DISTRIBUTION AGREEMENT

EXHIBIT 1-f

MORGAN STANLEY

Morgan Stanley DirectSecurities(SM)

DISTRIBUTION AGREEMENT

[ ], 2005

Morgan Stanley

1585 Broadway

New York, New York 10036

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Dear Sirs:

Morgan Stanley, a Delaware corporation (the "Company"), confirms its

agreement with you with respect to the issue and sale from time to time by the

Company of up to U.S.$[ ] aggregate initial public offering price of its

Morgan Stanley DirectSecurities(SM) due more than nine months from the date of

issue (the "Notes") or such larger aggregate initial public offering price as

the Company may determine to offer (the "Program Capacity"), subject to

reduction as a result of the sale of the Company's (i) Global Medium-Term Notes,

Series F (issued other than as part of a Unit), (ii) Global Units, Series F,

(iii) Global Medium-Term Notes, Series G and Series H (issued other than as part

of a Unit), to be sold primarily outside of the United States, and (iv) Global

Units, Series G and Series H, to be sold primarily outside of the United States,

and the sale of certain of the Company's other debt securities, warrants,

preferred stock, common stock, purchase contracts and units and of capital

securities of certain Morgan Stanley Capital Trusts (together with the Notes,

the "Program Securities") in excess of an aggregate initial public offering

price equal to U.S. $[ ] minus the Program Capacity.

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The Notes will be issued as senior indebtedness pursuant to the provisions

of a senior indenture dated as of November 1, 2004, between the Company and

JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as trustee

(the "Trustee") (as may be supplemented or amended from time to time, the

"Indenture").

The Notes will have the maturities, interest rates, redemption provisions,

if any, and other terms as set forth in supplements to the Basic Prospectus

referred to below.

The Company hereby appoints you as its exclusive agents for the purpose of

soliciting and receiving offers to purchase Notes from the Company by others

and, on the basis of the representations and warranties herein contained, but

subject to the terms and conditions herein set forth, you agree to use

reasonable efforts to solicit and receive offers to purchase Notes upon terms

acceptable to the Company at such times and in such amounts as the Company shall

from time to time specify. In addition, you may also purchase Notes as principal

pursuant to the terms of a terms agreement relating to such sale (a "Notes Terms

Agreement") in accordance with the provisions of Section 2(b) hereof.

The Company has filed with the Securities and Exchange Commission (the

"Commission") a registration statement, including a prospectus, relating to the

Notes. Such registration statement, including the exhibits thereto, as amended

at the Commencement Date (as hereinafter defined), is hereinafter referred to as

the "Registration Statement." The Company proposes to file with the Commission

from time to time, pursuant to Rule 424 under the Securities Act of 1933, as

amended (the "Securities Act"), supplements to the prospectus relating to the

Notes included in the Registration Statement that will describe certain terms of

the Notes. The prospectus relating to the Notes in the form in which it appears

in the Registration Statement is hereinafter referred to as the "Basic

Prospectus." The term "Prospectus" means the Basic Prospectus together with the

prospectus supplement or supplements (each, a "Prospectus Supplement")

specifically relating to the Notes, as filed with, or transmitted for filing to,

the Commission pursuant to Rule 424 under the Securities Act. As used herein,

the terms "Basic Prospectus" and "Prospectus" shall include in each case the

documents, if any, incorporated by reference therein. The terms "supplement,"

"amendment" and "amend" as used herein shall include all documents deemed to be

incorporated by reference in the Prospectus that are filed subsequent to the

date of the Basic Prospectus by the Company with the Commission pursuant to the

Securities Exchange Act of 1934, as amended (the "Exchange Act"). If the Company

has filed an abbreviated registration statement to register additional Program

Securities pursuant to Rule 462(b) under the Securities Act (the "Rule 462

Registration Statement"), then any reference herein to the term "Registration

Statement" shall be deemed to include such Rule 462 Registration Statement.

