EXHIBIT (4)
THIS NOTE IS A GLOBAL NOTE WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TRUST COMPANY (THE
“DEPOSITORY”) TO A NOMINEE OF THE DEPOSITORY OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS GLOBAL NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
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REGISTERED
No.:
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CUSIP
No.:
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PRINCIPAL AMOUNT:
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MERRILL LYNCH & CO.,
INC.
Medium-Term Notes, Series C
Knock-In Notes
(the “Notes”)
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ORIGINAL ISSUE DATE:
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STATED
MATURITY:
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INITIAL
PRICE:
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KNOCK-IN PRICE:
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MULTIPLIER:
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REFERENCE
PROPERTY:
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REFERENCE SECURITIES:
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CALCULATION
AGENT:
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INTEREST
RATE:
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INTEREST PAYMENT DATE:
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BUSINESS
DAY:
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TRADING
DAY:
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DENOMINATIONS:
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SPECIFIED
CURRENCY:
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DEFAULT
RATE:
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3
Merrill Lynch & Co., Inc.,
a Delaware corporation (hereinafter referred to as the
“Company”, which term includes any successor
corporation under the Indenture herein referred to), for value
received, hereby promises to deliver to CEDE & CO., or its
registered assigns interest at the Interest Rate payable monthly in
arrears on the Interest Payment Dates during the term of the Notes.
At the Stated Maturity the Company hereby promises to pay to
CEDE & CO., or its registered assigns, the Redemption
Amount (as defined below) or deliver the Reference Property, as
applicable, plus any accrued and unpaid interest.
Payment or delivery of interest and
the Redemption Amount or the Reference Property and any interest on
any overdue amount thereof with respect to this Global Note shall
be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, in such
coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private
debts.
Interest
The Company shall pay interest on
the Notes at the Interest Rate on the Principal Amount specified
above from and including the Original Issue Date or from and
including the most recent Interest Payment Date for which interest
has been paid or provided for, to but excluding the Stated
Maturity. The Company shall pay interest on the Notes in cash on
each Interest Payment Date. The Company shall pay such interest to
the persons in whose names the Notes are registered at the close of
business on the fifteenth calendar day preceding each Interest
Payment Date, whether or not a Business Day. At the Stated
Maturity, the final payment of interest shall be paid to the person
to whom the Company delivers the Redemption Amount or the Reference
Property, as the case may be. Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day months. If
an Interest Payment Date falls on a day that is not a Business Day,
that interest payment shall be made on the next Business Day and no
additional interest shall accrue as a result of the delayed payment
or delivery.
Payment at the Stated
Maturity
At the Stated Maturity, a holder of
this Global Note (“Holder”) shall be entitled to
receive the Redemption Amount of this Note, or the delivery of the
Reference Property, as provided below.
The “Redemption Amount”,
and whether Reference Property shall be delivered, shall be
determined as follows:
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(i)
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If the Closing
Market Price (as defined below) of the Reference Property is equal
to or above the Knock-In Price on each Trading Day during the term
of the Notes, or the Ending Value (as defined below) is equal to or
greater than the Initial Price, the Redemption Amount shall equal
the Principal Amount specified above.
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(ii)
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If the Closing
Market Price of the Reference Property is below the Knock-In Price
on any Trading Day during the term of the Notes and the Ending
Value is less than the Initial Price, the Company shall deliver to
a Holder a number of units of the Reference Property equal to the
then current Multiplier for each $1,000 of the Principal Amount of
this Note.
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The Reference Property shall be
subject to adjustment from time to time in accordance with the
adjustment provisions described below under “Dilution and
Reorganization Adjustments”.
The Company shall not distribute the
Reference Property in lot amounts of less than 100 units of the
Reference Property or multiples thereof. If the number of units of
the Reference Property to be delivered at the Stated Maturity is
not divisible by 100, the Company shall aggregate all rights due to
a registered Holder at the Stated Maturity, and, in lieu of
delivering lots of less than 100 Reference Property, the Company
shall pay to the Holder the cash value of any Reference Property in
lots of less than 100 units based on the Closing Market Price. In
addition, the Company shall not distribute fractional rights to the
Reference Property and shall deliver the cash value of any
fractional rights based on the Closing Market Price.
If the Calculation Agent in its sole
discretion determines that it shall be impracticable for the
Company to deliver the Reference Property, whether due to the
occurrence of a Market Disruption Event (as defined below) or any
other event or circumstance, then the Company shall discharge its
obligations in respect of the Notes by payment of a cash settlement
price based on a valuation of the Reference Property as determined
by the Calculation Agent on a commercially reasonable
basis.
4
The “Ending Value” shall
be determined by the Calculation Agent and shall equal the value of
the Reference Property determined as follows:
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(A)
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for any portion
of the Reference Property consisting of cash:
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interest on the
amount accruing from and including the date of the payment of that
cash to holders of the Reference Property for which that cash was
paid to but excluding the Stated Maturity at a fixed interest rate
determined on the date of the payment equal to the interest rate
that would be paid on a fixed rate senior non-callable debt
security of the Company with a term approximately equal to the
remaining term for the Notes as determined by the Calculation
Agent;
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(B)
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for any portion
of the Reference Property consisting of property other than cash or
Reference Securities:
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•
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the market
value of that property, as determined by the Calculation Agent on
the date that the property was delivered to holders of the relevant
Reference Property for which the property was distributed,
plus
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•
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interest on the
amount accruing from and including the date of delivery to but
excluding the Stated Maturity at a fixed interest rate determined
as described in (A) above; and
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(C)
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for any portion
of the Reference Property consisting of Reference Securities, the
Closing Market Prices of each such Reference Security determined on
the third scheduled Trading Day before the Stated Maturity. If that
day is not a Trading Day, or if a Market Disruption Event has
occurred on that Trading Day, then the Ending Value shall equal the
Closing Market Prices of that Reference Security on the second
scheduled Trading Day before the Stated Maturity, regardless of the
occurrence of a Market Disruption Event on that scheduled Trading
Day. If the Closing Market Price cannot be determined on such
second scheduled Trading Day, then the Ending Value shall be
determined by the Calculation Agent in a manner which is considered
commercially reasonable under the circumstances.
