EXHIBIT 4-m
[FORM OF FACE OF SECURITY]
SENIOR VARIABLE RATE RENEWABLE NOTE
REGISTERED REGISTERED
No. SRVRR CUSIP:
[PRINCIPAL AMOUNT],
as modified by Schedule I
Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the registered
owner hereof, Cede & Co., has an interest herein.(1)
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(1) Applies only if this Note is a Registered Global Security.
MORGAN STANLEY
SENIOR VARIABLE RATE RENEWABLE
MEDIUM-TERM NOTE, SERIES F
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BASE RATE: ORIGINAL ISSUE DATE: INITIAL MATURITY DATE:
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FINAL MATURITY DATE:
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MATURITY EXTENSION DATES:
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INDEX MATURITY: INTEREST ACCRUAL DATE: INTEREST PAYMENT DATE(S):
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SPREAD (PLUS OR MINUS): INITIAL INTEREST RATE: INTEREST PAYMENT PERIOD:
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SPREAD MULTIPLIER: INITIAL INTEREST RESET DATE: INTEREST RESET PERIOD:
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REPORTING SERVICE: MAXIMUM INTEREST RATE: INTEREST RESET DATE(S):
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MINIMUM INTEREST RATE: CALCULATION AGENT:
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INDEX CURRENCY: INITIAL REDEMPTION DATE; SPECIFIED CURRENCY:
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EXCHANGE RATE AGENT: INITIAL REDEMPTION PERCENTAGE: IF SPECIFIED CURRENCY OTHER THAN U.S.
DOLLARS, OPTION TO ELECT PAYMENT IN
U.S. DOLLARS: [YES](2)
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INCREMENTAL SPREAD COMMENCEMENT ANNUAL REDEMPTION PERCENTAGE DESIGNATED CMT TELERATE PAGE:
DATE: REDUCTION:
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ELECTION DATES:
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INCREMENTAL SPREAD (PLUS OR MINUS): TAX REDEMPTION AND PAYMENT OF
ADDITIONAL AMOUNTS: NO(3)
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REDEMPTION DATES: IF YES, STATE INITIAL
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(2) Applies if this is a Registered Global Security, unless arrangements
are made with DTC outside of existing Letters of Representations, as has been
the case in the past.
(3) Default provision is NO. Indicate YES only for certain notes issued on
a global basis if specified in pricing supplement.
2
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OFFERING DATE: N/A
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REDEMPTION PERCENTAGE:
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SPECIFIED CURRENCY: OPTIONAL REPAYMENT DATE(S): DESIGNATED CMT MATURITY INDEX:
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REDEMPTION NOTICE PERIOD:(4) OTHER PROVISIONS:
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Morgan Stanley, a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to ,
or registered assignees, the principal sum specified in Schedule I hereto on
the Initial Maturity Date specified above or, to the extent the maturity date
of any portion of the principal amount of this Note is extended in accordance
with the procedures set forth below to an Extended Maturity Date, as defined
below, on such Extended Maturity Date (except to the extent such portion is
redeemed prior to such Extended Maturity Date) and to pay interest on the
principal amount hereof outstanding from time to time, from the Interest
Accrual Date specified above at a rate per annum equal to the Initial Interest
Rate specified above until the Initial Interest Reset Date specified above, and
thereafter at a rate per annum determined in accordance with the provisions
specified on the reverse hereof until (a) the principal hereof is paid or duly
made available for payment or (b) this Note has been 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 date; provided,
however, if the Interest Accrual Date occurs between a Record Date, as defined
below, and the next succeeding Interest Payment Date, interest payments will
commence on the second Interest Payment Date succeeding the Interest Accrual
Date to the registered holder of this Note on the Record Date with respect to
such second Interest Payment Date; provided, further, that if an Interest
Payment Date or the Maturity Date or redemption date would fall on a day that
is not a Business Day, as defined on the reverse hereof, such Interest Payment
Date, Maturity Date or redemption date shall be the following day that is a
Business Day, except that if the Base Rate specified above is LIBOR or EURIBOR
and such next Business Day falls in the next calendar month, the Interest
Payment Date, Maturity Date or redemption date shall be the immediately
preceding day that is a Business Day. As used herein, "Extended Maturity Date"
means the Maturity Extension Date (as specified above) occurring in the month
twelve months after the most recent Election Date on which the maturity of this
Note has been extended pursuant to the provisions set forth below.
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(4) Applicable if other than 30-60 calendar days. If this is a Registered
Global Security, minimum notice period is [10] calendar days [current DTC
limitation].
3
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 (a) the principal hereof has been paid or duly
made available for payment or (b) 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 any redemption date) shall be payable to the
person to whom the principal hereof shall be payable.
On each Election Date, the maturity of this Note shall be extended to the
Maturity Extension Date occurring in the month twelve months following such
Election Date, unless, in any such case, the holder hereof elects to terminate
the automatic extension of the maturity hereof or of any portion hereof having
a principal amount of $1,000 or any larger multiple of $1,000 in excess thereof
by delivering to the Trustee at least 15 but not more than 30 calendar days
prior to the applicable Election Date (i) this Note with the form entitled
"Option to Elect Termination of Automatic Extension" below duly completed or
(ii) a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc. or a commercial bank or a trust company in the United States of America
setting forth the name of the holder of this Note, the principal amount hereof,
the certificate number of this Note or a description of this Note's tenor or
terms, a statement that the option to elect termination of automatic extension
is being exercised thereby, the principal amount hereof with respect to which
such option is being exercised and a guarantee that this Note with the form
entitled "Option to Elect Termination of Automatic Extension" below duly
completed will be received by the Trustee no later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter;
provided that such telegram, telex, facsimile transmission or letter shall not
be effective unless this Note and such form duly completed are received by the
Trustee by such fifth Business Day. Such option may be exercised by the holder
for less than the entire principal amount hereof provided that the principal
amount for which such option is not exercised is at least $1,000 or any larger
amount that is an integral multiple of $1,000. If the option to terminate the
automatic extension of the maturity of any portion hereof is exercised, a new
Note or Notes in the form attached hereto as Exhibit A (each, a "Short-Term
Note") for the principal amount hereof for which such option was exercised and
having as its or their "Maturity Date" (as such term is used in each such
Short-Term Note) the Maturity Extension Date occurring in the month twelve
months after such Election Date shall be issued on such Election Date in the
name of the holder hereof and Schedule I hereto shall be annotated as of such
Election Date to reflect the corresponding decrease in the principal amount
hereof. If any exercise of the option to terminate the automatic extension of
the maturity hereof causes the principal amount of this Note to be reduced to
zero, this Note shall nevertheless not be canceled until the date on which all
outstanding Short-Term Notes issued in exchange for this Note shall have been
paid in full.
4
Notwithstanding the foregoing, the maturity of this Note shall not be
extended beyond the Final Maturity Date specified above.
If the holder of any Short-Term Note elects to exchange all or a portion
of such Short-Term Note for an interest in this Note in accordance with the
terms of such Short-Term Note, Schedule I hereto shall be annotated on the date
of such exchange to reflect the corresponding increase in the principal amount
hereof.
Payment of the principal of and premium, if any, and the interest on this
Note due at maturity (or any redemption date), unless this Note is denominated
in a Specified Currency other than U.S. dollars and is to be paid in whole or
in part in such Specified Currency, will be made in immediately available funds
upon surrender of this Note at the office or agency of the Trustee, as defined
on the reverse hereof, maintained for that purpose in the Borough of Manhattan,
The City of New York, or at the office or agency of such other paying agent as
the Issuer may determine in U.S. dollars. U.S. dollars payments of interest,
other than interest due at maturity or any date of redemption, will be made by
United States dollar check mailed to the address of the person entitled thereto
as such address shall appear in the Note register. A holder of U.S. $10,000,000
(or the equivalent in a Specified Currency) or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which is
payable in U.S. dollars, will be entitled to receive payments of interest,
other than interest due at maturity or on any date of redemption, by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Trustee 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 Paying Agent (as defined on the
reverse of this Note) in writing [not less than 15 calendar days prior to the
applicable payment date]5, [, 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]6;
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
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(5) Applies for a Registered Note that is not in global form.