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1. Representations and Warranties. The Company represents and warrants to

and agrees with you as of the Commencement Date, as of each date on which you

solicit offers to purchase Notes, as of each date on which the Company accepts

an offer to purchase Notes (including any purchase by you as principal pursuant

to a Notes Terms Agreement), as of each date the Company issues and delivers

Notes and as of each date the Registration Statement or the Basic Prospectus is

amended or supplemented, as follows (it being understood that such

representations, warranties and agreements shall be deemed to relate to the

Registration Statement, the Basic Prospectus and the Prospectus, each as amended

or supplemented to each such date):

(a) The Registration Statement has become effective, no stop order

suspending the effectiveness of the Registration Statement is in effect, and no

proceedings for such purpose are pending before or threatened by the Commission.

(b) (i) Each document, if any, filed or to be filed pursuant to the

Exchange Act and incorporated by reference in the Prospectus complied or will

comply when so filed in all material respects with the Exchange Act and the

applicable rules and regulations of the Commission thereunder, (ii) each part of

the Registration Statement, when such part became effective, did not contain and

each such part, as amended or supplemented, if applicable, will not contain any

untrue statement of a material fact or omit to state a material fact required to

be stated therein or necessary to make the statements therein not misleading,

(iii) the Registration Statement and the Prospectus comply and, as amended or

supplemented, if applicable, will comply in all material respects with the

Securities Act and the applicable rules and regulations of the Commission

thereunder and (iv) the Prospectus does not contain and, as amended or

supplemented, if applicable, will not contain any untrue statement of a material

fact or omit to state a material fact necessary to make the statements therein,

in the light of the circumstances under which they were made, not misleading,

except that (1) the representations and warranties set forth in this Section

1(b) do not apply (A) to statements or omissions in the Registration Statement

or the Prospectus based upon information relating to you furnished to the

Company in writing by you expressly for use therein or (B) to those parts of the

Registration Statement that constitute the Statements of Eligibility (Form T-1)

under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),

of the Trustees and (2) the representations and warranties set forth in clauses

(iii) and (iv) above, when made as of the Commencement Date or as of any date on

which you solicit offers to purchase Notes or on which the Company accepts an

offer to purchase Notes, shall be deemed not to cover information concerning an

offering of particular Notes to the extent such information will be set forth in

a supplement to the Basic Prospectus.

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(c) The Company has been duly incorporated, is validly existing as a

corporation in good standing under the laws of the State of Delaware, has the

corporate power and authority to own its property and to conduct its business as

described in the Prospectus and is duly qualified to transact business and is in

good standing in each jurisdiction in which the conduct of its business or its

ownership or leasing of property requires such qualification, except to the

extent that the failure to be so qualified or be in good standing would not have

a material adverse effect on the Company and its consolidated subsidiaries,

taken as a whole.

(d) Each subsidiary of the Company has been duly incorporated, is validly

existing as a corporation in good standing under the laws of the jurisdiction of

its incorporation, has the corporate power and authority to own its property and

to conduct its business as described in the Prospectus and is duly qualified to

transact business and is in good standing in each jurisdiction in which the

conduct of its business or its ownership or leasing of property requires such

qualification, except to the extent that the failure to be so qualified or be in

good standing would not have a material adverse effect on the Company and its

consolidated subsidiaries, taken as a whole.

(e) Each of this Agreement and any applicable Written Notes Terms Agreement

(as hereinafter defined) has been duly authorized, executed and delivered by the

Company.

(f) The Indenture has been duly qualified under the Trust Indenture Act and

has been duly authorized, executed and delivered by the Company and is a valid

and binding agreement of the Company, enforceable in accordance with its terms

except as the enforceability thereof (i) may be limited by bankruptcy,

insolvency, reorganization, liquidation, moratorium and other similar laws

affecting creditors' rights generally and (ii) is subject to general principles

of equity, regardless of whether such enforceability is considered at a

proceeding in equity or at law.

(g) The form of the Notes has been duly authorized and established in

conformity with the provisions of the Indenture and, when the Notes have been

executed and authenticated in accordance with the provisions of the Indenture

and delivered to and duly paid for by the purchasers thereof, the Notes will be

entitled to the benefits of such Indenture and will be valid and binding

obligations of the Company, enforceable in accordance with their respective

terms except as the enforceability thereof (i) may be limited by bankruptcy,

insolvency, reorganization, liquidation, moratorium and other similar laws

affecting creditors' rights generally and (ii) is subject to general principles

of equity, regardless of whether such enforceability is considered at a

proceeding in equity or at law.