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“Closing Market Price”
means:
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(a)
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If the
Reference Property (or any other security for which a closing
market price must be determined for purposes of the Notes) are
listed or admitted to trading on a national securities exchange in
the United States registered under the Exchange Act
(“registered national securities exchange”), are
included in the OTC Bulletin Board Service (“OTC Bulletin
Board”) operated by the National Association of Securities
Dealers, Inc. or are quoted on a United States quotation medium or
inter-dealer quotation system, then the closing market price
means:
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the last
reported sale price, regular way, on that day on the principal
registered national securities exchange on which that security is
listed or admitted to trading (without taking into account any
extended or after-hours trading session);
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if the last
reported sale price is not obtainable on a registered national
securities exchange, then the last reported sale price on the
over-the-counter market as reported on the OTC Bulletin Board or,
if not available on the OTC Bulletin Board, then the last reported
sale price on any other United States quotation medium or
inter-dealer quotation system on that day (without taking into
account any extended or after-hours trading session); or
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5
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if the last
reported sale price is not available for any reason on a registered
national securities exchange, on the OTC Bulletin Board, or on any
other United States quotation medium or inter-dealer quotation
system, including, without limitation, the occurrence of a Market
Disruption Event, as described below, then the mean of the last
reported bid and offer price of the principal trading session on
the registered national securities exchange, or if there were no
bids and offers on such exchange, then the mean of the last
reported bid and offer on the over-the-counter market as reported
on the OTC Bulletin Board or, if there were no bids and offers on
the OTC Bulletin Board, then the mean of the last reported bid and
offer on any other United States quotation medium or inter-dealer
quotation system on that day as determined by the Calculation Agent
or from as many dealers in that security, but not exceeding three,
as have made the bid prices available to the Calculation Agent
after 3:00 p.m., local time in the principal market, on that date
(without taking into account any extended or after-hours trading
session).
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(b)
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If the
Reference Property (or any other security for which a closing
market price must be determined for purposes of the Notes) are not
listed on a registered national securities exchange, are not
included in the OTC Bulletin Board, or are not quoted on any other
United States quotation medium or inter-dealer system, then the
closing market price means for the Reference Property (or any other
security for which a closing market price must be determined for
purposes of the Notes) then the last reported sale price on that
day on the foreign securities exchange on which that security is
listed or admitted to trading with the greatest volume of trading
for the calendar month preceding that Trading Day as determined by
the Calculation Agent; provided that if that last reported sale
price is for a transaction which occurred more than four hours
prior to the close of that foreign exchange, then the closing
market price shall mean the arithmetic mean of the last available
bid and offer price on that foreign exchange.
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If the Reference Property (or any
other security for which a closing market price must be determined
for purposes of the Notes) are not so listed on a registered
national securities exchange, are not included in the OTC Bulletin
Board, are not quoted on any other United States quotation medium
or inter-dealer quotation system, are not listed or admitted to
trading on any foreign securities exchange or if the last reported
sale price or bid and offer are not obtainable, then the closing
market price shall mean the arithmetic mean of the last available
bid and offer prices in that market of the three dealers which have
the highest volume of transactions in that security in the
immediately preceding calendar month as determined by the
Calculation Agent based on information that is reasonably available
to it.
“Market Disruption
Event” means either of the following events as determined by
the Calculation Agent:
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(A)
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a suspension
of, absence of, including the absence of an official closing price,
or material limitation on, trading of the Reference Property on the
primary market for the Reference Property for more than two hours
of trading or during the one-half hour period preceding the close
of trading, as determined by the Calculation Agent in its sole
discretion; or the suspension or material limitation on the primary
market for trading in options contracts related to the Reference
Property, 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
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(B)
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a determination
by the Calculation Agent in its sole discretion that the event
described in clause (A) above materially interfered with the
ability of the Company, Merrill Lynch Pierce Fenner &
Smith Incorporated or any of their affiliates to unwind all or a
material portion of the hedge with respect to the Notes.
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6
For purposes of determining whether
a Market Disruption Event has occurred:
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(1)
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a limitation on
the hours in a trading day and/or number of days of trading shall
not constitute a Market Disruption Event if it results from an
announced change in the regular business hours of the applicable
exchange;
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(2)
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a suspension in
trading in a futures or option contract in the Reference Property,
by a major securities market by reason of (a) a price change
violating limits set by that securities market, (b) an
imbalance of orders relating to those contracts or (c) a
disparity in bid and ask quotes relating to those contracts shall
constitute a suspension of or material limitation on trading in
futures or option contracts related to that stock;
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(3)
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a suspension of
or material limitation on trading on the applicable exchange shall
not include any time when that exchange is closed for trading under
ordinary circumstances; and
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(4)
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for the purpose
of clause (A) abov
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