on account of the principal of,
premium, if any, interest or any other amount payable, and any interest thereon, on the Guarantor
Senior Indebtedness held or represented by each, to the extent necessary to make payment in full
of all such Guarantor Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Guarantor Senior Indebtedness; and

(c)

in the event that, notwithstanding the foregoing, any payment or distribution of assets of the
Guarantor of any kind or character, whether in cash, property or securities, shall be received by the
Trustee on behalf of the Holders of the Subordinate Notes or the Subordinate Trustee (as defined
in the Indenture) or the Holders of the Subordinate Notes before all Guarantor Senior Indebtedness
is paid in full, such payment or distribution shall be paid over to the holders of such Guarantor
Senior Indebtedness or their representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Guarantor Senior Indebtedness
may have been issued, ratably as aforesaid, for application to the payment of all Guarantor Senior
Indebtedness remaining unpaid until all such Guarantor Senior Indebtedness shall have been paid
in full, after giving effect to any concurrent payment or distribution to the holders of such
Guarantor Senior Indebtedness.

Subject to the payment in full of all Guarantor Senior Indebtedness, the Holders of the Subordinate Notes
shall be subrogated to the rights of the holders of Guarantor Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Guarantor applicable to Guarantor Senior Indebtedness
until the principal, premium, interest or any other amount payable, and any interest thereon, of or on the
Subordinate Notes shall be paid in full and no payments or distributions to the Holders of Subordinate
Notes of cash, property or securities otherwise distributable to the Guarantor Senior Indebtedness shall, as
between the Guarantor, its creditors other than the holders of Guarantor Senior Indebtedness, and the
Holders of the Subordinate Notes, be deemed to be a payment by the Guarantor to or on account of the
Subordinate Notes. It is understood that the provisions of this and the immediately preceding paragraph are
and are intended solely for the purpose of defining the relative rights of the Holders of the Subordinate
Notes, on the one hand, and the holders of Guarantor Senior Indebtedness, on the other hand. Nothing
contained in this or the immediately preceding paragraph or elsewhere in this Guarantee is intended to or
shall impair, as between the Guarantor, its creditors other than the holders of Guarantor Senior
Indebtedness, and the Holders of the Subordinate Notes, the obligation of the Guarantor, which is

- 30 -

unconditional and absolute, to pay to the Holders of the Subordinate Notes the principal, premium, interest
or any other amount payable, and any interest thereon, of or on the Subordinate Notes as and when the
same shall become due and payable in accordance with their terms, or to affect the relative rights of the
Holders of such Subordinate Notes and creditors of the Guarantor other than the holders of Guarantor
Senior Indebtedness, nor shall anything herein or in the Subordinate Notes prevent the Trustee or
Subordinate Trustee or the Holder of any Subordinate Note from exercising all remedies otherwise
permitted by applicable law upon default under the Indenture, subject to the rights, if any, under this or the
immediately preceding paragraph of the holders of Guarantor Senior Indebtedness in respect of cash,
property or securities of the Guarantor received upon the exercise of any such remedy.
No payment by the Guarantor on account of principal, premium, interest or any other amount payable, and
any interest thereon, of or on the Subordinate Notes shall be made unless full payment of amounts then due
for principal, premium, if any, sinking funds and interest or any other amount payable on Guarantor Senior
Indebtedness has been made or duly provided for in money or money's worth.
"Guarantor Senior Indebtedness" means any payment with respect to indebtedness of the Guarantor for
money borrowed other than such indebtedness that by its terms subordinates its right of payment to other
indebtedness of the Guarantor for money borrowed.
Subject to the foregoing subordination provisions, the Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the invalidity, regularity or enforceability of the
Subordinate Notes; the absence of any action to enforce the same; any waiver or consent by the Holders
concerning any provisions thereof; the rendering of any judgment against the Issuer or any action to
enforce the same; or any other circumstances that might otherwise constitute a legal or equitable discharge
of a guarantor or a defense of a guarantor. The Guarantor covenants that this Guarantee will not be
discharged except by complete payment of the amounts payable under the Subordinate Notes and the
Indenture. This Guarantee shall continue to be effective if the Issuer merges or consolidates with or into
another entity, loses its separate legal identity or ceases to exist.
Anything to the contrary in this Guarantee notwithstanding, any obligations of the Guarantor to make any
payments with respect to the Subordinate Notes in a form other than cash may, in the sole discretion of the
Guarantor, be discharged in respect of the Guarantee by payment of a cash settlement based on a valuation
of the non-cash obligation. The Guarantor shall have sole discretion in determining what would constitute
a commercially reasonable valuation of the non-cash obligation.
The Guarantor hereby waives diligence, presentment, protest, notice of protest, acceleration and dishonor,
filing of claims with any court in the event of insolvency or bankruptcy of the Issuer, all demands
whatsoever, except as noted in the first paragraph hereof, and any right to require a proceeding first against
the Issuer.
The Guarantor hereby certifies and warrants that this Guarantee constitutes the valid obligation of the
Guarantor and complies with all applicable laws.
The Guarantor shall be subrogated to all of the rights of the Holders against the Issuer in respect of any
amount paid by the Guarantor pursuant to this Guarantee; provided, however, that the Guarantor shall not
be entitled to enforce, or to receive any payments arising out of or based upon such rights of subrogation
until all amounts payable on all Subordinate Notes issued under the Indenture shall have been paid in full.
This Guarantee shall not be valid or become obligatory for any purpose with respect to any Subordinate
Note until such Subordinate Note shall have been authenticated on behalf of the Trustee as provided in the
Indenture.
This Guarantee shall be governed by, and construed in accordance with, the laws of the State of New York
applicable to agreements made and to be performed in such State.

