Document:

Exhibit 10.2

 

NINTH AMENDMENT TO LOAN AGREEMENT

This NINTH AMENDMENT TO LOAN AGREEMENT (the "Ninth
Amendment"), dated as of the 20th day of January, 2005, is made by and
among HORIZON OFFSHORE CONTRACTORS, INC. ("Contractors"),
HORIZON SUBSEA SERVICES, INC. ("Subsea"), and HORIZON
VESSELS, INC. ("Vessels," and together with Contractors and
Subsea, the "Borrowers"), jointly and severally, each of the
financial institutions which is or may from time to time become a party to such
Agreement (as defined below) (collectively, "Lenders", and each a
"Lender"), and SOUTHWEST BANK OF TEXAS, N.A., as agent (in
such capacity, the "Agent").

W I T N E S S E T H:

WHEREAS, Borrowers, Lenders and Agent are parties to that
certain Loan Agreement dated as of March 26, 2001 (as the same has been or may
hereafter be amended, supplemented or otherwise modified, the "Agreement");
and

WHEREAS, Borrowers, Lenders and Agent now desire to amend
the Agreement as herein set forth.

NOW, THEREFORE, in consideration of the foregoing
recitals and the mutual covenants and premises contained herein, together with
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and subject to the conditions to effectiveness set forth in
Section 6 hereof, the parties hereto agree as follows:

    
1.     
    Terms.  Capitalized terms used in this Ninth 
      Amendment (including
    the recitals hereof) shall have the meanings assigned to them in the
    Agreement, as amended by this Ninth Amendment. 

2.     Amendments.
    

(a)    Section 1.1
of the Agreement is hereby amended to add the
following definition thereto: 

	
		"Borrowing Base Eligible Receivables"
      means any accounts receivable (on a gross basis without giving effect to
      advance rate percentages) of the Borrowers and its Subsidiaries derived
      from or attributable to any contract the receivables of which are or
      previously were eligible for inclusion in the Borrowing Base.

	

(b)    The following
definition set forth in Section 1.1 of the Agreement
is hereby amended and restated in its entirety as follows: 

	
		"Termination Date" means 11:00 a.m.,
      Houston, Texas time on February 11, 2005.

	

(c)    Section 7.1(e) of the
      Agreement is hereby amended and restated in its entirety as follows:

	
		(e)    Borrowing Base Certificate. On each Monday
    commencing on January 24, 2005, a Borrowing Base Certificate as of the last
    day of the prior calendar week certified by an officer of each Borrower
    acceptable to Agent.

	

3.    Termination of
    Commitments. Notwithstanding anything to the contrary contained in
    the Agreement, from and after the date hereof each Lender's Commitment is
    hereby terminated and the Borrowers shall have no right to receive any
    further Advances under the Agreement. Furthermore, the Lenders shall not be
    required to issue any new Letters of Credit or increase any existing Letters
    of Credit under the Agreement. 

4.    Cash Sweep and
    Combined Commitment Reductions. Notwithstanding anything to the
    contrary in the Loan Documents and without limitation of any terms thereof,
    commencing on January 21, 2005, through the Termination Date, Borrowers
    shall cause all funds consisting of Borrowing Base Eligible Receivables to
    be paid directly to the Holding Lockbox or deposited directly into the
    Holding Account. If for any reason such funds are not paid directly to the
    Holding Lockbox or deposited directly into the Holding Account, Borrower
    shall immediately transfer such funds into the Holding Account. From and
    after January 21, 2005, Agent shall transfer daily to the Collateral Account
    all such funds received in the Holding Lockbox or deposited directly into or
    transferred into the Holding Account (or not deposited or transferred to the
    extent required to be deposited or transferred hereunder) in excess of
    $5,500,000 in the aggregate. All such funds received in excess of
    such $5,500,000 amount consisting of Borrowing Base Eligible Receivables shall be
    applied by Agent to the Obligations. Borrowers shall deliver to Agent daily
    a report showing the sources of amounts received in the Holding Lockbox and
    deposited in the Holding Account on the prior day.

5.    Accounts. Borrowers and their
    respective Subsidiaries shall maintain all of their domestic deposit
    accounts with Agent (each such account a "Domestic Account"),
    except for petty cash accounts in an aggregate amount which does not exceed
    $300,000 and workmen's compensation accounts required to be maintained at
    other locations. Borrowers shall only transfer funds from a Domestic Account
    for purposes of paying Borrowers' operating expenses then due and payable in
    the ordinary course of Borrowers' business. Borrowers shall give Agent no
    less than twenty-four hours advance notice of any individual request for
    withdrawal from a Domestic Account in excess of $1,500,000, including the
    amount to be withdrawn, the payee thereof and the purpose of such payment.
    Agent shall have the right to refuse any withdrawal request in the event
    Agent is not provided prior written notice thereof as required in this
    Paragraph 5 or Agent determines that such withdrawal is being made for
    purposes other than paying Borrowers' operating expenses then due and
    payable in the ordinary course of Borrowers' business.

6.    Conditions Precedent. The
    effectiveness of this Ninth Amendment is subject to the satisfaction of the
    following: 

(a)    this Ninth Amendment shall have been duly executed and delivered by
      each of the parties set forth on the signature pages hereto;

(b)    Agent shall have received $1,300,000 in immediately available U.S.
      Dollars which shall be applied as a principal payment of outstanding
      Obligations; 

(c)    Agent shall have received $2,500,000 in immediately available U.S.
      Dollars to be held by Agent in the Collateral Account as cash collateral
      for the Obligations (the "Cash Collateral");

(d)    Agent shall have received, for the ratable benefit of the Lenders,
      $180,000 in immediately available U.S. Dollars which sum represents that
      portion of the remaining $450,000 fee payable to Borrowers under the
      consent letter dated May 25, 2004, which is allocable to the Agreement;

(e)    Agent and Lenders shall have received such other documents,
      instruments and consents, as they may require in connection with the Ninth
      Amendment;

(f)    Agent shall have received evidence satisfactory to it that the
      conditions precedent to effectiveness of the Eighth Amendment to the
      Foreign Loan Agreement shall have been satisfied; and

(g)    all fees and expenses of Vinson & Elkins, LLP, as counsel to Agent,
      and all other professional fees of Agent's consultants, in each case
      incurred in connection with the Agreement and this Ninth Amendment, shall
      have been paid in full.

7.    Cash Collateral. On February 11, 2005, Agent shall be entitled
    to, immediately and without notice to any party or any other action, apply
    the Cash Collateral to the Obligations in such manner and order as Agent
    shall select. Notwithstanding anything to the contrary in the Agreement or
    in any other Loan Document, Borrowers shall have no right to access the Cash
    Collateral held in the Collateral Account and Agent shall not be restricted
    by any provisions of the Loan Documents relating to the administration of
    the Collateral Account with respect to the Cash Collateral. 

8.    Amendment Fee. The Borrowers jointly and severally agree to pay
    to Agent, for the ratable benefit of the Lenders, an amendment fee of
    $5,800, payable on the earlier of February 11, 2005, or such earlier date as
    the Obligations shall be paid in their entirety.

9.    Release and
    Covenant Not to Sue. EACH BORROWER (IN ITS OWN RIGHT AND ON
    BEHALF OF ITS DIRECTORS, OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS,
    ATTORNEYS AND AGENTS) AND EACH OF THE GUARANTOR AND THE ADDITIONAL
    GUARANTORS (IN ITS OWN RIGHT AND ON BEHALF OF ITS RESPECTIVE ATTORNEYS AND
    AGENTS) (THE "RELEASING PARTIES") JOINTLY AND SEVERALLY RELEASE, ACQUIT, AND
    FOREVER DISCHARGE AGENT AND EACH LENDER AND THEIR RESPECTIVE DIRECTORS,
    OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS, ATTORNEYS AND AGENTS,
    (COLLECTIVELY, THE "RELEASED PARTIES"), TO THE FULLEST EXTENT
    PERMITTED BY APPLICABLE STATE AND FEDERAL LAW, FROM ANY AND ALL ACTS AND
    OMISSIONS OF THE RELEASED PARTIES, AND FROM ANY AND ALL CLAIMS, CAUSES OF
    ACTION, COUNTERCLAIMS, DEMANDS, CONTROVERSIES, COSTS, DEBTS, SUMS OF MONEY,
    ACCOUNTS, RECKONINGS, BONDS, BILLS, DAMAGES, OBLIGATIONS, LIABILITIES,
    OBJECTIONS, AND EXECUTIONS OF ANY NATURE, TYPE, OR DESCRIPTION WHICH THE
    RELEASING PARTIES HAVE AGAINST THE RELEASED PARTIES, INCLUDING, BUT NOT
    LIMITED TO, NEGLIGENCE, GROSS NEGLIGENCE, USURY, FRAUD, DECEIT,
    MISREPRESENTATION, CONSPIRACY, UNCONSCIONABILITY, DURESS, ECONOMIC DURESS,
    DEFAMATION, CONTROL, INTERFERENCE WITH CONTRACTUAL AND BUSINESS
    RELATIONSHIPS, CONFLICTS OF INTEREST, MISUSE OF INSIDER INFORMATION,
    CONCEALMENT, DISCLOSURE, SECRECY, MISUSE OF COLLATERAL, WRONGFUL RELEASE OF
    COLLATERAL, FAILURE TO INSPECT, ENVIRONMENTAL DUE DILIGENCE, NEGLIGENT LOAN
    PROCESSING AND ADMINISTRATION, WRONGFUL SETOFF, VIOLATIONS OF STATUTES AND
    REGULATIONS OF GOVERNMENTAL ENTITIES, INSTRUMENTALITIES AND AGENCIES (BOTH
    CIVIL AND CRIMINAL), RACKETEERING ACTIVITIES, SECURITIES AND ANTITRUST LAWS
    VIOLATIONS, TYING ARRANGEMENTS, DECEPTIVE TRADE PRACTICES, BREACH OR ABUSE
    OF ANY ALLEGED FIDUCIARY DUTY, BREACH OF ANY ALLEGED SPECIAL RELATIONSHIP,
    COURSE OF CONDUCT OR DEALING, ALLEGED OBLIGATION OF FAIR DEALING, ALLEGED
    OBLIGATION OF GOOD FAITH, AND ALLEGED OBLIGATION OF GOOD FAITH AND FAIR
    DEALING, WHETHER OR NOT IN CONNECTION WITH OR RELATED TO THE AGREEMENT, THE
    LOAN DOCUMENTS AND THIS NINTH AMENDMENT, AT LAW OR IN EQUITY, IN CONTRACT IN
    TORT, OR OTHERWISE, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED
    (COLLECTIVELY, THE "RELEASED CLAIMS"). THE RELEASING PARTIES FURTHER
    JOINTLY AND SEVERALLY AGREE TO LIMIT ANY DAMAGES THEY MAY SEEK IN CONNECTION
    WITH ANY CLAIM OR CAUSE OF ACTION, IF ANY, TO EXCLUDE ALL PUNITIVE AND
    EXEMPLARY DAMAGES, DAMAGES ATTRIBUTABLE TO LOST PROFITS OR OPPORTUNITY, AND
    THE RELEASING PARTIES DO HEREBY JOINTLY AND SEVERALLY WAIVE AND RELEASE ALL
    SUCH DAMAGES WITH RESPECT TO ANY AND ALL CLAIMS OR CAUSES OF ACTION WHICH
    MAY ARISE AT ANY TIME AGAINST ANY OF THE RELEASED PARTIES. THE RELEASING
    PARTIES REPRESENT AND WARRANT THAT NO FACTS EXIST WHICH COULD PRESENTLY
    SUPPORT THE ASSERTION OF ANY OF THE RELEASED CLAIMS AGAINST THE RELEASED
    PARTIES. THE RELEASING PARTIES FURTHER COVENANT NOT TO SUE THE RELEASED
    PARTIES ON ACCOUNT OF ANY OF THE RELEASED CLAIMS, AND EXPRESSLY WAIVE ANY
    AND ALL DEFENSES THEY MAY HAVE IN CONNECTION WITH THEIR DEBTS AND
    OBLIGATIONS UNDER THE AGREEMENT, THE LOAN DOCUMENTS AND THIS NINTH
    AMENDMENT. THIS SECTION 9 IS IN ADDITION TO AND SHALL NOT IN ANY WAY LIMIT
    ANY OTHER RELEASE, COVENANT NOT TO SUE, OR WAIVER BY THE RELEASING PARTIES
    IN FAVOR OF THE RELEASED PARTIES. NOTWITHSTANDING ANY PROVISION OF THE
    AGREEMENT, THIS NINTH AMENDMENT OR ANY OTHER LOAN DOCUMENT, THIS SECTION 9
    SHALL REMAIN IN FULL FORCE AND EFFECT AND SHALL SURVIVE THE DELIVERY AND
    PAYMENT ON THE OBLIGATIONS, THE AGREEMENT, THIS NINTH AMENDMENT AND THE
    OTHER LOAN DOCUMENTS. 

