U.S. DISTRIBUTION AGREEMENT

EXHIBIT 1-d

MORGAN STANLEY

Global Medium-Term Notes, Series F

Global Units, Series F

U.S. 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 $[ ] (or the equivalent thereof in one or more

currencies other than U.S. dollars) aggregate initial public offering price of

its Global Medium-Term Notes, Series F, due more than nine months from the date

of issue (the "Notes"), and its Global Units, Series F (the "Units" and,

together with the Notes, the "Program Securities"), in each case subject to

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

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

States, (ii) Global Units, Series G and Series H, to be sold primarily outside

of the United States, and (iii) the sale of certain of the Company's other debt

securities, warrants, common stock, preferred stock, purchase contracts and

units and of capital securities of certain Morgan Stanley Capital Trusts.

The Notes may be issued as senior indebtedness (the "Series F Senior

Notes") or as subordinated indebtedness (the "Series F Subordinated Notes") of

the Company. The Series F Senior Notes will be issued, either alone or as part

of a Unit, 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 "Senior Debt Trustee") (as may be

supplemented or amended from time to time, the "Senior Debt Indenture"). The

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Series F Subordinated Notes will be issued pursuant to the provisions of a

subordinated indenture dated as of October 1, 2004, between the Company and J.P.

Morgan Trust Company, National Association, as trustee (the "Subordinated Debt

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

"Subordinated Debt Indenture"). The Senior Debt Indenture and the Subordinated

Debt Indenture are sometimes hereinafter referred to individually as an

"Indenture" and collectively as the "Indentures," and the Senior Debt Trustee

and the Subordinated Debt Trustee are sometimes hereinafter referred to

individually as a "Trustee" and collectively as the "Trustees." Purchase

contracts ("Purchase Contracts") that require holders to satisfy their

obligations thereunder when such Purchase Contracts are issued are referred to

as "Pre-paid Purchase Contracts." Pre-paid Purchase Contracts that settle in

cash ("Cash-settled Pre-paid Purchase Contracts") generally will be issued under

an Indenture. Pre-paid Purchase Contracts that do not settle in cash

("Physically-settled Pre-paid Purchase Contracts") generally will be issued

under the Unit Agreement or the Unit Agreement Without Holders' Obligations

(each as defined below).

The Units will be issued either pursuant to the Unit Agreement dated as

of November 1, 2004, among the Company, JPMorgan Chase Bank, N.A. (formerly

known as JPMorgan Chase Bank), as Unit Agent, as Collateral Agent, as Trustee

and Paying Agent under the Indenture referred to therein, and as Warrant Agent

under the Warrant Agreement referred to therein, and the holders from time to

time of the Units described therein (as may be amended from time to time, the

"Unit Agreement") or, if the Units do not include Purchase Contracts (or include

only Pre-paid Purchase Contracts), pursuant to a Unit Agreement among the

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

as Unit Agent, as Trustee and Paying Agent under the Indenture referred to

therein, and as Warrant Agent under the Warrant Agreement referred to therein,

in the form of such agreement filed as an exhibit to the Registration Statement

referred to below (each such agreement, a "Unit Agreement Without Holders's

Obligations").(1) Units may include one or more (i) Series F Senior Notes, (ii)

warrants ("Warrants") entitling the holders thereof to purchase or sell (a)

securities issued by the Company or by an entity affiliated or not affiliated

with the Company, a basket of such securities, an index or indices of such

securities or any combination of the above, (b) currencies or (c) commodities,

(iii) Purchase Contracts, including Pre-paid Purchase Contracts, requiring the

holders thereof to purchase or sell (a) securities issued by the Company or by

an entity affiliated or not affiliated with the Company, a basket of such

securities, an index or indices of such securities or any combination of the

above, (b) currencies or (c) commodities or (iv) any combination thereof. The

applicable prospectus supplement will specify whether Notes, Warrants and

Purchase Contracts comprised by a Unit

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(1) The Unit Agreement Without Holders' Oligations shall include additional

provisions to allow for the issuance of Pre-Paid Purchase Contracts that are

not issued under the Indenture.