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(h) The execution and delivery by the Company of this Agreement, the Notes,

the Indenture and any applicable Written Notes Terms Agreement and the

performance by the Company of its obligations under this Agreement, the Notes,

the Indenture and any applicable Notes Terms Agreement will not contravene any

provision of applicable law or the certificate of incorporation or by-laws of

the Company or any agreement or other instrument binding upon the Company or any

of its subsidiaries that is material to the Company and its consolidated

subsidiaries, taken as a whole, or any judgment, order or decree of any

governmental body, agency or court having jurisdiction over the Company or any

consolidated subsidiary, and no consent, approval, authorization or order of, or

qualification with, any governmental body or agency is required for the

performance by the Company of its obligations under this Agreement, the Notes,

the Indenture and any applicable Notes Terms Agreement, except such as may be

required by the securities or Blue Sky laws of the various states in connection

with the offer and sale of the Notes; provided, however, that no representation

is made or warranty given as to whether the purchase of the Notes constitutes a

"prohibited transaction" under Section 406 of the Employee Retirement Income

Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code

of 1986, as amended.

(i) There has not occurred any material adverse change, or any development

involving a prospective material adverse change, in the condition, financial or

otherwise, or in the earnings, business or operations of the Company and its

subsidiaries, taken as a whole, from that set forth in the Prospectus.

(j) There are no legal or governmental proceedings pending or threatened to

which the Company or any of its consolidated subsidiaries is a party or to which

any of the properties of the Company or any of its consolidated subsidiaries is

subject that are required to be described in the Registration Statement or the

Prospectus and are not so described or any statutes, regulations, contracts or

other documents that are required to be described in the Registration Statement

or the Prospectus or to be filed or incorporated by reference as exhibits to the

Registration Statement that are not described, filed or incorporated as

required.

(k) Each of the Company and its consolidated subsidiaries has all necessary

consents, authorizations, approvals, orders, certificates and permits of and

from, and has made all declarations and filings with, all federal, state, local

and other governmental authorities, all self-regulatory organizations and all

courts and other tribunals, to own, lease, license and use its properties and

assets and to conduct its business in the manner described in the Prospectus,

except to the extent that the failure to obtain or file would not have a

material adverse effect on the Company and its consolidated subsidiaries, taken

as a whole.

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(l) Morgan Stanley is registered as a broker-dealer and investment adviser

with the Commission, is registered with the Commodity Futures Trading Commission

as a futures commission merchant and is a member of the New York Stock Exchange,

Inc. and the National Association of Securities Dealers, Inc.

(m) Morgan Stanley & Co. Incorporated is registered as a broker-dealer and

investment adviser with the Commission, is registered with the Commodity Futures

Trading Commission as a futures commission merchant and is a member of the New

York Stock Exchange, Inc. and the National Association of Securities Dealers,

Inc.

(n) The Company is not, and after giving effect to the offering and sale of

the Notes and the application of the proceeds thereof as described in the

Prospectus, will not be required to register as, an "investment company" as such

term is defined in the Investment Company Act of 1940, as amended.

2. Solicitations as Agents; Purchases as Principals.

(a) Solicitations as Agents. In connection with your actions as agents

hereunder, you agree to use reasonable efforts to solicit offers to purchase

Notes upon the terms and conditions set forth in the Prospectus as then amended

or supplemented.

The Company reserves the right, in its sole discretion, to instruct you to

suspend at any time, for any period of time or permanently, the solicitation of

offers to purchase Notes. Upon receipt of at least one business day's prior

notice from the Company, you will forthwith suspend solicitations of offers to

purchase Notes from the Company until such time as the Company has advised you

that such solicitation may be resumed. While such solicitation is suspended, the

Company shall not be required to deliver any certificates, opinions or letters

in accordance with Sections 5(a), 5(b) and 5(c); provided, however, that if the

Registration Statement or Prospectus is amended or supplemented during the

period of suspension (other than by an amendment or supplement providing solely

for (i) a change in the interest rates, repayment provisions, redemption

provisions or maturities offered on the Notes or (ii) for a change you deem to

be immaterial), you shall not be required to resume soliciting offers to

purchase Notes until the Company has delivered such certificates, opinions and

letters as you may request.

