EXHIBIT 4-aa
[FORM OF FACE OF SECURITY]
EURO SENIOR REGISTERED FLOATING RATE RENEWABLE NOTE
REGISTERED REGISTERED
No. EFLRR ISIN: [ ]
Common Code: [ ]
[Principal Amount],
as modified by Schedule I
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.
GLOBAL MEDIUM-TERM NOTE, SERIES [G/H]
EURO SENIOR REGISTERED FLOATING RATE RENEWABLE
EXtendible Liquidity Securities(SM) (EXLs(SM))
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BASE RATE: ORIGINAL ISSUE DATE: INITIAL MATURITY DATE:
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INDEX MATURITY: INTEREST ACCRUAL DATE: FINAL MATURITY DATE:
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REPORTING SERVICE: INITIAL INTEREST RATE: MATURITY EXTENSION
DATE:
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INTEREST PAYMENT PERIOD: INITIAL INTEREST RESET INTEREST PAYMENT
DATE: DATE(S):
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EXTENDED MATURITY DATE: ELECTION PERIODS: INTEREST RESET PERIOD:
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SPREAD (PLUS OR MINUS): MAXIMUM INTEREST RATE: INTEREST RESET DATE(S):
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SPREAD MULTIPLIER: MINIMUM INTEREST RATE: PRINCIPAL PAYING AGENT
AND CALCULATION
AGENT:
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INDEX CURRENCY: INITIAL REDEMPTION DATE:
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EXCHANGE RATE AGENT: INITIAL REDEMPTION DENOMINATIONS:
PERCENTAGE:
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INCREMENTAL SPREAD ANNUAL REDEMPTION SPECIFIED CURRENCY:
COMMENCEMENT DATE: PERCENTAGE
REDUCTION:
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INCREMENTAL SPREAD (PLUS OPTIONAL REPAYMENT IF SPECIFIED CURRENCY
OR MINUS): DATE(S): OTHER THAN U.S.
DOLLARS, OPTION TO
SELECT PAYMENT IN
U.S. DOLLARS:
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REDEMPTION DATES: REDEMPTION NOTICE DESIGNATED CMT TELERATE
PERIOD:(2) PAGE:
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REDEMPTION PERCENTAGE: INITIAL OFFERING DATE: DESIGNATED CMT MATURITY
INDEX:
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OTHER PROVISIONS: See
below.
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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.
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IRREVOCABLE NOTICE: [Upon delivery of a notice electing to extend the
maturity of this Note or any portion thereof to
JPMorgan Chase Bank (London Branch), such election
shall be irrevocable. The holder of a Short-Term Note
(as defined below) received as a consequence of the
failure to make such election may not elect to exchange
such Short-Term Note for an interest in this Note.]
MATURITY
EXTENSION PERIOD: [18 calendar months, or if the last day of such period
is not a Business Day, the Maturity Extension Period
shall end on the first Business Day immediately
preceding such day.]
MATURITY EXTENSION: [This Note shall mature on the Initial Maturity Date,
unless the maturity of all or any portion of the
principal amount hereof is extended in accordance with
the procedures described herein under "Option to Extend
Maturity."]
OPTION TO
EXTEND MATURITY: [During any Election Period, if the option to extend
the maturity of this Note is exercised, the maturity of
this Note, or of any portion of this Note having a
principal amount of Euro or any integral
multiple of Euro in excess thereof for which
such option has been exercised, shall be extended to
the Maturity Extension Date occurring in the month
eighteen months after the earliest to occur of the next
, , or immediately
succeeding such Election Period. In order to exercise
the option to extend the maturity of all, or any
portion, of the principal amount of this Note, the
holder of this Note must deliver to JPMorgan Chase Bank
(London Branch) during the relevant Election Period
(and on or prior to 5:00 p.m. (London time) on the last
Business Day in such Election Period) (i) the form
entitled "Option to Extend Maturity" included below
duly completed and, in the event of an election to
extend the maturity of only a portion of the principal
amount of this Note, this Note 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 setting
forth the name of the holder of this Note, the
principal amount
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hereof, the certificate number of this Note or a
description of this Note's tenor or terms, a statement
that the option to elect extension of maturity is being
exercised thereby, the principal amount hereof with
respect to which such option is being exercised and a
guarantee that the form entitled "Option to Extend
Maturity" included below duly completed and, in the
event of an election to extend the maturity of only a
portion of the principal amount of this Note, this Note
will be received by JPMorgan Chase Bank (London Branch)
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 (if required to be surrendered as aforesaid)
and such form duly completed are received by JPMorgan
Chase Bank (London Branch) 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 Euro or any larger amount
that is an integral multiple of Euro .]
