Document:

exv4w8

 

Exhibit 4.8

REGISTRATION RIGHTS AGREEMENT

Dated as of October 10, 2003

between

PLACER DOME INC.

and

CITIGROUP GLOBAL MARKETS INC.,

J.P. MORGAN SECURITIES INC,

and

MORGAN STANLEY & CO. INCORPORATED

 

 

REGISTRATION RIGHTS AGREEMENT

     Registration Rights Agreement (the “Agreement”) dated as of October 10,
2003, between Placer Dome Inc., a corporation organized under the Canada
Business Corporations Act (the “Company”), and Citigroup Global Markets Inc.,
J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated (the
“Representatives”), as representatives of the several initial purchasers named
in the Purchase Agreement (the “Initial Purchasers”).

     This Agreement is made pursuant to the Purchase Agreement dated October 7,
2003 between the Company and the Representatives (the “Purchase Agreement”),
which provides for the sale by the Company to the Initial Purchasers of an
aggregate of US$200,000,000 principal amount (the “Firm Securities”) of the
Company’s 2.75% Convertible Senior Debentures due 2023, and an additional
US$30,000,000 aggregate principal amount (the “Additional Securities” and
collectively with the Firm Securities, the
“Securities”). In order to induce
the Initial Purchasers to enter into the Purchase Agreement, the Company has
agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing under the Purchase
Agreement.

     In consideration of the foregoing, the Company agrees with the Initial
Purchasers, (i) for their benefit as Initial Purchasers and (ii) for the
benefit of each Holder, as follows;

      1. Definitions.

     As used in this Agreement, the following capitalized defined terms shall
have the following meanings:

     “1933
Act” or “Securities Act” shall mean the U.S. Securities Act of
1933, as amended from time to time.

     “1934
Act” shall mean the U.S. Securities Exchange Act of 1934, as
amended from time to time,

     “Additional Interest” shall have the meaning assigned to it in Section
2(g).

     “Amendment Effectiveness Deadline” has the meaning set forth in
Section 2(e) hereof.

     “Business Day” shall mean any day other than a Saturday or Sunday or a day
on which banking institutions in The City of New York are authorized or
required by law, regulation or executive order to remain closed.

 

 

     “Closing Date” shall mean the Closing Date as defined in the Purchase
Agreement.

     “Common Shares” shall mean the common shares, without par value, in the
capital of the Company and any other capital shares as may constitute “Common
Shares” for purposes of the Indenture, including the Underlying Common Shares.

     “Company” shall have the meaning set forth in the preamble to this
Agreement and shall also include the Company’s successors.

     “Conversion Price” shall have the meaning assigned such term in the
Indenture.

     “Deferral
Period” shall have the meaning set forth in Section 3
hereof.

     “Depositary” shall have the meaning set forth in Section 6(c) hereof.

     “Effectiveness Deadline” shall have the meaning set forth in Section 2(a)
hereof.

     “Effectiveness Period” shall mean the period commencing on the first date
that a Shelf Registration Statement is declared effective under the Securities
Act and ending on the date that all Securities and the Underlying Common Shares
have ceased to be Registrable Securities.

     “Filing Deadline” shall have the meaning set forth in Section 2(a)
hereof.

     “Holder” shall mean the Initial Purchasers for so long as they own any
Registrable Securities, and each of their respective successors, assigns and
direct and indirect transferees who become registered or beneficial owners of
the Securities and the Underlying Common Shares.

     “Indenture” shall mean the Indenture dated as of March 6, 2003, as
supplemented by the Third Supplemental Indenture dated as of the Closing Date,
each between the Company and Deutsche Bank Trust Company Americas, as trustee,
and as the same may be further amended or supplemented from time to time in
accordance with the terms thereof.

     “Initial Purchasers” shall have the meaning set forth in the preamble to
this Agreement.

     “Interest Payment Date” shall mean each April 15 and October 15.

     “Liquidated Damages” shall have the meaning set forth in Section 2(g)
hereof.

2

 

     “Majority Holders” shall mean the Holders of a majority of outstanding
Registrable Securities (which Holders of Securities deemed to be the Holders,
for purposes of determining such majority, of the number of Underlying Common
Shares into which such Securities are or would be convertible as of the date on
which such designation is made); provided, that whenever the consent or
approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or any of its
“affiliates” (as such term is defined in Rule 144 under the 1933 Act) (other

than (i) the Initial Purchasers, it being understood and agreed that none of
the Initial Purchasers nor any of their respective subsidiaries, parents or
affiliates shall be deemed affiliates of the Company for purposes of this
definition, and (ii) any subsequent Holder of Registrable Securities if such
subsequent Holder is deemed to be such an affiliate solely by reason of its
holding of Registrable Securities) shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage
or amount. In cases where this Agreement shall permit or require any action or
determination to be made by, for example, a majority of Registrable Securities
being sold or included in a Shelf Registration or offering or affected by an
amendment, the terms and procedures specified in the proviso to the foregoing
sentence shall be applied.

     “Material Event” shall have the meaning set forth in Section 2(a)
hereof.

     “Notice and Questionnaire” shall mean a written notice delivered to the
Company containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of the Company dated October 7, 2003 relating to the Securities.

     “Notice Holder” shall mean, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date.

     “Person” shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization or other entity, or
a government or agency or political subdivision thereof.

     “Prospectus” shall mean the prospectus included in a Shelf Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by such Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, including post-effective
amendments, and in each case including all material incorporated or deemed to
be incorporated by reference therein.

     “Purchase Agreement” shall have the meaning set forth in the preamble
to this Agreement.

3

 

     “Record Holder” shall mean with respect to any Interest Payment Date
relating to any Securities or Underlying Common Shares as to which any
Additional Interest or Liquidated Damages, as the case may be, has accrued, the
registered holder of such Security or Underlying Common Share, as the case may
be, on the April 1 or October 1 immediately preceding the Interest Payment
Date.

     “Registrable Securities” shall mean the Securities until such Securities
have been converted into or exchanged for the Underlying Common Shares and, at
all times subsequent to any such conversion, the Underlying Common Shares and
any securities into or for which such Underlying Common Shares have been
converted or exchanged, and any securities issued with respect thereto upon any
stock dividend, split or similar event until, in the case of any such security,
(A) the earliest of (i) its effective registration under the Securities Act and
resale in accordance with a Shelf Registration Statement, (ii) expiration of
the holding period that would be applicable thereto under Rule 144(k) or (iii)
its sale to the public pursuant to Rule 144 (or any similar provision then in
force, but not Rule 144A), and (B) as a result of the event or circumstance
described in any of the foregoing clauses (i) through (iii), the legend with
respect to transfer restrictions required under the Indenture is removed or
removable in accordance with the terms of the Indenture or such legend, as the
case may be.

     “Registration Expenses” shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, whether or not
any Shelf Registration Statement is declared effective, including without
limitation: (i) all SEC, stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees, (ii) all fees and expenses incurred
in connection with compliance with state securities or blue sky laws (including
fees and disbursements of counsel for any underwriters or Holders in connection
with blue sky qualification of any of the Registrable Securities), (iii) all
expenses of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Shelf Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting agreements,
securities sales agreements and other documents relating to the performance of
and compliance with this Agreement, (iv) all rating agency fees, (v) all fees
and disbursements relating to the qualification of the Indenture under
applicable securities laws, (vi) the fees and disbursements of the Trustee and
its counsel, (vii) the fees and disbursements of counsel for the Company and,
in the case of a Shelf Registration Statement, the fees and disbursements of
one counsel for the Holders (which counsel shall be selected by the
Representatives or, if the Representatives elect not to select such counsel, by
the Majority Holders and which counsel may in any event also be counsel for the
Initial Purchasers) and (viii) the fees and disbursements of the independent
public accountants of the Company and of any other Person or business whose
financial statements are included or incorporated or deemed to be incorporated
by reference in a Shelf Registration Statement, including the expenses of any
special audits or “cold comfort” or similar letters required by or incident to
such performance and compliance, but excluding fees and expenses of

4

 

counsel to the underwriters or the Holders (other than fees and expenses set
forth in clauses (ii) and (vii) above) and underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by a Holder pursuant to the Shelf Registration
Statement.

     “Representatives” shall have the meaning set forth in the preamble to this
Agreement.

     “Rule 144” shall mean Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

     “Rule 144A” shall mean Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

     “SEC” shall mean the U.S. Securities and Exchange Commission.

     “Securities” shall have the meaning set forth in the preamble to this
Agreement.

     “Shelf” Registration” shall mean a registration effected pursuant to
Section 2 hereof.

     “Shelf Registration Statement” shall mean a “shelf” registration statement
of the Company pursuant to the provisions of Section 2(a) of this Agreement
which covers the Registrable Securities (but no other securities unless
approved by all of the Holders whose Registrable Securities are covered by such
Shelf Registration Statement) on an appropriate form under Rule 415 under the
1933 Act, or on Form F-10 or any similar form that may be adopted by the SEC,
or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated or deemed to be incorporated by
reference therein.

     “TIA” shall have the meaning specified in Section 3(1) of this
Agreement.

     “Trustee” shall mean Deutsche Bank Trust Company Americas, as trustee with
respect to the Securities under the Indenture,

     “Underlying Common Shares” shall mean the Common Shares into which
the Securities are convertible or issued upon any such conversion.

     “Underwriters” shall have the meaning set forth in the last paragraph of
Section 3 of this Agreement.

5

 

     “Underwritten Registration” or “Underwritten Offering” shall mean a
registration in which Registrable Securities are sold to an Underwriter or
Underwriters for reoffering to the public.

     “Voluntary Suspension Notice” shall have the meaning set forth in
Section 2(a) hereof.

      2. Shelf Registration under the 1933 Act.

          (a) The Company shall use its reasonable best efforts to prepare
and, not later than 180 days after the Closing Date, file with the SEC (the
“Filing Deadline”) a Shelf Registration Statement providing for the resale
by the Holders of all Registrable Securities in accordance with the methods
of distribution elected by the Holders and set forth in the Shelf
Registration Statement. The Company shall use its reasonable best efforts to
cause such Shelf Registration Statement to be declared effective under the
Securities Act as promptly as is practicable after filing of the same with
the SEC but in any event by the date (the “Effectiveness Deadline”) that is
210 days after the Closing Date, and to keep a Shelf Registration Statement
continuously effective under the Securities Act and the related Prospectus
current until the expiration of the Effectiveness Period; provided, however,
that if there is a possible acquisition or business combination or other
transaction, business development or event involving the Company (a
“Material Event”) that would require disclosure in such Shelf Registration
Statement or the documents incorporated or deemed to be incorporated by
reference therein or the related Prospectus and either (x) the Company
determines, in the exercise of its reasonable judgment and in good faith,
that premature disclosure thereof is not in the best interests of the
Company and its shareholders or (y) despite the exercise of reasonable
diligence the Company cannot obtain any financial statements relating to an
acquisition or business combination required to be included in such Shelf
Registration Statement or the documents incorporated or deemed to be
incorporated by reference therein or the related Prospectus, the Company
shall give the Notice Holders and, if appointed, counsel to the Notice
Holders a notice (a “Voluntary Suspension Notice”) to suspend use of the
Prospectus relating to such Shelf Registration Statement, and such Holders
hereby agree to suspend use of such Prospectus until the Company has amended
or supplemented such Prospectus or has notified such Holders that use of the
then current Prospectus may be resumed as provided in the penultimate
paragraph of Section 3, In the case of any Voluntary Suspension Notice, the
Company shall not be required to disclose in such notice the Material Event
as a result of which such notice shall have been given if the Company
reasonably and in good faith determines that such Material Event should
remain confidential and, while such Voluntary Suspension Notice is in
effect, the Company shall not be required to amend or supplement such Shelf
Registration Statement, the documents incorporated or deemed to be
incorporated by reference therein or the related Prospectus to reflect such
Material Event, but shall continue to use its reasonable best efforts to
maintain

6

 

the effectiveness of such Shelf Registration Statement. Upon the abandonment,
consummation, termination or public announcement or other public disclosure of
the Material Event, or if the Material Event shall cease to exist or shall be
publicly disclosed, then the Company shall as promptly as practicable comply
with this Section 2(a) and Sections 3(b), 3(e) (if applicable), 3(j) (if
applicable) and the penultimate paragraph in Section 3 hereof and notify the
Notice Holders that disposition of such Registrable Securities may resume;
provided, that, if Section 3(j) shall require an amendment or supplement to
such Shelf Registration Statement or the related Prospectus, then such
resumption shall not occur until the Company shall have delivered copies of the
supplemented or amended Prospectus contemplated by Section 3(j) to the
applicable Holders. Anything herein to the contrary notwithstanding, the right
of the Company to suspend use of a Prospectus pursuant to this paragraph shall
be subject to the limitation set forth in the last sentence of the penultimate
paragraph of Section 3. The Company further agrees to supplement or amend the
Shelf Registration Statement and/or the related Prospectus if required by the
rules, regulations or instructions applicable to the registration form used by
the Company for such Shelf Registration Statement or by the 1933 Act or by any
other rules and regulations thereunder for shelf registration or if reasonably
requested by a Holder whose Registrable Securities are registered pursuant to
such Shelf Registration Statement with respect to information relating to such
Holder, and to use its reasonable best efforts to cause any such amendment to
become effective and such Shelf Registration Statement and/or the related
Prospectus to become usable as soon as thereafter practicable, subject to the
right of the Company, on the terms and subject to the conditions described
elsewhere in this Section 2(a), to suspend its obligation to amend or
supplement such Shelf Registration Statement and/or the related Prospectus by
giving a Voluntary Suspension Notice. The Company agrees to furnish to the
Notice Holders copies of any such supplement or amendment promptly after its
being declared effective by the SEC or, if such supplement or amendment is not
required to be declared effective, after its being filed with the SEC.