(6) Applies only for a Registered Global Security.
5
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, denominated
in a Specified Currency other than U.S. dollars, may elect to receive all or a
portion of payments on this Note in U.S. dollars by transmitting a written
request to the Paying Agent, on or prior to the fifth Business Day after such
Record Date or at least ten Business Days prior to the Maturity Date or any
redemption date, as the case may be. Such election shall remain in effect
unless such request is revoked by written notice to the Paying Agent as to all
or a portion of payments on this Note at least five Business Days prior to such
Record Date, for payments of interest, or at least ten calendar days prior to
the Maturity Date or any redemption date, for payments of principal, as the
case may be.
If the holder elects to receive all or a portion of payments of principal
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 The Depository Trust Company or its
successor or the nominee of The Depository Trust Company or its successor, this
Note will be exchanged for one or more Notes of authorized denominations having
an aggregate principal amount equal to the principal amount of this Note as
then shown on Schedule I hereto, which new Notes shall otherwise have the same
terms as this Note, except that the provisions of such new Notes regarding the
termination of the automatic extension of the maturity thereof shall be
modified to the extent appropriate for notes not required to be held in a
securities depositary; provided that the respective rights and obligations of
the Issuer and the holders of such new Notes shall be the same in all material
respects as the respective rights and obligations of the Issuer and the holder
of this Note. Such new Notes shall have stated principal amounts and shall be
registered in the names of the persons then having a beneficial interest in
this Note or in the names of their nominees.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
6
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.
7
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
8
[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of the Senior Medium-Term
Notes, Series F, 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 JP Morgan Chase Bank at
its corporate trust office in The City of New York as the paying agent (the
"Paying Agent," which term includes any additional or successor Paying Agent
appointed by the Issuer) with respect to the Notes. The terms of individual
Notes may vary with respect to interest rates, interest rate formulas, issue
dates, maturity dates, or otherwise, all as provided in the 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 provided on the face hereof
in accordance with the provisions of the following paragraph, will not be
redeemable prior to maturity.
If so indicated on the face hereof, this Note may be redeemed in whole or
in part at the option of the Issuer on or after the Redemption Dates specified
on the face hereof on the terms set forth on the face hereof, together with
interest accrued and unpaid hereon to the date of redemption. Notice of
redemption shall be mailed to the registered holders of the Notes designated
for redemption at their addresses as the same shall appear on the Note register
not less than 180 nor more than 210 calendar days prior to the date fixed for
redemption, subject to all the conditions and provisions of the Senior
Indenture. In the event of redemption of this Note in part only, a new Note or
Notes for the amount of the unredeemed portion hereof shall be issued in the
name of the holder hereof upon the cancellation hereof.
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 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
9
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 (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 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.
10
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,
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 either Morgan Stanley &
Co. Incorporated or Morgan Stanley DW Inc., as applicable.
(iii) If the dealers selected by the Calculation Agent are not quoting as
set forth in (ii) above, the CD Rate for that Interest Determination Date shall
remain the CD Rate for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
11
Determination of Commercial Paper Rate. If the Base Rate specified on the
face hereof is the "Commercial Paper Rate," for any Interest Determination
Date, the Commercial Paper Rate with respect to this Note shall be the Money
Market Yield (as defined herein), calculated as described below, of the rate on
that date for U.S. dollar commercial paper having the Index Maturity specified
on the face hereof, as that rate is published in H.15(519), under the heading
"Commercial Paper -- Nonfinancial."
The following procedures shall be followed if the Commercial Paper Rate
cannot be determined as described above:
(i) If the above rate is not published by 3:00 p.m., New York City time,
on the Calculation Date, then the Commercial Paper Rate shall be the Money
Market Yield of the rate on that Interest Determination Date for commercial
paper of the Index Maturity specified on the face hereof as published in the
H.15 Daily Update, or other recognized electronic source used for the purpose
of displaying the applicable rate, under the heading "Commercial Paper --
Nonfinancial."
(ii) If by 3:00 p.m., New York City time, on that Calculation Date the
rate is not yet published in either H.15(519) or the H.15 Daily Update, or
other recognized electronic source used for the purpose of displaying the
applicable rate, then the Calculation Agent shall determine the Commercial
Paper Rate to be the Money Market Yield of the arithmetic mean of the offered
rates as of 11:00 a.m., New York City time, on that Interest Determination Date
of three leading dealers of U.S. dollar commercial paper in The City of New
York, which may include the initial dealer and its affiliates, selected by the
Calculation Agent (after consultation with the Issuer), for commercial paper of
the Index Maturity specified on the face hereof, placed for an industrial
issuer whose bond rating is "Aa," or the equivalent, from a nationally
recognized statistical rating agency.
(iii) If the dealers selected by the Calculation Agent are not quoting as
set forth 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.
12
Determination of EURIBOR Notes. If the Base Rate specified on the face
hereof is "EURIBOR," for any Interest Determination Date, EURIBOR with respect
to this Note shall be the rate for deposits in euros as sponsored, calculated
and published jointly by the European Banking Federation and ACI - The
Financial Market Association, or any company established by the joint sponsors
for purposes of compiling and publishing those rates, for the Index Maturity
specified on the face hereof as that rate appears on the display on Moneyline
Telerate, or any successor service, on page 248 or any other page as may
replace page 248 on that service ("Telerate Page 248") as of 11:00 a.m.,
Brussels time.
The following procedures shall be followed if the rate cannot be
determined as described above:
(i) If the above rate does not appear, the Calculation Agent shall request
the principal Euro-zone office of each of four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer), to provide the Calculation Agent with its offered rate for
deposits in euros, at approximately 11:00 a.m., Brussels time, on the Interest
Determination Date, to prime banks in the Euro-zone interbank market for the
Index Maturity specified on the face hereof commencing on the applicable
Interest Reset Date, and in a principal amount not less than the equivalent of
U.S.$1 million in euro that is representative of a single transaction in euro,
in that market at that time. If at least two quotations are provided, EURIBOR
shall be the arithmetic mean of those quotations.
(ii) If fewer than two quotations are provided, EURIBOR shall be the
arithmetic mean of the rates quoted by four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer), at approximately 11:00 a.m., Brussels time, on the applicable
Interest Reset Date for loans in euro to leading European banks for a period of
time equivalent to the Index Maturity specified on the face hereof commencing
on that Interest Reset Date in a principal amount not less than the equivalent
of U.S.$1 million in euro.
(iii) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the EURIBOR rate for that Interest Determination Date shall
remain the EURIBOR for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
"Euro-zone" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the 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").
13
The following procedures shall be followed if the Federal Funds Rate
cannot be determined as described above:
(i) If the above rate is not published by 3:00 p.m., New York City time,
on the Calculation Date, the Federal Funds Rate shall be the rate on that
Interest Determination Date as published in the H.15 Daily Update, or other
recognized electronic source used for the purpose of displaying the applicable
rate, under the heading "Federal Funds (Effective)."
(ii) If the above rate is not yet published in either H.15(519) or the
H.15 Daily Update, or other recognized electronic source used for the purpose
of displaying the applicable rate, by 3:00 p.m., New York City time, on the
Calculation Date, the Calculation Agent shall determine the Federal Funds Rate
to be the arithmetic mean of the rates for the last transaction in overnight
U.S. dollar federal funds prior to 9:00 a.m., New York City time, on that
Interest Determination Date, by each of three leading brokers of U.S. dollar
federal funds transactions in The City of New York, which may include the
initial dealer and its affiliates, selected by the Calculation Agent (after
consultation with the Issuer).
(iii) If the brokers selected by the Calculation Agent are not quoting as
set forth above, the Federal Funds Rate for that Interest Determination Date
shall remain the Federal Funds Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.
