-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Th90aSmzuscLkp4FTkT792YNS8BOB62ZMa1JN3co0KE2ldsgmzv4rYpxD4uJrLYW vkbfkxIk30WRIqexR36JRg== 0000950103-95-000455.txt : 19951211 0000950103-95-000455.hdr.sgml : 19951211 ACCESSION NUMBER: 0000950103-95-000455 CONFORMED SUBMISSION TYPE: 8-A12B PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19951208 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY GROUP INC /DE/ CENTRAL INDEX KEY: 0000789625 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 132838811 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-A12B SEC ACT: 1934 Act SEC FILE NUMBER: 001-09085 FILM NUMBER: 95600400 BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2127034000 8-A12B 1 ============================================================================= UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________ FORM 8-A FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 MORGAN STANLEY GROUP INC. (Exact name of registrant as specified in its charter) DELAWARE 13-2838811 (State of incorporation) (I.R.S. employer identification number) 1585 BROADWAY NEW YORK, NEW YORK (Address of principal 10036 executive offices) (Zip code) If this Form relates to the If this Form relates to the registration of a class of registration of a class of debt debt securities and is securities and is to become effective upon filing pur- effective simultaneously with suant to General Instruction the effectiveness of a A(c)(1) please check the concurrent registration following box. [ ] statement under the Securities Act of 1933 pursuant to General Instruction A(c)(2) please check the following box. [ ] Securities to be registered pursuant to Section 12(b) of the Act: Title of each Class Name of each Exchange on which to be so registered each Class is to be registered - ------------------- ------------------------------------ Medium-Term Notes, THE NEW YORK STOCK EXCHANGE Series C (Senior Fixed Rate Notes) due December 31, 2001 Securities to be registered pursuant to Section 12(g) of the Act: None ============================================================================= Item 1. Description of the Registrant's Securities to be Registered. The title of the class of securities to be registered hereunder is: "Medium-Term Notes, Series C (Senior Fixed Rate Notes) due December 31, 2001 (the "SmithKline Beecham Exchangeable Notes"). A description of the SmithKline Beecham Exchangeable Notes is set forth under the caption "Description of Debt Securities" in the prospectus included within the Registration Statement of the Company on Form S-3 (Registration No. 33-57833) (the "Registration Statement"), as supplemented by the information under the caption "Description of Notes" in the registrant's prospectus supplement filed on March 29, 1995, pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the "Act"), which description is incorporated herein by reference, and as further supplemented by the description of the SmithKline Beecham Exchangeable Notes contained in the pricing supplement to be filed pursuant to Rule 424(b) under the Act, which contains the final terms and provisions of the SmithKline Beecham Exchangeable Notes and is hereby deemed to be incorporated by reference into this Registration Statement and to be a part hereof. Item 2. Exhibits. The following documents are filed as exhibits hereto: 4.1 Proposed form of global Note evidencing the SmithKline Beecham Exchangeable Notes. SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. MORGAN STANLEY GROUP INC. (Registrant) Date: December 7, 1995 By: /s/ Patricia A. Kurtz -------------------------------- Name: Patricia A. Kurtz Title: Assistant Secretary INDEX TO EXHIBITS Exhibit No. Page No. - ------------------------------------------------------- ---------- 4.1 Proposed form of global Note evidencing 5 the SmithKline Beecham Exchangeable Notes. EX-4.1 2 Exhibit 4.1 Fixed Rate Senior Note REGISTERED REGISTERED No. FXR U.S. $25,000,000 CUSIP: 617446AY5 Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "ORIGINAL YIELD TO MATURITY" AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) SET FORTH BELOW HAVE BEEN COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. MORGAN STANLEY GROUP INC. SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES C (Fixed Rate) EXCHANGEABLE NOTES DUE DECEMBER 31, 2001 Exchangeable for American Depositary Receipts Representing Class A Ordinary Shares of SMITHKLINE BEECHAM plc ORIGINAL ISSUE DATE: INITIAL REDEMPTION INTEREST RATE: ORIGINAL December 13, 1995 DATE: N/A N/A MATURITY DATE: December 31, 2001 INTEREST ACCRUAL DATE: INITIAL REDEMPTION APPLICABILITY OPTIONAL N/A PERCENTAGE: N/A OF MODIFIED REPAYMENT PAYMENT UPON DATES(S): ACCELERATION: N/A N/A TOTAL AMOUNT OF OID: ANNUAL REDEMPTION If yes, state $164.86 per $1,000 PERCENTAGE Issue Price: principal amount of REDUCTION: this Note N/A ORIGINAL YIELD TO SPECIFIED CURRENCY: MATURITY: U.S. Dollars 3.0% per annum computed on a semi-annual bond equivalent basis based on the Issue Price calculated from the Original Issue Date. INITIAL ACCRUAL PERIOD: N/A APPLICABILITY OF APPLICABILITY OF ISSUER's OPTION TO ANNUAL INTEREST EXTEND ORIGINAL PAYMENTS: N/A MATURITY DATE: N/A If yes, state Final Maturity Date: OTHER PROVISIONS: (See Below)
Issue Price:............................... 83.514% SBH American Depositary Receipts........... SBH American Depositary Receipts ("SBH ADRs") evidence SBH American Depositary Shares of SmithKline Beecham plc, a public limited company incorporated under the laws of England ("SmithKline Beecham"). Exchange Right:............................ On any Exchange Date (as defined below), subject to a prior call of this Note by the Issuer for cash in an amount equal to the Call Price (as defined below) as described under "Company Exchange Right" below, the holder of this Note shall be entitled upon (i) completion by the holder and acknowledgment by the Issuer and the Calculation Agent of the "Official Notice of Exchange," in substantially the form of Annex A attached hereto, prior to 11:00 a.m. New York City time on the Exchange Notification Date (as defined below) and (ii) delivery on such Exchange Notification Date of this Note to the Trustee, to exchange each $1,000 principal amount of this Note for 13.1182 (the "Exchange Ratio") SBH ADRs, subject to any adjustments (x) to the Exchange Ratio or (y) in the stock, other securities or other property or assets (including cash) to be delivered instead of or in addition to such SBH ADRs as a result of any corporate event described under "Adjustments to the Exchange Ratio" below, in each case, required to be made prior to the close of business on the first Business Day after any such Exchange Date (as defined herein). Upon any such exchange, the Issuer may, at its sole option, deliver such SBH ADRs (or such stock, other securities or other property or assets (including cash) to be delivered instead of or in addition to such SBH ADRs as aforesaid) or pay an amount in cash for each $1,000 principal amount of this Note equal to the Exchange Ratio as of the close of business on such Exchange Date