EXHIBIT 4-m
[FORM OF FACE OF SECURITY]
SUBORDINATED VARIABLE RATE RENEWABLE NOTE
REGISTERED REGISTERED
No. SUBVRR Cusip
[PRINCIPAL AMOUNT],
as modified by
Schedule I
Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the registered
owner hereof, Cede & Co., has an interest herein.(1)
- --------
(1) Applies only if this Note is a Registered Global Security.
MORGAN STANLEY DEAN WITTER & CO.
SUBORDINATED VARIABLE RATE RENEWABLE
GLOBAL MEDIUM-TERM NOTE, SERIES C
- ------------------------------------------------------------------------------------------------------
BASE RATE: ORIGINAL ISSUE DATE: INITIAL MATURITY DATE:
- ------------------------------------------------------------------------------------------------------
INDEX MATURITY: INTEREST ACCRUAL DATE: FINAL MATURITY DATE:
- ------------------------------------------------------------------------------------------------------
SPREAD (PLUS OR MINUS): INITIAL INTEREST RATE: INTEREST PAYMENT DATE(S):
- ------------------------------------------------------------------------------------------------------
REPORTING SERVICE: INITIAL INTEREST RESET INTEREST PAYMENT PERIOD:
DATE:
- ------------------------------------------------------------------------------------------------------
SPREAD MULTIPLIER: MAXIMUM INTEREST RATE: INTEREST RESET PERIOD:
- ------------------------------------------------------------------------------------------------------
APPLICABILITY OF ISSUER'S MINIMUM INTEREST RATE: INTEREST RESET DATE(S):
OPTION TO RESET SPREAD
OR SPREAD MULTIPLIER:
- ------------------------------------------------------------------------------------------------------
INDEX CURRENCY: REDEMPTION DATE(S): CALCULATION AGENT:
- ------------------------------------------------------------------------------------------------------
EXCHANGE RATE AGENT: REDEMPTION PERCENTAGE: SPECIFIED CURRENCY
- ------------------------------------------------------------------------------------------------------
ANNUAL REDEMPTION IF SPECIFIED CURRENCY
PERCENTAGE REDUCTION: OTHER THAN U.S.
DOLLARS, OPTION TO
ELECT PAYMENT IN U.S.
DOLLARS: [YES](2)
- ------------------------------------------------------------------------------------------------------
DESIGNATED CMT TELERATE
PAGE:
- ------------------------------------------------------------------------------------------------------
OTHER PROVISIONS: REDEMPTION NOTICE PERIOD:(3) DESIGNATED CMT MATURITY
INDEX:
- ------------------------------------------------------------------------------------------------------
TAX REDEMPTION AND
PAYMENT OF ADDITIONAL
AMOUNTS: NO(4)
- ------------------------------------------------------------------------------------------------------
IF YES, STATE INITIAL
OFFERING DATE: NA
===========================================================================================================
Morgan Stanley Dean Witter & Co., a Delaware corporation (together with
its successors and assigns, the "Issuer"), for value received, hereby promises
to pay to , or registered
- --------
(2) Applies if this is a Registered Global Security, unless new arrangements
are made with DTC outside of existing Letters of Representations.
(3) Applicable if other than 30-60 calendar days. If this is a Registered
Global Security, minimum notice period is [20] calendar days [current DTC
limitation].
(4) Default provision is NO. Indicate YES only for certain notes issued on a
global basis if specified in pricing supplement.
2
assignees, the principal [sum ](5) [amount specified in Schedule A hereto]
(6) specified in Schedule I hereto on the Initial Maturity Date specified above
or, to the extent the maturity date of any portion of the principal amount of
this Note is extended in accordance with the procedures set forth below to an
Extended Maturity Date, as defined below, on such Extended Maturity Date
(except to the extent such portion is redeemed prior to such Extended Maturity
Date) and to pay interest on the principal amount hereof outstanding from time
to time, from the Interest Accrual Date specified above at a rate per annum
equal to the Initial Interest Rate specified above until the Initial Interest
Reset Date specified above, and thereafter at a rate per annum determined in
accordance with the provisions specified on the reverse hereof until (a) the
principal hereof is paid or duly made available for payment or (b) this Note
has been cancelled in accordance with the provisions set forth below.
The Issuer will pay interest in arrears weekly, monthly, quarterly,
semiannually or annually as specified above as the Interest Payment Period on
each Interest Payment Date (as specified above), commencing with the first
Interest Payment Date next succeeding the Interest Accrual Date specified
above, and on the Initial Maturity Date or the Extended Maturity Date, as the
case may be (each, a "Maturity Date"), or any redemption date; provided,
however, if the Interest Accrual Date occurs between a Record Date, as defined
below, and the next succeeding Interest Payment Date, interest payments will
commence on the second Interest Payment Date succeeding the Interest Accrual
Date to the registered holder of this Note on the Record Date with respect to
such second Interest Payment Date; provided, further, that if an Interest
Payment Date or the Maturity Date or redemption date would fall on a day that
is not a Business Day, as defined on the reverse hereof, such Interest Payment
Date, Maturity Date or redemption date shall be the following day that is a
Business Day, except that if the Base Rate specified above is LIBOR or EURIBOR
and such next Business Day falls in the next calendar month, the Interest
Payment Date, Maturity Date or redemption date shall be the immediately
preceding day that is a Business Day. As used herein, "Extended Maturity Date"
means the Interest Payment Date occurring in the month six months after the
Initial Maturity Date and each Interest Payment Date occurring in the month six
months after the immediately preceding Extended Maturity Date.
Interest on this Note will accrue from and including the most recent date
to which interest has been paid or duly provided for, or, if no interest has
been paid or duly provided for, from and including the Interest Accrual Date,
until, but excluding the date the (a) the principal hereof has been paid or
duly made available for payment or (b) this Note has been cancelled in
accordance with the provisions set forth below. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will,
subject to certain exceptions described herein, be paid to the person in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on the date 15 calendar days prior to such Interest Payment Date
(whether or not a Business Day) (each such date, a "Record Date"); provided,
however, that interest payable at maturity (or any redemption date) shall be
payable to the person to whom the principal hereof shall be payable.
- --------
(5) Applies if this Note is not issued as part of, or in relation to, a
Unit.
(6) Applies if this Note is issued as part of, or in relation to, a Unit.
3
On the Interest Payment Date occurring in the month six months prior to
the Initial Maturity Date (the "Initial Election Date"), the maturity of this
Note shall be extended to the Extended Maturity Date occurring in the month
twelve months following the Initial Election Date and on the Interest Payment
Date occurring in the month six months prior to each Extended Maturity Date (an
"Election Date," which term shall include the Initial Election Date), the
maturity of this Note shall be extended to the Extended Maturity Date occurring
in the month twelve months after such Election Date, unless, in any such case,
the holder hereof elects to terminate the automatic extension of the maturity
hereof or of any portion hereof having a principal amount of $1,000 or any
larger multiple of $1,000 in excess thereof by delivering to the Paying Agent,
as defined on the reverse hereof, not less than 15 nor more than 30 calendar
days prior to the applicable Election Date (i) this Note with the form entitled
"Option to Elect Termination of Automatic Extension" below duly completed or
(ii) a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc. or a commercial bank or a trust company in the United States of America
setting forth the name of the holder of this Note, the principal amount hereof,
the certificate number of this Note or a description of this Note's tenor or
terms, a statement that the option to elect termination of automatic extension
is being exercised thereby, the principal amount hereof with respect to which
such option is being exercised and a guarantee that this Note with the form
entitled "Option to Elect Termination of Automatic Extension" below duly
completed will be received by the Paying Agent no later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter;
provided that such telegram, telex, facsimile transmission or letter shall not
be effective unless this Note and such form duly completed are received by the
Paying Agent by such fifth Business Day. Such option may be exercised by the
holder for less than the entire principal amount hereof provided that the
principal amount for which such option is not exercised is at least $1,000 or
any larger amount that is an integral multiple of $1,000. The exercise of such
option may be withdrawn before or after the applicable Election Date, pursuant
to the procedures described on the reverse hereof and in a Short-Term Note (as
defined below). If the option to terminate the automatic extension of the
maturity of any portion hereof is exercised and not withdrawn prior to the
applicable Election Date in accordance with such procedures, a new Note or
Notes in the form attached hereto as Exhibit A (each, a "Short-Term Note") for
the principal amount hereof for which such option was exercised and not
withdrawn shall be issued on such Election Date in the name of the holder
hereof and Schedule I hereto shall be annotated as of such Election Date to
reflect the corresponding decrease in the principal amount hereof. Each such
Short-Term Note shall have as its "Maturity Date" (as such term is used in such
Short-Term Note) the Interest Payment Date occurring in the month six months
after such Election Date and shall have as its Spread or Spread Multiplier, as
the case may be, the Spread or Spread Multiplier applicable to this Note on the
day prior to the issuance of such Short-Term Note. If any exercise of the
option to terminate the automatic extension of the maturity hereof causes the
principal amount of this Note to be reduced to zero, this Note shall
nevertheless not be cancelled until the date on which all outstanding
Short-Term Notes issued in exchange for this Note shall have been paid in full.
Notwithstanding the foregoing, the maturity of this Note shall not be
extended beyond the Final Maturity Date specified above.
4
If the holder of any Short-Term Note exchanges all or a portion of such
Short-Term Note for an interest in this Note in accordance with the terms of
such Short-Term Note, Schedule I hereto shall be annotated on the date of such
exchange to reflect the corresponding increase in the principal amount hereof.
Payment of the principal, premium, if any, and the interest due at
maturity on this Note (or any redemption date), unless this Note is denominated
in a Specified Currency other than U.S. dollars and is to be paid in whole or
in part in such Specified Currency, will be made in immediately available funds
upon surrender of this Note at the office or agency of the Paying Agent, as
defined on the reverse hereof, maintained for that purpose in the Borough of
Manhattan, The City of New York, or at such other paying agent as the Issuer
may determine in U.S. dollars. U.S. dollar payments of interest, other than
interest due at maturity or any date of redemption, will be made by United
States dollar check mailed to the address of the person entitled thereto as
such address shall appear in the Note register. A holder of U.S. $10,000,000
(or the equivalent in a Specified Currency) or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which is
payable in U.S. dollars, shall be entitled to receive payments of interest,
other than interest due at maturity or on any date of redemption, by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Paying Agent in writing not less than 15
calendar days prior to the applicable Interest Payment Date.
If this Note is denominated in a Specified Currency other than U.S.
dollars, and the holder does not elect (in whole or in part) to receive payment
in U.S. dollars pursuant to the next succeeding paragraph, payments of
principal, premium, if any, or interest with regard to this Note will be made
by wire transfer of immediately available funds to an account maintained by the
holder hereof with a bank located outside the United States if appropriate wire
transfer instructions have been received by the Paying Agent in writing [not
less than 15 calendar days prior to the applicable payment date](7) [, with
respect to payments of interest, on or prior to the fifth Business Day after
the applicable Record Date and, with respect to payments of principal or any
premium, at least ten Business Days prior to the Maturity Date or any
redemption or repayment date, as the case may be](8); provided that, if payment
of interest, principal or any premium with regard to this Note is payable in
euro, the account must be a euro account in a country for which the euro is the
lawful currency, provided, further, that if such wire transfer instructions are
not received, such payments will be made by check payable in such Specified
Currency mailed to the address of the person entitled thereto as such address
shall appear in the Note register, and provided, further, that payment of the
principal of this Note, any premium and the interest due at maturity (or on any
redemption or repayment date) will be made upon surrender of this Note at the
office or agency referred to in the preceding paragraph.
If so indicated on the face hereof, the holder of this Note, if
denominated in a Specified Currency other than U.S. dollars, may elect to
receive all or a portion of payments on this Note in U.S. dollars by
transmitting a written request to the Paying Agent, on or prior to the fifth
Business
- --------
(7) Applies for a Registered Note that is not in global form.
(8) Applies only for a Registered Global Security.
5
Day after such Record Date or at least ten Business Days prior to the Maturity
Date or any redemption date, as the case may be. Such election shall remain in
effect unless such request is revoked by written notice to the Paying Agent as
to all or a portion of payments on this Note at least five Business Days prior
to such Record Date or at least ten calendar days prior to the Maturity Date,
for payments of interest, or any redemption date, for payments of principal, as
the case may be.
If the holder elects to receive all or a portion of payments of principal
or premium, if any, and interest on this Note, if denominated in a Specified
Currency other than U.S. dollars, in U.S. dollars, the Exchange Rate Agent (as
defined on the reverse) will convert such payments into U.S. dollars. In the
event of such an election, payment in respect of this Note will be based upon
the exchange rate as determined by the Exchange Rate Agent based on the highest
bid quotation in The City of New York received by such Exchange Rate Agent at
approximately 11:00 a.m., New York City time, on the second Business Day
preceding the applicable payment date from three recognized foreign exchange
dealers (one of which may be the Exchange Rate Agent unless such Exchange Rate
Agent is an affiliate of the Issuer) for the purchase by the quoting dealer of
U.S. dollars for the Specified Currency for settlement on such payment date in
the amount of the Specified Currency payable in the absence of such an election
to such holder and at which the applicable dealer commits to execute a
contract. If such bid quotations are not available, such payment will be made
in the Specified Currency. All currency exchange costs will be borne by the
holder of this Note by deductions from such payments.
If this Note ceases to be held by The Depository Trust Company or its
successor or the nominee of The Depository Trust Company or its successor, this
Note will be exchanged for one or more Notes of authorized denominations having
an aggregate principal amount equal to the principal amount of this Note as
then shown on Schedule I hereto, which new Notes shall otherwise have the same
terms as this Note, except that the provisions of such new Notes regarding the
termination of the automatic extension of the maturity thereof shall be
modified to the extent appropriate for notes not required to be held in a
securities depositary; provided that the respective rights and obligations of
the Issuer and the holders of such new Notes shall be the same in all material
respects as the respective rights and obligations of the Issuer and the holder
of this Note. Such new Notes shall have stated principal amounts and shall be
registered in the names of the persons then having a beneficial interest in
this Note or in the names of their nominees.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place, including, without limitation, the
provisions relating to the subordination of this Note to the Issuer's Senior
Indebtedness, as defined on the reverse hereof.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Subordinated
Indenture, as defined on the reverse hereof, or be valid or obligatory for any
purpose.
6
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.