Determination of LIBOR. If the Base Rate specified on the face hereof is
"LIBOR," LIBOR with respect to this Note shall be based on London Interbank
Offered Rate. The Calculation Agent shall determine LIBOR for each Interest
Determination Date as follows:
(i) As of the Interest Determination Date, LIBOR shall be either: (a) if
"LIBOR Reuters" is specified as the Reporting Service on the face hereof, the
arithmetic mean of the offered rates for deposits in the Index Currency having
the Index Maturity designated on the face hereof, commencing on the second
London Banking Day immediately following that Interest Determination Date, that
appear on the Designated LIBOR Page, as defined below, as of 11:00 a.m., London
time, on that Interest Determination Date, if at least two offered rates appear
on the Designated LIBOR Page; except that if the specified Designated LIBOR
Page, by its terms provides only for a single rate, that single rate shall be
used; or (b) if "LIBOR Telerate" is specified as the Reporting Service on the
face hereof, the rate for deposits in the Index Currency having the Index
Maturity designated on the face hereof, commencing on the second London Banking
Day immediately following that Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest Determination Date,
that appears on the 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
14
reference banks in the London interbank market, as selected by the Calculation
Agent (after consultation with the Issuer), to provide the Calculation Agent
with its offered quotation for deposits in the Index Currency for the period of
the Index Maturity specified on the face hereof commencing on the second London
Banking Day immediately following the Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest Determination Date,
to prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on that Interest Determination Date and in a principal amount that
is representative of a single transaction in that Index Currency in that market
at that time.
(iii) If at least two quotations are provided, LIBOR determined on that
Interest Determination Date shall be the arithmetic mean of those quotations.
If fewer than two quotations are provided, LIBOR shall be determined for the
applicable Interest Reset Date as the arithmetic mean of the rates quoted at
approximately 11:00 a.m., London time, or some other time specified on the face
hereof, in the applicable principal financial center for the country of the
Index Currency on that Interest Reset Date, by three major banks in that
principal financial center selected by the Calculation Agent (after
consultation with the Issuer) for loans in the Index Currency to leading
European banks, having the Index Maturity specified on the face hereof and in a
principal amount that is representative of a single transaction in that Index
Currency in that market at that time.
(iv) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the LIBOR rate for that Interest Determination Date shall
remain the LIBOR for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
The "Index Currency" means the currency specified on the face hereof as
the currency for which LIBOR shall be calculated, or, if the euro is
substituted for that currency, the Index Currency shall be the euro. If that
currency is not specified on the face hereof, the Index Currency shall be U.S.
dollars.
"Designated LIBOR Page" means either: (a) if LIBOR Reuters is designated
as the Reporting Service on the face hereof, the display on the Reuters 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.
15
Determination of Prime Rate. If the Base Rate specified on the face hereof
is "Prime Rate," for any Interest Determination Date, the Prime Rate with
respect to this Note shall be the rate on that date as published in H.15(519)
under the heading "Bank Prime Loan."
The following procedures shall be followed if the Prime Rate cannot be
determined as described above:
(i) If the above rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date, then the Prime Rate shall be the rate on that
Interest Determination Date as published in the H.15 Daily Update under the
heading "Bank Prime Loan."
(ii) If the above rate is not published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the Calculation Date, 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 in The City of New York, which
may include affiliates of the initial dealer, selected by the Calculation Agent
(after consultation with the Issuer).
(iv) If the banks selected by the Calculation Agent are not quoting as set
forth above, the Prime Rate for that Interest Determination Date shall remain
the Prime Rate for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
"Reuters Screen USPRIME 1 Page" means the display designated as page
"USPRIME 1" on the Reuters Money 3000 Service, or any successor service, or any
other page as may replace the USPRIME 1 Page on that service for the purpose of
displaying prime rates or base lending rates of major U.S. banks.
Determination of Treasury Rate. If the Base Rate specified on the face
hereof is "Treasury Rate," the Treasury Rate with respect to this Note shall
be:
(i) the rate from the Auction held on the applicable Interest
Determination Date (the "Auction") of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified on the face hereof as
that rate appears under the caption "INVESTMENT RATE" on the display on
Moneyline Telerate, or any successor service, on page 56 or any other page as
may replace page 56 on that service ("Telerate Page 56") or page 57 or any
other page as may replace page 57 on that service ("Telerate Page 57"); or
16
(ii) if the rate described in (i) above is not published by 3:00 p.m., New
York City time, on the Calculation Date, the Bond Equivalent Yield of the rate
for the applicable Treasury Bills as published in the H.15 Daily Update, or
other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "U.S. Government Securities/Treasury
Bills/Auction High"; or
(iii) if the rate described in (ii) above is not published by 3:00 p.m.,
New York City time, on the related Calculation Date, the Bond Equivalent Yield
of the Auction rate of the applicable Treasury Bills, announced by the United
States Department of the Treasury; or
(iv) if the rate described in (iii) above is not announced by the United
States Department of the Treasury, or if the Auction is not held, the Bond
Equivalent Yield of the rate on the applicable Interest Determination Date of
Treasury Bills having the Index Maturity specified on the face hereof published
in H.15(519) under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market"; or
(v) if the rate described in (iv) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date of the applicable Treasury Bills as published in
the H.15 Daily Update, or other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market"; or
(vi) if the rate described in (v) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date calculated by the Calculation Agent as the Bond
Equivalent Yield of the arithmetic mean of the secondary market bid rates, as
of approximately 3:30 p.m., New York City time, on the applicable Interest
Determination Date, of three primary U.S. government securities dealers, which
may include the initial dealer and its affiliates, selected by the Calculation
Agent, for the issue of Treasury Bills with a remaining maturity closest to the
Index Maturity specified on the face hereof; or
(vii) if the dealers selected by the Calculation Agent are not quoting as
described in (vi), the Treasury Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.
The "Bond Equivalent Yield" means a yield calculated in accordance with
the following formula and expressed as a percentage:
D x N
Bond Equivalent Yield = ------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on
a bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest
is being calculated.
17
Determination of CMT Rate. If the Base Rate specified on the face hereof
is the "CMT Rate," for any Interest Determination Date, the CMT Rate with
respect to this Note shall be the rate displayed on the Designated CMT Telerate
Page (as defined below) under the caption "... Treasury Constant Maturities ...
Federal Reserve Board Release H.15... Mondays Approximately 3:45 p.m.," under
the column for the Designated CMT Maturity Index, as defined below, for:
(1) the rate on that Interest Determination Date, if the Designated CMT
Telerate Page is 7051; and
(2) the week or the month, as applicable, ended immediately preceding the
week in which the related Interest Determination Date occurs, if the Designated
CMT Telerate Page is 7052.
The following procedures shall be followed if the CMT Rate cannot be
determined as described above:
(i) If the above rate is no longer displayed on the relevant page, or if
not displayed by 3:00 p.m., New York City time, on the related Calculation
Date, then the CMT Rate shall be the Treasury Constant Maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519).
(ii) If the rate as described in (i) above is no longer published, or if
not published by 3:00 p.m., New York City time, on the related Calculation
Date, then the CMT Rate shall be the Treasury Constant Maturity Rate for the
Designated CMT Maturity Index or other U.S. Treasury rate for the Designated
CMT Maturity Index on the Interest Determination Date as may then be published
by either the Board of Governors of the Federal Reserve System or the United
States Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519).
(iii) If the information set forth above 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
18
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.
(v) If three or four, and not five, of the reference dealers are quoting
as described in (iv) above, then the CMT Rate shall be based on the arithmetic
mean of the offer prices obtained and neither the highest nor the lowest of
those quotes shall be eliminated.
(vi) If fewer than three reference dealers selected by the Calculation
Agent are quoting as described in (iv) above, the CMT Rate for that Interest
Determination Date shall remain the CMT Rate for the immediately preceding
Interest Reset Period, or, if there was no Interest Reset Period, the rate of
interest payable shall be the Initial Interest Rate.