- 31 -

Capitalized terms used herein and not defined herein shall have the meanings given to them in the
Indenture.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed in its corporate name
by its duly authorized representative.
MERRILL LYNCH & CO., INC."
PLAN OF DISTRIBUTION
The Notes may be offered by ML Canada and by one or more of the other Dealers under an agreement (the
"Dealer Agreement") dated June 30, 2006, as the same may be amended and supplemented from time to time,
between the Issuers, the Guarantor and the Dealers. The Dealers shall act as an Issuer's agents or as principals, as the
case may be, subject to confirmation by the relevant Issuer pursuant to the Dealer Agreement. The Notes may be
offered at par or at a discount or a premium. The rate of commission payable in connection with sales of the Notes
by the Issuer through the Dealers acting as agents will be determined pursuant to the Dealer Agreement. An Issuer
may also sell Notes to any Dealer, as principal, at such prices and with such commissions as may be agreed upon by
the Issuer and such Dealer, for resale to the public at prices to be negotiated by the Dealer with each purchaser. Such
resale prices may vary during the distribution period and as between purchasers. A Dealer's compensation for such
transactions will vary by the amount by which the aggregate price paid for the Notes by purchasers exceeds or is less
than the gross proceeds paid to the Issuer by the Dealer, acting as principal, for such Notes. The Notes may also be
offered directly by the Issuer to purchasers pursuant to applicable statutory exemptions at such prices and on such
terms as may be negotiated with any purchaser. No commission will be payable on Notes sold directly to purchasers
by the Issuer.
The obligation of the Dealers, when purchasing as principal, under the Dealer Agreement may be
terminated upon the occurrence of certain stated events. In connection with any offering of Notes, the Dealers may
over-allot or effect transactions which stabilize or maintain the market price of the Notes offered at a level above
that which might otherwise prevail in an open market. Such transactions, if commenced, may be discontinued at any
time.
There is no established trading market for the Notes. Unless otherwise specified in a pricing supplement
relating to the Notes, the Notes will not be listed on any securities or stock exchange. Any Dealers to or through
whom Notes are sold by the Issuer for public offering and sale may make a market in the Notes, but such Dealers
will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can
be given that a trading market in the Notes will develop or as to the liquidity of any trading market for the Notes.
The Issuer and, if applicable, each of the Dealers reserve the right to reject any offer to purchase Notes in
whole or in part. The Issuer also reserves the right to withdraw, cancel or modify the offering of Notes under this
Prospectus without notice.
Under Canadian securities legislation, ML Canada may act as underwriter in respect of up to 80% of an
offering of Notes, provided that one independent Dealer underwrites at least 20% of the offering. Alternatively,
pursuant to an exemption order issued by the Canadian securities regulatory authorities in each of the provinces of
Canada, an offering of Notes may be made without the involvement of an independent Dealer so long as the offering
is made under one of two arrangements. Under the first arrangement, independent Dealers will underwrite, in
aggregate, at least 51% of the offering and the minimum subscription for each subscriber under such offering will be
Cdn. $150,000. Under the second arrangement, ML Canada will underwrite up to 100% of the offering and the
minimum subscription for each subscriber under such offering will be Cdn. $150,000. Under the second
arrangement, 66 % of the subscriptions for the offering must also be made by Canadian institutions, pension funds,
endowment funds or mutual funds.
ML Canada was involved in the decision to distribute Notes hereunder and will be involved throughout the
currency of this Prospectus in the determination of the terms of each particular offering of Notes. Each of the Issuers
and ML Canada are indirect wholly-owned subsidiaries of the Guarantor. Consequently, the Issuers are "related

