EXHIBIT 4-o
[FORM OF FACE OF SECURITY]
SENIOR VARIABLE RATE RENEWABLE NOTE
REGISTERED REGISTERED
No. SRVRR Cusip
[PRINCIPAL AMOUNT],
as modified by Schedule
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.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD)
SET FORTH BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF APPLYING
THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
SENIOR VARIABLE RATE RENEWABLE
MEDIUM-TERM NOTE, SERIES C
Morgan Stanley, Dean Witter, Discover & Co., a Delaware
corporation (together with its successors and assigns, the "Issuer"), for
value received, hereby promises to pay to
, or registered assignees, the principal sum specified in Schedule I hereto on
the Initial Maturity Date specified above or, to the extent the maturity date
of any portion of the principal amount of this Note is extended in accordance
with the procedures set forth below to an Extended Maturity Date, as defined
below, on such Extended Maturity Date (except to the extent such portion is
redeemed prior to such Extended Maturity Date) and to pay interest on the
principal amount hereof outstanding from time to time, from the Interest
Accrual Date specified above at a rate per annum equal to the Initial Interest
Rate specified above until the Initial Interest Reset Date specified above,
and thereafter at a rate per annum determined in accordance with the
provisions specified on the reverse hereof until (a) the principal hereof is
paid or duly made available for payment or (b) this Note has been canceled in
accordance with the provisions set forth below.
The Issuer will pay interest in arrears 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 and such
next Business Day falls in the next calendar month, the Interest Payment Date,
Maturity Date or redemption date shall be the immediately preceding day that
is a Business Day. As used herein, "Extended Maturity Date" means the
Maturity Extension Date (as specified above) occurring in the month twelve
months after the most recent Election Date on which the maturity of this Note
has been extended pursuant to the provisions set forth below.
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 the Interest Accrual Date,
until, but excluding the date (a) the principal hereof has been paid or duly
made available for payment or (b) this Note has been canceled in accordance
with the provisions set forth below. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, subject to
certain exceptions described herein, be paid to the person in whose name this
Note (or one or more predecessor Notes) is registered at the close of business
on the date 15 calendar days prior to such Interest Payment Date (whether or
not a Business Day) (each such date a "Record Date"); provided, however, that
interest payable on the Maturity Date (or any redemption date) shall be
payable to the person to whom the principal hereof shall be payable.
On each Election Date, the maturity of this Note shall be
extended to the Maturity Extension Date occurring in the month twelve months
following such Election Date, unless, in any such case, the holder hereof
elects to terminate the automatic extension of the maturity hereof or of any
portion hereof having a principal amount of $1,000 or any larger multiple of
$1,000 in excess thereof by delivering to the Trustee 15 days prior to the
applicable Election Date (i) this Note with the form entitled "Option to Elect
Termination of Automatic Extension" below duly completed or (ii) a telegram,
telex, facsimile transmission or a letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or
a commercial bank or a trust company in the United States of America setting
forth the name of the holder of this Note, the principal amount hereof, the
certificate number of this Note or a description of this Note's tenor or
terms, a statement that the option to elect termination of automatic extension
is being exercised thereby, the principal amount hereof with respect to which
such option is being exercised and a guarantee that this Note with the form
entitled "Option to Elect Termination of Automatic Extension" below duly
completed will be received by the Trustee no later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter;
provided that such telegram, telex, facsimile transmission or letter shall not
be effective unless this Note and such form duly completed are received by the
Trustee by such fifth Business Day. Such option may be exercised by the
holder for less than the entire principal amount hereof provided that the
principal amount for which such option is not exercised is at least $1,000 or
any larger amount that is an integral multiple of $1,000. If the option to
terminate the automatic extension of the maturity of any portion hereof is
exercised, a new Note or Notes in the form attached hereto as Exhibit A (each,
a "Short-Term Note") for the principal amount hereof for which such option was
exercised and having as its or their "Maturity Date" (as such term is used in
each such Short-Term Note) the Maturity Extension Date occurring in the month
twelve months after such Election Date shall be issued on such Election Date
in the name of the holder hereof and Schedule I hereto shall be annotated as
of such Election Date to reflect the corresponding decrease in the principal
amount hereof. If any exercise of the option to terminate the automatic
extension of the maturity hereof causes the principal amount of this Note to
be reduced to zero, this Note shall nevertheless not be canceled until the
date on which all outstanding Short-Term Notes issued in exchange for this
Note shall have been paid in full.
Notwithstanding the foregoing, the maturity of this Note shall
not be extended beyond the Final Maturity Date specified above.
If the holder of any Short-Term Note elects to exchange all or
a portion of such Short-Term Note for an interest in this Note in accordance
with the terms of such Short-Term Note, Schedule I hereto shall be annotated
on the date of such exchange to reflect the corresponding increase in the
principal amount hereof.
Payment of the principal of this Note, any premium and the
interest due at the Maturity Date (or any redemption date), unless this Note
is denominated in a Specified Currency other than U.S. dollars and is to be
paid in whole or in part in such Specified Currency, will be made in
immediately available funds upon surrender of this Note at the office or
agency of the Trustee, as defined on the reverse hereof, maintained for that
purpose in the Borough of Manhattan, The City of New York, or at the office or
agency of such other paying agent as the Issuer may determine in U.S. dollars.
U.S. dollars payments of interest, other than interest due at maturity or any
date of redemption, will be made by United States dollar check mailed to the
address of the person entitled thereto as such address shall appear in the
Note register. A holder of U.S. $10,000,000 or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which
is payable in U.S. dollars, will be entitled to receive payments of interest,
other than interest due at maturity or any date of redemption, by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Trustee in writing not less than 15
calendar days prior to the applicable Interest Payment Date.
If this Note is denominated in a Specified Currency other than
U.S. dollars, and the holder does not elect (in whole or in part) to receive
payment in U.S. dollars pursuant to the next succeeding paragraph, payments of
interest, principal or any premium with regard to this Note will be made by
wire transfer of immediately available funds to an account maintained by the
holder hereof with a bank located outside the United States if appropriate
wire transfer instructions have been received by the Paying Agent in writing
not less than 15 calendar days prior to the applicable payment date, provided
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.
Unless otherwise indicated herein, the holder of this Note
denominated in a Specified Currency other than U.S. dollars, may elect to
receive all or a portion of payments on this Note in U.S. dollars by
transmitting a written request to the Paying Agent, on or prior to the 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 or at least ten days prior to the Maturity Date or any
redemption date, as the case may be.
If the holder elects to receive all or a portion of payments of
principal of and any premium 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 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 U.S.
dollars for the Specified Currency 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.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Senior Indenture, as
defined on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
DATED: MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:
--------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned
Senior Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
--------------------------
Authorized Officer
[REVERSE OF SECURITY]
This Note is one of a duly authorized issue of the Senior
Medium-Term Notes, Series C, having maturities more than nine months from the
date of issue (the "Notes") of the Issuer. The Notes are issuable under a
Senior Indenture, dated as of April 15, 1989, as supplemented by a First
Supplemental Senior Indenture dated as of May 15, 1991 and a Second
Supplemental Senior Indenture dated as of April 15, 1996, between Morgan
Stanley Group Inc. (as predecessor of the Issuer) and The Chase Manhattan Bank
(formerly known as Chemical Bank), as Trustee (the "Trustee," which term
includes any successor trustee under the Senior Indenture) as further
supplemented by a Third Supplemental Senior Indenture dated as of June 1, 1997
between the Issuer and the Trustee (as so supplemented the "Senior
Indenture"), to which Senior Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities of the Issuer, the Trustee and holders of the
Notes and the terms upon which the Notes are, and are to be, authenticated and
delivered. The terms of individual Notes may vary with respect to interest
rates, interest rate formulas, issue dates, maturity dates, or otherwise, all
as provided in the Senior Indenture. To the extent not inconsistent herewith,
the terms of the Senior Indenture are hereby incorporated by reference herein.
Unless otherwise provided 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.
Unless otherwise indicated on the face of this Note, this Note
may not be redeemed prior to the Maturity Date. If so indicated on the face
of this Note, this Note may be redeemed in whole or in part at the option of
the Issuer on 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 days prior to the date fixed for redemption, subject to all the conditions
and provisions of the Senior Indenture. In the event of redemption of this
Note in part only, a new Note or Notes for the amount of the unredeemed
portion hereof shall be issued in the name of the holder hereof upon the
cancellation hereof.
This Note will bear interest at the rate determined in
accordance with the applicable provisions below by reference to the Base Rate
specified on the face hereof based on the Index Maturity, if any, specified on
the face hereof (i) (A) plus or minus the Spread, if any, specified on the
face hereof and (B) for any period on or after the Incremental Spread
Commencement Date, if any, specified on the face hereof, plus or minus the
Incremental Spread, if any, specified on the face hereof or (ii) multiplied by
the Spread Multiplier, if any, specified on the face hereof. Commencing with
the Initial Interest Reset Date specified on the face hereof, the rate at
which interest on this Note is payable shall be reset as of each Interest
Reset Date (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. 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
next preceding Business Day. As used herein, "Business Day" means any day,
other than a Saturday or Sunday, that is neither a legal holiday nor a day on
which banking institutions are authorized or required by law or regulation to
close in The City of New York and, with respect to Notes bearing interest
calculated by reference to LIBOR, in the City of London.
The Interest Determination Date pertaining to an Interest Reset
Date for Notes bearing interest calculated by reference to the CD Rate,
Commercial Paper Rate, Federal Funds Rate, Prime Rate and CMT Rate will be the
second Business Day next preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date for Notes bearing
interest calculated by reference to LIBOR shall be the second London Banking
Day preceding 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; provided, however, that if as a result of a legal
holiday an auction is held on the Friday of the week preceding such Interest
Reset Date, the related 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.
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 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, the CD Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate on such
date for negotiable 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)," or,
if not so published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the CD Rate will be the rate
on such Interest Determination Date for negotiable certificates of deposit of
the Index Maturity specified on the face hereof as published by the Federal
Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" ("Composite Quotations") under the
heading "Certificates of Deposit." If neither of such rates is published by
3:00 P.M., New York City time, on such Calculation Date, then the CD Rate on
such Interest Determination Date will be calculated by the Calculation Agent
referred to on the face hereof and will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such
Interest Determination Date for certificates of deposit in the denomination of
$5,000,000 with a remaining maturity closest to the Index Maturity specified
on the face hereof of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money
center banks of the highest credit standing in the market for negotiable
certificates of deposit; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate in effect for the applicable period will be the same as
the CD Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable hereon 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, the Commercial
Paper Rate with respect to this Note shall be determined on each Interest
Determination Date and shall be the Money Market Yield (as defined herein) of
the rate on such date for commercial paper having the Index Maturity specified
on the face hereof, as such rate shall be published in H.15(519) under the
heading "Commercial Paper," or if not so published prior to 9:00 A.M., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Commercial Paper Rate shall be the Money Market Yield
of the rate on such Interest Determination Date for commercial paper of the
Index Maturity specified on the face hereof as published in Composite
Quotations under the heading "Commercial Paper." If neither of such rates is
published by 3:00 P.M., New York City time, on such Calculation Date, then the
Commercial Paper Rate shall be the Money Market Yield of the arithmetic mean
of the offered rates as of 11:00 A.M., New York City time, on such Interest
Determination Date of three leading dealers in commercial paper in The City of
New York selected by the Calculation Agent 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 rating
agency; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate in effect for the applicable period will be the same as
the Commercial Paper Rate for the immediately preceding Interest Reset Period
(or, if there was no such Interest Reset Period, the rate of interest payable
hereon shall be the Initial Interest Rate).
"Money Market Yield" shall be the yield calculated in
accordance with the following formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the applicable per annum 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 Federal Funds Rate. If the Base Rate
specified on the face hereof is the Federal Funds Rate, the Federal Funds Rate
with respect to this Note shall be determined on each Interest Determination
Date and shall be the rate on such date for Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)," or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the Federal Funds Rate will be the rate
on such Interest Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate." If neither of such rates is
published by 3:00 P.M., New York City time, on such Calculation Date, the
Federal Funds Rate for such Interest Determination Date will be calculated by
the Calculation Agent and will be the arithmetic mean of the rates for the
last transaction in overnight Federal funds as of 11:00 A.M., New York City
time, on such Interest Determination Date arranged by three leading brokers in
Federal funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate in effect for the applicable period will be the same as the Federal
Funds Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable hereon 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 determined on each
Interest Determination Date as follows:
(i) As of the Interest Determination Date, the Calculation
Agent will determine (a) if "LIBOR Reuters" is specified as the
Reporting Service on the face hereof, the arithmetic mean of the
offered rates (unless the specified Designated LIBOR Page (as defined
below) by its terms provides only for a single rate, in which case such
single rate shall be used) for deposits in the London interbank market
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 such Interest Determination Date, which appear on
the Designated LIBOR Page at approximately 11:00 a.m., London time, on
such Interest Determination Date, if at least two such offered rates
appear (unless, as aforesaid, only a single rate is required) on such
Designated LIBOR Page, or (b) if "LIBOR Telerate" is specified as the
Reporting Service on the face hereof, the rate for deposits in the
Index Currency for the period of the Index Maturity, each as designated
on the face hereof, commencing on the second London Banking Day
following such Interest Determination Date (or, if pounds sterling is
the Index Currency, commencing on such Interest Determination Date)
that appears on the Designated LIBOR Page at approximately 11:00 a.m.,
London time, on such Interest Determination Date. If fewer than two
offered rates appear (if "LIBOR Reuters" is specified as the Reporting
Service on the face hereof and calculation of LIBOR is based on the
arithmetic mean of the offered rates) or if no rate appears (if the
Reporting Service on the face hereof specifies either (x) "LIBOR
Reuters" and the Designated LIBOR Page by its terms provides only for a
single rate or (y) "LIBOR Telerate"), LIBOR in respect of that Interest
Determination Date will be determined as if the parties had specified
the rate described in (ii) below.
(ii) With respect to an Interest Determination Date on which
fewer than two offered rates appear (if "LIBOR Reuters" is specified as
the Reporting Service on the face hereof and calculation of LIBOR is
based on the arithmetic mean of the offered rates) or no rate appears
(if the Reporting Service on the face hereof specifies either (x)
"LIBOR Reuters" and the Designated LIBOR Page by its terms provides
only for a single rate or (y) "LIBOR Telerate"), the Calculation Agent
will 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 quotations 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 such Interest Determination Date (or, if pounds sterling is
the Index Currency, commencing on such Interest Determination Date), to
prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on such Interest Determination Date and in a principal
amount equal to an amount of not less than U.S.$1 million (or the
equivalent in the Index Currency) (if the Index Currency is not the
U.S. dollar)) that is representative of a single transaction in such
Index Currency in such market at such time. If at least two such
quotations are provided, LIBOR determined on such Interest
Determination Date will be the arithmetic mean of such quotations. If
fewer than two quotations are provided, LIBOR determined on such
Interest Determination Date will be the arithmetic mean of rates quoted
at approximately 11:00 a.m. (or such other time specified on the face
hereof), in the applicable principal financial center for the country
of the Index Currency on such Interest Determination Date, by three
major banks in such principal financial center selected by the
Calculation Agent (after consultation with the Issuer) on such Interest
Determination Date for loans in the Index Currency to leading European
banks, for the period of the Index Maturity specified on the face
hereof commencing on the second London Banking Day immediately
following such Interest Determination Date (or, if pounds sterling is
the Index Currency, commencing on such Interest Determination Date) and
in a principal amount of not less than U.S.$1 million (or the
equivalent in the Index Currency) (if the Index Currency is not the
U.S. dollar)) that is representative of a single transaction in such
Index Currency in such market at such time; provided, however, that if
the banks selected as aforesaid by the Calculation Agent are not
quoting rates as mentioned in this sentence, "LIBOR" for such Interest
Reset Period will be the same as LIBOR for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period,
the rate of interest payable on the LIBOR Notes for which LIBOR is
being determined shall be the Initial Interest Rate). "Index Currency"
means the currency (including composite currencies) specified as Index
Currency on the face hereof. If no such currency is specified as Index
Currency 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 Monitor Money Rates Service for the purpose of displaying
the London interbank rates of major banks for the applicable Index
Currency, or (b) if "LIBOR Telerate" is designated as the Reporting
Service on the face hereof, the display on the Dow Jones Telerate
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 as the Reporting Service on the
face hereof, LIBOR for the applicable Index Currency will be determined
as if LIBOR Telerate (and, if the U.S. dollar is the Index Currency,
Page 3750) had been specified.
Determination of Prime Rate. If the Base Rate specified on the
face hereof is the Prime Rate, the Prime Rate with respect to this Note shall
be determined on each Interest Determination Date and shall be the rate set
forth in H.15(519) for such date opposite the caption "Bank Prime Loan." If
such rate is not yet published by 9:00 a.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Prime
Rate for such Interest Determination Date will be the arithmetic mean of the
rates of interest publicly announced by each bank named on the Reuters Screen
USPRIME1 Page as such bank's prime rate or base lending rate as in effect for
such Interest Determination Date as quoted on the Reuters Screen USPRIME1 Page
on such Interest Determination Date, or, if fewer than four such rates appear
on the Reuters Screen USPRIME1 Page for such Interest Determination Date, the
rate shall 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 such Interest Determination Date by at least two of the three
major money center banks in The City of New York selected by the Calculation
Agent from which quotations are requested. If fewer than two quotations are
provided, the Prime Rate shall be calculated by the Calculation Agent and shall
be determined as the arithmetic mean on the basis of the prime rates in The
City of New York by the appropriate number of substitute banks or trust
companies organized and doing business under the laws of the United States, or
any State thereof, in each case having total equity capital of at least U.S.
