EXHIBIT 4-h
[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 OFFERING DATE: N/A
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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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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 or determined in accordance with the provisions
specified on the reverse hereof 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. Unless such rate is otherwise
specified on the face hereof, the Calculation Agent shall determine the Initial
Interest Rate for this Note in accordance with the provisions specified on the
reverse hereof.
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
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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
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,
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.
6
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.
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, N.A.,
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, N.A.,
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,
N.A., 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). For the purpose of determining the Initial Interest Rate,
references in this paragraph, the next succeeding paragraph and, if applicable,
clauses (i) and (ii) under "Determination of EURIBOR" below to Interest Reset
Date shall be deemed to mean the Original Issue Date. The determination of the
rate of interest at which this Note will be reset on any Interest Reset Date
9
shall be made on the Interest Determination Date (as defined below) pertaining
to such Interest Reset Date. The Interest Reset Dates will be the Interest Reset
Dates specified on the face hereof; provided, however, that (a) the interest
rate in effect for the period from the Interest Accrual Date to the Initial
Interest Reset Date specified on the face hereof will be the Initial Interest
Rate and (b) unless otherwise specified on the face hereof, the interest rate in
effect for the ten calendar days immediately prior to maturity, redemption or
repayment will be that in effect on the tenth calendar day preceding such
maturity, redemption or repayment. If any Interest Reset Date would otherwise be
a day that is not a Business Day, such Interest Reset Date shall be postponed to
the next succeeding day that is a Business Day, except that if the Base Rate
specified on the face hereof is LIBOR or EURIBOR and such Business Day is in the
next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day. As used herein, "Business Day" means any
day, other than a Saturday or Sunday, (a) that is neither a legal holiday nor a
day on which banking institutions are authorized or required by law or
regulation to close (x) in The City of New York or (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,
Federal Funds (Open) 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
10
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, including the Interest
Determination Date as of which the Initial Interest Rate is determined, 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.
11
(iii) If the dealers selected by the Calculation Agent are not quoting
as set forth in (ii) above, the CD Rate for that Interest Determination Date
shall remain the CD Rate for the immediately preceding Interest Reset Period,
or, if there was no Interest Reset Period, the rate of interest payable shall be
the Initial Interest Rate.
Determination of Commercial Paper Rate. If the Base Rate specified on
the face hereof is the "Commercial Paper Rate," for any Interest Determination
Date, the Commercial Paper Rate with respect to this Note shall be the Money
Market Yield (as defined herein), calculated as described below, of the rate on
that date for U.S. dollar commercial paper having the Index Maturity specified
on the face hereof, as that rate is published in H.15(519), under the heading
"Commercial Paper -- Nonfinancial."
The following procedures shall be followed if the Commercial Paper Rate
cannot be determined as described above:
(i) If the above rate is not published by 3:00 p.m., New York City
time, on the Calculation Date, then the Commercial Paper Rate shall be the Money
Market Yield of the rate on that Interest Determination Date for commercial
paper of the Index Maturity specified on the face hereof as published in the
H.15 Daily Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, under the heading "Commercial Paper --
Nonfinancial."
(ii) If by 3:00 p.m., New York City time, on that Calculation Date the
rate is not yet published in either H.15(519) or the H.15 Daily Update, or other
recognized electronic source used for the purpose of displaying the applicable
rate, then the Calculation Agent shall determine the Commercial Paper Rate to be
the Money Market Yield of the arithmetic mean of the offered rates as of 11:00
a.m., New York City time, on that Interest Determination Date of three leading
dealers of U.S. dollar commercial paper in The City of New York, which may
include the initial dealer and its affiliates, selected by the Calculation Agent
(after consultation with the Issuer), for commercial paper of the Index Maturity
specified on the face hereof, placed for an industrial issuer whose bond rating
is "Aa," or the equivalent, from a nationally recognized statistical rating
agency.
(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)
12
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. 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 Rate. 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
13
H.15(519) under the heading "Federal Funds (Effective)" as displayed on
Moneyline Telerate, or any successor service, on page 120 or any other page as
may replace page 120 on that service ("Telerate Page 120").
The following procedures shall be followed if the Federal Funds Rate
cannot be determined as described above:
(i) If the above rate is not published by 3:00 p.m., New York City
time, on the Calculation Date, the Federal Funds Rate shall be the rate on that
Interest Determination Date as published in the H.15 Daily Update, or other
recognized electronic source used for the purpose of displaying the applicable
rate, under the heading "Federal Funds (Effective)."