"Designated CMT Telerate Page" means the display on Moneyline Telerate, or
any successor service, on the page designated on the face hereof or any other
page as may replace that page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no page is specified
on the face hereof, the Designated CMT Telerate Page shall be 7052, for the
most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30
years, as specified in the applicable pricing supplement for which the CMT Rate
shall be calculated. If no maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be two years.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent
shall calculate the interest rate hereon in accordance with the foregoing on or
before each Calculation Date. The interest rate on this Note will in no event
be higher than the maximum rate permitted by New York law, as the same may be
modified by United States Federal law of general application.
At the request of the holder hereof, the Calculation Agent will provide to
the holder hereof the interest rate hereon then in effect and, if determined,
the interest rate that will become effective as of the next Interest Reset
Date.
19
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 date), as the case may be. Accrued
interest hereon for any period shall be the sum of the products obtained by
multiplying the interest factor calculated for each day in such period by the
principal amount hereof shown on Schedule I hereto for each such day; provided
that for the purpose of calculating the amount of interest payable hereon, any
decrease in the principal amount hereof attributable to an exercise of the
option to terminate the automatic extension of the maturity hereof shall be
effective on and as of the Election Date corresponding to the exercise of such
option, and any increase in the principal amount hereof shall be effective on
and as of the Interest Payment Date immediately preceding the date of such
increase. The interest factor for each such day shall be computed by dividing
the interest rate applicable to such day (i) by 360 if the Base Rate is CD
Rate, Commercial Paper Rate, EURIBOR, Federal Funds Rate, Prime Rate or LIBOR
(except if the Index Currency is pounds sterling); (ii) by 365 if the Base Rate
is LIBOR and the Index Currency is pounds sterling; or (iii) by the actual
number of days in the year if the Base Rate is the Treasury Rate or the CMT
Rate. All percentages resulting from any calculation of the rate of interest on
this Note will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point (with .000005% being 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. All Japanese
Yen amounts used in or resulting from such calculations will be rounded
downwards to the next lower whole Japanese Yen amount. All amounts denominated
in any other currency used in or resulting from such calculations will be
rounded to the nearest two decimal places in such currency, with .005 being
rounded up to .01. The interest rate in effect on any Interest Reset Date will
be the applicable rate as reset on such date. The interest rate applicable to
any other day is the interest rate from the immediately preceding Interest
Reset Date (or, if none, the Initial Interest Rate).
This Note, and 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, unless
otherwise stated above, is issuable only in denominations of U.S. $1,000 and
any integral multiple of U.S. $1,000 in excess thereof. If this Note is
denominated in a Specified Currency other than U.S. dollars, then, unless a
higher minimum denomination is required by applicable law, it is issuable only
in denominations of the equivalent of U.S. $1,000 (rounded to an integral
multiple of 1,000 units of such Specified Currency), or an amount in excess
thereof which is an integral multiple of 1,000 units of such Specified
Currency, as determined by reference to the noon dollar buying rate in The City
of New York for cable transfers of such Specified Currency published by the
Federal Reserve Bank of New York (the "Market Exchange Rate") on the Business
Day immediately preceding the date of issuance.
20
The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to 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 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 office for other Notes of other authorized denominations of equal
aggregate principal amount having identical terms and provisions. All such
registrations, exchanges and transfers of Notes will be free of charge, but the
Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge in connection therewith. All Notes surrendered for exchange
shall be accompanied by a written instrument of transfer in form satisfactory
to the 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.
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 or
premium, if any, or interest on, any series of debt securities issued under the
Senior Indenture, including the series of 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
21
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.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption, if the Issuer determines that, as a result of any change in or
amendment to the laws, or any regulations or rulings promulgated thereunder, of
the United States or of any political subdivision or taxing authority thereof
or therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which
change or amendment becomes effective on or after the Initial Offering Date
hereof, the Issuer has or will become obligated to pay Additional Amounts, as
defined below, with respect to this Note as described below. Prior to the
giving of any notice of redemption pursuant to this paragraph, the Issuer shall
deliver to the Trustee (i) a certificate stating that the Issuer is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Issuer to so redeem have occurred, and
(ii) an opinion of independent 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 tax redemption will be given not less than 30 nor more than 60
calendar days prior to the date fixed for redemption or within the Redemption
Notice Period specified on face hereof, which date and the applicable
redemption price will be specified in the notice.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," the Issuer will, subject to certain
exceptions and limitations set forth below, pay such additional amounts (the
"Additional Amounts") to the holder of this Note who is a United States Alien
as may be necessary in order that every net payment of the principal of and
interest on this Note and any other amounts payable on this Note, after
withholding 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
22
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 Sates 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
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
23
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 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 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 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 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
24
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 at approximately
11:00 a.m., New York City time, on the second Business Day preceding the date
of such payment from three recognized foreign exchange dealers (the "Exchange
Dealers") for the purchase by the quoting Exchange Dealer of the Specified
Currency for U.S. dollars for settlement on the payment date, in the aggregate
amount of the Specified Currency payable to those holders or beneficial owners
of Notes and at which the applicable Exchange Dealer commits to execute a
contract. One of the Exchange Dealers providing quotations may be the Exchange
Rate Agent (as defined below) unless the Exchange Rate Agent is an affiliate of
the Issuer. If those bid quotations are not available, the Exchange Rate Agent
shall determine the market exchange rate at its sole discretion.
The "Exchange Rate Agent" shall be Morgan Stanley & Co. Incorporated,
unless otherwise indicated on the face hereof.
All determinations referred to above made by, or on behalf of, the Issuer
or by, or on behalf of, the Exchange Rate Agent shall be at such entity's sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on holders of Notes and coupons.
So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the
Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and locations
of such agencies, if any are so designated. If any European Union Directive on
the taxation of savings 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.
With respect to moneys paid by the Issuer and held by the Trustee 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 shall notify the holders of such
25
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 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.
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, 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 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.
26
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.
_______________
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.
28
OPTION TO ELECT TERMINATION OF AUTOMATIC EXTENSION
The undersigned hereby elects to terminate the automatic extension of the
maturity of the within Note (or the portion thereof specified below) with the
effect provided in the within Note by surrendering the within Note to the
Trustee at JPMorgan Chase Bank, 4 New York Plaza, New York, New York 10004,
Attention: Institutional Trust Services, or such other address of which the
Issuer shall from time to time notify the holders of the Notes, together with
this form of "Option to Elect Termination of Automatic Extension" duly
completed by the holder of the within Note.
If the automatic extension of the maturity of less than the entire
principal amount of the within Note is to be terminated, specify the portion
thereof (which shall be $1,000 or an integral multiple of $1,000 in excess
thereof) as to which the holder elects to terminate the automatic extension of
the maturity $________; and specify the denomination or denominations (which
shall be $1,000 or an integral multiple of $1,000 in excess thereof) of the
Notes in the form attached to the within Note as Exhibit A to be issued to the
holder for the portion of the within Note as to which the automatic extension
of maturity is being terminated (in the absence of any such specification one
such Note will be issued for the portion as to which the automatic extension of
maturity is being terminated) $________.
Dated: ___________________________ __________________________________________
NOTICE: The signature on this Option to
Elect Termination of Automatic Extension
must correspond with the name as written
upon the face of the within Note in every
particular, without alteration or
enlargement or any change whatever.
29
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:
Principal
Reduced Amount of Increased
Principal Principal Short-Term Principal
Amount Amount Note Amount Notation Made
Exchanged For Outstanding Exchanged For Outstanding by or on
Short-Term Following Interest in Following Behalf of
Date of Exchange Note Such Exchange this Note Such Exchange Trustee
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30
EXHIBIT A TO SENIOR VARIABLE RATE RENEWABLE NOTE
[FORM OF FACE OF SECURITY]
REGISTERED REGISTERED
No. SRVRR CUSIP:
U.S. $_____________
Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the registered
owner hereof, Cede & Co., has an interest herein.
