Pre-Effective Amendment to Registration Statement for Securities Offered Pursuant to a Transaction — Form S-3
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-3/A Pre-Effective Amendment to Registration Statement 100 494K
for Securities Offered Pursuant to a
Transaction
2: EX-1.D Underwriting Agreement 64 192K
3: EX-1.E Underwriting Agreement 98 280K
4: EX-1.F Underwriting Agreement 37 117K
23: EX-4.AA Instrument Defining the Rights of Security Holders 68 208K
24: EX-4.BB Instrument Defining the Rights of Security Holders 19 70K
32: EX-4.BBB Instrument Defining the Rights of Security Holders 5 26K
25: EX-4.CC Instrument Defining the Rights of Security Holders 44 145K
26: EX-4.DD Instrument Defining the Rights of Security Holders 96 333K
5: EX-4.F Instrument Defining the Rights of Security Holders 77 287K
6: EX-4.G Instrument Defining the Rights of Security Holders 80 310K
27: EX-4.JJ Instrument Defining the Rights of Security Holders 10 35K
7: EX-4.K Instrument Defining the Rights of Security Holders 27 108K
8: EX-4.L Instrument Defining the Rights of Security Holders 19 70K
9: EX-4.M Instrument Defining the Rights of Security Holders 59 206K
10: EX-4.N Instrument Defining the Rights of Security Holders 28 106K
11: EX-4.O Instrument Defining the Rights of Security Holders 20 69K
12: EX-4.P Instrument Defining the Rights of Security Holders 61 209K
13: EX-4.Q Instrument Defining the Rights of Security Holders 19 70K
14: EX-4.R Instrument Defining the Rights of Security Holders 29 109K
15: EX-4.S Instrument Defining the Rights of Security Holders 13 43K
16: EX-4.T Instrument Defining the Rights of Security Holders 31 116K
17: EX-4.U Instrument Defining the Rights of Security Holders 26 106K
18: EX-4.V Instrument Defining the Rights of Security Holders 12 41K
28: EX-4.VV Instrument Defining the Rights of Security Holders 74 279K
19: EX-4.W Instrument Defining the Rights of Security Holders 20 79K
29: EX-4.WW Instrument Defining the Rights of Security Holders 84 324K
20: EX-4.X Instrument Defining the Rights of Security Holders 18 71K
21: EX-4.Y Instrument Defining the Rights of Security Holders 16 63K
30: EX-4.YY Instrument Defining the Rights of Security Holders 17 62K
22: EX-4.Z Instrument Defining the Rights of Security Holders 18 66K
31: EX-4.ZZ Instrument Defining the Rights of Security Holders 23 82K
33: EX-5.A Opinion re: Legality 6 37K
34: EX-5.B Opinion re: Legality 3 24K
35: EX-5.C Opinion re: Legality 3 24K
36: EX-5.D Opinion re: Legality 3 23K
37: EX-5.E Opinion re: Legality 3 24K
38: EX-5.F Opinion re: Legality 3 23K
39: EX-15 Letter re: Unaudited Interim Financial Information 1 19K
40: EX-23.A Consent of Experts or Counsel 1 15K
EX-4.P — Instrument Defining the Rights of Security Holders
Exhibit Table of Contents
EXHIBIT 4-p
[FORM OF FACE OF SECURITY]
SUBORDINATED VARIABLE RATE RENEWABLE NOTE
REGISTERED REGISTERED
No. SUBVRR CUSIP:
[PRINCIPAL AMOUNT],
as modified by Schedule I
Unless this certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the registered owner hereof,
Cede & Co., has an interest herein.(1)
THESE SECURITIES ARE NOT INSURED OR PROTECTED BY THE SECURITIES INVESTOR
PROTECTION CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
-----------------------------
(1) Applies only if this Note is a Registered Global Security.
MORGAN STANLEY
SUBORDINATED VARIABLE RATE RENEWABLE
GLOBAL MEDIUM-TERM NOTE, SERIES F
--------------------------------------------------------------------------------
BASE RATE: ORIGINAL ISSUE DATE: INITIAL MATURITY DATE:
--------------------------------------------------------------------------------
INDEX MATURITY: INTEREST ACCRUAL DATE: FINAL MATURITY DATE:
--------------------------------------------------------------------------------
SPREAD (PLUS OR MINUS): INITIAL INTEREST RATE: INTEREST PAYMENT DATE(S):
--------------------------------------------------------------------------------
REPORTING SERVICE: INITIAL INTEREST RESET INTEREST PAYMENT PERIOD:
DATE:
--------------------------------------------------------------------------------
SPREAD MULTIPLIER: MAXIMUM INTEREST RATE: INTEREST RESET PERIOD:
--------------------------------------------------------------------------------
APPLICABILITY OF ISSUER'S MINIMUM INTEREST RATE: INTEREST RESET DATE(S):
OPTION TO RESET SPREAD
OR SPREAD MULTIPLIER:
--------------------------------------------------------------------------------
INDEX CURRENCY: REDEMPTION DATE(S): CALCULATION AGENT:
--------------------------------------------------------------------------------
EXCHANGE RATE AGENT: REDEMPTION PERCENTAGE: SPECIFIED CURRENCY
--------------------------------------------------------------------------------
ANNUAL REDEMPTION IF SPECIFIED CURRENCY
PERCENTAGE OTHER THAN U.S.
REDUCTION: DOLLARS, OPTION TO
ELECT PAYMENT IN U.S.
DOLLARS: [YES](2)
--------------------------------------------------------------------------------
DESIGNATED CMT TELERATE
PAGE:
--------------------------------------------------------------------------------
REDEMPTION NOTICE DESIGNATED CMT MATURITY
PERIOD:(3) INDEX:
--------------------------------------------------------------------------------
TAX REDEMPTION AND
PAYMENT OF ADDITIONAL
AMOUNTS: NO(4)
--------------------------------------------------------------------------------
IF YES, STATE INITIAL OTHER PROVISIONS:
OFFERING DATE: NA
================================================================================
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
-----------------------------
(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) 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].
(4) Default provision is NO. Indicate YES only for certain notes issued on
a global basis if specified in pricing supplement.
2
the extent the maturity date of any portion of the principal amount of this Note
is extended in accordance with the procedures set forth below to an Extended
Maturity Date, as defined below, on such Extended Maturity Date (except to the
extent such portion is redeemed prior to such Extended Maturity Date) and to pay
interest on the principal amount hereof outstanding from time to time, from the
Interest Accrual Date specified above at a rate per annum equal to the Initial
Interest Rate specified above until the Initial Interest Reset Date specified
above, and thereafter at a rate per annum determined in accordance with the
provisions specified on the reverse hereof until (a) the principal hereof is
paid or duly made available for payment or (b) this Note has been cancelled in
accordance with the provisions set forth below.
The Issuer will pay interest in arrears weekly, monthly, quarterly,
semiannually or annually as specified above as the Interest Payment Period on
each Interest Payment Date (as specified above), commencing with the first
Interest Payment Date next succeeding the Interest Accrual Date specified above,
and on the Initial Maturity Date or the Extended Maturity Date, as the case may
be (each, a "Maturity Date"), or any redemption date; provided, however, if the
Interest Accrual Date occurs between a Record Date, as defined below, and the
next succeeding Interest Payment Date, interest payments will commence on the
second Interest Payment Date succeeding the Interest Accrual Date to the
registered holder of this Note on the Record Date with respect to such second
Interest Payment Date; provided, further, that if an Interest Payment Date or
the Maturity Date or redemption date would fall on a day that is not a Business
Day, as defined on the reverse hereof, such Interest Payment Date, Maturity Date
or redemption date shall be the following day that is a Business Day, except
that if the Base Rate specified above is LIBOR or EURIBOR and such next Business
Day falls in the next calendar month, the Interest Payment Date, Maturity Date
or redemption date shall be the immediately preceding day that is a Business
Day. As used herein, "Extended Maturity Date" means the Interest Payment Date
occurring in the month six months after the Initial Maturity Date and each
Interest Payment Date occurring in the month six months after the immediately
preceding Extended Maturity Date.
Interest on this Note will accrue from and including the most recent date
to which interest has been paid or duly provided for, or, if no interest has
been paid or duly provided for, from and including the Interest Accrual Date,
until, but excluding the date the (a) the principal hereof has been paid or duly
made available for payment or (b) this Note has been cancelled in accordance
with the provisions set forth below. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, subject to certain
exceptions described herein, be paid to the person in whose name this Note (or
one or more predecessor Notes) is registered at the close of business on the
date 15 calendar days prior to such Interest Payment Date (whether or not a
Business Day) (each such date, a "Record Date"); provided, however, that
interest payable at maturity (or any redemption date) shall be payable to the
person to whom the principal hereof shall be payable.
On the Interest Payment Date occurring in the month six months prior to the
Initial Maturity Date (the "Initial Election Date"), the maturity of this Note
shall be extended to the Extended Maturity Date occurring in the month twelve
months following the Initial Election Date and on the Interest Payment Date
occurring in the month six months prior to each Extended Maturity Date (an
"Election Date," which term shall include the Initial Election Date), the
3
maturity of this Note shall be extended to the Extended Maturity Date occurring
in the month twelve months after such Election Date, unless, in any such case,
the holder hereof elects to terminate the automatic extension of the maturity
hereof or of any portion hereof having a principal amount of $1,000 or any
larger multiple of $1,000 in excess thereof by delivering to the Paying Agent,
as defined on the reverse hereof, not less than 15 nor more than 30 calendar
days prior to the applicable Election Date (i) this Note with the form entitled
"Option to Elect Termination of Automatic Extension" below duly completed or
(ii) a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc. or a commercial bank or a trust company in the United States of America
setting forth the name of the holder of this Note, the principal amount hereof,
the certificate number of this Note or a description of this Note's tenor or
terms, a statement that the option to elect termination of automatic extension
is being exercised thereby, the principal amount hereof with respect to which
such option is being exercised and a guarantee that this Note with the form
entitled "Option to Elect Termination of Automatic Extension" below duly
completed will be received by the Paying Agent no later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter;
provided that such telegram, telex, facsimile transmission or letter shall not
be effective unless this Note and such form duly completed are received by the
Paying Agent by such fifth Business Day. Such option may be exercised by the
holder for less than the entire principal amount hereof provided that the
principal amount for which such option is not exercised is at least $1,000 or
any larger amount that is an integral multiple of $1,000. The exercise of such
option may be withdrawn before or after the applicable Election Date, pursuant
to the procedures described on the reverse hereof and in a Short-Term Note (as
defined below). If the option to terminate the automatic extension of the
maturity of any portion hereof is exercised and not withdrawn prior to the
applicable Election Date in accordance with such procedures, a new Note or Notes
in the form attached hereto as Exhibit A (each, a "Short-Term Note") for the
principal amount hereof for which such option was exercised and not withdrawn
shall be issued on such Election Date in the name of the holder hereof and
Schedule I hereto shall be annotated as of such Election Date to reflect the
corresponding decrease in the principal amount hereof. Each such Short-Term Note
shall have as its "Maturity Date" (as such term is used in such Short-Term Note)
the Interest Payment Date occurring in the month six months after such Election
Date and shall have as its Spread or Spread Multiplier, as the case may be, the
Spread or Spread Multiplier applicable to this Note on the day prior to the
issuance of such Short-Term Note. If any exercise of the option to terminate the
automatic extension of the maturity hereof causes the principal amount of this
Note to be reduced to zero, this Note shall nevertheless not be cancelled until
the date on which all outstanding Short-Term Notes issued in exchange for this
Note shall have been paid in full.
Notwithstanding the foregoing, the maturity of this Note shall not be
extended beyond the Final Maturity Date specified above.