(ii) If the above rate is not yet published in either H.15(519) or the
H.15 Daily Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, by 3:00 p.m., New York City time, on the
Calculation Date, the Calculation Agent shall determine the Federal Funds Rate
to be the arithmetic mean of the rates for the last transaction in overnight
U.S. dollar federal funds prior to 9:00 a.m., New York City time, on that
Interest Determination Date, by each of three leading brokers of U.S. dollar
federal funds transactions in The City of New York, which may include the
initial dealer and its affiliates, selected by the Calculation Agent (after
consultation with the Issuer).
(iii) If the brokers selected by the Calculation Agent are not quoting
as set forth above, the Federal Funds Rate for that Interest Determination Date
shall remain the Federal Funds Rate for the immediately preceding Interest Reset
Period, or, if there was no Interest Reset Period, the rate of interest payable
shall be the Initial Interest Rate.
Determination of Federal Funds (Open) Rate. If the Base Rate specified on
the face hereof is the "Federal Funds (Open) Rate", for any Interest
Determination Date, the Federal Funds (Open) 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 (Open)" as displayed on Moneyline
Telerate, or any successor service, on page 5 or any other page as may replace
page 5 on that service, ("Telerate Page 5").
The following procedures shall be followed if the Federal Funds (Open) Rate
cannot be determined as described above:
o If the above rate is not published by 3:00 p.m., New York City time,
on the Calculation Date, the Federal Funds (Open) Rate will 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 (Open)."
o 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 will determine
the Federal Funds (Open) Rate to be the arithmetic mean of the
14
rates for the last transaction in overnight U.S. dollar federal funds
(based on the Federal Funds (Open) Rate) 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 agent and its affiliates, selected
by the Calculation Agent, after consultation with the Issuer.
o If the brokers selected by the Calculation Agent are not quoting as
set forth above, the Federal Funds (Open) Rate for that Interest
Determination Date shall remain the Federal Funds (Open) Rate for the
immediately preceding Interest Reset Period, or, if there was no
Interest Reset Period, the rate of interest payable will 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.
15
(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.
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."
16
(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
17
(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
18
(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 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.
19
(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 (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
20
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,
Federal Funds (Open) 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.
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
21
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 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.
22
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 (including a holding, judgment or as ordered
by a court of competent jurisdiction), 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 occurs, becomes effective or, in the case
of a change in official position, is announced 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 U.S. 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 such holder who is a U.S. 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,
23
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 controlled foreign
corporation or passive foreign investment company with respect to the
United States or as a corporation which accumulates earnings to avoid
U.S. federal income tax or as a private foundation or other tax-exempt
organization or a bank receiving interest under Section 881(c)(3)(A)
of the Internal Revenue Code of 1986, as amended;
(d) any tax, assessment or other governmental charge that is
payable otherwise than by withholding or deduction from payments on or
in respect of this Note;
(e) any tax, assessment or other governmental charge required to
be withheld by any Paying Agent from any payment of principal of, or
interest on, this Note, if such payment can be made without such
withholding by any other Paying Agent in a city in Western Europe;
(f) any tax, assessment or other governmental charge that would
not have been imposed but for the failure to comply with
certification, information or other reporting requirements concerning
the nationality, residence or identity of the holder or beneficial
owner of this Note, if such compliance is required by statute or by
regulation of the United States or of any political subdivision or
taxing authority thereof or therein as a precondition to relief or
exemption from such tax, assessment or other governmental charge;
(g) any tax, assessment or other governmental charge imposed by
reason of such holder's past or present status as the actual or
constructive owner of 10% or more of the total combined voting power
of all classes of stock entitled to vote of the Issuer or as a direct
or indirect subsidiary of the Issuer; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or (g).
In addition, the Issuer shall not be required to make any payment of Additional
Amounts (i) to any such holder where such withholding or deduction is imposed on
a payment to an individual and is required to be made pursuant to any law
implementing or complying with, or introduced in order to conform to, any
European Union Directive on the taxation of savings; or (ii) by or on behalf of
a holder who would have been able to avoid such withholding or deduction by
24
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 U.S. 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 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
25
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 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.