          (b) The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2 hereof.

          (c) Each Holder that became a Notice Holder on or prior to the
date ten Business Days prior to the initial Shelf Registration Statement
is
declared effective shall be named as a selling securityholder in the
initial Shelf
Registration Statement and the related Prospectus in such a manner as to
permit such Holder to deliver the Prospectus to purchasers of Registrable
Securities in accordance with applicable U.S. securities law. For the
avoidance of doubt, none of the Company’s securityholders (other than the
Holders with respect to Registrable Securities) shall have the right to
include
any of the Company’s securities in a Shelf Registration Statement, unless

7

 

approved by all Holders whose Registrable Securities are covered by such Shelf
Registration Statement.

          (d) The Company shall amend and supplement the Prospectus and
amend the Shelf Registration Statement if required by the rules,
regulations or
instructions applicable to the registration form used by the Company for
such
Shelf Registration Statement or file a new Shelf Registration Statement,
if
required by the Securities Act, or any other documents necessary to name a
Notice Holder as a selling securityholder pursuant to Section 2(e) below.

          (e) Each Holder may sell Registrable Securities pursuant to a Shelf
Registration Statement and related Prospectus only in accordance with this
Section 2(e) and Section 3(h). Each Holder wishing to sell Registrable
Securities pursuant to a Shelf Registration Statement and related
Prospectus
shall, if such Holder has not previously submitted a Notice and
Questionnaire,
deliver a Notice and Questionnaire to the Company at least five Business
Days prior to any intended distribution of Registrable Securities under
the
Shelf Registration Statement and, at our request, provide any additional
information requested by the British Columbia Securities Commission and
the
SEC. From and after the date the initial Shelf Registration Statement is
declared effective, the Company shall, as promptly as practicable after
the
date a Notice and Questionnaire is delivered, and in any event upon the
later
of (x) five Business Days after such date or (y) five Business Days after
the
expiration of any Deferral Period in effect when the Notice and
Questionnaire
is delivered or put into effect within five Business Days of such delivery
date:

          (i) if required by applicable law, file with the SEC a
post-effective amendment to the Shelf Registration Statement or
prepare and, if required by applicable law, file a supplement to
the related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file a new Shelf Registration
Statement or any other required document so that the Holder
delivering such Notice and Questionnaire is named as a selling
securityholder in a Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver
such Prospectus to purchasers of the Registrable Securities in
accordance with applicable U.S. securities law and, if the Company
shall file a post effective amendment to a Shelf Registration
Statement or shall file a new Shelf Registration Statement, the
Company shall use its reasonable best efforts to cause such post
effective amendment or new Shelf Registration Statement to be
declared effective under the Securities Act as promptly as is
practicable, but in any event by the date (the “Amendment
Effectiveness Deadline”) that is 45 days after the date such post
effective amendment or new Shelf Registration Statement is required
by this clause to be filed;

8

 

          (ii) provide such Holder copies of any documents
filed pursuant to Section 2(e)(i); and

          (iii) notify such Holder as promptly as practicable after
the effectiveness under the Securities Act of any new Shelf
Registration Statement or post effective amendment filed pursuant
to Section 2(e)(i);

provided, that, if such Notice and Questionnaire is delivered during a
Deferral Period, the Company shall so inform the Holder delivering such
Notice and Questionnaire and shall take the actions set forth in clauses
(i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 3. Notwithstanding anything contained herein to the
contrary, (i) the Company shall be under no obligation to name any Holder
that is not a Notice Holder as a selling securityholder in any Shelf
Registration Statement or related Prospectus, (ii) the Amendment
Effectiveness Deadline shall be extended by up to ten Business Days from the
expiration of a Deferral Period and (iii) the Company shall not be obligated
to file more than one amendment to the Shelf Registration Statement or
supplement to the related Prospectus in each calendar month to name
additional Holders as selling securityholders under the Shelf Registration
Statement.

          (f) A Shelf Registration Statement pursuant to Section 2(a) hereof
will not be deemed to have become effective unless it has been declared
effective by the SEC; provided, however, that, if, after it has been declared
effective, the offering of Registrable Securities pursuant to a Shelf
Registration Statement is interfered with by any stop order, injunction or
other order or requirement of the SEC or any U.S. federal or state, Canadian
federal, provincial or territorial, or any other governmental agency or court,
such Shelf Registration Statement will be deemed not to be effective during the
period of such interference until the offering of Registrable Securities
covered by such Shelf Registration Statement may legally resume. If a Shelf
Registration Statement covering resales of the Registrable Securities ceases to
be effective for any reason at any time during the Effectiveness Period (other
than because all securities registered thereunder shall have been resold
pursuant thereto or shall have otherwise ceased to be Registrable Securities),
the Company shall, subject to its right under Section 2(a) to issue a Voluntary
Suspension Notice, use its reasonable best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness thereof, and in any event
shall within 30 days of such cessation of effectiveness amend the Shelf
Registration Statement in a manner reasonably expected to obtain the withdrawal
of the order suspending the effectiveness thereof, or file an additional Shelf
Registration Statement so that all Registrable Securities outstanding as of the
date of such filing are covered by a Shelf Registration Statement. If a new
Shelf Registration Statement is filed, the Company shall use its reasonable
best efforts to cause the new Shelf Registration Statement to become effective
as promptly as is

9

 

practicable after such filing and to keep the new Shelf Registration Statement
continuously effective until the end of the Effectiveness Period in accordance
with the provisions of Section 2(a).

          (g)
Additional cash interest (“Additional Interest”) in respect of the
Securities and liquidated damages (“Liquidated Damages”) in respect of each
Underlying Common Share, as the case may be, shall be payable by the Company as
follows:

          (i) If a Shelf Registration Statement is not filed within
the Filing Deadline, then commencing on and including the day
immediately following the Filing Deadline (A) in addition to
interest otherwise payable on the Securities, Additional Interest
will accrue and be payable on the Securities at the rate of 0.25%
per annum for the first 90 days following such date and 0.50%
thereafter, and (B) Liquidated Damages will accrue and be payable
on the Underlying Common Shares at a rate of 0.25% per annum for
the first 90 days following such date and 0.50% thereafter as the
case may be;

          (ii) If a Shelf Registration Statement is not declared
effective under the Securities Act by the Effectiveness Deadline,
then commencing on and including the day following the Effectiveness
Deadline (A) in addition to interest otherwise payable on the
Securities, Additional Interest will accrue and be payable on the
Securities at the rate of 0.25% per annum for the first 90 days
following such date and 0.50% thereafter, and (B) Liquidated Damages
will accrue and be payable on the Underlying Common Shares at a rate
of 0.25% per annum for the first 90 days following such date and
0.50% thereafter as the case may be;

          (iii) If the Company fails to perform any of its
obligations under Section 2(e) by the date therein prescribed, then
commencing on and including the day following such date (A) in
addition to interest otherwise payable on the Securities, Additional
Interest will accrue and be payable on the Securities with respect
to which such failure of performance occurred at the rate of 0.25%
per annum for the first 90 days following such date and 0.50%
thereafter, and (B) Liquidated Damages will accrue and be payable on
the Underlying Common Shares with respect to which such failure of
performance occurred at a rate of 0.25% per annum for the first 90
days following such date and 0.50% thereafter as the case may be;

          (iv) If the date on which the aggregate duration of
Deferral Periods in any period exceeds the number of days

10

 

permitted by Section 3, then commencing on and including the day
following such date (A) in addition to interest otherwise payable
on the Securities, Additional Interest will accrue and be payable
on the Securities held by Notice Holders at the rate of 0.25% per
annum for the first 90 days following such date and 0.50%
thereafter, and (B) Liquidated Damages will accrue and be payable
on the Underlying Common Shares held by Notice Holders at a rate of
0.25% per annum for the first 90 days following such date and 0.50%
thereafter as the case may be;

          (v) If the date of commencement of any Deferral Period
causes the number of Deferral Periods to exceed the number of
Deferral Periods permitted by Section 3, then commencing on and
including such date (A) in addition to interest otherwise payable
on the Securities, Additional Interest will accrue and be payable
on the Securities held by Notice Holders at the rate of 0.25% per
annum for the first 90 days following such date and 0.50%
thereafter, and (B) Liquidated Damages will accrue and be payable
on the Underlying Common Shares held by Notice Holders at a rate of
0.25% per annum for the first 90 days following such date and 0.50%
thereafter as the case may be;

provided, however, that the Additional Interest rate on the Securities and the
Liquidated Damages rate on the Underlying Common Shares shall in no event
exceed 0.50% per annum; and provided, further, that Additional Interest payable
on the Securities and Liquidated Damages payable on the Underlying Common
Shares as the case may be as a result of any of the events or circumstances
specified in clause (i), (ii), (iii), (iv), or (v) above, as the case may be,
shall cease to accrue (1) upon the filing of the Shelf Registration Statement
(in the case of (i) above), (2) upon the effectiveness of the Shelf
Registration Statement (in the case of (ii) above), (3) upon the date the
Company performs it obligations as set forth in 2(f) above (in the case of
(iii) above), (4) upon the termination of the Deferral Period that caused the
limit on the aggregate duration of Deferral Periods to be exceeded (in the case
of (iv) above) or (5) upon termination of the Deferral Period that caused the
number of Deferral Periods to exceed the number permitted by Section 3 (in the
case of (v) above). Notwithstanding the foregoing, no Additional Interest or
Liquidated Damages shall accrue as to any Security or Underlying Common Share
from and after the earlier of (x) the date such security is no longer a
Registrable Security and (y) the expiration of the Effectiveness Period.

          Any amount of Additional Interest or Liquidated Damages due pursuant to
the preceding paragraph will be payable in cash and will be payable on each
Interest Payment Date and to the Record Holders of the Registrable Securities
entitled thereto; provided, that any Additional Interest accrued with respect
to any Security or portion thereof redeemed by the

11

 

Company on a redemption date, purchased by the Company on a repurchase date or
converted into Underlying Common Shares on a conversion date prior to the
Interest Payment Date, shall, in any such event, be paid instead to the Holder
who submitted such Security or portion thereof for redemption, purchase or
conversion on the applicable redemption date, repurchase date or conversion
date, as the case may be, on such date (or promptly following the conversion
date, in the case of conversion), unless the redemption date or the repurchase
date, as the case may be, falls after April 1 or October 1 and on or prior to
the corresponding Interest Payment Date. In the event that the Company shall
fail to pay any Additional Interest due hereunder on the applicable payment
date, the Company shall pay interest from such date with respect to payments of
Additional Interest at a rate of 1% above the rate otherwise then payable
hereunder (without duplication of any similar obligation under or in respect of
the terms of the Indenture or any Security and to the extent that payment of
the same is enforceable under applicable law). In the event that the Company
shall fail to pay any Liquidated Damages on the applicable payment date, the
Company shall pay from such date Liquidated Damages at a rate equal to 1%
above the rate of Liquidated Damages otherwise then payable on Common Shares
hereunder (without duplication of any similar obligation under or in respect of
the terms of the Indenture or any Security and to the extent that payment of
the same is enforceable under applicable law). The amount of Additional
Interest or Liquidated Damages payable for any period will be determined by
multiplying the applicable Additional Interest rate or Liquidated Damages rate,
as applicable, by the principal amount of the Securities in the case thereof,
or the then applicable Conversion Price of the Securities in the case of
Liquidated Damages on the Underlying Common Shares, and then multiplying the
product by a fraction, the numerator of which is the number of days that the
Additional Interest or Liquidated Damages rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve 30-day
months) and the denominator of which is 360. In calculating the Liquidated
Damages on Underlying Common Shares on any date on which no Securities are
outstanding, the Conversion Price used shall be based on the Conversion Price
that would be in effect if the Securities were still outstanding. For the
purposes of disclosure under the Interest Act (Canada), the yearly rate of
interest which is equivalent to the rate payable under this Agreement is the
rate payable multiplied by the actual number of days in the year and divided by
360.

          Notwithstanding anything also contained herein: (i) no Additional Interest
is payable in respect of any Securities that have been converted into Common
Shares; (ii) no Liquidated Damages are payable in respect of any Underlying
Common Shares that have not been issued upon conversion of the Securities; and
(iii) no Additional Interest or Liquidated Damages shall be payable in respect
of any Securities or Underlying Common Shares that are

12

 

not Registrable Securities, or in respect of any period prior to receipt by
the Company of a Notice and Questionnaire.

          (h) Without limiting the remedies available to the Initial
Purchasers and the Holders, the Company acknowledges that any failure by the
Company to comply with its obligations under Section 2 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any
such failure, any Initial Purchaser or any Holder may obtain such relief as
may be required to specifically enforce the Company’s obligations under
Section 2 hereof.

          (i) Anything in this Agreement to the contrary notwithstanding,
Canadian Persons will not be entitled to register their Securities or
Underlying Common Shares for resale or to sell Securities pursuant to a
Shelf Registration Statement; and any failure by the Company to register
Securities or Underlying Common Shares held by Canadian Persons for resale
pursuant to the Shelf Registration Statement shall not constitute a default
by the Company in the performance or breach of any covenant or warranty of
the Company in this Agreement. For the avoidance of doubt, no Additional
Interest or Liquidated Damages shall be payable due solely to the failure by
the Company to register Securities or Underlying Common Shares held by or
for the benefit of Canadian Persons for resale pursuant to the Shelf
Registration Statement.