If the holder of any Short-Term Note exchanges all or a portion of such
Short-Term Note for an interest in this Note in accordance with the terms of
such Short-Term Note, Schedule I hereto shall be annotated on the date of such
exchange to reflect the corresponding increase in the principal amount hereof.
4
Payment of the principal, premium, if any, and the interest due at maturity
on this Note (or any redemption date), unless this Note is denominated in a
Specified Currency other than U.S. dollars and is to be paid in whole or in part
in such Specified Currency, will be made in immediately available funds upon
surrender of this Note at the office or agency of the Paying Agent, as defined
on the reverse hereof, maintained for that purpose in the Borough of Manhattan,
The City of New York, or at such other paying agent as the Issuer may determine
in U.S. dollars. U.S. dollar payments of interest, other than interest due at
maturity or any date of redemption, will be made by United States dollar check
mailed to the address of the person entitled thereto as such address shall
appear in the Note register. A holder of U.S. $10,000,000 (or the equivalent in
a Specified Currency) or more in aggregate principal amount of Notes having the
same Interest Payment Date, the interest on which is payable in U.S. dollars,
shall be entitled to receive payments of interest, other than interest due at
maturity or on any date of redemption, by wire transfer of immediately available
funds if appropriate wire transfer instructions have been received by the Paying
Agent in writing not less than 15 calendar days prior to the applicable Interest
Payment Date.
If this Note is denominated in a Specified Currency other than U.S.
dollars, and the holder does not elect (in whole or in part) to receive payment
in U.S. dollars pursuant to the next succeeding paragraph, payments of
principal, premium, if any, or interest with regard to this Note will be made by
wire transfer of immediately available funds to an account maintained by the
holder hereof with a bank located outside the United States if appropriate wire
transfer instructions have been received by the Paying Agent in writing [not
less than 15 calendar days prior to the applicable payment date](5) [, with
respect to payments of interest, on or prior to the fifth Business Day after the
applicable Record Date and, with respect to payments of principal or any
premium, at least ten Business Days prior to the Maturity Date or any redemption
or repayment date, as the case may be](6); provided that, if payment of
interest, principal or any premium with regard to this Note is payable in euro,
the account must be a euro account in a country for which the euro is the lawful
currency, provided, further, that if such wire transfer instructions are not
received, such payments will be made by check payable in such Specified Currency
mailed to the address of the person entitled thereto as such address shall
appear in the Note register, and provided, further, that payment of the
principal of this Note, any premium and the interest due at maturity (or on any
redemption or 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
-----------------------------
(5) Applies for a Registered Note that is not in global form.
(6) Applies only for a Registered Global Security.
5
least five Business Days prior to such Record Date or at least ten calendar
days prior to the Maturity Date, for payments of interest, or any redemption
date, for payments of principal, as the case may be.
If the holder elects to receive all or a portion of payments of principal
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) will convert such payments into U.S. dollars. In the
event of such an election, payment in respect of this Note will be based upon
the exchange rate as determined by the Exchange Rate Agent based on the highest
bid quotation in The City of New York received by such Exchange Rate Agent at
approximately 11:00 a.m., New York City time, on the second Business Day
preceding the applicable payment date from three recognized foreign exchange
dealers (one of which may be the Exchange Rate Agent unless such Exchange Rate
Agent is an affiliate of the Issuer) for the purchase by the quoting dealer of
the Specified Currency for U.S. dollars for settlement on such payment date in
the amount of the Specified Currency payable in the absence of such an election
to such holder and at which the applicable dealer commits to execute a contract.
If such bid quotations are not available, such payment will be made in the
Specified Currency. All currency exchange costs will be borne by the holder of
this Note by deductions from such payments.
If this Note ceases to be held by The Depository Trust Company or its
successor or the nominee of The Depository Trust Company or its successor, this
Note will be exchanged for one or more Notes of authorized denominations having
an aggregate principal amount equal to the principal amount of this Note as then
shown on Schedule I hereto, which new Notes shall otherwise have the same terms
as this Note, except that the provisions of such new Notes regarding the
termination of the automatic extension of the maturity thereof shall be modified
to the extent appropriate for notes not required to be held in a securities
depositary; provided that the respective rights and obligations of the Issuer
and the holders of such new Notes shall be the same in all material respects as
the respective rights and obligations of the Issuer and the holder of this Note.
Such new Notes shall have stated principal amounts and shall be registered in
the names of the persons then having a beneficial interest in this Note or in
the names of their nominees.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place, including, without limitation, the
provisions relating to the subordination of this Note to the Issuer's Senior
Indebtedness, as defined on the reverse hereof.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Subordinated Indenture, as defined on
the reverse hereof, or be valid or obligatory for any purpose.
6
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.
DATED: MORGAN STANLEY
By:
------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes
referred to in the
within-mentioned
Subordinated Indenture.
J.P. MORGAN TRUST
COMPANY, NATIONAL
ASSOCIATION,
as Trustee
By:
-----------------------
Authorized Officer
7
[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of the Subordinated Global
Medium-Term Notes, Series F, having maturities more than nine months from the
date of issue (the "Notes") of the Issuer. The Notes are issuable under a
Subordinated Indenture, dated as of October 1, 2004, between the Issuer and J.P.
Morgan Trust Company, National Association, as Trustee (the "Trustee," which
term includes any successor trustee under the Subordinated Indenture) (as may be
amended or supplemented from time to time, the "Subordinated Indenture"), to
which Subordinated Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities of the Issuer, the Trustee and holders of the Notes and
the terms upon which the Notes are, and are to be, authenticated and delivered.
The Issuer has appointed J.P. Morgan Trust Company, National Association, at its
corporate trust office in The City of New York as the paying agent (the "Paying
Agent," which term includes any additional or successor Paying Agent appointed
by the Issuer) with respect to the Notes. The terms of individual Notes may vary
with respect to interest rates, interest rate formulas, issue dates, maturity
dates, or otherwise, all as provided in the Subordinated Indenture. To the
extent not inconsistent herewith, the terms of the Subordinated Indenture are
hereby incorporated by reference herein.
Unless otherwise indicated on the face hereof, this Note will not be
subject to any sinking fund and, unless otherwise provided on the face hereof in
accordance with the provisions of the following paragraph, will not be
redeemable prior to maturity.
If so indicated on the face hereof, this Note may be redeemed in whole or
in part at the option of the Issuer on or after the Redemption Dates specified
on the face hereof on the terms set forth on the face hereof, together with
interest accrued and unpaid hereon to the date of redemption. Notice of
redemption shall be mailed to the registered holders of the Notes designated for
redemption at their addresses as the same shall appear on the Note register not
less than 180 nor more than 210 calendar days prior to the date fixed for
redemption, subject to all the conditions and provisions of the Subordinated
Indenture. In the event of redemption of this Note in part only, a new Note or
Notes for the amount of the unredeemed portion hereof shall be issued in the
name of the holder hereof upon the cancellation hereof.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption, if the Issuer determines that, as a result of any change in or
amendment to the laws (or any regulations or rulings promulgated thereunder) of
the United States or of any political subdivision or taxing authority thereof or
therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which change
or amendment becomes effective on or after the Initial Offering Date hereof, the
Issuer has or will become obligated to pay Additional Amounts (as defined
below), with respect to this Note as described below. Prior to the giving of any
notice of
8
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 the face hereof, which date and the applicable
redemption price will be specified in the notice.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," the Issuer will, subject to certain
exceptions and limitations set forth below, pay such additional amounts (the
"Additional Amounts") to the holder of this Note who is a United States Alien as
may be necessary in order that every net payment of the principal of and
interest on this Note and any other amounts payable on this Note, after
withholding or deduction for or on account of any present or future tax,
assessment or governmental charge imposed upon or as a result of such payment by
the United States, or any political subdivision or taxing authority thereof or
therein, will not be less than the amount provided for in this Note to be then
due and payable. The Issuer will not, however, make any payment of Additional
Amounts to any such holder who is a United States Alien for or on account of:
(a) any present or future tax, assessment or other governmental charge
that would not have been so imposed but for (i) the existence of any
present or former connection between such holder, or between a fiduciary,
settlor, beneficiary, member or shareholder of such holder, if such holder
is an estate, a trust, a partnership or a corporation for United States
federal income tax purposes, and the United States, including, without
limitation, such holder, or such fiduciary, settlor, beneficiary, member or
shareholder being or having been a citizen or resident thereof or being or
having been engaged in a trade or business or present therein or having, or
having had, a permanent establishment therein or (ii) the presentation by
or on behalf of the holder of this Note for payment on a date more than 15
calendar days after the date on which such payment became due and payable
or the date on which payment thereof is duly provided for, whichever occurs
later;
(b) any estate, inheritance, gift, sales, transfer, excise or personal
property tax or any similar tax, assessment or governmental charge;
(c) any tax, assessment or other governmental charge imposed by reason
of such holder's past or present status as a personal holding company or
foreign personal holding company or controlled foreign corporation or
passive foreign investment company with respect to the United States or as
a corporation which accumulates earnings to avoid United States federal
income tax or as a private foundation or other tax-
9
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 or any law
implementing or complying with, or introduced in order to conform to, any
European Union Directive on the taxation of savings; or (ii) by or on behalf of
a holder who would have been able to avoid such withholding or deduction by
presenting this Note or the relevant coupon to another Paying Agent in a member
state of the European Union. Nor shall the Issuer pay Additional Amounts with
respect to any payment on this Note to a United States Alien who is a fiduciary
or partnership or other than the sole beneficial owner of such payment to the
extent such payment would be required by the laws of the United States (or any
political subdivision thereof) to be included in the income, for tax purposes,
of a beneficiary or settlor with respect to such fiduciary or a member of such
partnership or a beneficial owner who would not have been entitled to the
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the holder of this Note.
This Note will bear interest at the rate determined in accordance with the
applicable provisions below by reference to the Base Rate shown on the face
hereof based on the Index Maturity, if any, shown on the face hereof (i) plus or
minus the Spread, if any, or (ii) multiplied by the Spread Multiplier, if any,
(a) specified on the face hereof, (b) if the Spread or Spread Multiplier is
reset in accordance with the procedures specified below, then as determined
10
pursuant to such procedures, or (c) if a holder of a Short-Term Note has
exchanged such Note for an interest in this Note in response to an Optional
Exchange Notice (as defined in such Short-Term Note), then as set forth in such
Optional Exchange Notice. Commencing with the Initial Interest Reset Date
specified on the face hereof, the rate at which interest on this Note is payable
shall be reset as of each Interest Reset Date specified on the face hereof (as
used herein, the term "Interest Reset Date" shall include the Initial Interest
Reset Date). The determination of the rate of interest at which this Note will
be reset on any Interest Reset Date shall be made on the Interest Determination
Date (as defined below) pertaining to such Interest Reset Date. The Interest
Reset Dates will be the Interest Reset Dates specified on the face hereof;
provided, however, that (a) the interest rate in effect for the period from the
Interest Accrual Date to the Initial Interest Reset Date specified on the face
hereof will be the Initial Interest Rate and (b) unless otherwise specified on
the face hereof, the interest rate in effect for the ten calendar days
immediately prior to maturity, redemption or repayment will be that in effect on
the tenth calendar day preceding such maturity, redemption or repayment date. If
any Interest Reset Date would otherwise be a day that is not a Business Day,
such Interest Reset Date shall be postponed to the next succeeding day that is a
Business Day, except that if the Base Rate specified on the face hereof is LIBOR
and such Business Day is in the next succeeding calendar month, such Interest
Reset Date shall be the immediately preceding Business Day. As used herein,
"Business Day" means any day, other than a Saturday or Sunday, (a) that is
neither a legal holiday nor a day on which banking institutions are authorized
or required by law or regulation to close (x) in The City of New York or (y) if
this Note is denominated in a Specified Currency other than U.S. dollars, euro
or Australian dollars, in the principal financial center of the country of the
Specified Currency, or (z) if this Note is denominated in Australian dollars, in
Sydney and (b) if this Note is denominated in euro, that is also a day on which
the Trans-European Automated Real-time Gross Settlement Express Transfer System
("TARGET") is operating (a "TARGET Settlement Day").
