EXHIBIT 4-u
[FORM OF FACE OF SECURITY]
DEFINITIVE FLOATING RATE SENIOR BEARER NOTE
BEARER BEARER
No. DFLR____________ [PRINCIPAL AMOUNT]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
THIS NOTE HAS NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE SECURITIES
AND EXCHANGE LAW OF JAPAN. THIS NOTE MAY NOT BE OFFERED OR SOLD, DIRECTLY OR
INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN (WHICH
TERM AS USED HEREIN MEANS ANY PERSON RESIDENT IN JAPAN INCLUDING ANY CORPORATION
OR OTHER ENTITY ORGANIZED UNDER THE LAWS OF JAPAN) OR TO OTHERS FOR THE
RE-OFFERING OR RE-SALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO A RESIDENT OF
JAPAN EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AND
OTHERWISE IN COMPLIANCE WITH, THE SECURITIES AND EXCHANGE LAW OF JAPAN AND OTHER
RELEVANT LAWS AND REGULATIONS OF JAPAN.(1)
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(1) If this Note is offered in Japan or denominated in Japanese Yen,
appropriate legends need to be added.
MORGAN STANLEY
MEDIUM-TERM NOTE, SERIES [G/H]
Definitive Floating Rate Senior Bearer Note
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ORIGINAL ISSUE DATE: INTEREST ACCRUAL DATE: INTEREST PAYMENT DATE(S):
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MATURITY DATE: INITIAL INTEREST RATE: INTEREST PAYMENT PERIOD:
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BASE RATE: INITIAL INTEREST RESET DATE: INTEREST RESET DATE(S):
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INDEX MATURITY: MAXIMUM INTEREST RATE: INTEREST RESET PERIOD:
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SPREAD (PLUS OR MINUS): MINIMUM INTEREST RATE: CALCULATION AGENT:
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SPREAD MULTIPLIER: INITIAL REDEMPTION DATE: EUROCLEAR NO:
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SPECIFIED CURRENCY: INITIAL REDEMPTION PERCENTAGE: CLEARSTREAM NO:
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INDEX CURRENCY: ANNUAL REDEMPTION PERCENTAGE COMMON CODE:
REDUCTION:
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DESIGNATED CMT TELERATE PAGE: REDEMPTION NOTICE PERIOD:(2) ISIN:
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DESIGNATED CMT MATURITY INDEX: OPTIONAL REPAYMENT DATE(S): MINIMUM DENOMINATIONS:
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REPORTING SERVICE: INITIAL OFFERING DATE: EXCHANGE FOR REGISTERED NOTES: [NO](3)
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OTHER PROVISIONS:
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Morgan Stanley, a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to bearer,
upon surrender hereof, the principal sum of ____________________ on the Maturity
Date specified above (except to the extent previously redeemed or repaid) and to
pay interest thereon to the bearer of the coupons, if any, appertaining hereto,
from and including the Interest Accrual Date specified above at a rate per annum
equal to the Initial Interest Rate specified above until but excluding the
Initial Interest Reset Date specified above, and on and after at a rate per
annum determined in accordance with the provisions specified on the reverse
hereof until but excluding the date such principal amount
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(2) Applicable if other than 30-60 calendar days. Consult with Euroclear or
Clearstream if a shorter redemption is requested. A minimum of 10 calendar days
may be possible.
(3) Unless explicitly stated otherwise in term sheet, MS practice has been
to exclude this option.
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is paid or duly made available for payment. The Issuer will pay interest in
arrears 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 specified above (or any
redemption or repayment date); provided, however, that if the Interest Accrual
Date occurs fifteen calendar days or less prior to the first Interest Payment
Date occurring after the Interest Accrual Date, interest payments will commence
on the second Interest Payment Date succeeding the Interest Accrual Date; and
provided, further, that if an Interest Payment Date (other than the Maturity
Date or any redemption or repayment date) would fall on a day that is not a
Business Day, as defined on the reverse hereof, such Interest Payment 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, such Interest Payment Date shall be the immediately preceding
day that is a Business Day; and provided, further, that if the Maturity Date or
redemption or repayment date would fall on a day that is not a Business Day, the
payment of principal of, premium, if any, and interest shall be made on the next
succeeding Business Day and no interest shall accrue for the period from and
after such Maturity Date or redemption or repayment date.