times the ADR Market Price on the Exchange Date, as determined by the Calculation Agent, in lieu of such SBH ADRs; provided that if a Delisting Date (as defined below) has occurred, the Issuer will pay such cash amount and will not deliver SBH ADRs. Such delivery or payment shall be made 3 Business Days after any Exchange Date, subject to delivery of this Note to the Trustee on the Exchange Notification Date as aforesaid. Prior to 10:30 a.m. on the second Business Day immediately succeeding any Exchange Date, the Issuer shall cause the Calculation Agent to provide written notice to the Trustee at its New York office and to The Depository Trust Company, or any successor depositary ("DTC"), on which notice the Trustee and DTC may conclusively rely, (i) of its receipt of any such "Official Notice of Exchange," (ii) of the Issuer's determination to deliver shares of SBH ADRs (or, if applicable, any other stock, other securities or other property or assets (including cash) to be delivered as a result of any corporate event described in paragraphs 5 or 6 under "Adjustments to Exchange Ratio" below) or to pay cash and (iii) if SBH ADRs are to be delivered (or, if applicable, any other stock, other securities or other property or assets (including cash)), of the number of SBH ADRs (or units of other securities or amounts of other property or assets (including cash)) to be delivered (and of the amount of any cash to be paid in lieu of fractional SBH ADRs, if applicable, or of any other stock, other securities or other property or assets (including cash) for each $1,000 principal amount of this Note or, if cash is to be paid, of the amount of such cash for each $1,000 principal amount of this Note. The Issuer shall, or shall cause the Calculation Agent to, deliver any such SBH ADRs (or any other stock, other securities or other property or assets (including cash)) or such cash to the Trustee for delivery to the holders. No Fractional Shares:...................... If upon any exchange of this Note the Issuer chooses to deliver SBH ADRs (and, if applicable, any other stock or other securities), the Issuer shall pay cash in lieu of delivering fractional SBH ADRs (and, if applicable, of any other stock or securities) in an amount equal to the corresponding fractional ADR Market Price of such fraction of SBH ADRs (or, if applicable, of such other stock or other securities) on such Exchange Date or on the second Exchange Date immediately prior to the Call Date, as applicable, as determined by the Calculation Agent on such Exchange Date. Exchange Ratio:............................ 13.1182, subject to adjustment for certain corporate events. See "Adjustments to Exchange Ratio" below. Exchange Notification Date:. . . . . . . The Business Day (as defined below) immediately prior to any Exchange Date. Exchange Date:............................. Any Exchanges Trading Day that is also a Business Day and that falls during the period beginning March 13, 1996 and ending on the day prior to the earliest of (i) the Maturity Date, (ii) the Call Date and (iii) in the event of a call for cash in an amount equal to the Call Price as described under "Company Exchange Right" below, the Company Notice Date. Company Exchange Right:.................... On or after December 15, 1998, the Issuer may call this Note, in whole but not in part, for cash in an amount equal to the Call Price; provided that, if Parity as determined by the Calculation Agent on the Exchanges Trading Day immediately prior to the Company Notice Date is equal to or greater than the Call Price, the Issuer shall, at its sole option (which election shall be made by the Issuer (and written notification of such election be given by the Issuer to the Trustee and DTC) prior to 10:30 a.m. on the Exchange Date immediately prior to the Call Date), either (i) deliver SBH ADRs (and, if applicable, any other stock, other securities or other property or assets (including cash)) at the Exchange Ratio or (ii) pay cash in an amount equal to Parity, in each case as determined on the second Exchange Date immediately prior to the Call Date. On the Company Notice Date, the Issuer shall give notice of the Issuer's exercise of the Company Exchange Right (i) to the holder of this Note by mailing notice of such exercise by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date (the "Call Date") on which the Issuer shall effect such exchange 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 class mail, postage prepaid, at its New York office and (iii) to DTC in accordance with the applicable procedures set forth in the Letter of Representations related to this Note. 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 Company Exchange Right with respect to any other Note. The notice of the Issuer's exercise of the Company Exchange Right to the holder of this Note, to the Trustee and to DTC shall specify the Call Date, whether Parity on the Exchanges Trading Day immediately prior to the Company Notice Date, as determined by the Calculation Agent, is less than the Call Price applicable to such Company Notice Date so that the Issuer will pay such applicable Call Price in cash on the Call Date, the place or places of payment of cash, or, if Parity, as so determined, is equal to or greater than such applicable Call Price, the place or places of delivery of the SBH ADRs and, if applicable, of any other stock, other securities or other property or assets (including cash) to be delivered as a result of any corporate event described in paragraphs 5 or 6 under "Adjustments to the Exchange Ratio" (and of any cash to be paid in lieu of fractional SBH ADRs (and, if applicable, of any such other stock or securities)), the number of SBH ADRs (and, if applicable, the quantity of any other stock, other securities or other property or assets (including cash)) to be delivered per $1,000 principal amount of this Note, that such delivery will be made upon presentation and surrender of this Note and that such exchange is pursuant to the Company Exchange Right. The notice of the Issuer's exercise of the Company Exchange 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 SBH ADRs (and, if applicable, any stock, other securities or other property or assets (including any cash)) is to be delivered and, as a result of any corporate event described under "Adjustments to the Exchange Ratio" occurring during the period from and including the Company Notice Date to the close of business on the second Exchange Date prior to the Call Date, the Calculation Agent makes any adjustment to the Exchange Ratio and consequent adjustment to the number of SBH ADRs to be delivered or any adjustment to the quantity of any other stock, other securities or other property or assets (including cash) 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 DTC, on which notice the Trustee and DTC may conclusively rely. No adjustment to the Exchange Ratio shall be made as a result of any corporate event occurring after the close of business on the second Exchange Date prior to the Call Date. If this Note is so called for mandatory exchange, then, unless the holder subsequently exercises his Exchange Right (the exercise of which will not be available to the holder following a call for cash in an amount equal to the Call Price), the SBH ADRs (and, if applicable, any other stock, other securities or other property or assets (including cash)) or 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 exchange, upon delivery of this Note to the Trustee. The Issuer shall, or shall cause the Calculation Agent to, deliver such SBH ADRs or cash to the Trustee for delivery to the holder. 