[If the option to extend the maturity of any portion
hereof is not duly exercised within any Election
Period, a new Note or Notes in the form attached hereto
as Exhibit A (each, a "Short-Term Note") for all or
that portion of the principal amount hereof as to which
such option to extend has not been made and having as
its or their "Maturity Date" (as such term is used in
each such Short-Term Note) the Extended Maturity Date
or, if the option to extend the maturity of this Note
has not previously been duly exercised as to such
portion of the principal amount hereof, the Initial
Maturity Date shall be issued on the Interest Payment
Date immediately succeeding such Election Period in the
name of the holder hereof, subject to delivery of this
Note to JPMorgan Chase Bank (London Branch), and
Schedule I hereto shall be annotated as of the Interest
Payment Date immediately succeeding such Election
Period to reflect the corresponding decrease in the
principal amount hereof. The failure to elect to extend
the maturity of all or any portion of this Note will be
irrevocable and will be binding upon any subsequent
holder of this Note.]
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[The Issuer and the Trustee shall deem this Note
cancelled as to any portion of the principal amount
hereof for which a duly completed form entitled "Option
to Extend Maturity" and, if applicable, this Note are
not delivered to JPMorgan Chase Bank (London Branch)
within the applicable Election Period in accordance
with the terms of this Note.]
[The maturity of this Note will not be extended beyond
the Final Maturity Date stated above.]
Morgan Stanley, a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to , or
registered assignees, the principal amount specified in Schedule I hereto on the
Initial Maturity Date specified above (except to the extent previously redeemed
or repaid) 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
herein to an Extended Maturity Date, as defined above, on such Extended Maturity
Date (except to the extent such portion is redeemed or repaid 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 but excluding the date on which (a) the principal hereof is paid or duly
made available for payment or (b) this Note has been canceled 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 or repayment date; provided,
however, that 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 a 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, Maturity Date, redemption date or repayment
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
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month, the Interest Payment Date, Maturity Date, redemption date or repayment
date shall be the immediately preceding day that is a Business Day.
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 (i) the principal hereof has been paid or duly made
available for payment or (ii) this Note has been canceled 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 on any redemption or repayment date) shall be payable to the
person to whom the principal hereof shall be payable.
Payment of the principal of this Note, any premium and the interest due at
maturity (or on any redemption or repayment 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
Principal Paying Agent, as defined on the reverse hereof, or at the office or
agency of such other paying agent as the Issuer may determine (each, a "Paying
Agent," which term shall include the Principal Paying Agent). U.S. dollar
payments of interest, other than interest due at maturity or on any date of
redemption or repayment, 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 or repayment, by wire transfer of immediately
available funds if appropriate wire transfer instructions have been received by
the Principal 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 interest,
principal or any premium 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 Principal Paying Agent in writing, 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
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premium, at least ten Business Days prior to the Maturity Date or any redemption
or repayment date, as the case may be; 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 Day after such
Record Date or at least ten Business Days prior to the Maturity Date or any
redemption or repayment 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, for payments of interest, or at least ten calendar days
prior to the Maturity Date or any redemption or repayment date, for payments of
principal, as the case may be.
If the holder elects to receive all or a portion of payments of principal
of, 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 hereof) 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
the Specified Currency for U.S. dollars 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 a common depositary for Euroclear Bank
S.A./N.V., as operator of the Euroclear system, and Clearstream Banking, societe
anonyme, this Note will be exchanged for one or more Notes of authorized
denominations having an aggregate principal amount equal to the principal
7
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 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.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Senior Indenture, as defined on the
reverse hereof, or be valid or obligatory for any purpose.
8
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.