      3. Registration Procedures.

     In connection with the obligations of the Company under Section 2 hereof,
the Company shall:

          (a) prepare and file with the SEC a Shelf Registration Statement
on the appropriate form under the 1933 Act, which form (x) shall be
selected
by the Company and (y) shall be available for the sale of the
Registrable
Securities by the selling Holders thereof and (z) shall comply as to
form in all
material respects with the requirements of the applicable form and
include or
incorporate by reference therein all financial statements required by
the SEC
to be included or incorporated by reference therein, and use its
reasonable best
efforts to cause such Shelf Registration Statement to become effective
and
remain effective in accordance with Section 2 hereof;

          (b) prepare and file with the SEC such amendments and post-
effective amendments to the Shelf Registration Statement as may be
necessary
to keep such Shelf Registration Statement effective for the applicable
period
and, subject to the Company’s rights to suspend the use of the
Prospectus
relating to any Shelf Registration Statement pursuant to Section 2(a)
of this
Agreement on the terms and subject to the conditions set forth in such
Section
2(a), cause each Prospectus to be supplemented by any prospectus
supplement

13

 

required by applicable law or regulation and, as so supplemented, to be filed
pursuant to Rule 424 or General Instruction II.L to Form F-10 (or any similar
provisions then in force) under the 1933 Act and to keep each Prospectus
current during the period described under Section 4(3) and Rule 174 under the
1933 Act that is applicable to transactions by brokers or dealers with respect
to the Registrable Securities;

          (c) furnish to each Holder of Registrable Securities, to counsel for
the Initial Purchasers, to counsel for the Holders and to each Underwriter
of
an Underwritten Offering of Registrable Securities, if any, without
charge, as
many copies of each related Prospectus, including each related preliminary
prospectus, and any amendment or supplement thereto and such other
documents as such Holder, counsel or Underwriter may reasonably request,
in
order to facilitate the public sale or other disposition of the
Registrable
Securities; and the Company consents to the use of such Prospectus and any
amendment or supplement thereto in accordance with applicable law by each
of the selling Holders of Registrable Securities and any such Underwriter
in
connection with the offering and sale of the Registrable Securities
covered by
and in the manner described in such Prospectus or any amendment or
supplement thereto in accordance with applicable law;

          (d) use its reasonable best efforts to register or qualify the
Registrable Securities (or obtain an exemption from registration or
qualification) covered by the Shelf Registration Statement under all
applicable
state securities or “blue sky” laws of such jurisdictions as any Notice
Holder
shall reasonably request in writing (which request may be included in the
Notice and Questionnaire), to keep such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period, to
cooperate
with such Holders in connection with any filings required to be made with
the
National Association of Securities Dealers, Inc. and do any and all other
acts
and things which may be reasonably necessary or advisable to enable such
Holder to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; provided, however, that the
Company shall not be required to (i) qualify as a foreign corporation or
as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Section 3(d), (ii) file any general
consent to
service of process or (iii) subject itself to taxation in any such
jurisdiction if it
is not so subject;

          (e) notify each Holder of Registrable Securities covered by the
Shelf Registration Statement, counsel for the Holders and counsel for the
Initial Purchasers promptly and, if reasonably requested by any such
Holder or
counsel, confirm such advice in writing (i) when any Prospectus,
prospectus
supplement, Shelf Registration Statement or post-effective amendment to
any
Shelf Registration Statement has been filed with the SEC, (ii) when such
Registration Statement has become effective and when any post-effective
amendment thereto has been filed and becomes effective, (iii) of any
request

14

 

by the SEC or any state securities authority or by any securities authority of
or in Canada or any territory or province thereof for amendments and
supplements to such Registration Statement or the related Prospectus or for
additional information, (iv) of the issuance by the SEC or any state securities
authority or by any securities regulatory authority of or in Canada or any
territory or province thereof of any stop order or similar order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose and of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or by any securities
regulatory authority or the initiation or threatening of any proceeding for
such purposes, (v) if, between the effective date of a Registration Statement
and the closing of any sale of Registrable Securities covered thereby, the
representations and warranties of the Company contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to the offering cease to be true and correct in all material respects
or if the Company receives any notification with respect to the suspension of
the qualification of the Registrable Securities for sale in any jurisdiction or
the initiation of any proceeding for such purpose, (vi) of the happening of any
event during the period such Shelf Registration Statement is effective which
makes any statement made in such Registration Statement or the related
Prospectus untrue in any material respect or as a result of which such Shelf
Registration Statement or the related Prospectus contains an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or which requires the
making of any changes in such Registration Statement or Prospectus in order to
make the statements therein not misleading (but subject to the right of the
Company, on the terms and subject to the conditions set forth in Section 2(a)
of this Agreement, not to disclose the nature of certain such events) and (vii)
of any determination by the Company that a post-effective amendment to such
Registration Statement would be appropriate;

     (f) use its reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness or qualification (or exemption from qualification)
of the Shelf Registration Statement, or any of the Registrable Securities for
sale in any jurisdiction in which they have been qualified for sale, in either
case at the earliest possible moment and provide immediate notice to each
Holder of the withdrawal of any such order;

     (g) furnish to each Holder of Registrable Securities covered by the Shelf
Registration Statement, without charge, one conformed copy of such Shelf
Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);

15

 

     (h) during the Effectiveness Period, deliver to each Notice Holder,
counsel to Notice Holders, and the Initial Purchasers, in connection with any
sale of Registrable Securities pursuant to a Shelf Registration Statement,
without charge, as many copies of the Prospectus relating to such Registrable
Securities (including each preliminary prospectus) and any amendment or
supplement thereto as such Notice Holder may reasonably request; and the
Company hereby consents to the use of such Prospectus or each amendment or
supplement thereto by each Notice Holder in connection with any offering and
sale of the Registrable Securities covered by such Prospectus or any amendment
or supplement thereto in the manner set forth therein;

     (i) cooperate with the selling Holders of Registrable Securities covered
by the Shelf Registration Statement to facilitate the timely preparation and
delivery of certificates representing such Registrable Securities to be sold
and not bearing any restrictive legends and enable such Registrable Securities
to be, in the case of the Securities, in such denominations (consistent with
the provisions of the Indenture), and registered in such names as such selling
Holders may reasonably request at least one Business Day prior to the closing
of any sale of Registrable Securities;

     (j) upon the occurrence of any event contemplated by Section 3(e)(vi)
hereof but subject to the Company’s right to suspend the use of the related
Prospectus pursuant to Section 2(a) on the terms and subject to the conditions
set forth in such Section 2(a), to prepare and file with the SEC as promptly as
practicable a supplement or post-effective amendment to the Shelf Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities, such Prospectus will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Company agrees to notify the
Holders to suspend use of the Prospectus as promptly as practicable after the
occurrence of such an event, and the Holders hereby agree to suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus to
correct such misstatement or omission;

     (k) obtain a CUSIP number for all Registrable Securities not later than
the effective date of the Shelf Registration Statement covering such Securities
and provide the Trustee and the transfer agent of the Common Shares with
printed certificates for the Registrable Securities that are in a form eligible
for deposit with The Depository Trust Company;

     (l) cause the Indenture to be qualified under the U.S. Trust Indenture Act
of 1939, as amended (the “TIA”), in connection with the registration of the
Registrable Securities, cooperate with the Trustee and the Holders to effect
such changes to the Indenture as may be required for the Indenture to be so
qualified in accordance with the terms of the TIA and

16

 

execute, and use its reasonable best efforts to cause the Trustee to execute,
all documents as may be required to effect such changes and all other forms and
documents required to be filed with the SEC to enable the Indenture to be so
qualified in a timely manner;

     (m) make available, upon request in writing, for inspection by a
representative of the Holders of the Registrable Securities covered by the
Shelf Registration Statement, any Initial Purchaser, any broker-dealer,
Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorneys and accountants designated by such
Holders or by any such Initial Purchaser or Underwriter, at reasonable times
and in a reasonable manner, all relevant financial and other relevant records
and documents of the Company, cause the appropriate officers, directors and
employees of the Company to make themselves available for “due diligence”
conferences, and cause the officers, directors and employees of the Company to
supply all information reasonably requested by any such representative of such
Holders, Initial Purchaser, Underwriter, broker-dealer, attorney or accountant
in connection with such Shelf Registration Statement; provided, however, that
such persons shall first agree in writing with the Company that any information
that is in good faith designated by the Company in writing as confidential at
the time of delivery of such information shall be kept confidential by such
persons and shall be used solely for the purposes of exercising rights under
this Agreement, unless (i) disclosure of such information is required by court
or administrative order or is necessary to respond to inquiries of regulatory
authorities, (ii) disclosure of such information is required by law (including
any disclosure requirements pursuant to federal securities laws in connection
with the filing of any Shelf Registration Statement or the use of any
Prospectus referred to in this Agreement), (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement; and provided further, that
the foregoing inspection and information gathering shall, to the greatest
extent possible, be coordinated on behalf of all the Notice Holders and the
other parties entitled thereto by counsel thereto.

     (n) if requested by any Holder of Registrable Securities covered by the
Shelf Registration Statement, (i) promptly incorporate in the related
Prospectus supplement or post-effective amendment such information with respect
to such Holder as such Holder reasonably requests to be included therein and
(ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such filing;

     (o) enter into such customary agreements and take all such other actions
in connection therewith (including those requested by the Majority

17

 

Holders) in order to expedite or facilitate the disposition of the Registrable
Securities covered by the Shelf Registration Statement, including, but not
limited to, an Underwritten Offering and in such connection, (i) to the extent
possible, make such representations and warranties to such Holders and any
Underwriters of such Registrable Securities with respect to the business of the
Company and its subsidiaries, such Shelf Registration Statement, the related
Prospectus and documents incorporated by reference or deemed incorporated by
reference and related matters, in each case, in form, substance and scope as
are customarily made by issuers to underwriters in underwritten offerings and
confirm the same if and when requested, (ii) obtain opinions of counsel to the
Company (which counsel and opinions, in form, scope and substance, shall be
reasonably satisfactory to the Holders and such Underwriters and their counsel)
addressed to each selling Holder and Underwriter of such Registrable
Securities, covering the matters customarily covered in opinions requested in
underwritten offerings, (iii) obtain “cold comfort” letters from the
independent certified public accountants of the Company (and, if necessary, any
other certified public accountant of any subsidiary of the Company, or of any
Person or business acquired by the Company for which financial statements and
financial data are or are required to be included or incorporated by reference
in the Shelf Registration Statement or the related Prospectus or in the
documents incorporated or deemed to be incorporated therein) addressed to each
selling Holder and Underwriter of such Registrable Securities, such letters to
be in customary form and covering matters of the type customarily covered in
“cold comfort” letters in connection with underwritten offerings, and (iv)
deliver such documents and certificates as may be reasonably requested by the
Majority Holders or the Underwriters, and which are customarily delivered in
underwritten offerings to evidence the continued validity of the
representations and warranties of the Company made pursuant to clause (i) above
and to evidence compliance with any customary conditions contained in the
related underwriting agreement;

     (p) comply with all applicable rules and regulations of the SEC and make
generally available to its securityholders earning statements (which need not
be audited) satisfying the provisions of Section 1 l (a) of the Securities Act
and Rule 158 thereunder (or any similar rule promulgated under the Securities
Act) for a 12-month period commencing on the first day of the first fiscal
quarter of the Company commencing after the effective date of a Shelf
Registration Statement, which statements shall be made available no later than
45 days after the end of the 12-month period or 90 days if the 12-month period
coincides with the fiscal year of the Company; and

     (q) Upon (i) the filing of the initial Shelf Registration Statement and
(ii) the effectiveness of the initial Shelf Registration Statement, announce
the same, in each case by release to Reuters Economic Services and Bloomberg
Business News.

18

 

     The Company may require each Holder of Registrable Securities that wishes
to include Registrable Securities in the Shelf Registration Statement, by
written request from the Company to such Holder, to furnish to the Company, on
a form to be provided by the Company, such information regarding such Holder
and the proposed distribution by such Holder of such Registrable Securities as
the Company may be reasonably required to include in the Shelf Registration
Statement or the related Prospectus pursuant to applicable Canadian federal,
provincial or territorial law or regulation or the Securities Act or the
applicable rules and regulations of the SEC thereunder, and the Company may
exclude from such Shelf Registration Statement the Securities of any Holders
that refuse to comply with such request.

     Each Holder of Registrable Securities covered by the Shelf Registration
Statement agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(e)(vi) hereof or upon
receipt from the Company of any Voluntary Suspension Notice pursuant to Section
2(a) hereof, such Holder will forthwith discontinue disposition of such
Registrable Securities pursuant to such Shelf Registration Statement until
either (x) such Holder’s receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 3(j) hereof or (y) solely in the case of a
Voluntary Suspension Notice, the Company shall have notified such Holder that
disposition of such Registrable Securities may be resumed using the then
current Prospectus, and, if so directed by the Company in the case of clause
(x), such Holder will deliver to the Company (at the Company’s expense) all
copies in such Holder’s possession, other than permanent file copies then in
such Holder’s possession, of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice. Anything herein to
the contrary notwithstanding, the Company will not be entitled to require
Holders to discontinue the sale or other disposition of Registrable Securities
pursuant to the Shelf Registration Statement or to suspend the use of the
related Prospectus (a “Deferral Period”) (whether because of the happening of
any event of the kind described in Section 3(e)(vi) hereof or by the giving of
a Voluntary Suspension Notice) for more than two periods (neither of which such
Deferral Period may exceed 60 consecutive days) during any period of 365
consecutive days.

     The Holders of Registrable Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (the “Underwriters”) that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Registrable Securities covered by such Shelf
Registration Statement included in such offering.

        4. Holder’s Obligations.

          (a) Each Holder agrees, by acquisition of the Registrable
Securities, that no Holder shall be entitled to sell any of such
Registrable

19

 

Securities pursuant to a Shelf Registration Statement or to receive a
Prospectus relating thereto, unless such Holder has furnished the Company with
a Notice and Questionnaire as required pursuant to Section 2(e) hereof
(including the information required to be included in such Notice and
Questionnaire), any information regarding such Holder that is requested by the
British Columbia Securities Commission or the SEC and the information set forth
in the next sentence. Each Notice Holder agrees promptly to furnish to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Notice Holder not
misleading and any other information regarding such Notice Holder and the
distribution of such Registrable Securities as the Company may from time to
time reasonably request. Any sale of any Registrable Securities by any Holder
shall constitute a representation and warranty by such Holder that the
information relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection with such
disposition, that such Prospectus does not as of the time of such sale contain
any untrue statement of a material fact relating to or provided by such Holder
or its plan of distribution and that such Prospectus does not as of the time of
such sale omit to state any material fact relating to or provided by such
Holder or its plan of distribution necessary to make the statements in such
Prospectus, in the light of the circumstances under which they were made, not
misleading.