Interest on this Note will accrue from and including the most recent
Interest Payment 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 principal hereof has
been paid or duly made available for payment (except as provided below). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will be payable only upon presentation and surrender at the office
or agency of the Principal Paying Agent (this and certain other capitalized
terms used herein are defined on the reverse of this Note) or at the office or
agency of such other paying agents outside the United States as the Issuer may
determine for that purpose (each, a "Paying Agent," which term shall include the
Principal Paying Agent) of the interest coupons hereto attached as they
severally mature.
Payment of the principal of and premium, if any, on this Note, at maturity
(or on any redemption or repayment date) will be made upon presentation and
surrender of this Note at the office or agency of the Principal Paying Agent or
at the office of any Paying Agent.
Payment of the principal of, premium, if any, and interest on this Note
will be made in the Specified Currency indicated above, except as provided on
the reverse hereof. If this Note is denominated in U.S. dollars, any payment of
the principal of and premium, if any, and interest on this Note will be made in
such coin or currency of the United States as at the time of payment is legal
tender for payment of public and private debts. Such payments on this Note will
be made either by a check mailed to an address outside the United States
furnished by the payee or, at the option of the payee and subject to applicable
laws and regulations and the procedures of the Paying Agent, by wire transfer of
immediately available funds to an account maintained by the payee with a bank
located outside the United States if appropriate wire transfer instructions have
been received by the Paying Agent not less than 15 calendar days prior to the
applicable payment date. Notwithstanding the foregoing, in the event that
payment in U.S. dollars of the full amount payable on this Note at the offices
of all Paying Agents would be illegal or effectively precluded as a result of
exchange controls or similar restrictions, payment on this Note will be made by
a paying agency in the United States, if such paying agency, under applicable
law and regulations, would be able to make such payment. If this Note is
denominated in a Specified Currency other
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than U.S. dollars, then, except as provided on the reverse hereof, payment of
the principal of and premium, if any, and interest on this Note will be made in
such Specified Currency either by a check drawn on a bank outside the United
States or, at the option of the payee and subject to applicable laws and
regulations and the procedures of the Paying Agent, by wire transfer of
immediately available funds to an account maintained by the payee with a bank
located outside the United States.
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.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, neither this Note
nor any coupons appertaining hereto shall be entitled to any benefit under the
Senior Indenture, as defined on the reverse hereof, or be valid or obligatory
for any purpose.
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IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed and
coupons bearing the facsimile signature of its ___________ to be annexed hereto.
DATED:
MORGAN STANLEY
By:
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Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned
Senior Indenture.
JPMORGAN CHASE BANK,
as Trustee
By:
-------------------------------
Authorized Officer
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[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of Medium-Term Notes, Series
[G/H], having maturities more than nine months from the date of issue (the
"Notes"), of the Issuer. The Notes are issuable under a Senior Indenture, dated
as of November 1, 2004, between the Issuer and JPMorgan Chase Bank, as Trustee
(the "Trustee," which term includes any successor trustee under the Senior
Indenture) (as may be amended or supplemented from time to time, the "Senior
Indenture"), to which Senior 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 any coupons appertaining thereto and the terms upon which the Notes
are, and are to be, authenticated and delivered. The Issuer has appointed
JPMorgan Chase Bank, London Branch, as its principal paying agent for the Notes
and the coupons appertaining thereto (the "Principal Paying Agent," which term
includes any additional or successor Principal Paying Agent appointed by the
Issuer). 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 Senior Indenture. To the extent not inconsistent herewith, the
terms of the Senior 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 indicated on the face hereof
in accordance with the provisions of the following two paragraphs and except as
set forth below, will not be redeemable or subject to repayment at the option of
the holder 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 Initial Redemption Date
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 (except as
indicated below). If this Note is subject to "Annual Redemption Percentage
Reduction," the Initial Redemption Percentage indicated on the face hereof will
be reduced on each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction specified on the face hereof until the
redemption price of this Note is 100% of the principal amount hereof, together
with interest accrued and unpaid hereon to the date of redemption (except as
provided below). Notice of redemption to holders of Notes shall be published in
the manner set forth in "Notices" as defined below once in each of three
successive calendar weeks, the first publication to be not less than 30 nor more
than 60 calendar days prior to the date set for redemption or within the
Redemption Notice Period specified on the face hereof. 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 upon the cancellation hereof. If
redeemed prior to maturity, this Note must be presented for payment together
with all unmatured coupons, if any, appertaining hereto, failing which the
amount of any missing unmatured coupon will be deducted from the sum due for
payment; provided, however, that such deduction may be waived by the Issuer and
the Principal Paying Agent if there is furnished to each of them such security
or indemnity as they may require.