10.    Reaffirmation of Guarantees. By their execution hereof, each of
    the Guarantor and the Additional Guarantors acknowledges and agrees  to the
    terms of the release and covenant not to sue set forth in the foregoing
    Section 9, and  that all of the terms and provisions of their respective
    guarantees shall remain in full force and effect and that the amendments and
    modifications herein contained shall in no manner adversely affect or impair
    the Guarantor's or any Additional Guarantor's obligations under such
    guaranty. 

11.    Binding Effect. It is further understood and agreed by and among
    the parties hereto that all terms and conditions of the Agreement, except as
    herein modified, shall remain in full force and effect. This Ninth Amendment
    shall constitute a Loan Document under and as defined in the Agreement. ANY
    FAILURE TO COMPLY WITH THE TERMS OF THIS NINTH AMENDMENT SHALL CONSTITUTE AN
    IMMEDIATE EVENT OF DEFAULT UNDER THE AGREEMENT. 

12.    Counterparts.
This Ninth Amendment may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

[Remainder of page intentionally left blank.]

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this
Ninth Amendment to be duly executed as of the day and year first above written.

 

	
     	
    BORROWERS:
	
     	
     
	
     
	
    
	HORIZON OFFSHORE CONTRACTORS, INC. 

	
     
	
    By:
	
    /s/
	David W. Sharp

	
     
	
     
	
    
	David W. Sharp

    
	Executive Vice President

 

	
     
	
    HORIZON SUBSEA SERVICES, INC. 
 

	
     
	
    By:
	
    /s/
	David W. Sharp

	
     
	
     
	
    
	David W. Sharp

    
	Executive Vice President

 

	
     
	
    HORIZON VESSELS, INC. 
 

	
     
	
    By:
	
    /s/
	David W. Sharp

	
     
	
     
	
    
	David W. Sharp

    
	Executive Vice President

 

	
     	
    AGENT:
	
     	
     
	
     
	
    SOUTHWEST BANK OF TEXAS, N.A., as Agent 
 

	
     
	
    By:
	
    /s/ Brian Duncan

	
     
	
     
	
    Brian Duncan

    Vice
	President

 

	
     	
    LENDERS:
	
     	
     
	
     
	
    SOUTHWEST BANK OF TEXAS,
    N.A. 
 

	
     
	
    By:
	
    /s/ Brian Duncan

	
     
	
     
	
    Brian Duncan

    Vice
	President

 

 

[Signatures continued on next page]

 

 

 

	
     
	
    
    DRESDNER BANK LATEINAMERIKA AG 
 

	
     
	
    By:
	
    /s/ Andreas Thomas and /s/
	Wolf-Peter Mueller

	
     
	
     
	
    Andreas Thomas and Wolf-Peter
	Mueller

    Vice
	Presidents

 

	
     
	
    BANK OF SCOTLAND 
 

	
     
	
    By:
	
    /s/ Karen Weich

	
     
	
     
	
    
	Karen Weich

    
	Assistant Vice President

 

	
     
	
    HIBERNIA NATIONAL BANK 
 

	
     
	
    By:
	
    /s/ Tammy Boyd

	
     
	
     
	
    Tammy Boyd

    
	Senior Vice President

 

 

 

 

Acknowledged and Agreed to this
20th day of January, 2005.

HORIZON OFFSHORE, INC.

PROGRESSIVE PIPELINE CONTRACTORS, INC.

AFFILIATED MARINE CONTRACTORS, INC.

TEXAS OFFSHORE CONTRACTORS CORP

FLEET PIPELINE SERVICES, INC.

GULF OFFSHORE CONSTRUCTION, INC.

BAYOU MARINE CONTRACTORS, INC.

HOC OFFSHORE, S. DE R.L. DE C.V.

PT ARMANDI PRANAUPAYA

ECH OFFSHORE, S. DE R.L. DE C.V.

HORIZON OFFSHORE NIGERIA LTD.

HORIZON C-BAY COSTA AFUERA, S. DE R.L. DE C.V.

HORIZON OFFSHORE PTE. LTD.

HORIZON OFFSHORE CONTRACTORS (MAURITIUS) LTD.

HORIZON MARINE CONSTRUCTION (MAURITIUS) LTD.

TIBURON INGENIERIA Y CONSTRUCCION, S. DE R.L. DE C.V.

HORIZON VESSELS INTERNATIONAL LTD.

HORIZON OFFSHORE INTERNATIONAL LTD.

HORIZON MARINE CONSTRUCTION LTD.

HORIZON GROUP L.D.C.

PT HORIZON INDONESIA

HORIZON OFFSHORE CONTRACTORS LTD.

HORIZON MARINE CONTRACTORS (MALASIA) SDN BHD

HORIZON OFFSHORE SERVICES, LTD.

MARINE LEASING (LABUAN) PTE LTD.

 

 

	
     

	
    By:
	
    /s/
	David W. Sharp

	
     
	
    
	David W. Sharp

    
	Executive Vice President

 

 

	
    ECH OFFSHORE, S. DE R.L. DE C.V. 
 

	
    By:
	
    /s/
	David W. Sharp

	
     
	
    
	David W. Sharp

    Sole
	Member

 

 

	
     

	
    By:
	
    /s/
	Robert M. Cheves

	
     
	
    
	Robert M. Cheves

    VP
	Latin AmericaFORM OF FLOATING RATE SENIOR NOTE

     REGISTERED                                                  REGISTERED
     NO. FLR                                                     U.S.$
                                                                 CUSIP:

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.

<PAGE>

                                                MORGAN STANLEY
                                   SENIOR GLOBAL MEDIUM-TERM NOTES, SERIES F
                                                (FLOATING RATE)

                                   CAPITAL PROTECTED NOTE DUE JUNE 30, 2008
                                BASED ON THE VALUE OF A BASKET OF THREE INDICES
<TABLE>
     <S>                               <C>                               <C>
     BASE RATE: None                 ORIGINAL ISSUE DATE:                  MATURITY DATE:
                                                                             See "Maturity Date" below.

     INDEX MATURITY: N/A             INTEREST ACCRUAL DATE: N/A            INTEREST PAYMENT DATE(S): N/A

     SPREAD (PLUS OR MINUS): N/A     INITIAL INTEREST RATE: N/A            INTEREST PAYMENT PERIOD: N/A

     REPORTING SERVICE: N/A          MAXIMUM INTEREST RATE: N/A            INTEREST RESET DATE(S): N/A

     INDEX CURRENCY: N/A             MINIMUM INTEREST RATE: N/A            CALCULATION AGENT: See
                                                                           "Calculation Agent" below.

     EXCHANGE RATE AGENT: N/A        INITIAL REDEMPTION DATE:              SPECIFIED CURRENCY:
                                     N/A                                   U.S. dollars

     APPLICABILITY OF MODIFIED       INITIAL REDEMPTION PERCENTAGE: N/A    IF SPECIFIED CURRENCY OTHER
     PAYMENT UPON ACCELERATION: See                                        THAN U.S. DOLLARS, OPTION TO
     "Alternate Exchange                                                   ELECT PAYMENT IN U.S. DOLLARS: N/A
     Calculation in Case of an
     Event of Default" below.
                                     ANNUAL REDEMPTION PERCENTAGE          DESIGNATED CMT TELERATE PAGE: N/A
                                     REDUCTION: N/A

                                     OPTIONAL REPAYMENT DATE(S): N/A       DESIGNATED CMT MATURITY INDEX: N/A

                                     REDEMPTION NOTICE PERIOD: N/A

                                     TAX REDEMPTION AND PAYMENT OF
                                     ADDITIONAL AMOUNTS: N/A

                                     IF YES, STATE INITIAL OFFERING        OTHER PROVISIONS: See below.
                                     DATE: N/A
     </TABLE>

     Maturity Date. . . . . . . . . . . .   June 30, 2008, subject to extension
                                            in accordance with the following
                                            paragraph in the event of a Market
                                            Disruption Event on the final
                                            Determination Date for calculating
                                            the Final Average Basket Value.

                                      A-2

<PAGE>

                                            If, due to a Market Disruption Event
                                            or otherwise, the final
                                            Determination Date with respect to
                                            any Basket Index is postponed so
                                            that it falls less than two
                                            scheduled Trading Days prior to the
                                            scheduled Maturity Date, the
                                            Maturity Date shall be the second
                                            scheduled Trading Day following the
                                            latest final Determination Date with
                                            respect to any Basket Index so
                                            postponed. See "Determination Dates"
                                            below.

                                            In the event that the final
                                            Determination Date with respect to
                                            any Basket Index is postponed due to
                                            a Market Disruption Event or
                                            otherwise, the Issuer shall give
                                            notice of such postponement as
                                            promptly as possible, and in no case
                                            later than one Business Day
                                            following the scheduled final
                                            Determination Date, (i) to the
                                            holder of this Note by mailing
                                            notice of such postponement by first
                                            class mail, postage prepaid, to the
                                            holder's last address as it shall
                                            appear upon the registry books, (ii)
                                            to the Trustee by telephone or
                                            facsimile confirmed by mailing such
                                            notice to the Trustee by first class
                                            mail, postage prepaid, at its New
                                            York office and (iii) to The
                                            Depository Trust Company (the
                                            "Depositary") by telephone or
                                            facsimile confirmed by mailing such
                                            notice to the Depositary by first
                                            class mail, postage prepaid. Any
                                            notice that is mailed in the manner
                                            herein provided shall be
                                            conclusively presumed to have been
                                            duly given, whether or not the
                                            holder of this Note receives the
                                            notice.

     Minimum Denominations. . . . . . . .   $10

     Issue Price. . . . . . . . . . . . .   $10

     Basket Indices . . . . . . . . . . .   The Dow Jones EURO STOXX 50 Index
                                            (the "Euro STOXX 50 Index"), the
                                            Standard & Poor's 500 Index (the
                                            "S&P 500 Index") and the Nikkei 225
                                            Index.

                                            References to Basket Indices shall
                                            include any Successor Indices (as
                                            defined under "Discontinuance of a
                                            Basket Index; Alteration of Method
                                            of Calculation" below), unless the
                                            context requires otherwise.

     Maturity Redemption Amount . . . . .   At maturity, upon delivery of this
                                            Note to the Trustee, the Issuer
                                            shall pay with respect to each $10
                                            principal amount of this Note an
                                            amount in cash equal to the $10
                                            principal

                                      A-3
<PAGE>

                                            amount of this Note plus the
                                            Supplemental Redemption Amount, if
                                            any.