DATED: MORGAN STANLEY
By:
-------------------------------------
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 Senior Global
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 the terms upon which the Notes are, and are to be,
authenticated and delivered. The Issuer has appointed JPMorgan Chase Bank acting
through its principal corporate trust office in the Borough of Manhattan, The
City of New York, as a paying agent for the Notes in the United States and
JPMorgan Chase Bank, London Branch, at its corporate trust office in London, as
its principal paying agent for the Notes outside the United States (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 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 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, subject to all the conditions and provisions of
the Senior Indenture. In the event of redemption
10
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 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 the
authorized denominations specified on the face hereof (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, (i) this Note with the form entitled "Option to
Elect Repayment" 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, Western Europe or Japan 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 and terms, the principal amount
hereof to be repaid, a statement that the option to elect repayment is being
exercised thereby and a guarantee that this Note, together with the form
entitled "Option to Elect Repayment" duly completed, will be received by the
Principal Paying Agent not later than the fifth Business Day after the date of
such telegram, telex, facsimile transmission or letter; provided, that such
telegram, telex, facsimile transmission or letter shall only be effective if
this Note and form duly completed are received by the Principal Paying Agent by
such fifth Business Day. Unless otherwise indicated on the face of this Note,
exercise of such repayment option by the holder hereof shall be irrevocable. In
the event of repayment of this Note in part only, a new Note or Notes for the
amount of the unpaid portion hereof shall be issued in the name of the holder
hereof upon the cancellation hereof.
This Note will bear interest at the rate determined in accordance with
the applicable provisions below by reference to the Base Rate specified on the
face hereof based on the Index Maturity, if any, specified on the face hereof
(i) (A) plus or minus the Spread, if any, specified on the face hereof and (B)
for any period on or after the Incremental Spread Commencement Date, if any,
specified on the face hereof, plus or minus the Incremental Spread, if any,
specified on the face hereof 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
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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. 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 or EURIBOR 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 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 (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").
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 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
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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, 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,
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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 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 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
14
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.
(iii) If the dealers selected by the Calculation Agent are not quoting
as mentioned 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.
15
(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 described in (ii) above, the EURIBOR rate 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.
"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 that 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
16
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 mentioned above, the Federal Funds Rate relating to 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 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
17
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.
18
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 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 rate is not published prior to 3:00 p.m., New York
City time, on the Calculation Date in either H.15(519) or the H.15
Daily Update, 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 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 are not quoting as described in
(iii) above, the Prime Rate 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:
19
(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 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) in the event that 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
20
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 that 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 described in (i) 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
21
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 described 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 and in a
principal amount that is representative for a single transaction in the
securities in that market at that time.
22
(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
shall be 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, 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. 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 or duly provided for, to but excluding the Interest Payment Dates or
Maturity Date (or any earlier redemption or repayment 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
23
decrease in the principal amount hereof attributable to the failure to duly
extend the maturity of this Note or any portion of this Note during any Election
Period shall be effective on and as of the first Interest Payment Date
immediately succeeding such Election Period.
Unless otherwise specified on the face hereof, 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 .000005%
rounded up to .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. 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 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, 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 the minimum denominations set forth on the face hereof or any
amount in excess thereof which is an authorized denomination set forth on the
face hereof.
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 either the
aforesaid New York office or the London office of the Trustee by surrendering
this Note for cancellation, accompanied by a written instrument of transfer in
form satisfactory to the Issuer and the Trustee and duly executed by the
registered holder hereof in person or by the holder's attorney duly authorized
in writing, and thereupon the Trustee 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 Trustee 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
24
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 the extent and during the period so provided in the Senior Indenture
with respect to the redemption of Notes. Notes are exchangeable at said offices
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 Issuer and the
Trustee 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 Trustee 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.
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,
25
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 such notice.
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 defined below) 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 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 present or future 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 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
26
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;
(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 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 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
27
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 Senior Indenture provides that (a) if an Event of Default (as
defined in the Senior Indenture) due to the default in payment of principal of,
premium, if any, or interest on, any series of debt securities issued under the
Senior Indenture, including the series of Senior 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
(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, 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 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 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, (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 or for other property or the cash value of the property
(other than as provided in the
28
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 (b)
reduce the aforesaid percentage in principal amount of debt securities of any
series the consent of the holders of which is required for any such supplemental
indenture.