If so indicated on the face of this Note, the Issuer has the option to
reset the Spread or Spread Multiplier on this Note as of any Election Date. Such
option shall include the right to reset the Maximum Interest Rate or Minimum
Interest Rate on this Note. The Issuer may exercise such option by notifying the
Paying Agent of such exercise at least 45 but not more than 60 calendar days
prior to an Election Date, such notice to be accompanied by the form of the
Reset Notice referred to below. Not later than 38 calendar days prior to such
Election Date, the Paying Agent will mail to the holder hereof a notice (the
"Reset Notice"), first class mail, postage prepaid, setting forth (a) the
election of the Issuer to reset the Spread or Spread Multiplier and (b) such new
Spread or Spread Multiplier, together with any new Maximum Interest Rate or
Minimum Interest Rate.
If the face hereof indicates that the Issuer has the option to reset the
Spread or Spread Multiplier on this Note, then, if the holder of this Note
elects to terminate the automatic extension of the maturity hereof or any
portion hereof as of any Election Date, the Issuer may, not later than the later
of (a) the twentieth calendar day prior to such Election Date and (b) the first
Business Day following the twenty-third calendar day prior to such Election
Date, propose a new Spread or Spread Multiplier or revoke a Spread or Spread
Multiplier previously set forth in a Reset Notice and propose a higher Spread or
Spread Multiplier, in either case together with any
11
new Maximum Interest Rate or Minimum Interest Rate, by causing the Paying Agent
to send notice thereof, to the holder of this Note by first class mail, postage
prepaid, or by such other means as shall be agreed between the Issuer and the
Paying Agent. If the Issuer has proposed a new or higher Spread or Spread
Multiplier as described above, the holder hereof may withdraw his election to
terminate the automatic extension of the maturity hereof or any portion hereof
by giving written notice to such effect to the Paying Agent not less than 16
calendar days prior to such Election Date (or if such sixteenth day is not a
Business Day, on the immediately preceding Business Day), in which case such new
or higher Spread or Spread Multiplier, together with any new Maximum Interest
Rate or Minimum Interest Rate, will apply to the entire principal amount of this
Note from such Election Date until the Maturity Date or until the Spread or
Spread Multiplier is further reset by the Issuer pursuant to the provisions
hereof or of a Short-Term Note.
The Interest Determination Date pertaining to an Interest Reset Date for
Notes bearing interest calculated by reference to the Federal Funds Rate and
Prime Rate shall be on the Business Day prior to the Interest Reset Date. The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to the CD Rate, Commercial Paper Rate
and CMT Rate will be the second Business Day prior to such Interest Reset Date.
The Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to EURIBOR (or to LIBOR when the Index
Currency is euros) shall be the second TARGET Settlement Day prior to such
Interest Reset Date. The Interest Determination Date pertaining to an Interest
Reset Date for Notes bearing interest calculated by reference to LIBOR, other
than for LIBOR Notes for which the Index Currency is euros, shall be the second
London Banking Day prior to such Interest Reset Date, except that the Interest
Determination Date pertaining to an Interest Reset Date for a LIBOR Note for
which the Index Currency is pounds sterling will be such Interest Reset Date. As
used herein, "London Banking Day" means any day on which dealings in deposits in
the Index Currency (as defined herein) are transacted in the London interbank
market. The Interest Determination Date pertaining to an Interest Reset Date for
Notes bearing interest calculated by reference to the Treasury Rate shall be the
day of the week in which such Interest Reset Date falls on which Treasury bills
normally would be auctioned. Treasury Bills are normally sold at auction on
Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except that the auction may
be held on the preceding Friday; provided, however, that if an auction is held
on the Friday of the week preceding such Interest Reset Date, the Interest
Determination Date shall be such preceding Friday; and provided, further, that
if an auction shall fall on any Interest Reset Date, then the Interest Reset
Date shall instead be the first Business Day following the date of such auction.
The Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to two or more base rates will be the
latest Business Day that is at least two Business Days before the Interest Reset
Date for the applicable Note on which each base rate is determinable.
Unless otherwise specified on the face hereof, the "Calculation Date"
pertaining to an Interest Determination Date will be the earlier of (i) the
tenth calendar day after such Interest Determination Date or, if such day is not
a Business Day, the next succeeding Business Day, or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or Maturity
12
Date (or, with respect to any principal amount to be redeemed or repaid, any
redemption or repayment date), as the case may be.
Determination of CD Rate. If the Base Rate specified on the face hereof is
the "CD Rate," for any Interest Determination Date, the CD Rate with respect to
this Note shall be the rate on that date for negotiable U.S. dollar certificates
of deposit having the Index Maturity specified on the face hereof as published
by the Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates," or any successor publication of the Board
of Governors of the Federal Reserve System ("H.15(519)") under the heading "CDs
(Secondary Market)."
The following procedures shall be followed if the CD Rate cannot be
determined as described above:
(i) If the above rate is not published in H.15(519) by 3:00 p.m., New York
City time, on the Calculation Date, the CD Rate shall be the rate on that
Interest Determination Date set forth in the daily update of H.15(519),
available through the world wide website of the Board of Governors of the
Federal Reserve System at http://www.federalreserve.gov/releases/h15/update, or
any successor site or publication ("H.15 Daily Update") for the Interest
Determination Date for certificates of deposit having the Index Maturity
specified on the face hereof, under the caption "CDs (Secondary Market)."
(ii) If the above rate is not yet published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the Calculation Date, the
Calculation Agent shall determine the CD Rate to be the arithmetic mean of the
secondary market offered rates as of 10:00 a.m., New York City time, on that
Interest Determination Date of three leading nonbank dealers in negotiable U.S.
dollar certificates of deposit in The City of New York, which may include the
initial dealer and its affiliates, selected by the Calculation Agent (after
consultation with the Issuer), for negotiable U.S. dollar certificates of
deposit of major U.S. money center banks of the highest credit standing in the
market for negotiable certificates of deposit with a remaining maturity closest
to the Index Maturity specified on the face hereof in an amount that is
representative for a single transaction in that market at that time.
"Initial dealer" with respect to this Note means either Morgan Stanley &
Co. Incorporated or Morgan Stanley DW Inc., as applicable.
(iii) If the dealers selected by the Calculation Agent are not quoting as
described in (ii) above, the CD Rate shall remain the CD Rate for the
immediately preceding Interest Reset Period, or, if there was no Interest Reset
Period, the rate of interest payable shall be the Initial Interest Rate.
Determination of Commercial Paper Rate. If the Base Rate specified on the
face hereof is the "Commercial Paper Rate," for any Interest Determination Date,
the Commercial Paper Rate with respect to this Note shall be the Money Market
Yield (as defined herein), calculated as described below, of the rate on that
date for U.S. dollar commercial paper having the Index
13
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 in (ii) above, the Commercial Paper Rate for that Interest
Determination Date shall remain the Commercial Paper Rate for the immediately
preceding Interest Reset Period, or, if there was no Interest Reset Period, the
rate of interest payable shall be the Initial Interest Rate.
The "Money Market Yield" shall be a yield calculated in accordance with the
following formula:
D x 360
Money Market Yield = ----------------- x 100
360 - (D x M)
where "D" refers to the applicable per year rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
Determination of EURIBOR Notes. If the Base Rate specified on the face
hereof is "EURIBOR," for any Interest Determination Date, EURIBOR with respect
to this Note shall be the rate for deposits in euros as sponsored, calculated
and published jointly by the European Banking Federation and ACI - The Financial
Market Association, or any company established by the joint sponsors for
purposes of compiling and publishing those rates, for the Index Maturity
specified on the face hereof as that rate appears on the display on Moneyline
Telerate, or any
14
successor service, on page 248 or any other page as may replace page 248 on that
service ("Telerate Page 248") as of 11:00 a.m., Brussels time.
The following procedures shall be followed if the rate cannot be determined
as described above:
(i) If the above rate does not appear, the Calculation Agent shall request
the principal Euro-zone office of each of four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer), to provide the Calculation Agent with its offered rate for deposits
in euros, at approximately 11:00 a.m., Brussels time, on the Interest
Determination Date, to prime banks in the Euro-zone interbank market for the
Index Maturity specified on the face hereof commencing on the applicable
Interest Reset Date, and in a principal amount not less than the equivalent of
U.S.$1 million in euro that is representative of a single transaction in euro,
in that market at that time. If at least two quotations are provided, EURIBOR
shall be the arithmetic mean of those quotations.
(ii) If fewer than two quotations are provided, EURIBOR shall be the
arithmetic mean of the rates quoted by four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer), at approximately 11:00 a.m., Brussels time, on the applicable
Interest Reset Date for loans in euro to leading European banks for a period of
time equivalent to the Index Maturity specified on the face hereof commencing on
that Interest Reset Date in a principal amount not less than the equivalent of
U.S.$1 million in euro.
(iii) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the EURIBOR rate for that Interest Determination Date shall
remain the EURIBOR for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
"Euro-zone" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the relevant treaty of
the European Union, as amended.
Determination of the Federal Funds Rates. If the Base Rate specified on the
face hereof is the "Federal Funds Rate," for any Interest Determination Date,
the Federal Funds Rate with respect to this Note shall be the rate on that date
for U.S. dollar federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)" as displayed on Moneyline Telerate, or any successor
service, on page 120 or any other page as may replace page 120 on that service
("Telerate Page 120").
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
15
published in the H.15 Daily Update, or other recognized electronic source used
for the purpose of displaying the applicable rate, under the heading "Federal
Funds (Effective)."
(ii) If that rate is not yet published in either H.15(519) or the H.15
Daily Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, by 3:00 p.m., New York City time, on the
Calculation Date, the Calculation Agent shall determine the Federal Funds Rate
to be the arithmetic mean of the rates for the last transaction in overnight
U.S. dollar federal funds prior to 9:00 a.m., New York City time, on that
Interest Determination Date, by each of three leading brokers of U.S. dollar
federal funds transactions in The City of New York, which may include the
initial dealer and its affiliates, selected by the Calculation Agent (after
consultation with the Issuer).
(iii) If the brokers selected by the Calculation Agent are not quoting as
set forth above, the Federal Funds Rate for that Interest Determination Date
shall remain the Federal Funds Rate for the immediately preceding Interest Reset
Period, or, if there was no Interest Reset Period, the rate of interest payable
shall be the Initial Interest Rate.
Determination of LIBOR. If the Base Rate specified on the face hereof is
"LIBOR," LIBOR with respect to this Note shall be based on London Interbank
Offered Rate. The Calculation Agent shall determine LIBOR for each Interest
Determination Date as follows:
(i) As of the Interest Determination Date, LIBOR shall be either: (a) if
"LIBOR Reuters" is specified as the Reporting Service on the face hereof, the
arithmetic mean of the offered rates for deposits in the Index Currency having
the Index Maturity designated on the face hereof, commencing on the second
London Banking Day immediately following that Interest Determination Date, that
appear on the Designated LIBOR Page, as defined below, as of 11:00 a.m., London
time, on that Interest Determination Date, if at least two offered rates appear
on the Designated LIBOR Page; except that if the specified Designated LIBOR
Page, by its terms provides only for a single rate, that single rate shall be
used; or (b) if "LIBOR Telerate" is specified as the Reporting Service on the
face hereof, the rate for deposits in the Index Currency having the Index
Maturity designated on the face hereof, commencing on the second London Banking
Day immediately following that Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest Determination Date,
that appears on the Designated LIBOR Page at approximately 11:00 a.m., London
time, on that Interest Determination Date.