The Company agrees to pay to you, as consideration for the sale of each

Note resulting from a solicitation made or an offer to purchase received by you,

a commission in the form of a discount from the purchase price of such Note

equal to between 0.2% and 3.0% (depending upon such Note's maturity) of the

principal amount of such Note or such other discount as may be specified in the

Prospectus Supplement relating to such Note.

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You shall communicate to the Company, orally or in writing, each offer to

purchase Notes received by you as agent that in your judgment should be

considered by the Company. The Company shall have the sole right to accept

offers to purchase Notes and may reject any offer in whole or in part. You shall

have the right to reject any offer to purchase Notes that you consider to be

unacceptable, and any such rejection shall not be deemed a breach of your

agreements contained herein. The procedural details relating to the issue and

delivery of Notes sold by you as agent and the payment therefor shall be as set

forth in the Administrative Procedures (as hereinafter defined).

(b) Purchases as Principals. Each sale of Notes to you as principals shall

be made in accordance with the terms of this Agreement. In connection with each

such sale, the Company will enter into a Notes Terms Agreement that will provide

for the sale of such Notes to and the purchase thereof by you. Each Notes Terms

Agreement will take the form of either (i) a written agreement between you and

the Company, which may be substantially in the form of Exhibit A hereto (a

"Written Notes Terms Agreement"), or (ii) an oral agreement between you and the

Company confirmed in writing by you to the Company.

Your commitment to purchase Notes as principal pursuant to a Notes Terms

Agreement shall be deemed to have been made on the basis of the representations

and warranties of the Company herein contained and shall be subject to the terms

and conditions herein set forth. Each Notes Terms Agreement shall specify the

principal amount of Notes to be purchased by you pursuant thereto, the maturity

date of such Notes, the price to be paid to the Company for such Notes, the

interest rate and interest rate formula, if any, applicable to such Notes and

any other terms of such Notes. Each such Notes Terms Agreement may also specify

any requirements for officers' certificates, opinions of counsel and letters

from the independent auditors of the Company pursuant to Section 4 hereof. A

Notes Terms Agreement may also specify certain provisions relating to the

reoffering of such Notes by you.

Each Notes Terms Agreement shall specify the time and place of delivery of

and payment for such Notes. Unless otherwise specified in a Notes Terms

Agreement, the procedural details relating to the issue and delivery of Notes

purchased by you as principal and the payment therefor shall be as set forth in

the Administrative Procedures. Each date of delivery of and payment for Notes to

be purchased by you as principal pursuant to a Notes Terms Agreement is referred

to herein as a "Settlement Date."

Unless otherwise specified in a Notes Terms Agreement, if you are

purchasing Notes as principal you may resell such Notes to other dealers. Any

such sales may be at a discount, which shall not exceed the amount set forth in

the Prospectus Supplement relating to such Notes.

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(c) Administrative Procedures. You and the Company agree to perform the

respective duties and obligations specifically provided to be performed in the

DirectSecurities, Administrative Procedures (attached hereto as Exhibit B) (the

"Administrative Procedures"), as amended from time to time. The Administrative

Procedures may be amended only by written agreement of the Company and you.

(d) Delivery. The documents required to be delivered by Section 4 of this

Agreement as a condition precedent to your obligation to begin soliciting offers

to purchase Notes as agents of the Company shall be delivered at the office of

Davis Polk & Wardwell, your counsel, not later than 4:00 p.m., New York City

time, on the date hereof, or at such other time and/or place as you and the

Company may agree upon in writing, but in no event later than the day prior to

the earlier of (i) the date on which you begin soliciting offers to purchase

Notes and (ii) the first date on which the Company accepts any offer by you to

purchase Notes as principal. The date of delivery of such documents is referred

to herein as the "Commencement Date."