Except as set forth below, if the principal of, 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 (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,
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 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
29
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on holders of these 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, 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. 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 the 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 Senior 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.
30
No recourse shall be had for the payment of the principal of, 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 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 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 "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;
(b) 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
(c) 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.
All other terms used in this Note which are defined in the
Senior Indenture and not otherwise defined herein shall have the
meanings assigned to them in the Senior Indenture.
31
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.
___________________
32
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.
33
OPTION TO EXTEND MATURITY
The undersigned hereby elects to extend the maturity of the Morgan
Stanley Global Medium-Term Notes, Series [G/H], Euro Senior Registered Floating
Rate Renewable Notes, EXtendible Liquidity Securities, No. EFLRR__ (ISIN
[ ]; Common Code [ ]) (or the portion thereof specified
below) with the effect provided in said Note by surrendering said Note to
JPMorgan Chase Bank (London Branch), Trinity Tower, 9 Thomas More Street, London
E19YT, England, Attention: Capital Markets Fiduciary Services, or such other
address of which the Issuer shall from time to time notify the holders of the
Notes in the event of an election to extend the maturity of only a portion of
the principal amount of said Note, together with this form of "Option to Extend
Maturity" duly completed by the holder of said Note.
If the option to extend the maturity of less than the entire principal
amount of said Note is elected, specify the portion of said Note (which shall be
[ ] or an integral multiple of [ ] in excess thereof) as to
which the holder elects to extend the maturity [ ] ____________; and
specify the denomination or denominations (which shall be [ ] or an
integral multiple of [ ] in excess thereof) of the Notes in the form
attached to said Note as Exhibit A to be issued to the holder for the portion of
said Note as to which the option to extend the maturity is not being elected (in
the absence of any such specification one such Note in the form of said Exhibit
A will be issued for the portion as to which the option to extend maturity is
not being made) Euro ________.
Dated:______________________________ ________________________________________
NOTICE: The signature on this Option to
Extend Maturity must correspond with the
name as written upon the face of the
Note in every particular, without
alteration or enlargement or any change
whatever.
34
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:__________________________ ________________________________________
NOTICE: The signature on this Option to
Elect Repayment must correspond with the
name as written upon the face of the
within instrument in every particular
without alteration or enlargement.
35
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 Amoun Amount Outstanding Notation Made by
Exchanged For Following Such or on Behalf of
Date of Exchange Short-Term Note Exchange Trustee
- ---------------- ---------------- ------------------ ----------------
- ---------------- ---------------- ------------------ ----------------
- ---------------- ---------------- ------------------ ----------------
- ---------------- ---------------- ------------------ ----------------
- ---------------- ---------------- ------------------ ----------------
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- ---------------- ---------------- ------------------ ----------------
- ---------------- ---------------- ------------------ ----------------
- ---------------- ---------------- ------------------ ----------------
- ---------------- ---------------- ------------------ ----------------
- ---------------- ---------------- ------------------ ----------------
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36
EXHIBIT A TO EURO SENIOR REGISTERED FLOATING RATE
RENEWABLE NOTE
(Short-Term Note)
[FORM OF FACE OF SECURITY]
REGISTERED REGISTERED
No. EFLRR ISIN: [ ]
Common Code: [ ]
Euro _________________
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.(3)
- ------------------------
(3) If this Note is offered in Japan or denominated in Japanese Yen,
appropriate legends need to be added.
MORGAN STANLEY
EURO SENIOR REGISTERED FLOATING RATE RENEWABLE
GLOBAL MEDIUM-TERM NOTE, SERIES [G/H]
- -------------------------------------------------------------------------------
BASE RATE: ORIGINAL ISSUE DATE: MATURITY DATE:
- -------------------------------------------------------------------------------
REPORTING SERVICE: INTEREST ACCRUAL DATE: INTEREST PAYMENT DATES:
[Insert date of
issuance of Short-term
Note.]