- 32 -

issuers" and are also "connected issuers" of ML Canada within the meaning of the securities legislation of each of
the provinces of Canada in connection with the offering of Notes under this Prospectus. The Dealers who signed the
Dealer Agreement have performed due diligence in connection with the offering of Notes under this Prospectus.
ML Canada may receive a commission in connection with its acting as a Dealer for the distribution of the Notes
under this Prospectus. In addition, ML Canada will benefit from the offering to the extent the proceeds of the
offering are used to fund the operations of ML Canada.
SELLING RESTRICTIONS
The Notes have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the
"Securities Act"). The Notes may not at any time be offered, sold, resold or delivered, directly or indirectly, in the
United States or to, and for the account or benefit of, any U.S. Person or to others for offer, sale, resale or delivery,
directly or indirectly, in the United States or to, or for the account or benefit of, any U.S. Person. Offers, sales,
resales or deliveries of the Notes, or interests therein, directly or indirectly, in the United States or to, or for the
account or benefit of, U.S. Persons would constitute a violation of United States securities laws unless made in
compliance with the registration requirements of the Securities Act or pursuant to an exemption therefrom. As used
herein, "United States" and "U.S. Person" shall have the meanings given to them by Regulation S under the
Securities Act.
The Dealers have agreed that they will not offer, sell, resell or redeliver, directly or indirectly, any Notes in
the United States or to, or for the account or benefit of, any U.S. Person or to others for offer, sale, resale or
delivery, directly or indirectly, in the United States or to, or for the account or benefit of, any such U.S. Person. Any
person purchasing Notes will be deemed to have agreed that (i) it will not at any time offer, sell, resell or deliver,
directly or indirectly, any Notes so purchased in the United States or to, or for the account or benefit of, any U.S.
Person or to others for offer, sale, resale or delivery, directly or indirectly, in the United States or to, or for the
account or benefit of, any U.S. Person, (ii) it is not purchasing any Notes for the account or benefit of any U.S.
Person, (iii) it will not make offers, sales, resales or deliveries of any Notes (otherwise acquired), directly or
indirectly, in the United States or to, or for the account or benefit of, any U.S. Person, and (iv) it will deliver, to each
person to whom it transfers any Notes or interests therein, notice of any restrictions on transfer of the Notes.
Each holder of the Notes issued by ML Finance will be deemed to have represented that such holder
understands that the Notes will bear a legend substantially in the following form:
"THIS NOTE HAS NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THIS NOTE MAY
NOT BE OFFERED, SOLD, RESOLD OR DELIVERED DIRECTLY OR INDIRECTLY IN
THE UNITED STATES, ITS TERRITORIES OR POSSESSIONS OR TO U.S. PERSONS (AS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT). NEITHER THIS NOTE
NOR ANY INTEREST THEREIN MAY BE OWNED BY A U.S. PERSON. THIS NOTE MAY
NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO A U.S.
PERSON WHO WOULD, UPON THE COMPLETION OF SUCH SALE, BE A U.S. HOLDER.
THIS NOTE MAY BE SUBJECT TO UNITED STATES TAX LAW REQUIREMENTS."
Each holder of the Notes issued by ML&Co Canada will be deemed to have represented that such holder
understands that the Notes will bear a legend substantially in the following form:
"THIS NOTE HAS NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THIS NOTE MAY
NOT BE OFFERED, SOLD, RESOLD OR DELIVERED DIRECTLY OR INDIRECTLY IN
THE UNITED STATES, ITS TERRITORIES OR POSSESSIONS OR TO U.S. PERSONS (AS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT). NEITHER THIS NOTE
NOR ANY INTEREST THEREIN MAY BE OWNED BY A U.S. PERSON. THIS NOTE MAY
NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO A U.S.
PERSON WHO WOULD, UPON THE COMPLETION OF SUCH SALE, BE A U.S. HOLDER."