                                            The Issuer shall, or shall cause the
                                            Calculation Agent to, (i) provide
                                            written notice to the Trustee at its
                                            New York office, on which notice the
                                            Trustee may conclusively rely, and
                                            to the Depositary of the Maturity
                                            Redemption Amount on or prior to
                                            10:30 a.m. on the Trading Day
                                            preceding the Maturity Date (but if
                                            such Trading Day is not a Business
                                            Day, prior to the close of business
                                            on the Business Day preceding the
                                            Maturity Date) and (ii) deliver the
                                            aggregate cash amount due with
                                            respect to this Note to the Trustee
                                            for delivery to the holder of this
                                            Note on the Maturity Date. See
                                            "Discontinuance of a Basket Index;
                                            Alteration of Method of Calculation"
                                            below.

     Supplemental Redemption
     Amount . . . . . . . . . . . . . . .   The Supplemental Redemption Amount
                                            shall be equal to the product of (i)
                                            $10 times (ii) the Basket Percent
                                            Change times (iii) the Participation
                                            Rate; provided that the Supplemental
                                            Redemption Amount shall not be less
                                            than zero. The Calculation Agent
                                            shall calculate the Supplemental
                                            Redemption Amount on the final
                                            Determination Date.

     Basket Percent Change. . . . . . . .   The Basket Percent Change is a
                                            fraction, the numerator of which
                                            shall be the Final Average Basket
                                            Value minus the Initial Basket Value
                                            and the denominator of which shall
                                            be the Initial Basket Value. The
                                            Basket Percent Change is described
                                            by the following formula:

                               Final Average Basket Value - Initial Basket Value
                               -------------------------------------------------
                                             Initial Basket Value

     Participation Rate . . . . . . . . .      %

     Basket Closing Value . . . . . . . .   The Basket Closing Value on any
                                            Determination Date shall equal the
                                            sum of (i) the Euro STOXX 50 Index
                                            Closing Value on such Determination
                                            Date times the Euro STOXX 50 Index
                                            Multiplier, (ii) the S&P 500 Index
                                            Closing Value on such Determination
                                            Date times the S&P 500 Index
                                            Multiplier and (iii) the Nikkei 225
                                            Index Closing Value on such
                                            Determination Date times the Nikkei
                                            225 Index Multiplier. In certain
                                            circumstances, the Basket Closing
                                            Value shall be based on the
                                            alternate calculation of the Basket
                                            Indices described under

                                      A-4
<PAGE>

                                            "Discontinuance of a Basket Index;
                                            Alteration of Method of
                                            Calculation."

     Initial Basket Value . . . . . . . .   10

     Final Average Basket Value . . . . .   The arithmetic average of the Basket
                                            Closing Values on the four
                                            Determination Dates, as calculated
                                            by the Calculation Agent on the
                                            final Determination Date.

     Euro STOXX 50
     Index Closing Value. . . . . . . . .   The Euro STOXX 50 Index Closing
                                            Value on any Trading Day shall equal
                                            the closing value of the Euro STOXX
                                            50 Index or any Successor Index (as
                                            defined under "Discontinuance of a
                                            Basket Index; Alteration of Method
                                            of Calculation" below) published at
                                            the regular weekday close of trading
                                            on that Trading Day. In certain
                                            circumstances, the Euro STOXX 50
                                            Index Closing Value shall be based
                                            on the alternate calculation of the
                                            Euro STOXX 50 Index described under
                                            "Discontinuance of a Basket Index;
                                            Alteration of Method of
                                            Calculation."

                                            In this Note, references to the Euro
                                            STOXX 50 Index shall include any
                                            Successor Index, unless the context
                                            requires otherwise.

     Euro STOXX 50 Index Multiplier . . .

     S&P 500 Index Closing Value. . . . .   The S&P 500 Index Closing Value on
                                            any Trading Day shall equal the
                                            closing value of the S&P 500 Index
                                            or any Successor Index (as defined
                                            under "Discontinuance of a Basket
                                            Index; Alteration of Method of
                                            Calculation" below) published at the
                                            regular weekday close of trading on
                                            that Trading Day. In certain
                                            circumstances, the S&P 500 Index
                                            Closing Value shall be based on the
                                            alternate calculation of the S&P 500
                                            Index described under
                                            "Discontinuance of a Basket Index;
                                            Alteration of Method of
                                            Calculation."

                                            In this Note, references to the S&P
                                            500 Index shall include any
                                            Successor Index, unless the context
                                            requires otherwise.

     S&P 500 Index Multiplier . . . . . .

     Nikkei 225 Index Closing Value . . .   The Nikkei 225 Index Closing Value
                                            on any Trading Day shall equal the
                                            closing value of the Nikkei 225
                                            Index or

                                      A-5
<PAGE>

                                            any Successor Index (as defined
                                            under "Discontinuance of a Basket
                                            Index; Alteration of Method of
                                            Calculation" below) published at the
                                            regular weekday close of trading on
                                            that Trading Day. In certain
                                            circumstances, the Nikkei 225 Index
                                            Closing Value shall be based on the
                                            alternate calculation of the Nikkei
                                            225 Index described under
                                            "Discontinuance of a Basket Index;
                                            Alteration of Method of
                                            Calculation."

                                            In this Note, references to the
                                            Nikkei 225 Index shall include any
                                            Successor Index, unless the context
                                            requires otherwise.

     Nikkei 225 Index Multiplier. . . . .

     Index Representation . . . . . . . .   3.3333

     Determination Dates. . . . . . . . .   The Determination Dates shall be
                                            June 30, 2005, June 30, 2006, June
                                            30, 2007 and June 26, 2008, in each
                                            such case subject to adjustment for
                                            non-Trading Days or Market
                                            Disruption Events with respect to a
                                            Basket Index as described in the two
                                            following paragraphs in this
                                            section.

                                            If any of the first three scheduled
                                            Determination Dates is not a Trading
                                            Day or if a Market Disruption Event
                                            occurs on any such date with respect
                                            to a Basket Index, such
                                            Determination Date with respect to
                                            that Basket Index shall be the
                                            immediately succeeding Trading Day
                                            during which no Market Disruption
                                            Event shall have occurred; provided
                                            that, with respect to any Basket
                                            Index, if a Market Disruption Event
                                            has occurred on each of the five
                                            Trading Days immediately succeeding
                                            any of the first three scheduled
                                            Determination Dates, the Calculation
                                            Agent shall determine the applicable
                                            Index Closing Value on such fifth
                                            succeeding Trading Day in accordance
                                            with the formula for calculating the
                                            value of the applicable Basket Index
                                            last in effect prior to the
                                            commencement of the Market
                                            Disruption Event, without
                                            rebalancing or substitution, using
                                            the closing price (or, if trading in
                                            the relevant securities has been
                                            materially suspended or materially
                                            limited, its good faith estimate of
                                            the closing price that would have
                                            prevailed but for such suspension or
                                            limitation) on such fifth succeeding
                                            Trading Day of each security most
                                            recently comprising the applicable
                                            Basket Index.

                                      A-6
<PAGE>

                                            If June 26, 2008 (the final
                                            scheduled Determination Date) is not
                                            a Trading Day or if there is a
                                            Market Disruption Event with respect
                                            to any Basket Index on such day, the
                                            final Determination Date for such
                                            Basket Index shall be the
                                            immediately succeeding Trading Day
                                            during which no Market Disruption
                                            Event shall have occurred.

     Trading Day. . . . . . . . . . . . .   A day, as determined by the
                                            Calculation Agent, on which trading
                                            is generally conducted on the
                                            Relevant Exchange(s) for securities
                                            underlying the applicable Basket
                                            Index.

     Market Disruption Event. . . . . . .   Market Disruption Event means, with
                                            respect to any Basket Index the
                                            occurrence or existence of a
                                            suspension, absence or material
                                            limitation of trading of stocks then
                                            constituting 20 percent or more of
                                            the level of such Basket Index (or
                                            the Successor Index) on the Relevant
                                            Exchange(s) for such securities for
                                            more than two hours of trading or
                                            during the one-half hour period
                                            preceding the close of the principal
                                            trading session on such Relevant
                                            Exchange(s); or a breakdown or
                                            failure in the price and trade
                                            reporting systems of any Relevant
                                            Exchange as a result of which the
                                            reported trading prices for stocks
                                            then constituting 20 percent or more
                                            of the level of such Basket Index
                                            (or the Successor Index) during the
                                            last one-half hour preceding the
                                            close of the principal trading
                                            session on such Relevant Exchange(s)
                                            are materially inaccurate; or the
                                            suspension, material limitation or
                                            absence of trading on any major
                                            securities market for trading in
                                            futures or options contracts or
                                            exchange traded funds related to
                                            such Basket Index (or the Successor
                                            Index) for more than two hours of
                                            trading or during the one-half hour
                                            period preceding the close of the
                                            principal trading session on such
                                            market, in each case as determined
                                            by the Calculation Agent in its sole
                                            discretion.

                                            For the purpose of determining
                                            whether a Market Disruption Event
                                            exists at any time, if trading in a
                                            security included in a Basket Index
                                            is materially suspended or
                                            materially limited at that time,
                                            then the relevant percentage
                                            contribution of that security to the
                                            value of such Basket Index shall be
                                            based on a comparison of (x) the
                                            portion of the value of such Basket
                                            Index attributable to that security
                                            relative to (y) the overall value of
                                            such

                                      A-7
<PAGE>

                                            Basket Index, in each case
                                            immediately before that suspension
                                            or limitation.

                                            For purposes of determining whether
                                            a Market Disruption Event has
                                            occurred: (1) a limitation on the
                                            hours or number of days of trading
                                            shall not constitute a Market
                                            Disruption Event if it results from
                                            an announced change in the regular
                                            business hours of the relevant
                                            exchange or market, (2) a decision
                                            to permanently discontinue trading
                                            in the relevant futures or options
                                            contract or exchange traded fund
                                            shall not constitute a Market
                                            Disruption Event, (3) limitations
                                            pursuant to the rules of any
                                            Relevant Exchange similar to NYSE
                                            Rule 80A (or any applicable rule or
                                            regulation enacted or promulgated by
                                            any other self-regulatory
                                            organization or any government
                                            agency of scope similar to NYSE Rule
                                            80A as determined by the Calculation
                                            Agent) on trading during significant
                                            market fluctuations shall constitute
                                            a suspension, absence or material
                                            limitation of trading, (4) a
                                            suspension of trading in futures or
                                            options contracts on a Basket Index
                                            by the primary securities market
                                            trading in such contracts by reason
                                            of (a) a price change exceeding
                                            limits set by such exchange or
                                            market, (b) an imbalance of orders
                                            relating to such contracts or (c) a
                                            disparity in bid and ask quotes
                                            relating to such contracts shall
                                            constitute a suspension, absence or
                                            material limitation of trading in
                                            futures or options contracts related
                                            to a Basket Index and (5) a
                                            "suspension, absence or material
                                            limitation of trading" on any
                                            Relevant Exchange or on the primary
                                            market on which futures or options
                                            contracts related to a Basket Index
                                            are traded shall not include any
                                            time when such market is itself
                                            closed for trading under ordinary
                                            circumstances.

     Relevant Exchange. . . . . . . . . .   Relevant Exchange means the primary
                                            exchange or market of trading for
                                            any security then included in any
                                            Basket Index or any Successor Index.

     Alternate Exchange Calculation
     in Case of an Event of Default . . .   In case an event of default with
                                            respect to this Note shall have
                                            occurred and be continuing, the
                                            amount declared due and payable for
                                            each $10 principal amount of this
                                            Note upon any acceleration of this
                                            Note (the "Acceleration Amount")
                                            shall be equal to such $10 principal
                                            amount plus the Supplemental
                                            Redemption Amount, if any,

                                      A-8
<PAGE>

                                            determined as though the Basket
                                            Closing Value for any Determination
                                            Date scheduled to occur on or after
                                            the date of such acceleration were
                                            the Basket Closing Value on the date
                                            of acceleration.