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 SBH ADRs (and, if applicable, any other stock, other securities or other property or assets (including cash)) or cash due in connection with the Company Exchange Right. Company Notice Date:....................... Any Exchanges Trading Day on or after December 15, 1998 on which the Issuer issues its notice of exchange. Parity:.................................... With respect to any Exchanges Trading Day, an amount equal to the Exchange Ratio times the ADR Market Price (as defined below) on such Exchanges Trading Day. Call Price:................................ 100% of the principal amount of this Note. ADR Market Price:.......................... If the SBH ADRs are listed on a national securities exchange, are securities on The Nasdaq National Market ("NASDAQ NMS") or are included in the OTC Bulletin Board Service ("OTC Bulletin Board") operated by the National Association of Securities Dealers, Inc. (the "NASD"), the ADR Market Price of an SBH ADR for any Exchange Date means (i) the last reported sale price, regular way, 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 SBH ADRs are listed or admitted to trading or (ii) if not listed or admitted to trading on any such securities exchange or if such last reported sale price is not obtainable, the last reported sale price on the over-the-counter market as reported on the NASDAQ NMS or OTC Bulletin Board on such day. If the last reported sale price is not available pursuant to clause (i) or (ii) of the preceding sentence, the ADR Market Price for any Exchange Date shall be the mean, as determined by the Calculation Agent, of the bid prices for an SBH ADR obtained from as many dealers in such SBH ADRs, but not exceeding three, as will make such bid prices available to the Calculation Agent. If the ADR Market Price is not available in accordance with the two preceding sentences because a Delisting Date has occurred, the ADR Market Price for any Exchange Date shall be the ADR Equivalent Market Price (as defined below) on such Exchange Date as determined by the Calculation Agent. The term "NASDAQ NMS security" shall include a security included in any successor to such system and the term "OTC Bulletin Board Service" shall include any successor service thereto. NYSE Trading Day:.......................... A day on which trading is generally conducted in the over-the-counter market for equity securities in the United States and on the New York Stock Exchange (the "NYSE"), as determined by the Calculation Agent, and on which a Market Disruption Event has not occurred. Exchanges Trading Day: . . . . . . . . . Any NYSE Trading Day on which trading in equity securities is also generally conducted on The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited (the "London Stock Exchange"), as determined by the Calculation Agent, and on which a Market Disruption Event has not occurred. Business Day: . . . . . . . . . . . . . Any day, other than a Saturday or Sunday that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in The City of New York or the City of London. Delisting Date: . . . . . . . . . . . . The first date on which the SBH ADRs (or the American depositary shares or common stock of any SmithKline Beecham Survivor (as defined under "Adjustments to Exchange Ratio")) are not listed on any U.S. national securities exchanges, traded through the facilities of a U.S. national securities system or are permanently suspended from trading (within the meaning of the Exchange Act and the rules and regulations thereunder) on each such securities exchange and securities system on which such security is then listed. ADR Equivalent Market Price: . . . . . . The ADR Equivalent Market Price, for any Exchange Date, shall be the product of (x) five (5) (as such multiple may have been adjusted by the depository for the SBH ADRs as described in paragraphs 1 and 2 in "Adjustments to the Exchange Ratio" below) and (y) the A Share Market Price, which product shall be converted from pounds sterling into dollars at the spot buying rate prevailing on such date as determined by the Calculation Agent. A Share Market Price: . . . . . . . . . If Class A Ordinary Shares, par value 12.5p per share ("A Shares"), of SmithKline Beecham are listed on the London Stock Exchange, the A Share Market Price for any Exchange Date (or Exchanges Trading Day, as applicable) shall be (i) the closing price, as derived from the London Stock Exchange Daily Official List, of the A shares on such day, not being subject to any special provisions (or, if no sale occurs on such day, the closing bid price on such day). If A Shares are not listed on the London Exchange (or are subject to any special provisions), the Market Price for the A Shares, for any Exchange Date (or Exchanges Trading Day, as applicable), shall be (i) the equivalent price by reference to such stock exchange or other securities market on which A Shares are principally traded, as the Calculation Agent shall determine in its sole discretion, on such day, not being subject to any special provisions, or, if such day is not a Business Day, the next succeeding Business Day that is also an Exchange Date (or Exchanges Trading Day, as applicable), converted (if necessary) into pounds sterling at the spot buying rate prevailing on such date as determined by the Calculation Agent. For purposes of the immediately preceding sentence, a "Business Day" shall be a day on which banks are open for business in the city in which the relevant stock exchange is located and on which such stock exchange is open for business. If the A Share Market Price cannot be determined in accordance with the above provisions, then such A Share Market Price shall be deemed to be the value, for any Exchange Date (or Exchanges Trading Day, as applicable) (converted (if necessary), into pounds sterling, as aforesaid) as determined by the Calculation Agent whose determination shall be conclusive. Calculation Agent:......................... Morgan Stanley & Co. Incorporated ("MS & Co.") Adjustments to the Exchange Ratio:......... The Exchange Ratio shall be adjusted as follows: 1. If the A Shares are subject to a stock split or reverse stock split, then once such split has become effective, the Exchange Ratio 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 A Share; provided, however, that if SmithKline Beecham and the depositary for the SBH ADRs shall have adjusted the number of A Shares represented by each SBH ADR so that the price of such SBH ADR would not be affected by such stock split or reverse stock