DATED: MORGAN STANLEY DEAN WITTER & CO.
By:______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned
Subordinated Indenture.
JPMORGAN CHASE BANK,
as Authentication Agent
By:_______________________________________
Authorized Officer
7
[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of the Subordinated Global
Medium-Term Notes, Series C, having maturities more than nine months from the
date of issue (the "Notes") of the Issuer. The Notes are issuable under an
Amended and Restated Subordinated Indenture, dated as of May 1, 1999, between
the Issuer and Bank One Trust Company, N.A. (as successor to The First National
Bank of Chicago), as Trustee (the "Trustee," which term includes any successor
trustee under the Subordinated Indenture) (as may be amended or supplemented
from time to time, the "Subordinated Indenture"), to which Subordinated
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and
immunities of the Issuer, the Trustee and holders of the Notes and the terms
upon which the Notes are, and are to be, authenticated and delivered. The
Trustee has appointed JPMorgan Chase Bank (formerly known as The Chase
Manhattan Bank), as Authenticating Agent (the "Authenticating Agent," which
term includes any successor authenticating agent appointed by the Trustee) with
respect to the Notes, and the Issuer has appointed JPMorgan Chase Bank at its
corporate trust office in The City of New York as the paying agent (the "Paying
Agent," which term includes any additional or successor Paying Agent appointed
by the Issuer) with respect to the Notes. The terms of individual Notes may
vary with respect to interest rates, interest rate formulas, issue dates,
maturity dates, or otherwise, all as provided in the Subordinated Indenture. To
the extent not inconsistent herewith, the terms of the Subordinated Indenture
are hereby incorporated by reference herein.
Unless otherwise indicated on the face hereof, this Note will not be
subject to any sinking fund and, unless otherwise provided on the face hereof
in accordance with the provisions of the following paragraph, will not be
redeemable prior to maturity.
If so indicated on the face hereof, this Note may be redeemed in whole or
in part at the option of the Issuer on or after the Redemption Dates specified
on the face hereof on the terms set forth on the face hereof, together with
interest accrued and unpaid hereon to the date of redemption. Notice of
redemption shall be mailed to the registered holders of the Notes designated
for redemption at their addresses as the same shall appear on the Note register
not less than 180 nor more than 210 calendar days prior to the date fixed for
redemption, subject to all the conditions and provisions of the Subordinated
Indenture. In the event of redemption of this Note in part only, a new Note or
Notes for the amount of the unredeemed portion hereof shall be issued in the
name of the holder hereof upon the cancellation hereof.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption, if the Issuer determines that, 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 therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which
change or amendment becomes effective on or after the Initial Offering Date
hereof, the Issuer has or will become obligated to pay Additional Amounts (as
defined below) with respect to this Note as
8
described below. Prior to the giving of any notice of redemption pursuant to
this paragraph, the Issuer shall deliver to the Trustee (i) a certificate
stating that the Issuer is entitled to effect such redemption and setting forth
a statement of facts showing that the conditions precedent to the right of the
Issuer to so redeem have occurred, and (ii) an opinion of independent counsel
satisfactory to the Trustee to such effect based on such statement of facts;
provided that no such notice of redemption shall be given earlier than 60
calendar days prior to the earliest date on which the Issuer would be obligated
to pay such Additional Amounts if a payment in respect of this Note were then
due.
Notice of redemption will be given not less than 30 nor more than 60
calendar days prior to the date fixed for redemption or within the Redemption
Notice Period specified on face hereof, which date and the applicable
redemption price will be specified in the notice.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," the Issuer will, subject to certain
exceptions and limitations set forth below, pay such additional amounts (the
"Additional Amounts") to the holder of this Note who is a United States Alien
as may be necessary in order that every net payment of the principal of and
interest on this Note and any other amounts payable on this Note, after
withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein),
will not be less than the amount provided for in this Note to be then due and
payable. The Issuer will not, however, be required to make any payment of
Additional Amounts to any such holder for or on account of:
(a) any such tax, assessment or other governmental charge that would
not have been so imposed but for (i) the existence of any present or
former connection between such holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of such holder, if such holder is an
estate, a trust, a partnership or a corporation) and the United States and
its possessions, including, without limitation, such holder (or such
fiduciary, settlor, beneficiary, member or shareholder) being or having
been a citizen or resident thereof or being or having been engaged in a
trade or business or present therein or having, or having had, a permanent
establishment therein or (ii) the presentation by the holder of this Note
for payment on a date more than 15 calendar days after the date on which
such payment became due and payable or the date on which payment thereof
is duly provided for, whichever occurs later;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or governmental charge;
(c) any tax, assessment or other governmental charge imposed by
reason of such holder's past or present status as a personal holding
company or foreign personal holding company or controlled foreign
corporation or passive foreign investment company with respect to the
United States or as a corporation which accumulates earnings to avoid
United States federal income tax or as a private foundation or other
tax-exempt organization;
9
(d) any tax, assessment or other governmental charge that is payable
otherwise than by withholding from payments on or in respect of this Note;
(e) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of principal of, or interest
on, this Note, if such payment can be made without such withholding by any
other Paying Agent in a city in Western Europe;
(f) any tax, assessment or other governmental charge that would not
have been imposed but for the failure to comply with certification,
information or other reporting requirements concerning the nationality,
residence or identity of the holder or beneficial owner of this Note, if
such compliance is required by statute or by regulation of the United
States or of any political subdivision or taxing authority thereof or
therein as a precondition to relief or exemption from such tax, assessment
or other governmental charge;
(g) any tax, assessment or other governmental charge imposed by
reason of 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 stock entitled to vote of the Issuer or as a direct or
indirect subsidiary of the Issuer; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or (g).
In addition, the Issuer shall not be required to make any payment of Additional
Amounts (i) to any such holder where such withholding or deduction is imposed
on a payment to an individual and is required to be made pursuant to any
European Union Directive on the taxation of savings implementing the agreement
reached in the ECOFIN Council meeting of 13 December 2001 or any law
implementing or complying with, or introduced in order to conform to, such
Directive; or (ii) by or on behalf of a holder who would have been able to
avoid such withholding or deduction by presenting this Note or the relevant
coupon to another Paying Agent in a member state of the European Union. Nor
shall Additional Amounts be paid with respect to any payment on this Note to a
United States Alien who is a fiduciary or partnership or other than the sole
beneficial owner of such payment to the extent such payment would be required
by the laws of the United States (or any political subdivision thereof) to be
included in the income, for tax purposes, of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
who would not have been entitled to the Additional Amounts had such
beneficiary, settlor, member or beneficial owner been the holder of this Note.
This Note will bear interest at the rate determined in accordance with the
applicable provisions below by reference to the Base Rate shown on the face
hereof based on the Index Maturity, if any, shown on the face hereof (i) plus
or minus the Spread, if any, or (ii) multiplied by the Spread Multiplier, if
any, (a) specified on the face hereof, (b) if the Spread or Spread Multiplier
is reset in accordance with the procedures specified below, then as determined
pursuant to such procedures, or (c) if a holder of a Short-Term Note has
exchanged such Note for an interest in this Note in response to an Optional
Exchange Notice (as defined in such Short-Term Note), then as set forth in such
Optional Exchange Notice. Commencing with the Initial Interest Reset Date
specified
10
on the face hereof, the rate at which interest on this Note is payable shall be
reset as of each Interest Reset Date specified on the face hereof (as used
herein, the term "Interest Reset Date" shall include the Initial Interest Reset
Date). The determination of the rate of interest at which this Note will be
reset on any Interest Reset Date shall be made on the Interest Determination
Date (as defined below) pertaining to such Interest Reset Date. The Interest
Reset Dates will be the Interest Reset Dates specified on the face hereof;
provided, however, that (a) the interest rate in effect for the period from the
Interest Accrual Date to the Initial Interest Reset Date specified on the face
hereof will be the Initial Interest Rate and (b) unless otherwise specified on
the face hereof, the interest rate in effect for the ten calendar days
immediately prior to maturity, redemption or repayment will be that in effect
on the tenth calendar day preceding such maturity, redemption or repayment
date. If any Interest Reset Date would otherwise be a day that is not a
Business Day, such Interest Reset Date shall be postponed to the next
succeeding day that is a Business Day, except that if the Base Rate specified
on the face hereof is LIBOR and such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Business Day. As used herein, "Business Day" means any day, other than a
Saturday or Sunday, (a) that is neither a legal holiday nor a day on which
banking institutions are authorized or required by law or regulation to close
(x) in The City of New York or (y) if this Note is denominated in a Specified
Currency other than U.S. dollars, euro or Australian dollars, in the principal
financial center of the country of the Specified Currency, or (z) if this Note
is denominated in Australian dollars, in Sydney and (b) if this Note is
denominated in euro, that is also a day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer System ("TARGET") is operating (a
"TARGET Settlement Day").
If so indicated on the face of this Note, the Issuer has the option to
reset the Spread or Spread Multiplier on this Note as of any Election Date.
Such option shall include the right to reset the Maximum Interest Rate or
Minimum Interest Rate on this Note. The Issuer may exercise such option by
notifying the Paying Agent of such exercise at least 45 but not more than 60
calendar days prior to an Election Date, such notice to be accompanied by the
form of the Reset Notice referred to below. Not later than 38 calendar days
prior to such Election Date, the Paying Agent will mail to the holder hereof a
notice (the "Reset Notice"), first class mail, postage prepaid, setting forth
(a) the election of the Issuer to reset the Spread or Spread Multiplier and (b)
such new Spread or Spread Multiplier, together with any new Maximum Interest
Rate or Minimum Interest Rate.
If the face hereof indicates that the Issuer has the option to reset the
Spread or Spread Multiplier on this Note, then, if the holder of this Note
elects to terminate the automatic extension of the maturity hereof or any
portion hereof as of any Election Date, the Issuer may, not later than the
later of (a) the twentieth calendar day prior to such Election Date and (b) the
first Business Day following the twenty-third calendar day prior to such
Election Date, propose a new Spread or Spread Multiplier or revoke a Spread or
Spread Multiplier previously set forth in a Reset Notice and propose a higher
Spread or Spread Multiplier, in either case together with any new Maximum
Interest Rate or Minimum Interest Rate, by causing the Paying Agent to send
notice thereof, to the holder of this Note by first class mail, postage
prepaid, or by such other means as shall be agreed between the Issuer and the
Paying Agent. If the Issuer has proposed a new or higher Spread or Spread
Multiplier as described above, the holder hereof may withdraw his election to
terminate the automatic extension of the maturity hereof or any portion hereof
by giving written notice to such effect to the Paying Agent not less than 16
calendar days prior to such Election Date (or if such sixteenth day is not a
11
Business Day, on the immediately preceding Business Day), in which case such
new or higher Spread or Spread Multiplier, together with any new Maximum
Interest Rate or Minimum Interest Rate, will apply to the entire principal
amount of this Note from such Election Date until the Maturity Date or until
the Spread or Spread Multiplier is further reset by the Issuer pursuant to the
provisions hereof or of a Short-Term Note.
The Interest Determination Date pertaining to an Interest Reset Date for
Notes bearing interest calculated by reference to the CD Rate, Commercial Paper
Rate, Federal Funds Rate, Prime Rate and CMT Rate will be the second Business
Day next preceding such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for Notes bearing interest calculated by
reference to EURIBOR (or to LIBOR when the Index Currency is euros) shall be
the second TARGET Settlement Day preceding such Interest Reset Date. The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to LIBOR, other than for LIBOR Notes
for which the Index Currency is euros, shall be the second London Banking Day
preceding such Interest Reset Date, except that the Interest Determination Date
pertaining to an Interest Reset Date for a LIBOR Note for which the Index
Currency is pounds sterling will be such Interest Reset Date. As used herein,
"London Banking Day" means any day on which dealings in deposits in the Index
Currency (as defined herein) are transacted in the London interbank market. The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to the Treasury Rate shall be the day
of the week in which such Interest Reset Date falls on which Treasury bills
normally would be auctioned; provided, however, that if as a result of a legal
holiday an auction is held on the Friday of the week preceding such Interest
Reset Date, the related Interest Determination Date shall be such preceding
Friday; and provided, further, that if an auction shall fall on any Interest
Reset Date, then the Interest Reset Date shall instead be the first Business
Day following the date of such auction.
Unless otherwise specified on the face hereof, the "Calculation Date"
pertaining to an Interest Determination Date will be the earlier of (i) the
tenth calendar day after such Interest Determination Date or, if such day is
not a Business Day, the next succeeding Business Day, or (ii) the Business Day
preceding the applicable Interest Payment Date or Maturity Date (or, with
respect to any principal amount to be redeemed or repaid, any redemption or
repayment date), as the case may be.
Determination of CD Rate. If the Base Rate specified on the face hereof is
the "CD Rate," for any Interest Determination Date, the CD Rate with respect to
this Note shall be the rate on that date for negotiable certificates of deposit
having the Index Maturity specified on the face hereof as published by the
Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates," or any successor publication of the Board
of Governors of the Federal Reserve System ("H.15(519)") under the heading "CDs
(Secondary Market)."
The following procedures shall be followed if the CD Rate cannot be
determined as described above:
(i) If the above rate is not published in H.15(519) by 9:00 a.m., New York
City time, on the Calculation Date, the CD Rate shall be the rate on that
Interest Determination Date set forth in
12
the daily update of H.15(519), available through the world wide website of the
Board of Governors of the Federal Reserve System at
http://www.federalreserve.gov/releases/h15/current, or any successor site or
publication ("H.15 Daily Update") for the Interest Determination Date for
certificates of deposit having the Index Maturity specified on the face hereof,
under the caption "CDs (Secondary Market)."
(ii) If the above rate is not yet published in either H.15(519) or the
H.15 Daily Update by 3:00 p.m., New York City time, on the Calculation Date,
the Calculation Agent shall determine the CD Rate to be the arithmetic mean of
the secondary market offered rates as of 10:00 a.m., New York City time, on
that Interest Determination Date of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent (after consultation with the Issuer) for negotiable
certificates of deposit of major United States money center banks of the
highest credit standing in the market for negotiable certificates of deposit
with a remaining maturity closest to the Index Maturity specified on the face
hereof in an amount that is representative for a single transaction in that
market at that time.