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CIRCULAR 230 NOTICE

Prospective investors are hereby notified that: (a) any discussion of United States federal tax issues
contained or referred to in this Prospectus or any document referred to herein is not intended or written to be used,
and cannot be used by prospective investors for the purpose of avoiding penalties that may be imposed on them
under the Code; (b) such discussion is written for use in connection with the promotion or marketing of the
transactions or matters addressed herein; and (c) prospective investors should seek advice based on their particular
circumstances from an independent tax advisor.
Notwithstanding anything to the contrary contained herein, a prospective investor (and each employee,
representative, or other agent of a prospective investor) may disclose to any and all persons, without limitation of
any kind, the tax treatment and tax structure of the transactions described in this prospectus or the related pricing
supplement and all materials of any kind that are provided to the prospective investor relating to such tax treatment
and tax structure (as such terms are defined in Treasury Regulation section 1.6011-4). This authorization of tax
disclosure is retroactively effective to the commencement of discussions with prospective investors regarding the
transactions contemplated herein.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The consolidated financial statements of the Guarantor and its subsidiaries as of December 30, 2005 and
December 31, 2004 and for each of the three years in the period ended December 30, 2005, the related financial
statement schedule, and management's report on the effectiveness of internal control over financial reporting
included or incorporated herein by reference in the Guarantor's annual report on Form 10-K for the year ended
December 30, 2005 have been audited by Deloitte & Touche LLP, an independent registered public accounting firm,
as stated in their reports, which are incorporated herein by reference.
REGISTRAR, TRANSFER AND PAYING AGENT
Unless otherwise specified in the applicable pricing supplement, the register and transfer books for the
Notes will be kept at the principal transfer office of CIBC Mellon Trust Company in Toronto, or at any other place
as the Issuer may designate. A person appointed from time to time by CIBC Mellon Trust Company or the Issuer on
behalf of the Issuer will act as paying agent for the Notes.
LEGAL MATTERS
Certain legal matters in connection with the offering will be passed upon on behalf of the Issuers by Davies
Ward Phillips & Vineberg LLP, Toronto, on behalf of the Guarantor by Sidley Austin LLP, New York and on behalf
of the Dealers by McMillan Binch Mendelsohn LLP, Toronto.
Partners and associates of Davies Ward Phillips & Vineberg LLP, as a group, and McMillan Binch
Mendelsohn LLP, as a group, respectively own beneficially, directly and indirectly, less than 1% of securities of the
Issuers and their affiliates and associates.
PURCHASERS' STATUTORY RIGHTS
Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw
from an agreement to purchase securities. This right may be exercised within two business days after receipt or
deemed receipt of a prospectus, the accompanying pricing supplement relating to the securities purchased by a
purchaser and any amendment. In several of the provinces, the securities legislation further provides a purchaser
with remedies for rescission or, in some jurisdictions, damages, if the prospectus, the accompanying pricing
supplement relating to the securities purchased by a purchaser and any amendment contains a misrepresentation or is
not delivered to the purchaser, provided that the remedies for rescission or damages are exercised by the purchaser
within the time limit prescribed by the securities legislation of the purchaser's province. The purchaser should refer
to any applicable provisions of the securities legislation of the purchaser's province for the particulars of these rights
or consult with a legal adviser.