split, as determined by the Calculation Agent, no adjustment of the Exchange Ratio shall be made. 2. If the A Shares are subject to a stock dividend (issuance of additional A Shares that is given ratably to all holders of A Shares), then once the dividend on the SBH ADRs corresponding to such dividend has become effective with respect to the SBH ADRs and SBH ADRs are trading ex-dividend, the Exchange Ratio shall be adjusted so that the new Exchange Ratio shall equal the prior Exchange Ratio plus the product of (i) the number of shares issued with respect to one A Share and (ii) the prior Exchange Ratio; provided, however, that if SmithKline Beecham and the depositary for the SBH ADRs shall have adjusted the number of A Shares represented by each SBH ADR so that the price of such SBH ADR would not be affected by such stock dividend, as determined by the Calculation Agent, no adjustment to the Exchange Ratio shall be made. 3. There shall be no adjustments to the Exchange Ratio to reflect cash dividends or other distributions paid with respect to the A Shares other than distributions described in paragraph 6 below and Extraordinary A Share Dividends as described below. An A Share Dividend shall be deemed an "Extraordinary A Share Dividend" if such A Share Dividend exceeds the immediately preceding non-Extraordinary A Share Dividend by an amount equal to at least 10% of the A Share Market Price on the Exchanges Trading Day preceding the ex-dividend date for the payment of such Extraordinary A Share Dividend (the "ex-dividend date") on the A Shares. If an Extraordinary A Share Dividend occurs, the Exchange Ratio with respect to SBH ADRs shall be adjusted on the ex-dividend date with respect to such Extraordinary A Share Dividend so that the new Exchange Ratio shall equal the product of (i) the then current Exchange Ratio and (ii) a fraction, the numerator of which is the A Share Market Price on the Exchanges Trading Day preceding the ex-dividend date, and the denominator of which is the amount by which the A Share Market Price on the Exchanges Trading Day preceding the ex-dividend date exceeds the Extraordinary A Share Dividend Amount. The "Extraordinary Dividend Amount" with respect to an Extraordinary A Share Dividend shall equal (i) in the case of cash dividends or other distributions that constitute quarterly dividends, the amount per A Share of such Extraordinary A Share Dividend minus the amount per A Share of the immediately preceding non-Extraordinary A Share Dividend or (ii) in the case of cash dividends or other distributions that do not constitute quarterly dividends, the amount per A Share of such Extraordinary A Share Dividend. To the extent an Extraordinary A Share Dividend is not paid in cash, the value of the non-cash component shall be determined by the Calculation Agent, whose determination shall be conclusive. A distribution on the SBH ADRs described in paragraph 6 below that also constitutes an Extraordinary ADR Dividend shall only cause an adjustment to the Exchange Ratio pursuant to paragraph 6. 4. If SmithKline Beecham is being liquidated or is subject to a proceeding under any applicable bankruptcy, insolvency or other similar law, this Note shall continue to be exchangeable into SBH ADRs so long as an ADR Market Price for the SBH ADRs is available. If an ADR Market Price is no longer available for the SBH ADRs for whatever reason, including the liquidation of SmithKline Beecham or the subjection of SmithKline Beecham to a proceeding under any applicable bankruptcy, insolvency or other similar law, then the value of an SBH ADR shall equal zero for so long as no ADR Market Price is available. 5. If there occurs any reclassification or change of the A Shares, or if SmithKline Beecham has been subject to a merger, combination or consolidation and is not the surviving entity, or if there occurs a sale or conveyance to another corporation of the property and assets of SmithKline Beecham as an entirety or substantially as an entirety, in each case as a result of which the holders of A Shares shall be entitled to receive stock, other securities or other property or assets (including cash) with respect to or in exchange for such A Shares, then the holder of this Note shall be entitled thereafter to exchange this Note into the kind and amount of shares of stock, other securities or other property or assets (including cash) that the holder would have owned or been entitled to receive upon such reclassification, change, merger, combination, consolidation, sale or conveyance had the holder exchanged this Note for SBH ADRs and exchanged the SBH ADRs for A Shares immediately prior to any such corporate event. At such time, no adjustment shall be made to the Exchange Ratio. 6. If SmithKline Beecham issues to all holders of A Shares (and consequently of SBH ADRs) equity securities of an issuer other than SmithKline Beecham (other than in a transaction described in paragraph 5 above), then the holder of this Note shall be entitled to receive such new equity securities upon exchange of this Note. The Exchange Ratio for such new equity securities shall equal the product of the Exchange Ratio in effect for the SBH ADRs at the time of the issuance of such new equity securities times the product of (x) five (5)(as such multiple may have been adjusted by the depository as described in paragraphs 1 and 2 above) and (y) the number of shares of the new equity securities issued with respect to one A Share. 7. In the event that SmithKline Beecham and the depositary for the SBH ADRs elect, in the absence of any of the events described in paragraph 1, 2 or 3 above, to change the number of A Shares that are represented by each SBH ADR, the Exchange Ratio on any Exchanges Trading Day after the change becomes effective will be proportionately adjusted. No adjustments to the Exchange Ratio shall be required unless such adjustment would require a change of at least 0.1% in the Exchange Ratio then in effect. The Exchange Ratio resulting from any of the adjustments specified above shall be rounded to the nearest one thousandth with five ten-thousandths being rounded upward. No adjustments to the Exchange Ratio shall be made other than those specified above. The Calculation Agent shall be solely responsible for the determination and calculation of any adjustments to the Exchange Ratio 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 paragraph 5 or 6 above, and its determinations and calculations with respect thereto shall be conclusive. The Calculation Agent shall provide information as to any adjustments to the Exchange Ratio upon written request by the holder of this Note. Market Disruption Event:................... "Market Disruption Event" means: (i) a suspension, absence or material limitation of trading of SBH ADRs or A Shares on the primary market for SBH ADRs or A Shares for more than two hours of trading or during the one-half hour period preceding the close of trading in such market; or the suspension or material limitation on the primary market for trading in options contracts related to SBH ADRs or A Shares, if