(ii) If (a) fewer than two offered rates appear and LIBOR Reuters is
specified on the face hereof, or (b) no rate appears and the face hereof
specifies either (x) LIBOR Telerate or (y) LIBOR Reuters and the Designated
LIBOR Page by its terms provides only for a single rate, then the Calculation
Agent shall request the principal London offices of each of four major reference
banks in the London interbank market, as selected by the Calculation Agent
(after consultation with the Issuer), to provide the Calculation Agent with its
offered quotation for deposits in the Index Currency for the period of the Index
Maturity specified on the face hereof commencing on the second London Banking
Day immediately following the Interest Determination Date or, if pounds sterling
is the Index Currency, commencing on that Interest
16
Determination Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on that Interest Determination Date and
in a principal amount that is representative of a single transaction in that
Index Currency in that market at that time.
(iii) If at least two quotations are provided, LIBOR determined on that
Interest Determination Date shall be the arithmetic mean of those quotations. If
fewer than two quotations are provided, LIBOR shall be determined for the
applicable Interest Reset Date as the arithmetic mean of the rates quoted at
approximately 11:00 a.m., London time, or some other time specified on the face
hereof, in the applicable principal financial center for the country of the
Index Currency on that Interest Reset Date, by three major banks in that
principal financial center selected by the Calculation Agent (after consultation
with the Issuer) for loans in the Index Currency to leading European banks,
having the Index Maturity specified on the face hereof and in a principal amount
that is representative of a single transaction in that Index Currency in that
market at that time.
(iv) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the LIBOR rate for that Interest Determination Date shall
remain the LIBOR for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.
The "Index Currency" means the currency specified on the face hereof as the
currency for which LIBOR shall be calculated, or, if the euro is substituted for
that currency, the Index Currency shall be the euro. If that currency is not
specified on the face hereof, the Index Currency shall be U.S. dollars.
"Designated LIBOR Page" means either: (a) if LIBOR Reuters is designated as
the Reporting Service on the face hereof, the display on the Reuters Money 3000
Service for the purpose of displaying the London interbank rates of major banks
for the applicable Index Currency or its designated successor, or (b) if LIBOR
Telerate is designated as the Reporting Service on the face hereof, the display
on Moneyline Telerate, or any successor service, on the page specified on the
face hereof, or any other page as may replace that page on that service, for the
purpose of displaying the London interbank rates of major banks for the
applicable Index Currency.
If neither LIBOR Reuters nor LIBOR Telerate is specified on the face
hereof, LIBOR for the applicable Index Currency shall be determined as if LIBOR
Telerate were specified, and, if the U.S. dollar is the Index Currency, as if
Page 3750 had been specified.
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:
17
(i) If the rate is not published prior to 3:00 p.m., New York City time, on
the Calculation Date, then the Prime Rate shall be the rate on that Interest
Determination Date as published in the H.15 Daily Update under the heading "Bank
Prime Loan."
(ii) If the 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 shall remain the Prime Rate for that Interest
Determination Date shall remain the Prime Rate for the immediately preceding
Interest Reset Period, or, if there was no Interest Reset Period, the rate of
interest payable shall be the Initial Interest Rate.
"Reuters Screen USPRIME 1 Page" means the display designated as page
"USPRIME 1" on the Reuters 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
18
(iii) if the rate described in (ii) above is not published by 3:00 p.m.,
New York City time, on the related Calculation Date, the Bond Equivalent Yield
of the Auction rate of the applicable Treasury Bills, announced by the United
States Department of the Treasury; or
(iv) if the rate described in (iii) above is not announced by the United
States Department of the Treasury, or if the Auction is not held, the Bond
Equivalent Yield of the rate on the applicable Interest Determination Date of
Treasury Bills having the Index Maturity specified on the face hereof published
in H.15(519) under the caption "U.S. Government Securities/Treasury
Bills/Secondary Market"; or
(v) if the rate described in (iv) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date of the applicable Treasury Bills as published in the
H.15 Daily Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market"; or
(vi) if the rate described in (v) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date calculated by the Calculation Agent as the Bond
Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 p.m., New York City time, on the applicable Interest
Determination Date, of three primary U.S. government securities dealers, which
may include the initial dealer and its affiliates, selected by the Calculation
Agent, for the issue of Treasury Bills with a remaining maturity closest to the
Index Maturity specified on the face hereof; or
(vii) if the dealers selected by the Calculation Agent are not quoting as
described in (vi), the Treasury Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.
The "Bond Equivalent Yield" means a yield calculated in accordance with the
following formula and expressed as a percentage:
D x N
Money Market 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:
19
(1) the rate on that Interest Determination Date, if the Designated CMT
Telerate Page is 7051; and
(2) the week or the month, as applicable, ended immediately preceding the
week in which the related Interest Determination Date occurs, if the Designated
CMT Telerate Page is 7052.
The following procedures shall be followed if the CMT Rate cannot be
determined as described above:
(i) If the above rate is no longer displayed on the relevant page, or if
not displayed by 3:00 p.m., New York City time, on the related Calculation Date,
then the CMT Rate shall be the Treasury Constant Maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519).
(ii) If the above rate is no longer published, or if not published by 3:00
p.m., New York City time, on the related Calculation Date, then the CMT Rate
shall be the Treasury Constant Maturity Rate for the Designated CMT Maturity
Index or other 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
20
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 for that Interest Determination Date
shall be based on the arithmetic mean of the offer prices obtained and neither
the highest nor the lowest of those quotes shall be eliminated.
(vi) If fewer than three reference dealers selected by the Calculation
Agent are quoting as described in (iv) above, the CMT Rate for that Interest
Determination Date shall remain the CMT Rate for the immediately preceding
Interest Reset Period, or, if there was no Interest Reset Period, the rate of
interest payable shall be the Initial Interest Rate.
"Designated CMT Telerate Page" means the display on Moneyline Telerate, or
any successor service, on the page designated on the face hereof or any other
page as may replace that page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no page is specified
on the face hereof, the Designated CMT Telerate Page shall be 7052, for the most
recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30 years,
specified in an applicable pricing supplement for which the CMT Rate shall be
calculated. If no maturity is specified on the face hereof, the Designated CMT
Maturity Index shall be two years.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof or, if the Maximum Interest
Rate or Minimum Interest Rate is reset in accordance with the procedures
referred to above, as determined pursuant to such procedures. The Calculation
Agent shall calculate the interest rate hereon in accordance with the foregoing
on or before each Calculation Date. The interest rate on this Note will in no
event be higher than the maximum rate permitted by New York law, as the same may
be modified by United States Federal law of general application.
At the request of the holder hereof, the Calculation Agent will provide to
the holder hereof the interest rate hereon then in effect and, if determined,
the interest rate that will become effective as of the next Interest Reset Date.
Unless otherwise indicated on the face hereof, interest payments on this
Note shall be the amount of interest accrued from and including the Interest
Accrual Date or from and including the last date to which interest has been paid
to but excluding the Interest Payment Dates or Maturity Date (or any earlier
redemption date), as the case may be. Accrued interest hereon for
21
any period shall be the sum of the products obtained by multiplying the interest
factor calculated for each day in such period by the principal amount hereof
shown on Schedule I hereto for each such day; provided that for the purpose of
calculating the amount of interest payable hereon, any decrease in the principal
amount hereof attributable to an exercise of the option to terminate the
automatic extension of the maturity hereof shall be effective on and as of the
Election Date corresponding to the exercise of such option, and any increase in
the principal amount hereof shall be effective on and as of the Interest Payment
Date immediately preceding the date of such increase. The interest factor for
each such day shall be computed by dividing the interest rate applicable to such
day (i) by 360 if the Base Rate is CD Rate, Commercial Paper Rate, EURIBOR,
Federal Funds Rate, Prime Rate or LIBOR (except if the Index Currency is pounds
sterling); (ii) by 365 if the Base Rate is LIBOR and the Index Currency is
pounds sterling; or (iii) by the actual number of days in the year if the Base
Rate is the Treasury Rate or the CMT Rate. All percentages resulting from any
calculation of the rate of interest on this Note will be rounded, if necessary,
to the nearest one hundred-thousandth of a percentage point (with .000005% being
rounded up to .00001%) and all dollar amounts used in or resulting from such
calculation on this Note will be rounded to the nearest cent, with one-half cent
rounded upward. All Japanese Yen amounts used in or resulting from such
calculations will be rounded downwards to the next lower whole Japanese Yen
amount. All amounts denominated in any other currency used in or resulting from
such calculations will be rounded to the nearest two decimal places in such
currency, with .005 being rounded up to .01. The interest rate in effect on any
Interest Reset Date will be the applicable rate as reset on such date. The
interest rate applicable to any other day is the interest rate from the
immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate).
This Note and all other obligations of the Issuer hereunder will constitute
part of the subordinated debt of the Issuer, will be issued under the
Subordinated Indenture and will be subordinate and junior in right of payment,
to the extent and in the manner set forth in the Subordinated Indenture, to all
"Senior Indebtedness" of the Issuer. The Subordinated Indenture defines "Senior
Indebtedness" as (i) obligations (other than non-recourse obligations, the debt
securities, including this Note, issued under the Subordinated Indenture or any
other obligations specifically designated as being subordinate in right of
payment to Senior Indebtedness) of, or guaranteed or assumed by, the Issuer for
borrowed money or evidenced by bonds, debentures, notes or other similar
instruments, and amendments, renewals, extensions, modifications and refundings
of any such indebtedness or obligation and (ii) if provided in the supplemental
indenture under which a series of Securities is issued or in the form of
Security for such series, any additional obligations that the Issuer determines
to include within the definition of Senior Indebtedness in order to assure that
the Securities of such series will be accorded the regulatory capital
recognition desired by the Issuer in accordance with Rule 15c3-1 under the
Securities Exchange Act of 1934, as amended, or any other rule or regulation
governing the definition of capital that is applicable to the Issuer or its
affiliates.
This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and is issuable only
in denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in
excess thereof. If this Note is denominated in a Specified Currency other than
U.S. dollars, then, unless a higher minimum denomination is
22
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 Registrar by surrendering this Note for cancellation, accompanied by a
written instrument of transfer in form satisfactory to the Issuer and the
Registrar and duly executed by the registered holder hereof in person or by the
holder's attorney duly authorized in writing, and thereupon the Registrar shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like aggregate
principal amount in authorized denominations, subject to the terms and
conditions set forth herein; provided, however, that the Registrar will not be
required (i) to register the transfer of or exchange any Note that has been
called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the
Subordinated 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 Registrar and executed by the registered holder in person or
by the holder's attorney duly authorized in writing. The date of registration of
any Note delivered upon any exchange or transfer of Notes shall be such that no
gain or loss of interest results from such exchange or transfer.
In case this Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and this Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, the Issuer in its discretion may execute a new Note of
like tenor in exchange for this Note, but, if this Note is destroyed, lost or
stolen, only upon receipt of evidence satisfactory to the Registrar and the
Issuer that this Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.
The Subordinated Indenture provides that, (a) if an Event of Default (as
defined in the Subordinated Indenture) pursuant to Section 5.01(c) of the
Subordinated Indenture is provided in
23
the supplemental indenture relating to the series of Subordinated Medium-Term
Notes of which this Note forms a part or in the form of debt security for such
series (if such Event of Default is with respect to less than all outstanding
debt securities issued under the Subordinated Indenture) and such Event of
Default 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
certain events of bankruptcy, insolvency or reorganization of the Issuer shall
have occurred and be continuing or if an Event of Default pursuant to Section
5.01(c) of the Subordinated Indenture is provided in the supplemental indenture
relating to the series of Subordinated Medium-Term Notes of which this Note
forms a part or in the form of debt security for such series (if such Event of
Default is with respect to all outstanding debt securities issued under the
Subordinated Indenture) and such Event of Default 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
Subordinated 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 all the debt securities
of all affected series then outstanding.