$500 million and being subject to supervision or examination by Federal or
State authority, selected by the Calculation Agent to quote such rate or
rates; provided, however, that if the banks or trust companies selected as
aforesaid by the Calculation Agent are not quoting rates as set forth above,
the "Prime Rate" in effect for such Interest Reset Period will be the same as
the Prime Rate for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the rate of interest payable hereon
shall be the Initial Interest Rate).
"Reuters Screen USPRIME1 Page" means the display designated as
Page "USPRIME1" on the Reuters Monitor Money Rates Service (or such other page
that may replace the USPRIME1 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 the Treasury Rate, the Treasury Rate with respect to this
Note shall be determined on each Interest Determination Date and shall be the
rate for the auction held on such date of direct obligations of the United
States ("Treasury Bills") having the Index Maturity specified on the face
hereof, as published in H.15(519) under the heading "Treasury Bills--auction
average (investment)," or if not so published by 9:00 a.m., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
the auction average rate on such Interest Determination Date (expressed as a
bond equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury Bills having the Index Maturity specified on the face hereof are not
published or reported as provided above by 3:00 P.M., New York City time, on
such Calculation Date or if no such auction is held on such Interest
Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) calculated using the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time,
on such Interest Determination Date, of three leading primary United States
government securities dealers 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; provided, however, that if the dealers selected
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate for such Interest Reset Date will be the same as
the Treasury Rate for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the rate of interest payable hereon
shall be the Initial Interest Rate).
Determination of CMT Rate. If the Base Rate specified on the
face hereof is the CMT Rate, the CMT Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate displayed
for the Index Maturity specified on the face hereof on the Designated CMT
Telerate Page (as defined below) under the caption ". . . Treasury Constant
Maturities . . .Federal Reserve Board Release H.15" under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT
Telerate Page is 7055, the rate on such Interest Determination Date and (ii)
if the Designated CMT Telerate Page is 7052, the week or the month, as
applicable, ended immediately preceding the week in which the related Interest
Determination Date occurs. If such rate is no longer displayed on the
relevant page, or is not displayed by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the CMT
Rate for such Interest Determination Date will be such Treasury Constant
Maturity rate for the Designated CMT Maturity Index as published in the
relevant H.15(519). If such rate is no longer published, or is not published
by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such Interest Determination Date will be such Treasury Constant
Maturity rate for the Designated CMT Maturity Index (or other United States
Treasury rate for the Designated CMT Maturity Index) for the Interest
Determination Date with respect to the related Interest Reset 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). If such
information is not provided by 3:00 P.M., New York time, on the related
Calculation Date, then the CMT Rate for the Interest Determination Date will
be calculated by the Calculation Agent and will 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
United States government securities dealers (each, a "Reference Dealer") in
The City of New York (which may include affiliates of the Issuer) selected by
the Calculation Agent (from five such Reference Dealers selected by the
Calculation Agent, after consultation with the Issuer, and eliminating 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 and remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. If the Calculation Agent
cannot obtain three such Treasury Notes quotations, the CMT Rate for such
Interest Determination Date will be calculated by the Calculation Agent and
will 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 (from five such Reference Dealers selected by the Calculation Agent,
after consultation with the Issuer, and eliminating 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 Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in an amount of at least $100,000,000. If
three or four (and not five) of such Reference Dealers are quoting as
described above, then the CMT Rate will be based on the arithmetic mean of the
offer prices obtained and neither the highest nor the lowest of such quotes
will be eliminated; provided, however, that if fewer than three Reference
Dealers selected by the Calculation Agent are quoting as described herein, the
CMT Rate for such Interest Reset Date will be the same as the CMT Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the rate of interest payable hereon shall be the Initial
Interest Rate). If two Treasury Notes with an original maturity as described
in the second preceding sentence 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 will be used.
"Designated CMT Telerate Page" means the display on the Dow
Jones Telerate Service specified on the face hereof (or any other page as may
replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)), for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" shall be the original period to
maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be two years.
Notwithstanding the foregoing, the interest rate hereon shall
not be greater than the Maximum Interest Rate, if any, or less than the
Minimum Interest Rate, if any, specified on the face hereof. The Calculation
Agent shall calculate the interest rate hereon in accordance with the
foregoing on or before each Calculation Date. The interest rate on this Note
will in no event be higher than the maximum rate permitted by New York law, as
the same may be modified by United States Federal law of general application.
At the request of the holder hereof, the Calculation Agent will
provide to the holder hereof the interest rate hereon then in effect and, if
determined, the interest rate that will become effective as of the next
Interest Reset Date.
Unless otherwise indicated on the face hereof, interest
payments on this Note shall be the amount of interest accrued from and
including the Interest Accrual Date or from and including the last date to
which interest has been paid or duly provided for to but, excluding the
Interest Payment Dates or Maturity Date (or any earlier redemption date), as
the case may be. Accrued interest hereon for any period shall be the sum of
the products obtained by multiplying the interest factor calculated for each
day in such period by the principal amount hereof shown on Schedule I hereto
for each such day; provided that for the purpose of calculating the amount of
interest payable hereon, any decrease in the principal amount hereof
attributable to an exercise of the option to terminate the automatic extension
of the maturity hereof shall be effective on and as of the Election Date
corresponding to the exercise of such option, and any increase in the
principal amount hereof shall be effective on and as of the Interest Payment
Date immediately 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 by 360 if the Base Rate is CD Rate, Commercial Paper Rate, Federal
Funds Rate, Prime Rate or LIBOR, as specified on the face hereof, or by the
actual number of days in the year if the Base Rate is the Treasury Rate or the
CMT Rate, as specified on the face hereof. 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
(.0000001), with five one-millionths of a percentage point rounded upward, and
all dollar amounts used in or resulting from such calculation on this Note will
be rounded to the nearest cent (with one-half cent rounded upward). The
interest rate in effect on any Interest Reset Date will be the applicable rate
as reset on such date. The interest rate applicable to any other day is the
interest rate from the immediately preceding Interest Reset Date (or, if none,
the Initial Interest Rate).
This Note, and all the obligations of the Issuer hereunder are
direct, unsecured obligations of the Issuer and rank without preference or
priority among themselves and pari passu with all other existing and future
unsecured and unsubordinated indebtedness of the Issuer, subject to certain
statutory exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or
exchange hereof, is issuable only in fully registered form, without coupons,
and is issuable only in denominations of U.S. $1,000 and any integral multiple
of U.S. $1,000 in excess thereof. If this Note is denominated in a Specified
Currency other than U.S. dollars, then, unless a higher minimum denomination
is required by applicable law, it is issuable only in denominations of the
equivalent of U.S. $1,000 (rounded to an integral multiple of 1,000 units of
such Specified Currency), or an amount in excess thereof which is an integral
multiple of 1,000 units of such Specified Currency, as determined by reference
to the noon dollar buying rate in New York City 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; provided, however, in the case of ECUs, the Market Exchange Rate
shall be the rate of exchange determined by the Commission of the European
Communities (or any successor thereto) as published by the Official Journal of
the European Communities, or any successor publication, on the Business Day
immediately preceding the date of issuance.
The Trustee has been appointed registrar for the Notes, and the
Trustee will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by the registered holder hereof in person or by the
holder's attorney duly authorized in writing, and thereupon the Trustee shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like
aggregate principal amount in authorized denominations, subject to the terms
and conditions set forth herein; provided, however, that the Trustee will not
be required (i) to register the transfer of or exchange any Note that has been
called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the Senior
Indenture with respect to the redemption of Notes. Notes are exchangeable at
said office for other Notes of other authorized denominations of equal
aggregate principal amount having identical terms and provisions. All such
exchanges and transfers of Notes will be free of charge, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge in connection therewith. All Notes surrendered for exchange shall be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and executed by the registered holder in person or by the holder's
attorney duly authorized in writing. The date of registration of any Note
delivered upon any exchange or transfer of Notes shall be such that no gain or
loss of interest results from such exchange or transfer.
In case this Note shall at any time become mutilated, defaced
or be destroyed, lost or stolen and this Note or evidence of the loss, theft
or destruction thereof (together with the indemnity hereinafter referred to
and such other documents or proof as may be required in the premises) shall
be delivered to the Trustee, a new Note of like tenor will be issued by the
Issuer in exchange for this Note, but, if this Note is destroyed, lost or
stolen, only upon receipt of evidence satisfactory to the Trustee and the
Issuer that this Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.
The Senior Indenture provides that, (a) if an Event of Default
(as defined in the Senior Indenture) due to the default in payment of
principal of, premium, if any, or interest on, any series of debt securities
issued under the Senior Indenture, including the series of Senior Medium-Term
Notes of which this Note forms a part, or due to the default in the
performance or breach of any other covenant or warranty of the Issuer
applicable to the debt securities of such series but not applicable to all
outstanding debt securities issued under the Senior Indenture shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the debt securities of each affected series (voting
as a single class) may then declare the principal of all debt securities of
all such series and interest accrued thereon to be due and payable immediately
and (b) if an Event of Default due to a default in the performance of any
other of the covenants or agreements in the Senior Indenture applicable to all
outstanding debt securities issued thereunder, including this Note, or due to
certain events of bankruptcy, insolvency and reorganization of the Issuer,
shall have occurred and be continuing, either the Trustee or the holders of
not less than 25% in principal amount of all debt securities issued under the
Senior Indenture then outstanding (treated as one class) 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 principal amount of the debt securities of all
affected series then outstanding.
The Senior Indenture permits the Issuer and the Trustee, with
the consent of the holders of not less than a majority in aggregate principal
amount of the debt securities of all series issued under the Senior Indenture
then outstanding and affected (voting as one class), to execute supplemental
indentures adding any provisions to or changing in any manner the rights of
the holders of each series so affected; provided that the Issuer and the
Trustee may not, without the consent of the holder of each outstanding debt
security affected thereby, (a) extend the final maturity of any such debt
security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable on
redemption thereof, or change the currency of payment thereof, or impair or
affect the rights of any holder to institute suit for the payment thereof
without the consent of the holder of each debt security so affected 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.
Except as set forth below, if the principal of, premium, if
any, or interest on, this Note is payable in a Specified Currency other than
U.S. dollars and such Specified Currency is not available to the Issuer for
making payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking
community, then the Issuer will be entitled to satisfy its obligations to the
holder of this Note by making such payments in U.S. dollars on the basis of
the Market Exchange Rate on the date of such payment or, if the Market
Exchange Rate is not available on such date, as of the most recent practicable
date; provided, however, that if such Specified Currency is replaced by a
single European currency (expected to be named the Euro), the payment of
principal of, premium, if any, or interest on any Note denominated in such
currency shall be effected in the new single European currency in conformity
with legally applicable measures taken pursuant to, or by virtue of, the treaty
establishing the European Community (the "EC"), as amended by the treaty on
European Union (as so amended, the "Treaty"). Any payment made under such
circumstances in U.S. dollars (or, if applicable, such new single European
currency) where the required payment is in a Specified Currency other than
U.S. dollars will not constitute an Event of Default.
Subject to the provisions below, the value of the ECU, in which
the Notes may be denominated or may be payable, is equal to the value of the
ECU that is from time to time used as the unit of account of the EC. If the
ECU becomes a currency in its own right in accordance with the Treaty, all
references to ECU in the Notes shall be construed as references to such
currency.
With respect to each due date for the payment of principal of,
or interest on, the Notes on or after the first business day in Brussels on
which the ECU ceases to be used as the unit of account of the EC, and has not
become a currency in its own right replacing all or some of the currencies of
the member States of the EC, the Company shall choose a substitute currency
(the "Chosen Currency"), which may be any currency which was, on the last day
on which the ECU was used as the unit of account of the EC, a component
currency of the ECU or U.S. dollars, in which all payments due on or after
that date with respect to the Notes and coupons shall be made. Notice of the
Chosen Currency so selected shall be provided by first class mail to each
holder at the address of such holder which appears on the books maintained by
the registrar and to the Paying Agent. The amount of each payment in such
Chosen Currency shall be computed on the basis of the equivalent of the ECU in
that currency, determined as described below, as of the fourth business day in
Brussels prior to the date on which such payment is due.
On the first business day in Brussels on which the ECU ceases
to be used as the unit of account of the EC, and has not become a currency in
its own right replacing all or some of the currencies of the member States of
the EC, the Company shall select a Chosen Currency in which all payments with
respect to Notes and coupons having a due date prior thereto but not yet
presented for payment with respect to Notes and coupons having a due date
prior thereto but not yet presented for payment are to be made. The amount of
each payment in such Chosen Currency shall be computed on the basis of the
equivalent of the ECU in that currency, determined as described below, as of
such first business day.
The equivalent of the ECU in the relevant Chosen Currency as of
any date (the "Day of Valuation") shall be determined by, or on behalf of, the
Exchange Rate Agent on the following basis. The amounts and components
composing the ECU for this purpose (the "Components") shall be the amounts and
components that composed the ECU as of the last date on which the ECU was used
as the unit of account of the EC. The equivalent of the ECU in the Chosen
Currency shall be calculated by, first, aggregating the U.S. dollar
equivalents of the Components; and then, in the case of a Chosen Currency
other than U.S. dollars, using the rate used for determining the U.S. dollar
equivalent of the Components in the Chosen Currency as set forth below,
calculating the equivalent in the Chosen Currency of such aggregate amount in
U.S. dollars.
The "Exchange Rate Agent" shall be Morgan Stanley & Co.
Incorporated, unless otherwise indicated on the face hereof.
The U.S. dollar equivalent of each of the Components shall be
determined by, or on behalf of, the Exchange Rate Agent on the basis of the
middle spot delivery quotations prevailing at 2:30 P.M., Brussels time, on the
Day of Valuation, as obtained by, or on behalf of, the Exchange Rate Agent
from one or more major banks, as selected by the Company, in the country of
issue of the component currency in question.
If for any reason no direct quotations are available for a
Component as of a Day of Valuation from any of the banks selected for this
purpose, in computing the U.S. dollar equivalent of such Component, the
Exchange Rate Agent shall (except as provided below) use the most recent direct
quotations for such Component obtained by it or on its behalf, provided that
such quotations were prevailing in the country of issue not more than two
Business Days before such Day of Valuation. If such most recent quotations
were so prevailing in the country of issue more than two Business Days before
such Day of Valuation, the Exchange Rate Agent shall determine the U.S. dollar
equivalent of such Component on the basis of cross rates derived from the
middle spot delivery quotations for such component currency and for the U.S.
dollar prevailing at 2:30 P.M., Brussels time, on such Day of Valuation, as
obtained by, or on behalf of, the Exchange Rate Agent from one or more major
banks, as selected by the Company, in a country other than the country of
issue of such component currency. Notwithstanding the foregoing, the Exchange
Rate Agent shall determine the U.S. dollar equivalent of such Component on the
basis of such cross rates if the Company or such agent judges that the
equivalent so calculated is more representative than the U.S. dollar equivalent
calculated as provided in the first sentence of this paragraph. Unless
otherwise specified by the Company, if there is more than one market for
dealing in any component currency by reason of foreign exchange regulations or
for any other reason, the market to be referred to in respect of such currency
shall be that upon which a non-resident issuer of securities denominated in
such currency would purchase such currency in order to make payments in
respect of such securities.
Payments in the Chosen Currency will be made at the specified
office of a paying agent in the country of the Chosen Currency, or, if none,
or at the option of the holder, at the specified office of any Paying Agent
either by a check drawn on, or by transfer to an account maintained by the
holder with, a bank in the principal financial center of the country of the
Chosen Currency.
All determinations referred to above made by, or on behalf of,
the Company 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 to the extent permitted by law for all purposes and binding on the
holder of this Note 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.
With respect to moneys paid by the Issuer and held by the
Trustee for the payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee shall notify the
holders of such Notes that such moneys shall be repaid to the Issuer and any
person claiming such moneys shall thereafter look only to the Issuer for
payment thereof and (ii) such moneys shall be so repaid to the Issuer. Upon
such repayment all liability of the Trustee with respect to such moneys shall
thereupon cease, without, however, limiting in any way any obligation that the
Issuer may have to pay the principal of or interest or premium, if any, on
this Note as the same shall become due.
No provision of this Note or of the Senior Indenture shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on this
Note at the time, place, and rate, and in the coin or currency, herein
prescribed unless otherwise agreed between the Issuer and the registered
holder of this Note.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the holder in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and none of the Issuer,
the Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of,
premium, if any, or the interest on this Note, for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Senior Indenture
or any indenture supplemental thereto, against any incorporator, shareholder,
officer or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
All terms used in this Note which are defined in the Senior
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Senior Indenture.