- 34 -

C
CERTIFICATE OF THE ISSUERS AND THE GUARANTOR
Dated: June 30, 2006
This short form prospectus, together with the documents incorporated in the prospectus by reference, will,
as of the date of the last supplement to this prospectus relating to the securities offered by this prospectus and the
supplement(s), constitute full, true and plain disclosure of all material facts relating to the securities offered by this
prospectus and the supplement(s) as required by the securities legislation of each of the provinces of Canada. For the
purpose of the Province of Qubec, this simplified prospectus, together with documents incorporated by reference
herein and as supplemented by the permanent information record, will contain no misrepresentation that is likely to
affect the value or the market price of the securities to be distributed.
MERRILL LYNCH CANADA FINANCE COMPANY

By: (Signed) LYNN K. PATTERSON

President (acting in the capacity of Chief
Executive Officer)

By: (Signed) ROBERT J. MONTESIONE

Chief Financial Officer

On behalf of the Board of Directors

By: (Signed) DANIEL M. MIDA

Director

By: (Signed) PAUL D. ALLISON

Director

MERRILL LYNCH & CO., CANADA LTD.

By: (Signed) LYNN K. PATTERSON

Director (acting in the capacity of Chief
Executive Officer)

By: (Signed) ROBERT J. MONTESIONE

Chief Financial Officer

On behalf of the Board of Directors

By: (Signed) DANIEL M. MIDA

Director

By: (Signed) PAUL D. ALLISON

Director

- C-1 -

MERRILL LYNCH & CO., INC.

By: (Signed) E. STANLEY O'NEAL

Chief Executive Officer

By: (Signed) JEFFREY N. EDWARDS

Chief Financial Officer

On behalf of the Board of Directors

By: (Signed) JOHN D. FINNEGAN

Director

By: (Signed) ALBERTO CRIBIORE

Director

- C-2 -

CERTIFICATE OF THE DEALERS

Dated: June 30, 2006
To the best of our knowledge, information and belief, this short form prospectus, together with the
documents incorporated in this prospectus by reference, will, as of the date of the last supplement to this prospectus
relating to the securities offered by this prospectus and the supplement(s), constitute full, true and plain disclosure of
all material facts relating to the securities offered by this prospectus and the supplement(s) as required by the
securities legislation of each of the provinces of Canada. For the purpose of the Province of Qubec, this simplified
prospectus, together with documents incorporated by reference herein and as supplemented by the permanent
information record, will contain no misrepresentation that is likely to affect the value or the market price of the
securities to be distributed.
MERRILL LYNCH CANADA INC.

BMO NESBITT BURNS INC.

CANACCORD CAPITAL
CORPORATION

By: (Signed) SCOTT MCBURNEY

By: (Signed) PETER K. MARCHANT

By: (Signed) ISAAC MUSKAT

CIBC WORLD MARKETS INC.

DESJARDINS SECURITIES INC.

EDWARD JONES

By: (Signed) DARRELL BURT

By: (Signed) JAMES DARLING

By (Signed) GARY REAMEY

HSBC SECURITIES (CANADA) INC

LAURENTIAN BANK
SECURITIES INC.

NATIONAL BANK FINANCIAL INC.

By: (Signed) CATHERINE CODE

By: (Signed) MICHEL RICHARD

By: (Signed) DARIN E. DESCHAMPS

RBC DOMINION SECURITIES INC.

SCOTIA CAPITAL INC.

TD SECURITIES INC.

By: (Signed) CHRIS SEIP

By: (Signed) D. GREGORY LAWRENCE

By: (Signed) PATRICK SCACE

- C-3 -