A-1
MORGAN STANLEY
SENIOR VARIABLE RATE RENEWABLE
MEDIUM-TERM NOTE, SERIES F
- --------------------------------------------------------------------------------------------------------------------
BASE RATE: ORIGINAL ISSUE DATE: MATURITY DATE:
- --------------------------------------------------------------------------------------------------------------------
REPORTING SERVICE: INITIAL INTEREST RATE: INTEREST PAYMENT DATE(S):
- --------------------------------------------------------------------------------------------------------------------
INDEX MATURITY: MAXIMUM INTEREST RATE: INTEREST PAYMENT PERIOD:
- --------------------------------------------------------------------------------------------------------------------
SPREAD (PLUS OR MINUS): MINIMUM INTEREST RATE: INTEREST ACCRUAL DATE:
- --------------------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY: INTEREST RESET PERIOD:
- --------------------------------------------------------------------------------------------------------------------
INCREMENTAL SPREAD (PLUS OR MINUS): EXCHANGE RATE AGENT: INTEREST RESET DATE(S):
- --------------------------------------------------------------------------------------------------------------------
INCREMENTAL SPREAD COMMENCEMENT DATE: REDEMPTION NOTICE PERIOD(1) CALCULATION AGENT:
- --------------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS: INDEX CURRENCY:
IF SPECIFIED CURRENCY OTHER THAN
U.S. DOLLARS OPTION TO ELECT
PAYMENT IN U.S. DOLLARS: [YES](2)
- --------------------------------------------------------------------------------------------------------------------
TAX REDEMPTION AND PAYMENT OF DESIGNATED CMT TELERATE PAGE:
ADDITIONAL AMOUNTS: NO(3)
- --------------------------------------------------------------------------------------------------------------------
IF YES, STATE INITIAL OFFERING DATE: DESIGNATED CMT MATURITY INDEX:
N/A
- --------------------------------------------------------------------------------------------------------------------
- ---------
(1) Applicable if other than 30-60 calendar days. If this is a Registered
Global Security, minimum notice period is [10] calendar days [current DTC
limitation].
(2) Applies if this is a Registered Global Security, unless new
arrangements are made with DTC outside of existing Letters of Representations.
9 Default provision is NO. Indicate YES only for certain notes issued on a
global basis if specified in pricing supplement. 4 Applies for Registered Note
that is not in global form.
(3) Applies only for a Registered Global Security.
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 specified in Schedule I hereto on
the Maturity Date specified above and to pay interest on the principal amount
hereof outstanding from time to time, from the Interest Accrual Date specified
above at a rate per annum equal to the Initial Interest Rate, as defined below,
until the Initial Interest Reset Date specified above, and thereafter at a rate
per annum determined in accordance with the provisions specified on the reverse
hereof until the earlier of (a) the date on which the principal hereof is paid
or duly made available for payment and (b) the Interest Payment Date
immediately preceding the date on which the principal amount hereof is reduced
to zero, in each case, together with the unpaid amount of interest, if any,
payable on the principal amount hereof during the period that the Issuer's
obligation to pay such principal amount was evidenced by a predecessor Note
that provided for the automatic extension of the maturity thereof (the
"Renewable Note"), which amount shall be payable on the first date succeeding
the Interest Accrual Date specified above on which interest on this Note is
paid and shall be payable to the person receiving such interest payment. The
Issuer will pay interest hereon in arrears weekly, monthly, quarterly,
semiannually or annually as specified above as the Interest Payment Period on
each Interest Payment Date (as specified above), commencing with the first
Interest Payment Date next succeeding the Interest Accrual Date specified
above, and on the Maturity Date or any redemption date; provided, however, if
the Interest Accrual Date occurs between a Record Date, as defined below, and
the next succeeding Interest Payment Date, interest payments will commence on
the second Interest Payment Date succeeding the Interest Accrual Date to the
registered holder of this Note on the Record Date with respect to such second
Interest Payment Date; provided, further, that if an Interest Payment Date or
the Maturity Date would fall on a day that is not a Business Day, as defined on
the reverse hereof, such Interest Payment Date or Maturity Date shall be the
following day that is a Business Day, except that if the Base Rate specified
above is LIBOR or EURIBOR and such next Business Day falls in the next calendar
month, the Interest Payment Date or Maturity Date shall be the immediately
preceding day that is a Business Day. As used herein, "Initial Interest Rate"
means the rate of interest determined 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 (a) the principal hereof has been paid or duly
made available for payment and (b) the Interest Payment Date immediately
preceding the date on which the principal amount hereof is reduced to zero in
accordance with the provisions set forth below. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will,
subject to certain exceptions described herein, be paid to the person in whose
name this Note (or one or more predecessor Notes) is registered at the close of
business on the date 15 calendar days prior to such Interest Payment Date
(whether or not a Business Day) (each such date, a "Record Date"); provided,
however, that interest payable at maturity will be payable to the person to
whom the principal hereof shall be payable.
A-3
On any date following the Interest Accrual Date and prior to the Record
Date immediately preceding the Maturity Date, the holder hereof may elect to
exchange this Note or any portion hereof having a principal amount of $1,000 or
any larger multiple of $1,000 in excess thereof for an interest in the
Renewable Note equal to the principal amount hereof so exchanged by delivering
to the Trustee (i) this Note with the form entitled "Option to Exchange" below
duly completed or (ii) a telegram, telex, facsimile transmission or a letter
from a member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth the name of the holder of this Note, the
principal amount hereof, the certificate number of this Note or a description
of this Note's tenor or terms, a statement that the option to exchange is being
exercised thereby, the principal amount hereof with respect to which such
option is being exercised and a guarantee that this Note with the form entitled
"Option to Exchange" below duly completed will be received by the Trustee no
later than five Business Days after the date of such telegram, telex, facsimile
transmission or letter; provided that such telegram, telex, facsimile
transmission or letter shall not be effective unless this Note and such form
duly completed are received by the Trustee by such fifth Business Day. Such
option may be exercised by the holder for less than the entire principal amount
hereof provided that the principal amount for which such option is not
exercised is at least $1,000 or any larger amount that is an integral multiple
of $1,000. Notwithstanding the foregoing, the option to exchange all or a
portion of this Note for an interest in the Renewable Note may not be exercised
during the period from and including a Record Date to but excluding the
immediately succeeding Interest Payment Date. If the option to exchange any
portion hereof is exercised, then, on the date of such exchange, Schedule I
hereto shall be annotated to reflect the corresponding decrease in the
principal amount hereof, and Schedule I to the Renewable Note shall be
annotated to reflect the corresponding increase in the principal amount
thereof.
Payment of the principal of this Note, any premium and the interest due at
maturity (or any redemption date), unless this Note is denominated in a
Specified Currency other than U.S. dollars and is to be paid in whole or in
part in such Specified Currency, will be made in immediately available funds
upon surrender of this Note at the office or agency of the Trustee, as defined
on the reverse hereof, maintained for that purpose in the Borough of Manhattan,
The City of New York, or at the office or agency of such other paying agent as
the Issuer may determine in U.S. dollars. U.S. dollar payments of interest,
other than interest due at maturity or any date of redemption, will be made by
United States dollar check mailed to the address of the person entitled thereto
as such address shall appear in the Note register. A holder of U.S. $10,000,000
(or the equivalent in a Specified Currency) or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which is
paid in U.S. dollars, shall be entitled to receive payments of interest, other
than interest due at maturity or any date of redemption, by wire transfer of
immediately available funds if appropriate wire transfer instructions have been
received by the Trustee 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
A-4
will be made by wire transfer of immediately available funds to an account
maintained by the holder hereof with a bank located outside the United States
if appropriate wire transfer instructions have been received by the Paying
Agent (as defined on the reverse hereof) in writing [not less than 15 calendar
days prior to the applicable payment date](4) [, with respect to payments of
interest, on or prior to the fifth Business Day after the applicable Record
Date and, with respect to payments of principal or any premium, at least ten
Business Days prior to the Maturity Date or any redemption or repayment date,
as the case may be]5; provided that, if payment of interest, principal or any
premium with regard to this Note is payable in euro, the account must be a euro
account in a country for which the euro is the lawful currency, provided,
further, that, if such wire transfer instructions are not received, such
payments will be made by check payable in such Specified Currency mailed to the
address of the person entitled thereto as such address shall appear in the Note
register; and provided, further, that payment of the principal of this Note,
any premium and the interest due at maturity (or on any redemption or repayment
date) will be made upon surrender of this Note at the office or agency referred
to in the preceding paragraph.