The Subordinated Indenture permits the Issuer and the Trustee, with the
consent of the holders of not less than a majority in aggregate principal amount
of the debt securities of all series issued under the Subordinated Indenture
then outstanding and affected (voting as one class), to execute supplemental
indentures adding any provisions to or changing in any manner the rights of the
holders of each series so affected; provided that the Issuer and the Trustee may
not, without the consent of the holder of each outstanding debt security
affected thereby, (i) extend the final maturity of any such debt security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof,
or change the currency of payment thereof, or modify or amend the provisions for
conversion of any currency into any other currency, or modify or amend the
provisions for conversion or exchange of the debt security for securities of the
Issuer or other entities or for other property or the cash value of the property
(other than as provided in the antidilution provisions or other similar
adjustment provisions of the debt securities or otherwise in accordance with the
terms thereof), or impair or affect the rights of any holder to institute suit
for the payment thereof or (ii) reduce the aforesaid percentage in principal
amount of debt securities the consent of the holders of which is required for
any such supplemental indenture; provided, however, that neither this Note nor
the Subordinated Indenture may be amended to alter the subordination provisions
hereof or thereof without the written consent of each holder of Senior
Indebtedness then outstanding that would be adversely affected thereby.
Except as set forth below, if the principal, premium, if any, or interest
on this Note is payable in a Specified Currency other than U.S. dollars and such
Specified Currency is not
24
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 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
25
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 or any
Paying Agent for payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting in
any way any obligation that the Issuer may have to pay the principal of or
interest or premium, if any, on this Note as the same shall become due.
No provision of this Note or of the Subordinated Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to pay
the principal of, premium, if any, and interest on this Note at the time, place,
and rate, and in the coin or currency, herein prescribed unless otherwise agreed
between the Issuer and the registered holder of this Note.
Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or premium, if
any, or the interest on this Note, for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Subordinated Indenture or any
indenture supplemental thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.
As used herein, the term "United States Alien" means any person who is, for
United States federal income tax purposes, (i) a nonresident alien individual,
(ii) a foreign corporation, (iii) a nonresident alien fiduciary of a foreign
estate or trust or (iv) a foreign partnership one or more of the members of
which is, for United States federal income tax purposes, a nonresident alien
individual, a foreign corporation or a nonresident alien fiduciary of a foreign
estate or trust.
All terms used in this Note which are defined in the Subordinated Indenture
and not otherwise defined herein shall have the meanings assigned to them in the
Subordinated Indenture.
26
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT- Custodian
-------------------- ---------------------
(Minor) (Cust)
Under Uniform Gifts to Minors Act
------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
-----------------------------
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.
28
OPTION TO ELECT TERMINATION OF AUTOMATIC EXTENSION
The undersigned hereby elects to terminate the automatic extension of the
maturity of the within Note (or the portion thereof specified below) with the
effect provided in the within Note by surrendering the within Note to the Paying
Agent at J.P. Morgan Trust Company, National Association, 4 New York Plaza, New
York, New York 10004, Attention: Institutional Trust Services, or such other
address of which the Issuer shall from time to time notify the holders of the
Notes, together with this form of "Option to Elect Termination of Automatic
Extension" duly completed by the holder of the within Note.
If the automatic extension of the maturity of less than the entire
principal amount of the within Note is to be terminated, specify the portion
thereof (which shall be $1,000 or an integral multiple of $1,000 in excess
thereof) as to which the holder elects to terminate the automatic extension of
the maturity $______; and specify the denomination or denominations (which shall
be $1,000 or an integral multiple of $1,000 in excess thereof) of the Notes in
the form attached to the within Note as Exhibit A to be issued to the holder for
the portion of the within Note as to which the automatic extension of maturity
is being terminated (in the absence of any such specification one such Note will
be issued for the portion as to which the automatic extension of maturity is
being terminated) $__________.
Dated:
----------------------------- -----------------------------------------
NOTICE: The signature on this Option to
Elect Termination of Automatic
Extension must correspond with the name
as written upon the face of the within
Note in every particular, without
alteration or enlargement or any change
whatever.
29
SCHEDULE I
SCHEDULE OF EXCHANGES
The initial principal amount of this Note is $__________. The following
exchanges of a portion of this Note for an interest in a Short-Term Note and the
following exchanges of an interest in a Short-Term Note for an interest in this
Note have been made:
Principal Increased
Amount of Principal
Principal Reduced Short-Term Amount of Notation
Amount Principal Note this Note Made by
Exchanged Amount Exchanged Outstanding or on
for Outstanding for Following Behalf of
Date of Short-Term Following Interest in Such Paying
Exchange Note Such Exchange this Note Exchange Agent
---------- ------------ ------------- ------------ ------------ ---------
---------- ------------ ------------- ------------ ------------ ---------
---------- ------------ ------------- ------------ ------------ ---------
---------- ------------ ------------- ------------ ------------ ---------
---------- ------------ ------------- ------------ ------------ ---------
---------- ------------ ------------- ------------ ------------ ---------
---------- ------------ ------------- ------------ ------------ ---------
---------- ------------ ------------- ------------ ------------ ---------
---------- ------------ ------------- ------------ ------------ ---------
---------- ------------ ------------- ------------ ------------ ---------
30
EXHIBIT A TO SUBORDINATED VARIABLE RATE RENEWABLE NOTE
[FORM OF FACE OF SECURITY]
REGISTERED REGISTERED
No. SUBVRR CUSIP:
U.S. $___________
Unless this certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the registered owner hereof,
Cede & Co., has an interest herein.
THESE SECURITIES ARE NOT INSURED OR PROTECTED BY THE SECURITIES INVESTOR
PROTECTION CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
A-1
MORGAN STANLEY
SUBORDINATED VARIABLE RATE RENEWABLE
GLOBAL MEDIUM-TERM NOTE, SERIES F
--------------------------------------------------------------------------
BASE RATE: ORIGINAL ISSUE DATE: INTEREST ACCRUAL DATE:
--------------------------------------------------------------------------
INDEX MATURITY: INITIAL INTEREST RESET MATURITY DATE:
DATE:
--------------------------------------------------------------------------
SPREAD (PLUS OR MINUS): MAXIMUM INTEREST RATE: INTEREST PAYMENT
DATE(S):
--------------------------------------------------------------------------
SPREAD MULTIPLIER: MINIMUM INTEREST RATE: INTEREST RESET PERIOD:
--------------------------------------------------------------------------
REPORTING SERVICE: INDEX CURRENCY: INTEREST RESET
DATE(S):
--------------------------------------------------------------------------
INITIAL INTEREST RATE: SPECIFIED CURRENCY: CALCULATION AGENT:
--------------------------------------------------------------------------
EXCHANGE RATE AGENT: DESIGNATED CMT
TELERATE PAGE:
------------------------------------------------
REDEMPTION NOTICE DESIGNATED CMT
PERIOD(1) MATURITY INDEX:
------------------------------------------------
TAX REDEMPTION AND IF SPECIFIED CURRENCY
PAYMENT OF OTHER THAN U.S.
ADDITIONAL DOLLARS, OPTION TO
AMOUNTS: NO(2) ELECT PAYMENT IN
U.S. DOLLARS:
[YES](3)
------------------------------------------------
IF YES, STATE INITIAL OTHER PROVISIONS:
OFFERING DATE: N/A
--------------------------------------------------------------------------
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
-----------------------------
(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) Default provision is NO. Indicate YES only for certain notes issued on
a global basis if specified in pricing supplement.
(3) Applies if this is a Registered Global Security, unless new
arrangements are made with DTC outside of existing Letters of Representations.
A-2
thereafter at a rate per annum determined in accordance with the provisions
specified on the reverse hereof until (a) the principal hereof is paid or duly
made available for payment and (b) the Interest Payment Date immediately
preceding the date on which the principal amount hereof is reduced to zero, in
each case, together with the unpaid amount of interest, if any, payable on the
principal amount hereof during the period that the Issuer's obligation to pay
such principal amount was evidenced by a predecessor Note that provided for the
automatic extension of the maturity thereof (the "Renewable Note"), which amount
shall be payable on the first date succeeding the Interest Accrual Date
specified above on which interest on this Note is paid and shall be payable to
the person receiving such interest payment. The Issuer will pay interest hereon
in arrears weekly, monthly, quarterly, semiannually or annually as specified
above as the Interest Payment Period on each Interest Payment Date (as specified
above), commencing with the first Interest Payment Date next succeeding the
Interest Accrual Date specified above, and on the Maturity Date or any
redemption date; provided, however, if the Interest Accrual Date occurs between
a Record Date, as defined below, and the next succeeding Interest Payment Date,
interest payments will commence on the second Interest Payment Date succeeding
the Interest Accrual Date to the registered holder of this Note on the Record
Date with respect to such second Interest Payment Date; provided, further, that
if an Interest Payment Date or the Maturity Date would fall on a day that is not
a Business Day, as defined on the reverse hereof, such Interest Payment Date or
Maturity Date shall be the following day that is a Business Day, except that if
the Base Rate specified above is LIBOR or EURIBOR and such next Business Day
falls in the next calendar month, the Interest Payment Date or Maturity Date
shall be the immediately preceding day that is a Business Day. As used herein,
"Initial Interest Rate" means the rate of interest determined using the Spread
or Spread Multiplier, as the case may be, specified in the Renewable Note and
using the Base Rate determined in accordance with the provisions of the
Renewable Note (i) on the Interest Reset Date with respect to the Renewable Note
occurring on the Interest Accrual Date specified above or (ii) if no such
Interest Reset Date occurred on the Interest Accrual Date, on the Interest Reset
Date with respect to the Renewable Note occurring immediately preceding the
Interest Accrual Date.
Interest on this Note will accrue from and including the most recent date
to which interest has been paid or duly provided for, or, if no interest has
been paid or duly provided for, from and including the Interest Accrual Date,
until the earlier of (a) the date on which the principal hereof has been paid or
duly made available for payment and (b) the Interest Payment Date immediately
preceding the date on which the principal amount hereof is reduced to zero in
accordance with the provisions set forth below. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, subject
to certain exceptions described herein, be paid to the person in whose name this
Note (or one or more predecessor Notes) is registered at the close of business
on the date 15 calendar days prior to such Interest Payment Date (whether or not
a Business Day) (each such date, a "Record Date"); provided, however, that
interest payable at maturity will be payable to the person to whom the principal
hereof shall be payable.
A-3
On any date following the Original Issue Date and prior to the Record Date
immediately preceding the Maturity Date, the holder hereof may, with the consent
of the Issuer, exchange this Note or any portion hereof having a principal
amount of $1,000 or any larger multiple of $1,000 in excess thereof for an
interest in the Renewable Note equal to the principal amount hereof so exchanged
by delivering to the Paying Agent, as defined on the reverse hereof, (i) this
Note with the form entitled "Request to Exchange" below duly completed or (ii) a
telegram, telex, facsimile transmission or a letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or a trust company in the United States of America setting forth
the name of the holder of this Note, the principal amount hereof, the
certificate number of this Note or a description of this Note's tenor or terms,
a statement that a request to exchange is being made thereby, the principal
amount hereof with respect to which such request is being made and a guarantee
that this Note with the form entitled "Request to Exchange" below duly completed
will be received by the Paying Agent no later than five Business Days after the
date of such telegram, telex, facsimile transmission or letter; provided that
such telegram, telex, facsimile transmission or letter shall not be effective
unless this Note and such form duly completed are received by the Paying Agent
by such fifth Business Day. Such exchange may occur with respect to less than
the entire principal amount hereof provided that the principal amount for which
such exchange does not occur is at least $1,000 or any larger amount that is an
integral multiple of $1,000. Notwithstanding the foregoing, a request to
exchange all or a portion of this Note for an interest in the Renewable Note may
not be made during the period from and including a Record Date to but excluding
the immediately succeeding Interest Payment Date. If a request to exchange any
portion hereof is granted by the Issuer, then, on the date of such exchange,
Schedule I hereto shall be annotated to reflect the corresponding decrease in
the principal amount hereof, and Schedule I to the Renewable Note shall be
annotated to reflect the corresponding increase in the principal amount thereof.