3. Agreements. The Company agrees with you that:

(a) Prior to the termination of the offering of the Notes pursuant to this

Agreement or pursuant to any Notes Terms Agreement, the Company will not file

any Prospectus Supplement relating to the Notes or any amendment to the

Registration Statement relating to the Notes unless the Company has previously

furnished to you a copy thereof for your review and will not file any such

proposed supplement or amendment to which you reasonably object; provided,

however, that the foregoing requirement shall not apply to any of the Company's

periodic filings with the Commission required to be filed pursuant to Section

13(a), 13(c), 13(f), 14 or 15(d) of the Exchange Act, copies of which filings

the Company will cause to be delivered to you promptly after being transmitted

for filing with the Commission. Subject to the foregoing sentence, the Company

will promptly cause each Prospectus Supplement to be filed with or transmitted

for filing to the Commission in accordance with Rule 424(b) under the Securities

Act. The Company will promptly advise you (i) of the filing of any amendment or

supplement to the Basic Prospectus, (ii) of the filing and effectiveness of any

amendment to the Registration Statement, (iii) of any request by the Commission

for any amendment to the Registration Statement or any amendment or supplement

to the Basic Prospectus or for any additional information, (iv) of the issuance

by the Commission of any stop order suspending the effectiveness of the

Registration Statement or the institution or threatening of any proceeding for

that purpose and (v) of the receipt by the Company of any notification with

respect to the suspension of the qualification of the Notes for sale in any

jurisdiction or the initiation or threatening of any proceeding for such

purpose. The Company will use its best efforts to prevent the issuance of any

such stop order or notice of suspension of qualification and, if issued, to

obtain as soon as possible the

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withdrawal thereof. If the Basic Prospectus is amended or supplemented as a

result of the filing under the Exchange Act of any document incorporated by

reference in the Prospectus, you shall not be obligated to solicit offers to

purchase Notes so long as you are not reasonably satisfied with such document.

(b) If, at any time when a prospectus relating to the Notes is required to

be delivered under the Securities Act, any event occurs or condition exists as a

result of which the Prospectus, as then amended or supplemented, would include

an untrue statement of a material fact, or omit to state any material fact

necessary to make the statements therein, in the light of the circumstances when

the Prospectus, as then amended or supplemented, is delivered to a purchaser,

not misleading, or if, in your opinion or in the opinion of the Company, it is

necessary at any time to amend or supplement the Prospectus, as then amended or

supplemented, to comply with applicable law, the Company will immediately notify

you by telephone (with confirmation in writing) to suspend solicitation of

offers to purchase Notes and, if so notified by the Company, you shall forthwith

suspend such solicitation and cease using the Prospectus, as then amended or

supplemented. If the Company shall decide to amend or supplement the

Registration Statement or Prospectus, as then amended or supplemented, it shall

so advise you promptly by telephone (with confirmation in writing) and, at its

expense, shall prepare and cause to be filed promptly with the Commission an

amendment or supplement to the Registration Statement or Prospectus, as then

amended or supplemented, satisfactory in all respects to you, that will correct

such statement or omission or effect such compliance and will supply such

amended or supplemented Prospectus to you in such quantities as you may

reasonably request. If any documents, certificates, opinions and letters

furnished to you pursuant to paragraph (f) below and Sections 5(a), 5(b) and

5(c) in connection with the preparation and filing of such amendment or

supplement are satisfactory in all respects to you, upon the filing with the

Commission of such amendment or supplement to the Prospectus or upon the

effectiveness of an amendment to the Registration Statement, you will resume the

solicitation of offers to purchase Notes hereunder. Notwithstanding any other

provision of this Section 3(b), until the distribution of any Notes you may own

as principal has been completed, if any event described above in this paragraph

(b) occurs, the Company will, at its own expense, forthwith prepare and cause to

be filed promptly with the Commission an amendment or supplement to the

Registration Statement or Prospectus, as then amended or supplemented,

satisfactory in all respects to you, will supply such amended or supplemented

Prospectus to you in such quantities as you may reasonably request and shall

furnish to you pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c)

such documents, certificates, opinions and letters as you may request in

connection with the preparation and filing of such amendment or supplement.

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(c) The Company will make generally available to its security holders and

to you as soon as practicable earning statements that satisfy the provisions of

Section 11(a) of the Securities Act and the rules and regulations of the

Commission thereunder covering twelve month periods beginning, in each case, not

later than the first day of the Company's fiscal quarter next following the

"effective date" (as defined in Rule 158 under the Securities Act) of the

Registration Statement with respect to each sale of Notes. If such fiscal

quarter is the first fiscal quarter of the Company's fiscal year, such earning

statement shall be made available not later than 90 days after the close of the

period covered thereby and in all other cases shall be made available not later

than 45 days after the close of the period covered thereby.