                                            If the maturity of this Note is
                                            accelerated because of an event of
                                            default as described above, the
                                            Issuer shall, or shall cause the
                                            Calculation Agent to, provide
                                            written notice to the Trustee at its
                                            New York office, on which notice the
                                            Trustee may conclusively rely, and
                                            to the Depositary of the
                                            Acceleration Amount and the
                                            aggregate cash amount due with
                                            respect to this Note as promptly as
                                            possible and in no event later than
                                            two Business Days after the date of
                                            acceleration.

     Calculation Agent. . . . . . . . . .   Morgan Stanley & Co. Incorporated
                                            and its successors ("MS & Co.")

                                            All determinations made by the
                                            Calculation Agent shall be at the
                                            sole discretion of the Calculation
                                            Agent and shall, in the absence of
                                            manifest error, be conclusive for
                                            all purposes and binding on the
                                            holder of this Note, the Trustee and
                                            the Issuer.

                                            All calculations with respect to the
                                            Basket Closing Value on each
                                            Determination Date, the Final
                                            Average Basket Value and the
                                            Supplemental Redemption Amount, if
                                            any, shall be made by the
                                            Calculation Agent and shall be
                                            rounded to the nearest one
                                            hundred-thousandth, with five
                                            one-millionths rounded upward (e.g.,
                                            .876545 would be rounded to .87655);
                                            all dollar amounts related to
                                            determination of the amount of cash
                                            payable per Note shall be rounded to
                                            the nearest ten-thousandth, with
                                            five one hundred-thousandths rounded
                                            upward (e.g., .76545 would be
                                            rounded up to .7655); and all dollar
                                            amounts paid on the aggregate
                                            principal amount of this Note shall
                                            be rounded to the nearest cent, with
                                            one-half cent rounded upward.

     Discontinuance of a Basket
     Index; Alteration of Method of
     Calculation. . . . . . . . . . . . .   If the publication of any Basket
                                            Index is discontinued and a
                                            successor or substitute index that
                                            MS & Co., as the Calculation Agent,
                                            determines, in its sole discretion,
                                            to be comparable to the discontinued
                                            Basket Index (such index

                                      A-9
<PAGE>

                                            being referred to herein as a
                                            "Successor Index"), then any
                                            subsequent Euro STOXX 50 Index
                                            Closing Value, S&P 500 Index Closing
                                            Value or Nikkei 225 Index Closing
                                            Value (each, an "Index Closing
                                            Value") shall be determined by
                                            reference to the value of such
                                            Successor Index at the regular
                                            official weekday close of the
                                            principal trading session of the
                                            Relevant Exchange or market for the
                                            Successor Index on the date that any
                                            Index Closing Value is to be
                                            determined.

                                            Upon any selection by the
                                            Calculation Agent of a Successor
                                            Index, the Calculation Agent shall
                                            cause written notice thereof to be
                                            furnished to the Trustee, to the
                                            Issuer and to the Depositary, as
                                            holder of this Note, within three
                                            Trading Days of such selection.

                                            If the publication of a Basket Index
                                            is discontinued prior to, and such
                                            discontinuance is continuing on, the
                                            date that any Index Closing Value is
                                            to be determined and MS & Co., as
                                            the Calculation Agent, determines,
                                            in its sole discretion, that no
                                            Successor Index is available at such
                                            time, then the Calculation Agent
                                            shall determine the relevant Index
                                            Closing Value for such date in
                                            accordance with the formula for
                                            calculating such Basket Index last
                                            in effect prior to such
                                            discontinuance, without rebalancing
                                            or substitution, using the closing
                                            price (or, if trading in the
                                            relevant securities has been
                                            materially suspended or materially
                                            limited, its good faith estimate of
                                            the closing price that would have
                                            prevailed but for such suspension or
                                            limitation) at the close of the
                                            principal trading session on such
                                            date of each security most recently
                                            comprising such Basket Index on the
                                            Relevant Exchange.

                                            If at any time the method of
                                            calculating a Basket Index or a
                                            Successor Index, or the value
                                            thereof, is changed in a material
                                            respect, or if a Basket Index or a
                                            Successor Index is in any other way
                                            modified so that such index does
                                            not, in the opinion of MS & Co., as
                                            the Calculation Agent, fairly
                                            represent the value of such Basket
                                            Index or such Successor Index had
                                            such changes or modifications not
                                            been made, then, from and after such
                                            time, the Calculation Agent shall,
                                            at the close of business in New York
                                            City on each date on which the Index
                                            Closing Value for such Basket Index
                                            is to be determined, make such
                                            calculations and adjustments as, in
                                            the good faith

                                      A-10
<PAGE>

                                            judgment of the Calculation Agent,
                                            may be necessary in order to arrive
                                            at a value of a stock index
                                            comparable to such Basket Index or
                                            such Successor Index, as the case
                                            may be, as if such changes or
                                            modifications had not been made, and
                                            the Calculation Agent shall
                                            determine the Final Average Basket
                                            Value with reference to such Basket
                                            Index or such Successor Index, as
                                            adjusted. Accordingly, if the method
                                            of calculating such Basket Index or
                                            a Successor Index is modified so
                                            that the value of such index is a
                                            fraction of what it would have been
                                            if it had not been modified (e.g.,
                                            due to a split in the index), then
                                            the Calculation Agent shall adjust
                                            such index in order to arrive at a
                                            value of such Basket Index or such
                                            Successor Index as if it had not
                                            been modified (i.e., as if such
                                            split had not occurred).

                                      A-11
<PAGE>

     Morgan Stanley, a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to CEDE &
CO., or registered assignees, the amount of cash, as determined in accordance
with the provisions set forth under "Maturity Redemption Amount" above, due with
respect to the principal sum of U.S.$              (UNITED STATES DOLLARS
                     ) on the Maturity Date specified above (except to the
extent redeemed or repaid prior to the maturity) and to pay interest thereon
from and including 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 the
principal hereof is paid or duly made available for payment. The Issuer will pay
interest in arrears weekly, monthly, quarterly, semiannually or annually as
specified above as the Interest Payment Period on each Interest Payment Date (as
specified above), commencing with the first Interest Payment Date next
succeeding the Interest Accrual Date specified above, and on the Maturity Date
(or any redemption or repayment date); provided, however, that if the Interest
Accrual Date occurs between a Record Date, as defined below, and the next
succeeding Interest Payment Date, interest payments will commence on the second
Interest Payment Date succeeding the Interest Accrual Date to the registered
holder of this Note on the Record Date with respect to such second Interest
Payment Date; and provided, further, that if an Interest Payment Date (other
than the Maturity Date or redemption or repayment date) would fall on a day that
is not a Business Day, as defined on the reverse hereof, such Interest Payment
Date shall be the following day that is a Business Day, except that if the Base
Rate specified above is LIBOR or EURIBOR and such next Business Day falls in the
next calendar month, such Interest Payment Date shall be the immediately
preceding day that is a Business Day; and provided, further, that if the
Maturity Date or redemption or repayment date would fall on a day that is not a
Business Day, such payment shall be made on the following day that is a Business
Day and no interest shall accrue for the period from and after such Maturity
Date or redemption or repayment date.

     Interest on this Note will accrue from and including the most recent date
to which interest has been paid or duly provided for, or, if no interest has
been paid or duly provided for, from and including the Interest Accrual Date,
until but excluding the date the principal hereof has been paid or duly made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the date 15
calendar days prior to such Interest Payment Date (whether or not a Business
Day) (each such date, a "Record Date"); provided, however, that interest payable
at maturity (or any redemption or repayment date) will be payable to the person
to whom the principal hereof shall be payable.

     Payment of the principal of and premium, if any, and interest on this Note
due at maturity (or any redemption or repayment date), unless this Note is
denominated in a Specified Currency other than U.S. dollars and is to be paid in
whole or in part in such Specified Currency, will be made in immediately
available funds upon surrender of this Note at the office or agency of the
Paying Agent, as defined on the reverse hereof, maintained for that purpose in
the Borough of Manhattan, The City of New York, or at such other paying agency
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 or repayment, will
be made by U.S. dollar check mailed to the address of the person entitled
thereto as

                                      A-12
<PAGE>

such address shall appear in the Note register. A holder of U.S. $10,000,000
(or the equivalent in a Specified Currency) or more in aggregate principal
amount of Notes having the same Interest Payment Date, the interest on which is
payable in U.S. dollars, shall be entitled to receive payments of interest,
other than interest due at maturity or on any date of redemption or repayment,
by wire transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Paying Agent in writing not less than 15
calendar days prior to the applicable Interest Payment Date.

     If this Note is denominated in a Specified Currency other than U.S.
dollars, and the holder does not elect (in whole or in part) to receive payment
in U.S. dollars pursuant to the next succeeding paragraph, payments of
principal, premium, if any, and interest with regard to this Note will be made
by wire transfer of immediately available funds to an account maintained by the
holder hereof with a bank located outside the United States if appropriate wire
transfer instructions have been received by the Paying Agent in writing, with
respect to payments of interest, on or prior to the fifth Business Day after the
applicable Record Date and, with respect to payments of principal or any
premium, at least ten Business Days prior to the Maturity Date or any redemption
or repayment date, as the case may be; provided that, if payment of interest,
principal or any premium with regard to this Note is payable in euro, the
account must be a euro account in a country for which the euro is the lawful
currency, provided, further, that if such wire transfer instructions are not
received, such payments will be made by check payable in such Specified Currency
mailed to the address of the person entitled thereto as such address shall
appear in the Note register; and provided, further, that payment of the
principal of this Note, any premium and the interest due at maturity (or on any
redemption or repayment date) will be made upon surrender of this Note at the
office or agency referred to in the preceding paragraph.

     If so indicated on the face hereof, the holder of this Note, if denominated
in a Specified Currency other than U.S. dollars, may elect to receive all or a
portion of payments on this Note in U.S. dollars by transmitting a written
request to the Paying Agent, on or prior to the fifth Business Day after such
Record Date or at least ten Business Days prior to the Maturity Date or any
redemption or repayment date, as the case may be. Such election shall remain in
effect unless such request is revoked by written notice to the Paying Agent as
to all or a portion of payments on this Note at least five Business Days prior
to such Record Date, for payments of interest, or at least ten calendar days
prior to the Maturity Date or any redemption or repayment date, for payments of
principal, as the case may be.

     If the holder elects to receive all or a portion of payments of principal
of, premium, if any, and interest on this Note, if denominated in a Specified
Currency other than U.S. dollars, in U.S. dollars, the Exchange Rate Agent (as
defined on the reverse hereof) will convert such payments into U.S. dollars. In
the event of such an election, payment in respect of this Note will be based
upon the exchange rate as determined by the Exchange Rate Agent based on the
highest bid quotation in The City of New York received by such Exchange Rate
Agent at approximately 11:00 a.m., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign exchange
dealers (one of which may be the Exchange Rate Agent unless such Exchange Rate
Agent is an affiliate of the Issuer) for the purchase by the quoting dealer of
the Specified Currency for U.S. dollars for settlement on such payment date in
the amount of the Specified Currency payable

                                      A-13
<PAGE>

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.

     Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Senior Indenture, as defined on the
reverse hereof, or be valid or obligatory for any purpose.

                                      A-14
<PAGE>

     IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.

     DATED:                                   MORGAN STANLEY

                                              By:__________________________
                                                  Name:
                                                  Title:

     TRUSTEE'S CERTIFICATE
         OF AUTHENTICATION

     This is one of the Notes referred
         to in the within-mentioned
         Senior Indenture.