(iii) If the dealers selected by the Calculation Agent are not quoting as
described in (ii) above, the CD Rate shall remain the CD Rate for the
immediately preceding Interest Reset Period, or, if there was no Interest Reset
Period, the rate of interest payable shall be the Initial Interest Rate.
Determination of Commercial Paper Rate. If the Base Rate specified on the
face hereof is the "Commercial Paper Rate," for any Interest Determination
Date, the Commercial Paper Rate with respect to this Note shall be the Money
Market Yield (as defined herein), calculated as described below, of the rate on
that date for commercial paper having the Index Maturity specified on the face
hereof, as that rate is published in H.15(519), under the heading "Commercial
Paper -- Nonfinancial."
The following procedures shall be followed if the Commercial Paper Rate
cannot be determined as described above:
(i) If the above rate is not published by 9:00 a.m., New York City time,
on the Calculation Date, then the Commercial Paper Rate shall be the Money
Market Yield of the rate on that Interest Determination Date for commercial
paper of the Index Maturity specified on the face hereof as published in the
H.15 Daily Update under the heading "Commercial Paper -- Nonfinancial."
(ii) If by 3:00 p.m., New York City time, on that Calculation Date the
rate is not yet published in either H.15(519) or the H.15 Daily Update, then
the Calculation Agent shall determine the Commercial Paper Rate to be the Money
Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New
York City time, on that Interest Determination Date of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent
(after consultation with the Issuer) for commercial paper of the Index Maturity
specified on the face hereof, placed for an industrial issuer whose bond rating
is "AA," or the equivalent, from a nationally recognized statistical rating
agency.
13
(iii) If the dealers selected by the Calculation Agent are not quoting as
set forth in (ii) above, the Commercial Paper Rate for that Interest
Determination Date shall remain the Commercial Paper Rate for the immediately
preceding Interest Reset Period, or, if there was no Interest Reset Period, the
rate of interest payable shall be the Initial Interest Rate.
The "Money Market Yield" shall be a yield calculated in accordance with
the following formula:
D x 360
Money Market Yield = ------------- x 100
360 - (D x M)
where "D" refers to the applicable per year rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
Determination of EURIBOR Notes. If the Base Rate specified on the face
hereof is "EURIBOR," for any Interest Determination Date, EURIBOR with respect
to this Note shall be the rate for deposits in euros as sponsored, calculated
and published jointly by the European Banking Federation and ACI - The
Financial Market Association, or any company established by the joint sponsors
for purposes of compiling and publishing those rates, for the Index Maturity
specified on the face hereof as that rate appears on the display on Moneyline
Telerate, Inc., or any successor service, on page 248 or any other page as may
replace page 248 on that service ("Telerate Page 248") as of 11:00 a.m.
(Brussels time).
The following procedures shall be followed if the rate cannot be
determined as described above:
(i) If the above rate does not appear, the Calculation Agent shall request
the principal Euro-zone office of each of four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer) to provide the Calculation Agent with its offered rate for deposits
in euros, at approximately 11:00 a.m. (Brussels time) on the Interest
Determination Date, to prime banks in the Euro-zone interbank market for the
Index Maturity specified on the face hereof commencing on the applicable
Interest Reset Date, and in a principal amount not less than the equivalent of
U.S.$1 million in euro that is representative of a single transaction in euro,
in that market at that time. If at least two quotations are provided, EURIBOR
shall be the arithmetic mean of those quotations.
(ii) If fewer than two quotations are provided, EURIBOR shall be the
arithmetic mean of the rates quoted by four major banks in the Euro-zone, as
selected by the Calculation Agent (after consultation with the Issuer) at
approximately 11:00 a.m. (Brussels time), on the applicable Interest Reset Date
for loans in euro to leading European banks for a period of time equivalent to
the Index Maturity specified on the face hereof commencing on that Interest
Reset Date in a principal amount not less than the equivalent of U.S.$1 million
in euro.
14
(iii) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the EURIBOR rate for that Interest Determination Date shall
remain the EURIBOR for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
"Euro-zone" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the treaty establishing
the European Community, as amended.
Determination of the Federal Funds Rates. If the Base Rate specified on
the face hereof is the "Federal Funds Rate," for any Interest Determination
Date, the Federal Funds Rate with respect to this Note shall be the rate on
that date for federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)" as displayed on Moneyline Telerate, Inc., or any
successor service, on page 120 or any other page as may replace page 120 on
that service ("Telerate Page 120").
The following procedures shall be followed if the Federal Funds Rate
cannot be determined as described above:
(i) If the above rate is not published by 9:00 a.m., New York City time,
on the Calculation Date, the Federal Funds Rate shall be the rate on that
Interest Determination Date as published in the H.15 Daily Update under the
heading "Federal Funds/Effective Rate."
(ii) If that rate is not yet published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the Calculation Date, the
Calculation Agent shall determine the Federal Funds Rate to be the arithmetic
mean of the rates for the last transaction in overnight federal funds by each
of three leading brokers of federal funds transactions in The City of New York
selected by the Calculation Agent (after consultation with the Issuer) prior to
9:00 a.m., New York City time, on that Interest Determination Date.
(iii) If the brokers selected by the Calculation Agent are not quoting as
set forth above, the Federal Funds Rate for that Interest Determination Date
shall remain the Federal Funds Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.
Determination of LIBOR. If the Base Rate specified on the face hereof is
"LIBOR," LIBOR with respect to this Note shall be based on London interbank
offered rate. The Calculation Agent shall determine "LIBOR" for each Interest
Determination Date as follows:
(i) As of the Interest Determination Date, LIBOR shall be either: (a) if
"LIBOR Reuters" is specified as the Reporting Service on the face hereof, the
arithmetic mean of the offered rates for deposits in the Index Currency having
the Index Maturity designated on the face hereof, commencing on the second
London Banking Day immediately following that Interest Determination Date, that
appear on the Designated LIBOR Page, as defined below, as of 11:00 a.m., London
time, on that Interest Determination Date, if at least two offered rates appear
on the Designated LIBOR Page; except that if the specified Designated LIBOR
Page, by its terms provides only for a single rate, that
15
single rate shall be used; or (b) if "LIBOR Telerate" is specified as the
Reporting Service on the face hereof, the rate for deposits in the Index
Currency having the Index Maturity designated on the face hereof, commencing on
the second London Banking Day immediately following that Interest Determination
Date or, if pounds sterling is the Index Currency, commencing on that Interest
Determination Date, that appears on the Designated LIBOR Page at approximately
11:00 a.m., London time, on that Interest Determination Date.
(ii) If (a) fewer than two offered rates appear and LIBOR Reuters is
specified on the face hereof, or (b) no rate appears and the face hereof
specifies either (x) LIBOR Telerate or (y) LIBOR Reuters and the Designated
LIBOR Page by its terms provides only for a single rate, then the Calculation
Agent shall request the principal London offices of each of four major
reference banks in the London interbank market, as selected by the Calculation
Agent (after consultation with the Issuer) to provide the Calculation Agent
with its offered quotation for deposits in the Index Currency for the period of
the Index Maturity specified on the face hereof commencing on the second London
Banking Day immediately following the Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest Determination Date,
to prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on that Interest Determination Date and in a principal amount that
is representative of a single transaction in that Index Currency in that market
at that time.
(iii) If at least two quotations are provided, LIBOR determined on that
Interest Determination Date shall be the arithmetic mean of those quotations.
If fewer than two quotations are provided, LIBOR shall be determined for the
applicable Interest Reset Date as the arithmetic mean of the rates quoted at
approximately 11:00 a.m., London time, or some other time specified on the face
hereof, in the applicable principal financial center for the country of the
Index Currency on that Interest Reset Date, by three major banks in that
principal financial center selected by the Calculation Agent (after
consultation with the Issuer) for loans in the Index Currency to leading
European banks, having the Index Maturity specified on the face hereof and in a
principal amount that is representative of a single transaction in that Index
Currency in that market at that time.
(iv) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the LIBOR rate for that Interest Determination Date shall
remain the LIBOR for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
The "Index Currency" means the currency specified on the face hereof as
the currency for which LIBOR shall be calculated, or, if the euro is
substituted for that currency, the Index Currency shall be the euro. If that
currency is not specified on the face hereof, the Index Currency shall be U.S.
dollars.
"Designated LIBOR Page" means either: (a) if LIBOR Reuters is designated
as the Reporting Service on the face hereof, the display on the Reuters Monitor
Money Rates Service for the purpose of displaying the London interbank rates of
major banks for the applicable Index Currency or its designated successor, or
(b) if LIBOR Telerate is designated as the Reporting Service on the face
hereof, the display on Moneyline Telerate Inc., or any successor service, on
the page
16
specified on the face hereof, or any other page as may replace that page on
that service, for the purpose of displaying the London interbank rates of major
banks for the applicable Index Currency.
If neither LIBOR Reuters nor LIBOR Telerate is specified on the face
hereof, LIBOR for the applicable Index Currency shall be determined as if LIBOR
Telerate were specified, and, if the U.S. dollar is the Index Currency, as if
Page 3750, had been specified.
Determination of Prime Rate. If the Base Rate specified on the face hereof
is "Prime Rate," for any Interest Determination Date, the Prime Rate with
respect to this Note shall be the rate on that date as published in H.15(519)
under the heading "Bank Prime Loan."
The following procedures shall be followed if the Prime Rate cannot be
determined as described above:
(i) If the rate is not published prior to 9:00 a.m., New York City time,
on the Calculation Date, then the Prime Rate shall be the rate on that Interest
Determination Date as published in H.15 Daily Update under the heading "Bank
Prime Loan."
(ii) If the above rate is not published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the Calculation Date, then
the Calculation Agent shall determine the Prime Rate to be the arithmetic mean
of the rates of interest publicly announced by each bank that appears on the
Reuters Screen USPRIME 1 Page, as defined below, as that bank's Prime Rate or
base lending rate as in effect for that Interest Determination Date.
(iii) If fewer than four rates appear on the Reuters Screen USPRIME 1 Page
for that Interest Determination Date, the Calculation Agent shall determine the
Prime Rate to be the arithmetic mean of the Prime Rates quoted on the basis of
the actual number of days in the year divided by 360 as of the close of
business on that Interest Determination Date by at least three major banks in
The City of New York selected by the Calculation Agent (after consultation with
the Issuer).
(iv) If the banks selected by the Calculation Agent are not quoting as set
forth above, the Prime Rate shall remain the Prime Rate for that Interest
Determination Date shall remain the Prime Rate for the immediately preceding
Interest Reset Period, or, if there was no Interest Reset Period, the rate of
interest payable shall be the Initial Interest Rate.
"Reuters Screen USPRIME 1 Page" means the display designated as page
"USPRIME 1" on the Reuters Monitor Money Rates Service, or any successor
service, or any other page as may replace the USPRIME 1 Page on that service
for the purpose of displaying prime rates or base lending rates of major United
States banks.
Determination of Treasury Rate. If the Base Rate specified on the face
hereof is "Treasury Rate," the Treasury Rate with respect to this Note shall
be:
(i) the rate from the Auction held on the applicable Interest
Determination Date (the "Auction") of direct obligations of the United States
("Treasury Bills") having the Index Maturity
17
specified on the face hereof as that rate appears under the caption "INVESTMENT
RATE" on the display on Moneyline Telerate, Inc., or any successor service, on
page 56 or any other page as may replace page 56 on that service ("Telerate
Page 56") or page 57 or any other page as may replace page 57 on that service
("Telerate Page 57"); or
(ii) if the rate described in (i) above is not published by 3:00 p.m., New
York City time, on the Calculation Date, the Bond Equivalent Yield of the rate
for the applicable Treasury Bills as published in the H.15 Daily Update, or
other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "U.S. Government Securities/Treasury
Bills/Auction High;" or
(iii) if the rate described in (ii) above is not published by 3:00 p.m.,
New York City time, on the related Calculation Date, the Bond Equivalent Yield
of the Auction rate of the applicable Treasury Bills, announced by the United
States Department of the Treasury; or
(iv) if the rate described in (iii) above is not announced by the United
States Department of the Treasury, or if the Auction is not held, the Bond
Equivalent Yield of the rate on the applicable Interest Determination Date of
Treasury Bills having the Index Maturity specified on the face hereof published
in H.15(519) under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market;" or
(v) if the rate described in (iv) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date of the applicable Treasury Bills as published in
H.15 Daily Update, or other recognized electronic source used for the purpose
of displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market;" or
(vi) if the rate described in (v) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date calculated by the Calculation Agent as the Bond
Equivalent Yield of the arithmetic mean of the secondary market bid rates, as
of approximately 3:30 p.m., New York City time, on the applicable Interest
Determination Date, of three primary United States government securities
dealers, which may include the agent or its affiliates, selected by the
Calculation Agent, for the issue of Treasury Bills with a remaining maturity
closest to the Index Maturity specified on the face hereof; or
(vii) if the dealers selected by the Calculation Agent are not quoting as
described in (vi), the Treasury Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.
The "Bond Equivalent Yield" means a yield calculated in accordance with
the following formula and expressed as a percentage:
D x N
Bond Equivalent Yield = ------------- x 100
360 - (D x M)
18
where "D" refers to the applicable per annum rate for Treasury Bills quoted on
a bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest
is being calculated.
Determination of CMT Rate. If the Base Rate specified on the face hereof
is the "CMT Rate," for any Interest Determination Date, the CMT Rate with
respect to this Note shall be the rate displayed on the Designated CMT Telerate
Page (as defined below) under the caption "... Treasury Constant Maturities ...
Federal Reserve Board Release H.15... Mondays Approximately 3:45 p.m.," under
the column for the Designated CMT Maturity Index, as defined below, for:
(1) the rate on that Interest Determination Date, if the Designated CMT
Telerate Page is 7051; and
(2) the week or the month, as applicable, ended immediately preceding the
week in which the related Interest Determination Date occurs, if the Designated
CMT Telerate Page is 7052.
The following procedures shall be followed if the CMT Rate cannot be
determined as described above:
(i) If the above rate is no longer displayed on the relevant page, or if
not displayed by 3:00 p.m., New York City time, on the related Calculation
Date, then the CMT Rate shall be the Treasury Constant Maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519).
(ii) If the above rate is no longer published, or if not published by 3:00
p.m., New York City time, on the related Calculation Date, then the CMT Rate
shall be the Treasury Constant Maturity Rate for the Designated CMT Maturity
Index or other United States Treasury rate for the Designated CMT Maturity
Index on the Interest Determination Date as may then be published by either the
Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519).