If so indicated on the face hereof, the holder of this Note, if
denominated in a Specified Currency other than U.S. dollars, may elect to
receive all or a portion of payments on this Note in U.S. dollars by
transmitting a written request to the Paying Agent, on or prior to the fifth
Business Day after such Record Date or at least ten Business Days prior to the
Maturity Date or any redemption date, as the case may be. Such election shall
remain in effect unless such request is revoked by written notice to the Paying
Agent as to all or a portion of payments on this Note at least five Business
Days prior to such Record Date, for payments of interest, or at least ten
calendar days prior to the Maturity Date or any redemption date, for payments
of principal, as the case may be.
If the holder elects to receive all or a portion of payments of principal
of and 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.
- ---------
(4) Applies for Registered Note that is not in global form.
(5) Applies only for a Registered Global Security.
A-5
If this Note ceases to be held by The Depository Trust Company or its
successor or the nominee of The Depository Trust Company or its successor, this
Note will be exchanged for one or more Notes of authorized denominations having
an aggregate principal amount equal to the principal amount of this Note as
then shown on Schedule I hereto, which new Notes shall otherwise have the same
terms as this Note, except that the provisions of such new Notes regarding the
exchange thereof for an interest in a note providing for the automatic
extension of the maturity thereof (a "New Renewable Note") shall be modified to
the extent appropriate for notes not required to be held in a securities
depositary; provided that the respective rights and obligations of the Issuer
and the holders of such new Notes shall be the same in all material respects as
the respective rights and obligations of the Issuer and the holder of this
Note. The terms of the New Renewable Note shall be the same as the terms of the
Renewable Note, except that the principal amount thereof shall equal the
principal amount of the new Notes exchanged therefor and the provisions of such
New Renewable Notes regarding the automatic extension of the maturity thereof
shall be modified to the extent appropriate for notes not required to be held
in a securities depositary; provided that the respective rights and obligations
of the Issuer and the holders of such New Renewable Notes shall be the same in
all material respects as the respective rights and obligations of the Issuer
and the holder of the Renewable Note. Such new Notes shall have stated
principal amounts and shall be registered in the names of the persons then
having a beneficial interest in this Note or in the names of their nominees.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
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
A-7
[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of the Senior Medium-Term
Notes, Series F, 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 JP Morgan Chase Bank at
its corporate trust office in the City of New York as the paying agent (the
"Paying Agent," which term includes any additional or successor Paying Agent
appointed by the Issuer) with respect to the Notes. The terms of individual
Notes may vary with respect to interest rates, interest rate formulas, issue
dates, maturity dates, or otherwise, all as provided in the 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 will not be redeemable prior to maturity.
This Note will bear interest at the rate determined in accordance with the
applicable provisions below by reference to the Base Rate 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 the rate of interest at
which this Note will be reset on any Interest Reset Date shall be made, on the
Interest Determination Date (as defined below) pertaining to such Interest
Reset Date. The Interest Reset Dates will be the Interest Reset Dates specified
on the face hereof; provided, however, that (a) the interest rate in effect for
the period from the Interest Accrual Date to the Initial Interest Reset Date
specified on the face hereof will be the Initial Interest Rate and (b) unless
otherwise specified on the face hereof, the interest rate in effect for the ten
calendar days immediately prior to maturity, redemption or repayment will be
that in effect on the tenth calendar day preceding such maturity, redemption or
repayment date. If any Interest Reset Date would otherwise be a day that is not
a Business Day, such Interest Reset Date shall be postponed to the next
succeeding day that is a Business Day, except that if the Base Rate specified
on the face hereof is LIBOR 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
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required by law or regulation to close (x) in The City of New York or (y) if
this Note is denominated in a Specified Currency other than U.S. dollars, euro
or Australian dollars, in the principal financial center of the country of the
Specified Currency, or (z) if this Note is denominated in Australian dollars,
in Sydney and (b) if this Note is denominated in euro, that is also a day on
which the Trans-European Automated Real-time Gross Settlement Express Transfer
System ("TARGET") is operating (a "TARGET Settlement Day").
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 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
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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,
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 either Morgan Stanley &
Co. Incorporated or Morgan Stanley DW Inc., as applicable.
(iii) If the dealers selected by the Calculation Agent are not quoting as
set forth in (ii) above, the CD Rate for that Interest Determination Date shall
remain the CD Rate for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
Determination of Commercial Paper Rate. If the Base Rate specified on the
face hereof is the "Commercial Paper Rate," for any Interest Determination
Date, the Commercial Paper Rate with respect to this Note shall be the Money
Market Yield (as defined herein), calculated as described below, of the rate on
that date for U.S. dollar commercial paper having the Index Maturity specified
on the face hereof, as that rate is published in H.15(519), under the heading
"Commercial Paper -- Nonfinancial."
The following procedures shall be followed if the Commercial Paper Rate
cannot be determined as described above:
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(i) If the above rate is not published by 3:00 p.m., New York City time,
on the Calculation Date, then the Commercial Paper Rate shall be the Money
Market Yield of the rate on that Interest Determination Date for commercial
paper of the Index Maturity specified on the face hereof as published in the
H.15 Daily Update, or other recognized electronic source used for the purpose
of displaying the applicable rate, under the heading "Commercial Paper --
Nonfinancial."
(ii) If by 3:00 p.m., New York City time, on that Calculation Date the
rate is not yet published in either H.15(519) or the H.15 Daily Update, or
other recognized electronic source used for the purpose of displaying the
applicable rate, then the Calculation Agent shall determine the Commercial
Paper Rate to be the Money Market Yield of the arithmetic mean of the offered
rates as of 11:00 a.m., New York City time, on that Interest Determination Date
of three leading dealers of U.S. dollar commercial paper in The City of New
York, which may include the initial dealer and its affiliates, selected by the
Calculation Agent (after consultation with the Issuer), for commercial paper of
the Index Maturity specified on the face hereof, placed for an industrial
issuer whose bond rating is "Aa," or the equivalent, from a nationally
recognized statistical rating agency.
(iii) If the dealers selected by the Calculation Agent are not quoting as
set forth 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.
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The following procedures shall be followed if the rate cannot be
determined as described above:
(i) If the above rate does not appear, the Calculation Agent shall request
the principal Euro-zone office of each of four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer), to provide the Calculation Agent with its offered rate for
deposits in euros, at approximately 11:00 a.m., Brussels time, on the Interest
Determination Date, to prime banks in the Euro-zone interbank market for the
Index Maturity specified on the face hereof commencing on the applicable
Interest Reset Date, and in a principal amount not less than the equivalent of
U.S.$1 million in euro that is representative of a single transaction in euro,
in that market at that time. If at least two quotations are provided, EURIBOR
shall be the arithmetic mean of those quotations.
(ii) If fewer than two quotations are provided, EURIBOR shall be the
arithmetic mean of the rates quoted by four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer), at approximately 11:00 a.m., Brussels time, on the applicable
Interest Reset Date for loans in euro to leading European banks for a period of
time equivalent to the Index Maturity specified on the face hereof commencing
on that Interest Reset Date in a principal amount not less than the equivalent
of U.S.$1 million in euro.