The Issuer will not be required (i) to exchange any Bearer Note to be
redeemed for a period of fifteen calendar days preceding the first publication
of the relevant Notice of redemption or (ii) to exchange any Bearer Note
selected for redemption or surrendered for optional repayment, except that such
Bearer Note may be exchanged for a Registered Note of like tenor unless
6
indicated otherwise on the face of this Note, provided that such Registered Note
shall be simultaneously surrendered for redemption or repayment, as the case may
be.
If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments of
$1,000 or, if this Note is denominated in a Specified Currency other than U.S.
dollars, in increments of 1,000 units of such Specified Currency (provided that
any remaining principal amount hereof shall not be less than the minimum
authorized denomination hereof) at the option of the holder hereof at a price
equal to 100% of the principal amount to be repaid, together with interest
accrued and unpaid hereon to the date of repayment (except as provided below).
For this Note to be repaid at the option of the holder hereof, the Principal
Paying Agent must receive at its office in London, at least 15 but not more than
30 calendar days prior to the date of repayment, this Note, together with all
unmatured coupons appertaining hereto, with the form entitled "Option to Elect
Repayment" below duly completed, or 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 trust company in
the United States, Western Europe or Japan setting forth the principal amount of
the Note, the principal amount of the Note to be repaid, the certificate number
or a description of the tenor and terms of this Note, a statement that the
Option to Elect Repayment is being exercised and a guarantee that this Note to
be repaid, together with all unmatured coupons appertaining hereto and the duly
completed form entitled Option to Elect Repayment, will be received by the
Principal Paying Agent not later than the fifth Business Day after the date of
that telegram, telex, facsimile transmission or letter. However, the telegram,
telex, facsimile transmission or letter shall only be effective if this Note,
all unmatured coupons appertaining hereto and an Option to Elect Repayment form
duly completed are received by the Principal Paying Agent by the fifth Business
Day after the date of such telegram, telex, facsimile transmission or letter.
Exercise of such repayment option by the holder hereof shall be irrevocable.
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 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 the interest rate in effect for the period from the
Interest Accrual Date to the Initial Interest Reset Date will be the Initial
Interest Rate. If any Interest Reset Date would otherwise be a day that is not a
Business Day (as defined below), 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 or EURIBOR and such Business Day is in the
next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day.
The Interest Determination Date pertaining to an Interest Reset Date for
Notes bearing interest calculated by reference to the Federal Funds Rate and
Prime Rate shall be on the
7
Business Day prior to the Interest Reset 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 and CMT Rate will be the second
Business Day prior to 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 prior to 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 prior to
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. Treasury Bills are normally sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the auction is
normally held on the following Tuesday, except that the auction may be held on
the preceding Friday; provided, however, that if an auction is held on the
Friday of the week preceding such Interest Reset Date, the 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.
The Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to two or more base rates will be the
latest Business Day that is at least two Business Days before the Interest Reset
Date for the applicable Note on which each base rate is determinable.
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
immediately 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 U.S. dollar 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 3:00 p.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/update,
8
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, which may include the
initial dealer and its affiliates, selected by the Calculation Agent (after
consultation with the Issuer), for negotiable U.S. dollar certificates of
deposit of major U.S. 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.