(iii) If the information set forth above is not provided by 3:00 p.m., New
York City time, on the related Calculation Date, then the Calculation Agent
shall determine the CMT Rate to be a yield to maturity, based on the arithmetic
mean of the secondary market closing offer side prices as of approximately 3:30
p.m., New York City time, on the Interest Determination Date, reported,
according to their written records, by three leading primary United States
government securities dealers ("Reference Dealers") in The City of New York,
which may include an agent or other affiliates of the Issuer, selected by the
Calculation Agent as described in the following sentence. The Calculation Agent
shall select five reference dealers (after consultation with the Issuer) and
shall eliminate the highest quotation or, in the event of equality, one of the
highest, and the lowest quotation or, in the event of equality, one of the
lowest, for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to
maturity of not less than that Designated CMT Maturity Index minus one year. If
two Treasury Notes with an original
19
maturity as described above have remaining terms to maturity equally close to
the Designated CMT Maturity Index, the quotes for the Treasury Note with the
shorter remaining term to maturity shall be used.
(iv) If the Calculation Agent cannot obtain three Treasury Notes
quotations as described in (iii) above, the Calculation Agent shall determine
the CMT Rate to be a yield to maturity based on the arithmetic mean of the
secondary market offer side prices as of approximately 3:30 p.m., New York City
time, on the Interest Determination Date of three reference dealers in The City
of New York, selected using the same method described in (iii) above, for
Treasury Notes with an original maturity equal to the number of years closest
to but not less than the Designated CMT Maturity Index and a remaining term to
maturity closest to the Designated CMT Maturity Index and in an amount of at
least $100,000,000.
(v) If three or four (and not five) of the reference dealers are quoting
as described in (iv) above, then the CMT Rate for that Interest Determination
Date shall be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of those quotes shall be eliminated.
(vi) If fewer than three reference dealers selected by the Calculation
Agent are quoting as described in (iv) above, the CMT Rate for that Interest
Determination Date shall remain the CMT Rate for the immediately preceding
Interest Reset Period, or, if there was no Interest Reset Period, the rate of
interest payable shall be the Initial Interest Rate.
"Designated CMT Telerate Page" means the display on Moneyline Telerate,
Inc., or any successor service, on the page designated on the face hereof or
any other page as may replace that page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519). If no page is
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30
years, specified in an applicable pricing supplement for which the CMT Rate
shall be calculated. If no maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be two years.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof or, if the Maximum Interest
Rate or Minimum Interest Rate is reset in accordance with the procedures
referred to above, as determined pursuant to such procedures. The Calculation
Agent shall calculate the interest rate hereon in accordance with the foregoing
on or before each Calculation Date. The interest rate on this Note will in no
event be higher than the maximum rate permitted by New York law, as the same
may be modified by United States Federal law of general application.
At the request of the holder hereof, the Calculation Agent will provide to
the holder hereof the interest rate hereon then in effect and, if determined,
the interest rate that will become effective as of the next Interest Reset
Date.
20
Unless otherwise indicated on the face hereof, interest payments on this
Note shall be the amount of interest accrued from and including the Interest
Accrual Date or from and including the last date to which interest has been
paid to but, excluding the Interest Payment Dates or Maturity Date (or any
earlier redemption date), as the case may be. Accrued interest hereon for any
period shall be the sum of the products obtained by multiplying the interest
factor calculated for each day in such period by the principal amount hereof
shown on Schedule I hereto for each such day; provided that for the purpose of
calculating the amount of interest payable hereon, any decrease in the
principal amount hereof attributable to an exercise of the option to terminate
the automatic extension of the maturity hereof shall be effective on and as of
the Election Date corresponding to the exercise of such option, and any
increase in the principal amount hereof shall be effective on and as of the
Interest Payment Date immediately preceding the date of such increase. The
interest factor for each such day shall be computed by dividing the interest
rate applicable to such day (i) by 360 if the Base Rate is CD Rate, Commercial
Paper Rate, EURIBOR Federal Funds Rate, Prime Rate or LIBOR (except if the
Index Currency is pounds sterling); (ii) by 365 if the Base Rate is LIBOR and
the Index Currency is pounds sterling; or (iii) by the actual number of days in
the year if the Base Rate is the Treasury Rate or the CMT Rate. All percentages
resulting from any calculation of the rate of interest on this Note will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point (with 0.000005% being rounded up to 0.00001%) and all dollar amounts used
in or resulting from such calculation on this Note will be rounded to the
nearest cent (with one-half cent rounded upward). All Japanese Yen amounts used
in or resulting from such calculations will be rounded downwards to the next
lower whole Japanese Yen amount. All amounts denominated in any other currency
used in or resulting from such calculations will be rounded to the nearest two
decimal places in such currency (with 0.005 being rounded up to 0.01). The
interest rate in effect on any Interest Reset Date will be the applicable rate
as reset on such date. The interest rate applicable to any other day is the
interest rate from the immediately preceding Interest Reset Date (or, if none,
the Initial Interest Rate).
This Note and all other obligations of the Issuer hereunder will
constitute part of the subordinated debt of the Issuer, will be issued under
the Subordinated Indenture and will be subordinate and junior in right of
payment, to the extent and in the manner set forth in the Subordinated
Indenture, to all "Senior Indebtedness" of the Issuer. The Subordinated
Indenture defines "Senior Indebtedness" as obligations (other than non-recourse
obligations, the debt securities, including this Note, issued under the
Subordinated Indenture or any other obligations specifically designated as
being subordinate in right of payment to Senior Indebtedness) of, or guaranteed
or assumed by, the Issuer for borrowed money or evidenced by bonds, debentures,
notes or other similar instruments, and amendments, renewals, extensions,
modifications and refundings of any such indebtedness or obligation.
This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and is issuable
only in denominations of U.S. $1,000 and any integral multiple of U.S. $1,000
in excess thereof. If this Note is denominated in a Specified Currency other
than U.S. dollars, then, unless a higher minimum denomination is required by
applicable law, it is issuable only in denominations of the equivalent of U.S.
$1,000 (rounded to an integral multiple of 1,000 units of such Specified
Currency), or any amount in excess thereof which is an integral multiple of
1,000 units of such Specified Currency, as determined by reference to the
21
noon dollar buying rate in The City of New York for cable transfers of such
Specified Currency published by the Federal Reserve Bank of New York (the
"Market Exchange Rate") on the Business Day immediately preceding the date of
issuance.
The Trustee has been appointed registrar for the Notes and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Registrar by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Registrar and duly executed by the registered holder hereof in person or by the
holder's attorney duly authorized in writing, and thereupon the Registrar shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like aggregate
principal amount in authorized denominations, subject to the terms and
conditions set forth herein; provided, however, that the Registrar will not be
required (i) to register the transfer of or exchange any Note that has been
called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased or (iii) to register the transfer of or
exchange Notes to be redeemed for a period of fifteen calendar days preceding
the mailing of the relevant notice of redemption. Notes are exchangeable at
said office for other Notes of other authorized denominations of equal
aggregate principal amount having identical terms and provisions. All such
registrations, exchanges and transfers of Notes will be free of charge, but the
Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge in connection therewith. All Notes surrendered for exchange
shall be accompanied by a written instrument of transfer in form satisfactory
to the Registrar and executed by the registered holder in person or by the
holder's attorney duly authorized in writing. The date of registration of any
Note delivered upon any exchange or transfer of Notes shall be such that no
gain or loss of interest results from such exchange or transfer.
In case this Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and this Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, the Issuer in its discretion may execute a new Note
of like tenor in exchange for this Note, but, if this Note is destroyed, lost
or stolen, only upon receipt of evidence satisfactory to the Registrar and the
Issuer that this Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.
The Subordinated Indenture provides that (a) if an Event of Default (as
defined in the Subordinated Indenture) due to the default in payment of
principal, premium, if any, or interest on, any series of debt securities
issued under the Subordinated Indenture, including the series of Subordinated
Medium-Term Notes of which this Note forms a part, or due to the default in the
performance or breach of any other covenant or warranty of the Issuer
applicable to the debt securities of such series but not applicable to all
outstanding debt securities issued under the
22
Subordinated Indenture, shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in principal amount of the debt
securities of each affected series (voting as a single class) may then declare
the principal of all debt securities of all such series and interest accrued
thereon to be due and payable immediately and (b) if an Event of Default due to
a default in the performance of any other of the covenants or agreements in the
Senior Indenture applicable to all outstanding debt securities issued
thereunder, including this Note, or due to certain events of bankruptcy or
insolvency of the Issuer, shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in principal amount of all debt
securities issued under the Subordinated Indenture then outstanding (treated as
one class) may declare the principal of all such debt securities and interest
accrued thereon to be due and payable immediately, but upon certain conditions
such declarations may be annulled and past defaults may be waived (except a
continuing default in payment of principal, or premium, if any, or interest on
such debt securities) by the holders of a majority in principal amount of the
debt securities of all affected series then outstanding.
The Subordinated Indenture permits the Issuer and the Trustee, with the
consent of the holders of not less than a majority in aggregate principal
amount of the debt securities of all series issued under the Subordinated
Indenture then outstanding and affected (voting as one class), to execute
supplemental indentures adding any provisions to or changing in any manner the
rights of the holders of each series so affected; provided that the Issuer and
the Trustee may not, without the consent of the holder of each outstanding debt
security affected thereby, (a) extend the final maturity of any such debt
security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable on
redemption thereof, or change the currency of payment thereof, or modify or
amend the provisions for conversion of any currency into any other currency, or
modify or amend the provisions for conversion or exchange of the debt security
for securities of the Issuer or other entities (other than as provided in the
antidilution provisions or other similar adjustment provisions of the debt
securities or otherwise in accordance with the terms thereof), or impair or
affect the rights of any holder to institute suit for the payment thereof
without the consent of the holder of each debt security so affected or (b)
reduce the aforesaid percentage in principal amount of debt securities the
consent of the holders of which is required for any such supplemental
indenture; provided, however, that neither this Note nor the Subordinated
Indenture may be amended to alter the subordination provisions hereof or
thereof without the written consent of each holder of Senior Indebtedness then
outstanding that would be adversely affected thereby.
Except as set forth below, if the principal, premium, if any, or interest
on, this Note is payable in a Specified Currency other than U.S. dollars and
such Specified Currency is not available to the Issuer for making payments
hereon due to the imposition of exchange controls or other circumstances beyond
the control of the Issuer or is no longer used by the government of the country
issuing such currency or for the settlement of transactions by public
institutions within the international banking community, then the Issuer will
be entitled to satisfy its obligations to the holder of this Note by making
such payments in U.S. dollars on the basis of the Market Exchange Rate on the
date of such payment or, if the Market Exchange Rate is not available on such
date, as of the most recent practicable date; provided, however, that if the
euro has been substituted for such Specified Currency, the Issuer may at its
option (or shall, if so required by applicable law) without the consent of the
holder of this Note effect the payment of principal of, premium, if any, or
interest
23
on, any Note denominated in such Specified Currency in euro in lieu of such
Specified Currency in conformity with legally applicable measures taken
pursuant to, or by virtue of, the treaty establishing the European Community,
as amended. Any payment made under such circumstances in U.S. dollars or euro
where the required payment is in an unavailable Specified Currency will not
constitute an Event of Default. If such Market Exchange Rate is not then
available to the Issuer or is not published for a particular Specified
Currency, the Market Exchange Rate will be based on the highest bid quotation
in The City of New York received by the Exchange Rate Agent at approximately
11:00 a.m., New York City time, on the second Business Day preceding the date
of such payment from three recognized foreign exchange dealers (the "Exchange
Dealers") for the purchase by the quoting Exchange Dealer of the Specified
Currency for U.S. dollars for settlement on the payment date, in the aggregate
amount of the Specified Currency payable to those holders or beneficial owners
of Notes and at which the applicable Exchange Dealer commits to execute a
contract. One of the Exchange Dealers providing quotations may be the Exchange
Rate Agent (as defined below) unless the Exchange Rate Agent is an affiliate of
the Issuer. If those bid quotations are not available, the Exchange Rate Agent
shall determine the market exchange rate at its sole discretion.
The "Exchange Rate Agent" shall be Morgan Stanley & Co. Incorporated,
unless otherwise indicated on the face hereof.
All determinations referred to above made by, or on behalf of, the Issuer
or by, or on behalf of, the Exchange Rate Agent shall be at such entity's sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on holders of Notes and coupons.
So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the
Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and locations
of such agencies, if any are so designated. If any European Union Directive on
the taxation of savings implementing the agreement reached in the ECOFIN
Council meeting of 13 December 2001 or any law implementing or complying with,
or introduced in order to conform to, such Directive is introduced and a Paying
Agent has been designated within the European Union, the Issuer will maintain a
Paying Agent in a member state of the European Union that will not be obligated
to withhold or deduct tax pursuant to any such Directive or law.
With respect to moneys paid by the Issuer and held by the Trustee or any
Paying Agent for payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting
in any
24
way any obligation that the Issuer may have to pay the principal of or interest
or premium, if any, on this Note as the same shall become due.
No provision of this Note or of the Subordinated Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Note at the time,
place, and rate, and in the coin or currency, herein prescribed unless
otherwise agreed between the Issuer and the registered holder of this Note.
Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or premium,
if any, or the interest on this Note, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Subordinated Indenture or
any indenture supplemental thereto, against any incorporator, shareholder,
officer or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.
As used herein, the term "United States Alien" means any person who, for
United States federal income tax purposes, is a foreign corporation, a
non-resident alien individual, a non-resident alien fiduciary of a foreign
estate or trust, or a foreign partnership one or more of the members of which
is a foreign corporation, a non-resident alien individual or a non-resident
alien fiduciary of a foreign estate or trust.
All terms used in this Note which are defined in the Subordinated
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Subordinated Indenture.
25
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - ______________________ Custodian ______________________
(Minor) (Cust)
Under Uniform Gifts to Minors Act _________________________________________
(State)
Additional abbreviations may also be used though not in the above list.
-----------------------
26
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________
[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.
Dated:________________________
NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the within Note in every particular
without alteration or enlargement or any change whatsoever.