Payment of the principal, premium, if any, and the interest due at maturity
on this Note (or any redemption date), unless this Note is denominated in a
Specified Currency other than U.S. dollars and is to be paid in whole or in part
in such Specified Currency, will be made in immediately available funds upon
surrender of this Note at the office or agency of the Paying Agent maintained
for that purpose in the Borough of Manhattan, The City of New York, or at the
office or agency of such other paying agent as the Issuer may determine in U.S.
dollars. U.S. dollar payments of interest, other than interest due at maturity
or any date of redemption, will be made by United States dollar check mailed to
the address of the person entitled thereto as such address shall appear in the
Note register. A holder of U.S. $10,000,000 (or the equivalent in a Specified
Currency) or more in aggregate principal amount of Notes having the same
Interest Payment Date, the interest on which is paid in U.S. dollars, shall be
entitled to receive payments of interest, other than interest due at maturity or
any date of redemption, by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received by the Paying
A-4
Agent in writing not less than 15 calendar days prior to the applicable Interest
Payment Date.
If this Note is denominated in a Specified Currency other than U.S.
dollars, and the holder does not elect (in whole or in part) to receive payment
in U.S. dollars pursuant to the next succeeding paragraph, payments of
principal, premium, if any, or interest with regard to this Note will be made by
wire transfer of immediately available funds to an account maintained by the
holder hereof with a bank located outside the United States if appropriate wire
transfer instructions have been received by the Paying Agent in writing [not
less than 15 calendar days prior to the applicable payment date](4) [, with
respect to payments of interest, on or prior to the fifth Business Day after the
applicable Record Date and, with respect to payments of principal or any
premium, at least ten Business Days prior to the Maturity Date or any redemption
or repayment date, as the case may be](5); provided that, if payment of
interest, principal or any premium with regard to this Note is payable in euro,
the 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, premium, if any, and interest on this Note, if denominated in a Specified
Currency other than U.S. dollars, in U.S. dollars, the Exchange Rate Agent will
convert such payments into U.S. dollars. In the event of such an election,
payment in respect of this Note will be based upon the exchange rate as
determined by the Exchange Rate Agent based on the highest bid quotation in The
City of New York received by such Exchange Rate Agent at
-----------------------------
(4) Applies for Registered Note that is not in global form.
(5) Applies only for a Registered Global Security.
A-5
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
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, including, without limitation, the
provisions relating to the subordination of this Note to the Issuer's Senior
Indebtedness, as defined on the reverse hereof.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Subordinated Indenture, as defined on
the reverse hereof, or be valid or obligatory for any purpose.
A-6
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.
DATED: MORGAN STANLEY
By:
----------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes
referred to in the
within-mentioned
Subordinated Indenture.
J.P. MORGAN TRUST COMPANY,
NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------
Authorized Officer
A-7
[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of the Subordinated Global
Medium-Term Notes, Series F, having maturities more than nine months from the
date of issue (the "Notes") of the Issuer. The Notes are issuable under a
Subordinated Indenture, dated as of October 1, 2004, between the Issuer and J.P.
Morgan Trust Company, National Association, as Trustee (the "Trustee," which
term includes any successor trustee under the Subordinated Indenture) (as may be
amended or supplemented and as further supplemented from time to time, the
"Subordinated Indenture"), to which Subordinated Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities of the Issuer, the Trustee
and holders of the Notes and the terms upon which the Notes are, and are to be,
authenticated and delivered. The Issuer has appointed J.P. Morgan Trust Company,
National Association, at its corporate trust office in The City of New York as
the paying agent (the "Paying Agent," which term includes any additional or
successor Paying Agent appointed by the Issuer) with respect to the Notes. The
terms of individual Notes may vary with respect to interest rates, interest rate
formulas, issue dates, maturity dates, or otherwise, all as provided in the
Subordinated Indenture. To the extent not inconsistent herewith, the terms of
the Subordinated Indenture are hereby incorporated by reference herein.
Unless otherwise indicated on the face hereof, this Note will not be
subject to any sinking fund and, unless otherwise provided on the face hereof in
accordance with the provisions of the following paragraph, will not be
redeemable prior to maturity.
This Note will bear interest at the rate determined in accordance with the
applicable provisions below by reference to the Base Rate shown on the face
hereof based on the Index Maturity, if any, shown on the face hereof (i) plus or
minus the Spread, if any, or (ii) multiplied by the Spread Multiplier, if any,
specified on the face hereof. Commencing with the Initial Interest Reset Date
specified on the face hereof, the rate at which interest on this Note is payable
shall be reset as of each Interest Reset Date (as used herein, the term
"Interest Reset Date" shall include the Initial Interest Reset Date). The
determination of the rate of interest at which this Note will be reset on any
Interest Reset Date shall be made, on the Interest Determination Date (as
defined below) pertaining to such Interest Reset Date. The Interest Reset Dates
will be the Interest Reset Dates specified on the face hereof; provided,
however, that (a) the interest rate in effect for the period from the Interest
Accrual Date to the Initial Interest Reset Date specified on the face hereof
will be the Initial Interest Rate and (b) unless otherwise specified on the face
hereof, the interest rate in effect for the ten calendar days immediately prior
to maturity, redemption or repayment will be that in effect on the tenth
calendar day preceding such maturity, redemption or repayment date. If any
Interest Reset Date would otherwise be a day that is not a Business Day, such
Interest Reset Date shall be postponed to the next succeeding day that is a
Business Day, except that if the Base Rate specified on the face hereof is LIBOR
or EURIBOR and such Business Day is in the next succeeding calendar month, such
Interest Reset Date shall be the immediately preceding
A-8
Business Day. As used herein, "Business Day" means any day, other than a
Saturday or Sunday, (a) that is neither a legal holiday nor a day on which
banking institutions are authorized or required by law or regulation to close
(x) in The City of New York or (y) if this Note is denominated in a Specified
Currency other than U.S. dollars, euro or Australian dollars, in the principal
financial center of the country of the Specified Currency, or (z) if this Note
is denominated in Australian dollars, in Sydney and (b) if this Note is
denominated in euro, that is also a day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer System ("TARGET") is operating (a
"TARGET Settlement Day").
If so indicated on the face of this Note, the Issuer may from time to time
offer to reset the Spread or Spread Multiplier, as the case may be, on the
Renewable Note by causing the Paying Agent to send to the holder hereof a notice
(an "Optional Exchange Notice") by first class mail, postage prepaid, or by such
other means as shall be agreed between the Issuer and the Paying Agent, setting
forth (a) the new Spread or Spread Multiplier to be applied to the Renewable
Note, together with any change in the Maximum Interest Rate or Minimum Interest
Rate, and (b) the date, if any, on which such offer will expire. In order to
accept such offer, the holder hereof must exchange this Note in whole or in part
for an interest in the Renewable Note in accordance with the third paragraph on
the face of this Note by delivering to the Paying Agent the notice referred to
in clause (i) or (ii) of such paragraph prior to the earlier of the expiration
date, if any, of such offer and the Record Date immediately preceding the
Maturity Date.
The Interest Determination Date pertaining to an Interest Reset Date for
Notes bearing interest calculated by reference to the Federal Funds Rate and
Prime Rate shall be on the Business Day prior to the Interest Reset Date. The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to the CD Rate, Commercial Paper Rate,
and CMT Rate will be the second Business Day prior to such Interest Reset Date.
The Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to EURIBOR (or to LIBOR when the Index
Currency is euros) shall be the second TARGET Settlement Day prior to such
Interest Reset Date. The Interest Determination Date pertaining to an Interest
Reset Date for Notes bearing interest calculated by reference to LIBOR (other
than for LIBOR Notes for which the Index Currency is euros) shall be the second
London Banking Day prior to such Interest Reset Date except that the Interest
Determination Date pertaining to an Interest Reset Date for a LIBOR Note for
which the Index Currency is pounds Sterling will be such Interest Reset Date. As
used herein, "London Banking Day" means any day on which dealings in deposits in
the Index Currency (as defined herein) are transacted in the London interbank
market. The Interest Determination Date pertaining to an Interest Reset Date for
Notes bearing interest calculated by reference to the Treasury Rate shall be the
day of the week in which such Interest Reset Date falls on which Treasury bills
normally would be auctioned. Treasury Bills are normally sold at auction on
Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except that the auction may
be held on the preceding Friday; provided, however, that if an auction is held
on the Friday of the
A-9
week preceding such Interest Reset Date, the Interest Determination Date shall
be such preceding Friday; and provided, further, that if an auction shall fall
on any Interest Reset Date, then the Interest Reset Date shall instead be the
first Business Day following the date of such auction. The Interest
Determination Date pertaining to an Interest Reset Date for Notes bearing
interest calculated by reference to two or more base rates will be the latest
Business Day that is at least two Business Days before the Interest Reset Date
for the applicable Note on which each base rate is determinable.
Unless otherwise specified on the face hereof, the "Calculation Date"
pertaining to an Interest Determination Date will be the earlier of (i) the
tenth calendar day after such Interest Determination Date or, if such day is not
a Business Day, the next succeeding Business Day, or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or Maturity Date (or,
with respect to any principal amount to be redeemed or repaid, any redemption or
repayment date), as the case may be.
Determination of CD Rate. If the Base Rate specified on the face hereof is
the "CD Rate," for any Interest Determination Date, the CD Rate with respect to
this Note shall be the rate on that date for negotiable U.S. dollar certificates
of deposit having the Index Maturity specified on the face hereof as published
by the Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates," or any successor publication of the Board
of Governors of the Federal Reserve System ("H.15(519)") under the heading "CDs
(Secondary Market)."
The following procedures shall be followed if the CD Rate cannot be
determined as described above:
(i) If the above rate is not published in H.15(519) by 3:00 p.m., New York
City time, on the Calculation Date, the CD Rate shall be the rate on that
Interest Determination Date set forth in the daily update of H.15(519),
available through the world wide website of the Board of Governors of the
Federal Reserve System at http://www.federalreserve.gov/releases/h15/update, or
any successor site or publication ("H.15 Daily Update") for the Interest
Determination Date for certificates of deposit having the Index Maturity
specified on the face hereof, under the caption "CDs (Secondary Market)."
(ii) If the above rate is not yet published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the Calculation Date, 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
A-10
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 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 in (ii) above, the Commercial Paper Rate for that Interest
Determination Date shall remain the Commercial Paper Rate for the immediately
preceding Interest Reset Period, or, if there was no Interest Reset Period, the
rate of interest payable shall be the Initial Interest Rate.
A-11
The "Money Market Yield" shall be a yield calculated in accordance with the
following formula:
D x 360
Money Market Yield = ----------------- x 100
360 - (D x M)
where "D" refers to the applicable per year rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
Determination of EURIBOR Notes. If the Base Rate specified on the face
hereof is "EURIBOR," for any Interest Determination Date, EURIBOR with respect
to this Note shall be the rate for deposits in euros as sponsored, calculated
and published jointly by the European Banking Federation and ACI - The Financial
Market Association, or any company established by the joint sponsors for
purposes of compiling and publishing those rates, for the Index Maturity
specified on the face hereof as that rate appears on the display on Moneyline
Telerate, or any successor service, on page 248 or any other page as may replace
page 248 on that service ("Telerate Page 248") as of 11:00 a.m., Brussels time.