"Initial dealer" with respect to this Note means Morgan Stanley & Co.
International Limited.
(iii) If the dealers selected by the Calculation Agent are not quoting as
set forth in (ii) 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 U.S. dollar 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 3:00 p.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, or other recognized electronic source used for the purpose of displaying
the applicable rate, 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, or other
recognized electronic source used for the purpose of displaying the applicable
rate, 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 U.S. dollar commercial paper in The City of New York, which may
include the initial dealer and its affiliates, 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.
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(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, 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
interbank market, 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 in (ii) above, EURIBOR in effect for the applicable period shall be
the same as 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.
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"Euro-zone" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the relevant treaty of
the European Union, 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 U.S. dollar federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)" as displayed on Moneyline Telerate, 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 3:00 p.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, or other recognized
electronic source used for the purpose of displaying the applicable rate, under
the heading "Federal Funds (Effective)."
(ii)If the above rate is not yet published in either H.15(519) or the H.15
Daily Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, 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
U.S. dollar federal funds prior to 9:00 a.m., New York City time, on that
Interest Determination Date, by each of three leading brokers of U.S. dollar
federal funds transactions in The City of New York, which may include the
initial dealer and its affiliates, selected by the Calculation Agent (after
consultation with the Issuer).
(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 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
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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
described in (iii) above, LIBOR in effect for the applicable period shall be the
same as 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 Money 3000
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, 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.
12
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 3:00 p.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 the 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, 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 for that Interest Determination Date appear
on the Reuters Screen USPRIME 1 Page by 3:00 p.m., New York City time, on the
Calculation 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, which may include affiliates
of the initial dealer, 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 in (iii) above, 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 Money 3000 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 U.S. 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, 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
13
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 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/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 U.S. government securities dealers, which
may include the initial dealer and 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:
14
(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 rate as described in (i) above 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 U.S. 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 in (ii) 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 U.S.
government securities dealers ("Reference Dealers") in The City of New York,
which may include the initial dealer or another affiliate, 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, a remaining term to maturity of
no more than 1 year shorter than that Designated CMT Maturity Index and in a
principal amount that is representative for a single transaction in the
securities in that market at that time. 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
15
and in a principal amount that is representative for a single transaction in the
securities in that market at that time.
(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, 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 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.
Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Date or the Maturity Date (or any earlier
redemption or repayment date), as the case may be. Accrued interest hereon shall
be an amount calculated by multiplying the principal amount hereof shown on
Schedule A hereto by an accrued interest factor. Such accrued interest factor
shall be computed by adding the interest factor calculated for each day in the
period for which interest is being paid. Unless otherwise specified on the face
hereof, the interest factor for each such date 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 used in or 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 .000005% rounded up to .00001%), and all U.S. dollar
amounts used in or resulting from such calculations on this Note will be rounded
to the nearest cent, with one-half cent rounded upward. All Japanese Yen amounts
used
16
in or resulting from such calculations will be rounded downward 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 .005 being rounded up to .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 the coupons appertaining hereto and all the obligations of
the Issuer hereunder are direct, unsecured obligations of the Issuer and rank
without preference or priority among themselves and pari passu with all other
existing and future unsecured and unsubordinated indebtedness of the Issuer,
subject to certain statutory exceptions in the event of liquidation upon
insolvency.
This Note is issued in definitive bearer form with coupons attached (a
"Definitive Bearer Note") and, unless otherwise indicated on the face hereof, is
issuable only in the minimum denominations set forth on the face hereof or any
amount in excess thereof which is an integral multiple of 1,000 units of the
Specified Currency set forth on the face hereof.