27
OPTION TO ELECT TERMINATION OF AUTOMATIC EXTENSION
The undersigned hereby elects to terminate the automatic extension
of the maturity of the within Note (or the portion thereof specified below)
with the effect provided in the within Note by surrendering the within Note to
the Paying Agent at JPMorgan Chase Bank (formerly known as The Chase Manhattan
Bank), 55 Water Street, New York, New York 10041, Attention: Corporate Trustee
Administration Department, or such other address of which the Issuer shall from
time to time notify the holders of the Notes, together with this form of
"Option to Elect Termination of Automatic Extension" duly completed by the
holder of the within Note.
If the automatic extension of the maturity of less than the entire
principal amount of the within Note is to be terminated, specify the portion
thereof (which shall be $100,000 or an integral multiple of $1,000 in excess
thereof) as to which the holder elects to terminate the automatic extension of
the maturity $______; and specify the denomination or denominations (which
shall be $100,000 or an integral multiple of $1,000 in excess thereof) of the
Notes in the form attached to the within Note as Exhibit A to be issued to the
holder for the portion of the within Note as to which the automatic extension
of maturity is being terminated (in the absence of any such specification one
such Note will be issued for the portion as to which the automatic extension of
maturity is being terminated) $__________.
Dated:_____________________________ ________________________________________
NOTICE: The signature on this Option
to Elect Termination of Automatic
Extension must correspond with the
name as written upon the face of the
within Note in every particular,
without alteration or enlargement or
any change whatever.
28
SCHEDULE I
SCHEDULE OF EXCHANGES
The initial principal amount of this Note is $__________. The following
exchanges of a portion of this Note for an interest in a Short-Term Note and
the following exchanges of an interest in a Short-Term Note for an interest in
this Note have been made:
Reduced Principal Principal Amount of Increased Principal
Principal Amount Amount Outstanding Short-Term Note Amount of this Note Notation Made by
Date of Exchanged for Following Such Exchanged for Outstanding Following or on Behalf of
Exchange Short-Term Note Exchange Interest in this Note Such Exchange Paying Agent
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
- -------- ---------------- ------------------ --------------------- --------------------- ----------------
29
EXHIBIT A TO SUBORDINATED VARIABLE RATE RENEWABLE NOTE
[FORM OF FACE OF SECURITY]
REGISTERED REGISTERED
No. SUBVRR Cusip
U.S. $_________
Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the registered
owner hereof, Cede & Co., has an interest herein.
A-1
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
SUBORDINATED VARIABLE RATE RENEWABLE
GLOBAL MEDIUM-TERM NOTE, SERIES C
- ----------------------------------------------------------------------------------------
BASE RATE: ORIGINAL ISSUE DATE: INTEREST ACCRUAL DATE:
- ----------------------------------------------------------------------------------------
INDEX MATURITY: INITIAL INTEREST RESET MATURITY DATE:
DATE:
- ----------------------------------------------------------------------------------------
SPREAD (PLUS OR MINUS): MAXIMUM INTEREST RATE: INTEREST PAYMENT DATE(S):
- ----------------------------------------------------------------------------------------
SPREAD MULTIPLIER: MINIMUM INTEREST RATE: INTEREST RESET PERIOD:
- ----------------------------------------------------------------------------------------
REPORTING SERVICE: INDEX CURRENCY: INTEREST RESET DATE(S):
- ----------------------------------------------------------------------------------------
SPECIFIED CURRENCY: CALCULATION AGENT:
- ----------------------------------------------------------------------------------------
EXCHANGE RATE AGENT: DESIGNATED CMT
TELERATE PAGE:
- ----------------------------------------------------------------------------------------
REDEMPTION NOTICE PERIOD(1) DESIGNATED CMT
MATURITY INDEX:
- ----------------------------------------------------------------------------------------
TAX REDEMPTION AND IF SPECIFIED CURRENCY
PAYMENT OF ADDITIONAL OTHER THAN U.S.
AMOUNTS: NO(2) DOLLARS, OPTION TO
ELECT PAYMENT IN U.S.
DOLLARS: [YES](3)
- ----------------------------------------------------------------------------------------
IF YES, STATE INITIAL
OFFERING DATE: N/A
- ----------------------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co., a Delaware corporation (together with
its successors and assigns, the "Issuer"), for value received, hereby promises
to pay to , or registered assignees, the principal sum specified in
Schedule I hereto on the Maturity Date specified above and to pay interest on
the principal amount hereof outstanding from time to time, from the Interest
Accrual Date specified above at a rate per annum equal to the Initial Interest
Rate, as defined below, until the Initial Interest Reset Date specified above,
and thereafter at a rate per annum determined in accordance with the provisions
specified on the reverse hereof until (a) the principal hereof is paid or duly
made available for payment and (b) the Interest Payment Date immediately
preceding the date on which the principal amount hereof is reduced to zero, in
each case, together with the unpaid amount of interest, if any, payable on the
principal amount hereof during the period that the Issuer's
- --------
(1) Applicable if other than 30-60 calendar days. If this is a Registered
Global Security, minimum notice period is [20] calendar days [current DTC
limitation].
(2) Default provision is NO. Indicate YES only for certain notes issued on a
global basis if specified in pricing supplement.
(3) Applies if this is a Registered Global Security, unless new arrangements
are made with DTC outside of existing Letters of Representations.
A-2
obligation to pay such principal amount was evidenced by a predecessor Note
that provided for the automatic extension of the maturity thereof (the
"Renewable Note"), which amount shall be payable on the first date succeeding
the Interest Accrual Date specified above on which interest on this Note is
paid and shall be payable to the person receiving such interest payment. The
Issuer will pay interest hereon in arrears weekly, monthly, quarterly,
semiannually or annually as specified above as the Interest Payment Period on
each Interest Payment Date (as specified above), commencing with the first
Interest Payment Date next succeeding the Interest Accrual Date specified
above, and on the Maturity Date or any redemption date; provided, however, if
the Interest Accrual Date occurs between a Record Date, as defined below, and
the next succeeding Interest Payment Date, interest payments will commence on
the second Interest Payment Date succeeding the Interest Accrual Date to the
registered holder of this Note on the Record Date with respect to such second
Interest Payment Date; provided, further, that if an Interest Payment Date or
the Maturity Date would fall on a day that is not a Business Day, as defined on
the reverse hereof, such Interest Payment Date or Maturity Date shall be the
following day that is a Business Day, except that if the Base Rate specified
above is LIBOR or EURIBOR and such next Business Day falls in the next calendar
month, the Interest Payment Date or Maturity Date shall be the immediately
preceding day that is a Business Day. As used herein, "Initial Interest Rate"
means the rate of interest determined using the Spread or Spread Multiplier, as
the case may be, specified in the Renewable Note and using the Base Rate
determined in accordance with the provisions of the Renewable Note (i) on the
Interest Reset Date with respect to the Renewable Note occurring on the
Interest Accrual Date specified above or (ii) if no such Interest Reset Date
occurred on the Interest Accrual Date, on the Interest Reset Date with respect
to the Renewable Note occurring immediately preceding the Interest Accrual
Date.
Interest on this Note will accrue from and including the most recent date
to which interest has been paid or duly provided for, or, if no interest has
been paid or duly provided for, from and including the Interest Accrual Date,
until the earlier of (a) the date on which the principal hereof has been paid
or duly made available for payment and (b) the Interest Payment Date
immediately preceding the date on which the principal amount hereof is reduced
to zero in accordance with the provisions set forth below. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, subject to certain exceptions described herein, be paid to the person in
whose name this Note (or one or more predecessor Notes) is registered at the
close of business on the date 15 calendar days prior to such Interest Payment
Date (whether or not a Business Day) (each such date, a "Record Date");
provided, however, that interest payable at maturity will be payable to the
person to whom the principal hereof shall be payable.
On any date following the Original Issue Date and prior to the Record Date
immediately preceding the Maturity Date, the holder hereof may, with the
consent of the Issuer, exchange this Note or any portion hereof having a
principal amount of $1,000 or any larger multiple of $1,000 in excess thereof
for an interest in the Renewable Note equal to the principal amount hereof so
exchanged by delivering to the Paying Agent, as defined on the reverse hereof,
(i) this Note with the form entitled "Request to Exchange" below duly completed
or (ii) a telegram, telex, facsimile transmission or a letter from a member of
a national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or a trust company in the United States of
America setting forth the name of the holder of this Note, the principal amount
hereof, the certificate number of this Note or a description of this Note's
tenor or terms, a statement that a request to exchange is
A-3
being made thereby, the principal amount hereof with respect to which such
request is being made and a guarantee that this Note with the form entitled
"Request to Exchange" below duly completed will be received by the Paying Agent
no later than five Business Days after the date of such telegram, telex,
facsimile transmission or letter; provided that such telegram, telex, facsimile
transmission or letter shall not be effective unless this Note and such form
duly completed are received by the Paying Agent by such fifth Business Day.
Such exchange may occur with respect to less than the entire principal amount
hereof provided that the principal amount for which such exchange does not
occur is at least $1,000 or any larger amount that is an integral multiple of
$1,000. Notwithstanding the foregoing, a request to exchange all or a portion
of this Note for an interest in the Renewable Note may not be made during the
period from and including a Record Date to but excluding the immediately
succeeding Interest Payment Date. If a request to exchange any portion hereof
is granted by the Issuer, then, on the date of such exchange, Schedule I hereto
shall be annotated to reflect the corresponding decrease in the principal
amount hereof, and Schedule I to the Renewable Note shall be annotated to
reflect the corresponding increase in the principal amount thereof.
Payment of the principal, premium, if any, and the interest due at
maturity on this Note (or any redemption date), unless this Note is denominated
in a Specified Currency other than U.S. Dollars and is to be paid in whole or
in part in such Specified Currency, will be made in immediately available funds
upon surrender of this Note at the office or agency of the Paying Agent
maintained for that purpose in the Borough of Manhattan, The City of New York,
or at the office or agency of such other paying agent as the Issuer may
determine in U.S. dollars. U.S. dollar payments of interest, other than
interest due at maturity or any date of redemption, will be made by United
States dollar check mailed to the address of the person entitled thereto as
such address shall appear in the Note register. A holder of U.S. $10,000,000
(or the equivalent in a Specified Currency) or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which is
paid in U.S. dollars, shall be entitled to receive payments of interest, other
than interest due at maturity or any date of redemption, by wire transfer of
immediately available funds if appropriate wire transfer instructions have been
received by the Paying Agent in writing not less than 15 calendar days prior to
the applicable Interest Payment Date.
If this Note is denominated in a Specified Currency other than U.S.
dollars, and the holder does not elect (in whole or in part) to receive payment
in U.S. dollars pursuant to the next succeeding paragraph, payments of
principal, premium, if any, or interest with regard to this Note will be made
by wire transfer of immediately available funds to an account maintained by the
holder hereof with a bank located outside the United States if appropriate wire
transfer instructions have been received by the Paying Agent in writing [not
less than 15 calendar days prior to the applicable payment date](4) [, with
respect to payments of interest, on or prior to the fifth Business Day after
the applicable Record Date and, with respect to payments of principal or any
premium, at least ten Business Days prior to the Maturity Date or any
redemption or repayment date, as the case may be](5); provided that, if payment
of interest, principal or any premium with regard to this Note is payable in
euro, the
- --------
(4) Applies for Registered Note that is not in global form.
(5) Applies only for a Registered Global Security.
A-4
account must be a euro account in a country for which the euro is the lawful
currency, provided, further, that], if such wire transfer instructions are not
received, such payments will be made by check payable in such Specified
Currency mailed to the address of the person entitled thereto as such address
shall appear in the Note register, and provided, further, that payment of the
principal of this Note, any premium and the interest due at maturity (or on any
redemption or repayment date) will be made upon surrender of this Note at the
office or agency referred to in the preceding paragraph.
If so indicated on the face hereof, the holder of this Note, if
denominated in a Specified Currency other than U.S. dollars, may elect to
receive all or a portion of payments on this Note in U.S. dollars by
transmitting a written request to the Paying Agent, on or prior to the fifth
Business Day after such Record Date or at least ten Business Days prior to the
Maturity Date or any redemption date, as the case may be. Such election shall
remain in effect unless such request is revoked by written notice to the Paying
Agent as to all or a portion of payments on this Note at least five Business
Days prior to such Record Date or at least ten calendar days prior to the
Maturity Date, for payments of interest, or any redemption date, for payments
of principal, as the case may be.
If the holder elects to receive all or a portion of payments of principal
or premium, if any, and interest on this Note, if denominated in a Specified
Currency other than U.S. dollars, in U.S. dollars, the Exchange Rate Agent will
convert such payments into U.S. dollars. In the event of such an election,
payment in respect of this Note will be based upon the exchange rate as
determined by the Exchange Rate Agent based on the highest bid quotation in The
City of New York received by such Exchange Rate Agent at approximately 11:00
a.m., New York City time, on the second Business Day preceding the applicable
payment date from three recognized foreign exchange dealers (one of which may
be the Exchange Rate Agent unless such Exchange Rate Agent is an affiliate of
the Issuer) for the purchase by the quoting dealer of U.S. dollars for the
Specified Currency for settlement on such payment date in the amount of the
Specified Currency payable in the absence of such an election to such holder
and at which the applicable dealer commits to execute a contract. If such bid
quotations are not available, such payment will be made in the Specified
Currency. All currency exchange costs will be borne by the holder of this Note
by deductions from such payments.
If this Note ceases to be held by The Depository Trust Company or its
successor or the nominee of The Depository Trust Company or its successor, this
Note will be exchanged for one or more Notes of authorized denominations having
an aggregate principal amount equal to the principal amount of this Note as
then shown on Schedule I hereto, which new Notes shall otherwise have the same
terms as this Note, except that the provisions of such new Notes regarding the
exchange thereof for an interest in a note providing for the automatic
extension of the maturity thereof (a "New Renewable Note") shall be modified to
the extent appropriate for notes not required to be held in a securities
depositary; provided that the respective rights and obligations of the Issuer
and the holders of such new Notes shall be the same in all material respects as
the respective rights and obligations of the Issuer and the holder of this
Note. The terms of the New Renewable Note shall be the same as the terms of the
Renewable Note, except that the principal amount thereof shall equal the
principal amount of the new Notes exchanged therefor and the provisions of such
New Renewable Notes regarding the automatic extension of the maturity thereof
shall be modified to the extent appropriate for notes not required to be held
in a securities depositary; provided that the respective rights and obligations
of the Issuer and the holders of such New Renewable Notes shall
A-5
be the same in all material respects as the respective rights and obligations
of the Issuer and the holder of the Renewable Note. Such new Notes shall have
stated principal amounts and shall be registered in the names of the persons
then having a beneficial interest in this Note or in the names of their
nominees.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place, including, without limitation, the
provisions relating to the subordination of this Note to the Issuer's Senior
Indebtedness, as defined on the reverse hereof.