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 _______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act ___________________________
(State)
Additional abbreviations may also be used though not in the
above list.
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FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
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[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
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[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:
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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.
OPTION TO ELECT TERMINATION OF AUTOMATIC EXTENSION
The undersigned hereby elects to terminate the automatic
extension of the maturity of the within Note (or the portion thereof specified
below) with the effect provided in the within Note by surrendering the within
Note to the Trustee at The Chase Manhattan Bank (formerly known as Chemical
Bank), 55 Water Street, New York, New York 10041, Attention: Corporate Trustee
Administration Department, 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.
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:
EXHIBIT A TO SENIOR VARIABLE RATE RENEWABLE NOTE
[FORM OF FACE OF SECURITY]
REGISTERED REGISTERED
No. SRVRR Cusip
U.S. $_____________
Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since
the registered owner hereof, Cede & Co., has an interest herein.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD)
SET FORTH BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF APPLYING
THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
SENIOR VARIABLE RATE RENEWABLE
MEDIUM-TERM NOTE, SERIES C
Morgan Stanley, Dean Witter, Discover & Co., a Delaware
corporation (together with its successors and assigns, the "Issuer"), for
value received, hereby promises to pay to
, or registered assignees, the principal sum specified in Schedule I hereto on
the Maturity Date specified above and to pay interest on the principal amount
hereof outstanding from time to time, from the Interest Accrual Date specified
above at a rate per annum equal to the Initial Interest Rate, as defined
below, until the Initial Interest Reset Date specified above, and thereafter
at a rate per annum determined in accordance with the provisions specified on
the reverse hereof until the earlier of (a) the date on which the principal
hereof is paid or duly made available for payment and (b) the Interest Payment
Date immediately preceding the date on which the principal amount hereof is
reduced to zero, in each case, together with the unpaid amount of interest, if
any, payable on the principal amount hereof during the period that the
Issuer's obligation to pay such principal amount was evidenced by a
predecessor Note that provided for the automatic extension of the maturity
thereof (the "Renewable Note"), which amount shall be payable on the first
date succeeding the Interest Accrual Date specified above on which interest on
this Note is paid and shall be payable to the person receiving such interest
payment. The Issuer will pay interest hereon in arrears 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 and such next Business Day falls in the next calendar
month, the Interest Payment Date or Maturity Date shall be the immediately
preceding day that is a Business Day. As used herein, "Initial Interest Rate"
means the rate of interest determined in accordance with the provisions of the
Renewable Note (i) on the Interest Reset Date with respect to the Renewable
Note occurring on the Interest Accrual Date specified above or (ii) if no such
Interest Reset Date occurred on the Interest Accrual Date, on the Interest
Reset Date with respect to the Renewable Note occurring immediately preceding
the Interest Accrual Date.
Interest on this Note will accrue from and including the most
recent date to which interest has been paid or duly provided for, or, if no
interest has been paid or duly provided for, from 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 on the Maturity Date
will be payable to the person to whom the principal hereof shall be payable.
On any date following the Interest Accrual Date and prior to
the Record Date immediately preceding the Maturity Date, the holder hereof may
elect to exchange this Note or any portion hereof having a principal amount of
$1,000 or any larger multiple of $1,000 in excess thereof for an interest in
the Renewable Note equal to the principal amount hereof so exchanged by
delivering to the Trustee (i) this Note with the form entitled "Option to
Exchange" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a
trust company in the United States of America setting forth the name of the
holder of this Note, the principal amount hereof, the certificate number of
this Note or a description of this Note's tenor or terms, a statement that the
option to exchange is being exercised thereby, the principal amount hereof
with respect to which such option is being exercised and a guarantee that this
Note with the form entitled "Option to Exchange" below duly completed will be
received by the Trustee no later than five Business Days after the date of
such telegram, telex, facsimile transmission or letter; provided that such
telegram, telex, facsimile transmission or letter shall not be effective
unless this Note and such form duly completed are received by the Trustee by
such fifth Business Day. Such option may be exercised by the holder for less
than the entire principal amount hereof provided that the principal amount for
which such option is not exercised is at least $1,000 or any larger amount
that is an integral multiple of $1,000. Notwithstanding the foregoing, the
option to exchange all or a portion of this Note for an interest in the
Renewable Note may not be exercised during the period from and including a
Record Date to but excluding the immediately succeeding Interest Payment Date.
If the option to exchange any portion hereof is exercised, then, on the date
of such exchange, Schedule I hereto shall be annotated to reflect the
corresponding decrease in the principal amount hereof, and Schedule I to the
Renewable Note shall be annotated to reflect the corresponding increase in the
principal amount thereof.
Payment of the principal of this Note, any premium and the
interest due at the Maturity Date (or any redemption date), unless this Note
is denominated in a Specified Currency other than U.S. dollars and is to be
paid in whole, or in part in such Specified Currency, will be made in
immediately available funds upon surrender of this Note at the office or
agency of the Trustee, as defined on the reverse hereof, maintained for that
purpose in the Borough of Manhattan, The City of New York, or at the office or
agency of such other paying agent as the Issuer may determine in U.S. dollars.
U.S. dollar payments of interest, other than interest due at maturity or any
date of redemption, will be made by United States dollar check mailed to the
address of the person entitled thereto as such address shall appear in the
Note register. A holder of U.S. $10,000,000 or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which
is paid in U.S. dollars, will be entitled to receive payments of interest,
other than interest due at maturity or any date of redemption, by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Trustee in writing not less than 15
calendar days prior to the applicable Interest Payment Date.
If this Note is denominated in a Specified Currency other than
U.S. dollars, and the holder does not elect (in whole or in part) to receive
payment in U.S. dollars pursuant to the next succeeding paragraph, payments of
interest, principal or any premium with regard to this Note 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; provided
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 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 or at least ten days prior to the Maturity Date or any
redemption date, as the case may be.
If the holder elects to receive all or a portion of payments of
principal of and any premium 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 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 U.S.
dollars for the Specified Currency 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.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Senior Indenture, as
defined on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
DATED: MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:
--------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned
Senior Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
---------------------------
Authorized Officer
[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of the Senior
Medium-Term Notes, Series C, having maturities more than nine months from the
date of issue (the "Notes") of the Issuer. The Notes are issuable under a
Senior Indenture, dated as of April 15, 1989, as supplemented by a First
Supplemental Senior Indenture dated as of May 15, 1991 and a Second
Supplemental Senior Indenture dated as of April 15, 1996 between Morgan
Stanley Group Inc. (as predecessor of the Issuer) and The Chase Manhattan Bank
(formerly known as Chemical Bank), as Trustee (the "Trustee," which term
includes any successor trustee under the Senior Indenture) as further
supplemented by a Third Supplemental Senior Indenture dated as of June 1, 1997
between the Issuer and the Trustee (as so supplemented, the "Senior
Indenture"), to which Senior Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities of the Issuer, the Trustee and holders of the
Notes and the terms upon which the Notes are, and are to be, authenticated and
delivered. The terms of individual Notes may vary with respect to interest
rates, interest rate formulas, issue dates, maturity dates, or otherwise, all
as provided in the Senior Indenture. To the extent not inconsistent herewith,
the terms of the Senior Indenture are hereby incorporated by reference herein.
Unless otherwise provided on the face hereof this Note will not
be subject to any sinking fund and will not be redeemable prior to maturity.
This Note will bear interest at the rate determined in
accordance with the applicable provisions below by reference to the Base Rate
specified on the face hereof based on the Index Maturity, if any, specified on
the face hereof (i) (A) plus or minus the Spread, if any, specified on the
face hereof and (B) for any period on or after the Incremental Spread
Commencement Date, if any, specified on the face hereof, plus or minus the
Incremental Spread, if any, specified on the face hereof or (ii) multiplied by
the Spread Multiplier, if any, specified on the face hereof. Commencing with
the Initial Interest Reset Date specified on the face hereof, the rate at
which interest on this Note is payable shall be reset as of each Interest
Reset Date (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
next preceding Business Day. As used herein, "Business Day" means any day,
other than a Saturday or Sunday, and that is neither a legal holiday nor a day
on which banking institutions are authorized or required by law or regulation
to close in The City of New York and, with respect to Notes bearing interest
calculated by reference to LIBOR, in the City of London.
The Interest Determination Date pertaining to an Interest Reset
Date for Notes bearing interest calculated by reference to the CD Rate,
Commercial Paper Rate, Federal Funds Rate, Prime Rate and CMT Rate will be the
second Business Day next preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date for Notes bearing
interest calculated by reference to LIBOR shall be the second London Banking
Day preceding 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; provided, however,
that if as a result of a legal holiday an auction is held on the Friday of the
week preceding such Interest Reset Date, the related 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.
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 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, the CD Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate on such
date for negotiable 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)," or,
if not so published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the CD Rate will be the rate
on such Interest Determination Date for negotiable certificates of deposit of
the Index Maturity specified on the face hereof as published by the Federal
Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" ("Composite Quotations") under the
heading "Certificates of Deposit." If neither of such rates is published by
3:00 P.M., New York City time, on such Calculation Date, then the CD Rate on
such Interest Determination Date will be calculated by the Calculation Agent
referred to on the face hereof and will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such
Interest Determination Date for certificates of deposit in the denomination of
$5,000,000 with a remaining maturity closest to the Index Maturity specified
on the face hereof of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money
center banks of the highest credit standing in the market for negotiable
certificates of deposit; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate in effect for the applicable period will be the same as
the CD Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable hereon 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, the Commercial
Paper Rate with respect to this Note shall be determined on each Interest
Determination Date and shall be the Money Market Yield (as defined herein) of
the rate on such date for commercial paper having the Index Maturity specified
on the face hereof, as such rate shall be published in H.15(519) under the
heading "Commercial Paper," or if not so published prior to 9:00 A.M., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Commercial Paper Rate shall be the Money Market Yield
of the rate on such Interest Determination Date for commercial paper of the
Index Maturity specified on the face hereof as published in Composite
Quotations under the heading "Commercial Paper." If neither of such rates is
published by 3:00 P.M., New York City time, on such Calculation Date, then the
Commercial Paper Rate shall be the Money Market Yield of the arithmetic mean
of the offered rates as of 11:00 A.M., New York City time, on such Interest
Determination Date of three leading dealers in commercial paper in The City of
New York selected by the Calculation Agent 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 rating
agency; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate in effect for the applicable period will be the same as
the Commercial Paper Rate for the immediately preceding Interest Reset Period
(or, if there was no such Interest Reset Period, the rate of interest payable
hereon shall be the Initial Interest Rate).
"Money Market Yield" shall be the yield calculated in
accordance with the following formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the applicable per annum 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 Federal Funds Rate. If the Base Rate
specified on the face hereof is the Federal Funds Rate, the Federal Funds Rate
with respect to this Note shall be determined on each Interest Determination
Date and shall be the rate on such date for Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)," or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the Federal Funds Rate will be the rate
on such Interest Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate." If neither of such rates is
published by 3:00 P.M., New York City time, on such Calculation Date, the
Federal Funds Rate for such Interest Determination Date will be calculated by
the Calculation Agent and will be the arithmetic mean of the rates for the
last transaction in overnight Federal funds as of 11:00 A.M., New York City
time, on such Interest Determination Date arranged by three leading brokers in
Federal funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate in effect for the applicable period will be the same as the Federal
Funds Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable hereon 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 determined on each
Interest Determination Date as follows:
(i) As of the Interest Determination Date, the Calculation
Agent will determine (a) if "LIBOR Reuters" is specified as the
Reporting Service on the face hereof, the arithmetic mean of the
offered rates (unless the specified Designated LIBOR Page (as defined
below) by its terms provides only for a single rate, in which case such
single rate shall be used) for deposits in the London interbank market
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 such Interest Determination Date, which appear on
the Designated LIBOR Page at approximately 11:00 a.m., London time, on
such Interest Determination Date, if at least two such offered rates
appear (unless, as aforesaid, only a single rate is required) on such
Designated LIBOR Page, or (b) if "LIBOR Telerate" is specified as the
Reporting Service on the face hereof, the rate for deposits in the
Index Currency for the period of the Index Maturity, each as designated
on the face hereof, commencing on the Second London Banking Day
following such Interest Determination Date (or, if pounds Sterling is
the Index Currency commencing on such Interest Determination Date) that
appears on the Designated LIBOR Page at approximately 11:00 a.m.,
London time, on such Interest Determination Date. If fewer than two
offered rates appear (if "LIBOR Reuters" is specified as the Reporting
Service on the face hereof and calculation of LIBOR is based on the
arithmetic mean of the offered rates) or if no rate appears (if the
Reporting Service on the face hereof specifies either (x) "LIBOR
Reuters" and the Designated LIBOR Page by its terms provides only for a
single rate or (y) "LIBOR Telerate"), LIBOR in respect of that Interest
Determination Date will be determined as if the parties had specified
the rate described in (ii) below.
(ii) With respect to an Interest Determination Date on which
fewer than two offered rates appear (if "LIBOR Reuters" is specified as
the Reporting Service on the face hereof and calculation of LIBOR is
based on the arithmetic mean of the offered rates) or no rate appears
(if the Reporting Service on the face hereof specifies either (x)
"LIBOR Reuters" and the Designated LIBOR Page by its terms provides
only for a single rate or (y) "LIBOR Telerate"), the Calculation Agent
will 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 quotations 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 such Interest Determination Date (or, if pounds sterling is
the Index Currency, commencing on such Interest Determination Date), to
prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on such Interest Determination Date and in a principal
amount equal to an amount of not less than U.S.$1 million (or the
equivalent in the Index Currency (if the Index Currency is not U.S.
Dollars)) that is representative of a single transaction in such Index
Currency in such market at such time. If at least two such quotations
are provided, LIBOR determined on such Interest Determination Date will
be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR determined on such Interest
Determination Date will be the arithmetic mean of rates quoted at
approximately 11:00 a.m. (or such other time specified on the face
hereof), in the applicable principal financial center for the country
of the Index Currency on such Interest Determination Date, by three
major banks in such principal financial center selected by the
Calculation Agent (after consultation with the Issuer) on such Interest
Determination Date for loans in the Index Currency to leading European
banks, for the period of the Index Maturity specified on the face
hereof commencing on the second London Banking Day immediately
following such Interest Determination Date (or, if pounds sterling is
the Index Currency, commencing on such Interest Determination Date) and
in a principal amount of not less than U.S.$1 million (or the
equivalent in the Index Currency (if the Index Currency is not U.S.
dollars)) that is representative of a single transaction in such Index
Currency in such market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent are not quoting
rates as mentioned in this sentence, "LIBOR" for such Interest Reset
Period will be the same as LIBOR for the immediately preceding Interest
Reset Period (or, if there was no such Interest Reset Period, the rate
of interest payable on the LIBOR Notes for which LIBOR is being
determined shall be the Initial Interest Rate). "Index Currency" means
the currency (including composite currencies) specified as Index
Currency on the face hereof. If no such currency is specified as Index
Currency 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 Monitor Money Rates Service for the purpose of displaying
the London interbank rates of major banks for the applicable Index
Currency, or (b) if "LIBOR Telerate" is designated as the Reporting
Service on the face hereof, the display on the Dow Jones Telerate
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 as the Reporting Service on the
face hereof, LIBOR for the applicable Index Currency will be determined
as if LIBOR Telerate (and, if the U.S. dollar is the Index Currency,
Page 3750) had been specified.
Determination of Prime Rate. If the Base Rate specified on the
face hereof is the Prime Rate, the Prime Rate with respect to this Note shall
be determined on each Interest Determination Date and shall be the rate set
forth in H.15(519) for such date opposite the caption "Bank Prime Loan." If
such rate is not yet published by 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Prime
Rate for such Interest Determination Date will be the arithmetic mean of the
rates of interest publicly announced by each bank named on the Reuters Screen
USPRIME1 Page as such bank's prime rate or base lending rate as in effect for
such Interest Determination Date as quoted on the Reuters Screen USPRIME1 Page
on such Interest Determination Date, or, if fewer than four such rates appear
on the Reuters Screen USPRIME1 Page for such Interest Determination Date, the
rate shall 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 such Interest Determination Date by at least two of the three
major money center banks in The City of New York selected by the Calculation
Agent from which quotations are requested. If fewer than two quotations are
provided, the Prime Rate shall be calculated by the Calculation Agent and shall
be determined as the arithmetic mean on the basis of the prime rates in The
City of New York by the appropriate number of substitute banks or trust
companies organized and doing business under the laws of the United States, or
any State thereof, in each case having total equity capital of at least U.S.
$500 million and being subject to supervision or examination by Federal or
State authority, selected by the Calculation Agent to quote such rate or
rates; provided, however, that if the banks or trust companies selected as
aforesaid by the Calculation Agent are not quoting rates as set forth above,
the "Prime Rate" in effect for such Interest Reset Period will be the same as
the Prime Rate for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the rate of interest payable hereon
shall be the Initial Interest Rate).