     JPMORGAN CHASE BANK, N.A.,
         as Trustee

     By:_____________________________
         Authorized Officer

                                      A-15
<PAGE>

                            REVERSE OF SECURITY

     This Note is one of a duly authorized issue of Senior Global Medium-Term
Notes, Series F, having maturities more than nine months from the date of issue
(the "NOTES") of the Issuer. The Notes are issuable under a Senior Indenture,
dated as of November 1, 2004, between the Issuer and JPMorgan Chase Bank, N.A.
(formerly known as JPMorgan Chase Bank), as Trustee (the "TRUSTEE," which term
includes any successor trustee under the Senior Indenture) (as may be amended or
supplemented from time to time, the "SENIOR INDENTURE"), to which Senior
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
of the Issuer, the Trustee and holders of the Notes and the terms upon which the
Notes are, and are to be, authenticated and delivered. The Issuer has appointed
JPMorgan Chase Bank, N.A. at its corporate trust office in The City of New York
as the paying agent (the "PAYING AGENT," which term includes any additional or
successor Paying Agent appointed by the Issuer) with respect to the Notes. The
terms of individual Notes may vary with respect to interest rates, interest rate
formulas, issue dates, maturity dates, or otherwise, all as provided in the
Senior Indenture. To the extent not inconsistent herewith, the terms of the
Senior Indenture are hereby incorporated by reference herein.

     Unless otherwise indicated on the face hereof, this Note will not be
subject to any sinking fund and, unless otherwise provided on the face hereof in
accordance with the provisions of the following two paragraphs, will not be
redeemable or subject to repayment at the option of the holder prior to
maturity.

     If so indicated on the face hereof, this Note may be redeemed in whole or
in part at the option of the Issuer on or after the Initial Redemption Date
specified on the face hereof on the terms set forth on the face hereof, together
with interest accrued and unpaid hereon to the date of redemption. If this Note
is subject to "ANNUAL REDEMPTION PERCENTAGE REDUCTION," the Initial Redemption
Percentage indicated on the face hereof will be reduced on each anniversary of
the Initial Redemption Date by the Annual Redemption Percentage Reduction
specified on the face hereof until the redemption price of this Note is 100% of
the principal amount hereof, together with interest accrued and unpaid hereon to
the date of redemption. Notice of redemption shall be mailed to the registered
holders of the Notes designated for redemption at their addresses as the same
shall appear on the Note register not less than 30 nor more than 60 calendar
days prior to the date fixed for redemption or within the Redemption Notice
Period specified on the face hereof, subject to all the conditions and
provisions of the Senior Indenture. In the event of redemption of this Note in
part only, a new Note or Notes for the amount of the unredeemed portion hereof
shall be issued in the name of the holder hereof upon the cancellation hereof.

     If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments of
$1,000 or, if this Note is denominated in a Specified Currency other than U.S.
dollars, in increments of 1,000 units of such Specified Currency (provided that
any remaining principal amount hereof shall not be less than the minimum
authorized denomination

                                      A-16
<PAGE>

hereof) at the option of the holder hereof at a price equal to 100% of the
principal amount to be repaid, together with interest accrued and unpaid hereon
to the date of repayment. For this Note to be repaid at the option of the holder
hereof, the Paying Agent must receive at its corporate trust office in the
Borough of Manhattan, The City of New York, at least 15 but not more than 30
calendar days prior to the date of repayment, (i) this Note with the form
entitled "Option to Elect Repayment" below duly completed or (ii) a telegram,
telex, facsimile transmission or a letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc. or a commercial
bank or a trust company in the United States setting forth the name of the
holder of this Note, the principal amount hereof, the certificate number of this
Note or a description of this Note's tenor and terms, the principal amount
hereof to be repaid, a statement that the option to elect repayment is being
exercised thereby and a guarantee that this Note, together with the form
entitled "Option to Elect Repayment" duly completed, will be received by the
Paying Agent not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter; provided, that such telegram,
telex, facsimile transmission or letter shall only be effective if this Note and
form duly completed are received by the Paying Agent by such fifth Business Day.
Exercise of such repayment option by the holder hereof shall be irrevocable. In
the event of repayment of this Note in part only, a new Note or Notes for the
amount of the unpaid portion hereof shall be issued in the name of the holder
hereof upon the cancellation hereof.

     If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption, if the Issuer determines that, as a result of any change in or
amendment to the laws, or any regulations or rulings promulgated thereunder, of
the United States or of any political subdivision or taxing authority thereof or
therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which change
or amendment becomes effective on or after the Initial Offering Date hereof, the
Issuer has or will become obligated to pay Additional Amounts, as defined below,
with respect to this Note as described below. Prior to the giving of any notice
of redemption pursuant to this paragraph, the Issuer shall deliver to the
Trustee (i) a certificate stating that the Issuer is entitled to effect such
redemption and setting forth a statement of facts showing that the conditions
precedent to the right of the Issuer to so redeem have occurred, and (ii) an
opinion of independent legal counsel satisfactory to the Trustee to such effect
based on such statement of facts; provided that no such notice of redemption
shall be given earlier than 60 calendar days prior to the earliest date on which
the Issuer would be obligated to pay such Additional Amounts if a payment in
respect of this Note were then due.

     Notice of redemption will be given not less than 30 nor more than 60
calendar days prior to the date fixed for redemption or within the Redemption
Notice Period specified on the face hereof, which date and the applicable
redemption price will be specified in the notice.

     If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," the Issuer will, subject to certain
exceptions and limitations set forth

                                      A-17
<PAGE>

below, pay such additional amounts (the "ADDITIONAL AMOUNTS") to the holder of
this Note who is a United States Alien as may be necessary in order that every
net payment of the principal of and interest on this Note and any other amounts
payable on this Note, after withholding or deduction for or on account of any
present or future tax, assessment or governmental charge imposed upon or as a
result of such payment by the United States, or any political subdivision or
taxing authority thereof or therein, will not be less than the amount provided
for in this Note to be then due and payable. The Issuer will not, however, make
any payment of Additional Amounts to any such holder who is a United States
Alien for or on account of:

          (a) any present or future tax, assessment or other governmental charge
     that would not have been so imposed but for (i) the existence of any
     present or former connection between such holder, or between a fiduciary,
     settlor, beneficiary, member or shareholder of such holder, if such holder
     is an estate, a trust, a partnership or a corporation for United States
     federal income tax purposes, and the United States, including, without
     limitation, such holder (or such fiduciary, settlor, beneficiary, member or
     shareholder) being or having been a citizen or resident thereof or being or
     having been engaged in a trade or business or present therein or having, or
     having had, a permanent establishment therein or (ii) the presentation by
     or on behalf of the holder of this Note for payment on a date more than 15
     calendar days after the date on which such payment became due and payable
     or the date on which payment thereof is duly provided for, whichever occurs
     later;

          (b) any estate, inheritance, gift, sales, transfer, excise or personal
     property tax or any similar tax, assessment or governmental charge;

          (c) any tax, assessment or other governmental charge imposed by reason
     of such holder's past or present status as a personal holding company or
     foreign personal holding company or controlled foreign corporation or
     passive foreign investment company with respect to the United States or as
     a corporation which accumulates earnings to avoid United States federal
     income tax or as a private foundation or other tax-exempt organization or a
     bank receiving interest under Section 881(c)(3)(A) of the Internal Revenue
     Code of 1986, as amended;

          (d) any tax, assessment or other governmental charge that is payable
     otherwise than by withholding or deduction from payments on or in respect
     of this Note;

          (e) any tax, assessment or other governmental charge required to be
     withheld by any Paying Agent from any payment of principal of, or interest
     on, this Note, if such payment can be made without such withholding by any
     other Paying Agent in a city in Western Europe;

          (f) any tax, assessment or other governmental charge that would not
     have been imposed but for the failure to comply with certification,
     information or other reporting requirements concerning the nationality,
     residence or identity of the holder or beneficial owner of this Note, if
     such compliance is required by statute or by regulation of the

                                      A-18
<PAGE>

     United States or of any political subdivision or taxing authority thereof
     or therein as a precondition to relief or exemption from such tax,
     assessment or other governmental charge;

          (g) any tax, assessment or other governmental charge imposed by reason
     of such holder's past or present status as the actual or constructive owner
     of 10% or more of the total combined voting power of all classes of stock
     entitled to vote of the Issuer or as a direct or indirect subsidiary of the
     Issuer; or

          (h) any combination of items (a), (b), (c), (d), (e), (f) or (g).

     In addition, the Issuer shall not be required to make any payment of
Additional Amounts (i) to any such holder where such withholding or deduction is
imposed on a payment to an individual and is required to be made pursuant to any
law implementing or complying with, or introduced in order to conform to, any
European Union Directive on the taxation of savings; or (ii) by or on behalf of
a holder who would have been able to avoid such withholding or deduction by
presenting this Note or the relevant coupon to another Paying Agent in a member
state of the European Union. Nor shall the Issuer pay Additional Amounts with
respect to any payment on this Note to a United States Alien who is a fiduciary
or partnership or other than the sole beneficial owner of such payment to the
extent such payment would be required by the laws of the United States (or any
political subdivision thereof) to be included in the income, for tax purposes,
of a beneficiary or settlor with respect to such fiduciary or a member of such
partnership or a beneficial owner who would not have been entitled to the
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the holder of this Note.

     This Note will bear interest at the rate determined in accordance with the
applicable provisions below by reference to the Base Rate shown on the face
hereof based on the Index Maturity, if any, shown on the face hereof (i) plus or
minus the Spread, if any, and/or (ii) multiplied by the Spread Multiplier, if
any, specified on the face hereof. Commencing with the Initial Interest Reset
Date specified on the face hereof, the rate at which interest on this Note is
payable shall be reset as of each Interest Reset Date specified on the face
hereof (as used herein, the term "INTEREST RESET DATE" shall include the Initial
Interest Reset Date). The determination of the rate of interest at which this
Note will be reset on any Interest Reset Date shall be made on the Interest
Determination Date (as defined below) pertaining to such Interest Reset Dates.
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 will be the
Initial Interest Rate and (b) unless otherwise specified on the face hereof, the
interest rate in effect for the ten calendar days immediately prior to maturity,
redemption or repayment will be that in effect on the tenth calendar day
preceding such maturity, redemption or repayment date. If any Interest Reset
Date would otherwise be a day that is not a Business Day, such Interest Reset
Date shall be postponed to the next succeeding day that is a Business Day,
except that if the Base Rate specified on the face hereof is LIBOR or EURIBOR
and such Business Day is in the next succeeding calendar month, such Interest
Reset Date shall be the immediately preceding Business Day. As used herein,
"BUSINESS DAY" means any day, other than a Saturday or Sunday, (a) that is
neither a legal holiday nor a day on which banking

                                      A-19
<PAGE>

institutions are authorized or required by law or regulation to close (x) in The
City of New York or (y) if this Note is denominated in a Specified Currency
other than U.S. dollars, euro or Australian dollars, in the principal financial
center of the country of the Specified Currency, or (z) if this Note is
denominated in Australian dollars, in Sydney and (b) if this Note is denominated
in euro, that is also a day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer System ("TARGET") is operating (a "TARGET
SETTLEMENT DAY").