(d) The Company will furnish in New York City, without charge, (i) to each

Agent, a signed copy of the Registration Statement, including exhibits and all

amendments thereto, and as many copies of the Prospectus, any documents

incorporated by reference therein and any supplements and amendments thereto as

you may reasonably request and (ii) to each Agent that purchases Notes pursuant

to a Notes Terms Agreement or solicits an offer to purchase Notes that is

accepted by the Company, prior to 10:00 a.m. New York City time on the business

day next succeeding the date of such Notes Terms Agreement or the acceptance of

such offer, as many copies of the Prospectus, as then amended or supplemented

(including the Prospectus Supplement relating to the Notes to be purchased

pursuant to such Notes Terms Agreement or accepted offer), as such Agent may

reasonably request.

(e) The Company will endeavor to qualify the Notes for offer and sale under

the securities or Blue Sky laws of such jurisdictions as you shall reasonably

request and to maintain such qualifications for as long as you shall reasonably

request.

(f) During the term of this Agreement, the Company shall furnish to you

such relevant documents and certificates of officers of the Company relating to

the business, operations and affairs of the Company, the Registration Statement,

the Basic Prospectus, any amendments or supplements thereto, the Indenture, the

Notes, this Agreement, the Administrative Procedures, any Notes Terms Agreement

and the performance by the Company of its obligations hereunder or thereunder as

you may from time to time reasonably request.

(g) The Company shall notify you promptly in writing of any downgrading, or

of its receipt of any notice of any intended or potential downgrading or of any

review for possible change that does not indicate the direction of the possible

change, in the rating accorded the Company or any of the Company's securities by

any "nationally recognized statistical rating organization," as such term is

defined for purposes of Rule 436(g)(2) under the Securities Act.

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(h) The Company will, whether or not any sale of Notes is consummated, pay

all expenses incident to the performance of its obligations under this Agreement

and any Notes Terms Agreement, including: (i) the preparation and filing of the

Registration Statement and the Prospectus and all amendments and supplements

thereto, (ii) the preparation, issuance and delivery of the Notes, (iii) the

fees and disbursements of the Company's counsel and accountants and of the

Trustees and their counsel, (iv) the qualification of the Notes under securities

or Blue Sky laws in accordance with the provisions of Section 3(e), including

filing fees and the fees and disbursements of your counsel in connection

therewith and in connection with the preparation of any Blue Sky or Legal

Investment Memoranda, (v) the printing and delivery to you in quantities as

hereinabove stated of copies of the Registration Statement and all amendments

thereto and of the Prospectus and any amendments or supplements thereto, (vi)

the printing and delivery to you of copies of the Indenture and any Blue Sky or

Legal Investment Memoranda, (vii) any fees charged by rating agencies for the

rating of the Notes, (viii) the fees and expenses, if any, incurred with respect

to any filing with the National Association of Securities Dealers, Inc., (ix)

the fees and disbursements of your counsel incurred in connection with the

offering and sale of the Notes, including any opinions to be rendered by such

counsel hereunder, and (x) any out-of-pocket expenses incurred by you; provided

that any advertising expenses incurred by you shall have been approved by the

Company.

(i) During the period beginning on the date of any Notes Terms Agreement

and continuing to and including the Settlement Date with respect to such Notes

Terms Agreement, the Company will not, without your prior consent, offer, sell,

contract to sell or otherwise dispose of any debt securities of the Company

substantially similar to the Notes set forth in such Notes Terms Agreement

(other than (A) the Notes that are to be sold pursuant to such Notes Terms

Agreement, (B) Notes previously agreed to be sold by the Company and (C)

commercial paper issued in the ordinary course of business), except as may

otherwise be provided in the applicable Notes Terms Agreement.

4. Conditions of the Obligations of the Agents. Your obligation to solicit

offers to purchase Notes as agents of the Company, your obligation to purchase

Notes as principals pursuant to any Notes Terms Agreement and the obligation of

any other purchaser to purchase Notes will be subject to the accuracy of the

representations and warranties on the part of the Company herein, to the

accuracy of the statements of the Company's officers made in each certificate

furnished pursuant to the provisions hereof and to the performance and

observance by the Company of all covenants and agreements herein contained on

its part to be performed and observed (in the case of your obligation to solicit

offers to purchase Notes, at the time of such solicitation, and, in the case of

your or any other purchaser's obligation to purchase Notes, at the time the

Company accepts the offer to purchase such Notes and at the time of issuance and

delivery)