"Reuters Screen USPRIME1 Page" means the display designated as
Page "USPRIME1" on the Reuters Monitor Money Rate Service (or such other page
that may replace the USPRIME1 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 the Treasury Rate, the Treasury Rate with respect to this
Note shall be determined on each Interest Determination Date and shall be the
rate for the auction held on such date of direct obligations of the United
States ("Treasury Bills") having the Index Maturity specified on the face
hereof, as published in H.15(519) under the heading "Treasury Bills--auction
average (investment)," or if not so published by 9:00 A.M., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
the auction average rate on such Interest Determination Date (expressed as a
bond equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury Bills having the Index Maturity specified on the face hereof are not
published or reported as provided above by 3:00 P.M., New York City time, on
such Calculation Date or if no such auction is held on such Interest
Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) calculated using the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time,
on such Interest Determination Date, of three leading primary United States
government securities dealers 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; provided, however, that if the dealers selected
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate for such Interest Reset Date will be the same as
the Treasury Rate for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the rate of interest payable hereon
shall be the Initial Interest Rate).
Determination of CMT Rate. If the Base Rate specified on the
face hereof is the CMT Rate, the CMT Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate displayed
for the Index Maturity specified on the face hereof on the Designated CMT
Telerate Page (as defined below) under the caption ". . . Treasury Constant
Maturities . . . /Federal Reserve Board Release H.15," under the column for
the Designated CMT Maturity Index (as defined below) for (i) if the Designated
CMT Telerate Page is 7055, the rate on such Interest Determination Date and
(ii) if the Designated CMT Telerate Page is 7052, the week or the month, as
applicable, ended immediately preceding the week in which the related Interest
Determination Date occurs. If such rate is no longer displayed on the
relevant page, or is not displayed by 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the CMT
Rate for such Interest Determination Date will be such Treasury Constant
Maturity rate for the Designated CMT Maturity Index as published in the
relevant H.15(519). If such rate is no longer published, or is not published
by 3:00 p.m., New York City time, on the related Calculation Date, then the CMT
Rate for such Interest Determination Date will be such Treasury Constant
Maturity rate for the Designated CMT Maturity Index (or other United States
Treasury rate for the Designated CMT Maturity Index) for the Interest
Determination Date with respect to the related Interest Reset 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). If such
information is not provided by 3:00 p.m., New York time, on the related
Calculation Date, then the CMT Rate for the Interest Determination Date will
be calculated by the Calculation Agent and will 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
United States government securities dealers (each, a "Reference Dealer") in
The City of New York (which may include affiliates of the Issuer) selected by
the Calculation Agent (from five such Reference Dealers selected by the
Calculation Agent, after consultation with the Issuer, and eliminating 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 and remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. If the Calculation Agent
cannot obtain three such Treasury Notes quotations, the CMT Rate for such
Interest Determination Date will be calculated by the Calculation Agent and
will 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 (from five such Reference Dealers selected by the Calculation Agent,
after consultation with the Issuer, and eliminating 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 Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in an amount of at least $100,000,000. If
three or four (and not five) of such Reference Dealers are quoting as
described above, then the CMT Rate will be based on the arithmetic mean of the
offer prices obtained and neither the highest nor the lowest of such quotes
will be eliminated; provided, however, that if fewer than three Reference
Dealers selected by the Calculation Agent are quoting as described herein, the
CMT Rate for such Interest Reset Date will be the same as the CMT Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the rate of interest payable hereon shall be the Initial
Interest Rate). If two Treasury Notes with an original maturity as described
in the second preceding sentence 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 will be used.
"Designated CMT Telerate Page" means the display on the Dow
Jones Telerate Service specified on the face hereof (or any other page as may
replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)), for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" shall be the original period to
maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be two years.
Notwithstanding the foregoing, the interest rate hereon shall
not be greater than the Maximum Interest Rate, if any, or less than the
Minimum Interest Rate, if any, specified on the face hereof. The Calculation
Agent shall calculate the interest rate hereon in accordance with the
foregoing on or before each Calculation Date. The interest rate on this Note
will in no event be higher than the maximum rate permitted by New York law, as
the same may be modified by United States Federal law of general application.
At the request of the holder hereof, the Calculation Agent will
provide to the holder hereof the interest rate hereon then in effect and, if
determined, the interest rate that will become effective as of the next
Interest Reset Date.
Unless otherwise indicated on the face hereof, interest
payments on this Note shall be the amount of interest accrued from and
including the Interest Accrual Date or from and including the last date to
which interest has been paid or duly provided for to but, excluding the
Interest Payment Dates or Maturity Date, as the case may be. Accrued interest
hereon for any period shall be the sum of the products obtained by multiplying
the interest factor calculated for each day in such period by the principal
amount hereof shown on Schedule I hereto for each such day; provided that for
the purpose of calculating the amount of interest payable hereon, any decrease
in the principal amount hereof attributable to an exercise of the option to
exchange a portion of this Note for an interest in the Renewable Note shall be
effective on and as of the Interest Payment Date immediately preceding the
date of such decrease. The interest factor for each such day shall be
computed by dividing the interest rate applicable to such day by 360 if the
Base Rate is CD Rate, Commercial Paper Rate, Federal Funds Rate, Prime Rate or
LIBOR, as specified on the face hereof, or by the actual number of days in the
year if the Base Rate is the Treasury Rate or the CMT Rate, as specified on
the face hereof. 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 (.0000001), with five one-millionths
of a percentage point rounded upward, and all dollar amounts used in or
resulting from such calculation on this Note will be rounded to the nearest
cent (with one-half cent rounded upward). The interest rate in effect on any
Interest Reset Date will be the applicable rate as reset on such date. The
interest rate applicable to any other day is the interest rate from the
immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate).
This Note, and all the obligations of the Issuer hereunder are
direct, unsecured obligations of the Issuer and rank without preference or
priority among themselves and pari passu with all other existing and future
unsecured and unsubordinated indebtedness of the Issuer, subject to certain
statutory exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or
exchange hereof, is issuable only in fully registered form, without coupons,
and is issuable only in 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 New York City 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; provided, however, in the case of ECUs, the Market Exchange Rate
shall be the rate of exchange determined by the Commission of the European
Communities (or any successor thereto) as published in the Official Journal of
the European Communities, or any successor publication, on the Business Day
immediately preceding the date of issuance.
The Trustee has been appointed registrar for the Notes, and the
Trustee will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by the registered holder hereof in person or by the
holder's attorney duly authorized in writing, and thereupon the Trustee shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like
aggregate principal amount in authorized denominations, subject to the terms
and conditions set forth herein; provided, however, that the Trustee will not
be required (i) to register the transfer of or exchange any Note that has been
called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the Senior
Indenture with respect to the redemption of Notes. Notes are exchangeable at
said office for other Notes of other authorized denominations of equal
aggregate principal amount having identical terms and provisions. All such
exchanges and transfers of Notes will be free of charge, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge in connection therewith. All Notes surrendered for exchange shall be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and executed by the registered holder in person or by the holder's
attorney duly authorized in writing. The date of registration of any Note
delivered upon any exchange or transfer of Notes shall be such that no gain or
loss of interest results from such exchange or transfer.
In case this Note shall at any time become mutilated, defaced
or be destroyed, lost or stolen and this Note or evidence of the loss, theft
or destruction thereof (together with the indemnity hereinafter referred to
and such other documents or proof as may be required in the premises) shall
be delivered to the Trustee, a new Note of like tenor will be issued by the
Issuer in exchange for this Note, but, if this Note is destroyed, lost or
stolen, only upon receipt of evidence satisfactory to the Trustee and the
Issuer that this Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.
The Senior Indenture provides that, (a) if an Event of Default
(as defined in the Senior Indenture) due to the default in payment of
principal of, premium, if any, or interest on, any series of debt securities
issued under the Senior Indenture, including the series of Senior Medium-Term
Notes of which this Note forms a part, or due to the default in the
performance or breach of any other covenant or warranty of the Issuer
applicable to the debt securities of such series but not applicable to all
outstanding debt securities issued under the Senior Indenture shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the debt securities of each affected series (voting
as a single class) may then declare the principal of all debt securities of
all such series and interest accrued thereon to be due and payable immediately
and (b) if an Event of Default due to a default in the performance of any
other of the covenants or agreements in the Senior Indenture applicable to all
outstanding debt securities issued thereunder, including this Note, or due to
certain events of bankruptcy, insolvency and reorganization of the Issuer,
shall have occurred and be continuing, either the Trustee or the holders of
not less than 25% in principal amount of all debt securities issued under the
Senior Indenture then outstanding (treated as one class) 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 principal amount of the debt securities of all
affected series then outstanding.
The Senior Indenture permits the Issuer and the Trustee, with
the consent of the holders of not less than a majority in aggregate principal
amount of the debt securities of all series issued under the Senior Indenture
then outstanding and affected (voting as one class), to execute supplemental
indentures adding any provisions to or changing in any manner the rights of
the holders of each series so affected; provided that the Issuer and the
Trustee may not, without the consent of the holder of each outstanding debt
security affected thereby, (a) extend the final maturity of any such debt
security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable on
redemption thereof, or change the currency of payment thereof, or impair or
affect the rights of any holder to institute suit for the payment thereof
without the consent of the holder of each debt security so affected 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.
Except as set forth below, if the principal of, premium, if
any, or interest on, this Note is payable in a Specified Currency other than
U.S. dollars and such Specified Currency is not available to the Issuer for
making payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking
community, then the Issuer will be entitled to satisfy its obligations to the
holder of this Note by making such payments in U.S. dollars on the basis of
the Market Exchange Rate on the date of such payment or, if the Market
Exchange Rate is not available on such date, as of the most recent practicable
date; provided, however, that if such Specified Currency is replaced by a
single European currency (expected to be named the Euro), the payment of
principal of, premium, if any, or interest on any Note denominated in such
currency shall be effected in the new single European currency in conformity
with legally applicable measures taken pursuant to, or by virtue of, the treaty
establishing the European Community (the "EC"), as amended by the treaty on
European Union (as so amended, the "Treaty"). Any payment made under such
circumstances in U.S. dollars (or, if applicable, such new single European
currency) where the required payment is in a Specified Currency other than
U.S. dollars will not constitute an Event of Default.
Subject to the provisions below, the value of the ECU, in which
the Notes may be denominated or may be payable, is equal to the value of the
ECU that is from time to time used as the unit of account of the EC. If the
ECU becomes a currency in its own right in accordance with the Treaty, all
references to ECU in the Notes shall be construed as references to such
currency.
With respect to each due date for the payment of principal of,
or interest on, the Notes on or after the first business day in Brussels on
which the ECU ceases to be used as the unit of account of the EC, and has not
become a currency in its own right replacing all or some of the currencies of
the member States of the EC, the Company shall choose a substitute currency
(the "Chosen Currency"), which may be any currency which was, on the last day
on which the ECU was used as the unit of account of the EC, a component
currency of the ECU or U.S. dollars, in which all payments due on or after
that date with respect to the Notes and coupons shall be made. Notice of the
Chosen Currency so selected shall be provided by first class mail to each
holder at the address of such holder which appears on the books maintained by
the registrar and to the Paying Agent. The amount of each payment in such
Chosen Currency shall be computed on the basis of the equivalent of the ECU in
that currency, determined as described below, as of the fourth business day in
Brussels prior to the date on which such payment is due.
On the first business day in Brussels on which the ECU ceases
to be used as the unit of account of the EC, and has not become a currency in
its own right replacing all or some of the currencies of the member States of
the EC, the Company shall select a Chosen Currency in which all payments with
respect to Notes and coupons having a due date prior thereto but not yet
presented for payment with respect to Notes and coupons having a due date
prior thereto but not yet presented for payment are to be made. The amount of
each payment in such Chosen Currency shall be computed on the basis of the
equivalent of the ECU in that currency, determined as described below, as of
such first business day.
The equivalent of the ECU in the relevant Chosen Currency as of
any date (the "Day of Valuation") shall be determined by, or on behalf of, the
Exchange Rate Agent on the following basis. The amounts and components
composing the ECU for this purpose (the "Components") shall be the amounts and
components that composed the ECU as of the last date on which the ECU was used
as the unit of account of the EC. The equivalent of the ECU in the Chosen
Currency shall be calculated by, first, aggregating the U.S. dollar
equivalents of the Components; and then, in the case of a Chosen Currency
other than U.S. dollars, using the rate used for determining the U.S. dollar
equivalent of the Components in the Chosen Currency as set forth below,
calculating the equivalent in the Chosen Currency of such aggregate amount in
U.S. dollars.
The "Exchange Rate Agent" shall be Morgan Stanley & Co.
Incorporated, unless otherwise indicated on the face hereof.
The U.S. dollar equivalent of each of the Components shall be
determined by, or on behalf of, the Exchange Rate Agent on the basis of the
middle spot delivery quotations prevailing at 2:30 p.m., Brussels time, on the
Day of Valuation, as obtained by, or on behalf of, the Exchange Rate Agent
from one or more major banks, as selected by the Company, in the country of
issue of the component currency in question.
If for any reason no direct quotations are available for a
Component as of a Day of Valuation from any of the banks selected for this
purpose, in computing the U.S. dollar equivalent of such Component, the
Exchange Rate Agent shall (except as provided below) use the most recent direct
quotations for such Component obtained by it or on its behalf, provided that
such quotations were prevailing in the country of issue not more than two
Business Days before such Day of Valuation. If such most recent quotations
were so prevailing in the country of issue more than two Business Days before
such Day of Valuation, the Exchange Rate Agent shall determine the U.S. dollar
equivalent of such Component on the basis of cross rates derived from the
middle spot delivery quotations for such component currency and for the U.S.
dollar prevailing at 2:30 p.m., Brussels time, on such Day of Valuation, as
obtained by, or on behalf of, the Exchange Rate Agent from one or more major
banks, as selected by the Company, in a country other than the country of
issue of such component currency. Notwithstanding the foregoing, the Exchange
Rate Agent shall determine the U.S. dollar equivalent of such Component on the
basis of such cross rates if the Company or such agent judges that the
equivalent so calculated is more representative than the U.S. dollar equivalent
calculated as provided in the first sentence of this paragraph. Unless
otherwise specified by the Company, if there is more than one market for
dealing in any component currency by reason of foreign exchange regulations or
for any other reason, the market to be referred to in respect of such currency
shall be that upon which a non-resident issuer of securities denominated in
such currency would purchase such currency in order to make payments in
respect of such securities.
Payments in the Chosen Currency will be made at the specified
office of a paying agent in the country of the Chosen Currency, or, if none,
or at the option of the holder, at the specified office of any Paying Agent
either by a check drawn on, or by transfer to an account maintained by the
holder with, a bank in the principal financial center of the country of the
Chosen Currency.
All determinations referred to above made by, or on behalf of,
the Company 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 to the extent permitted by law for all purposes and binding on the
holder of this Note 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.
With respect to moneys paid by the Issuer and held by the
Trustee for the payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee shall notify the
holders of such Notes that such moneys shall be repaid to the Issuer and any
person claiming such moneys shall thereafter look only to the Issuer for
payment thereof and (ii) such moneys shall be so repaid to the Issuer. Upon
such repayment all liability of the Trustee with respect to such moneys shall
thereupon cease, without, however, limiting in any way any obligation that the
Issuer may have to pay the principal of or interest or premium, if any, on
this Note as the same shall become due.
No provision of this Note or of the Senior Indenture shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on this
Note at the time, place, and rate, and in the coin or currency, herein
prescribed unless otherwise agreed between the Issuer and the registered
holder of this Note.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the holder in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and none of the Issuer,
the Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of,
premium, if any, or the interest on this Note, for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Senior Indenture
or any indenture supplemental thereto, against any incorporator, shareholder,
officer or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
All terms used in this Note which are defined in the Senior
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Senior Indenture.
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 _______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act ___________________________
(State)
Additional abbreviations may also be used though not in the
above list.
------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
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[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
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[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.
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 The Chase
Manhattan Bank (formerly known as Chemical Bank), 55 Water Street, New York,
New York 10041, Attention: Corporate Trustee Administration Department, 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
$100,000 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.
SCHEDULE I
SCHEDULE OF EXCHANGES
The initial principal amount of this Note is ___________. The
following exchanges of a portion of this Note for an interest in the Renewable
Note have been made:
Principal Amount Reduced Principal
Date of Exchanged for Amount Outstanding Notation Made by or
Exchange Renewable Note Following Such Exchange on Behalf of Trustee
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[N/A] [N/A] [N/A] [N/A]
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[FORM OF FACE OF SECURITY]
SENIOR VARIABLE RATE RENEWABLE NOTE
REGISTERED REGISTERED
No. SRVRR Cusip
[PRINCIPAL AMOUNT],
as modified by Schedule
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.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD)
SET FORTH BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF APPLYING
THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
SENIOR VARIABLE RATE RENEWABLE
MEDIUM-TERM NOTE, SERIES C
Morgan Stanley, Dean Witter, Discover & Co., a Delaware
corporation (together with its successors and assigns, the "Issuer"), for
value received, hereby promises to pay to
, or registered assignees, the principal sum specified in Schedule I hereto on
the Initial Maturity Date specified above or, to the extent the maturity date
of any portion of the principal amount of this Note is extended in accordance
with the procedures set forth below to an Extended Maturity Date, as defined
below, on such Extended Maturity Date (except to the extent such portion is
redeemed prior to such Extended Maturity Date) and to pay interest on the
principal amount hereof outstanding from time to time, from the Interest
Accrual Date specified above at a rate per annum equal to the Initial Interest
Rate specified above until the Initial Interest Reset Date specified above,
and thereafter at a rate per annum determined in accordance with the
provisions specified on the reverse hereof until (a) the principal hereof is
paid or duly made available for payment or (b) this Note has been canceled in
accordance with the provisions set forth below.