          (b) Upon receipt of any Voluntary Suspension Notice, each Notice Holder
agrees not to sell any Registrable Securities pursuant to any Shelf
Registration Statement until such Notice Holder’s receipt of copies of the
supplemented or amended Prospectus provided for in Section 3(j), or until it is
advised in writing by the Company that the Prospectus may be used.

          (c) Each Notice Holder agrees not to sell any Registrable Securities
pursuant to any Shelf Registration Statement unless such Notice Holder delivers
a Prospectus to purchasers.

    
        5. Indemnification and Contribution.

          (a) The Company agrees to indemnify and hold harmless the Initial
Purchasers, each Holder and each Person, if any, who controls any Initial
Purchaser or any Holder within the meaning of either Section 15 of the 1933 Act
or Section 20 of the 1934 Act, or is under common control with, or is
controlled by, any Initial Purchaser or any Holder, from and against all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Initial Purchaser, any
Holder or any such controlling or affiliated Person in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in any Shelf
Registration Statement (or any amendment thereto) pursuant to which Registrable
Securities were registered under the 1933 Act, including all documents
incorporated or deemed to be incorporated therein by reference, or in any

20

 

document filed with any securities regulatory authority of or in Canada or any
province or territory thereof in connection with any such Shelf Registration
Statement (or any amendment thereto) or any document incorporated or deemed to
be incorporated by reference therein, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or caused by any
untrue statement or alleged untrue statement of a material fact contained in
any Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Initial Purchasers or any
Holder furnished to the Company in writing through Citigroup Global Markets
Inc., J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated or by
any selling Holder, respectively, expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
Prospectus relating to a Shelf Registration Statement shall not inure to the
benefit of any Holder from whom the Person asserting any such losses, claims,
damages or liabilities purchased Securities covered by such Shelf Registration
Statement, or any person controlling such Holder, if a copy of the final
Prospectus relating to such Shelf Registration Statement (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Holder, as the case may
be, to such Person, if required by law so to have been delivered, at or prior
to the written confirmation of the sale of such Securities to such Person, and
if such final Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such losses, claims, damages or liabilities, unless such
failure is the result of noncompliance by the Company with Section 2(a), 3 (b),
3(e) or 3(j) or the penultimate paragraph of Section 3 hereof, or unless such
defect shall have been cured by a document incorporated or deemed to be
incorporated by reference in such Prospectus. In connection with any
Underwritten Offering permitted by Section 3, the Company will also indemnify
the Underwriters, if any, selling brokers, dealers and similar securities
industry professionals participating in the distribution, their officers and
directors and each Person who controls any such Persons (within the meaning of
the 1933 Act or the 1934 Act) to the same extent as provided above with respect
to the indemnification of the Holders, if requested in connection with any
Shelf Registration Statement.

          (b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, the Initial Purchasers and the other selling Holders, and
each of their respective directors, each of the officers of the Company who
sign the Shelf Registration Statement and each Person, if any,

21

 

who controls the Company, any Initial Purchaser and any other selling Holder
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act to the same extent as the foregoing indemnity from the Company to the
Initial Purchasers and the Holders, but only with reference to information
relating to such Holder furnished to the Company in writing by such Holder
expressly for use in any Shelf Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto).

          (c) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may be
sought pursuant to either paragraph (a) or paragraph (b) above, such Person
(the “Indemnified Party”) shall promptly notify the Person against whom such
indemnity may be sought (the “Indemnifying Party”) in writing and the
Indemnifying Party, upon request of the Indemnified Party, shall retain counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party and any others the Indemnifying Party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any Indemnified Party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Party unless (i) the Indemnifying Party and
the Indemnified Party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Party and the Indemnified
Party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for the Initial Purchasers and all Persons, if any, who control any
Initial Purchasers within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act, (b) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Company, its directors, its
officers who sign the Shelf Registration Statement and each Person, if any, who
controls the Company within the meaning of either such Section and (c) the fees
and expenses of more than one separate firm (in addition to any local counsel)
for all Holders and all Persons, if any, who control any Holders within the
meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In such case involving the Initial Purchasers
and Persons who control the Initial Purchasers, such firm shall be designated
in writing by Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated. In such case involving the Holders and such
Persons who control Holders, such firm shall be designated in writing by the
Majority Holders. In all other cases, such firm shall be designated by the
Company. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent but, if settled with such

22

 

consent or if there be a final judgment for the plaintiff, the Indemnifying
Party agrees to indemnify the Indemnified Party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Party shall have requested an
Indemnifying Party to reimburse the Indemnified Party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph,
the Indemnifying Party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Party of the
aforesaid request and (ii) such Indemnifying Party shall not have reimbursed
the Indemnified Party for such fees and expenses of counsel in accordance with
such request prior to the date of such settlement. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which such
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such proceeding.

          (d) If the indemnification provided for in paragraph (a) or paragraph (b)
of this Section 5 is unavailable to an Indemnified Party or insufficient in
respect of any losses, claims, damages or liabilities, then each Indemnifying
Party under such paragraph, in lieu of indemnifying such Indemnified Party
thereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party or Parties on the one hand and of the Indemnified Party or Parties on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and the Holders shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or by the
Holders and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Holders’
respective obligations to contribute pursuant to this Section 5(d) are several
in proportion to the respective principal amount of Registrable Securities of
such Holders that were registered pursuant to a Shelf Registration Statement.

          (e) The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an Indemnified Party as a result of the losses, claims,

23

 

damages and liabilities referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5, no Holder shall be required to indemnify or
contribute any amount in excess of the amount by which the total price at which
Registrable Securities were sold by such Holder exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 1 l(f) of
the 1933 Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 5 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any Indemnified Party at law or in equity.

          (f) The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchasers, any Holder or any Person controlling any of the Initial
Purchasers or any Holder, or by or on behalf of the Company, its officers or
directors or any Person controlling the Company and (iii) any sale of
Registrable Securities pursuant to a Shelf Registration Statement.

     
       6. Miscellaneous.

          (a) No Inconsistent Agreements. The Company has not entered into, and on
or after the date of this Agreement will not enter into, any agreement which is
inconsistent with the rights granted to the Holders of Registrable Securities
in this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company’s other
issued and outstanding securities under any such agreements.

          (b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of the Majority
Holders affected by such amendment, modification, supplement, waiver or
consent; provided, however, that no amendment, modification, supplement, waiver
or consent to any departure from the provisions of Section 5 hereof shall be
effective as against any Holder of Registrable Securities or Initial Purchaser
unless consented to in writing by such Holder or Initial Purchaser, as the case
may be.

24

 

          (c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address given by such Holder to the
Company by means of a notice given in accordance with the provisions of this
Section 6(c), which address initially is, with respect to the Initial
Purchasers, c/o Morgan Stanley & Co. Incorporated, 1585 Broadway, New York,
New York 10036, Attention: Michael Fusco, with a copy to Citigroup Global
Markets Inc., 390 Greenwich Street, New York, New York 10013, Attention:
Martha Bailey and J.P. Morgan Securities Inc., 270 Park Avenue, New York,
New York 10017, Attention: Maria Sramek; and (ii) if to the Company,
initially at Placer Dome Inc., P.O. Box 49330 Bentall Station, 1055 Dunsmuir
Street, Suite 1600, Vancouver, BC, Canada V7X 1P1, Attention: Secretary and
thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 6(c). Notwithstanding the foregoing
provisions of this paragraph, any notices given to The Depository Trust
Company (the “Depositary,” which term includes any successor in such
capacity) or its nominee, as Holder of any Securities, may be given in
accordance with the Depositary’s customary procedures as in effect from time
to time.

     All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; seven Business
Days after being deposited in the mail, postage prepaid, if mailed; when
receipt is acknowledged, if telecopied; on the next Business Day if timely
delivered to a courier providing for overnight delivery; and, in the case of
any notices or communications that are delivered to the Depositary or its
nominee electronically, upon receipt.

     Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.

          (d) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of
the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided, that nothing herein shall
be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement
or the Indenture; and provided, further, that, without limitation to the
foregoing, if any Person shall assume or otherwise succeed to the Company’s
obligations under the Indenture, the Company will, prior to or
contemporaneous with such transaction, cause such successor Person to
deliver a written agreement to the Representatives and the Trustee whereby
such successor Person shall expressly assume all of the Company’s
obligations and agree to perform all of the Company’s agreement under this
Agreement. If any transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by

25

 

operation of law or otherwise, such Registrable Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding such
Registrable Securities such Person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of this Agreement
and such Person shall be entitled to receive the benefits hereof. The
Representatives and the Initial Purchasers (in their respective capacities as
Representatives and Initial Purchasers) shall have no liability or obligation
to the Company with respect to any failure by a Holder to comply with, or any
breach by any Holder of, any of the obligations of such Holder under this
Agreement.

          (e) Purchases and Sales of Securities. The Company shall not, and shall
use its reasonable best efforts to cause its affiliates (as defined in Rule 405
under the 1933 Act) not to, purchase and then resell or otherwise transfer any
Securities.

          (f) Third Party Beneficiary. The Holders and the Initial Purchasers shall
be third party beneficiaries to the agreements made hereunder between the
Company, on the one hand, and the Representatives, on the other hand, and each
of them shall have the right to enforce such agreements directly to the extent
it deems such enforcement necessary or advisable to protect its rights or the
rights of Holders or Initial Purchasers, respectively hereunder.

          (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

          (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

          (i) Governing Law. This Agreement shall be governed by the laws of
the State of New York.

          (j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, then, to the maximum extent permitted by
law, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions contained herein shall not be
affected or impaired thereby.

          (k) The Company irrevocably (i) agrees, to the fullest extent of may
effectively do so under applicable law, that any action, suit or proceeding
against the Company brought by any Initial Purchaser or Holder or by any person
who controls any Initial Purchaser arising out of, based upon or relating to
this Agreement or any of the transactions contemplated hereby may

26

 

be instituted in any federal or state court in the State of New York, (ii)
waives, to the fullest extent it may effectively do so under applicable law,
any objection which it may now or hereafter have to the laying of venue of any
such proceeding or to the convenience of the forum and (iii) submits, to the
fullest extent it may effectively do so under applicable law, to the
non-exclusive jurisdiction of any federal or state court in the State of New
York in any such action, suit or proceeding. The Company has appointed CT
Corporation System as its authorized agent (the “Authorized Agent”, which term,
as used herein, includes any successor in such capacity) upon whom process may
be served in any such action, suit or proceeding arising out of, based on or
relating to this Agreement or any of the transactions contemplated hereby which
may be instituted in any federal or state court in the State of New York by any
Initial Purchaser or Holder or by any person who controls any Initial
Purchaser, expressly consents, to the fullest extent it may effectively do so
under applicable law, to the jurisdiction of any such court in respect of any
such action, suit or proceeding and waives, to the fullest extent it may
effectively do so under applicable law, any other requirements of or objections
to personal jurisdiction with respect thereto. Such appointment shall, to the
fullest extent it may effectively do so under applicable law, be irrevocable.
The Company represents and warrants that the Authorized Agent has agreed to act
as such agent for service of process and the Company agrees, to the fullest
extent it may effectively do so under applicable law, to take any and all
action, including the filing of any and all documents and instruments and the
payment of all fees, that may be necessary to continue such appointment in full
force and effect as aforesaid for so long as any of the Registrable Securities
shall be outstanding and until the principal of, premium, if any, and interest
on, and any and all other amounts payable under or with respect to, this
Agreement, the Registrable Securities shall have been paid in full. The Company
agrees, to the fullest extent it may effectively do so under applicable law,
that service of process upon the Authorized Agent and written notice of such
service to the Company (mailed or delivered to its Secretary at its principal
office in Vancouver, British Columbia, Canada) shall be deemed, in every
respect, effective service of process upon the Company in any such action, suit
or proceeding.

          (l) In respect of any judgment or order given or made against the Company
for any amount due hereunder that is expressed and paid in a currency (the
“judgment currency”) other than United States dollars, the Company will
indemnify each Person entitled to all or any portion of such payment from and
against any and all loss incurred by such Person as a result of any variation
as between (i) the rate of exchange at which the United States dollar amount is
converted into the judgment currency for the purpose of such judgment or order
and (ii) the rate of exchange at which such Person is able to purchase United
States dollars with the amount of judgment currency actually received by such
Person; provided, however, that the foregoing provisions of this sentence shall
not be applicable with respect to any judgment or order

27

 

given or made against the Company for any amount of Additional Interest or
Liquidated Damages which may be due hereunder, it being understood and agreed
by the Company that the provisions of Section 116 of the Indenture shall apply
with respect to Additional Interest or Liquidated Damages instead of the
foregoing provisions of this sentence. The Company agrees, to the fullest
extent it may effectively do so under applicable law, that the foregoing
indemnity shall constitute a separate and independent obligation of the Company
and shall continue in full force and effect notwithstanding any such judgment
or order as aforesaid. The term “rate of exchange” shall include any premiums
and costs of exchange payable in connection with the purchase of or conversion
into United States dollars.