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Subordinated
Indenture, as defined on the reverse hereof, or be valid or obligatory for any
purpose.
A-6
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.
DATED: MORGAN STANLEY DEAN WITTER & CO.
By:_______________________________
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned
Subordinated Indenture.
JPMORGAN CHASE BANK,
as Authentication Agent
By:___________________________________
Authorized Officer
A-7
[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of the Subordinated Global
Medium-Term Notes, Series C, having maturities more than nine months from the
date of issue (the "Notes") of the Issuer. The Notes are issuable under an
Amended and Restated Subordinated Indenture, dated as of May 1, 1999, between
the Issuer and Bank One Trust Company, N.A. (as successor to The First National
Bank of Chicago), as Trustee (the "Trustee," which term includes any successor
trustee under the Subordinated Indenture) (as may be amended or supplemented
and as further supplemented from time to time, the "Subordinated Indenture"),
to which Subordinated Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities of the Issuer, the Trustee and holders of the
Notes and the terms upon which the Notes are, and are to be, authenticated and
delivered. The Trustee has appointed JPMorgan Chase Bank as Authenticating
Agent (the "Authenticating Agent," which term includes any successor
authenticating agent appointed by the Trustee) with respect to the Notes, and
the Issuer has appointed JPMorgan Chase Bank at its corporate trust office in
The City of New York as the paying agent (the "Paying Agent," which term
includes any additional or successor Paying Agent appointed by the Issuer) with
respect to the Notes. The terms of individual Notes may vary with respect to
interest rates, interest rate formulas, issue dates, maturity dates, or
otherwise, all as provided in the Subordinated Indenture. To the extent not
inconsistent herewith, the terms of the Subordinated Indenture are hereby
incorporated by reference herein.
Unless otherwise indicated on the face hereof, this Note will not be
subject to any sinking fund and, unless otherwise provided on the face hereof
in accordance with the provisions of the following paragraph, will not be
redeemable prior to maturity.
This Note will bear interest at the rate determined in accordance with the
applicable provisions below by reference to the Base Rate shown on the face
hereof based on the Index Maturity, if any, shown on the face hereof (i) plus
or minus the Spread, if any, or (ii) multiplied by the Spread Multiplier, if
any, specified on the face hereof. Commencing with the Initial Interest Reset
Date specified on the face hereof, the rate at which interest on this Note is
payable shall be reset as of each Interest Reset Date (as used herein, the term
"Interest Reset Date" shall include the Initial Interest Reset Date). The
determination of the rate of interest at which this Note will be reset on any
Interest Reset Date shall be made, on the Interest Determination Date (as
defined below) pertaining to such Interest Reset Date. The Interest Reset Dates
will be the Interest Reset Dates specified on the face hereof; provided,
however, that (a) the interest rate in effect for the period from the Interest
Accrual Date to the Initial Interest Reset Date specified on the face hereof
will be the Initial Interest Rate and (b) unless otherwise specified on the
face hereof, the interest rate in effect for the ten calendar days immediately
prior to maturity, redemption or repayment will be that in effect on the tenth
calendar day preceding such maturity, redemption or repayment date. If any
Interest Reset Date would otherwise be a day that is not a Business Day, such
Interest Reset Date shall be postponed to the next succeeding day that is a
Business Day, except that if the Base Rate specified on the face hereof is
LIBOR and such Business Day is in the next succeeding calendar month, such
Interest Reset Date shall be the immediately preceding Business Day. As used
herein, "Business Day" means any day, other than a Saturday or Sunday, (a) that
is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close (x) in The City of New
A-8
York or (y) if this Note is denominated in a Specified Currency other than U.S.
dollars, euro or Australian dollars, in the principal financial center of the
country of the Specified Currency, or (z) if this Note is denominated in
Australian dollars, in Sydney and (b) if this Note is denominated in euro, that
is also a day on which the Trans-European Automated Real-time Gross Settlement
Express Transfer System ("TARGET") is operating (a "TARGET Settlement Day").
If so indicated on the face of this Note, the Issuer may from time to time
offer to reset the Spread or Spread Multiplier, as the case may be, on the
Renewable Note by causing the Paying Agent to send to the holder hereof a
notice (an "Optional Exchange Notice") by first class mail, postage prepaid, or
by such other means as shall be agreed between the Issuer and the Paying Agent,
setting forth (a) the new Spread or Spread Multiplier to be applied to the
Renewable Note, together with any change in the Maximum Interest Rate or
Minimum Interest Rate, and (b) the date, if any, on which such offer will
expire. In order to accept such offer, the holder hereof must exchange this
Note in whole or in part for an interest in the Renewable Note in accordance
with the third paragraph on the face of this Note by delivering to the Paying
Agent the notice referred to in clause (i) or (ii) of such paragraph prior to
the earlier of the expiration date, if any, of such offer and the Record Date
immediately preceding the Maturity Date.
The Interest Determination Date pertaining to an Interest Reset Date for
Notes bearing interest calculated by reference to the CD Rate, Commercial Paper
Rate, Federal Funds Rate, Prime Rate and CMT Rate will be the second Business
Day next preceding such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for Notes bearing interest calculated by
reference to EURIBOR (or to LIBOR when the Index Currency is euros) shall be
the second TARGET Settlement Day preceding such Interest Reset Date. The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to LIBOR (other than for LIBOR Notes
for which the Index Currency is euros) shall be the second London Banking Day
preceding such Interest Reset Date except that the Interest Determination Date
pertaining to an Interest Reset Date for a LIBOR Note for which the Index
Currency is pounds Sterling will be such Interest Reset Date. As used herein,
"London Banking Day" means any day on which dealings in deposits in the Index
Currency (as defined herein) are transacted in the London interbank market. The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to the Treasury Rate shall be the day
of the week in which such Interest Reset Date falls on which Treasury bills
normally would be auctioned; provided, however, that if as a result of a legal
holiday an auction is held on the Friday of the week preceding such Interest
Reset Date, the related Interest Determination Date shall be such preceding
Friday; and provided, further, that if an auction shall fall on any Interest
Reset Date, then the Interest Reset Date shall instead be the first Business
Day following the date of such auction.
Unless otherwise specified on the face hereof, the "Calculation Date"
pertaining to an Interest Determination Date will be the earlier of (i) the
tenth calendar day after such Interest Determination Date or, if such day is
not a Business Day, the next succeeding Business Day, or (ii) the Business Day
preceding the applicable Interest Payment Date or Maturity Date (or, with
respect to any principal amount to be redeemed or repaid, any redemption or
repayment date), as the case may be.
A-9
Determination of CD Rate. If the Base Rate specified on the face hereof is
the "CD Rate," for any Interest Determination Date, the CD Rate with respect to
this Note shall be the rate on that date for negotiable certificates of deposit
having the Index Maturity specified on the face hereof as published by the
Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates," or any successor publication of the Board
of Governors of the Federal Reserve System ("H.15(519)") under the heading "CDs
(Secondary Market)."
The following procedures shall be followed if the CD Rate cannot be
determined as described above:
(i) If the above rate is not published in H.15(519) by 9:00 a.m., New York
City time, on the Calculation Date, the CD Rate shall be the rate on that
Interest Determination Date set forth in the daily update of H.15(519),
available through the world wide website of the Board of Governors of the
Federal Reserve System at http://www.federalreserve.gov/releases/h15/current,
or any successor site or publication ("H.15 Daily Update") for the Interest
Determination Date for certificates of deposit having the Index Maturity
specified on the face hereof, under the caption "CDs (Secondary Market)."
(ii) If the above rate is not yet published in either H.15(519) or the
H.15 Daily Update by 3:00 p.m., New York City time, on the Calculation Date,
the Calculation Agent shall determine the CD Rate to be the arithmetic mean of
the secondary market offered rates as of 10:00 a.m., New York City time, on
that Interest Determination Date of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent (after consultation with the Issuer) for negotiable
certificates of deposit of major United States money center banks of the
highest credit standing in the market for negotiable certificates of deposit
with a remaining maturity closest to the Index Maturity specified on the face
hereof in an amount that is representative for a single transaction in that
market at that time.
(iii) If the dealers selected by the Calculation Agent are not quoting as
set forth above, the CD Rate for that Interest Determination Date shall remain
the CD Rate for the immediately preceding Interest Reset Period, or, if there
was no Interest Reset Period, the rate of interest payable shall be the Initial
Interest Rate.
Determination of Commercial Paper Rate. If the Base Rate specified on the
face hereof is the "Commercial Paper Rate," for any Interest Determination
Date, the Commercial Paper Rate with respect to this Note shall be the Money
Market Yield (as defined herein), calculated as described below, of the rate on
that date for commercial paper having the Index Maturity specified on the face
hereof, as that rate is published in H.15(519), under the heading "Commercial
Paper -- Nonfinancial."
The following procedures shall be followed if the Commercial Paper Rate
cannot be determined as described above:
(i) If the above rate is not published by 9:00 a.m., New York City time,
on the Calculation Date, then the Commercial Paper Rate shall be the Money
Market Yield of the rate on that Interest
A-10
Determination Date for commercial paper of the Index Maturity specified on the
face hereof as published in the H.15 Daily Update under the heading "Commercial
Paper -- Nonfinancial."
(ii) If by 3:00 p.m., New York City time, on that Calculation Date the
rate is not yet published in either H.15(519) or the H.15 Daily Update, then
the Calculation Agent shall determine the Commercial Paper Rate to be the Money
Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New
York City time, on that Interest Determination Date of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent
(after consultation with the Issuer) for commercial paper of the Index Maturity
specified on the face hereof, placed for an industrial issuer whose bond rating
is "AA," or the equivalent, from a nationally recognized statistical rating
agency.
(iii) If the dealers selected by the Calculation Agent are not quoting as
set forth in (ii) above, the Commercial Paper Rate for that Interest
Determination Date shall remain the Commercial Paper Rate for the immediately
preceding Interest Reset Period, or, if there was no Interest Reset Period, the
rate of interest payable shall be the Initial Interest Rate.
The "Money Market Yield" shall be a yield calculated in accordance with
the following formula:
D x 360
Money Market Yield = ------------- x 100
360 - (D x M)
where "D" refers to the applicable per year rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
Determination of EURIBOR Notes. If the Base Rate specified on the face
hereof is "EURIBOR," for any Interest Determination Date, EURIBOR with respect
to this Note shall be the rate for deposits in euros as sponsored, calculated
and published jointly by the European Banking Federation and ACI - The
Financial Market Association, or any company established by the joint sponsors
for purposes of compiling and publishing those rates, for the Index Maturity
specified on the face hereof as that rate appears on the display on Moneyline
Telerate, Inc., or any successor service, on page 248 or any other page as may
replace page 248 on that service ("Telerate Page 248") as of 11:00 a.m.
(Brussels time).
The following procedures shall be followed if the rate cannot be
determined as described above:
(i) If the above rate does not appear, the Calculation Agent shall request
the principal Euro-zone office of each of four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer) to provide the Calculation Agent with its offered rate for deposits
in euros, at approximately 11:00 a.m. (Brussels time) on the Interest
Determination Date, to prime banks in the Euro-zone interbank market for the
Index Maturity
A-11
specified on the face hereof commencing on the applicable Interest Reset Date,
and in a principal amount not less than the equivalent of U.S.$1 million in
euro that is representative of a single transaction in euro, in that market at
that time. If at least two quotations are provided, EURIBOR shall be the
arithmetic mean of those quotations.
(ii) If fewer than two quotations are provided, EURIBOR shall be the
arithmetic mean of the rates quoted by four major banks in the Euro-zone, as
selected by the Calculation Agent (after consultation with the Issuer) at
approximately 11:00 a.m. (Brussels time), on the applicable Interest Reset Date
for loans in euro to leading European banks for a period of time equivalent to
the Index Maturity specified on the face hereof commencing on that Interest
Reset Date in a principal amount not less than the equivalent of U.S.$1 million
in euro.
(iii) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the EURIBOR rate for that Interest Determination Date shall
remain the EURIBOR for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
"Euro-zone" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the treaty establishing
the European Community, as amended.
Determination of the Federal Funds Rates. If the Base Rate specified on
the face hereof is the "Federal Funds Rate," for any Interest Determination
Date, the Federal Funds Rate with respect to this Note shall be the rate on
that date for federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)" as displayed on Moneyline Telerate, Inc., or any
successor service, on page 120 or any other page as may replace page 120 on
that service ("Telerate Page 120").
The following procedures shall be followed if the Federal Funds Rate
cannot be determined as described above:
(i) If the above rate is not published by 9:00 a.m., New York City time,
on the Calculation Date, the Federal Funds Rate shall be the rate on that
Interest Determination Date as published in the H.15 Daily Update under the
heading "Federal Funds/Effective Rate."
(ii) If the above rate is not yet published in either H.15(519) or the
H.15 Daily Update by 3:00 p.m., New York City time, on the Calculation Date,
the Calculation Agent shall determine the Federal Funds Rate to be the
arithmetic mean of the rates for the last transaction in overnight federal
funds by each of three leading brokers of federal funds transactions in The
City of New York selected by the Calculation Agent (after consultation with the
Issuer) prior to 9:00 a.m., New York City time, on that Interest Determination
Date.
(iii) If the brokers selected by the Calculation Agent are not quoting as
set forth above, the Federal Funds Rate for that Interest Determination Date
shall remain the Federal Funds Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.
A-12
Determination of LIBOR. If the Base Rate specified on the face hereof is
"LIBOR," LIBOR with respect to this Note shall be based on London interbank
offered rate. The Calculation Agent shall determine "LIBOR" for each Interest
Determination Date as follows:
(i) As of the Interest Determination Date, LIBOR shall be either: (a) if
"LIBOR Reuters" is specified as the Reporting Service on the face hereof, the
arithmetic mean of the offered rates for deposits in the Index Currency having
the Index Maturity designated on the face hereof, commencing on the second
London Banking Day immediately following that Interest Determination Date, that
appear on the Designated LIBOR Page, as defined below, as of 11:00 a.m., London
time, on that Interest Determination Date, if at least two offered rates appear
on the Designated LIBOR Page; except that if the specified Designated LIBOR
Page, by its terms provides only for a single rate, that single rate shall be
used; or (b) if "LIBOR Telerate" is specified as the Reporting Service on the
face hereof, the rate for deposits in the Index Currency having the Index
Maturity designated on the face hereof, commencing on the second London Banking
Day immediately following that Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest Determination Date,
that appears on the Designated LIBOR Page at approximately 11:00 a.m., London
time, on that Interest Determination Date.