     The Interest Determination Date pertaining to an Interest Reset Date for
Notes bearing interest calculated by reference to the Federal Funds Rate and
Prime Rate shall be on the Business Day prior to the Interest Reset Date. The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to the CD Rate, Commercial Paper Rate
and CMT Rate will be the second Business Day prior to such Interest Reset Date.
The Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to EURIBOR (or to LIBOR when the Index
Currency is euros) shall be the second TARGET Settlement Day prior such Interest
Reset Date. The Interest Determination Date pertaining to an Interest Reset Date
for Notes bearing interest calculated by reference to LIBOR (other than for
LIBOR Notes for which the Index Currency is euros) shall be the second London
Banking Day prior such Interest Reset Date, except that the Interest
Determination Date pertaining to an Interest Reset Date for a LIBOR Note for
which the Index Currency is pounds sterling will be such Interest Reset Date. As
used herein, "LONDON BANKING DAY" means any day on which dealings in deposits in
the Index Currency (as defined herein) are transacted in the London interbank
market. The Interest Determination Date pertaining to an Interest Reset Date for
Notes bearing interest calculated by reference to the Treasury Rate shall be the
day of the week in which such Interest Reset Date falls on which Treasury bills
normally would be auctioned. Treasury Bills are normally sold at auction on
Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except that the auction may
be held on the preceding Friday; provided, however, that if an auction is held
on the Friday of the week preceding such Interest Reset Date, the Interest
Determination Date shall be such preceding Friday; and provided, further, that
if an auction shall fall on any Interest Reset Date, then the Interest Reset
Date shall instead be the first Business Day following the date of such auction.
The Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to two or more base rates will be the
latest Business Day that is at least two Business Days before the Interest Reset
Date for the applicable Note on which each base rate is determinable.

     Unless otherwise specified on the face hereof, the "CALCULATION DATE"
pertaining to an Interest Determination Date will be the earlier of (i) the
tenth calendar day after such Interest Determination Date or, if such day is not
a Business Day, the next succeeding Business Day, or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or Maturity Date (or,
with respect to any principal amount to be redeemed or repaid, any redemption or
repayment date), as the case may be.

     Determination of CD Rate. If the Base Rate specified on the face hereof is
the "CD RATE," for any Interest Determination Date, the CD Rate with respect to
this Note shall be the

                                      A-20
<PAGE>

rate on that date for negotiable U.S. dollar certificates of deposit having the
Index Maturity specified on the face hereof as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates," or any successor publication of the Board of Governors
of the Federal Reserve System ("H.15(519)") under the heading "CDs (Secondary
Market)."

     The following procedures shall be followed if the CD Rate cannot be
determined as described above:

     (i) If the above rate is not published in H.15(519) by 3:00 p.m., New York
City time, on the Calculation Date, the CD Rate shall be the rate on that
Interest Determination Date set forth in the daily update of H.15(519),
available through the world wide website of the Board of Governors of the
Federal Reserve System at http://www.federalreserve.gov/releases/h15/update, or
any successor site or publication ("H.15 DAILY UPDATE") for the Interest
Determination Date for certificates of deposit having the Index Maturity
specified on the face hereof, under the caption "CDs (Secondary Market)."

     (ii) If the above rate is not yet published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the Calculation Date, the
Calculation Agent shall determine the CD Rate to be the arithmetic mean of the
secondary market offered rates as of 10:00 a.m., New York City time, on that
Interest Determination Date of three leading nonbank dealers in negotiable U.S.
dollar certificates of deposit in The City of New York, which may include the
initial dealer and its affiliates, selected by the Calculation Agent (after
consultation with the Issuer), for negotiable U.S. dollar certificates of
deposit of major U.S. money center banks of the highest credit standing in the
market for negotiable certificates of deposit with a remaining maturity closest
to the Index Maturity specified on the face hereof in an amount that is
representative for a single transaction in that market at that time.

     "Initial dealer" with respect to this Note means either Morgan Stanley &
Co. Incorporated or Morgan Stanley DW Inc., as applicable.

     (iii) If the dealers selected by the Calculation Agent are not quoting as
set forth above, the CD Rate for that Interest Determination Date shall remain
the CD Rate for the immediately preceding Interest Reset Period, or, if there
was no Interest Reset Period, the rate of interest payable shall be the Initial
Interest Rate.

     Determination of Commercial Paper Rate. If the Base Rate specified on the
face hereof is the "COMMERCIAL PAPER RATE," for any Interest Determination Date,
the Commercial Paper Rate with respect to this Note shall be the Money Market
Yield (as defined herein), calculated as described below, of the rate on that
date for U.S. dollar commercial paper having the Index Maturity specified on the
face hereof, as that rate is published in H.15(519), under the heading
"Commercial Paper Nonfinancial."

     The following procedures shall be followed if the Commercial Paper Rate
cannot be determined as described above:

                                      A-21
<PAGE>

     (i) If the above rate is not published by 3:00 p.m., New York City time, on
the Calculation Date, then the Commercial Paper Rate shall be the Money Market
Yield of the rate on that Interest Determination Date for commercial paper of
the Index Maturity specified on the face hereof as published in the H.15 Daily
Update, or other recognized electronic source used for the purpose of displaying
the applicable rate, under the heading "Commercial Paper Nonfinancial."

     (ii) If by 3:00 p.m., New York City time, on that Calculation Date the rate
is not yet published in either H.15(519) or the H.15 Daily Update, or other
recognized electronic source used for the purpose of displaying the applicable
rate, then the Calculation Agent shall determine the Commercial Paper Rate to be
the Money Market Yield of the arithmetic mean of the offered rates as of 11:00
a.m., New York City time, on that Interest Determination Date of three leading
dealers of U.S. dollar commercial paper in The City of New York, which may
include the initial dealer and its affiliates, selected by the Calculation Agent
(after consultation with the Issuer), for commercial paper of the Index Maturity
specified on the face hereof, placed for an industrial issuer whose bond rating
is "Aa," or the equivalent, from a nationally recognized statistical rating
agency.

     (iii) If the dealers selected by the Calculation Agent are not quoting as
set forth in (ii) above, the Commercial Paper Rate for that Interest
Determination Date shall remain the Commercial Paper Rate for the immediately
preceding Interest Reset Period, or, if there was no Interest Reset Period, the
rate of interest payable shall be the Initial Interest Rate.

     The "MONEY MARKET YIELD" shall be a yield calculated in accordance with the
following formula:

     Money Market Yield =             D x 360
                                   -------------   x 100
                                   360 - (D x M)

where "D" refers to the applicable per year rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.

     Determination of EURIBOR Notes. If the Base Rate specified on the face
hereof is "EURIBOR," for any Interest Determination Date, EURIBOR with respect
to this Note shall be the rate for deposits in euros as sponsored, calculated
and published jointly by the European Banking Federation and ACI - The Financial
Market Association, or any company established by the joint sponsors for
purposes of compiling and publishing those rates, for the Index Maturity
specified on the face hereof as that rate appears on the display on Moneyline
Telerate, or any successor service, on page 248 or any other page as may replace
page 248 on that service ("TELERATE PAGE 248") as of 11:00 a.m., Brussels time.

     The following procedures shall be followed if the rate cannot be determined
as described above:

                                      A-22
<PAGE>

     (i) If the above rate does not appear, the Calculation Agent shall request
the principal Euro-zone office of each of four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer), to provide the Calculation Agent with its offered rate for deposits
in euros, at approximately 11:00 a.m., Brussels time, on the Interest
Determination Date, to prime banks in the Euro-zone interbank market for the
Index Maturity specified on the face hereof commencing on the applicable
Interest Reset Date, and in a principal amount not less than the equivalent of
U.S.$1 million in euro that is representative of a single transaction in euro,
in that market at that time. If at least two quotations are provided, EURIBOR
shall be the arithmetic mean of those quotations.

     (ii) If fewer than two quotations are provided, EURIBOR shall be the
arithmetic mean of the rates quoted by four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer), at approximately 11:00 a.m., Brussels time, on the applicable
Interest Reset Date for loans in euro to leading European banks for a period of
time equivalent to the Index Maturity specified on the face hereof commencing on
that Interest Reset Date in a principal amount not less than the equivalent of
U.S.$1 million in euro.

     (iii) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the EURIBOR rate for that Interest Determination Date shall
remain the EURIBOR for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.

     "EURO-ZONE" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the relevant treaty of
the European Union, as amended.

     Determination of the Federal Funds Rates. If the Base Rate specified on the
face hereof is the "FEDERAL FUNDS RATE," for any Interest Determination Date,
the Federal Funds Rate with respect to this Note shall be the rate on that date
for U.S. dollar federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)" as displayed on Moneyline Telerate, or any successor
service, on page 120 or any other page as may replace page 120 on that service
("TELERATE PAGE 120").

     The following procedures shall be followed if the Federal Funds Rate cannot
be determined as described above:

     (i) If the above rate is not published by 3:00 p.m., New York City time, on
the Calculation Date, the Federal Funds Rate shall be the rate on that Interest
Determination Date as published in the H.15 Daily Update, or other recognized
electronic source used for the purpose of displaying the applicable rate, under
the heading "Federal Funds (Effective)."

     (ii) If the above rate is not yet published in either H.15(519) or the H.15
Daily Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, by 3:00 p.m., New York City time, on the
Calculation Date, the Calculation Agent shall determine the Federal Funds Rate
to be the arithmetic mean of the rates for the last transaction in

                                      A-23
<PAGE>

overnight U.S. dollar federal funds prior to 9:00 a.m., New York City time, on
that Interest Determination Date, by each of three leading brokers of U.S.
dollar federal funds transactions in The City of New York, which may include the
initial dealer and its affiliates, selected by the Calculation Agent (after
consultation with the Issuer).

     (iii) If the brokers selected by the Calculation Agent are not quoting as
set forth in (ii) above, the Federal Funds Rate for that Interest Determination
Date shall remain the Federal Funds Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.

     Determination of LIBOR. If the Base Rate specified on the face hereof is
"LIBOR," LIBOR with respect to this Note shall be based on London Interbank
Offered Rate. The Calculation Agent shall determine LIBOR for each Interest
Determination Date as follows:

     (i) As of the Interest Determination Date, LIBOR shall be either (a) if
"LIBOR REUTERS" is specified as the Reporting Service on the face hereof, the
arithmetic mean of the offered rates for deposits in the Index Currency having
the Index Maturity designated on the face hereof, commencing on the second
London Banking Day immediately following that Interest Determination Date, that
appear on the Designated LIBOR Page, as defined below, as of 11:00 a.m., London
time, on that Interest Determination Date, if at least two offered rates appear
on the Designated LIBOR Page; except that if the specified Designated LIBOR
Page, by its terms provides only for a single rate, that single rate shall be
used; or (b) if "LIBOR TELERATE" is specified as the Reporting Service on the
face hereof, the rate for deposits in the Index Currency having the Index
Maturity designated on the face hereof, commencing on the second London Banking
Day immediately following that Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest Determination Date,
that appears on the Designated LIBOR Page at approximately 11:00 a.m., London
time, on that Interest Determination Date.

     (ii) If (a) fewer than two offered rates appear and LIBOR Reuters is
specified on the face hereof, or (b) no rate appears and the face hereof
specifies either (x) LIBOR Telerate or (y) LIBOR Reuters and the Designated
LIBOR Page by its terms provides only for a single rate, then the Calculation
Agent shall request the principal London offices of each of four major reference
banks in the London interbank market, as selected by the Calculation Agent
(after consultation with the Issuer), to provide the Calculation Agent with its
offered quotation for deposits in the Index Currency for the period of the Index
Maturity specified on the face hereof commencing on the second London Banking
Day immediately following the Interest Determination Date or, if pounds sterling
is the Index Currency, commencing on that Interest Determination Date, to prime
banks in the London interbank market at approximately 11:00 a.m., London time,
on that Interest Determination Date and in a principal amount that is
representative of a single transaction in that Index Currency in that market at
that time.