available, during the one-half hour period preceding the close of trading 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 the event described in clause (i) above materially interfered with the ability of the Issuer or any of its affiliates to unwind all or a material portion of the hedge with respect to the Exchangeable Notes Due December 31, 2001 (Exchangeable For American Depositary Receipts Representing Class A Ordinary Shares of SmithKline Beecham plc). For purposes of determining whether a Market Disruption Event has occurred: (1) a limitation on the hours or number of days of trading will not constitute a Market 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 contract will not constitute a Market Disruption Event, (3) limitations pursuant to New York Stock Exchange Rule 80A (or any applicable rule or regulation enacted or promulgated by the New York Stock Exchange, any other self-regulatory organization, the Securities and Exchange Commission, the London Stock Exchange or any other exchange relevant to the determination of the ADR Market Price or the A Share Market Price, as applicable of similar scope as determined by the Calculation Agent) on trading during significant market fluctuations shall constitute a Market Disruption Event, (4) a suspension of trading in an options contract on SBH ADRs or A Shares 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 will constitute a suspension or material limitation of trading in options contracts related to SBH ADRs or A Shares and (5) an "absence of trading" on the primary securities market on which options contracts related to SBH ADRs or A Shares are traded shall not include any time when such securities market is itself closed for trading under ordinary circumstances. Morgan Stanley Group Inc., 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. $25,000,000 (United States Dollars Twenty-Five Million), on the Original Maturity Date specified above or, if the maturity hereof is extended in accordance with the procedures set forth below to an Extended Maturity Date, as defined below, on such Extended Maturity Date (except to the extent previously redeemed or repaid) and to pay interest thereon at the Interest Rate per annum specified above or, if the interest rate hereon is reset or re-established in connection with an extension of maturity in accordance with the procedures specified on the reverse hereof, at the interest rate per annum determined pursuant to such procedures, from the Interest Accrual Date specified above until the principal hereof is paid or duly made available for payment (except as provided below), semiannually in arrears on the first day of March and September in each year (each such date an "Interest Payment Date") commencing on the Interest Payment Date next succeeding the Interest Accrual Date specified above, and at maturity (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 will commence on the second Interest Payment Date succeeding the Interest Accrual Date to the registered holder of this Note on the Record Date with respect to such second Interest Payment Date; and provided, further, that if 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 will accrue from the most recent Interest Payment Date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for, from the Interest Accrual Date, until the principal hereof has been paid or duly made available for payment (except as provided below). The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, subject to certain exceptions described herein, be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the date 15 calendar days prior to such Interest Payment Date (whether or not a Business Day) (each such date a "Record Date"); provided, however, that interest payable at maturity (or on any redemption or repayment date) will 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, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in The City of New York and (i) with respect to Notes denominated in a Specified Currency other than U.S. dollars, Australian dollars or European Currency Units (ECUs"), in the principal financial center of the country of the Specified Currency, (ii) with respect to Notes denominated in Australian dollars, in Sydney and (iii) with respect to Notes denominated in ECUs, that is not a non-ECU clearing day, as determined by the ECU Banking Association in Paris. Payment of the principal of this Note, any premium and the interest due at maturity (or on any redemption or repayment date) will be made 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. Payment of the principal of and premium, if any, and interest on this Note will be made in the Specified Currency indicated above; provided, however, that U.S. dollar payments of interest, other than interest due at maturity or on any date of redemption or repayment, will 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 more in aggregate principal amount of Notes having the same Interest Payment Date will 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, payments of interest hereon will be made by wire transfer of immediately available funds to an account maintained by the holder hereof with a bank located outside the United States if appropriate wire transfer instructions have been received by the Paying Agent in writing not less than 15 calendar days prior to the applicable Interest Payment Date. If such wire transfer instructions are not so received, such interest payments will be made by check payable in such Specified Currency mailed to the address of the person entitled thereto as such address shall appear in the Note register. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Senior Indenture, as defined on the reverse hereof, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed under its corporate seal. DATED: December 13, 1995 MORGAN STANLEY GROUP INC. By_________________________________ Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes referred to in the within-mentioned Senior Indenture. CHEMICAL BANK, as Trustee By_______________________________ Authorized Officer 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 a Senior Indenture, dated as of April 15, 1989, as supplemented by a First Supplemental Indenture dated as of May 15, 1991 (as so supplemented, the "Senior Indenture"), between the Issuer and Chemical Bank, as Trustee (the "Trustee," which term includes any successor trustee under 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 Chemical 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. This Note will not be subject to any sinking fund and, unless otherwise provided on the face hereof in accordance with the provisions of the following two paragraphs, will not be redeemable or subject to repayment at the option of the holder prior to maturity. If so indicated on the face of this Note, 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 (except as provided below). If this Note is subject to "Annual Redemption Percentage Reduction," the Initial Redemption Percentage indicated on the face hereof will be reduced on each anniversary of the Initial Redemption Date by the Annual Redemption Percentage Reduction specified on the face hereof until the redemption price of this Note is 100% of the principal amount hereof, together with interest accrued and unpaid hereon to the date of redemption (except as provided below). 