(ii) If (a) fewer than two offered rates appear and LIBOR Reuters is
specified on the face hereof, or (b) no rate appears and the face hereof
specifies either (x) LIBOR Telerate or (y) LIBOR Reuters and the Designated
LIBOR Page by its terms provides only for a single rate, then the Calculation
Agent shall request the principal London offices of each of four major
reference banks in the London interbank market, as selected by the Calculation
Agent (after consultation with the Issuer) to provide the Calculation Agent
with its offered quotation for deposits in the Index Currency for the period of
the Index Maturity specified on the face hereof commencing on the second London
Banking Day immediately following the Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest Determination Date,
to prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on that Interest Determination Date and in a principal amount that
is representative of a single transaction in that Index Currency in that market
at that time.
(iii) If at least two quotations are provided, LIBOR determined on that
Interest Determination Date shall be the arithmetic mean of those quotations.
If fewer than two quotations are provided, LIBOR shall be determined for the
applicable Interest Reset Date as the arithmetic mean of the rates quoted at
approximately 11:00 a.m., London time, or some other time specified on the face
hereof, in the applicable principal financial center for the country of the
Index Currency on that Interest Reset Date, by three major banks in that
principal financial center selected by the Calculation Agent (after
consultation with the Issuer) for loans in the Index Currency to leading
European banks, having the Index Maturity specified on the face hereof and in a
principal amount that is representative of a single transaction in that Index
Currency in that market at that time.
(iv) If the banks so selected by the Calculation Agent are not quoting as
set forth above, LIBOR in effect for the applicable period shall be the same as
LIBOR for the immediately preceding
A-13
Interest Reset Period, or, if there was no Interest Reset Period, the rate of
interest payable shall be the Initial Interest Rate.
The "Index Currency" means the currency specified on the face hereof as
the currency for which LIBOR shall be calculated, or, if the euro is
substituted for that currency, the Index Currency shall be the euro. If that
currency is not specified on the face hereof, the Index Currency shall be U.S.
dollars.
"Designated LIBOR Page" means either: (a) if LIBOR Reuters is designated
as the Reporting Service on the face hereof, the display on the Reuters Monitor
Money Rates Service for the purpose of displaying the London interbank rates of
major banks for the applicable Index Currency or its designated successor, or
(b) if LIBOR Telerate is designated as the Reporting Service on the face
hereof, the display on Moneyline Telerate Inc., or any successor service, on
the page specified on the face hereof, or any other page as may replace that
page on that service, for the purpose of displaying the London interbank rates
of major banks for the applicable Index Currency.
If neither LIBOR Reuters nor LIBOR Telerate is specified on the face
hereof, LIBOR for the applicable Index Currency shall be determined as if LIBOR
Telerate were specified, and, if the U.S. dollar is the Index Currency, as if
Page 3750, had been specified.
Determination of Prime Rate. If the Base Rate specified on the face hereof
is "Prime Rate," for any Interest Determination Date, the Prime Rate with
respect to this Note shall be the rate on that date as published in H.15(519)
under the heading "Bank Prime Loan."
The following procedures shall be followed if the Prime Rate cannot be
determined as described above:
(i) If the above rate is not published prior to 9:00 a.m., New York City
time, on the Calculation Date, then the Prime Rate shall be the rate on that
Interest Determination Date as published in H.15 Daily Update under the heading
"Bank Prime Loan."
(ii) If the above rate is not published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the Calculation Date, then
the Calculation Agent shall determine the Prime Rate to be the arithmetic mean
of the rates of interest publicly announced by each bank that appears on the
Reuters Screen USPRIME 1 Page, as defined below, as that bank's Prime Rate or
base lending rate as in effect for that Interest Determination Date.
(iii) If fewer than four rates appear on the Reuters Screen USPRIME 1 Page
for that Interest Determination Date, the Calculation Agent shall determine the
Prime Rate to be the arithmetic mean of the Prime Rates quoted on the basis of
the actual number of days in the year divided by 360 as of the close of
business on that Interest Determination Date by at least three major banks in
The City of New York selected by the Calculation Agent (after consultation with
the Issuer).
(iv) If the banks selected by the Calculation Agent are not quoting as set
forth above, the Prime Rate for that Interest Determination Date shall remain
the Prime Rate for the immediately
A-14
preceding Interest Reset Period, or, if there was no Interest Reset Period, the
rate of interest payable shall be the Initial Interest Rate.
"Reuters Screen USPRIME 1 Page" means the display designated as page
"USPRIME 1" on the Reuters Monitor Money Rates Service, or any successor
service, or any other page as may replace the USPRIME 1 Page on that service
for the purpose of displaying prime rates or base lending rates of major United
States banks.
Determination of Treasury Rate. If the Base Rate specified on the face
hereof is "Treasury Rate," the Treasury Rate with respect to this Note shall
be:
(i) the rate from the Auction held on the applicable Interest
Determination Date (the "Auction") of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified on the face hereof as
that rate appears under the caption "INVESTMENT RATE" on the display on
Moneyline Telerate, Inc., or any successor service, on page 56 or any other
page as may replace page 56 on that service ("Telerate Page 56") or page 57 or
any other page as may replace page 57 on that service ("Telerate Page 57"); or
(ii) if the rate described in (i) above is not published by 3:00 p.m., New
York City time, on the Calculation Date, the Bond Equivalent Yield of the rate
for the applicable Treasury Bills as published in the H.15 Daily Update, or
other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "U.S. Government Securities/Treasury
Bills/Auction High;" or
(iii) if the rate described in (ii) above is not published by 3:00 p.m.,
New York City time, on the related Calculation Date, the Bond Equivalent Yield
of the Auction rate of the applicable Treasury Bills, announced by the United
States Department of the Treasury; or
(iv) if the rate described in (iii) above is not announced by the United
States Department of the Treasury, or if the Auction is not held, the Bond
Equivalent Yield of the rate on the applicable Interest Determination Date of
Treasury Bills having the Index Maturity specified on the face hereof published
in H.15(519) under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market;" or
(v) if the rate described in (iv) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date of the applicable Treasury Bills as published in
H.15 Daily Update, or other recognized electronic source used for the purpose
of displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market;" or
(vi) if the rate described in (v) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date calculated by the Calculation Agent as the Bond
Equivalent Yield of the arithmetic mean of the secondary market bid rates, as
of approximately 3:30 p.m., New York City time, on the applicable Interest
Determination Date, of three primary United States government securities
dealers, which may
A-15
include the agent or its affiliates, selected by the Calculation Agent, for the
issue of Treasury Bills with a remaining maturity closest to the Index Maturity
specified on the face hereof; or
(vii) if the dealers selected by the Calculation Agent are not quoting as
described in (vi), the Treasury Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.
The "Bond Equivalent Yield" means a yield calculated in accordance with
the following formula and expressed as a percentage:
D x N
Bond Equivalent Yield = ------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on
a bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest
is being calculated.
Determination of CMT Rate. If the Base Rate specified on the face hereof
is the "CMT Rate," for any Interest Determination Date, the CMT Rate with
respect to this Note shall be the rate displayed on the Designated CMT Telerate
Page (as defined below) under the caption "... Treasury Constant Maturities ...
Federal Reserve Board Release H.15... Mondays Approximately 3:45 p.m.," under
the column for the Designated CMT Maturity Index, as defined below, for:
(1) the rate on that Interest Determination Date, if the Designated CMT
Telerate Page is 7051; and
(2) the week or the month, as applicable, ended immediately preceding the
week in which the related Interest Determination Date occurs, if the Designated
CMT Telerate Page is 7052.
The following procedures shall be followed if the CMT Rate cannot be
determined as described above:
(i) If the above rate is no longer displayed on the relevant page, or if
not displayed by 3:00 p.m., New York City time, on the related Calculation
Date, then the CMT Rate shall be the Treasury Constant Maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519).
(ii) If the above rate is no longer published, or if not published by 3:00
p.m., New York City time, on the related Calculation Date, then the CMT Rate
shall be the Treasury Constant Maturity Rate for the Designated CMT Maturity
Index or other United States Treasury rate for the Designated CMT Maturity
Index on the Interest Determination Date as may then be published by either the
Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519).
A-16
(iii) If the information set forth above is not provided by 3:00 p.m., New
York City time, on the related Calculation Date, then the Calculation Agent
shall determine the CMT Rate to be a yield to maturity, based on the arithmetic
mean of the secondary market closing offer side prices as of approximately 3:30
p.m., New York City time, on the Interest Determination Date, reported,
according to their written records, by three leading primary United States
government securities dealers ("Reference Dealers") in The City of New York,
which may include an agent or other affiliates of the Issuer, selected by the
Calculation Agent as described in the following sentence. The Calculation Agent
shall select five reference dealers (after consultation with the Issuer) and
shall eliminate the highest quotation or, in the event of equality, one of the
highest, and the lowest quotation or, in the event of equality, one of the
lowest, for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to
maturity of not less than that Designated CMT Maturity Index minus one year. If
two Treasury Notes with an original maturity as described above have remaining
terms to maturity equally close to the Designated CMT Maturity Index, the
quotes for the Treasury Note with the shorter remaining term to maturity shall
be used.
(iv) If the Calculation Agent cannot obtain three Treasury Notes
quotations as described in (iii) above, the Calculation Agent shall determine
the CMT Rate to be a yield to maturity based on the arithmetic mean of the
secondary market offer side prices as of approximately 3:30 p.m., New York City
time, on the Interest Determination Date of three reference dealers in The City
of New York, selected using the same method described in (iii) above, for
Treasury Notes with an original maturity equal to the number of years closest
to but not less than the Designated CMT Maturity Index and a remaining term to
maturity closest to the Designated CMT Maturity Index and in an amount of at
least $100,000,000.
(v) If three or four (and not five) of the reference dealers are quoting
as described in (iv) above, then the CMT Rate shall be based on the arithmetic
mean of the offer prices obtained and neither the highest nor the lowest of
those quotes shall be eliminated.
(vi) If fewer than three reference dealers selected by the Calculation
Agent are quoting as described in (iv) above, the CMT Rate for that Interest
Determination Date shall remain the CMT Rate for the immediately preceding
Interest Reset Period, or, if there was no Interest Reset Period, the rate of
interest payable shall be the Initial Interest Rate.
"Designated CMT Telerate Page" means the display on Moneyline Telerate,
Inc., or any successor service, on the page designated on the face hereof or
any other page as may replace that page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519). If no page is
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30
years, as specified in the applicable
A-17
pricing supplement for which the CMT Rate shall be calculated. If no maturity
is specified on the face hereof, the Designated CMT Maturity Index shall be two
years.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent
shall calculate the interest rate hereon in accordance with the foregoing on or
before each Calculation Date. The interest rate on this Note will in no event
be higher than the maximum rate permitted by New York law, as the same may be
modified by United States Federal law of general application.
At the request of the holder hereof, the Calculation Agent will provide to
the holder hereof the interest rate hereon then in effect and, if determined,
the interest rate that will become effective as of the next Interest Reset
Date.
Unless otherwise indicated on the face hereof, interest payments on this
Note shall be the amount of interest accrued from and including the Interest
Accrual Date or from and including the last date to which interest has been
paid to but, excluding the Interest Payment Dates or Maturity Date, as the case
may be. Accrued interest hereon for any period shall be the sum of the products
obtained by multiplying the interest factor calculated for each day in such
period by the principal amount hereof shown on Schedule I hereto for each such
day; provided that for the purpose of calculating the amount of interest
payable hereon, any decrease in the principal amount hereof attributable to an
exchange of a portion of this Note for an interest in the Renewable Note shall
be effective on and as of the Interest Payment Date immediately preceding the
date of such decrease. The interest factor for each such day shall be computed
by dividing the interest rate applicable to such day (i) by 360 if the Base
Rate is CD Rate, Commercial Paper Rate, EURIBOR Federal Funds Rate, Prime Rate
or LIBOR (except if the Index Currency is pounds sterling); (ii) by 365 if the
Base Rate is LIBOR and the Index Currency is pounds sterling; or (iii) by the
actual number of days in the year if the Base Rate is the Treasury Rate or the
CMT Rate. All percentages resulting from any calculation of the rate of
interest on this Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point (with 0.000005% being rounded up to
0.00001%) and all dollar amounts used in or resulting from such calculation on
this Note will be rounded to the nearest cent (with one-half cent rounded
upward). All Japanese Yen amounts used in or resulting from such calculations
will be rounded downwards to the next lower whole Japanese Yen amount. All
amounts denominated in any other currency used in or resulting from such
calculations will be rounded to the nearest two decimal places in such currency
(with 0.005 being rounded up to 0.01). The interest rate in effect on any
Interest Reset Date will be the applicable rate as reset on such date. The
interest rate applicable to any other day is the interest rate from the
immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate).
This Note and all other obligations of the Issuer hereunder will
constitute part of the subordinated debt of the Issuer, will be issued under
the Subordinated Indenture and will be subordinate and junior in right of
payment, to the extent and in the manner set forth in the Subordinated
Indenture, to all "Senior Indebtedness" of the Issuer. The Subordinated
Indenture defines "Senior Indebtedness" as obligations (other than non-recourse
obligations, the debt securities, including this Note, issued under the
Subordinated Indenture or any other obligations
A-18
specifically designated as being subordinate in right of payment to Senior
Indebtedness) of, or guaranteed or assumed by, the Issuer for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments, and
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligation.
This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and is issuable
only in denominations of U.S. $1,000 and any integral multiple of U.S. $1,000
in excess thereof. If this Note is denominated in a Specified Currency other
than U.S. dollars, then, unless a higher minimum denomination is required by
applicable law, it is issuable only in denominations of the equivalent of U.S.