The Issuer will pay interest in arrears 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 and such
next Business Day falls in the next calendar month, the Interest Payment Date,
Maturity Date or redemption date shall be the immediately preceding day that
is a Business Day. As used herein, "Extended Maturity Date" means the
Maturity Extension Date (as specified above) occurring in the month twelve
months after the most recent Election Date on which the maturity of this Note
has been extended pursuant to the provisions set forth below.
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 the Interest Accrual Date,
until, but excluding the date (a) the principal hereof has been paid or duly
made available for payment or (b) this Note has been canceled in accordance
with the provisions set forth below. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, subject to
certain exceptions described herein, be paid to the person in whose name this
Note (or one or more predecessor Notes) is registered at the close of business
on the date 15 calendar days prior to such Interest Payment Date (whether or
not a Business Day) (each such date a "Record Date"); provided, however, that
interest payable on the Maturity Date (or any redemption date) shall be
payable to the person to whom the principal hereof shall be payable.
On each Election Date, the maturity of this Note shall be
extended to the Maturity Extension Date occurring in the month twelve months
following such Election Date, unless, in any such case, the holder hereof
elects to terminate the automatic extension of the maturity hereof or of any
portion hereof having a principal amount of $1,000 or any larger multiple of
$1,000 in excess thereof by delivering to the Trustee 15 days prior to the
applicable Election Date (i) this Note with the form entitled "Option to Elect
Termination of Automatic Extension" below duly completed or (ii) a telegram,
telex, facsimile transmission or a letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc. or
a commercial bank or a trust company in the United States of America setting
forth the name of the holder of this Note, the principal amount hereof, the
certificate number of this Note or a description of this Note's tenor or
terms, a statement that the option to elect termination of automatic extension
is being exercised thereby, the principal amount hereof with respect to which
such option is being exercised and a guarantee that this Note with the form
entitled "Option to Elect Termination of Automatic Extension" below duly
completed will be received by the Trustee no later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter;
provided that such telegram, telex, facsimile transmission or letter shall not
be effective unless this Note and such form duly completed are received by the
Trustee by such fifth Business Day. Such option may be exercised by the
holder for less than the entire principal amount hereof provided that the
principal amount for which such option is not exercised is at least $1,000 or
any larger amount that is an integral multiple of $1,000. If the option to
terminate the automatic extension of the maturity of any portion hereof is
exercised, a new Note or Notes in the form attached hereto as Exhibit A (each,
a "Short-Term Note") for the principal amount hereof for which such option was
exercised and having as its or their "Maturity Date" (as such term is used in
each such Short-Term Note) the Maturity Extension Date occurring in the month
twelve months after such Election Date shall be issued on such Election Date
in the name of the holder hereof and Schedule I hereto shall be annotated as
of such Election Date to reflect the corresponding decrease in the principal
amount hereof. If any exercise of the option to terminate the automatic
extension of the maturity hereof causes the principal amount of this Note to
be reduced to zero, this Note shall nevertheless not be canceled until the
date on which all outstanding Short-Term Notes issued in exchange for this
Note shall have been paid in full.
Notwithstanding the foregoing, the maturity of this Note shall
not be extended beyond the Final Maturity Date specified above.
If the holder of any Short-Term Note elects to exchange all or
a portion of such Short-Term Note for an interest in this Note in accordance
with the terms of such Short-Term Note, Schedule I hereto shall be annotated
on the date of such exchange to reflect the corresponding increase in the
principal amount hereof.
Payment of the principal of this Note, any premium and the
interest due at the Maturity Date (or any redemption date), unless this Note
is denominated in a Specified Currency other than U.S. dollars and is to be
paid in whole or in part in such Specified Currency, will be made in
immediately available funds upon surrender of this Note at the office or
agency of the Trustee, as defined on the reverse hereof, maintained for that
purpose in the Borough of Manhattan, The City of New York, or at the office or
agency of such other paying agent as the Issuer may determine in U.S. dollars.
U.S. dollars payments of interest, other than interest due at maturity or any
date of redemption, will be made by United States dollar check mailed to the
address of the person entitled thereto as such address shall appear in the
Note register. A holder of U.S. $10,000,000 or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which
is payable in U.S. dollars, will be entitled to receive payments of interest,
other than interest due at maturity or any date of redemption, by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Trustee in writing not less than 15
calendar days prior to the applicable Interest Payment Date.
If this Note is denominated in a Specified Currency other than
U.S. dollars, and the holder does not elect (in whole or in part) to receive
payment in U.S. dollars pursuant to the next succeeding paragraph, payments of
interest, principal or any premium with regard to this Note will be made by
wire transfer of immediately available funds to an account maintained by the
holder hereof with a bank located outside the United States if appropriate
wire transfer instructions have been received by the Paying Agent in writing
not less than 15 calendar days prior to the applicable payment date, provided
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.
Unless otherwise indicated herein, the holder of this Note
denominated in a Specified Currency other than U.S. dollars, may elect to
receive all or a portion of payments on this Note in U.S. dollars by
transmitting a written request to the Paying Agent, on or prior to the 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 or at least ten days prior to the Maturity Date or any
redemption date, as the case may be.
If the holder elects to receive all or a portion of payments of
principal of and any premium 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 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 U.S.
dollars for the Specified Currency 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.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Senior Indenture, as
defined on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
DATED: MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:
--------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned
Senior Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
--------------------------
Authorized Officer
[REVERSE OF SECURITY]
This Note is one of a duly authorized issue of the Senior
Medium-Term Notes, Series C, having maturities more than nine months from the
date of issue (the "Notes") of the Issuer. The Notes are issuable under a
Senior Indenture, dated as of April 15, 1989, as supplemented by a First
Supplemental Senior Indenture dated as of May 15, 1991 and a Second
Supplemental Senior Indenture dated as of April 15, 1996, between Morgan
Stanley Group Inc. (as predecessor of the Issuer) and The Chase Manhattan Bank
(formerly known as Chemical Bank), as Trustee (the "Trustee," which term
includes any successor trustee under the Senior Indenture) as further
supplemented by a Third Supplemental Senior Indenture dated as of June 1, 1997
between the Issuer and the Trustee (as so supplemented the "Senior
Indenture"), to which Senior Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities of the Issuer, the Trustee and holders of the
Notes and the terms upon which the Notes are, and are to be, authenticated and
delivered. The terms of individual Notes may vary with respect to interest
rates, interest rate formulas, issue dates, maturity dates, or otherwise, all
as provided in the Senior Indenture. To the extent not inconsistent herewith,
the terms of the Senior Indenture are hereby incorporated by reference herein.
Unless otherwise provided 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.
Unless otherwise indicated on the face of this Note, this Note
may not be redeemed prior to the Maturity Date. If so indicated on the face
of this Note, this Note may be redeemed in whole or in part at the option of
the Issuer on 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 days prior to the date fixed for redemption, subject to all the conditions
and provisions of the Senior Indenture. In the event of redemption of this
Note in part only, a new Note or Notes for the amount of the unredeemed
portion hereof shall be issued in the name of the holder hereof upon the
cancellation hereof.
This Note will bear interest at the rate determined in
accordance with the applicable provisions below by reference to the Base Rate
specified on the face hereof based on the Index Maturity, if any, specified on
the face hereof (i) (A) plus or minus the Spread, if any, specified on the
face hereof and (B) for any period on or after the Incremental Spread
Commencement Date, if any, specified on the face hereof, plus or minus the
Incremental Spread, if any, specified on the face hereof or (ii) multiplied by
the Spread Multiplier, if any, specified on the face hereof. Commencing with
the Initial Interest Reset Date specified on the face hereof, the rate at
which interest on this Note is payable shall be reset as of each Interest
Reset Date (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. 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
next preceding Business Day. As used herein, "Business Day" means any day,
other than a Saturday or Sunday, that is neither a legal holiday nor a day on
which banking institutions are authorized or required by law or regulation to
close in The City of New York and, with respect to Notes bearing interest
calculated by reference to LIBOR, in the City of London.
The Interest Determination Date pertaining to an Interest Reset
Date for Notes bearing interest calculated by reference to the CD Rate,
Commercial Paper Rate, Federal Funds Rate, Prime Rate and CMT Rate will be the
second Business Day next preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date for Notes bearing
interest calculated by reference to LIBOR shall be the second London Banking
Day preceding 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; provided, however, that if as a result of a legal
holiday an auction is held on the Friday of the week preceding such Interest
Reset Date, the related 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.
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 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, the CD Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate on such
date for negotiable 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)," or,
if not so published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the CD Rate will be the rate
on such Interest Determination Date for negotiable certificates of deposit of
the Index Maturity specified on the face hereof as published by the Federal
Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" ("Composite Quotations") under the
heading "Certificates of Deposit." If neither of such rates is published by
3:00 P.M., New York City time, on such Calculation Date, then the CD Rate on
such Interest Determination Date will be calculated by the Calculation Agent
referred to on the face hereof and will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such
Interest Determination Date for certificates of deposit in the denomination of
$5,000,000 with a remaining maturity closest to the Index Maturity specified
on the face hereof of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money
center banks of the highest credit standing in the market for negotiable
certificates of deposit; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate in effect for the applicable period will be the same as
the CD Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable hereon 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, the Commercial
Paper Rate with respect to this Note shall be determined on each Interest
Determination Date and shall be the Money Market Yield (as defined herein) of
the rate on such date for commercial paper having the Index Maturity specified
on the face hereof, as such rate shall be published in H.15(519) under the
heading "Commercial Paper," or if not so published prior to 9:00 A.M., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Commercial Paper Rate shall be the Money Market Yield
of the rate on such Interest Determination Date for commercial paper of the
Index Maturity specified on the face hereof as published in Composite
Quotations under the heading "Commercial Paper." If neither of such rates is
published by 3:00 P.M., New York City time, on such Calculation Date, then the
Commercial Paper Rate shall be the Money Market Yield of the arithmetic mean
of the offered rates as of 11:00 A.M., New York City time, on such Interest
Determination Date of three leading dealers in commercial paper in The City of
New York selected by the Calculation Agent 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 rating
agency; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate in effect for the applicable period will be the same as
the Commercial Paper Rate for the immediately preceding Interest Reset Period
(or, if there was no such Interest Reset Period, the rate of interest payable
hereon shall be the Initial Interest Rate).
"Money Market Yield" shall be the yield calculated in
accordance with the following formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the applicable per annum 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 Federal Funds Rate. If the Base Rate
specified on the face hereof is the Federal Funds Rate, the Federal Funds Rate
with respect to this Note shall be determined on each Interest Determination
Date and shall be the rate on such date for Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)," or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the Federal Funds Rate will be the rate
on such Interest Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate." If neither of such rates is
published by 3:00 P.M., New York City time, on such Calculation Date, the
Federal Funds Rate for such Interest Determination Date will be calculated by
the Calculation Agent and will be the arithmetic mean of the rates for the
last transaction in overnight Federal funds as of 11:00 A.M., New York City
time, on such Interest Determination Date arranged by three leading brokers in
Federal funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate in effect for the applicable period will be the same as the Federal
Funds Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable hereon 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 determined on each
Interest Determination Date as follows:
(i) As of the Interest Determination Date, the Calculation
Agent will determine (a) if "LIBOR Reuters" is specified as the
Reporting Service on the face hereof, the arithmetic mean of the
offered rates (unless the specified Designated LIBOR Page (as defined
below) by its terms provides only for a single rate, in which case such
single rate shall be used) for deposits in the London interbank market
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 such Interest Determination Date, which appear on
the Designated LIBOR Page at approximately 11:00 a.m., London time, on
such Interest Determination Date, if at least two such offered rates
appear (unless, as aforesaid, only a single rate is required) on such
Designated LIBOR Page, or (b) if "LIBOR Telerate" is specified as the
Reporting Service on the face hereof, the rate for deposits in the
Index Currency for the period of the Index Maturity, each as designated
on the face hereof, commencing on the second London Banking Day
following such Interest Determination Date (or, if pounds sterling is
the Index Currency, commencing on such Interest Determination Date)
that appears on the Designated LIBOR Page at approximately 11:00 a.m.,
London time, on such Interest Determination Date. If fewer than two
offered rates appear (if "LIBOR Reuters" is specified as the Reporting
Service on the face hereof and calculation of LIBOR is based on the
arithmetic mean of the offered rates) or if no rate appears (if the
Reporting Service on the face hereof specifies either (x) "LIBOR
Reuters" and the Designated LIBOR Page by its terms provides only for a
single rate or (y) "LIBOR Telerate"), LIBOR in respect of that Interest
Determination Date will be determined as if the parties had specified
the rate described in (ii) below.
(ii) With respect to an Interest Determination Date on which
fewer than two offered rates appear (if "LIBOR Reuters" is specified as
the Reporting Service on the face hereof and calculation of LIBOR is
based on the arithmetic mean of the offered rates) or no rate appears
(if the Reporting Service on the face hereof specifies either (x)
"LIBOR Reuters" and the Designated LIBOR Page by its terms provides
only for a single rate or (y) "LIBOR Telerate"), the Calculation Agent
will 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 quotations 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 such Interest Determination Date (or, if pounds sterling is
the Index Currency, commencing on such Interest Determination Date), to
prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on such Interest Determination Date and in a principal
amount equal to an amount of not less than U.S.$1 million (or the
equivalent in the Index Currency) (if the Index Currency is not the
U.S. dollar)) that is representative of a single transaction in such
Index Currency in such market at such time. If at least two such
quotations are provided, LIBOR determined on such Interest
Determination Date will be the arithmetic mean of such quotations. If
fewer than two quotations are provided, LIBOR determined on such
Interest Determination Date will be the arithmetic mean of rates quoted
at approximately 11:00 a.m. (or such other time specified on the face
hereof), in the applicable principal financial center for the country
of the Index Currency on such Interest Determination Date, by three
major banks in such principal financial center selected by the
Calculation Agent (after consultation with the Issuer) on such Interest
Determination Date for loans in the Index Currency to leading European
banks, for the period of the Index Maturity specified on the face
hereof commencing on the second London Banking Day immediately
following such Interest Determination Date (or, if pounds sterling is
the Index Currency, commencing on such Interest Determination Date) and
in a principal amount of not less than U.S.$1 million (or the
equivalent in the Index Currency) (if the Index Currency is not the
U.S. dollar)) that is representative of a single transaction in such
Index Currency in such market at such time; provided, however, that if
the banks selected as aforesaid by the Calculation Agent are not
quoting rates as mentioned in this sentence, "LIBOR" for such Interest
Reset Period will be the same as LIBOR for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period,
the rate of interest payable on the LIBOR Notes for which LIBOR is
being determined shall be the Initial Interest Rate). "Index Currency"
means the currency (including composite currencies) specified as Index
Currency on the face hereof. If no such currency is specified as Index
Currency 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 Monitor Money Rates Service for the purpose of displaying
the London interbank rates of major banks for the applicable Index
Currency, or (b) if "LIBOR Telerate" is designated as the Reporting
Service on the face hereof, the display on the Dow Jones Telerate
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 as the Reporting Service on the
face hereof, LIBOR for the applicable Index Currency will be determined
as if LIBOR Telerate (and, if the U.S. dollar is the Index Currency,
Page 3750) had been specified.
Determination of Prime Rate. If the Base Rate specified on the
face hereof is the Prime Rate, the Prime Rate with respect to this Note shall
be determined on each Interest Determination Date and shall be the rate set
forth in H.15(519) for such date opposite the caption "Bank Prime Loan." If
such rate is not yet published by 9:00 a.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Prime
Rate for such Interest Determination Date will be the arithmetic mean of the
rates of interest publicly announced by each bank named on the Reuters Screen
USPRIME1 Page as such bank's prime rate or base lending rate as in effect for
such Interest Determination Date as quoted on the Reuters Screen USPRIME1 Page
on such Interest Determination Date, or, if fewer than four such rates appear
on the Reuters Screen USPRIME1 Page for such Interest Determination Date, the
rate shall 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 such Interest Determination Date by at least two of the three
major money center banks in The City of New York selected by the Calculation
Agent from which quotations are requested. If fewer than two quotations are
provided, the Prime Rate shall be calculated by the Calculation Agent and shall
be determined as the arithmetic mean on the basis of the prime rates in The
City of New York by the appropriate number of substitute banks or trust
companies organized and doing business under the laws of the United States, or
any State thereof, in each case having total equity capital of at least U.S.