          (m) To the extent that the Company or any of its properties, assets or
revenues may have or may hereafter become entitled to, or have attributed to
it, any right of immunity, on the grounds of sovereignty or otherwise, from (i)
any legal action, suit or proceeding, (ii) setoff or counterclaim, (iii) the
jurisdiction of any court, (iv) service of process, (v) attachment upon or
prior to judgment, (vi) attachment in aid of execution of judgment, (vii)
execution of judgment, or (viii) other legal process or proceeding for the
giving of any relief or for the enforcement of any judgment, in any
jurisdiction in which any action, suit or proceeding may at any time be
commenced, with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Agreement, the Company, to
the fullest extent it may effectively do so under applicable law, hereby
irrevocably and unconditionally waives, and agrees not to plead or claim, any
such immunity and consents to such relief and enforcement.

[SIGNATURE PAGE FOLLOWS]

28

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.

	 	 	 	 	 
	 	PLACER DOME INC. 

 	 
	 	By:  	/s/ Tony S. Giardini
 	 
	 	Name:  	Tony S. Giardini  	 	 
	 	Title:  	Treasurer 	 	 
	 

	 	 	 
	 

	 	Confirmed and accepted as of
the date first above written:
	 
	 	 
	

	 	CITIGROUP GLOBAL MARKETS INC.
	

	 	J.P. MORGAN SECURITIES INC.
	

	 	MORGAN STANLEY & CO.
	

	 	INCORPORATED
	 
	 	 
	

	 	Acting severally on behalf of
themselves and the several Initial
Purchasers named in the Purchase
Agreement.

	 	 	 	 	 
	 	CITIGROUP GLOBAL MARKETS INC.

 	 
	 	By:  	/s/ Dave
Eberlee
 	 
	 	Name:  	Dave Eberlee	 	 
	 	Title:  	Managing Director 	 	 
	 

	 	 	 	 	 
	 	J.P. MORGAN SECURITIES INC.

 	 
	 	By:  	/s/ Juan Vogeler
 	 
	 	Name:  	Juan Vogeler 	 	 
	 	Title:  	Vice President 	 	 
	 

	 	 	 	 	 
	 	MORGAN STANLEY & CO.

INCORPORATED

 	 
	 	By:  	/s/
David Schwarzbach
 	 
	 	Name:  	David Schwarzbach 	 	 
	 	Title:  	Vice President 	 	 
	 

29FORM OF FIXED RATE SENIOR NOTE

REGISTERED                                               REGISTERED
No. FXR                                                  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.

                                      A-1
<PAGE>

                                 MORGAN STANLEY
                    SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES C
                                  (Fixed Rate)

                     % EXCHANGEABLE NOTES DUE APRIL 1, 2009
                       (EXCHANGEABLE FOR SHARES OF COMMON
                     STOCK OF THREE HEALTH CARE COMPANIES)

<TABLE>
=======================================================================================================================

<S>                            <C>                            <C>                            <C>
ORIGINAL ISSUE DATE:           INITIAL REDEMPTION             INTEREST RATE:    %            MATURITY DATE:
                                   DATE: March    , 2007.         per annum                      April 1, 2009
                                   See also "Morgan
                                   Stanley Call Right"
                                   below.
-----------------------------------------------------------------------------------------------------------------------

INTEREST ACCRUAL               INITIAL REDEMPTION             INTEREST PAYMENT               OPTIONAL
    DATE:                          PERCENTAGE: See                DATE(S):                       REPAYMENT
                                   "Morgan Stanley Call                                          DATE(S): N/A
                                   Right" below.
-----------------------------------------------------------------------------------------------------------------------

SPECIFIED CURRENCY:            ANNUAL REDEMPTION              INTEREST PAYMENT               APPLICABILITY OF
    U.S. dollars                   PERCENTAGE                     PERIOD: Semi-annually          MODIFIED
                                   REDUCTION: N/A                                                PAYMENT UPON
                                                                                                 ACCELERATION:
                                                                                                 See "Alternate
                                                                                                 Exchange Calculation
                                                                                                 in Case of an Event
                                                                                                 of Default" below.
-----------------------------------------------------------------------------------------------------------------------

IF SPECIFIED                   REDEMPTION NOTICE              APPLICABILITY OF               If yes, state Issue Price:
    CURRENCY                       PERIOD: See "Morgan            ANNUAL INTEREST
    OTHER THAN U.S.                Stanley Notice Date"           PAYMENTS: N/A
    DOLLARS, OPTION                below.
    TO ELECT
    PAYMENT IN U.S.
    DOLLARS: N/A
-----------------------------------------------------------------------------------------------------------------------

EXCHANGE RATE                  TAX REDEMPTION AND                                            ORIGINAL YIELD TO
    AGENT: N/A                 PAYMENT OF                                                    MATURITY: N/A
                               ADDITIONAL
                               AMOUNTS: NO
-----------------------------------------------------------------------------------------------------------------------

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

Basket Value............   The Basket Value on any date equals the sum of the
                           products of the Closing Price and the Exchange Ratio
                           for each Basket Stock, each as determined as of such
                           date by the Calculation Agent.

                                      A-2
<PAGE>

Basket Stocks...........   The Basket Stocks are the three common stocks of the
                           three issuers set forth in the table below. The
                           table also indicates the exchange or primary market
                           on which each Basket Stock trades (either the New
                           York Stock Exchange, Inc. ("NYSE") or the Nasdaq
                           National Market ("Nasdaq")), the ticker symbol for
                           each Basket Stock, the proportion of the Initial
                           Basket Value represented by the shares of each
                           Basket Stock, and the Exchange Ratio (as defined
                           below) with respect to each Basket Stock, each as
                           determined on March   , 2004.

<TABLE>
<CAPTION>
                                                                                Proportion
                                                                                of Initial
                           Issuer of                       Exchange   Ticker      Basket      Exchange
                           -------------                   --------  --------   -----------  ----------
<S>                        <C>                             <C>       <C>        <C>          <C>
                           Biogen Idec Inc.                 Nasdaq     BIIB          %
                           Bristol-Myers Squibb Company      NYSE       BMY          %
                           Merck & Co., Inc.                 NYSE       MRK          %
</TABLE>

                           If, as a result of any event described under
                           "--Antidilution Adjustments" below, this Note is
                           exchangeable into equity securities other than the
                           shares of the issuers of the Basket Stocks, "Basket
                           Stocks" shall include such other securities, and the
                           Exchange Ratio with respect to such securities shall
                           equal the product of the Exchange Ratio in effect
                           for the Basket Stock with respect to which the event
                           occurs at the time of the event times the number of
                           shares of the new equity securities issued with
                           respect to one share of such Basket Stock. For
                           additional details on adjustments, see
                           "--Antidilution Adjustments" below.

Exchange Right..........   On any Exchange Date, subject to a prior call of this
                           Note for cash in an amount equal to the Call Price
                           (as defined below) by the Issuer as described under
                           "Morgan Stanley Call Right" below, the holder of
                           this Note shall be entitled, upon the holder's

                           o   completion and delivery to the Issuer and the
                               Calculation Agent of an Official Notice of
                               Exchange (in the form of Annex A attached
                               hereto) prior to 11:00 a.m. (New York City time)
                               on such date; and

                           o   transfer of this Note to the Trustee on the
                               Issuer's behalf on or before the Exchange
                               Settlement Date (as defined below),

                                      A-3
<PAGE>

                           to exchange each $1,000 principal amount of this
                           Note for a number of shares of each of the Basket
                           Stocks at its Exchange Ratio (as defined below),
                           subject to any adjustment (x) to the Exchange Ratio
                           or (y) resulting in other Exchange Property (as
                           defined below) being required to be delivered
                           instead of or in addition to any such Basket Stock
                           as a result of any corporate event described under
                           "Antidilution Adjustments" below, in each case,
                           required to be made prior to the close of business
                           on such Exchange Date.

                           Upon any exercise of the Exchange Right, the holder
                           of this Note shall not be entitled, with respect to
                           the principal amount of this Note that is exchanged,
                           to receive any cash payment representing any accrued
                           but unpaid interest on this Note. If this Note is
                           exchanged so that the Exchange Settlement Date
                           occurs during the period from the close of business
                           on a Record Date (as defined below) for the payment
                           of interest and prior to the next succeeding
                           Interest Payment Date, this Note must, as a
                           condition to the delivery of the Basket Stocks,
                           other Exchange Property or cash, be accompanied by
                           funds equal to the interest payable on the
                           succeeding Interest Payment Date on the principal
                           amount so exchanged.

                           Upon any such exchange, the Issuer may, at its sole
                           option, either deliver shares of the Basket Stocks
                           (or such other Exchange Property) or pay an amount
                           in cash for each $1,000 principal amount of this
                           Note equal to the Basket Value on the Exchange Date,
                           as determined by the Calculation Agent, in lieu of
                           such Basket Stocks (or such other Exchange
                           Property).

                           The Issuer shall, or shall cause the Calculation
                           Agent to, deliver such shares of the Basket Stocks
                           or cash to the Trustee for delivery to the holder of
                           this Note on the third Business Day after any
                           Exchange Date, subject to delivery of this Note to
                           the Trustee on such day (such third Business Day,
                           or, if later, the day on which this exercised Note
                           is delivered to the Trustee, the "Exchange
                           Settlement Date").

                           Prior to 9:30 a.m. on the first Business Day
                           immediately succeeding any Exchange Date, the Issuer
                           shall cause the Calculation Agent to provide written
                           notice to the Trustee

                                      A-4
<PAGE>

                           at its New York office and to The Depository Trust
                           Company, or any successor depositary (the
                           "Depositary"), on which notice the Trustee and the
                           Depositary may conclusively rely, (i) of its receipt
                           of any such "Official Notice of Exchange," (ii) of
                           the Issuer's determination to deliver shares of the
                           Basket Stocks (or, if applicable, any other Exchange
                           Property or Reference Basket Stocks to be delivered
                           as a result of any corporate event described in
                           paragraph 3 or 4 under "Antidilution Adjustments"
                           below) or to pay an equivalent amount of cash for
                           each $1,000 principal amount of this Note and (iii)
                           if shares of the Basket Stocks (or, if applicable,
                           any other Exchange Property) are to be delivered, of
                           the number of shares of the Basket Stocks (or the
                           amount of such other Exchange Property) to be
                           delivered for each $1,000 principal amount of this
                           Note and of the amount of any cash to be paid in
                           lieu of any fractional share of the Basket Stocks
                           (or of any other securities included in other
                           Exchange Property, if applicable), or, if cash is to
                           be paid, of the amount of such cash for each $1,000
                           principal amount of this Note.

Minimum Exchange........   The Exchange Right may only be exercised with respect
                           to aggregate principal amounts of $25,000 or
                           greater, unless the principal amount of this Note to
                           be exchanged represents the entire principal amount
                           of the interest in this Note beneficially owned by
                           the owner causing the exchange, as determined by the
                           Calculation Agent.

Exchange Ratio..........   The Exchange Ratio for each Basket Stock is set forth
                           in the table under "Basket Stocks" above, subject to
                           adjustment for certain corporate events relating to
                           the issuer of that Basket Stock.

No Fractional Shares....   If upon any exchange or call of this Note the Issuer
                           delivers shares of the Basket Stocks (and, if
                           applicable, any other stock or other securities),
                           the Issuer shall pay cash in lieu of delivering any
                           fractional share of any Basket Stock (and, if
                           applicable, of any other stock or securities) in an
                           amount equal to the corresponding fractional Closing
                           Price of such Basket Stock (and, if applicable, any
                           such other stock or other securities) as determined
                           by the Calculation Agent on the applicable Exchange
                           Date or on the second Trading Day immediately
                           preceding the Call Date (as defined below).

                                      A-5
<PAGE>

Exchange Date...........   Any Trading Day on which a holder of this Note has
                           duly completed and delivered to the Issuer and the
                           Calculation Agent through the Depositary and the
                           Issuer has received an official notice of exchange
                           prior to 11:00 a.m., or if the Issuer received it
                           after 11:00 a.m., the next Trading Day; provided
                           that such Trading Day falls during the period
                           beginning April 20, 2004 and ending on the Trading
                           Day prior to the earliest of (i) the fifth scheduled
                           Trading Day prior to the Maturity Date, (ii) the
                           fifth scheduled Trading Day prior to the Call Date
                           and (iii) in the event of a call for the cash Call
                           Price as described under "Morgan Stanley Call Right"
                           below, the Morgan Stanley Notice Date.

Morgan Stanley Call
Right ..................   On or after March   , 2007 to and including the
                           Maturity Date, the Issuer may call this Note, in
                           whole but not in part, for mandatory exchange into
                           shares of each of the Basket Stocks (and, if
                           applicable, any other Exchange Property) at the
                           applicable Exchange Ratio (with respect to each
                           $1,000 principal amount of this Note) or, at the
                           Issuer's subsequent election on the third scheduled
                           Trading Day prior to the Call Date, the cash value
                           of such shares of each Basket Stock determined by
                           the Calculation Agent based on the Closing Price of
                           each Basket Stock on the third scheduled Trading Day
                           prior to the Call Date; provided that, if the Basket
                           Value on the Trading Day immediately preceding the
                           Morgan Stanley Notice Date, as determined by the
                           Calculation Agent, is less than the Call Price, the
                           Issuer shall pay the Call Price in cash on the Call
                           Date.

                           Unless the Issuer has called this Note for the Call
                           Price in cash pursuant to the Morgan Stanley Call
                           Right on the third scheduled Trading Day prior to
                           the Call Date, the holder of this Note shall
                           continue to be entitled to exchange this Note and
                           receive any amounts described under "Exchange Right"
                           above.

                           On the Morgan Stanley Notice Date, the Issuer shall
                           give notice of the Issuer's exercise of the Morgan
                           Stanley Call Right (i) to the holder of this Note by
                           mailing notice of such exercise by first class mail,
                           postage prepaid, at 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

                                      A-6
<PAGE>

                           class mail, postage prepaid, at its New York office
                           and (iii) to the Depositary by telephone or
                           facsimile confirmed by mailing such notice to the
                           Depositary by first class mail, postage prepaid, at
                           its New York office. Any notice which 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. Failure to
                           give notice by mail, or any defect in the notice to
                           the holder of any Note shall not affect the validity
                           of the proceedings for the exercise of the Morgan
                           Stanley Call Right with respect to any other Note.