This Note and the coupons appertaining hereto may be transferred by
delivery. At the option of the holder of this Note, and subject to the terms of
the Senior Indenture, this Note (with all unmatured coupons, and all matured
coupons, if any, in default appertaining hereto) will be exchanged for two or
more Definitive Bearer Notes (if this Note is issuable in more than one
authorized denomination) or for a Registered Note, in each case, of any
authorized denomination of like tenor and in an equal aggregate principal
amount, in accordance with the provisions of the Senior Indenture, at the office
of the Trustee in The City of New York (which initially has been appointed
registrar and transfer agent for the Notes) or at the office of the Principal
Paying Agent in London (which initially has been appointed transfer agent for
the Notes), or at the office of any transfer agent designated by the Issuer for
such purpose. If this Note is surrendered in exchange for a Registered Note
after the close of business at any such office on any record date (whether or
not a Business Day) for the payment of interest on such Registered Note and
before the opening of business at such office on the relevant Interest Payment
Date, this Note shall be surrendered without the coupon relating to such
Interest Payment Date. All such exchanges of Notes and coupons will be free of
service charge, but the Issuer may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. None of
the Issuer, the Trustee or any agent of the Issuer or the Trustee shall be
required to exchange this Note for a Registered Note if such exchange would
result in adverse United States federal income tax consequences to the Issuer
under then applicable United States federal income tax laws.
The date of any Registered Note delivered upon any exchange of this Note
shall be such that no gain or loss of interest results from such exchange.
In case this Note or any coupon appertaining hereto shall at any time
become mutilated, defaced or be destroyed, lost or stolen and this Note or such
coupon 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 the Note, or in
lieu of the Note so destroyed or lost or stolen, with coupons corresponding to
the coupons
17
appertaining to the Note so mutilated, defaced, destroyed, lost or stolen, or in
exchange for the Note to which such mutilated, defaced, destroyed, lost or
stolen coupon appertained, with coupons appertaining thereto corresponding to
the coupons so mutilated, defaced, destroyed, lost or stolen, but, if this Note
or coupon is destroyed, lost or stolen, only upon receipt of evidence
satisfactory to the Trustee and the Issuer that this Note or coupon 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 and coupons shall be borne by the owner of the Note or
the coupons mutilated, defaced, destroyed, lost or stolen.
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 legal 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 the face hereof, which date and the applicable
redemption price will be specified in the Notice.
If the Issuer shall determine that any payment made outside the United
States by the Issuer or any Paying Agent of principal, premium or interest due
in respect of this Note or any coupons appertaining hereto would, under any
present or future laws or regulations of the United States, be subject to any
certification, identification or other information reporting requirement of any
kind, the effect of which is the disclosure to the Issuer, any Paying Agent or
any governmental authority of the nationality, residence or identity of a
beneficial owner of this Note or any coupons appertaining hereto who is a United
States Alien (as defined below) (other than such a requirement (a) that would
not be applicable to a payment made by the Issuer or any Paying Agent (i)
directly to the beneficial owner or (ii) to a custodian, nominee or other agent
of the beneficial owner, or (b) that can be satisfied by such custodian, nominee
or other agent certifying to the effect that such beneficial owner is a United
States Alien; provided that in each case referred to in clauses (a)(ii) and (b)
payment by such custodian, nominee or agent to such beneficial owner is not
otherwise subject to any such requirement), the Issuer shall redeem this Note,
as a whole, at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to the date fixed for redemption, or, at the
election of the Issuer if the conditions of the next succeeding paragraph are
satisfied, pay the additional amounts specified in
18
such paragraph. The Issuer shall make such determination and election as soon as
practicable, shall promptly notify the Trustee thereof and shall publish (or
transmit, as applicable) prompt notice thereof (the "Determination Notice")
stating the effective date of such certification, identification or other
information reporting requirements, whether the Issuer will redeem this Note or
has elected to pay the additional amounts specified in the next succeeding
paragraph, and (if applicable) the last date by which the redemption of this
Note must take place, as provided in the next succeeding sentence. If the Issuer
redeems this Note, such redemption shall take place on such date, not later than
one year after the publication of the Determination Notice, as the Issuer shall
elect by notice to the Trustee at least 60 calendar days prior to the date fixed
for redemption or at least 30 calendar days prior to the last day of the
Redemption Notice Period specified on the face hereof. Notice of such redemption
of this Note will be given to the holder of this Note not more than 60 nor less
than 30 calendar days prior to the date fixed for redemption or within the
Redemption Notice Period specified on the face hereof. Such redemption notice
shall include a statement as to the last date by which this Note to be redeemed
may be exchanged for Registered Notes. Notwithstanding the foregoing, the Issuer
shall not so redeem this Note if the Issuer shall subsequently determine, not
less than 30 calendar days prior to the date fixed for redemption or prior to
the last day of the Redemption Notice Period specified on the face hereof, that
subsequent payments would not be subject to any such certification,
identification or other information reporting requirement, in which case the
Issuer shall publish (or transmit, as applicable) prompt notice of such
determination and any earlier redemption notice shall be revoked and of no
further effect. The right of the holder of this Note to exchange this Note for
Registered Notes pursuant to the provisions of this paragraph will terminate at
the close of business of the Principal Paying Agent on the fifteenth day prior
to the date fixed for redemption, and no further exchanges of this Note for
Registered Notes shall be permitted.