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 days prior to the date fixed for redemption, subject to all the conditions and provisions of the Senior Indenture. In the event of redemption of this Note in part only, a new Note or Notes for the amount of the unredeemed portion hereof shall be issued in the name of the holder hereof upon the cancellation hereof. Notwithstanding the foregoing, this Note may be redeemed in accordance with the terms of any Extension Notice, as defined below, sent to the holder hereof as described below. If so indicated on the face of this Note, this Note will be subject to repayment at the option of the holder on the Optional Repayment Date or Dates specified on the face hereof on the terms set forth herein. On any Optional Repayment Date, this Note will be repayable in whole or in part in increments of $1,000 or, if this Note is denominated in a Specified Currency other than U.S. dollars, in increments of 1,000 units of such Specified Currency (provided that any remaining principal amount hereof shall not be less than the minimum authorized denomination hereof) at the option of the holder hereof at a price equal to 100% of the principal amount to be repaid, together with interest accrued and unpaid hereon to the date of repayment (except as provided below). 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 days prior to the date of repayment, (i) this Note with the form entitled "Option to Elect Repayment" below duly completed or (ii) a telegram, telex, facsimile transmission or a letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States setting forth the name of the holder of this Note, the principal amount hereof, the certificate number of this Note or a description of this Note's tenor and terms, the principal amount hereof to be repaid, a statement that the option to elect repayment is being exercised thereby and a guarantee that this Note, together with the form entitled "Option to Elect Repayment" duly completed, will be received by the Paying Agent not later than the fifth Business Day after the date of such telegram, telex, facsimile transmission or letter; provided, that such telegram, telex, facsimile transmission or letter shall only be effective if this Note and form duly completed are received by the Paying Agent by such fifth Business Day. Exercise of such repayment option by the holder hereof shall be irrevocable. In the event of repayment of this Note in part only, a new Note or Notes for the amount of the unpaid portion hereof shall be issued in the name of the holder hereof upon the cancellation hereof. If so indicated on the face of this Note, the Issuer has the option to extend the Original Maturity Date hereof for one or more periods of one or more whole years (each an "Extension Period") up to but not beyond the Final Maturity Date specified on the face hereof and in connection therewith to establish a new interest rate and new redemption provisions for the Extension Period. The Issuer may exercise such option by notifying the Paying Agent of such exercise at least 45 but not more than 60 days prior to the Original Maturity Date or, if the maturity hereof has already been extended, prior to the maturity date then in effect (an "Extended Maturity Date"), such notice to be accompanied by the form of the Extension Notice referred to below. No later than 38 days prior to the Original Maturity Date or an Extended Maturity Date, as the case may be (each, a "Maturity Date"), the Paying Agent will mail to the holder hereof a notice (the "Extension Notice") relating to such Extension Period, first class mail, postage prepaid, setting forth (a) the election of the Issuer to extend the maturity of this Note; (b) the new Extended Maturity Date; (c) the interest rate applicable to the Extension Period; and (d) the provisions, if any, for redemption during the Extension Period, including the date or dates on which, the period or periods during which and the price or prices at which such redemption may occur during the Extension Period. Upon the mailing by the Paying Agent of an Extension Notice to the holder of this Note, the maturity hereof shall be extended automatically, and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms it had prior to the mailing of such Extension Notice. Notwithstanding the foregoing, not later than 10:00 A.M., New York City time, on the twentieth calendar day prior to the Maturity Date in effect immediately preceding the mailing of the applicable Extension Notice (or if such day is not a Business Day, not later than 10:00 A.M., New York City time, on the immediately succeeding Business Day), the Issuer may, at its option, revoke the interest rate provided for in such Extension Notice and establish a higher interest rate for the Extension Period by causing the Paying Agent to send notice of such higher interest rate to the holder of this Note by first class mail, postage prepaid, or by such other means as shall be agreed between the Issuer and the Paying Agent. Such notice shall be irrevocable. All Notes with respect to which the Maturity Date is extended in accordance with an Extension Notice will bear such higher interest rate for the Extension Period, whether or not tendered for repayment. If the Issuer elects to extend the maturity hereof, the holder of this Note will have the option to require the Issuer to repay this Note on the Maturity Date in effect immediately preceding the mailing of the applicable Extension Notice at a price equal to the principal amount hereof plus any accrued and unpaid interest to such date. In order for this Note to be so repaid on such Maturity Date, the holder hereof must follow the procedures set forth above for optional repayment, except that the period for delivery of this Note or notification to the Paying Agent shall be at least 25 but not more than 35 days prior to the Maturity Date in effect immediately preceding the mailing of the applicable Extension Notice and except that if the holder hereof has tendered this Note for repayment pursuant to this paragraph he may, by written notice to the Paying Agent, revoke any such tender for repayment until 3:00 P.M., New York City time, on the twentieth calendar day prior to the Maturity Date then in effect (or, if such day is not a Business Day, until 3:00 P.M., New York City time, on the immediately succeeding Business Day). Interest payments on this Note will 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. Interest payments for this Note will 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, is issuable only in denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess thereof. If this Note is denominated in a Specified Currency other than U.S. dollars, then, unless a higher minimum denomination is required by applicable law, it is issuable only in denominations of the equivalent