The following procedures shall be followed if the rate cannot be determined
as described above:
(i) If the above rate does not appear, the Calculation Agent shall request
the principal Euro-zone office of each of four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer), to provide the Calculation Agent with its offered rate for deposits
in euros, at approximately 11:00 a.m., Brussels time, on the Interest
Determination Date, to prime banks in the Euro-zone interbank market for the
Index Maturity specified on the face hereof commencing on the applicable
Interest Reset Date, and in a principal amount not less than the equivalent of
U.S.$1 million in euro that is representative of a single transaction in euro,
in that market at that time. If at least two quotations are provided, EURIBOR
shall be the arithmetic mean of those quotations.
(ii) If fewer than two quotations are provided, EURIBOR shall be the
arithmetic mean of the rates quoted by four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer), at approximately 11:00 a.m., Brussels time, on the applicable
Interest Reset Date for loans in euro to leading European banks for a period of
time equivalent to the Index Maturity specified on the face hereof commencing on
that Interest Reset Date in a principal amount not less than the equivalent of
U.S.$1 million in euro.
(iii) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the EURIBOR rate for that Interest Determination Date shall
remain the
A-12
EURIBOR for the immediately preceding Interest Reset Period, or, if there was no
Interest Reset Period, the rate of interest payable shall be the Initial
Interest Rate.
"Euro-zone" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the relevant treaty of
the European Union, as amended.
Determination of the Federal Funds Rates. If the Base Rate specified on the
face hereof is the "Federal Funds Rate," for any Interest Determination Date,
the Federal Funds Rate with respect to this Note shall be the rate on that date
for U.S. dollar federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)" as displayed on Moneyline Telerate, or any successor
service, on page 120 or any other page as may replace page 120 on that service
("Telerate Page 120").
The following procedures shall be followed if the Federal Funds Rate cannot
be determined as described above:
(i) If the above rate is not published by 3:00 p.m., New York City time, on
the Calculation Date, the Federal Funds Rate shall be the rate on that Interest
Determination Date as published in the H.15 Daily Update, or other recognized
electronic source used for the purpose of displaying the applicable rate, under
the heading "Federal Funds (Effective)."
(ii) If the above rate is not yet published in either H.15(519) or the H.15
Daily Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, by 3:00 p.m., New York City time, on the
Calculation Date, the Calculation Agent shall determine the Federal Funds Rate
to be the arithmetic mean of the rates for the last transaction in overnight
U.S. dollar federal funds prior to 9:00 a.m., New York City time, on that
Interest Determination Date, by each of three leading brokers of U.S. dollar
federal funds transactions in The City of New York, which may include the
initial dealer and its affiliates, selected by the Calculation Agent (after
consultation with the Issuer).
(iii) If the brokers selected by the Calculation Agent are not quoting as
set forth above, the Federal Funds Rate for that Interest Determination Date
shall remain the Federal Funds Rate for the immediately preceding Interest Reset
Period, or, if there was no Interest Reset Period, the rate of interest payable
shall be the Initial Interest Rate.
Determination of LIBOR. If the Base Rate specified on the face hereof is
"LIBOR," LIBOR with respect to this Note shall be based on London Interbank
Offered Rate. The Calculation Agent shall determine LIBOR for each Interest
Determination Date as follows:
(i) As of the Interest Determination Date, LIBOR shall be either: (a) if
"LIBOR Reuters" is specified as the Reporting Service on the face hereof, the
arithmetic
A-13
mean of the offered rates for deposits in the Index Currency having the Index
Maturity designated on the face hereof, commencing on the second London Banking
Day immediately following that Interest Determination Date, that appear on the
Designated LIBOR Page, as defined below, as of 11:00 a.m., London time, on that
Interest Determination Date, if at least two offered rates appear on the
Designated LIBOR Page; except that if the specified Designated LIBOR Page, by
its terms provides only for a single rate, that single rate shall be used; or
(b) if "LIBOR Telerate" is specified as the Reporting Service on the face
hereof, the rate for deposits in the Index Currency having the Index Maturity
designated on the face hereof, commencing on the second London Banking Day
immediately following that Interest Determination Date or, if pounds sterling is
the Index Currency, commencing on that Interest Determination Date, that appears
on the Designated LIBOR Page at approximately 11:00 a.m., London time, on that
Interest Determination Date.
(ii) If (a) fewer than two offered rates appear and LIBOR Reuters is
specified on the face hereof, or (b) no rate appears and the face hereof
specifies either (x) LIBOR Telerate or (y) LIBOR Reuters and the Designated
LIBOR Page by its terms provides only for a single rate, then the Calculation
Agent shall request the principal London offices of each of four major reference
banks in the London interbank market, as selected by the Calculation Agent
(after consultation with the Issuer), to provide the Calculation Agent with its
offered quotation for deposits in the Index Currency for the period of the Index
Maturity specified on the face hereof commencing on the second London Banking
Day immediately following the Interest Determination Date or, if pounds sterling
is the Index Currency, commencing on that Interest Determination Date, to prime
banks in the London interbank market at approximately 11:00 a.m., London time,
on that Interest Determination Date and in a principal amount that is
representative of a single transaction in that Index Currency in that market at
that time.
(iii) If at least two quotations are provided, LIBOR determined on that
Interest Determination Date shall be the arithmetic mean of those quotations. If
fewer than two quotations are provided, LIBOR shall be determined for the
applicable Interest Reset Date as the arithmetic mean of the rates quoted at
approximately 11:00 a.m., London time, or some other time specified on the face
hereof, in the applicable principal financial center for the country of the
Index Currency on that Interest Reset Date, by three major banks in that
principal financial center selected by the Calculation Agent (after consultation
with the Issuer) for loans in the Index Currency to leading European banks,
having the Index Maturity specified on the face hereof and in a principal amount
that is representative of a single transaction in that Index Currency in that
market at that time.
(iv) If the banks so selected by the Calculation Agent are not quoting as
set forth above, LIBOR in effect for the applicable period shall be the same as
LIBOR for the immediately preceding Interest Reset Period, or, if there was no
Interest Reset Period, the rate of interest payable shall be the Initial
Interest Rate.
A-14
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
A-15
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
(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
A-16
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
(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:
A-17
(i) If the above rate is no longer displayed on the relevant page, or if
not displayed by 3:00 p.m., New York City time, on the related Calculation Date,
then the CMT Rate shall be the Treasury Constant Maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519).
(ii) If the above rate is no longer published, or if not published by 3:00
p.m., New York City time, on the related Calculation Date, then the CMT Rate
shall be the Treasury Constant Maturity Rate for the Designated CMT Maturity
Index or other U.S. Treasury rate for the Designated CMT Maturity Index on the
Interest Determination Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519).
(iii) If the information set forth above is not provided by 3:00 p.m., New
York City time, on the related Calculation Date, then the Calculation Agent
shall determine the CMT Rate to be a yield to maturity, based on the arithmetic
mean of the secondary market closing offer side prices as of approximately 3:30
p.m., New York City time, on the Interest Determination Date, reported,
according to their written records, by three leading primary U.S. government
securities dealers ("Reference Dealers") in The City of New York, which may
include the initial dealer or its affiliates, selected by the Calculation Agent
as described in the following sentence. The Calculation Agent shall select five
reference dealers (after consultation with the Issuer) and shall eliminate the
highest quotation or, in the event of equality, one of the highest, and the
lowest quotation or, in the event of equality, one of the lowest, for the most
recently issued direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately the Designated CMT
Maturity Index, a remaining term to maturity of no more than 1 year shorter than
that Designated CMT Maturity Index and in a principal amount that is
representative for a single transaction in the securities in that market at that
time. If two Treasury Notes with an original maturity as described above have
remaining terms to maturity equally close to the Designated CMT Maturity Index,
the quotes for the Treasury Note with the shorter remaining term to maturity
shall be used.
(iv) If the Calculation Agent cannot obtain three Treasury Notes quotations
as described in (iii) above, the Calculation Agent shall determine the CMT Rate
to be a yield to maturity based on the arithmetic mean of the secondary market
offer side prices as of approximately 3:30 p.m., New York City time, on the
Interest Determination Date of three reference dealers in The City of New York,
selected using the same method described in (iii) above, for Treasury Notes with
an original maturity equal to the number of years closest to but 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.
A-18
(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
to but, excluding the Interest Payment Dates or Maturity Date, as the case may
be. Accrued interest hereon for any period shall be the sum of the products
obtained by multiplying the interest factor calculated for each day in such
period by the principal amount hereof shown on Schedule I hereto for each such
day; provided that for the purpose of calculating the amount of interest payable
hereon, any decrease in the principal amount hereof attributable to an exchange
of a portion of this Note for an interest in the Renewable Note shall be
effective on and as of the Interest Payment Date immediately preceding the date
of such decrease. The interest factor for each such day shall be computed by
dividing the
A-19
interest rate applicable to such day (i) by 360 if the Base Rate is CD Rate,
Commercial Paper Rate, EURIBOR, Federal Funds Rate, Prime Rate or LIBOR (except
if the Index Currency is pounds sterling); (ii) by 365 if the Base Rate is LIBOR
and the Index Currency is pounds sterling; or (iii) by the actual number of days
in the year if the Base Rate is the Treasury Rate or the CMT Rate. All
percentages resulting from any calculation of the rate of interest on this Note
will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point (with .000005% being rounded up to .00001%) and all dollar
amounts used in or resulting from such calculation on this Note will be rounded
to the nearest cent, with one-half cent rounded upward. All Japanese Yen amounts
used in or resulting from such calculations will be rounded downwards to the
next lower whole Japanese Yen amount. All amounts denominated in any other
currency used in or resulting from such calculations will be rounded to the
nearest two decimal places in such currency, with .005 being rounded up to .01.
The interest rate in effect on any Interest Reset Date will be the applicable
rate as reset on such date. The interest rate applicable to any other day is the
interest rate from the immediately preceding Interest Reset Date (or, if none,
the Initial Interest Rate).
This Note and all other obligations of the Issuer hereunder will constitute
part of the subordinated debt of the Issuer, will be issued under the
Subordinated Indenture and will be subordinate and junior in right of payment,
to the extent and in the manner set forth in the Subordinated Indenture, to all
"Senior Indebtedness" of the Issuer. The Subordinated Indenture defines "Senior
Indebtedness" as (i) obligations (other than non-recourse obligations, the debt
securities, including this Note, issued under the Subordinated Indenture or any
other obligations specifically designated as being subordinate in right of
payment to Senior Indebtedness) of, or guaranteed or assumed by, the Issuer for
borrowed money or evidenced by bonds, debentures, notes or other similar
instruments, and amendments, renewals, extensions, modifications and refundings
of any such indebtedness or obligation and (ii) if provided in the supplemental
indenture under which a series of Securities is issued or in the form of
Security for such series, any additional obligations that the Issuer determines
to include within the definition of Senior Indebtedness in order to assure that
the Securities of such series will be accorded the regulatory capital
recognition desired by the Issuer in accordance with Rule 15c3-1 under the
Securities Exchange Act of 1934, as amended, or any other rule or regulation
governing the definition of capital that is applicable to the Issuer or its
affiliates.
This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and is issuable only
in denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in
excess thereof. If this Note is denominated in a Specified Currency other than
U.S. dollars, then, unless a higher minimum denomination is required by
applicable law, it is issuable only in denominations of the equivalent of U.S.