If and so long as the certification, identification or other information
reporting requirements referred to in the preceding paragraph would be fully
satisfied by payment of a backup withholding tax or similar charge, the Issuer
may elect by notice to the Trustee to pay as additional amounts such amounts as
may be necessary so that every net payment made outside the United States
following the effective date of such requirements by the Issuer or any Paying
Agent of principal, premium or interest due in respect of this Note or any
coupons appertaining hereto of which the beneficial owner is a United States
Alien (but without any requirement that the nationality, residence or identity
of such beneficial owner be disclosed to the Issuer, any Paying Agent or any
governmental authority, with respect to the payment of such additional amounts),
after deduction or withholding for or on account of such backup withholding tax
or similar charge (other than a backup withholding tax or similar charge that
(i) would not be applicable in the circumstances referred to in the second
parenthetical clause of the first sentence of the preceding paragraph, or (ii)
is imposed as a result of presentation of this Note or any coupons appertaining
hereto for payment more than 15 calendar days after the date on which such
payment becomes due and payable or on which payment thereof is duly provided
for, whichever occurs later), will not be less than the amount provided for in
this Note or any coupons appertaining hereto to be then due and payable. In the
event the Issuer elects to pay any additional amounts pursuant to this
paragraph, the Issuer shall have the right to redeem this Note as a whole at any
time pursuant to the applicable provisions of the immediately preceding
paragraph and the redemption price of this Note will not be reduced for
applicable withholding taxes. If the Issuer elects to pay additional amounts
pursuant to this paragraph and the condition
19
specified in the first sentence of this paragraph should no longer be satisfied,
then the Issuer will redeem this Note as a whole, pursuant to the applicable
provisions of the immediately preceding paragraph.
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 or any coupons appertaining hereto 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 or
deduction 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 or in any such coupon
appertaining hereto to be then due and payable. The Issuer will not, however,
make any payment of Additional Amounts to any such holder who is a United States
Alien 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 for United
States federal income tax purposes, and the United States, 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 or on behalf of the holder of this
Note or any coupons appertaining hereto 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, excise 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 or a bank receiving interest under Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended;
(d)any tax, assessment or other governmental charge that is
payable otherwise than by withholding or deduction from payments on or
in respect of this Note or any coupons appertaining hereto;
(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;
20
(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 or
any coupons appertaining hereto, 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 law
implementing or complying with, or introduced in order to conform to, any
European Union Directive on the taxation of savings; 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 the Issuer pay Additional Amounts with
respect to any payment on this Note or any coupons appertaining hereto 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 or any coupons
appertaining hereto.