$500 million and being subject to supervision or examination by Federal or
State authority, selected by the Calculation Agent to quote such rate or
rates; provided, however, that if the banks or trust companies selected as
aforesaid by the Calculation Agent are not quoting rates as set forth above,
the "Prime Rate" in effect for such Interest Reset Period will be the same as
the Prime Rate for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the rate of interest payable hereon
shall be the Initial Interest Rate).
"Reuters Screen USPRIME1 Page" means the display designated as
Page "USPRIME1" on the Reuters Monitor Money Rates Service (or such other page
that may replace the USPRIME1 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 the Treasury Rate, the Treasury Rate with respect to this
Note shall be determined on each Interest Determination Date and shall be the
rate for the auction held on such date of direct obligations of the United
States ("Treasury Bills") having the Index Maturity specified on the face
hereof, as published in H.15(519) under the heading "Treasury Bills--auction
average (investment)," or if not so published by 9:00 a.m., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
the auction average rate on such Interest Determination Date (expressed as a
bond equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury Bills having the Index Maturity specified on the face hereof are not
published or reported as provided above by 3:00 P.M., New York City time, on
such Calculation Date or if no such auction is held on such Interest
Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) calculated using the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time,
on such Interest Determination Date, of three leading primary United States
government securities dealers 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; provided, however, that if the dealers selected
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate for such Interest Reset Date will be the same as
the Treasury Rate for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the rate of interest payable hereon
shall be the Initial Interest Rate).
Determination of CMT Rate. If the Base Rate specified on the
face hereof is the CMT Rate, the CMT Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate displayed
for the Index Maturity specified on the face hereof on the Designated CMT
Telerate Page (as defined below) under the caption ". . . Treasury Constant
Maturities . . .Federal Reserve Board Release H.15" under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT
Telerate Page is 7055, the rate on such Interest Determination Date and (ii)
if the Designated CMT Telerate Page is 7052, the week or the month, as
applicable, ended immediately preceding the week in which the related Interest
Determination Date occurs. If such rate is no longer displayed on the
relevant page, or is not displayed by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the CMT
Rate for such Interest Determination Date will be such Treasury Constant
Maturity rate for the Designated CMT Maturity Index as published in the
relevant H.15(519). If such rate is no longer published, or is not published
by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such Interest Determination Date will be such Treasury Constant
Maturity rate for the Designated CMT Maturity Index (or other United States
Treasury rate for the Designated CMT Maturity Index) for the Interest
Determination Date with respect to the related Interest Reset 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). If such
information is not provided by 3:00 P.M., New York time, on the related
Calculation Date, then the CMT Rate for the Interest Determination Date will
be calculated by the Calculation Agent and will 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
United States government securities dealers (each, a "Reference Dealer") in
The City of New York (which may include affiliates of the Issuer) selected by
the Calculation Agent (from five such Reference Dealers selected by the
Calculation Agent, after consultation with the Issuer, and eliminating 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 and remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. If the Calculation Agent
cannot obtain three such Treasury Notes quotations, the CMT Rate for such
Interest Determination Date will be calculated by the Calculation Agent and
will 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 (from five such Reference Dealers selected by the Calculation Agent,
after consultation with the Issuer, and eliminating 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 Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in an amount of at least $100,000,000. If
three or four (and not five) of such Reference Dealers are quoting as
described above, then the CMT Rate will be based on the arithmetic mean of the
offer prices obtained and neither the highest nor the lowest of such quotes
will be eliminated; provided, however, that if fewer than three Reference
Dealers selected by the Calculation Agent are quoting as described herein, the
CMT Rate for such Interest Reset Date will be the same as the CMT Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the rate of interest payable hereon shall be the Initial
Interest Rate). If two Treasury Notes with an original maturity as described
in the second preceding sentence 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 will be used.
"Designated CMT Telerate Page" means the display on the Dow
Jones Telerate Service specified on the face hereof (or any other page as may
replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)), for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" shall be the original period to
maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be two years.
Notwithstanding the foregoing, the interest rate hereon shall
not be greater than the Maximum Interest Rate, if any, or less than the
Minimum Interest Rate, if any, specified on the face hereof. The Calculation
Agent shall calculate the interest rate hereon in accordance with the
foregoing on or before each Calculation Date. The interest rate on this Note
will in no event be higher than the maximum rate permitted by New York law, as
the same may be modified by United States Federal law of general application.
At the request of the holder hereof, the Calculation Agent will
provide to the holder hereof the interest rate hereon then in effect and, if
determined, the interest rate that will become effective as of the next
Interest Reset Date.
Unless otherwise indicated on the face hereof, interest
payments on this Note shall be the amount of interest accrued from and
including the Interest Accrual Date or from and including the last date to
which interest has been paid or duly provided for to but, excluding the
Interest Payment Dates or Maturity Date (or any earlier redemption date), as
the case may be. Accrued interest hereon for any period shall be the sum of
the products obtained by multiplying the interest factor calculated for each
day in such period by the principal amount hereof shown on Schedule I hereto
for each such day; provided that for the purpose of calculating the amount of
interest payable hereon, any decrease in the principal amount hereof
attributable to an exercise of the option to terminate the automatic extension
of the maturity hereof shall be effective on and as of the Election Date
corresponding to the exercise of such option, and any increase in the
principal amount hereof shall be effective on and as of the Interest Payment
Date immediately 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 by 360 if the Base Rate is CD Rate, Commercial Paper Rate, Federal
Funds Rate, Prime Rate or LIBOR, as specified on the face hereof, or by the
actual number of days in the year if the Base Rate is the Treasury Rate or the
CMT Rate, as specified on the face hereof. 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
(.0000001), with five one-millionths of a percentage point rounded upward, and
all dollar amounts used in or resulting from such calculation on this Note will
be rounded to the nearest cent (with one-half cent rounded upward). The
interest rate in effect on any Interest Reset Date will be the applicable rate
as reset on such date. The interest rate applicable to any other day is the
interest rate from the immediately preceding Interest Reset Date (or, if none,
the Initial Interest Rate).
This Note, and all the obligations of the Issuer hereunder are
direct, unsecured obligations of the Issuer and rank without preference or
priority among themselves and pari passu with all other existing and future
unsecured and unsubordinated indebtedness of the Issuer, subject to certain
statutory exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or
exchange hereof, is issuable only in fully registered form, without coupons,
and is issuable only in denominations of U.S. $1,000 and any integral multiple
of U.S. $1,000 in excess thereof. If this Note is denominated in a Specified
Currency other than U.S. dollars, then, unless a higher minimum denomination
is required by applicable law, it is issuable only in denominations of the
equivalent of U.S. $1,000 (rounded to an integral multiple of 1,000 units of
such Specified Currency), or an amount in excess thereof which is an integral
multiple of 1,000 units of such Specified Currency, as determined by reference
to the noon dollar buying rate in New York City 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; provided, however, in the case of ECUs, the Market Exchange Rate
shall be the rate of exchange determined by the Commission of the European
Communities (or any successor thereto) as published by the Official Journal of
the European Communities, or any successor publication, on the Business Day
immediately preceding the date of issuance.
The Trustee has been appointed registrar for the Notes, and the
Trustee will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by the registered holder hereof in person or by the
holder's attorney duly authorized in writing, and thereupon the Trustee shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like
aggregate principal amount in authorized denominations, subject to the terms
and conditions set forth herein; provided, however, that the Trustee will not
be required (i) to register the transfer of or exchange any Note that has been
called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the Senior
Indenture with respect to the redemption of Notes. Notes are exchangeable at
said office for other Notes of other authorized denominations of equal
aggregate principal amount having identical terms and provisions. All such
exchanges and transfers of Notes will be free of charge, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge in connection therewith. All Notes surrendered for exchange shall be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and executed by the registered holder in person or by the holder's
attorney duly authorized in writing. The date of registration of any Note
delivered upon any exchange or transfer of Notes shall be such that no gain or
loss of interest results from such exchange or transfer.
In case this Note shall at any time become mutilated, defaced
or be destroyed, lost or stolen and this Note or evidence of the loss, theft
or destruction thereof (together with the indemnity hereinafter referred to
and such other documents or proof as may be required in the premises) shall
be delivered to the Trustee, a new Note of like tenor will be issued by the
Issuer in exchange for this Note, but, if this Note is destroyed, lost or
stolen, only upon receipt of evidence satisfactory to the Trustee and the
Issuer that this Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.
The Senior Indenture provides that, (a) if an Event of Default
(as defined in the Senior Indenture) due to the default in payment of
principal of, premium, if any, or interest on, any series of debt securities
issued under the Senior Indenture, including the series of Senior Medium-Term
Notes of which this Note forms a part, or due to the default in the
performance or breach of any other covenant or warranty of the Issuer
applicable to the debt securities of such series but not applicable to all
outstanding debt securities issued under the Senior Indenture shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the debt securities of each affected series (voting
as a single class) may then declare the principal of all debt securities of
all such series and interest accrued thereon to be due and payable immediately
and (b) if an Event of Default due to a default in the performance of any
other of the covenants or agreements in the Senior Indenture applicable to all
outstanding debt securities issued thereunder, including this Note, or due to
certain events of bankruptcy, insolvency and reorganization of the Issuer,
shall have occurred and be continuing, either the Trustee or the holders of
not less than 25% in principal amount of all debt securities issued under the
Senior Indenture then outstanding (treated as one class) 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 principal amount of the debt securities of all
affected series then outstanding.
The Senior Indenture permits the Issuer and the Trustee, with
the consent of the holders of not less than a majority in aggregate principal
amount of the debt securities of all series issued under the Senior Indenture
then outstanding and affected (voting as one class), to execute supplemental
indentures adding any provisions to or changing in any manner the rights of
the holders of each series so affected; provided that the Issuer and the
Trustee may not, without the consent of the holder of each outstanding debt
security affected thereby, (a) extend the final maturity of any such debt
security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable on
redemption thereof, or change the currency of payment thereof, or impair or
affect the rights of any holder to institute suit for the payment thereof
without the consent of the holder of each debt security so affected 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.
Except as set forth below, if the principal of, premium, if
any, or interest on, this Note is payable in a Specified Currency other than
U.S. dollars and such Specified Currency is not available to the Issuer for
making payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking
community, then the Issuer will be entitled to satisfy its obligations to the
holder of this Note by making such payments in U.S. dollars on the basis of
the Market Exchange Rate on the date of such payment or, if the Market
Exchange Rate is not available on such date, as of the most recent practicable
date; provided, however, that if such Specified Currency is replaced by a
single European currency (expected to be named the Euro), the payment of
principal of, premium, if any, or interest on any Note denominated in such
currency shall be effected in the new single European currency in conformity
with legally applicable measures taken pursuant to, or by virtue of, the treaty
establishing the European Community (the "EC"), as amended by the treaty on
European Union (as so amended, the "Treaty"). Any payment made under such
circumstances in U.S. dollars (or, if applicable, such new single European
currency) where the required payment is in a Specified Currency other than
U.S. dollars will not constitute an Event of Default.
Subject to the provisions below, the value of the ECU, in which
the Notes may be denominated or may be payable, is equal to the value of the
ECU that is from time to time used as the unit of account of the EC. If the
ECU becomes a currency in its own right in accordance with the Treaty, all
references to ECU in the Notes shall be construed as references to such
currency.
With respect to each due date for the payment of principal of,
or interest on, the Notes on or after the first business day in Brussels on
which the ECU ceases to be used as the unit of account of the EC, and has not
become a currency in its own right replacing all or some of the currencies of
the member States of the EC, the Company shall choose a substitute currency
(the "Chosen Currency"), which may be any currency which was, on the last day
on which the ECU was used as the unit of account of the EC, a component
currency of the ECU or U.S. dollars, in which all payments due on or after
that date with respect to the Notes and coupons shall be made. Notice of the
Chosen Currency so selected shall be provided by first class mail to each
holder at the address of such holder which appears on the books maintained by
the registrar and to the Paying Agent. The amount of each payment in such
Chosen Currency shall be computed on the basis of the equivalent of the ECU in
that currency, determined as described below, as of the fourth business day in
Brussels prior to the date on which such payment is due.
On the first business day in Brussels on which the ECU ceases
to be used as the unit of account of the EC, and has not become a currency in
its own right replacing all or some of the currencies of the member States of
the EC, the Company shall select a Chosen Currency in which all payments with
respect to Notes and coupons having a due date prior thereto but not yet
presented for payment with respect to Notes and coupons having a due date
prior thereto but not yet presented for payment are to be made. The amount of
each payment in such Chosen Currency shall be computed on the basis of the
equivalent of the ECU in that currency, determined as described below, as of
such first business day.
The equivalent of the ECU in the relevant Chosen Currency as of
any date (the "Day of Valuation") shall be determined by, or on behalf of, the
Exchange Rate Agent on the following basis. The amounts and components
composing the ECU for this purpose (the "Components") shall be the amounts and
components that composed the ECU as of the last date on which the ECU was used
as the unit of account of the EC. The equivalent of the ECU in the Chosen
Currency shall be calculated by, first, aggregating the U.S. dollar
equivalents of the Components; and then, in the case of a Chosen Currency
other than U.S. dollars, using the rate used for determining the U.S. dollar
equivalent of the Components in the Chosen Currency as set forth below,
calculating the equivalent in the Chosen Currency of such aggregate amount in
U.S. dollars.
The "Exchange Rate Agent" shall be Morgan Stanley & Co.
Incorporated, unless otherwise indicated on the face hereof.
The U.S. dollar equivalent of each of the Components shall be
determined by, or on behalf of, the Exchange Rate Agent on the basis of the
middle spot delivery quotations prevailing at 2:30 P.M., Brussels time, on the
Day of Valuation, as obtained by, or on behalf of, the Exchange Rate Agent
from one or more major banks, as selected by the Company, in the country of
issue of the component currency in question.
If for any reason no direct quotations are available for a
Component as of a Day of Valuation from any of the banks selected for this
purpose, in computing the U.S. dollar equivalent of such Component, the
Exchange Rate Agent shall (except as provided below) use the most recent direct
quotations for such Component obtained by it or on its behalf, provided that
such quotations were prevailing in the country of issue not more than two
Business Days before such Day of Valuation. If such most recent quotations
were so prevailing in the country of issue more than two Business Days before
such Day of Valuation, the Exchange Rate Agent shall determine the U.S. dollar
equivalent of such Component on the basis of cross rates derived from the
middle spot delivery quotations for such component currency and for the U.S.
dollar prevailing at 2:30 P.M., Brussels time, on such Day of Valuation, as
obtained by, or on behalf of, the Exchange Rate Agent from one or more major
banks, as selected by the Company, in a country other than the country of
issue of such component currency. Notwithstanding the foregoing, the Exchange
Rate Agent shall determine the U.S. dollar equivalent of such Component on the
basis of such cross rates if the Company or such agent judges that the
equivalent so calculated is more representative than the U.S. dollar equivalent
calculated as provided in the first sentence of this paragraph. Unless
otherwise specified by the Company, if there is more than one market for
dealing in any component currency by reason of foreign exchange regulations or
for any other reason, the market to be referred to in respect of such currency
shall be that upon which a non-resident issuer of securities denominated in
such currency would purchase such currency in order to make payments in
respect of such securities.
Payments in the Chosen Currency will be made at the specified
office of a paying agent in the country of the Chosen Currency, or, if none,
or at the option of the holder, at the specified office of any Paying Agent
either by a check drawn on, or by transfer to an account maintained by the
holder with, a bank in the principal financial center of the country of the
Chosen Currency.
All determinations referred to above made by, or on behalf of,
the Company 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 to the extent permitted by law for all purposes and binding on the
holder of this Note 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.
With respect to moneys paid by the Issuer and held by the
Trustee for the payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee shall notify the
holders of such Notes that such moneys shall be repaid to the Issuer and any
person claiming such moneys shall thereafter look only to the Issuer for
payment thereof and (ii) such moneys shall be so repaid to the Issuer. Upon
such repayment all liability of the Trustee with respect to such moneys shall
thereupon cease, without, however, limiting in any way any obligation that the
Issuer may have to pay the principal of or interest or premium, if any, on
this Note as the same shall become due.
No provision of this Note or of the Senior Indenture shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on this
Note at the time, place, and rate, and in the coin or currency, herein
prescribed unless otherwise agreed between the Issuer and the registered
holder of this Note.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the holder in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and none of the Issuer,
the Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of,
premium, if any, or the interest on this Note, for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Senior Indenture
or any indenture supplemental thereto, against any incorporator, shareholder,
officer or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
All terms used in this Note which are defined in the Senior
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Senior Indenture.
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 _______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act ___________________________
(State)
Additional abbreviations may also be used though not in the
above list.
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FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
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[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
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[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:
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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.
OPTION TO ELECT TERMINATION OF AUTOMATIC EXTENSION
The undersigned hereby elects to terminate the automatic
extension of the maturity of the within Note (or the portion thereof specified
below) with the effect provided in the within Note by surrendering the within
Note to the Trustee at The Chase Manhattan Bank (formerly known as Chemical
Bank), 55 Water Street, New York, New York 10041, Attention: Corporate Trustee
Administration Department, 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.