     (iii) If at least two quotations are provided, LIBOR determined on that
Interest Determination Date shall be the arithmetic mean of those quotations. If
fewer than two quotations are provided, LIBOR shall be determined for the
applicable Interest Reset Date as the arithmetic mean of the rates quoted at
approximately 11:00 a.m., London time, or some other

                                      A-24
<PAGE>

time specified on the face hereof, in the applicable principal financial center
for the country of the Index Currency on that Interest Reset Date, by three
major banks in that principal financial center selected by the Calculation Agent
(after consultation with the Issuer) for loans in the Index Currency to leading
European banks, having the Index Maturity specified on the face hereof and in a
principal amount that is representative of a single transaction in that Index
Currency in that market at that time.

     (iv) If the banks so selected by the Calculation Agent are not quoting as
set forth above, the LIBOR rate for that Interest Determination Date shall
remain the LIBOR for the immediately preceding Interest Reset Period, or, if
there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.

     The "INDEX CURRENCY" means the currency specified on the face hereof as the
currency for which LIBOR shall be calculated, or, if the euro is substituted for
that currency, the Index Currency shall be the euro. If that currency is not
specified on the face hereof, the Index Currency shall be U.S. dollars.

     "DESIGNATED LIBOR PAGE" means either: (a) if LIBOR Reuters is designated as
the Reporting Service on the face hereof, the display on the Reuters Money 3000
Service for the purpose of displaying the London interbank rates of major banks
for the applicable Index Currency or its designated successor, or (b) if LIBOR
Telerate is designated as the Reporting Service on the face hereof, the display
on Moneyline Telerate, or any successor service, on the page specified on the
face hereof, or any other page as may replace that page on that service, for the
purpose of displaying the London interbank rates of major banks for the
applicable Index Currency.

     If neither LIBOR Reuters nor LIBOR Telerate is specified on the face
hereof, LIBOR for the applicable Index Currency shall be determined as if LIBOR
Telerate were specified, and, if the U.S. dollar is the Index Currency, as if
Page 3750 had been specified.

     Determination of Prime Rate. If the Base Rate specified on the face hereof
is "PRIME RATE," for any Interest Determination Date, the Prime Rate with
respect to this Note shall be the rate on that date as published in H.15(519)
under the heading "Bank Prime Loan."

          The following procedures shall be followed if the Prime Rate cannot be
     determined as described above:

     (i) If the above rate is not published prior to 3:00 p.m., New York City
time, on the Calculation Date, then the Prime Rate shall be the rate on that
Interest Determination Date as published in the H.15 Daily Update under the
heading "Bank Prime Loan."

     (ii) If the above rate is not published in either H.15(519) or the H.15
Daily Update by 3:00 p.m., New York City time, on the Calculation Date, then the
Calculation Agent shall determine the Prime Rate to be the arithmetic mean of
the rates of interest publicly announced by

                                      A-25
<PAGE>

each bank that appears on the Reuters Screen USPRIME 1 Page, as defined below,
as that bank's Prime Rate or base lending rate as in effect for that Interest
Determination Date.

     (iii) If fewer than four rates for that Interest Determination Date appear
on the Reuters Screen USPRIME 1 Page by 3:00 p.m., New York City time, on the
Calculation Date, the Calculation Agent shall determine the Prime Rate to be the
arithmetic mean of the Prime Rates quoted on the basis of the actual number of
days in the year divided by 360 as of the close of business on that Interest
Determination Date by at least three major banks in The City of New York, which
may include affiliates of the initial dealer, selected by the Calculation Agent
(after consultation with the Issuer).

     (iv) If the banks selected by the Calculation Agent are not quoting as set
forth above, the Prime Rate for that Interest Determination Date shall remain
the Prime Rate for the immediately preceding Interest Reset Period, or, if there
was no Interest Reset Period, the rate of interest payable shall be the Initial
Interest Rate.

     "REUTERS SCREEN USPRIME 1 PAGE" means the display designated as page
"USPRIME 1" on the Reuters Money 3000 Service, or any successor service, or any
other page as may replace the USPRIME 1 Page on that service for the purpose of
displaying prime rates or base lending rates of major U.S. banks.

     Determination of Treasury Rate. If the Base Rate specified on the face
hereof is "TREASURY RATE," the Treasury Rate with respect to this Note shall be

     (i) the rate from the Auction held on the applicable Interest Determination
Date (the "Auction") of direct obligations of the United States ("Treasury
Bills") having the Index Maturity specified on the face hereof as that rate
appears under the caption "INVESTMENT RATE" on the display on Moneyline
Telerate, or any successor service, on page 56 or any other page as may replace
page 56 on that service ("Telerate Page 56") or page 57 or any other page as may
replace page 57 on that service ("Telerate Page 57"); or

     (ii) if the rate described in (i) above is not published by 3:00 p.m., New
York City time, on the Calculation Date, the Bond Equivalent Yield of the rate
for the applicable Treasury Bills as published in the H.15 Daily Update, or
other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "U.S. Government Securities/Treasury
Bills/Auction High"; or

     (iii) if the rate described in (ii) above is not published by 3:00 p.m.,
New York City time, on the related Calculation Date, the Bond Equivalent Yield
of the Auction rate of the applicable Treasury Bills, announced by the United
States Department of the Treasury; or

     (iv) if the rate described in (iii) above is not announced by the United
States Department of the Treasury, or if the Auction is not held, the Bond
Equivalent Yield of the rate on the applicable Interest Determination Date of
Treasury Bills having the Index Maturity

                                      A-26
<PAGE>

specified on the face hereof published in H.15(519) under the caption "U.S.
Government Securities/Treasury Bills/Secondary Market"; or

     (v) if the rate described in (iv) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date of the applicable Treasury Bills as published in the
H.15 Daily Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market"; or

     (vi) if the rate described in (v) above is not so published by 3:00 p.m.,
New York City time, on the related Calculation Date, the rate on the applicable
Interest Determination Date calculated by the Calculation Agent as the Bond
Equivalent Yield of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 p.m., New York City time, on the applicable Interest
Determination Date, of three primary U.S. government securities dealers, which
may include the initial dealer and its affiliates, selected by the Calculation
Agent, for the issue of Treasury Bills with a remaining maturity closest to the
Index Maturity specified on the face hereof; or

     (vii) if the dealers selected by the Calculation Agent are not quoting as
described in (vi), the Treasury Rate for the immediately preceding Interest
Reset Period, or, if there was no Interest Reset Period, the rate of interest
payable shall be the Initial Interest Rate.

     The "BOND EQUIVALENT YIELD" means a yield calculated in accordance with the
following formula and expressed as a percentage:

                                       D x N
         Bond Equivalent Yield =   -------------  x 100
                                   360 - (D x M)

where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest is
being calculated.

     Determination of CMT Rate. If the Base Rate specified on the face hereof is
the "CMT RATE," for any Interest Determination Date, the CMT Rate with respect
to this Note shall be the rate displayed on the Designated CMT Telerate Page (as
defined below) under the caption "... Treasury Constant Maturities ... Federal
Reserve Board Release H.15... Mondays Approximately 3:45 p.m.," under the column
for the Designated CMT Maturity Index, as defined below, for:

     (1) the rate on that Interest Determination Date, if the Designated CMT
Telerate Page is 7051; and

     (2) the week or the month, as applicable, ended immediately preceding the
week in which the related Interest Determination Date occurs, if the Designated
CMT Telerate Page is 7052.

                                      A-27
<PAGE>

     The following procedures shall be followed if the CMT Rate cannot be
determined as described above:

     (i) If the above rate is no longer displayed on the relevant page, or if
not displayed by 3:00 p.m., New York City time, on the related Calculation Date,
then the CMT Rate shall be the Treasury Constant Maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519).

     (ii) If the above rate is no longer published, or if not published by 3:00
p.m., New York City time, on the related Calculation Date, then the CMT Rate
shall be the Treasury Constant Maturity Rate for the Designated CMT Maturity
Index or other U.S. Treasury rate for the Designated CMT Maturity Index on the
Interest Determination Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519).

     (iii) If the information set forth above is not provided by 3:00 p.m., New
York City time, on the related Calculation Date, then the Calculation Agent
shall determine the CMT Rate to be a yield to maturity, based on the arithmetic
mean of the secondary market closing offer side prices as of approximately 3:30
p.m., New York City time, on the Interest Determination Date, reported,
according to their written records, by three leading primary U.S. government
securities dealers ("REFERENCE DEALERS") in The City of New York, which may
include the initial dealer or its affiliates, selected by the Calculation Agent
as described in the following sentence. The Calculation Agent shall select five
reference dealers (after consultation with the Issuer) and shall eliminate the
highest quotation or, in the event of equality, one of the highest, and the
lowest quotation or, in the event of equality, one of the lowest, for the most
recently issued direct noncallable fixed rate obligations of the United States
("TREASURY NOTES") with an original maturity of approximately the Designated CMT
Maturity Index, a remaining term to maturity of no more than 1 year shorter than
that Designated CMT Maturity Index and in a principal amount that is
representative for a single transaction in the securities in that market at that
time. If two Treasury Notes with an original maturity as described above have
remaining terms to maturity equally close to the Designated CMT Maturity Index,
the quotes for the Treasury Note with the shorter remaining term to maturity
shall be used.

     (iv) If the Calculation Agent cannot obtain three Treasury Notes quotations
as described in (iii) above, the Calculation Agent shall determine the CMT Rate
to be a yield to maturity based on the arithmetic mean of the secondary market
offer side prices as of approximately 3:30 p.m., New York City time, on the
Interest Determination Date of three reference dealers in The City of New York,
selected using the same method described in (iii) above, for Treasury Notes with
an original maturity equal to the number of years closest to but not less than
the Designated CMT Maturity Index and a remaining term to maturity closest to
the Designated CMT Maturity Index and in a principal amount that is
representative for a single transaction in the securities in that market at that
time.

                                      A-28
<PAGE>

     (v) If three or four, and not five, of the reference dealers are quoting as
described in (iv) above, then the CMT Rate for that Interest Determination Date
shall be based on the arithmetic mean of the offer prices obtained and neither
the highest nor the lowest of those quotes shall be eliminated.

     (vi) If fewer than three reference dealers selected by the Calculation
Agent are quoting as described in (iv) above, the CMT Rate for that Interest
Determination Date shall remain the CMT Rate for the immediately preceding
Interest Reset Period, or, if there was no Interest Reset Period, the rate of
interest payable shall be the Initial Interest Rate.

     "DESIGNATED CMT TELERATE PAGE" means the display on Moneyline Telerate, or
any successor service, on the page designated on the face hereof or any other
page as may replace that page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no page is specified
on the face hereof, the Designated CMT Telerate Page shall be 7052, for the most
recent week.

     "DESIGNATED CMT MATURITY INDEX" means the original period to maturity of
the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30 years,
as specified in the applicable pricing supplement for which the CMT Rate shall
be calculated. If no maturity is specified on the face hereof, the Designated
CMT Maturity Index shall be two years.

     Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent shall
calculate the interest rate hereon in accordance with the foregoing on or before
each Calculation Date. The interest rate on this Note will in no event be higher
than the maximum rate permitted by New York law, as the same may be modified by
United States Federal law of general application.

     At the request of the holder hereof, the Calculation Agent will provide to
the holder hereof the interest rate hereon then in effect and, if determined,
the interest rate that will become effective as of the next Interest Reset Date.