26
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 "U.S. Alien" means any person who is, for U.S.
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 U.S.
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.
27
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.
----------------------
28
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.
29
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, N.A., 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.
30
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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31
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.
(3) Default provision is NO. Indicate YES only for certain notes issued on
a global basis if specified in pricing supplement.
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.
A-4
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
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
- ----------------
(4) Applies for Registered Note that is not in global form.
(5) Applies only for a Registered Global Security.
A-5
and at which the applicable dealer commits to execute a contract. If such bid
quotations are not available, such payment will be made in the Specified
Currency. All currency exchange costs will be borne by the holder of this Note
by deductions from such payments.
If this Note ceases to be held by The Depository Trust Company or its
successor or the nominee of The Depository Trust Company or its successor, this
Note will be exchanged for one or more Notes of authorized denominations having
an aggregate principal amount equal to the principal amount of this Note as then
shown on Schedule I hereto, which new Notes shall otherwise have the same terms
as this Note, except that the provisions of such new Notes regarding the
exchange thereof for an interest in a note providing for the automatic extension
of the maturity thereof (a "New Renewable Note") shall be modified to the extent
appropriate for notes not required to be held in a securities depositary;
provided that the respective rights and obligations of the Issuer and the
holders of such new Notes shall be the same in all material respects as the
respective rights and obligations of the Issuer and the holder of this Note. The
terms of the New Renewable Note shall be the same as the terms of the Renewable
Note, except that the principal amount thereof shall equal the principal amount
of the new Notes exchanged therefor and the provisions of such New Renewable
Notes regarding the automatic extension of the maturity thereof shall be
modified to the extent appropriate for notes not required to be held in a
securities depositary; provided that the respective rights and obligations of
the Issuer and the holders of such New Renewable Notes shall 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, N.A.,
as Trustee
By:
----------------------------------
Authorized Officer
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[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, N.A.,
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,
N.A., 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,
Federal Funds (Open) 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.
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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.
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."
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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.
Determination of EURIBOR. 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 Rate. 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 Federal Funds (Open) Rate. If the Base Rate specified
on the face hereof is the "Federal Funds (Open) Rate", for any Interest
Determination Date, the Federal Funds (Open) 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 (Open)" as displayed on Moneyline
Telerate, or any successor service, on page 5 or any other page as may replace
page 5 on that service, ("Telerate Page 5").
The following procedures shall be followed if the Federal Funds (Open)
Rate cannot be determined as described above:
o If the above rate is not published by 3:00 p.m., New York City
time, on the Calculation Date, the Federal Funds (Open) Rate will
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 (Open)."
o 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
will determine the Federal Funds (Open) Rate to be the arithmetic
mean of the rates for the last transaction in overnight U.S.
dollar federal funds (based on the Federal Funds (Open) Rate)
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 agent and its affiliates, selected by the
Calculation Agent, after consultation with the Issuer.
o If the brokers selected by the Calculation Agent are not quoting
as set forth above, the Federal Funds (Open) Rate for that
Interest Determination Date shall remain the Federal Funds (Open)
Rate for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable
will be the Initial Interest Rate.
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Determination of LIBOR. If the Base Rate specified on the face hereof
is "LIBOR," LIBOR with respect to this Note shall be based on London Interbank
Offered Rate. The Calculation Agent shall determine LIBOR for each Interest
Determination Date as follows:
(i) As of the Interest Determination Date, LIBOR shall be either: (a)
if "LIBOR Reuters" is specified as the Reporting Service on the face hereof, the
arithmetic mean of the offered rates for deposits in the Index Currency having
the Index Maturity designated on the face hereof, commencing on the second
London Banking Day immediately following that Interest Determination Date, that
appear on the Designated LIBOR Page, as defined below, as of 11:00 a.m., London
time, on that Interest Determination Date, if at least two offered rates appear
on the Designated LIBOR Page; except that if the specified Designated LIBOR
Page, by its terms provides only for a single rate, that single rate shall be
used; or (b) if "LIBOR Telerate" is specified as the Reporting Service on the
face hereof, the rate for deposits in the Index Currency having the Index
Maturity designated on the face hereof, commencing on the second London Banking
Day immediately following that Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest Determination Date,
that appears on the Designated LIBOR Page at approximately 11:00 a.m., London
time, on that Interest Determination Date.