                           The notice of the Issuer's exercise of the Morgan
                           Stanley Call Right shall specify (i) the Call Date
                           (as defined below), (ii) whether the Basket Value on
                           the Trading Day immediately prior to the Morgan
                           Stanley Notice Date, as determined by the
                           Calculation Agent, is less than the Call Price so
                           that the Issuer shall pay the Call Price in cash on
                           the Call Date, (iii) the place or places of payment
                           in cash (in the event of a call for the Call Price)
                           or, if the Basket Value on the Trading Day
                           immediately prior to the Morgan Stanley Notice Date,
                           as determined by the Calculation Agent, is equal to
                           or greater than the Call Price, the place or places
                           of delivery of the shares of the Basket Stocks (and,
                           if applicable, of any other Exchange Property to be
                           delivered as a result of any corporate event
                           described in under "Antidilution Adjustments" below)
                           (and of any cash to be paid in lieu of any
                           fractional share of each Basket Stock (and, if
                           applicable, of any such other stock or securities)),
                           (iv) the number of shares of each Basket Stock (and,
                           if applicable, the quantity of any other Exchange
                           Property), if any, to be delivered per $1,000
                           principal amount of this Note, (v) that such
                           delivery is subject to the subsequent election by
                           the Issuer to deliver the cash value of such shares
                           in lieu of such shares of each Basket Stock
                           described above, (vi) that such delivery will be
                           made upon presentation and surrender of this Note
                           and (vii) that such exchange is pursuant to the
                           Morgan Stanley Call Right.

                           If the Issuer makes a subsequent election to deliver
                           the cash value of the shares of each Basket Stock in
                           lieu of delivering such shares, the Issuer shall
                           give notice of the Issuer's subsequent election to
                           deliver the cash value of such shares and of the
                           cash value of such shares for each

                                      A-7
<PAGE>

                           $1,000 principal amount of this Note no later than
                           the second scheduled Trading Day prior to the Call
                           Date (i) to the holder of this Note, (ii) to the
                           Trustee and (iii) to the Depositary, each in the
                           manner described above for giving notice of the
                           Issuer's exercise of the Morgan Stanley Call Right.
                           Any such notice which 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. Failure to give notice by mail,
                           or any defect in the notice to the holder of any
                           Note shall not affect the validity of the
                           proceedings for the Issuer's subsequent election to
                           deliver the cash value of the shares of each Basket
                           Stock in lieu of delivering such shares with respect
                           to any other Note.

                           The notice of the Issuer's exercise of the Morgan
                           Stanley Call Right shall be given by the Issuer or,
                           at the Issuer's request, by the Trustee in the name
                           and at the expense of the Issuer.

                           If shares of the Basket Stocks (and, if applicable,
                           any other Exchange Property) are to be delivered
                           and, as a result of any corporate event described
                           under "Antidilution Adjustments" occurring during
                           the period from and including the Morgan Stanley
                           Notice Date to the close of business on the third
                           Trading Day prior to the Call Date, the Calculation
                           Agent makes any adjustment to the Exchange Ratio of
                           any Basket Stock and consequent adjustment to the
                           number of shares of such Basket Stock to be
                           delivered or any adjustment to the quantity of any
                           other Exchange Property due to the holder of this
                           Note, the Calculation Agent shall give prompt notice
                           of any such adjustments to the Trustee at its New
                           York office and to the Depositary, on which notice
                           the Trustee and the Depositary may conclusively
                           rely. No adjustment to the Exchange Ratio of any
                           Basket Stock shall be made as a result of any
                           corporate event occurring after the close of
                           business on the third Trading Day prior to the Call
                           Date.

                           Upon any call by the Issuer (as described above),
                           the holder of this Note shall not receive any
                           accrued but unpaid interest on the Note for the
                           period from and including the most recent Interest
                           Payment Date to but excluding the specified Call
                           Date.

                                      A-8
<PAGE>

                           If this Note is so called for mandatory exchange by
                           the Issuer, then, unless the holder of this Note
                           subsequently exercises the Exchange Right (the
                           exercise of which shall not be available to the
                           holder of this Note following a call for cash in an
                           amount equal to the Call Price), the shares of each
                           Basket Stock (and, if applicable, any other Exchange
                           Property) or (in the event of a call for cash in an
                           amount equal to the Call Price, or in the event of a
                           subsequent election by the Issuer to deliver the
                           cash value of the shares of each Basket Stock in
                           lieu of delivering such shares, each as described
                           above) cash to be delivered to the holder of this
                           Note shall be delivered on the Call Date fixed by
                           the Issuer and set forth in its notice of its
                           exercise of the Morgan Stanley Call Right, upon
                           delivery of this Note to the Trustee. The Issuer
                           shall, or shall cause the Calculation Agent to,
                           deliver such shares of each Basket Stock or cash to
                           the Trustee for delivery to the holder of this Note.

                           If this Note is not surrendered for exchange on the
                           Call Date, it shall be deemed to be no longer
                           Outstanding under, and as defined in, the Senior
                           Indenture (as defined below) after the Call Date,
                           except with respect to the holder's right to receive
                           shares of each Basket Stock (and, if applicable, any
                           other Exchange Property) or cash due in connection
                           with the Morgan Stanley Call Right.

Morgan Stanley Notice
Date....................   The scheduled Trading Day on which the Issuer issues
                           its notice of mandatory exchange, which must be at
                           least 30 but no more than 60 days prior to the Call
                           Date.

Call Date...............   The scheduled Trading Day on or after March   , 2007
                           or the Maturity Date (regardless of whether the
                           Maturity Date is a scheduled Trading Day) as
                           specified by the Issuer in its notice of mandatory
                           exchange on which the Issuer shall deliver shares of
                           the Basket Stocks, or, at the Issuer's subsequent
                           election, the cash value of such shares, or cash
                           equal to the Call Price to the holder of this Note
                           for mandatory exchange.

Call Price..............   $1,000 per Note.

Closing Price...........   The Closing Price for one share of a Basket Stock (or
                           one unit of any other security for which a Closing
                           Price must

                                      A-9
<PAGE>

                           be determined) on any Trading Day (as defined below)
                           means:

                           o   if such Basket Stock (or any such other
                               security) is listed or admitted to trading on a
                               national securities exchange, the last reported
                               sale price, regular way, of the principal
                               trading session on such day on the principal
                               United States securities exchange registered
                               under the Securities Exchange Act of 1934, as
                               amended (the "Exchange Act"), on which such
                               Basket Stock (or any such other security) is
                               listed or admitted to trading,

                           o   if such Basket Stock (or any such other
                               security) is a security of the Nasdaq National
                               Market (and provided that the Nasdaq National
                               Market is not then a national securities
                               exchange), the Nasdaq official closing price
                               published by The Nasdaq Stock Market, Inc. on
                               such day, or

                           o   if such Basket Stock (or any such other
                               security) is not listed or admitted to trading
                               on any national securities exchange or is not a
                               security of the Nasdaq National Market but is
                               included in the OTC Bulletin Board Service (the
                               "OTC Bulletin Board") operated by the National
                               Association of Securities Dealers, Inc. (the
                               "NASD"), the last reported sale price of the
                               principal trading session on the OTC Bulletin
                               Board on such day.

                           If such Basket Stock (or any such other security) is
                           listed or admitted to trading on any national
                           securities exchange or is a security of the Nasdaq
                           National Market but the last reported sale price or
                           Nasdaq official closing price, as applicable, is not
                           available pursuant to the preceding sentence, then
                           the Closing Price for one share of such Basket Stock
                           (or one unit of any such other security) on any
                           Trading Day will mean the last reported sale price
                           of the principal trading session on the
                           over-the-counter market as reported on the Nasdaq
                           National Market or the OTC Bulletin Board on such
                           day. If, because of a Market Disruption Event (as
                           defined below) or otherwise, the last reported sale
                           price or Nasdaq official closing price, as
                           applicable, for such Basket Stock (or any such other
                           security) is not available pursuant to either of the
                           two

                                     A-10
<PAGE>

                           preceding sentences, then the Closing Price for any
                           Trading Day will be the mean, as determined by the
                           Calculation Agent, of the bid prices for such Bakset
                           Stock (or any such other security) obtained from as
                           many recognized dealers in such security, but not
                           exceeding three, as will make such bid prices
                           available to the Calculation Agent. Bids of MS & Co.
                           or any of its affiliates may be included in the
                           calculation of such mean, but only to the extent
                           that any such bid is the highest of the bids
                           obtained. The term "security of the Nasdaq National
                           Market" will include a security included in any
                           successor to such system, and the term OTC Bulletin
                           Board Service will include any successor service
                           thereto.

Trading Day.............   A day, as determined by the Calculation Agent, on
                           which trading is generally conducted on the NYSE,
                           the American Stock Exchange LLC, the Nasdaq National
                           Market, the Chicago Mercantile Exchange and the
                           Chicago Board of Options Exchange and in the
                           over-the- counter market for equity securities in
                           the United States and on which a Market Disruption
                           Event has not occurred.

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 and the Issuer.

Antidilution
Adjustments.............   The Exchange Ratio shall be adjusted as follows:

                           1. If a Basket Stock is subject to a stock split or
                           reverse stock split, then once such split has become
                           effective, the Exchange Ratio for such Basket Stock
                           shall be adjusted to equal the product of the prior
                           Exchange Ratio and the number of shares issued in
                           such stock split or reverse stock split with respect
                           to one share of such Basket Stock.

                           2. If a Basket Stock is subject (i) to a stock
                           dividend (issuance of additional shares of such
                           Basket Stock) that is given ratably to all holders
                           of shares of such Basket Stock or (ii) to a
                           distribution of such Basket Stock as a

                                     A-11
<PAGE>

                           result of the triggering of any provision of the
                           corporate charter of the issuer of such Basket
                           Stock, then once the dividend has become effective
                           and such Basket Stock is trading ex-dividend, the
                           Exchange Ratio for such Basket Stock shall be
                           adjusted so that the new Exchange Ratio for such
                           Basket Stock shall equal the prior Exchange Ratio
                           for such Basket Stock plus the product of (i) the
                           number of shares issued with respect to one share of
                           such Basket Stock and (ii) the prior Exchange Ratio
                           for such Basket Stock.

                           3. There shall be no adjustments to the Exchange
                           Ratio for any Basket Stock to reflect cash dividends
                           or other distributions paid with respect to such
                           Basket Stock other than distributions described in
                           paragraph 2 and clauses (i), (iv) and (v) of the
                           first sentence of paragraph 4 and Extraordinary
                           Dividends. "Extraordinary Dividend" means each of
                           (a) the full amount per share of a Basket Stock of
                           any cash dividend or special dividend or
                           distribution that is identified by the issuer of
                           such Basket Stock as an extraordinary or special
                           dividend or distribution, (b) the excess of any cash
                           dividend or other cash distribution (that is not
                           otherwise identified by the issuer of the Basket
                           Stock as an extraordinary or special dividend or
                           distribution) distributed per share of such Basket
                           Stock over the immediately preceding cash dividend
                           or other cash distribution, if any, per share of
                           such Basket Stock that did not include an
                           Extraordinary Dividend (as adjusted for any
                           subsequent corporate event requiring an adjustment
                           hereunder, such as a stock split or reverse stock
                           split) if such distribution or excess portion of the
                           dividend is more than 5% of the Closing Price of
                           such Basket Stock on the Trading Day preceding the
                           "ex-dividend date" (that is, the day on and after
                           which transactions in such Basket Stock on an
                           organized securities exchange or trading system no
                           longer carry the right to receive that cash dividend
                           or other cash distribution) for the payment of such
                           cash dividend or other cash distribution (such
                           Closing Price, the "Base Closing Price") and (c) the
                           full cash value of any non-cash dividend or
                           distribution per share of such Basket Stock
                           (excluding Marketable Securities, as defined in
                           paragraph 4 below). Subject to the following
                           sentence, if any cash dividend or distribution of
                           such other property with respect to any Basket Stock
                           includes an Extraordinary

                                     A-12
<PAGE>

                           Dividend, the Exchange Ratio with respect to such
                           Basket Stock shall be adjusted on the ex-dividend
                           date so that the new Exchange Ratio shall equal the
                           product of (i) the prior Exchange Ratio and (ii) a
                           fraction, the numerator of which is the Base Closing
                           Price, and the denominator of which is the amount by
                           which the Base Closing Price exceeds the
                           Extraordinary Dividend. If any Extraordinary
                           Dividend is at least 35% of the Base Closing Price,
                           then, instead of adjusting the Exchange Ratio, upon
                           any exchange or, if the Issuer calls this Note and
                           the Basket Value exceeds the principal amount per
                           Note, upon the Issuer's call of this Note, the
                           payment, upon an exchange or such call of this Note,
                           shall be determined as described in paragraph 4
                           below, and the Extraordinary Dividend shall be
                           allocated to Reference Basket Stocks in accordance
                           with the procedures for a Reference Basket Event as
                           described in clause 3(b) of paragraph 4 below. The
                           value of the non-cash component of an Extraordinary
                           Dividend shall be determined on the ex-dividend date
                           for such distribution by the Calculation Agent,
                           whose determination shall be conclusive in the
                           absence of manifest error. A distribution on any
                           Basket Stock described in clause (i), (iv) or (v) of
                           the first sentence of paragraph 4 below shall cause
                           an adjustment to the Exchange Ratio pursuant only to
                           clause (i), (iv) or (v) of the first sentence of
                           paragraph 4, as applicable.