(iii) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the EURIBOR rate for that Interest Determination Date shall
remain the EURIBOR for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
"Euro-zone" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the 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 the above rate is not yet published in either H.15(519) or the
H.15 Daily Update, or other recognized electronic source used for the purpose
of displaying the applicable rate, by 3:00 p.m., New York City time, on the
Calculation Date, the Calculation Agent shall determine the Federal Funds Rate
to be the arithmetic mean of the rates for the last transaction in overnight
U.S. dollar federal funds prior to 9:00 a.m., New York City time, on that
Interest Determination Date, by each of three leading brokers of U.S. dollar
federal funds transactions in The City of New York, which may include the
initial dealer and its affiliates, selected by the Calculation Agent (after
consultation with the Issuer).
(iii) If the brokers selected by the Calculation Agent are not quoting as
set forth above, the Federal Funds Rate for that Interest Determination Date
shall remain the Federal Funds Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.
Determination of LIBOR. If the Base Rate specified on the face hereof is
"LIBOR," LIBOR with respect to this Note shall be based on London Interbank
Offered Rate. The Calculation Agent shall determine LIBOR for each Interest
Determination Date as follows:
(i) As of the Interest Determination Date, LIBOR shall be either: (a) if
"LIBOR Reuters" is specified as the Reporting Service on the face hereof, the
arithmetic mean of the offered rates for deposits in the Index Currency having
the Index Maturity designated on the face hereof, commencing on the second
London Banking Day immediately following that Interest Determination Date, that
appear on the Designated LIBOR Page, as defined below, as of 11:00 a.m., London
time, on that Interest Determination Date, if at least two offered rates appear
on the Designated LIBOR Page; except that if the specified Designated LIBOR
Page, by its terms provides only for a single rate, that single rate shall be
used; or (b) if "LIBOR Telerate" is specified as the Reporting Service on the
face hereof, the rate for deposits in the Index Currency having the Index
Maturity designated on the face hereof, commencing on the second London Banking
Day immediately following that Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest Determination Date,
that appears on the Designated LIBOR Page at approximately 11:00 a.m., London
time, on that Interest Determination Date.
(ii) If (a) fewer than two offered rates appear and LIBOR Reuters is
specified on the face hereof, or (b) no rate appears and the face hereof
specifies either (x) LIBOR Telerate or (y) LIBOR Reuters and the Designated
LIBOR Page by its terms provides only for a single rate, then the Calculation
Agent shall request the principal London offices of each of four major
reference banks in the London interbank market, as selected by the Calculation
Agent (after consultation with the Issuer), to provide the Calculation Agent
with its offered quotation for deposits in the Index Currency for the period of
the Index Maturity specified on the face hereof commencing on the second London
Banking Day immediately following the Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest Determination Date,
to prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on that Interest Determination Date and in a principal amount that
is representative of a single transaction in that Index Currency in that market
at that time.
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(iii) If at least two quotations are provided, LIBOR determined on that
Interest Determination Date shall be the arithmetic mean of those quotations.
If fewer than two quotations are provided, LIBOR shall be determined for the
applicable Interest Reset Date as the arithmetic mean of the rates quoted at
approximately 11:00 a.m., London time, or some other time specified on the face
hereof, in the applicable principal financial center for the country of the
Index Currency on that Interest Reset Date, by three major banks in that
principal financial center selected by the Calculation Agent (after
consultation with the Issuer) for loans in the Index Currency to leading
European banks, having the Index Maturity specified on the face hereof and in a
principal amount that is representative of a single transaction in that Index
Currency in that market at that time.
(iv) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the LIBOR rate for that Interest Determination Date shall 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.
Determination of Prime Rate. If the Base Rate specified on the face hereof
is "Prime Rate," for any Interest Determination Date, the Prime Rate with
respect to this Note shall be the rate on that date as published in H.15(519)
under the heading "Bank Prime Loan."
The following procedures shall be followed if the Prime Rate cannot be
determined as described above:
(i) If the above rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date, then the Prime Rate shall be the rate on that
Interest Determination Date as published in the H.15 Daily Update under the
heading "Bank Prime Loan."
A-14
(ii) If the above rate is not published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the Calculation Date, then
the Calculation Agent shall determine the Prime Rate to be the arithmetic mean
of the rates of interest publicly announced by each bank that appears on the
Reuters Screen USPRIME 1 Page, as defined below, as that bank's Prime Rate or
base lending rate as in effect for that Interest Determination Date.
(iii) If fewer than four rates 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 in The City of New York, which
may include affiliates of the initial dealer, selected by the Calculation Agent
(after consultation with the Issuer).
(iv) If the banks selected by the Calculation Agent are not quoting as set
forth above, the Prime Rate for that Interest Determination Date shall remain
the Prime Rate for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
"Reuters Screen USPRIME 1 Page" means the display designated as page
"USPRIME 1" on the Reuters Money 3000 Service, or any successor service, or any
other page as may replace the USPRIME 1 Page on that service for the purpose of
displaying prime rates or base lending rates of major U.S. banks.
Determination of Treasury Rate. If the Base Rate specified on the face
hereof is "Treasury Rate," the Treasury Rate with respect to this Note shall
be:
(i) the rate from the Auction held on the applicable Interest
Determination Date (the "Auction") of direct obligations of the United States
("Treasury Bills") having the Index Maturity specified on the face hereof as
that rate appears under the caption "INVESTMENT RATE" on the display on
Moneyline Telerate, or any successor service, on page 56 or any other page as
may replace page 56 on that service ("Telerate Page 56") or page 57 or any
other page as may replace page 57 on that service ("Telerate Page 57"); or
(ii) if the rate described in (i) above is not published by 3:00 p.m., New
York City time, on the Calculation Date, the Bond Equivalent Yield of the rate
for the applicable Treasury Bills as published in the H.15 Daily Update, or
other recognized electronic source used for the purpose 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
A-15
(iv) if the rate described in (iii) above is not announced by the United
States Department of the Treasury, or if the Auction is not held, the Bond
Equivalent Yield of the rate on the applicable Interest Determination Date of
Treasury Bills having the Index Maturity specified on the face hereof published
in H.15(519) under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market"; or
(v) if the rate described in (iv) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date of the applicable Treasury Bills as published in
the H.15 Daily Update, or other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market"; or
(vi) if the rate described in (v) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date calculated by the Calculation Agent as the Bond
Equivalent Yield of the arithmetic mean of the secondary market bid rates, as
of approximately 3:30 p.m., New York City time, on the applicable Interest
Determination Date, of three primary U.S. government securities dealers, which
may include the initial dealer and its affiliates, selected by the Calculation
Agent, for the issue of Treasury Bills with a remaining maturity closest to the
Index Maturity specified on the face hereof; or
(vii) if the dealers selected by the Calculation Agent are not quoting as
described in (vi), the Treasury Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.
The "Bond Equivalent Yield" means a yield calculated in accordance with
the following formula and expressed as a percentage:
D x N
Bond Equivalent Yield = ------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on
a bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest
is being calculated.
Determination of CMT Rate. If the Base Rate specified on the face hereof
is the "CMT Rate," for any Interest Determination Date, the CMT Rate with
respect to this Note shall be the rate displayed on the Designated CMT Telerate
Page (as defined below) under the caption "... Treasury Constant Maturities ...
Federal Reserve Board Release H.15... Mondays Approximately 3:45 p.m.," under
the column for the Designated CMT Maturity Index, as defined below, for:
(1) the rate on that Interest Determination Date, if the Designated CMT
Telerate Page is 7051; and
A-16
(2) the week or the month, as applicable, ended immediately preceding the
week in which the related Interest Determination Date occurs, if the Designated
CMT Telerate Page is 7052.
The following procedures shall be followed if the CMT Rate cannot be
determined as described above:
(i) If the above rate is no longer displayed on the relevant page, or if
not displayed by 3:00 p.m., New York City time, on the related Calculation
Date, then the CMT Rate shall be the Treasury Constant Maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519).