     Unless otherwise indicated on the face hereof, interest payments on this
Note shall be the amount of interest accrued from and including the Interest
Accrual Date or from and including the last date to which interest has been paid
or duly provided for to but excluding the Interest Payment Dates or the Maturity
Date (or any earlier redemption or repayment date), as the case may be. Accrued
interest hereon shall be an amount calculated by multiplying the face amount
hereof by an accrued interest factor. Such accrued interest factor shall be
computed by adding the interest factor calculated for each day in the period for
which interest is being paid. The interest factor for each such date shall be
computed by dividing the interest rate applicable to such day (i) by 360 if the
Base Rate is CD Rate, Commercial Paper Rate, EURIBOR, Federal Funds Rate, Prime
Rate or LIBOR (except if the Index Currency is pounds sterling); (ii) by 365 if
the Base Rate is LIBOR and the Index Currency is pounds sterling; or (iii) by
the actual number of days in the year if the Base Rate is the Treasury Rate or
the CMT Rate. All percentages resulting from any calculation of the rate of
interest on this Note will be rounded, if necessary, to

                                      A-29
<PAGE>

the nearest one hundred thousandth of a percentage point with (.000005% being
rounded up to .00001%) and all U.S. dollar amounts used in or resulting from
such calculation on this Note will be rounded to the nearest cent, with one half
cent rounded upward. All Japanese Yen amounts used in or resulting from such
calculations will be rounded downwards to the next lower whole Japanese Yen
amount. All amounts denominated in any other currency used in or resulting from
such calculations will be rounded to the nearest two decimal places in such
currency, with .005 being rounded up to .01. The interest rate in effect on any
Interest Reset Date will be the applicable rate as reset on such date. The
interest rate applicable to any other day is the interest rate from the
immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate).

     This Note and all the obligations of the Issuer hereunder are direct,
unsecured obligations of the Issuer and rank without preference or priority
among themselves and pari passu with all other existing and future unsecured and
unsubordinated indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.

     This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and, if denominated
in U.S. dollars, unless otherwise stated above, is issuable only in
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. If this Note is denominated in a Specified Currency other than U.S.
dollars, then, unless a higher minimum denomination is required by applicable
law, it is issuable only in denominations of the equivalent of U.S. $1,000
(rounded to an integral multiple of 1,000 units of such Specified Currency), or
any amount in excess thereof which is an integral multiple of 1,000 units of
such Specified Currency, as determined by reference to the noon dollar buying
rate in The City of New York for cable transfers of such Specified Currency
published by the Federal Reserve Bank of New York (the "MARKET EXCHANGE RATE")
on the Business Day immediately preceding the date of issuance.

     The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the Trustee and duly executed by the registered holder hereof in
person or by the holder's attorney duly authorized in writing, and thereupon the
Trustee shall issue in the name of the transferee or transferees, in exchange
herefor, a new Note or Notes having identical terms and provisions and having a
like aggregate principal amount in authorized denominations, subject to the
terms and conditions set forth herein; provided, however, that the Trustee will
not be required (i) to register the transfer of or exchange any Note that has
been called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased, or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the Senior
Indenture with respect to the redemption of Notes. Notes are exchangeable at
said office for other Notes of other authorized denominations of equal aggregate
principal amount having identical terms and provisions. All such exchanges and
transfers of Notes will be free of charge, but the Issuer may require payment of
a sum sufficient to cover any

                                      A-30
<PAGE>

tax or other governmental charge in connection therewith. All Notes surrendered
for exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee and executed by the registered holder
in person or by the holder's attorney duly authorized in writing. The date of
registration of any Note delivered upon any exchange or transfer of Notes shall
be such that no gain or loss of interest results from such exchange or transfer.

     In case this Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and this Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, the Issuer in its discretion may execute a new Note of
like tenor in exchange for this Note, but, if this Note is destroyed, lost or
stolen, only upon receipt of evidence satisfactory to the Trustee and the Issuer
that this Note was destroyed or lost or stolen and, if required, upon receipt
also of indemnity satisfactory to each of them. All expenses and reasonable
charges associated with procuring such indemnity and with the preparation,
authentication and delivery of a new Note shall be borne by the owner of the
Note mutilated, defaced, destroyed, lost or stolen.

     The Senior Indenture provides that (a) if an Event of Default (as defined
in the Senior Indenture) due to the default in payment of principal of or
premium, if any, or interest on, any series of debt securities issued under the
Senior Indenture, including the series of Notes of which this Note forms a part,
or due to the default in the performance or breach of any other covenant or
warranty of the Issuer applicable to the debt securities of such series but not
applicable to all outstanding debt securities issued under the Senior Indenture,
shall have occurred and be continuing, either the Trustee or the holders of not
less than 25% in aggregate principal amount of the outstanding debt securities
of each affected series, voting as one class, by notice in writing to the Issuer
and to the Trustee, if given by the securityholders, may then declare the
principal of all debt securities of all such series and interest accrued thereon
to be due and payable immediately and (b) if an Event of Default due to a
default in the performance of any other of the covenants or agreements in the
Senior Indenture applicable to all outstanding debt securities issued
thereunder, including this Note, or due to certain events of bankruptcy,
insolvency or reorganization of the Issuer, shall have occurred and be
continuing, either the Trustee or the holders of not less than 25% in aggregate
principal amount of all outstanding debt securities issued under the Senior
Indenture, voting as one class, by notice in writing to the Issuer and to the
Trustee, if given by the securityholders, may declare the principal of all such
debt securities and interest accrued thereon to be due and payable immediately,
but upon certain conditions such declarations may be annulled and past defaults
may be waived (except a continuing default in payment of principal or premium,
if any, or interest on such debt securities) by the holders of a majority in
aggregate principal amount of the debt securities of all affected series then
outstanding.

     The Senior Indenture permits the Issuer and the Trustee, with the consent
of the holders of not less than a majority in aggregate principal amount of the
debt securities of all series issued under the Senior Indenture then outstanding
and affected (voting as one class), to execute supplemental indentures adding
any provisions to or changing in any manner the rights of the

                                      A-31
<PAGE>

holders of each series so affected; provided that the Issuer and the Trustee may
not, without the consent of the holder of each outstanding debt security
affected thereby, (i) extend the final maturity of any such debt security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof,
or change the currency of payment thereof, or modify or amend the provisions for
conversion of any currency into any other currency, or modify or amend the
provisions for conversion or exchange of the debt security for securities of the
Issuer or other entities or for other property or the cash value of the property
(other than as provided in the antidilution provisions or other similar
adjustment provisions of the debt securities or otherwise in accordance with the
terms thereof), or impair or affect the rights of any holder to institute suit
for the payment thereof or (ii) reduce the aforesaid percentage in principal
amount of debt securities the consent of the holders of which is required for
any such supplemental indenture.

     Except as set forth below, if the principal of, premium, if any, or
interest on, this Note is payable in a Specified Currency other than U.S.
dollars and such Specified Currency is not available to the Issuer for making
payments hereon due to the imposition of exchange controls or other
circumstances beyond the control of the Issuer or is no longer used by the
government of the country issuing such currency or for the settlement of
transactions by public institutions within the international banking community,
then the Issuer will be entitled to satisfy its obligations to the holder of
this Note by making such payments in U.S. dollars on the basis of the Market
Exchange Rate on the date of such payment or, if the Market Exchange Rate is not
available on such date, as of the most recent practicable date; provided,
however, that if the euro has been substituted for such Specified Currency, the
Issuer may at its option (or shall, if so required by applicable law) without
the consent of the holder of this Note effect the payment of principal of or
premium, if any, or interest on any Note denominated in such Specified Currency
in euro in lieu of such Specified Currency in conformity with legally applicable
measures taken pursuant to, or by virtue of, the Treaty establishing the
European Community, as amended. Any payment made under such circumstances in
U.S. dollars or euro where the required payment is in an unavailable Specified
Currency will not constitute an Event of Default. If such Market Exchange Rate
is not then available to the Issuer or is not published for a particular
Specified Currency, the Market Exchange Rate will be based on the highest bid
quotation in The City of New York received by the Exchange Rate Agent at
approximately 11:00 a.m., New York City time, on the second Business Day
preceding the date of such payment from three recognized foreign exchange
dealers (the "EXCHANGE DEALERS") for the purchase by the quoting Exchange Dealer
of the Specified Currency for U.S. dollars for settlement on the payment date,
in the aggregate amount of the Specified Currency payable to those holders or
beneficial owners of Notes and at which the applicable Exchange Dealer commits
to execute a contract. One of the Exchange Dealers providing quotations may be
the Exchange Rate Agent unless the Exchange Rate Agent is an affiliate of the
Issuer. If those bid quotations are not available, the Exchange Rate Agent shall
determine the market exchange rate at its sole discretion.

     The "EXCHANGE RATE AGENT" shall be Morgan Stanley & Co. Incorporated,
unless otherwise indicated on the face hereof.

                                      A-32
<PAGE>

     All determinations referred to above made by, or on behalf of, the Issuer
or by, or on behalf of, the Exchange Rate Agent shall be at such entity's sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on holders of Notes.

     So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the Notes.
The Issuer may designate other agencies for the payment of said principal,
premium and interest at such place or places (subject to applicable laws and
regulations) as the Issuer may decide. So long as there shall be such an agency,
the Issuer shall keep the Trustee advised of the names and locations of such
agencies, if any are so designated. If any European Union Directive on the
taxation of savings comes into force, the Issuer will, to the extent possible as
a matter of law, maintain a Paying Agent in a member state of the European Union
that will not be obligated to withhold or deduct tax pursuant to any such
Directive or any law implementing or complying with, or introduced in order to
conform to, such Directive.

     With respect to moneys paid by the Issuer and held by the Trustee or any
Paying Agent for payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting in
any way any obligation that the Issuer may have to pay the principal of or
interest or premium, if any, on this Note as the same shall become due.

     No provision of this Note or of the Senior Indenture shall alter or impair
the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and premium, if any, and interest on this Note at the time, place,
and rate, and in the coin or currency, herein prescribed unless otherwise agreed
between the Issuer and the registered holder of this Note.

     Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.

     No recourse shall be had for the payment of the principal of or premium, if
any, or the interest on this Note, for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the 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

                                      A-33
<PAGE>

otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.

     This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.

     As used herein, the term "United States Alien" means any person who is, for
United States federal income tax purposes, (i) a nonresident alien individual,
(ii) a foreign corporation, (iii) a nonresident alien fiduciary of a foreign
estate or trust or (iv) a foreign partnership one or more of the members of
which is, for United States federal income tax purposes, a nonresident alien
individual, a foreign corporation or a nonresident alien fiduciary of a foreign
estate or trust.

     All terms used in this Note which are defined in the Senior Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Senior Indenture.

                                      A-34
<PAGE>

                               ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

                    TEN COM   --   as tenants in common
                    TEN ENT   --   as tenants by the entireties
                    JT TEN    --   as joint tenants with right
                                   of survivorship and not as
                                   tenants in common

       UNIF GIFT MIN ACT______________________Custodian____________________
                               (Minor)                           (Cust)

       Under Uniform Gifts to Minors Act___________________________________
                                                    (State)

     Additional abbreviations may also be used though not in the above list.

                                    ________

                                      A-35
<PAGE>

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

________________________________________
[PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE]

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________
    [PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.

     Dated: ________________________________

NOTICE: The signature to this assignment must correspond with the name as
        written upon the face of the within Note in every particular without
        alteration or enlargement or any change whatsoever.

                                      A-36
<PAGE>

                            OPTION TO ELECT REPAYMENT

     The undersigned hereby irrevocably requests and instructs the Issuer to
repay the within Note (or portion thereof specified below) pursuant to its terms
at a price equal to the principal amount thereof, together with interest to the
Optional Repayment Date, to the undersigned at

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________
      (Please print or typewrite name and address of the undersigned)

     If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have
repaid:______________________________; and specify the denomination or
denominations (which shall not be less than the minimum authorized denomination)
of the Notes to be issued to the holder for the portion of the within Note not
being repaid (in the absence of any such specification, one such Note will be
issued for the portion not being repaid):___________________________.

Dated:__________________________         ____________________________________
                                         NOTICE: The signature on this Option
                                         to Elect Repayment must correspond
                                         with the name as written upon the
                                         face of the within instrument in
                                         every particular without alteration
                                         or enlargement.

                                     A-37

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