                           4. Any of the following shall constitute a
                           Reorganization Event: (i) a Basket Stock is
                           reclassified or changed, including, without
                           limitation, as a result of the issuance of any
                           tracking stock by the issuer of such Basket Stock,
                           (ii) the issuer of a Basket Stock has been subject
                           to any merger, combination or consolidation and is
                           not the surviving entity, (iii) the issuer of a
                           Basket Stock completes a statutory exchange of
                           securities with another corporation (other than
                           pursuant to clause (ii) above), (iv) the issuer of a
                           Basket Stock is liquidated, (v) the issuer of a
                           Basket Stock issues to all of its shareholders
                           equity securities of an issuer other than the issuer
                           of such Basket Stock (other than in a transaction
                           described in clause (ii), (iii) or (iv) above) (a
                           "spinoff stock") or (vi) the issuer of a Basket
                           Stock is the subject of a tender or exchange offer
                           or going private transaction on all of the
                           outstanding shares. If any Reorganization Event
                           occurs, in each case as a result of which the
                           holders of a Basket Stock receive

                                     A-13
<PAGE>

                           any equity security listed on a national securities
                           exchange or traded on The Nasdaq National Market (a
                           "Marketable Security"), other securities or other
                           property, assets or cash (collectively "Exchange
                           Property"), upon any exchange or upon the Issuer's
                           call of this Note for shares of the Basket Stock,
                           the payment with respect to the $1,000 principal
                           amount of each Note following the effective date for
                           such Reorganization Event (or, if applicable, in the
                           case of spinoff stock, the ex-dividend date for the
                           distribution of such spinoff stock) shall be
                           determined in accordance with the following:

                               (1) if a Basket Stock continues to be
                               outstanding, such Basket Stock (if applicable,
                               as reclassified upon the issuance of any
                               tracking stock) at the Exchange Ratio in effect
                               for such Basket Stock on the third Trading Day
                               prior to the scheduled Maturity Date (taking
                               into account any adjustments for any
                               distributions described under clause (3)(a)
                               below); and

                               (2) for each Marketable Security received in
                               such Reorganization Event (each a "New Stock"),
                               including the issuance of any tracking stock or
                               spinoff stock or the receipt of any stock
                               received in exchange for shares of the Basket
                               Stock where the issuer of such Basket Stock is
                               not the surviving entity, the number of shares
                               of the New Stock received with respect to one
                               share of the Basket Stock multiplied by the
                               Exchange Ratio for such Basket Stock on the
                               Trading Day immediately prior to the effective
                               date of the Reorganization Event (the "New Stock
                               Exchange Ratio"), as adjusted to the third
                               Trading Day prior to the scheduled Maturity Date
                               (taking into account any adjustments for
                               distributions described under clause (3)(a)
                               below); and

                               (3) for any cash and any other property or
                               securities other than Marketable Securities
                               received in such Reorganization Event (the
                               "Non-Stock Exchange Property"),

                                   (a) if the combined value of the amount of
                                   Non-Stock Exchange Property received per
                                   share of a Basket Stock, as determined by
                                   the

                                     A-14
<PAGE>

                                   Calculation Agent in its sole discretion on
                                   the effective date of such Reorganization
                                   Event (the "Non-Stock Exchange Property
                                   Value"), by holders of such Basket Stock is
                                   less than 25% of the Closing Price of such
                                   Basket Stock on the Trading Day immediately
                                   prior to the effective date of such
                                   Reorganization Event, a number of shares of
                                   such Basket Stock, if applicable, and of any
                                   New Stock received in connection with such
                                   Reorganization Event, if applicable, in
                                   proportion to the relative Closing Prices of
                                   such Basket Stock and any such New Stock,
                                   and with an aggregate value equal to the
                                   Non-Stock Exchange Property Value multiplied
                                   by the Exchange Ratio in effect for such
                                   Basket Stock on the Trading Day immediately
                                   prior to the effective date of such
                                   Reorganization Event, based on such Closing
                                   Prices, in each case as determined by the
                                   Calculation Agent in its sole discretion on
                                   the effective date of such Reorganization
                                   Event; and the number of such shares of that
                                   Basket Stock or any New Stock determined in
                                   accordance with this clause (3)(a) shall be
                                   added at the time of such adjustment to the
                                   Exchange Ratio in subparagraph (1) above
                                   and/or the New Stock Exchange Ratio in
                                   subparagraph (2) above, as applicable, or

                                   (b) if the Non-Stock Exchange Property Value
                                   is equal to or exceeds 25% of the Closing
                                   Price of a Basket Stock on the Trading Day
                                   immediately prior to the effective date
                                   relating to such Reorganization Event or, if
                                   a Basket Stock is surrendered exclusively
                                   for Non-Stock Exchange Property (in each
                                   case, a "Reference Basket Event"), an
                                   initially equal-dollar weighted basket of
                                   three Reference Basket Stocks (as defined
                                   below) with an aggregate value on the
                                   effective date of such Reorganization Event
                                   equal to the Non-Stock Exchange Property
                                   Value multiplied by the Exchange Ratio in
                                   effect for such Basket Stock on the Trading
                                   Day immediately prior to the effective date
                                   of such Reorganization Event. The "Reference
                                   Basket Stocks" shall be the three stocks
                                   with the largest market capitalization

                                     A-15
<PAGE>

                                   among the stocks that then comprise the S&P
                                   500 Index (or, if publication of such index
                                   is discontinued, any successor or substitute
                                   index selected by the Calculation Agent in
                                   its sole discretion) with the same primary
                                   Standard Industrial Classification Code
                                   ("SIC Code") as the issuer of such Basket
                                   Stock; provided, however, that a Reference
                                   Basket Stock shall not include any stock
                                   that is subject to a trading restriction
                                   under the trading restriction policies of
                                   Morgan Stanley or any of its affiliates that
                                   would materially limit the ability of Morgan
                                   Stanley or any of its affiliates to hedge
                                   this Note with respect to such stock (a
                                   "Hedging Restriction"); provided further
                                   that if three Reference Basket Stocks cannot
                                   be identified from the S&P 500 Index by
                                   primary SIC Code for which a Hedging
                                   Restriction does not exist, the remaining
                                   Reference Basket Stock(s) shall be selected
                                   by the Calculation Agent from the largest
                                   market capitalization stock(s) within the
                                   same Division and Major Group classification
                                   (as defined by the Office of Management and
                                   Budget) as the primary SIC Code for the
                                   issuer of such Basket Stock. Each Reference
                                   Basket Stock shall be assigned a Basket
                                   Stock Exchange Ratio equal to the number of
                                   shares of such Reference Basket Stock with a
                                   Closing Price on the effective date of such
                                   Reorganization Event equal to the product of
                                   (a) the Non-Stock Exchange Property Value,
                                   (b) the Exchange Ratio in effect for such
                                   Basket Stock on the Trading Day immediately
                                   prior to the effective date of such
                                   Reorganization Event and (c) 0.3333333.

                           Following the allocation of any Extraordinary
                           Dividend to Reference Basket Stocks pursuant to
                           paragraph 3 above or any Reorganization Event
                           described in this paragraph 4, the Basket Value on
                           any Trading Day determined by the Calculation Agent
                           upon any exchange, call or at maturity of this Note
                           with respect to the $1,000 principal amount of each
                           Note shall be an amount equal to:

                                     A-16
<PAGE>

                               (i) if applicable, the Closing Price of the
                                   Basket Stock times the Exchange Ratio then
                                   in effect for such Basket Stock; and

                               (ii) if applicable, for each New Stock, the
                                   Closing Price of such New Stock times the
                                   New Stock Exchange Ratio then in effect for
                                   such New Stock; and

                               (iii) if applicable, for each Reference Basket
                                   Stock, the Closing Price of such Reference
                                   Basket Stock times the Basket Stock Exchange
                                   Ratio then in effect for such Reference
                                   Basket Stock.

                           In each case, the applicable Exchange Ratio
                           (including for this purpose, any New Stock Exchange
                           Ratio or Reference Basket Stock Exchange Ratio)
                           shall be determined, as applicable, upon any
                           exchange, call or maturity of this Note.

                           5. No adjustments to the Exchange Ratio shall be
                           required other than those specified above. The
                           adjustments specified above do not cover all of the
                           events that could affect the Closing Prices of the
                           Basket Stocks, including, without limitation, a
                           partial tender or exchange offer for any Basket
                           Stock. However, the Issuer may, at its sole
                           discretion, cause the Calculation Agent to make
                           additional changes to the Exchange Ratios upon the
                           occurrence of corporate or other similar events that
                           affect or could potentially affect market prices of,
                           or shareholders' rights in, the Basket Stocks (or
                           other Exchange Property) but only to reflect such
                           changes, and not with the aim of changing relative
                           investment risk.

                                             *     *    *

                           For purposes of paragraph 4 above, in the case of a
                           consummated tender or exchange offer or
                           going-private transaction involving Exchange
                           Property of a particular type, Exchange Property
                           shall be deemed to include the amount of cash or
                           other property paid by the offeror in the tender or
                           exchange offer with respect to such Exchange
                           Property (in an amount determined on the basis of
                           the rate of exchange in such tender or exchange
                           offer or going-private transaction). In the event
                           of a tender or exchange

                                     A-17
<PAGE>

                           offer or a going-private transaction with respect to
                           Exchange Property in which an offeree may elect to
                           receive cash or other property, Exchange Property
                           shall be deemed to include the kind and amount of
                           cash and other property received by offerees who
                           elect to receive cash.

                           Following the occurrence of any Reorganization Event
                           referred to in paragraphs 3 or 4 above, (i)
                           references to "Basket Stock" under "--No Fractional
                           Shares," "--Closing Price" and "--Market Disruption
                           Event" shall be deemed to also refer to any New
                           Stock or Reference Basket Stock, and (ii) all other
                           references in this pricing supplement to "Basket
                           Stock" shall be deemed to refer to the Exchange
                           Property received with respect to such Basket Stock
                           into which this Note is thereafter exchangeable and
                           references to a "share" or "shares" of a Basket
                           Stock shall be deemed to refer to the applicable
                           unit or units of such Exchange Property, including
                           any New Stock or Reference Basket Stock, unless the
                           context otherwise requires. The New Stock Exchange
                           Ratio(s) or Reference Basket Stock Exchange Ratios
                           resulting from any Reorganization Event described in
                           paragraph 4 above or similar adjustment under
                           paragraph 3 above shall be subject to the
                           adjustments set forth in paragraphs 1 through 4
                           hereof.

                           No adjustment to any Exchange Ratio shall be
                           required unless such adjustment would require a
                           change of at least .1% in such Exchange Ratio then
                           in effect. The Exchange Ratio resulting from any of
                           the adjustments specified above shall be rounded to
                           the nearest ten-thousandth, with five one
                           hundred-thousandths rounded upward.

                           The Calculation Agent shall be solely responsible
                           for the determination and calculation of any
                           adjustments to the Exchange Ratios and of any
                           related determinations and calculations with respect
                           to any distributions of stock, other securities or
                           other property or assets (including cash) in
                           connection with any corporate event described in
                           paragraphs 3 or 4 above, and its determinations and
                           calculations with respect thereto shall be
                           conclusive in the absence of manifest error.

                                     A-18
<PAGE>

                           The Calculation Agent shall provide information as
                           to any adjustments to any Exchange Ratio upon
                           written request by the holder of this Note.

                           If the holder of this Note exercises its Exchange
                           Right and the Issuer elects to deliver shares of the
                           Basket Stocks or if the Issuer calls this Note for
                           shares of the Basket Stocks, the Calculation Agent
                           shall continue to make such adjustments until, but
                           not beyond, the close of business on the Exchange
                           Date or the third Trading Day prior to the Call
                           Date, as applicable.

Market Disruption Event.   "Market Disruption Event" means, with respect to any
                           Basket Stock:

                               (i) a suspension, absence or material limitation
                               of trading of such Basket Stock on the primary
                               market for such Basket Stock for more than two
                               hours of trading or during the one-half hour
                               period preceding the close of the principal
                               trading session in such market; or a breakdown
                               or failure in the price and trade reporting
                               systems of the primary market for such Basket
                               Stock as a result of which the reported trading
                               prices for such Basket Stock during the last
                               one-half hour preceding the close of the
                               principal trading session in such market are
                               materially inaccurate; or the suspension,
                               absence or material limitation of trading on the
                               primary market for trading in options contracts
                               related to such Basket Stock, if available,
                               during the one-half hour period preceding the
                               close of the principal trading session in the
                               applicable market, in each case as determined by
                               the Calculation Agent in its sole discretion;
                               and

                               (ii) a determination by the Calculation Agent in
                               its sole discretion that any event described in
                               clause (i) above materially interfered with the
                               ability of the Issuer or any of its affiliates
                               to unwind or adjust all or a material portion of
                               the hedge with respect to the Exchangeable Notes
                               due April 1, 2009 (Exchangeable for Common Stock
                               of Three Health Care Companies).

                           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

                                     A-19
<PAGE>

                           Disruption Event if it results from an announced
                           change in the regular business hours of the relevant
                           exchange, (2) a decision to permanently discontinue
                           trading in the relevant options contract shall not
                           constitute a Market Disruption Event, (3)
                           limitations pursuant to NYSE Rule 80A (or any
                           applicable rule or regulation enacted or promulgated
                           by the NYSE, any other self-regulatory organization
                           or the Securities and Exchange Commission 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 options contracts on such
                           Basket Stock by the primary securities market
                           trading in such options, if available, by reason of
                           (x) a price change exceeding limits set by such
                           securities exchange or market, (y) an imbalance of
                           orders relating to such contracts or (z) a disparity
                           in bid and ask quotes relating to such contracts
                           shall constitute a suspension, absence or material
                           limitation of trading in options contracts related
                           to such Basket Stock and (5) a suspension, absence
                           or material limitation of trading on the primary
                           securities market on which options contracts related
                           to such Basket Stock are traded shall not include
                           any time when such securities market is itself
                           closed for trading under ordinary circumstances.