- -------------------------------------------------------------------------------
INDEX MATURITY: INITIAL INTEREST RESET INTEREST RESET PERIOD:
DATE:
- -------------------------------------------------------------------------------
SPREAD (PLUS OR MINUS): INTEREST PAYMENT PERIOD: INTEREST RESET DATE(S):
- -------------------------------------------------------------------------------
INITIAL OFFERING DATE: INITIAL INTEREST RATE: PRINCIPAL PAYING AGENT
AND CALCULATION
AGENT:
- -------------------------------------------------------------------------------
SPECIFIED CURRENCY: MAXIMUM INTEREST RATE: DENOMINATIONS:
- -------------------------------------------------------------------------------
INCREMENTAL SPREAD (PLUS MINIMUM INTEREST RATE: IF SPECIFIED CURRENCY
OR MINUS): OTHER THAN U.S.
DOLLARS. OPTION TO
ELECT PAYMENT IN U.S.
DOLLARS:
- -------------------------------------------------------------------------------
INCREMENTAL SPREAD EXCHANGE RATE AGENT: OPTIONAL REPAYMENT
COMMENCEMENT DATE: DATE(S):
- -------------------------------------------------------------------------------
INITIAL REDEMPTION DATE: DESIGNATED CMT MATURITY DESIGNATED CMT
INDEX: TELERATE PAGE:
- -------------------------------------------------------------------------------
INITIAL REDEMPTION ANNUAL REDEMPTION REDEMPTION NOTICE PERIOD:
PERCENTAGE: PERCENTAGE REDUCTION:
- -------------------------------------------------------------------------------
REDEMPTION DATES: REDEMPTION PERCENTAGE:
- -------------------------------------------------------------------------------
OTHER PROVISIONS:
- -------------------------------------------------------------------------------
A-2
Morgan Stanley, 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 of , on the Maturity Date
specified above (except to the extent previously redeemed or repaid) 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 but excluding the date on which
the principal hereof is paid or duly made available for payment, together with
the unpaid amount of interest, if any, payable on the principal amount hereof
during the period that the Issuer's obligation to pay such principal amount was
evidenced by a predecessor Note (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 or
repayment date; provided, however, that 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 a 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, Maturity Date, redemption date
or repayment 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,
redemption date or repayment date shall be the immediately preceding day that is
a Business Day. As used herein, "Initial Interest Rate" means the rate of
interest 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 but excluding the date the principal hereof has been paid or duly
made available for payment. The interest so payable, and punctually paid or duly
provided for, on
A-3
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 on any
redemption or repayment date) shall be payable to the person to whom the
principal hereof shall be payable.
Payment of the principal of this Note, any premium and the interest due
at maturity (or on any redemption or repayment 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
Principal Paying Agent, as defined on the reverse hereof, or at the office or
agency of such other paying agent as the Issuer may determine (each, a "Paying
Agent," which term shall include the Principal Paying Agent). U.S. dollar
payments of interest, other than interest due at maturity or on any date of
redemption or repayment, 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 or repayment, by wire transfer of immediately
available funds if appropriate wire transfer instructions have been received by
the Principal 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 interest,
principal or any premium 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 Principal Paying Agent in writing, 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; 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
A-4
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 or repayment 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, for payments of interest, or at
least ten calendar days prior to the Maturity Date or any redemption or
repayment date, for payments of principal, as the case may be.
If the holder elects to receive all or a portion of payments of
principal of, 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 hereof) 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 the Specified Currency for U.S. dollars 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 a common depositary for Euroclear
Bank S.A./N.V., as operator of the Euroclear system, and Clearstream Banking,
societe anonyme, 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, which new Notes shall otherwise have the same terms as this Note;
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.
A-5
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, this Note
shall not be entitled to any benefit under the Senior 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
By:
--------------------------------
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
[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of Senior Global
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 the terms upon which the Notes are, and are to be,
authenticated and delivered. The Issuer has appointed JPMorgan Chase Bank acting
through its principal corporate trust office in the Borough of Manhattan, The
City of New York, as a paying agent for the Notes in the United States and
JPMorgan Chase Bank, London Branch, at its corporate trust office in London, as
its principal paying agent for the Notes outside the United States (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 principal amount hereof, together with interest
accrued and unpaid hereon to the date of redemption (except as provided below).