of U.S. $1,000 (rounded to an integral multiple of 1,000 units of such Specified Currency), or any amount in excess thereof which is an integral multiple of 1,000 units of such Specified Currency, as determined by reference to the noon dollar buying rate in New York City for cable transfers of such Specified Currency published by the Federal Reserve Bank of New York (the "Market Exchange Rate") on the Business Day immediately preceding the date of issuance; provided, however, in the case of ECUs, the Market Exchange Rate shall be the rate of exchange determined by the Commission of the European Communities (or any successor thereto) as published in the Official Journal of the European Communities, or any successor publication, on the Business Day immediately preceding the date of issuance. The Trustee has been appointed registrar for the Notes, and the Trustee will maintain at its office in The City of New York a register for the registration and transfer of Notes. This Note may be transferred at the aforesaid office of the Trustee by surrendering this Note for cancellation, accompanied by a written instrument of transfer in form satisfactory to the Trustee and duly executed by the registered holder hereof in person or by the holder's attorney duly authorized in writing, and thereupon the Trustee shall issue in the name of the transferee or transferees, in exchange herefor, a new Note or Notes having identical terms and provisions and having a like aggregate principal amount in authorized denominations, subject to the terms and conditions set forth herein; provided, however, that the Trustee will not be required (i) to register the transfer of or exchange any Note that has been called for redemption in whole or in part, except the unredeemed portion of Notes being redeemed in part, (ii) to register the transfer of or exchange any Note if the holder thereof has exercised his right, if any, to require the Issuer to repurchase such Note in whole or in part, except the portion of such Note not required to be repurchased, or (iii) to register the transfer of or exchange Notes to the extent and during the period so provided in the Senior Indenture with respect to the redemption of Notes. Notes are exchangeable at said office for other Notes of other authorized denominations of equal aggregate principal amount having identical terms and provisions. All such exchanges and transfers of Notes will be free of charge, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge in connection therewith. All Notes surrendered for exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Trustee and executed by the registered holder in person or by the holder's attorney duly authorized in writing. The date of registration of any Note delivered upon any exchange or transfer of Notes shall be such that no gain or loss of interest results from such exchange or transfer. In case any Note shall at any time become mutilated, defaced or be destroyed, lost or stolen and such Note or evidence of the loss, theft or destruction thereof (together with the indemnity hereinafter referred to and such other documents or proof as may be required in the premises) shall be delivered to the Trustee, a new Note of like tenor will be issued by the Issuer in exchange for the Note so mutilated or defaced, or in lieu of the Note so destroyed or lost or stolen, but, in the case of any destroyed or lost or stolen Note, only upon receipt of evidence satisfactory to the Trustee and the Issuer that such Note was destroyed or lost or stolen and, if required, upon receipt also of indemnity satisfactory to each of them. All expenses and reasonable charges associated with procuring such indemnity and with the preparation, authentication and delivery of a new Note shall be borne by the owner of the Note mutilated, defaced, destroyed, lost or stolen. The Senior Indenture provides that, (a) if an Event of Default (as defined in the Senior Indenture) due to the default in payment of principal of, premium, if any, or interest on, any series of debt securities issued under the Senior Indenture, including the series of Senior Medium-Term Notes of which this Note forms a part, or due to the default in the performance or breach of any other covenant or warranty of the Issuer applicable to the debt securities of such series but not applicable to all outstanding debt securities issued under the Senior Indenture shall have occurred and be continuing, either the Trustee or the holders of not less than 25% in principal amount of the debt securities of each affected series (voting as a single class) may then declare the principal of all debt securities of all such series and interest accrued thereon to be due and payable immediately and (b) if an Event of Default due to a default in the performance of any other of the covenants or agreements in the Senior Indenture applicable to all outstanding debt securities issued thereunder, including this Note, or due to certain events of bankruptcy, insolvency and reorganization of the Issuer, shall have occurred and be continuing, either the Trustee or the holders of not less than 25% in principal amount of all debt securities issued under the Senior Indenture then outstanding (treated as one class) may declare the principal of all such debt securities and interest accrued thereon to be due and payable immediately, but upon certain conditions such declarations may be annulled and past defaults may be waived (except a continuing default in payment of principal (or premium, if any) or interest on such debt securities) by the holders of a majority in principal amount of the debt securities of all affected series then outstanding. If the face hereof indicates that this Note is subject to "Modified Payment upon Acceleration," 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. The Senior Indenture permits the Issuer and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of the debt securities of all series issued under the Senior Indenture then outstanding and affected (voting as one class), to execute supplemental indentures adding any provisions to or changing in any manner the rights of the holders of each series so affected; provided that the Issuer and the Trustee may not, without the consent of the holder of each outstanding debt security affected thereby, (a) extend the final maturity of any such debt security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption or repayment thereof, or change the currency of payment thereof, or impair or affect the rights of any holder to institute suit for the payment thereof without the consent of the holder of each debt security so affected; or (b) reduce the aforesaid percentage in principal amount of debt securities the consent of the holders of which is required for any such supplemental indenture, without the consent of the holders of each debt security so affected. Except as set forth below, if the principal of, premium, if any, or interest on, this Note is payable in a Specified Currency other than U.S. dollars and such Specified Currency is not available to the Issuer for making payments