(ii) If the above rate is no longer published, or if not published by 3:00
p.m., New York City time, on the related Calculation Date, then the CMT Rate
shall be the Treasury Constant Maturity Rate for the Designated CMT Maturity
Index or other U.S. Treasury rate for the Designated CMT Maturity Index on the
Interest Determination Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519).
(iii) If the information set forth above 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 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
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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 for that Interest
Determination Date shall remain the CMT Rate for the immediately preceding
Interest Reset Period, or, if there was no Interest Reset Period, the rate of
interest payable shall be the Initial Interest Rate.
"Designated CMT Telerate Page" means the display on Moneyline Telerate, or
any successor service, on the page designated on the face hereof or any other
page as may replace that page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no page is specified
on the face hereof, the Designated CMT Telerate Page shall be 7052, for the
most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30
years, as specified in the applicable pricing supplement for which the CMT Rate
shall be calculated. If no maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be two years.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent
shall calculate the interest rate hereon in accordance with the foregoing on or
before each Calculation Date. The interest rate on this Note will in no event
be higher than the maximum rate permitted by New York law, as the same may be
modified by United States Federal law of general application.
At the request of the holder hereof, the Calculation Agent will provide to
the holder hereof the interest rate hereon then in effect and, if determined,
the interest rate that will become effective as of the next Interest Reset
Date.
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, as the case may be. Accrued interest hereon for any period shall
be the sum of the products obtained by multiplying the interest factor
calculated for each day in such period by the principal amount hereof shown on
Schedule I hereto for each such day; provided that for the purpose of
calculating the amount of interest payable hereon, any decrease in the
principal amount hereof attributable to an exercise of the option to exchange a
portion of this Note for an interest in the Renewable Note shall be effective
on and as of the Interest Payment Date immediately preceding the date of such
decrease. The interest factor for each such
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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%
being 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. All Japanese Yen amounts used in or resulting
from such calculations will be rounded downwards to the next lower whole
Japanese Yen amount. All amounts denominated in any other currency used in or
resulting from such calculations will be rounded to the nearest two decimal
places in such currency, with .005 being rounded up to .01. The interest rate
in effect on any Interest Reset Date will be the applicable rate as reset on
such date. The interest rate applicable to any other day is the interest rate
from the immediately preceding Interest Reset Date (or, if none, the Initial
Interest Rate).
This Note, and 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, unless
otherwise stated above, is issuable only in denominations of U.S. $1,000 and
any integral multiple of U.S. $1,000 in excess thereof. If this Note is
denominated in a Specified Currency other than U.S. dollars, then, unless a
higher minimum denomination is required by applicable law, it is issuable only
in denominations of the equivalent of U.S. $1,000 (rounded to an integral
multiple of 1,000 units of such Specified Currency), or any amount in excess
thereof which is an integral multiple of 1,000 units of such Specified
Currency, as determined by reference to the noon dollar buying rate in The City
of New York for cable transfers of such Specified Currency published by the
Federal Reserve Bank of New York (the "Market Exchange Rate") on the Business
Day immediately preceding the date of issuance.
The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the 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 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
A-19
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 office for other Notes of other authorized denominations of equal
aggregate principal amount having identical terms and provisions. All such
registrations, exchanges and transfers of Notes will be free of charge, but the
Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge in connection therewith. All Notes surrendered for exchange
shall be accompanied by a written instrument of transfer in form satisfactory
to the 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.
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 or
premium, if any, or interest on, any series of debt securities issued under the
Senior Indenture, including the series of 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
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majority in aggregate principal amount of the debt securities of all affected
series then outstanding.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption, if the Issuer determines that, as a result of any change in or
amendment to the laws, or any regulations or rulings promulgated thereunder, of
the United States or of any political subdivision or taxing authority thereof
or therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which
change or amendment becomes effective on or after the Initial Offering Date
hereof, the Issuer has or will become obligated to pay Additional Amounts, as
defined below, with respect to this Note as described below. Prior to the
giving of any notice of redemption pursuant to this paragraph, the Issuer shall
deliver to the Trustee (i) a certificate stating that the Issuer is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Issuer to so redeem have occurred, and
(ii) an opinion of independent 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 tax redemption will be given not less than 30 nor more than 60
calendar days prior to the date fixed for redemption or within the Redemption
Notice Period specified on face hereof, which date and the applicable
redemption price will be specified in the notice.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," the Issuer will, subject to certain
exceptions and limitations set forth below, pay such additional amounts (the
"Additional Amounts") to the holder of this Note who is a United States Alien
as may be necessary in order that every net payment of the principal of and
interest on this Note and any other amounts payable on this Note, after
withholding 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
A-21
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
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 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
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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
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 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 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 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 on the date of such payment or, if the Market Exchange Rate is
not available on such date, as of the most recent practicable date; provided,
however, that if the euro has been substituted for such Specified Currency, the
Issuer may at its option (or shall, if so required by applicable law) without
the consent of the holder of this Note effect the payment of principal of,
premium, if any, or interest on any Note denominated in such currency in euro
in conformity with legally applicable measures taken pursuant to, or by virtue
of, the Treaty establishing the European Community, as amended. Any payment
made under such circumstances in U.S. dollars (or, if applicable, euro) where
the required payment is in a Specified Currency other than U.S. dollars will
not constitute an Event of Default. If such Market Exchange Rate is not then
available to the Issuer or is not published for a particular Specified
Currency, the Market Exchange Rate will be based on the highest bid quotation
in The City of New York received by the Exchange Rate Agent at approximately
11:00 a.m., New York City time, on the second Business Day preceding the date
of such payment from three recognized
A-23
foreign exchange dealers (the "Exchange Dealers") for the purchase by the
quoting Exchange Dealer of the Specified Currency for U.S. dollars for
settlement on the payment date, in the aggregate amount of the Specified
Currency payable to those holders or beneficial owners of Notes and at which
the applicable Exchange Dealer commits to execute a contract. One of the
Exchange Dealers providing quotations may be the Exchange Rate Agent (as
defined below) unless the Exchange Rate Agent is an affiliate of the Issuer. If
those bid quotations are not available, the Exchange Rate Agent shall determine
the market exchange rate at its sole discretion.
The "Exchange Rate Agent" shall be Morgan Stanley & Co. Incorporated,
unless otherwise indicated on the face hereof.
All determinations referred to above made by, or on behalf of, the Issuer
or by, or on behalf of, the Exchange Rate Agent shall be at such entity's sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on the 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. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and locations
of such agencies, if any are so designated. If any European Union Directive on
the taxation of savings 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.
With respect to moneys paid by the Issuer and held by the Trustee 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 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 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 and premium, if any, and interest on this Note at the time, place,
and rate, and in the coin or currency, herein prescribed unless otherwise
agreed between the Issuer and the registered holder of this Note.
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Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of and 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, 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 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.
__________________
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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.
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REQUEST TO EXCHANGE
The undersigned hereby requests to exchange the within Note (or the
portion thereof specified below) with the effect provided in the within Note by
surrendering the within Note to the Paying Agent at JPMorgan Chase Bank, 4 New
York Plaza, New York, New York 10004, Attention: Institutional Trust Services,
or such other address of which the Issuer shall from time to time notify the
holders of the Notes, together with this form of "Request to Exchange" duly
completed by the holder of the within Note.
If less than the entire principal amount of the within Note is requested
to be exchanged, specify the portion thereof (which shall be $1,000 or an
integral multiple of $1,000 in excess thereof) to be exchanged $______.
Dated:_________________________________ ______________________________________
NOTICE: The signature on this Request
to Exchange must correspond with the
name written upon the face of the
within Note in every particular,
without alteration or enlargement or
any change whatever.
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SCHEDULE I
SCHEDULE OF EXCHANGES
The initial principal amount of this Note is ___________. The following
exchanges of a portion of this Note for an interest in the Renewable Note have
been made:
Principal Amount Reduced Principal Amount
Exchanged For Renewable Outstanding Following Notation Made by or on
Date of Exchange Note Such Exchange Behalf of Trustee
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