$1,000 (rounded to an integral multiple of 1,000 units of such Specified
Currency), or any amount in excess thereof which is an integral multiple of
1,000 units of such Specified Currency, as determined by reference to the noon
dollar buying rate in The City of New York for cable transfers of such
Specified Currency published by the Federal Reserve Bank of New York (the
"Market Exchange Rate") on the Business Day immediately preceding the date of
issuance.
JPMorgan Chase Bank has been appointed registrar for the Notes (the
"Registrar," which term includes any successor registrar appointed by the
Issuer), and the Registrar will maintain at its office in The City of New York
a register for the registration and transfer of Notes. This Note may be
transferred at the aforesaid office of the Registrar by surrendering this Note
for cancellation, accompanied by a written instrument of transfer in form
satisfactory to the Registrar and duly executed by the registered holder hereof
in person or by the holder's attorney duly authorized in writing, and thereupon
the Registrar shall issue in the name of the transferee or transferees, in
exchange herefor, a new Note or Notes having identical terms and provisions and
having a like aggregate principal amount in authorized denominations, subject
to the terms and conditions set forth herein; provided, however, that the
Registrar will not be required (i) to register the transfer of or exchange any
Note that has been called for redemption in whole or in part, except the
unredeemed portion of Notes being redeemed in part, (ii) to register the
transfer of or exchange any Note if the holder thereof has exercised his right,
if any, to require the Issuer to repurchase such Note in whole or in part,
except the portion of such Note not required to be repurchased or (iii) to
register the transfer of or exchange Notes to be redeemed for a period of
fifteen calendar days preceding the mailing of the relevant notice of
redemption. Notes are exchangeable at said office for other Notes of other
authorized denominations of equal aggregate principal amount having identical
terms and provisions. All such registrations, exchanges and transfers of Notes
will be free of charge, but the Issuer may require payment of a sum sufficient
to cover any tax or other governmental charge in connection therewith. All
Notes surrendered for exchange shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar and executed by the registered
holder in person or by the holder's attorney duly authorized in writing. The
date of registration of any Note delivered upon any exchange or transfer of
Notes shall be such that no gain or loss of interest results from such exchange
or transfer.
In case this Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and this Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Registrar, the Issuer in its discretion may execute a new Note
of like tenor will
A-19
be issued by the Issuer in exchange for this Note, but, if this Note is
destroyed, lost or stolen, only upon receipt of evidence satisfactory to the
Registrar and the Issuer that this Note was destroyed or lost or stolen and, if
required, upon receipt also of indemnity satisfactory to each of them. All
expenses and reasonable charges associated with procuring such indemnity and
with the preparation, authentication and delivery of a new Note shall be borne
by the owner of the Note mutilated, defaced, destroyed, lost or stolen.
The Subordinated Indenture provides that (a) if an Event of Default (as
defined in the Subordinated Indenture) due to the default in payment of
principal, premium, if any, or interest on, any series of debt securities
issued under the Subordinated Indenture, including the series of Subordinated
Medium-Term Notes of which this Note forms a part, or due to the default in the
performance or breach of any other covenant or warranty of the Issuer
applicable to the debt securities of such series but not applicable to all
outstanding debt securities issued under the Subordinated Indenture, shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the debt securities of each affected series (voting
as a single class) may then declare the principal of all debt securities of all
such series and interest accrued thereon to be due and payable immediately and
(b) if an Event of Default due to a default in the performance of any other of
the covenants or agreements in the Subordinated Indenture applicable to all
outstanding debt securities issued thereunder, including this Note, or due to
certain events of bankruptcy or insolvency of the Issuer, shall have occurred
and be continuing, either the Trustee or the holders of not less than 25% in
principal amount of all debt securities issued under the Subordinated Indenture
then outstanding (treated as one class) may declare the principal of all such
debt securities and interest accrued thereon to be due and payable immediately,
but upon certain conditions such declarations may be annulled and past defaults
may be waived (except a continuing default in payment of principal, premium, if
any, or interest on such debt securities) by the holders of a majority in
principal amount of the debt securities of all affected series then
outstanding.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption, if the Issuer determines that, 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 therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which
change or amendment becomes effective on or after the Initial Offering Date
hereof, the Issuer has or will become obligated to pay Additional Amounts (as
defined below) with respect to this Note as described below. Prior to the
giving of any notice of redemption pursuant to this paragraph, the Issuer shall
deliver to the Trustee (i) a certificate stating that the Issuer is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Issuer to so redeem have occurred, and
(ii) an opinion of independent counsel satisfactory to the Trustee to such
effect based on such statement of facts; provided that no such notice of
redemption shall be given earlier than 60 calendar days prior to the earliest
date on which the Issuer would be obligated to pay such Additional Amounts if a
payment in respect of this Note were then due.
A-20
Notice of redemption will be given not less than 30 nor more than 60
calendar days prior to the date fixed for redemption or within the Redemption
Notice Period specified on face hereof, which date and the applicable
redemption price will be specified in the notice.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," the Issuer will, subject to certain
exceptions and limitations set forth below, pay such additional amounts (the
"Additional Amounts") to the holder of this Note who is a United States Alien
as may be necessary in order that every net payment of the principal of and
interest on this Note and any other amounts payable on this Note, after
withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein),
will not be less than the amount provided for in this Note to be then due and
payable. The Issuer will not, however, be required to make any payment of
Additional Amounts to any such holder for or on account of:
(a) any such tax, assessment or other governmental charge that would
not have been so imposed but for (i) the existence of any present or
former connection between such holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of such holder, if such holder is an
estate, a trust, a partnership or a corporation) and the United States and
its possessions, including, without limitation, such holder (or such
fiduciary, settlor, beneficiary, member or shareholder) being or having
been a citizen or resident thereof or being or having been engaged in a
trade or business or present therein or having, or having had, a permanent
establishment therein or (ii) the presentation by the holder of this Note
for payment on a date more than 15 calendar days after the date on which
such payment became due and payable or the date on which payment thereof
is duly provided for, whichever occurs later;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or governmental charge;
(c) any tax, assessment or other governmental charge imposed by
reason of such holder's past or present status as a personal holding
company or foreign personal holding company or controlled foreign
corporation or passive foreign investment company with respect to the
United States or as a corporation which accumulates earnings to avoid
United States federal income tax or as a private foundation or other
tax-exempt organization;
(d) any tax, assessment or other governmental charge that is payable
otherwise than by withholding from payments on or in respect of this Note;
(e) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of principal of, or interest
on, this Note, if such payment can be made without such withholding by any
other Paying Agent in a city in Western Europe;
A-21
(f) any tax, assessment or other governmental charge that would not
have been imposed but for the failure to comply with certification,
information or other reporting requirements concerning the nationality,
residence or identity of the holder or beneficial owner of this Note, if
such compliance is required by statute or by regulation of the United
States or of any political subdivision or taxing authority thereof or
therein as a precondition to relief or exemption from such tax, assessment
or other governmental charge;
(g) any tax, assessment or other governmental charge imposed by
reason of 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 stock entitled to vote of the Issuer or as a direct or
indirect subsidiary of the Issuer; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or (g).
In addition, the Issuer shall not be required to make any payment of Additional
Amounts (i) to any such holder where such withholding or deduction is imposed
on a payment to an individual and is required to be made pursuant to any
European Union Directive on the taxation of savings implementing the agreement
reached in the ECOFIN Council meeting of 13 December 2001 or any law
implementing or complying with, or introduced in order to conform to, such
Directive; or (ii) by or on behalf of a holder who would have been able to
avoid such withholding or deduction by presenting this Note or the relevant
coupon to another Paying Agent in a member state of the European Union. Nor
shall Additional Amounts be paid with respect to any payment on this Note to a
United States Alien who is a fiduciary or partnership or other than the sole
beneficial owner of such payment to the extent such payment would be required
by the laws of the United States (or any political subdivision thereof) to be
included in the income, for tax purposes, of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
who would not have been entitled to the Additional Amounts had such
beneficiary, settlor, member or beneficial owner been the holder of this Note.
The Subordinated Indenture permits the Issuer and the Trustee, with the
consent of the holders of not less than a majority in aggregate principal
amount of the debt securities of all series issued under the Subordinated
Indenture then outstanding and affected (voting as one class), to execute
supplemental indentures adding any provisions to or changing in any manner the
rights of the holders of each series so affected; provided that the Issuer and
the Trustee may not, without the consent of the holder of each outstanding debt
security affected thereby, (a) extend the final maturity of any such debt
security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable on
redemption thereof, or change the currency of payment thereof, or modify or
amend the provisions for conversion of any currency into any other currency, or
modify or amend the provisions for conversion or exchange of the debt security
for securities of the Issuer or other entities (other than as provided in the
antidilution provisions or other similar adjustment provisions of the debt
securities or otherwise in accordance with the terms thereof), or impair or
affect the rights of any holder to institute suit for the payment thereof
without the consent of the holder of each debt security so affected or (b)
reduce the aforesaid percentage in principal amount of debt securities the
consent of the holders of which is required for any such supplemental
indenture; provided, however, that neither this Note nor the Subordinated
A-22
Indenture may be amended to alter the subordination provisions hereof or
thereof without the written consent of each holder of Senior Indebtedness then
outstanding that would be adversely affected thereby.
Except as set forth below, if the principal, premium, if any, or interest
on, this Note is payable in a Specified Currency other than U.S. dollars and
such Specified Currency is not available to the Issuer for making payments
hereon due to the imposition of exchange controls or other circumstances beyond
the control of the Issuer or is no longer used by the government of the country
issuing such currency or for the settlement of transactions by public
institutions within the international banking community, then the Issuer will
be entitled to satisfy its obligations to the holder of this Note by making
such payments in U.S. dollars on the basis of the Market Exchange Rate on the
date of such payment or, if the Market Exchange Rate is not available on such
date, as of the most recent practicable date; provided, however, that if the
euro has been substituted for such Specified Currency, the Issuer may at its
option (or shall, if so required by applicable law) without the consent of the
holder of this Note effect the payment of principal of, premium, if any, or
interest on any Note denominated in such currency in euro in conformity with
legally applicable measures taken pursuant to, or by virtue of, the treaty
establishing the European Community, as amended. Any payment made under such
circumstances in U.S. dollars (or, if applicable, euro) where the required
payment is in a Specified Currency other than U.S. dollars will not constitute
an Event of Default. If such Market Exchange Rate is not then available to the
Issuer or is not published for a particular Specified Currency, the Market
Exchange Rate will be based on the highest bid quotation in The City of New
York received by the Exchange Rate Agent at approximately 11:00 a.m., New York
City time, on the second Business Day preceding the date of such payment from
three recognized foreign exchange dealers (the "Exchange Dealers") for the
purchase by the quoting Exchange Dealer of the Specified Currency for U.S.
dollars for settlement on the payment date, in the aggregate amount of the
Specified Currency payable to those holders or beneficial owners of Notes and
at which the applicable Exchange Dealer commits to execute a contract. One of
the Exchange Dealers providing quotations may be the Exchange Rate Agent (as
defined below) unless the Exchange Rate Agent is an affiliate of the Issuer. If
those bid quotations are not available, the Exchange Rate Agent shall determine
the market exchange rate at its sole discretion.
The "Exchange Rate Agent" shall be Morgan Stanley & Co. Incorporated,
unless otherwise indicated on the face hereof.
All determinations referred to above made by, or on behalf of, the Issuer
or by, or on behalf of, the Exchange Rate Agent shall be at such entity's sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on holders of Notes and coupons, if any.
So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the
Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and locations
A-23
of such agencies, if any are so designated. If any European Union Directive on
the taxation of savings implementing the agreement reached in the ECOFIN
Council meeting of 13 December 2001 or any law implementing or complying with,
or introduced in order to conform to, such Directive is introduced and a Paying
Agent has been designated within the European Union, the Issuer will maintain a
Paying Agent in a member state of the European Union that will not be obligated
to withhold or deduct tax pursuant to any such Directive or law.
With respect to moneys paid by the Issuer and held by the Trustee or any
Paying Agent for payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting
in any way any obligation that the Issuer may have to pay the principal of or
interest or premium, if any, on this Note as the same shall become due.
No provision of this Note or of the Subordinated Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to
pay the principal of, premium, if any, and interest on this Note at the time,
place, and rate, and in the coin or currency, herein prescribed unless
otherwise agreed between the Issuer and the registered holder of this Note.
Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or premium,
if any, or the interest on this Note, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Subordinated Indenture or
any indenture supplemental thereto, against any incorporator, shareholder,
officer or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.
As used herein, the term "United States Alien" means any person who, for
United States federal income tax purposes, is a foreign corporation, a
non-resident alien individual, a non-resident alien fiduciary of a foreign
estate or trust, or a foreign partnership one or more of the members of which
is a foreign corporation, a non-resident alien individual or a non-resident
alien fiduciary of a foreign estate or trust.
A-24
All terms used in this Note which are defined in the Subordinated
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Subordinated Indenture.
A-25
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - ______________________ Custodian ______________________
(Minor) (Cust)
Under Uniform Gifts to Minors Act _________________________________________
(State)
Additional abbreviations may also be used though not in the above list.
-----------------------
A-26
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________
[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.
Dated:________________________
NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the within Note in every particular
without alteration or enlargement or any change whatsoever.
A-27
REQUEST TO EXCHANGE
The undersigned hereby requests to exchange the within Note (or the
portion thereof specified below) with the effect provided in the within Note by
surrendering the within Note to the Paying Agent at JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank), 55 Water Street, New York, New
York 10041, Attention: Corporate Trustee Administration Department, or such
other address of which the Issuer shall from time to time notify the holders of
the Notes, together with this form of "Request to Exchange" duly completed by
the holder of the within Note.
If less than the entire principal amount of the within Note is requested
to be exchanged, specify the portion thereof (which shall be $100,000 or an
integral multiple of $1,000 in excess thereof) to be exchanged $______.
Dated:______________________________ __________________________________________
NOTICE: The signature on this Request to
Exchange must correspond with the name as
written upon the face of the within Note
in every particular, without alteration
or enlargement or any change whatever.
A-28
SCHEDULE I
SCHEDULE OF EXCHANGES
The initial principal amount of this Note is ________________. The
following exchanges of a portion of this Note for an interest in the Renewable
Note have been made:
Principal Amount Reduced Principal
Date of Exchanged for Amount Outstanding Notation Made by or
Exchange Renewable Note Following Such Exchange on Behalf of Paying Agent
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
- -------- ---------------- ----------------------- -------------------------
A-29