The Senior Indenture provides that (i) if an Event of Default (as defined
in the Senior Indenture) due to the default in payment of principal of or
premium, if any, or interest on any series of debt securities issued under the
Senior Indenture, including the series of Global 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 Senior Indenture, shall have occurred and be continuing, either the Trustee
or the holders of not less than 25% in aggregate principal amount of the
outstanding debt securities of each affected series, voting as one class, by
notice in writing to the Issuer and to the Trustee, if given by the
securityholders, may then declare the principal of all debt securities of all
such series and interest accrued thereon to be due and payable immediately and
(ii) 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, insolvency or reorganization of the Issuer, shall
have occurred and be continuing, either the Trustee or the holders of not less
than 25% in aggregate principal amount of all outstanding debt securities issued
under the Senior Indenture, voting as one class, by notice in writing to the
Issuer and to the Trustee, if given by the securityholders, may declare the
principal of all such debt securities and interest accrued thereon to be due and
payable immediately, but
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upon certain conditions such declarations may be
annulled and past defaults may be waived (except a continuing default in payment
of principal of or premium, if any, or interest on such debt securities) by the
holders of a majority in aggregate principal amount of the debt securities of
all affected series then outstanding.
The Senior 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 Senior 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,
(i) 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 or for other property or the cash value of the property (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 or (ii) reduce the aforesaid percentage in principal amount of
debt securities the consent of the holders of which is required for any such
supplemental indenture.
Except as set forth below, if the principal of or 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 or any coupons
appertaining hereto by making such payments in U.S. dollars on the basis of the
Market Exchange Rate (as defined below) 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 or premium, if any, or interest 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 (as defined below) 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
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Dealers providing quotations may be the Exchange Rate Agent 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. International
Limited, 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 appertaining thereto.
So long as this Note or any coupons appertaining hereto 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. If this Note is listed on the London Stock Exchange plc and
such exchange so requires, the Issuer shall maintain a Paying Agent in London.
If any European Union Directive on the taxation of savings comes into force, the
Issuer will, to the extent possible as a matter of law, 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 any law implementing or
complying with, or introduced in order to conform to, such Directive. The Issuer
may designate other agencies for the payment of said principal, premium and
interest at such place or places outside the United States (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.
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 any coupons appertaining hereto or of the
Senior Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and 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 holder of
this Note or any coupons appertaining hereto.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the holder of this Note or any coupons appertaining hereto as the absolute
owner thereof for all purposes, whether or not this Note or such coupon 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 interest on this Note for any claim based hereon or on any coupon
appertaining hereto, or otherwise in
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respect hereof, or based on or in respect of the Senior 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 and the coupons appertaining hereto shall for all purposes be
governed by, and construed in accordance with, the laws of the State of New
York.
As used herein:
(a) the term "Business Day" means any day, other than a Saturday
or Sunday, (i) 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 in London 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 (ii) 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");
(b) the term "Market Exchange Rate" means the noon U.S. dollar
buying rate in The City of New York for cable transfers of the
Specified Currency indicated on the face hereof published by the
Federal Reserve Bank of New York;
(c) the term "Notices" refers to notices to the holders of the
Notes and any coupons appertaining thereto to be given by publication
in an authorized newspaper in the English language and of general
circulation in the Borough of Manhattan, The City of New York, and
London or, if publication in London is not practical, in an English
language newspaper with general circulation in Western Europe. Such
Notices will be deemed to have been given on the date of such
publication or, if published in such newspapers on different dates, on
the date of the first such publication;
(d) the term "United States" means the United States of America
(including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction; and
(e) the term "United States Alien" means any person who is, for
United States federal income tax purposes, (i) a nonresident alien
individual, (ii) a foreign corporation, (iii) a nonresident alien
fiduciary of a foreign estate or trust or (iv) a foreign partnership
one or more of the members of which is, for United States federal
income tax purposes, a nonresident alien individual, a foreign
corporation or a nonresident alien fiduciary of a foreign estate or
trust.
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All other terms used in this Note and the coupons appertaining hereto which
are defined in the Senior Indenture and not otherwise defined herein shall have
the meanings assigned to them in the Senior Indenture.
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OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Issuer to
repay the within Note (or portion thereof specified below) pursuant to its terms
at a price equal to the principal amount thereof, together with interest to the
Optional Repayment Date, to the undersigned at
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have repaid:
_________________________; and specify the denomination or denominations (which
shall not be less than the minimum authorized denomination) of the Notes to be
issued to the holder for the portion of the within Note not being repaid (in the
absence of any such specification, one such Note will be issued for the portion
not being repaid):_________________________.
Dated: _________________________________ __________________________________
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