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:
EXHIBIT A TO SENIOR VARIABLE RATE RENEWABLE NOTE
[FORM OF FACE OF SECURITY]
REGISTERED REGISTERED
No. SRVRR Cusip
U.S. $_____________
Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since
the registered owner hereof, Cede & Co., has an interest herein.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD)
SET FORTH BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF APPLYING
THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES.
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
SENIOR VARIABLE RATE RENEWABLE
MEDIUM-TERM NOTE, SERIES C
Morgan Stanley, Dean Witter, Discover & Co., a Delaware
corporation (together with its successors and assigns, the "Issuer"), for
value received, hereby promises to pay to
, or registered assignees, the principal sum specified in Schedule I hereto on
the Maturity Date specified above and to pay interest on the principal amount
hereof outstanding from time to time, from the Interest Accrual Date specified
above at a rate per annum equal to the Initial Interest Rate, as defined
below, until the Initial Interest Reset Date specified above, and thereafter
at a rate per annum determined in accordance with the provisions specified on
the reverse hereof until the earlier of (a) the date on which the principal
hereof is paid or duly made available for payment and (b) the Interest Payment
Date immediately preceding the date on which the principal amount hereof is
reduced to zero, in each case, together with the unpaid amount of interest, if
any, payable on the principal amount hereof during the period that the
Issuer's obligation to pay such principal amount was evidenced by a
predecessor Note that provided for the automatic extension of the maturity
thereof (the "Renewable Note"), which amount shall be payable on the first
date succeeding the Interest Accrual Date specified above on which interest on
this Note is paid and shall be payable to the person receiving such interest
payment. The Issuer will pay interest hereon in arrears 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 and such next Business Day falls in the next calendar
month, the Interest Payment Date or Maturity Date shall be the immediately
preceding day that is a Business Day. As used herein, "Initial Interest Rate"
means the rate of interest determined in accordance with the provisions of the
Renewable Note (i) on the Interest Reset Date with respect to the Renewable
Note occurring on the Interest Accrual Date specified above or (ii) if no such
Interest Reset Date occurred on the Interest Accrual Date, on the Interest
Reset Date with respect to the Renewable Note occurring immediately preceding
the Interest Accrual Date.
Interest on this Note will accrue from and including the most
recent date to which interest has been paid or duly provided for, or, if no
interest has been paid or duly provided for, from 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 on the Maturity Date
will be payable to the person to whom the principal hereof shall be payable.
On any date following the Interest Accrual Date and prior to
the Record Date immediately preceding the Maturity Date, the holder hereof may
elect to exchange this Note or any portion hereof having a principal amount of
$1,000 or any larger multiple of $1,000 in excess thereof for an interest in
the Renewable Note equal to the principal amount hereof so exchanged by
delivering to the Trustee (i) this Note with the form entitled "Option to
Exchange" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a
trust company in the United States of America setting forth the name of the
holder of this Note, the principal amount hereof, the certificate number of
this Note or a description of this Note's tenor or terms, a statement that the
option to exchange is being exercised thereby, the principal amount hereof
with respect to which such option is being exercised and a guarantee that this
Note with the form entitled "Option to Exchange" below duly completed will be
received by the Trustee no later than five Business Days after the date of
such telegram, telex, facsimile transmission or letter; provided that such
telegram, telex, facsimile transmission or letter shall not be effective
unless this Note and such form duly completed are received by the Trustee by
such fifth Business Day. Such option may be exercised by the holder for less
than the entire principal amount hereof provided that the principal amount for
which such option is not exercised is at least $1,000 or any larger amount
that is an integral multiple of $1,000. Notwithstanding the foregoing, the
option to exchange all or a portion of this Note for an interest in the
Renewable Note may not be exercised during the period from and including a
Record Date to but excluding the immediately succeeding Interest Payment Date.
If the option to exchange any portion hereof is exercised, then, on the date
of such exchange, Schedule I hereto shall be annotated to reflect the
corresponding decrease in the principal amount hereof, and Schedule I to the
Renewable Note shall be annotated to reflect the corresponding increase in the
principal amount thereof.
Payment of the principal of this Note, any premium and the
interest due at the Maturity Date (or any redemption date), unless this Note
is denominated in a Specified Currency other than U.S. dollars and is to be
paid in whole, or in part in such Specified Currency, will be made in
immediately available funds upon surrender of this Note at the office or
agency of the Trustee, as defined on the reverse hereof, maintained for that
purpose in the Borough of Manhattan, The City of New York, or at the office or
agency of such other paying agent as the Issuer may determine in U.S. dollars.
U.S. dollar payments of interest, other than interest due at maturity or any
date of redemption, will be made by United States dollar check mailed to the
address of the person entitled thereto as such address shall appear in the
Note register. A holder of U.S. $10,000,000 or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which
is paid in U.S. dollars, will be entitled to receive payments of interest,
other than interest due at maturity or any date of redemption, by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Trustee in writing not less than 15
calendar days prior to the applicable Interest Payment Date.
If this Note is denominated in a Specified Currency other than
U.S. dollars, and the holder does not elect (in whole or in part) to receive
payment in U.S. dollars pursuant to the next succeeding paragraph, payments of
interest, principal or any premium with regard to this Note 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; provided
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 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 or at least ten days prior to the Maturity Date or any
redemption date, as the case may be.
If the holder elects to receive all or a portion of payments of
principal of and any premium 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 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 U.S.
dollars for the Specified Currency 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.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Senior Indenture, as
defined on the reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
DATED: MORGAN STANLEY, DEAN WITTER,
DISCOVER & CO.
By:
--------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned
Senior Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
---------------------------
Authorized Officer
[FORM OF REVERSE OF SECURITY]
This Note is one of a duly authorized issue of the Senior
Medium-Term Notes, Series C, having maturities more than nine months from the
date of issue (the "Notes") of the Issuer. The Notes are issuable under a
Senior Indenture, dated as of April 15, 1989, as supplemented by a First
Supplemental Senior Indenture dated as of May 15, 1991 and a Second
Supplemental Senior Indenture dated as of April 15, 1996 between Morgan
Stanley Group Inc. (as predecessor of the Issuer) and The Chase Manhattan Bank
(formerly known as Chemical Bank), as Trustee (the "Trustee," which term
includes any successor trustee under the Senior Indenture) as further
supplemented by a Third Supplemental Senior Indenture dated as of June 1, 1997
between the Issuer and the Trustee (as so supplemented, the "Senior
Indenture"), to which Senior Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities of the Issuer, the Trustee and holders of the
Notes and the terms upon which the Notes are, and are to be, authenticated and
delivered. The terms of individual Notes may vary with respect to interest
rates, interest rate formulas, issue dates, maturity dates, or otherwise, all
as provided in the Senior Indenture. To the extent not inconsistent herewith,
the terms of the Senior Indenture are hereby incorporated by reference herein.
Unless otherwise provided on the face hereof this Note will not
be subject to any sinking fund and will not be redeemable prior to maturity.
This Note will bear interest at the rate determined in
accordance with the applicable provisions below by reference to the Base Rate
specified on the face hereof based on the Index Maturity, if any, specified on
the face hereof (i) (A) plus or minus the Spread, if any, specified on the
face hereof and (B) for any period on or after the Incremental Spread
Commencement Date, if any, specified on the face hereof, plus or minus the
Incremental Spread, if any, specified on the face hereof or (ii) multiplied by
the Spread Multiplier, if any, specified on the face hereof. Commencing with
the Initial Interest Reset Date specified on the face hereof, the rate at
which interest on this Note is payable shall be reset as of each Interest
Reset Date (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
next preceding Business Day. As used herein, "Business Day" means any day,
other than a Saturday or Sunday, and that is neither a legal holiday nor a day
on which banking institutions are authorized or required by law or regulation
to close in The City of New York and, with respect to Notes bearing interest
calculated by reference to LIBOR, in the City of London.
The Interest Determination Date pertaining to an Interest Reset
Date for Notes bearing interest calculated by reference to the CD Rate,
Commercial Paper Rate, Federal Funds Rate, Prime Rate and CMT Rate will be the
second Business Day next preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date for Notes bearing
interest calculated by reference to LIBOR shall be the second London Banking
Day preceding 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; provided, however,
that if as a result of a legal holiday an auction is held on the Friday of the
week preceding such Interest Reset Date, the related 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.
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 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, the CD Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate on such
date for negotiable 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)," or,
if not so published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the CD Rate will be the rate
on such Interest Determination Date for negotiable certificates of deposit of
the Index Maturity specified on the face hereof as published by the Federal
Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" ("Composite Quotations") under the
heading "Certificates of Deposit." If neither of such rates is published by
3:00 P.M., New York City time, on such Calculation Date, then the CD Rate on
such Interest Determination Date will be calculated by the Calculation Agent
referred to on the face hereof and will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such
Interest Determination Date for certificates of deposit in the denomination of
$5,000,000 with a remaining maturity closest to the Index Maturity specified
on the face hereof of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money
center banks of the highest credit standing in the market for negotiable
certificates of deposit; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate in effect for the applicable period will be the same as
the CD Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable hereon 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, the Commercial
Paper Rate with respect to this Note shall be determined on each Interest
Determination Date and shall be the Money Market Yield (as defined herein) of
the rate on such date for commercial paper having the Index Maturity specified
on the face hereof, as such rate shall be published in H.15(519) under the
heading "Commercial Paper," or if not so published prior to 9:00 A.M., New
York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Commercial Paper Rate shall be the Money Market Yield
of the rate on such Interest Determination Date for commercial paper of the
Index Maturity specified on the face hereof as published in Composite
Quotations under the heading "Commercial Paper." If neither of such rates is
published by 3:00 P.M., New York City time, on such Calculation Date, then the
Commercial Paper Rate shall be the Money Market Yield of the arithmetic mean
of the offered rates as of 11:00 A.M., New York City time, on such Interest
Determination Date of three leading dealers in commercial paper in The City of
New York selected by the Calculation Agent 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 rating
agency; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the
Commercial Paper Rate in effect for the applicable period will be the same as
the Commercial Paper Rate for the immediately preceding Interest Reset Period
(or, if there was no such Interest Reset Period, the rate of interest payable
hereon shall be the Initial Interest Rate).
"Money Market Yield" shall be the yield calculated in
accordance with the following formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the applicable per annum 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 Federal Funds Rate. If the Base Rate
specified on the face hereof is the Federal Funds Rate, the Federal Funds Rate
with respect to this Note shall be determined on each Interest Determination
Date and shall be the rate on such date for Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)," or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Interest Determination Date, the Federal Funds Rate will be the rate
on such Interest Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate." If neither of such rates is
published by 3:00 P.M., New York City time, on such Calculation Date, the
Federal Funds Rate for such Interest Determination Date will be calculated by
the Calculation Agent and will be the arithmetic mean of the rates for the
last transaction in overnight Federal funds as of 11:00 A.M., New York City
time, on such Interest Determination Date arranged by three leading brokers in
Federal funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate in effect for the applicable period will be the same as the Federal
Funds Rate for the immediately preceding Interest Reset Period (or, if there
was no such Interest Reset Period, the rate of interest payable hereon 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 determined on each
Interest Determination Date as follows:
(i) As of the Interest Determination Date, the Calculation
Agent will determine (a) if "LIBOR Reuters" is specified as the
Reporting Service on the face hereof, the arithmetic mean of the
offered rates (unless the specified Designated LIBOR Page (as defined
below) by its terms provides only for a single rate, in which case such
single rate shall be used) for deposits in the London interbank market
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 such Interest Determination Date, which appear on
the Designated LIBOR Page at approximately 11:00 a.m., London time, on
such Interest Determination Date, if at least two such offered rates
appear (unless, as aforesaid, only a single rate is required) on such
Designated LIBOR Page, or (b) if "LIBOR Telerate" is specified as the
Reporting Service on the face hereof, the rate for deposits in the
Index Currency for the period of the Index Maturity, each as designated
on the face hereof, commencing on the Second London Banking Day
following such Interest Determination Date (or, if pounds Sterling is
the Index Currency commencing on such Interest Determination Date) that
appears on the Designated LIBOR Page at approximately 11:00 a.m.,
London time, on such Interest Determination Date. If fewer than two
offered rates appear (if "LIBOR Reuters" is specified as the Reporting
Service on the face hereof and calculation of LIBOR is based on the
arithmetic mean of the offered rates) or if no rate appears (if the
Reporting Service on the face hereof specifies either (x) "LIBOR
Reuters" and the Designated LIBOR Page by its terms provides only for a
single rate or (y) "LIBOR Telerate"), LIBOR in respect of that Interest
Determination Date will be determined as if the parties had specified
the rate described in (ii) below.
(ii) With respect to an Interest Determination Date on which
fewer than two offered rates appear (if "LIBOR Reuters" is specified as
the Reporting Service on the face hereof and calculation of LIBOR is
based on the arithmetic mean of the offered rates) or no rate appears
(if the Reporting Service on the face hereof specifies either (x)
"LIBOR Reuters" and the Designated LIBOR Page by its terms provides
only for a single rate or (y) "LIBOR Telerate"), the Calculation Agent
will 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 quotations 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 such Interest Determination Date (or, if pounds sterling is
the Index Currency, commencing on such Interest Determination Date), to
prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on such Interest Determination Date and in a principal
amount equal to an amount of not less than U.S.$1 million (or the
equivalent in the Index Currency (if the Index Currency is not U.S.
Dollars)) that is representative of a single transaction in such Index
Currency in such market at such time. If at least two such quotations
are provided, LIBOR determined on such Interest Determination Date will
be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR determined on such Interest
Determination Date will be the arithmetic mean of rates quoted at
approximately 11:00 a.m. (or such other time specified on the face
hereof), in the applicable principal financial center for the country
of the Index Currency on such Interest Determination Date, by three
major banks in such principal financial center selected by the
Calculation Agent (after consultation with the Issuer) on such Interest
Determination Date for loans in the Index Currency to leading European
banks, for the period of the Index Maturity specified on the face
hereof commencing on the second London Banking Day immediately
following such Interest Determination Date (or, if pounds sterling is
the Index Currency, commencing on such Interest Determination Date) and
in a principal amount of not less than U.S.$1 million (or the
equivalent in the Index Currency (if the Index Currency is not U.S.
dollars)) that is representative of a single transaction in such Index
Currency in such market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent are not quoting
rates as mentioned in this sentence, "LIBOR" for such Interest Reset
Period will be the same as LIBOR for the immediately preceding Interest
Reset Period (or, if there was no such Interest Reset Period, the rate
of interest payable on the LIBOR Notes for which LIBOR is being
determined shall be the Initial Interest Rate). "Index Currency" means
the currency (including composite currencies) specified as Index
Currency on the face hereof. If no such currency is specified as Index
Currency 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 Monitor Money Rates Service for the purpose of displaying
the London interbank rates of major banks for the applicable Index
Currency, or (b) if "LIBOR Telerate" is designated as the Reporting
Service on the face hereof, the display on the Dow Jones Telerate
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 as the Reporting Service on the
face hereof, LIBOR for the applicable Index Currency will be determined
as if LIBOR Telerate (and, if the U.S. dollar is the Index Currency,
Page 3750) had been specified.
Determination of Prime Rate. If the Base Rate specified on the
face hereof is the Prime Rate, the Prime Rate with respect to this Note shall
be determined on each Interest Determination Date and shall be the rate set
forth in H.15(519) for such date opposite the caption "Bank Prime Loan." If
such rate is not yet published by 9:00 A.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, the Prime
Rate for such Interest Determination Date will be the arithmetic mean of the
rates of interest publicly announced by each bank named on the Reuters Screen
USPRIME1 Page as such bank's prime rate or base lending rate as in effect for
such Interest Determination Date as quoted on the Reuters Screen USPRIME1 Page
on such Interest Determination Date, or, if fewer than four such rates appear
on the Reuters Screen USPRIME1 Page for such Interest Determination Date, the
rate shall 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 such Interest Determination Date by at least two of the three
major money center banks in The City of New York selected by the Calculation
Agent from which quotations are requested. If fewer than two quotations are
provided, the Prime Rate shall be calculated by the Calculation Agent and shall
be determined as the arithmetic mean on the basis of the prime rates in The
City of New York by the appropriate number of substitute banks or trust
companies organized and doing business under the laws of the United States, or
any State thereof, in each case having total equity capital of at least U.S.
$500 million and being subject to supervision or examination by Federal or
State authority, selected by the Calculation Agent to quote such rate or
rates; provided, however, that if the banks or trust companies selected as
aforesaid by the Calculation Agent are not quoting rates as set forth above,
the "Prime Rate" in effect for such Interest Reset Period will be the same as
the Prime Rate for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the rate of interest payable hereon
shall be the Initial Interest Rate).