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 per each $1,000 principal
                           amount of this Note upon any acceleration of this
                           Note shall be determined by MS & Co., as Calculation
                           Agent, and shall be equal to the principal amount of
                           this Note plus any accrued and unpaid interest at
                           the Interest Rate to but not including the date of
                           acceleration; provided that if (x) the holder of
                           this Note has submitted an Official Notice of
                           Exchange to the Issuer in accordance with the
                           Exchange Right or (y) the Issuer has called this
                           Note, other than a call for the cash Call Price, in
                           accordance with the Morgan Stanley Call Right, the
                           amount declared due and payable upon any such
                           acceleration with respect to each $1,000 principal
                           amount of this Note (i) for which such Official
                           Notice of Exchange has been duly submitted or (ii)
                           that has been called (other than a call for the cash
                           Call Price) shall be an amount in cash equal to the
                           Basket Value, determined by

                                     A-20
<PAGE>

                           the Calculation Agent as of the Exchange Date or as
                           of the date of acceleration (or, if the Issuer has
                           previously elected to pay the cash value of such
                           shares of Basket Stocks on the Call Date, the Basket
                           Value as of the third scheduled Trading Day prior to
                           the Call Date), respectively, and shall not include
                           any accrued and unpaid interest thereon; provided
                           further that if the Issuer has called this Note for
                           the Call Price in cash, in accordance with the
                           Morgan Stanley Call Right, the amount declared due
                           and payable upon any such acceleration shall be an
                           amount in cash per each $1,000 principal amount of
                           this Note equal to the Call Price and shall not
                           include any accrued and unpaid interest thereon.

                                     A-21
<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 principal sum of U.S.$          (UNITED STATES
DOLLARS           ), on the Maturity Date specified above (except to the
extent redeemed or repaid prior to maturity) and to pay interest thereon at the
Interest Rate per annum specified above, from and including the Interest
Accrual Date specified above until the principal hereof is paid or duly made
available for payment weekly, monthly, quarterly, semiannually or annually in
arrears as specified above as the Interest Payment Period on each Interest
Payment Date (as specified above), commencing on the Interest Payment Date next
succeeding the Interest Accrual Date specified above, and on the Maturity Date
(or on 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 shall 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 this Note is subject to
"Annual Interest Payments," interest payments shall be made annually in arrears
and the term "Interest Payment Date" shall be deemed to mean the first day of
March in each year.

     Interest on this Note shall 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 shall, 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 (as defined below)) (each such date, a "Record Date"); provided, however,
that interest payable at maturity (or any redemption or repayment date) shall
be payable to the person to whom the principal hereof shall be payable. As used
herein, "Business Day" means any day, other than a Saturday or Sunday, (a) that
is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close (x) in The City of New
York or (y) if this Note is denominated in a Specified Currency other than U.S.
dollars, euro or Australian dollars, in the principal financial center of the
country of the Specified Currency, or (z) if this Note is denominated in
Australian dollars, in Sydney and (b) if this Note is denominated in euro, that
is also a day on which the Trans-European Automated Real-time Gross Settlement
Express Transfer System ("TARGET") is operating (a "TARGET Settlement Day").

     Payment of the principal of this Note, any premium and the interest 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, shall 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 on any date of redemption or repayment, shall be
made by U.S. dollar check mailed to the address of the person entitled thereto
as such address shall appear in the Note register. A holder of U.S. $10,000,000
(or the equivalent in a Specified Currency) or more in aggregate principal
amount of Notes having the same Interest

                                     A-22
<PAGE>

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
interest, principal or any premium with regard to this Note shall 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 shall 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) shall 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) shall convert such payments into U.S. dollars.
In the event of such an election, payment in respect of this Note shall be
based upon the exchange rate as determined by the Exchange Rate Agent based on
the highest bid quotation in The City of New York received by such Exchange
Rate Agent at approximately 11:00 a.m., New York City time, on the second
Business Day preceding the applicable payment date from three recognized
foreign exchange dealers (one of which may be the Exchange Rate Agent unless
such Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the
quoting dealer of U.S. dollars for the Specified Currency of U.S. dollars for
settlement on such payment date in the amount of the Specified Currency payable
in the absence of such an election to such holder and at which the applicable
dealer commits to execute a contract. If such bid quotations are not available,
such

                                     A-23
<PAGE>

payment shall be made in the Specified Currency. All currency exchange costs
shall 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-24
<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,
    as Trustee

By:
    -------------------------------
    Authorized Officer

                                     A-25
<PAGE>

                              REVERSE OF SECURITY

     This Note is one of a duly authorized issue of Senior Global Medium-Term
Notes, Series C, having maturities more than nine months from the date of issue
(the "Notes") of the Issuer. The Notes are issuable under an Amended and
Restated Senior Indenture, dated as of May 1, 1999, between the Issuer and
JPMorgan Chase Bank (formerly known as The Chase Manhattan 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 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 shall 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, shall not be
redeemable or subject to repayment at the option of the holder prior to
maturity.

     If so indicated on the face of 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 shall 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 hereof, this Note shall 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 shall 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 hereof) at the option of the holder hereof at a price
equal to 100% of the principal amount to be repaid, together with interest

                                     A-26
<PAGE>

accrued and unpaid hereon to the date of repayment, provided that this Note is
issued with original issue discount, this Note will be repayable on the
applicable Optional Repayment Date or Dates at the price(s) specified on the
face hereof. 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, shall 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.

     Interest payments on this Note shall include interest accrued to but
excluding the Interest Payment Dates or the Maturity Date (or any earlier
redemption or repayment date), as the case may be. Unless otherwise provided on
the face hereof, interest payments for this Note shall be computed and paid on
the basis of a 360 day year of twelve 30 day months.

     In the case where the Interest Payment Date or the Maturity Date (or any
redemption or repayment date) does not fall on a Business Day, payment of
interest, premium, if any, or principal otherwise payable on such date need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or on the
Maturity Date (or any redemption or repayment date), and no interest on such
payment shall accrue for the period from and after the Interest Payment Date or
the Maturity Date (or any redemption or repayment date) to such next succeeding
Business Day.

     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

                                     A-27
<PAGE>

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

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

     The Senior Indenture provides that (a) if an Event of Default (as defined
in the Senior Indenture) due to the default in payment of principal of,
premium, if any, or interest on, any series of debt securities issued under the
Senior Indenture, including the series of Senior Medium-Term Notes of which
this Note forms a part, or due to the default in the performance or breach of
any other covenant or warranty of the Issuer applicable to the debt securities
of such series but not applicable

                                     A-28
<PAGE>

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

     If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration and Redemption," then (i) if the principal hereof is
declared to be due and payable as described in the preceding paragraph, the
amount of principal due and payable with respect to this Note shall be limited
to the aggregate principal amount hereof multiplied by the sum of the Issue
Price specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of declaration, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of declaration), (ii) for the
purpose of any vote of securityholders taken pursuant to the Senior Indenture
prior to the acceleration of payment of this Note, the principal amount hereof
shall equal the amount that would be due and payable hereon, calculated as set
forth in clause (i) above, if this Note were declared to be due and payable on
the date of any such vote and (iii) for the purpose of any vote of
securityholders taken pursuant to the Senior Indenture following the
acceleration of payment of this Note, the principal amount hereof shall equal
the amount of principal due and payable with respect to this Note, calculated
as set forth in clause (i) above.

     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 (except that if this Note is subject to "Modified Payment upon
Acceleration or Redemption," such redemption price would be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of redemption, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of redemption) (the "Amortized
Amount")), 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

                                     A-29
<PAGE>

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

                                     A-30
<PAGE>

     company or controlled foreign corporation or passive foreign investment
     company with respect to the United States or as a corporation which
     accumulates earnings to avoid United States federal income tax or as a
     private foundation or other tax exempt organization or a bank receiving
     interest under Section 881(c)(3)(A) of the Internal Revenue Code of 1986,
     as amended;

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

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

          (f) any tax, assessment or other governmental charge that would not
     have been imposed but for the failure to comply with certification,
     information or other reporting requirements concerning the nationality,
     residence or identity of the holder or beneficial owner of this Note, if
     such compliance is required by statute or by regulation of the United
     States or of any political subdivision or taxing authority thereof or
     therein as a precondition to relief or exemption from such tax, assessment
     or other governmental charge;

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

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

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

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

                                     A-31
<PAGE>

indentures adding any provisions to or changing in any manner the rights of the
holders of each series so affected; provided that the Issuer and the Trustee
may not, without the consent of the holder of each outstanding debt security
affected thereby, (a) extend the final maturity of any such debt security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption
thereof, or change the currency of payment thereof, or modify or amend the
provisions for conversion of any currency into any other currency, or modify or
amend the provisions for conversion or exchange of the debt security for
securities of the Issuer or other entities or for other property or the cash
value of the property (other than as provided in the antidilution provisions or
other similar adjustment provisions of the debt securities or otherwise in
accordance with the terms thereof), or impair or affect the rights of any
holder to institute suit for the payment thereof or (b) reduce the aforesaid
percentage in principal amount of debt securities 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 shall be entitled to satisfy its obligations to the holder of
this Note by making such payments in U.S. dollars on the basis of the Market
Exchange Rate on the date of such payment or, if the Market Exchange Rate is
not available on such date, as of the most recent practicable date; provided,
however, that if the euro has been substituted for such Specified Currency, the
Issuer may at its option (or shall, if so required by applicable law) without
the consent of the holder of this Note effect the payment of principal of,
premium, if any, or interest on any Note denominated in such Specified Currency
in euro in lieu of such Specified Currency in conformity with legally
applicable measures taken pursuant to, or by virtue of, the Treaty establishing
the European Community, as amended. Any payment made under such circumstances
in U.S. dollars or euro where the required payment is in an unavailable
Specified Currency shall 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 shall 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 and coupons.

     So long as this Note shall be outstanding, the Issuer shall 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, premium, if any, and interest on this Note at the time, place,
and rate, and in the coin or currency, herein prescribed unless otherwise
agreed between the Issuer and the registered holder of this Note.

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

     No recourse shall be had for the payment of the principal of, premium, if
any, or the interest on this Note, for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Senior Indenture or any
indenture supplemental thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise,

                                     A-33
<PAGE>

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 shall 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
<PAGE>

                                                                        ANNEX A

                          OFFICIAL NOTICE OF EXCHANGE

                                            Dated: [On or after April 20, 2004]

Morgan Stanley                 Morgan Stanley & Co. Incorporated, as
1585 Broadway                    Calculation Agent
New York, New York 10036       1585 Broadway
                               New York, New York 10036
                               Fax No.: (212) 761-0674
                               (Attn: Meghan Maloney)

Dear Sirs:

 The undersigned holder of the Global Medium-Term Notes, Series C, Senior Fixed
Rate Notes,   % Exchangeable Notes due April 1, 2009 (Exchangeable for Shares of
Common Stock of Three Health Care Companies) of Morgan Stanley (CUSIP No.      )
(the "Notes") hereby irrevocably elects to exercise with respect to the
principal amount of the Notes indicated below, as of the date hereof (or, if
this letter is received after 11:00 a.m. on any Trading Day, as of the next
Trading Day), provided that such day is on or after April 20, 2004 and is no
later than the Trading Day prior to the earliest of (i) the fifth scheduled
Trading Day prior to April 1, 2009, (ii) the fifth scheduled Trading Day prior
to the Call Date and (iii) in the event of a call for the cash Call Price, the
Morgan Stanley Notice Date, the Exchange Right as described in Pricing
Supplement No. 47 dated March 19, 2004 (the "Pricing Supplement") to the
Prospectus Supplement dated August 26, 2003 and the Prospectus dated August 26,
2003 related to Registration Statement No. 333-106789. Terms not defined herein
have the meanings given to such terms in the Pricing Supplement. Please date
and acknowledge receipt of this notice in the place provided below on the date
of receipt, and fax a copy to the fax number indicated, whereupon Morgan
Stanley will deliver, at its sole option, shares of the Basket Stocks or cash
on the third business day after the Exchange Date in accordance with the terms
of the Notes, as described in the Pricing Supplement.

 The undersigned certifies to you that (i) it is, or is duly authorized to act
for, the beneficial owner of the principal amount of the Notes indicated below
its signature (and attaches evidence of such ownership as provided by the
undersigned's position services department or the position services department
of the entity through which the undersigned holds its Notes), (ii) it will
cause the principal amount of Notes to be exchanged to be transferred to the
Trustee on the Exchange Settlement Date and (iii) the principal amount of Notes
to be exchanged pursuant to this notice is equal to or greater than $25,000,
unless the Notes identified for exchange hereby constitute the undersigned's
entire holding of Notes.

 If the Exchange Settlement Date for this exchange falls after a Record Date
and prior to the succeeding Interest Payment Date, the undersigned will deliver
to the Trustee on the Exchange Settlement Date an amount of cash equal to the
interest payable on the succeeding Interest Payment Date with respect to the
principal amount of Notes to be exchanged. The amount of any such cash payment
will be determined by the Calculation Agent and indicated in its acknowledgment
of this Official Notice of Exchange.

                       Very truly yours,

                       --------------------------------------
                       [Name of Holder]

                       By:
                           ----------------------------------
                           [Title]

                       --------------------------------------
                       [Fax No.]

                       $
                        -------------------------------------
                        Principal Amount of Notes to be surrendered for exchange

Receipt of the above Official
Notice of Exchange is hereby acknowledged
MORGAN STANLEY, as Issuer
MORGAN STANLEY & CO. INCORPORATED, as Calculation Agent
By MORGAN STANLEY & CO. INCORPORATED, as Calculation Agent

By:
    ------------------------------------------
   Title:

Date and time of acknowledgment
                                -------------------------
Accrued interest, if any, due upon surrender of the Notes for exchange: $
                                                                         -------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}]]