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and (in each case) to the following additional conditions precedent when and as

specified:

(a) Prior to such solicitation or purchase, as the case may be:

(i) there shall not have occurred any change, or any development

involving a prospective change, in the condition, financial or otherwise,

or in the earnings, business or operations of the Company and its

subsidiaries, taken as a whole, from that set forth in the Prospectus, as

amended or supplemented at the time of such solicitation or at the time

such offer to purchase was made, that, in your judgment, is material and

adverse and that makes it, in your judgment, impracticable to market the

Notes on the terms and in the manner contemplated by the Prospectus, as so

amended or supplemented;

(ii) there shall not have occurred any (A) suspension or material

limitation of trading generally on or by, as the case may be, any of the

New York Stock Exchange, the American Stock Exchange, the Nasdaq National

Market, the Chicago Board of Options Exchange, the Chicago Mercantile

Exchange or the Chicago Board of Trade, (B) suspension of trading of any

securities of the Company on any exchange or in any over-the-counter

market, (C) material disruption in securities settlement, payment or

clearance services in the United States or, in the event of a global

offering, in any relevant foreign jurisdiction, (D) declaration of any

moratorium on commercial banking activities by Federal or New York State

authorities or (E) any outbreak or escalation of hostilities or any change

in financial markets or any calamity or crisis that, in your judgment, is

material and adverse and which, singly or together with any other event

specified in this clause (E), makes it, in your judgment, impracticable or

inadvisable to proceed with the offer, sale or delivery of the Notes on the

terms and in the manner contemplated by the Prospectus, as amended or

supplemented, at the time of such solicitation or at the time such offer to

purchase was made; and

(iii) there shall not have occurred any downgrading, nor shall any

notice have been given of any intended or potential downgrading or of any

review for a possible change that does not indicate the direction of the

possible change, in the rating accorded the Company or any of the Company's

securities by any "nationally recognized statistical rating organization,"

as such term is defined for purposes of Rule 436(g)(2) under the Securities

Act;

(A) except, in each case described in paragraph (i), (ii) or (iii) above, as

disclosed to you in writing by the Company prior to such solicitation or, in the

case of a purchase of Notes, before the offer to purchase such Notes was made or

(B)

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unless in each case described in (ii) above, the relevant event shall have

occurred and been known to you prior to such solicitation or, in the case of a

purchase of Notes, before the offer to purchase such Notes was made.

(b) On the Commencement Date and, if called for by any Notes Terms

Agreement, on the corresponding Settlement Date, you shall have received:

(i) The opinion, dated as of such date, of Sidley Austin Brown & Wood

LLP, counsel to the Company, or of other counsel satisfactory to you and

who may be an officer of the Company, to the following effect that:

(A) the Company has been duly incorporated, is validly existing

as a corporation in good standing under the laws of the State of

Delaware, has the corporate power and authority to own its property

and to conduct its business as described in the Prospectus, as amended

or supplemented, and is duly qualified to transact business and is in

good standing in each jurisdiction in which the conduct of its

business or its ownership or leasing of property requires such

qualification, except to the extent that the failure to be so

qualified or be in good standing would not have a material adverse

effect on the Company and its consolidated subsidiaries, taken as a

whole;

(B) each of Morgan Stanley, Discover Bank, Morgan Stanley & Co.

Incorporated and Morgan Stanley International Holdings Inc. (each a

"Material Subsidiary") has been duly incorporated, is validly existing

as a corporation in good standing under the laws of the jurisdiction

of its incorporation, has the corporate power and authority to own its

property and to conduct its business as described in the Prospectus,

as amended or supplemented, and is duly qualified to transact business

and is in good standing in each jurisdiction in which the conduct of

its business or its ownership or leasing of property requires such

qualification, except to the extent that the failure to be so

qualified or be in good standing would not have a material adverse

effect on the Company and its consolidated subsidiaries, taken as a

whole;

(C) each of the Company and its Material Subsidiaries has all

necessary consents, authorizations, approvals, orders, certificates

and permits of and from, and has made all declarations and filings

with, all federal, state, local and other governmental authorities,

all self-regulatory organizations and all courts and other tribunals,

to own, lease,

13

<PAGE>

license and use its properties and assets and to conduct it