$1,000 (rounded to an integral multiple of 1,000 units of such Specified
Currency), or any amount in excess thereof which is an integral multiple of
1,000 units of such Specified Currency, as determined by reference to the noon
dollar buying rate in The City of New York for cable transfers of such Specified
A-20
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 (the "Registrar,"
which term includes any successor registrar appointed by the Issuer), and the
Registrar will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Registrar by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the Registrar and duly executed by the registered holder hereof in
person or by the holder's attorney duly authorized in writing, and thereupon the
Registrar shall issue in the name of the transferee or transferees, in exchange
herefor, a new Note or Notes having identical terms and provisions and having a
like aggregate principal amount in authorized denominations, subject to the
terms and conditions set forth herein; provided, however, that the Registrar
will not be required (i) to register the transfer of or exchange any Note that
has been called for redemption in whole or in part, except the unredeemed
portion of Notes being redeemed in part, (ii) to register the transfer of or
exchange any Note if the holder thereof has exercised his right, if any, to
require the Issuer to repurchase such Note in whole or in part, except the
portion of such Note not required to be repurchased or (iii) to register the
transfer of or exchange Notes to the extent and during the period so provided in
the Subordinated 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 Registrar and executed by the registered holder in person or
by the holder's attorney duly authorized in writing. The date of registration of
any Note delivered upon any exchange or transfer of Notes shall be such that no
gain or loss of interest results from such exchange or transfer.
In case this Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and this Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Registrar, the Issuer in its discretion may execute a new Note
of like tenor in exchange for this Note, but, if this Note is destroyed, lost or
stolen, only upon receipt of evidence satisfactory to the Registrar and the
Issuer that this Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.
The Subordinated Indenture provides that, (a) if an Event of Default (as
defined in the Subordinated Indenture) pursuant to Section 5.01(c) of the
Subordinated Indenture is
A-21
provided in the supplemental indenture relating to the series of Subordinated
Medium-Term Notes of which this Note forms a part or in the form of debt
security for such series (if such Event of Default is with respect to less than
all outstanding debt securities issued under the Subordinated Indenture) and
such Event of Default 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 certain events of bankruptcy, insolvency or
reorganization of the Issuer shall have occurred and be continuing or if an
Event of Default pursuant to Section 5.01(c) of the Subordinated Indenture is
provided in the supplemental indenture relating to the series of Subordinated
Medium-Term Notes of which this Note forms a part or in the form of debt
security for such series (if such Event of Default is with respect to all
outstanding debt securities issued under the Subordinated Indenture) and such
Event of Default 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 Subordinated Indenture, voting as
one class, by notice in writing to the Issuer and to the Trustee, if given by
the securityholders, may declare the principal of all such debt securities and
interest accrued thereon to be due and payable immediately, but upon certain
conditions such declarations may be annulled and past defaults may be waived
(except a continuing default in payment of principal, premium, if any, or
interest on such debt securities) by the holders of a majority in aggregate
principal amount of all the debt securities of all affected series then
outstanding.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption, if the Issuer determines that, as a result of any change in or
amendment to the laws, or any regulations or rulings promulgated thereunder, of
the United States or of any political subdivision or taxing authority thereof or
therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which change
or amendment becomes effective on or after the Initial Offering Date hereof, the
Issuer has or will become obligated to pay Additional Amounts, as defined below,
with respect to this Note as described below. Prior to the giving of any notice
of redemption pursuant to this paragraph, the Issuer shall deliver to the
Trustee (i) a certificate stating that the Issuer is entitled to effect such
redemption and setting forth a statement of facts showing that the conditions
precedent to the right of the Issuer to so redeem have occurred, and (ii) an
opinion of independent legal counsel satisfactory to the Trustee to such effect
based on such statement of facts; provided that no such notice of redemption
shall be given earlier than 60 calendar days prior to the earliest date on which
the Issuer would be obligated to pay such Additional Amounts if a payment in
respect of this Note were then due.
A-22
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 the face hereof, which date and the applicable
redemption price will be specified in the notice.
If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," the Issuer will, subject to certain
exceptions and limitations set forth below, pay such additional amounts (the
"Additional Amounts") to the holder of this Note who is a United States Alien as
may be necessary in order that every net payment of the principal of and
interest on this Note and any other amounts payable on this Note, after
withholding or deduction for or on account of any present or future tax,
assessment or governmental charge imposed upon or as a result of such payment by
the United States, or any political subdivision or taxing authority thereof or
therein, will not be less than the amount provided for in this Note to be then
due and payable. The Issuer will not, however, make any payment of Additional
Amounts to any holder who is a United States Alien for or on account of:
(a) any present or future tax, assessment or other governmental charge
that would not have been so imposed but for (i) the existence of any
present or former connection between such holder, or between a fiduciary,
settlor, beneficiary, member or shareholder of such holder, if such holder
is an estate, a trust, a partnership or a corporation for United States
federal income tax purposes, and the United States, including, without
limitation, such holder, or such fiduciary, settlor, beneficiary, member or
shareholder, being or having been a citizen or resident thereof or being or
having been engaged in a trade or business or present therein or having, or
having had, a permanent establishment therein or (ii) the presentation by
or on behalf of the holder of this Note for payment on a date more than 15
calendar days after the date on which such payment became due and payable
or the date on which payment thereof is duly provided for, whichever occurs
later;
(b) any estate, inheritance, gift, sales, transfer, excise or personal
property tax or any similar tax, assessment or governmental charge;
(c) any tax, assessment or other governmental charge imposed by reason
of such holder's past or present status as a personal holding company or
foreign personal holding company or controlled foreign corporation or
passive foreign investment company with respect to the United States or as
a corporation which accumulates earnings to avoid United States federal
income tax or as a private foundation or other tax-exempt organization or a
bank receiving interest under Section 881(c)(3)(A) of the Internal Revenue
Code of 1986, as amended;
(d) any tax, assessment or other governmental charge that is payable
otherwise than by withholding or deduction from payments on or in respect
of this Note;
A-23
(e) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of principal of, or interest
on, this Note, if such payment can be made without such withholding by any
other Paying Agent in a city in Western Europe;
(f) any tax, assessment or other governmental charge that would not
have been imposed but for the failure to comply with certification,
information or other reporting requirements concerning the nationality,
residence or identity of the holder or beneficial owner of this Note, if
such compliance is required by statute or by regulation of the United
States or of any political subdivision or taxing authority thereof or
therein as a precondition to relief or exemption from such tax, assessment
or other governmental charge;
(g) any tax, assessment or other governmental charge imposed by reason
of such holder's past or present status as the actual or constructive owner
of 10% or more of the total combined voting power of all classes of stock
entitled to vote of the Issuer or as a direct or indirect subsidiary of the
Issuer; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or (g).
In addition, the Issuer shall not be required to make any payment of Additional
Amounts (i) to any such holder where such withholding or deduction is imposed on
a payment to an individual and is required to be made pursuant to any law
implementing or complying with, or introduced in order to conform to, any
European Union Directive on the taxation of savings; or (ii) by or on behalf of
a holder who would have been able to avoid such withholding or deduction by
presenting this Note or the relevant coupon to another Paying Agent in a member
state of the European Union. Nor shall the Issuer pay Additional Amounts with
respect to any payment on this Note to a United States Alien who is a fiduciary
or partnership or other than the sole beneficial owner of such payment to the
extent such payment would be required by the laws of the United States (or any
political subdivision thereof) to be included in the income, for tax purposes,
of a beneficiary or settlor with respect to such fiduciary or a member of such
partnership or a beneficial owner who would not have been entitled to the
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the holder of this Note.
The Subordinated Indenture permits the Issuer and the Trustee, with the
consent of the holders of not less than a majority in aggregate principal amount
of the debt securities of all series issued under the Subordinated Indenture
then outstanding and affected (voting as one class), to execute supplemental
indentures adding any provisions to or changing in any manner the rights of the
holders of each series so affected; provided that the Issuer and the Trustee may
not, without the consent of the holder of each outstanding debt security
affected thereby, (a) extend the final maturity of any such debt security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof,
or change the currency of payment thereof, or modify or amend the provisions for
conversion of any currency into any other currency, or modify or amend the
provisions for
A-24
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 the consent of the holders of which is required for any such
supplemental indenture; provided, however, that neither this Note nor the
Subordinated Indenture may be amended to alter the subordination provisions
hereof or thereof without the written consent of each holder of Senior
Indebtedness then outstanding that would be adversely affected thereby.
Except as set forth below, if the principal, premium, if any, or interest
on this Note is payable in a Specified Currency other than U.S. dollars and such
Specified Currency is not available to the Issuer for making payments hereon due
to the imposition of exchange controls or other circumstances beyond the control
of the Issuer or is no longer used by the government of the country issuing such
currency or for the settlement of transactions by public institutions within the
international banking community, then the Issuer will be entitled to satisfy its
obligations to the holder of this Note by making such payments in U.S. dollars
on the basis of the Market Exchange Rate on the date of such payment or, if the
Market Exchange Rate is not available on such date, as of the most recent
practicable date; provided, however, that if the euro has been substituted for
such Specified Currency, the Issuer may at its option (or shall, if so required
by applicable law) without the consent of the holder of this Note effect the
payment of principal of, premium, if any, or interest 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-25
All determinations referred to above made by, or on behalf of, the Issuer
or by, or on behalf of, the Exchange Rate Agent shall be at such entity's sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on holders of Notes and coupons, if any.
So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the Notes.
The Issuer may designate other agencies for the payment of said principal,
premium and interest at such place or places (subject to applicable laws and
regulations) as the Issuer may decide. So long as there shall be such an agency,
the Issuer shall keep the Trustee advised of the names and locations of such
agencies, if any are so designated. If any law implementing or complying with,
or introduced in order to conform to, any European Union Directive on the
taxation of savings is introduced and a Paying Agent has been designated within
the European Union, the Issuer will maintain a Paying Agent in a member state of
the European Union that will not be obligated to withhold or deduct tax pursuant
to any such Directive or law.
With respect to moneys paid by the Issuer and held by the Trustee or any
Paying Agent for payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting in
any way any obligation that the Issuer may have to pay the principal of or
interest or premium, if any, on this Note as the same shall become due.
No provision of this Note or of the Subordinated Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to pay
the principal of, premium, if any, and interest on this Note at the time, place,
and rate, and in the coin or currency, herein prescribed unless otherwise agreed
between the Issuer and the registered holder of this Note.
Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of or premium, if
any, or the interest on this Note, for any claim based hereon, or otherwise in
respect hereof, or
A-26
based on or in respect of the Subordinated Indenture or any indenture
supplemental thereto, against any incorporator, shareholder, officer or
director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.
As used herein, the term "United States Alien" means any person who is, for
United States federal income tax purposes, (i) a nonresident alien individual,
(ii) a foreign corporation, (iii) a nonresident alien fiduciary of a foreign
estate or trust or (iv) a foreign partnership one or more of the members of
which is, for United States federal income tax purposes, a nonresident alien
individual, a foreign corporation or a nonresident alien fiduciary of a foreign
estate or trust.
All terms used in this Note which are defined in the Subordinated Indenture
and not otherwise defined herein shall have the meanings assigned to them in the
Subordinated Indenture.
A-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.
-----------------------------
A-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.
A-29
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 J.P. Morgan Trust Company,
National Association, 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-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 the Renewable
Note have been made:
Reduced
Principal
Principal Amount
Amount Outstanding Notation Made by
Exchanged for Following Such or on Behalf of
Date of Exchange Renewable Note Exchange Paying Agent
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
---------------- ---------------- ---------------- -------------------
A-31
Dates Referenced Herein and Documents Incorporated by Reference
8 Subsequent Filings that Reference this Filing
↑Top
Filing Submission 0000950103-04-001615 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Fri., May 17, 9:04:57.1am ET 