hereon due to the imposition of exchange controls or other circumstances beyond the control of the Issuer or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions within the international banking community, then the Issuer will be entitled to satisfy its obligations to the holder of this Note by making such payments in U.S. dollars on the basis of the Market Exchange Rate on the date of such payment or, if the Market Exchange Rate is not available on such date, as of the most recent practicable date. Any payment made under such circumstances in U.S. dollars where the required payment is in a Specified Currency other than U.S. dollars will not constitute an Event of Default. If payment in respect of this Note is required to be made in ECUs and ECUs are unavailable due to the imposition of exchange controls or other circumstances beyond the Issuer's control or are no longer used as either the unit of account of the European Community or as the currency of the European Union, then all payments in respect of this Note shall be made in U.S. dollars until ECUs are again available or so used. The amount of each payment in U.S. dollars shall be computed on the basis of the equivalent of the ECU in U.S. dollars, determined as described below, as of the second Business Day prior to the date on which such payment is due. The equivalent of the ECU in U.S. dollars as of any date shall be determined by the Issuer or its agent on the following basis. The component currencies of the ECU for this purpose (the "Components") shall be the currency amounts that were components of the ECU as of the last date on which the ECU was used as the unit of account of the European Community. The equivalent of the ECU in U.S. dollars shall be calculated by aggregating the U.S. dollar equivalents of the Components. The U.S. dollar equivalent of each of the Components shall be determined by the Issuer or such agent on the basis of the most recently available Market Exchange Rates for such Components. All determinations referred to above made by the Issuer or its agent shall be at its sole discretion and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all purposes and binding on the holder of this Note. So long as this Note shall be outstanding, the Issuer will cause to be maintained an office or agency for the payment of the principal of and premium, if any, and interest on this Note as herein provided in the Borough of Manhattan, The City of New York, and an office or agency in said Borough of Manhattan for the registration, transfer and exchange as aforesaid of the Notes. The Issuer may designate other agencies for the payment of said principal, premium and interest at such place or places (subject to applicable laws and regulations) as the Issuer may decide. So long as there shall be such an agency, the Issuer shall keep the Trustee advised of the names and locations of such agencies, if any are so designated. With respect to moneys paid by the Issuer and held by the Trustee 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, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. This Note shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York. All terms used in this Note which are defined in the Senior Indenture and not otherwise defined herein shall have the meanings assigned to them in the Senior Indenture. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM-as tenants in common TEN ENT-as tenants by the entireties JT TEN-as joint tenants with right of survivorship and not as tenants in common UNIF GIFT MIN ACT-...........Custodian.............. (Cust) (Minor) Under Uniform Gifts to Minors Act................... (State) Additional abbreviations may also be used though not in the above list. ------------- FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto [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. OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably requests and instructs the Issuer to repay the within Note (or portion thereof specified below) pursuant to its terms at a price equal to the principal amount thereof, together with interest to the Optional Repayment Date, to the undersigned at ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ (Please print or typewrite name and address of the undersigned) If less than the entire principal amount of the within Note is to be repaid, specify the portion thereof which the holder elects to have repaid: __________________; and specify the denomination or denominations (which shall not be less than the minimum authorized denomination) of the Notes to be issued to the holder for the portion of the within Note not being repaid (in the absence of any such specification, one such Note will be issued for the portion not being repaid): ______________________________. Dated:_______________ ___________________________________________ NOTICE: The signature on this Option to Elect Repayment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement. ANNEX A OFFICIAL NOTICE OF EXCHANGE Dated: [On or after March 13, 1996] -------------------------- Morgan Stanley Group Inc. 1585 Broadway New York, New York 10036 Morgan Stanley & Co. Incorporated, as Calculation Agent 1585 Broadway New York, New York 10036 Fax No.: (212) 761-0028 (Attn: Richard P. Sandulli) Dear Sirs: The undersigned holder of the Medium Term Notes, Series C (Senior Fixed Rate Notes), Exchangeable Notes Due December 31, 2001 (Exchangeable for American Depositary Receipts ("SBH ADRs") Representing Class A Ordinary Shares of SmithKline Beecham plc) of Morgan Stanley Group Inc. (the "Notes") hereby irrevocably elects to exercise with respect to the principal amount of the Notes indicated below, as of the next Exchange Date after the date hereof (or, if this letter is received after 11:00 a.m. on any Business Day, as of the second Exchange Date after the date hereof, provided that such day is prior to the earliest of (i) December 31, 2001, (ii) the Call Date and (iii) in the event of a call for cash at the Call Price, the Company Notice Date), the Exchange Right as described in Pricing Supplement No. 23 dated December 6, 1995 (the "Pricing Supplement") to the Prospectus Supplement dated March 29, 1995 and the Prospectus dated March 29, 1995 related to Registration Statement No. 33-57833. Capitalized 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 the Company will deliver, at its sole option, SBH ADRs of SmithKline Beecham or cash 3 Business Days after the Exchange Date in accordance with the terms of the Notes, as described in the Pricing Supplement. Very truly yours, __________________________ [Name of Holder] By:_______________________ [Title] ___________________ [Fax No.] $__________________________ Principal Amount of Notes surrendered for exchange Receipt of the above Official Notice of Exchange is hereby acknowledged MORGAN STANLEY GROUP INC., as Issuer MORGAN STANLEY & CO. INCORPORATED, as Calculation Agent By MORGAN STANLEY & CO. INCORPORATED, as Calculation Agent By: _________________________________________ Title: Date and time of acknowledgement_____________ -----END PRIVACY-ENHANCED MESSAGE-----