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 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, subject to all the conditions and provisions of the Senior
Indenture. In the event of redemption
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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 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 the
authorized denominations specified on the face hereof (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, (i) this Note with the form entitled "Option to
Elect Repayment" 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, Western Europe or Japan 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 and terms, the principal amount
hereof to be repaid, a statement that the option to elect repayment is being
exercised thereby and a guarantee that this Note, together with the form
entitled "Option to Elect Repayment" duly completed, will be received by the
Principal Paying Agent not later than the fifth Business Day after the date of
such telegram, telex, facsimile transmission or letter; provided, that such
telegram, telex, facsimile transmission or letter shall only be effective if
this Note and form duly completed are received by the Principal Paying Agent by
such fifth Business Day. Unless otherwise indicated on the face of this Note,
exercise of such repayment option by the holder hereof shall be irrevocable. In
the event of repayment of this Note in part only, a new Note or Notes for the
amount of the unpaid portion hereof shall be issued in the name of the holder
hereof upon the cancellation hereof.
This Note will bear interest at the rate determined in accordance with
the applicable provisions below by reference to the Base Rate specified on the
face hereof based on the Index Maturity, if any, specified on the face hereof
(i) (A) plus or minus the Spread, if any, specified on the face hereof and (B)
for any period on or after the Incremental Spread Commencement Date, if any,
specified on the face hereof, plus or minus the Incremental Spread, if any,
specified on the face hereof 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
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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
(i) 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 (ii) 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. 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 or EURIBOR 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 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 (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").
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 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
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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, 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)".
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(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 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 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
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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.
(iii) If the dealers selected by the Calculation Agent are not
quoting as mentioned 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
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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 described in (ii) above, the EURIBOR rate 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.
"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)."
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(ii) If that 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 mentioned above, the Federal Funds Rate relating to 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 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
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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
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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 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 rate is not published prior to 3:00 p.m., New York
City time, on the Calculation Date in either H.15(519) or the H.15
Daily Update, 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 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 are not quoting as described in
(iii) above, the Prime Rate 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.
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"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 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) in the event that 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
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(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:
(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:
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(i) If that 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 described in (i) 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 described 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 its affiliates, 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
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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 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
shall be 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, 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. 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.
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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 or duly provided for, to but excluding the Interest Payment Dates or
Maturity Date (or any earlier redemption or repayment 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.
Unless otherwise specified on the face hereof, 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 .000005%
rounded up to .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. 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 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, 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 the minimum denominations set forth on the face hereof or any
amount in excess thereof which is an authorized denomination set forth on the
face hereof.
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 either the
aforesaid New York office or the London office of the Trustee by surrendering
this Note for cancellation, accompanied by a written instrument of transfer in
form satisfactory to the Issuer and the Trustee and duly executed by the
registered holder hereof in person or by the holder's attorney duly authorized
in writing, and thereupon the Trustee 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
A-21
like aggregate principal amount in authorized denominations, subject to the
terms and conditions set forth herein; provided, however, that the Trustee 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 the extent and during the period so provided in the Senior
Indenture with respect to the redemption of Notes. Notes are exchangeable at
said offices 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 Issuer and the Trustee 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 Trustee 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.
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
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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 such notice.
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 defined below) 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 to be then due and
payable. The Issuer will not, however, make any payment of Additional Amounts to
any holder who is a United States Alien for or on account of:
(a) any present or future 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 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, exercise
or personal property tax or any similar tax, assessment or governmental
charge;
A-23
(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 or deduction 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 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 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
A-24
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 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,
premium, if any, or interest on, any series of debt securities issued under the
Senior Indenture, including the series of Senior 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 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 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
A-25
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, 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 (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,
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 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.
A-26
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 these 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.
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 the 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 Senior 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,
A-27
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, 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 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 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 "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;
(b) 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
(c) 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.
All other terms used in this Note 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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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-29
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-30
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:______________________________ ________________________________________
NOTICE: The signature on this Option to
Extend Maturity must correspond with the
name as written upon the face of the
Note in every particular, without
alteration or enlargement or any change
whatever.
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