"Reuters Screen USPRIME1 Page" means the display designated as
Page "USPRIME1" on the Reuters Monitor Money Rate Service (or such other page
that may replace the USPRIME1 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 the Treasury Rate, the Treasury Rate with respect to this
Note shall be determined on each Interest Determination Date and shall be the
rate for the auction held on such date of direct obligations of the United
States ("Treasury Bills") having the Index Maturity specified on the face
hereof, as published in H.15(519) under the heading "Treasury Bills--auction
average (investment)," or if not so published by 9:00 A.M., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
the auction average rate on such Interest Determination Date (expressed as a
bond equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States
Department of the Treasury. In the event that the results of the auction of
Treasury Bills having the Index Maturity specified on the face hereof are not
published or reported as provided above by 3:00 P.M., New York City time, on
such Calculation Date or if no such auction is held on such Interest
Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) calculated using the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time,
on such Interest Determination Date, of three leading primary United States
government securities dealers 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; provided, however, that if the dealers selected
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate for such Interest Reset Date will be the same as
the Treasury Rate for the immediately preceding Interest Reset Period (or, if
there was no such Interest Reset Period, the rate of interest payable hereon
shall be the Initial Interest Rate).
Determination of CMT Rate. If the Base Rate specified on the
face hereof is the CMT Rate, the CMT Rate with respect to this Note shall be
determined on each Interest Determination Date and shall be the rate displayed
for the Index Maturity specified on the face hereof on the Designated CMT
Telerate Page (as defined below) under the caption ". . . Treasury Constant
Maturities . . . /Federal Reserve Board Release H.15," under the column for
the Designated CMT Maturity Index (as defined below) for (i) if the Designated
CMT Telerate Page is 7055, the rate on such Interest Determination Date and
(ii) if the Designated CMT Telerate Page is 7052, the week or the month, as
applicable, ended immediately preceding the week in which the related Interest
Determination Date occurs. If such rate is no longer displayed on the
relevant page, or is not displayed by 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Interest Determination Date, then the CMT
Rate for such Interest Determination Date will be such Treasury Constant
Maturity rate for the Designated CMT Maturity Index as published in the
relevant H.15(519). If such rate is no longer published, or is not published
by 3:00 p.m., New York City time, on the related Calculation Date, then the CMT
Rate for such Interest Determination Date will be such Treasury Constant
Maturity rate for the Designated CMT Maturity Index (or other United States
Treasury rate for the Designated CMT Maturity Index) for the Interest
Determination Date with respect to the related Interest Reset 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). If such
information is not provided by 3:00 p.m., New York time, on the related
Calculation Date, then the CMT Rate for the Interest Determination Date will
be calculated by the Calculation Agent and will 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
United States government securities dealers (each, a "Reference Dealer") in
The City of New York (which may include affiliates of the Issuer) selected by
the Calculation Agent (from five such Reference Dealers selected by the
Calculation Agent, after consultation with the Issuer, and eliminating 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 and remaining term to maturity of not less than
such Designated CMT Maturity Index minus one year. If the Calculation Agent
cannot obtain three such Treasury Notes quotations, the CMT Rate for such
Interest Determination Date will be calculated by the Calculation Agent and
will 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 (from five such Reference Dealers selected by the Calculation Agent,
after consultation with the Issuer, and eliminating 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 Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in an amount of at least $100,000,000. If
three or four (and not five) of such Reference Dealers are quoting as
described above, then the CMT Rate will be based on the arithmetic mean of the
offer prices obtained and neither the highest nor the lowest of such quotes
will be eliminated; provided, however, that if fewer than three Reference
Dealers selected by the Calculation Agent are quoting as described herein, the
CMT Rate for such Interest Reset Date will be the same as the CMT Rate for the
immediately preceding Interest Reset Period (or, if there was no such Interest
Reset Period, the rate of interest payable hereon shall be the Initial
Interest Rate). If two Treasury Notes with an original maturity as described
in the second preceding sentence 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 will be used.
"Designated CMT Telerate Page" means the display on the Dow
Jones Telerate Service specified on the face hereof (or any other page as may
replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)), for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" shall be the original period to
maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified on the face hereof with respect to which the CMT Rate will be
calculated. If no such maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be two years.
Notwithstanding the foregoing, the interest rate hereon shall
not be greater than the Maximum Interest Rate, if any, or less than the
Minimum Interest Rate, if any, specified on the face hereof. The Calculation
Agent shall calculate the interest rate hereon in accordance with the
foregoing on or before each Calculation Date. The interest rate on this Note
will in no event be higher than the maximum rate permitted by New York law, as
the same may be modified by United States Federal law of general application.
At the request of the holder hereof, the Calculation Agent will
provide to the holder hereof the interest rate hereon then in effect and, if
determined, the interest rate that will become effective as of the next
Interest Reset Date.
Unless otherwise indicated on the face hereof, interest
payments on this Note shall be the amount of interest accrued from and
including the Interest Accrual Date or from and including the last date to
which interest has been paid or duly provided for to but, excluding the
Interest Payment Dates or Maturity Date, as the case may be. Accrued interest
hereon for any period shall be the sum of the products obtained by multiplying
the interest factor calculated for each day in such period by the principal
amount hereof shown on Schedule I hereto for each such day; provided that for
the purpose of calculating the amount of interest payable hereon, any decrease
in the principal amount hereof attributable to an exercise of the option to
exchange a portion of this Note for an interest in the Renewable Note shall be
effective on and as of the Interest Payment Date immediately preceding the
date of such decrease. The interest factor for each such day shall be
computed by dividing the interest rate applicable to such day by 360 if the
Base Rate is CD Rate, Commercial Paper Rate, Federal Funds Rate, Prime Rate or
LIBOR, as specified on the face hereof, or by the actual number of days in the
year if the Base Rate is the Treasury Rate or the CMT Rate, as specified on
the face hereof. 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 (.0000001), with five one-millionths
of a percentage point rounded upward, and all dollar amounts used in or
resulting from such calculation on this Note will be rounded to the nearest
cent (with one-half cent rounded upward). The interest rate in effect on any
Interest Reset Date will be the applicable rate as reset on such date. The
interest rate applicable to any other day is the interest rate from the
immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate).
This Note, and all the obligations of the Issuer hereunder are
direct, unsecured obligations of the Issuer and rank without preference or
priority among themselves and pari passu with all other existing and future
unsecured and unsubordinated indebtedness of the Issuer, subject to certain
statutory exceptions in the event of liquidation upon insolvency.
This Note, and any Note or Notes issued upon transfer or
exchange hereof, is issuable only in fully registered form, without coupons,
and is issuable only in 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 New York City 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; provided, however, in the case of ECUs, the Market Exchange Rate
shall be the rate of exchange determined by the Commission of the European
Communities (or any successor thereto) as published in the Official Journal of
the European Communities, or any successor publication, on the Business Day
immediately preceding the date of issuance.
The Trustee has been appointed registrar for the Notes, and the
Trustee will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and duly executed by the registered holder hereof in person or by the
holder's attorney duly authorized in writing, and thereupon the Trustee shall
issue in the name of the transferee or transferees, in exchange herefor, a new
Note or Notes having identical terms and provisions and having a like
aggregate principal amount in authorized denominations, subject to the terms
and conditions set forth herein; provided, however, that the Trustee will not
be required (i) to register the transfer of or exchange any Note that has been
called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the Senior
Indenture with respect to the redemption of Notes. Notes are exchangeable at
said office for other Notes of other authorized denominations of equal
aggregate principal amount having identical terms and provisions. All such
exchanges and transfers of Notes will be free of charge, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge in connection therewith. All Notes surrendered for exchange shall be
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and executed by the registered holder in person or by the holder's
attorney duly authorized in writing. The date of registration of any Note
delivered upon any exchange or transfer of Notes shall be such that no gain or
loss of interest results from such exchange or transfer.
In case this Note shall at any time become mutilated, defaced
or be destroyed, lost or stolen and this Note or evidence of the loss, theft
or destruction thereof (together with the indemnity hereinafter referred to
and such other documents or proof as may be required in the premises) shall
be delivered to the Trustee, a new Note of like tenor will be issued by the
Issuer in exchange for this Note, but, if this Note is destroyed, lost or
stolen, only upon receipt of evidence satisfactory to the Trustee and the
Issuer that this Note was destroyed or lost or stolen and, if required, upon
receipt also of indemnity satisfactory to each of them. All expenses and
reasonable charges associated with procuring such indemnity and with the
preparation, authentication and delivery of a new Note shall be borne by the
owner of the Note mutilated, defaced, destroyed, lost or stolen.
The Senior Indenture provides that, (a) if an Event of Default
(as defined in the Senior Indenture) due to the default in payment of
principal of, premium, if any, or interest on, any series of debt securities
issued under the Senior Indenture, including the series of Senior Medium-Term
Notes of which this Note forms a part, or due to the default in the
performance or breach of any other covenant or warranty of the Issuer
applicable to the debt securities of such series but not applicable to all
outstanding debt securities issued under the Senior Indenture shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in principal amount of the debt securities of each affected series (voting
as a single class) may then declare the principal of all debt securities of
all such series and interest accrued thereon to be due and payable immediately
and (b) if an Event of Default due to a default in the performance of any
other of the covenants or agreements in the Senior Indenture applicable to all
outstanding debt securities issued thereunder, including this Note, or due to
certain events of bankruptcy, insolvency and reorganization of the Issuer,
shall have occurred and be continuing, either the Trustee or the holders of
not less than 25% in principal amount of all debt securities issued under the
Senior Indenture then outstanding (treated as one class) 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 principal amount of the debt securities of all
affected series then outstanding.
The Senior Indenture permits the Issuer and the Trustee, with
the consent of the holders of not less than a majority in aggregate principal
amount of the debt securities of all series issued under the Senior Indenture
then outstanding and affected (voting as one class), to execute supplemental
indentures adding any provisions to or changing in any manner the rights of
the holders of each series so affected; provided that the Issuer and the
Trustee may not, without the consent of the holder of each outstanding debt
security affected thereby, (a) extend the final maturity of any such debt
security, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable on
redemption thereof, or change the currency of payment thereof, or impair or
affect the rights of any holder to institute suit for the payment thereof
without the consent of the holder of each debt security so affected 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.
Except as set forth below, if the principal of, premium, if
any, or interest on, this Note is payable in a Specified Currency other than
U.S. dollars and such Specified Currency is not available to the Issuer for
making payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking
community, then the Issuer will be entitled to satisfy its obligations to the
holder of this Note by making such payments in U.S. dollars on the basis of
the Market Exchange Rate on the date of such payment or, if the Market
Exchange Rate is not available on such date, as of the most recent practicable
date; provided, however, that if such Specified Currency is replaced by a
single European currency (expected to be named the Euro), the payment of
principal of, premium, if any, or interest on any Note denominated in such
currency shall be effected in the new single European currency in conformity
with legally applicable measures taken pursuant to, or by virtue of, the treaty
establishing the European Community (the "EC"), as amended by the treaty on
European Union (as so amended, the "Treaty"). Any payment made under such
circumstances in U.S. dollars (or, if applicable, such new single European
currency) where the required payment is in a Specified Currency other than
U.S. dollars will not constitute an Event of Default.
Subject to the provisions below, the value of the ECU, in which
the Notes may be denominated or may be payable, is equal to the value of the
ECU that is from time to time used as the unit of account of the EC. If the
ECU becomes a currency in its own right in accordance with the Treaty, all
references to ECU in the Notes shall be construed as references to such
currency.
With respect to each due date for the payment of principal of,
or interest on, the Notes on or after the first business day in Brussels on
which the ECU ceases to be used as the unit of account of the EC, and has not
become a currency in its own right replacing all or some of the currencies of
the member States of the EC, the Company shall choose a substitute currency
(the "Chosen Currency"), which may be any currency which was, on the last day
on which the ECU was used as the unit of account of the EC, a component
currency of the ECU or U.S. dollars, in which all payments due on or after
that date with respect to the Notes and coupons shall be made. Notice of the
Chosen Currency so selected shall be provided by first class mail to each
holder at the address of such holder which appears on the books maintained by
the registrar and to the Paying Agent. The amount of each payment in such
Chosen Currency shall be computed on the basis of the equivalent of the ECU in
that currency, determined as described below, as of the fourth business day in
Brussels prior to the date on which such payment is due.
On the first business day in Brussels on which the ECU ceases
to be used as the unit of account of the EC, and has not become a currency in
its own right replacing all or some of the currencies of the member States of
the EC, the Company shall select a Chosen Currency in which all payments with
respect to Notes and coupons having a due date prior thereto but not yet
presented for payment with respect to Notes and coupons having a due date
prior thereto but not yet presented for payment are to be made. The amount of
each payment in such Chosen Currency shall be computed on the basis of the
equivalent of the ECU in that currency, determined as described below, as of
such first business day.
The equivalent of the ECU in the relevant Chosen Currency as of
any date (the "Day of Valuation") shall be determined by, or on behalf of, the
Exchange Rate Agent on the following basis. The amounts and components
composing the ECU for this purpose (the "Components") shall be the amounts and
components that composed the ECU as of the last date on which the ECU was used
as the unit of account of the EC. The equivalent of the ECU in the Chosen
Currency shall be calculated by, first, aggregating the U.S. dollar
equivalents of the Components; and then, in the case of a Chosen Currency
other than U.S. dollars, using the rate used for determining the U.S. dollar
equivalent of the Components in the Chosen Currency as set forth below,
calculating the equivalent in the Chosen Currency of such aggregate amount in
U.S. dollars.
The "Exchange Rate Agent" shall be Morgan Stanley & Co.
Incorporated, unless otherwise indicated on the face hereof.
The U.S. dollar equivalent of each of the Components shall be
determined by, or on behalf of, the Exchange Rate Agent on the basis of the
middle spot delivery quotations prevailing at 2:30 p.m., Brussels time, on the
Day of Valuation, as obtained by, or on behalf of, the Exchange Rate Agent
from one or more major banks, as selected by the Company, in the country of
issue of the component currency in question.
If for any reason no direct quotations are available for a
Component as of a Day of Valuation from any of the banks selected for this
purpose, in computing the U.S. dollar equivalent of such Component, the
Exchange Rate Agent shall (except as provided below) use the most recent direct
quotations for such Component obtained by it or on its behalf, provided that
such quotations were prevailing in the country of issue not more than two
Business Days before such Day of Valuation. If such most recent quotations
were so prevailing in the country of issue more than two Business Days before
such Day of Valuation, the Exchange Rate Agent shall determine the U.S. dollar
equivalent of such Component on the basis of cross rates derived from the
middle spot delivery quotations for such component currency and for the U.S.
dollar prevailing at 2:30 p.m., Brussels time, on such Day of Valuation, as
obtained by, or on behalf of, the Exchange Rate Agent from one or more major
banks, as selected by the Company, in a country other than the country of
issue of such component currency. Notwithstanding the foregoing, the Exchange
Rate Agent shall determine the U.S. dollar equivalent of such Component on the
basis of such cross rates if the Company or such agent judges that the
equivalent so calculated is more representative than the U.S. dollar equivalent
calculated as provided in the first sentence of this paragraph. Unless
otherwise specified by the Company, if there is more than one market for
dealing in any component currency by reason of foreign exchange regulations or
for any other reason, the market to be referred to in respect of such currency
shall be that upon which a non-resident issuer of securities denominated in
such currency would purchase such currency in order to make payments in
respect of such securities.
Payments in the Chosen Currency will be made at the specified
office of a paying agent in the country of the Chosen Currency, or, if none,
or at the option of the holder, at the specified office of any Paying Agent
either by a check drawn on, or by transfer to an account maintained by the
holder with, a bank in the principal financial center of the country of the
Chosen Currency.
All determinations referred to above made by, or on behalf of,
the Company 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 to the extent permitted by law for all purposes and binding on the
holder of this Note 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.
With respect to moneys paid by the Issuer and held by the
Trustee for the payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee shall notify the
holders of such Notes that such moneys shall be repaid to the Issuer and any
person claiming such moneys shall thereafter look only to the Issuer for
payment thereof and (ii) such moneys shall be so repaid to the Issuer. Upon
such repayment all liability of the Trustee with respect to such moneys shall
thereupon cease, without, however, limiting in any way any obligation that the
Issuer may have to pay the principal of or interest or premium, if any, on
this Note as the same shall become due.
No provision of this Note or of the Senior Indenture shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on this
Note at the time, place, and rate, and in the coin or currency, herein
prescribed unless otherwise agreed between the Issuer and the registered
holder of this Note.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the holder in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and none of the Issuer,
the Trustee or any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of,
premium, if any, or the interest on this Note, for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Senior Indenture
or any indenture supplemental thereto, against any incorporator, shareholder,
officer or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall for all purposes be governed by, and construed
in accordance with, the laws of the State of New York.
All terms used in this Note which are defined in the Senior
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Senior Indenture.
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 _______________
(Cust) (Minor)
Under Uniform Gifts to Minors Act ___________________________
(State)
Additional abbreviations may also be used though not in the
above list.
------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
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[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
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[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.
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 The Chase
Manhattan Bank (formerly known as Chemical Bank), 55 Water Street, New York,
New York 10041, Attention: Corporate Trustee Administration Department, 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
$100,000 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.
SCHEDULE I
SCHEDULE OF EXCHANGES
The initial principal amount of this Note is ___________. The
following exchanges of a portion of this Note for an interest in the Renewable
Note have been made:
Principal Amount Reduced Principal
Date of Exchanged for Amount Outstanding Notation Made by or
Exchange Renewable Note Following Such Exchange on Behalf of Trustee
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[N/A] [N/A] [N/A] [N/A]
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