(ii) If (a) fewer than two offered rates appear and LIBOR Reuters is
specified on the face hereof, or (b) no rate appears and the face hereof
specifies either (x) LIBOR Telerate or (y) LIBOR Reuters and the Designated
LIBOR Page by its terms provides only for a single rate, then the Calculation
Agent shall request the principal London offices of each of four major reference
banks in the London interbank market, as selected by the Calculation Agent
(after consultation with the Issuer), to provide the Calculation Agent with its
offered quotation for deposits in the Index Currency for the period of the Index
Maturity specified on the face hereof commencing on the second London Banking
Day immediately following the Interest Determination Date or, if pounds sterling
is the Index Currency, commencing on that Interest Determination Date, to prime
banks in the London interbank market at approximately 11:00 a.m., London time,
on that Interest Determination Date and in a principal amount that is
representative of a single transaction in that Index Currency in that market at
that time.
(iii) If at least two quotations are provided, LIBOR determined on that
Interest Determination Date shall be the arithmetic mean of those quotations. If
fewer than two quotations are provided, LIBOR shall be determined for the
applicable Interest Reset Date as the arithmetic mean of the rates quoted at
approximately 11:00 a.m., London time, or some other time specified on the face
hereof, in the applicable principal financial center for the country of the
Index Currency on that Interest Reset Date, by three major banks in that
principal financial center selected by the Calculation Agent (after consultation
with the Issuer) for loans in the Index Currency to leading European banks,
having the Index Maturity specified on the face hereof and in a principal amount
that is representative of a single transaction in that Index Currency in that
market at that time.
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(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."
(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).
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(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
(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
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(vi) if the rate described in (v) above is not so published by 3:00
p.m., New York City time, on the related Calculation Date, the rate on the
applicable Interest Determination Date calculated by the Calculation Agent as
the Bond Equivalent Yield of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 p.m., New York City time, on the applicable
Interest Determination Date, of three primary U.S. government securities
dealers, which may include the initial dealer and its affiliates, selected by
the Calculation Agent, for the issue of Treasury Bills with a remaining maturity
closest to the Index Maturity specified on the face hereof; or
(vii) if the dealers selected by the Calculation Agent are not quoting
as described in (vi), the Treasury Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.
The "Bond Equivalent Yield" means a yield calculated in accordance with
the following formula and expressed as a percentage:
D x N
Bond Equivalent Yield = ------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest is
being calculated.
Determination of CMT Rate. If the Base Rate specified on the face
hereof is the "CMT Rate," for any Interest Determination Date, the CMT Rate with
respect to this Note shall be the rate displayed on the Designated CMT Telerate
Page (as defined below) under the caption "... Treasury Constant Maturities ...
Federal Reserve Board Release H.15... Mondays Approximately 3:45 p.m.," under
the column for the Designated CMT Maturity Index, as defined below, for:
(1) the rate on that Interest Determination Date, if the Designated CMT
Telerate Page is 7051; and
(2) the week or the month, as applicable, ended immediately preceding
the week in which the related Interest Determination Date occurs, if the
Designated CMT Telerate Page is 7052.
The following procedures shall be followed if the CMT Rate cannot be
determined as described above:
(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).
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(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 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.
A-18
"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 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, Federal Funds (Open) 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).
A-19
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 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.
A-20
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 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 (including a
holding, judgment or as ordered by a court of competent jurisdiction),
regulations or rulings, which change or amendment occurs, becomes effective or,
in the case of a change in official position, is announced on or after the
Initial Offering Date hereof, the Issuer has or will become
A-21
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 U.S. 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 U.S. 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 U.S. 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 controlled
foreign corporation or passive foreign investment company with respect
to the United States or as a corporation which accumulates earnings to
avoid U.S. federal income tax or as a private foundation or other
A-22
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 European Union. Nor shall the Issuer pay Additional Amounts
with respect to any payment on this Note to a U.S. 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
A-23
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
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.
A-24
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.
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.
A-25
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 "U.S. Alien" means any person who is, for U.S.
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 U.S.
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.
A-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.
---------------
A-27
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
- ---------------------------------------
[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.
Dated: __________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Note in every particular
without alteration or enlargement or any change whatsoever.
A-28
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, N.A., 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
as written upon the face of the within
Note in every particular, without
alteration or enlargement or any change
whatever.
A-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 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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A-30