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may or may not be separated from any series of Units. Warrants issued as part of

a Unit will be issued pursuant to the Warrant Agreement dated as of November 1,

2004 (as may be amended from time to time, the "Warrant Agreement") between the

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

as Warrant Agent. Purchase Contracts, other than Pre-paid Purchase Contracts

("Non-Pre-paid Purchase Contracts"), entered into by the Company and the holders

thereof will be governed by the Unit Agreement.

The Notes, whether issued alone or as part of a Unit, 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 Warrants

will have the exercise prices, exercise dates, expiration dates and other terms

as set forth in supplements to the Basic Prospectus. The Purchase Contracts will

have the closing dates, purchase or sale prices and other terms as set forth in

supplements to the Basic Prospectus.

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

of soliciting and receiving offers to purchase Program Securities 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 Program

Securities 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 Program Securities as principal pursuant to the terms of a terms

agreement relating to such sale (in the case of Notes, a "Notes Terms Agreement"

and, in the case of Units, a "Units 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

Program Securities. 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 Program Securities included in the Registration Statement that

will describe certain terms of the Program Securities. The prospectus relating

to the Program Securities 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

Program Securities, 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

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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.

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 Program Securities, as of each date on which the

Company accepts an offer to purchase Program Securities (including any purchase

by you as principal pursuant to a Notes Terms Agreement or a Units Terms

Agreement), as of each date the Company issues and delivers Program Securities

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

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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 Program Securities or on which

the Company accepts an offer to purchase Program Securities, shall be

deemed not to cover information concerning an offering of particular

Program Securities to the extent such information will be set forth in a

supplement to the Basic Prospectus.

(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 or Written Units Terms Agreement (each as hereinafter defined)

has been duly authorized, executed and delivered by the Company.

(f) Each Indenture has been duly qualified under the Trust Indenture

Act and each of the Senior Indenture, the Subordinated Indenture, the Unit

Agreement and the Warrant Agreement 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 Unit Agreement Without Holders' Obligations has been

duly authorized by the Company and, when a Unit Agreement

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Without Holders' Obligations has been duly executed and delivered by the

Company, the Unit Agreement Without Holders' Obligations will be 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.

(h) The forms of Notes (including the form of Cash-settled Pre-paid

Purchase Contracts), whether issued alone or as part of a Unit, have been

duly authorized and established in conformity with the provisions of the

relevant Indenture and, when the Notes (and the Cash-settled Pre-paid

Purchase Contracts) have been executed and authenticated in accordance with

the provisions of the relevant Indenture and delivered to and duly paid for

by the purchasers thereof, the Notes (and the Cash-settled Pre-paid

Purchase Contracts) 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.

(i) The forms of Units under the Unit Agreement, including the forms

of Warrants, Physically-settled Pre-paid Purchase Contracts and

Non-Pre-paid Purchase Contracts, have been duly authorized and established

in conformity with the provisions of (i) in the case of such Units,

Physically-settled Pre-paid Purchase Contracts, Non-Pre-paid Purchase

Contracts, the Unit Agreement and (ii) in the case of Warrants, the Warrant

Agreement. When such Units have been delivered to and duly paid for by the

purchasers thereof and (A) any Physically-settled Pre-paid Purchase

Contracts and Non-Pre-paid Purchase Contracts included in such Units have

been executed by the Company and countersigned by the Unit Agent and (B)

any Warrants included in such Units have been executed by the Company and

countersigned by the Warrant Agent, such Units (including any such

Physically-settled Pre-paid Purchase Contracts, Non-Pre-paid Purchase

Contracts or Warrants contained therein) will be entitled to the benefits

of the Unit Agreement and, in the case of the Warrants, the Warrant

Agreement 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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(j) When a Unit Agreement Without Holders' Obligations has been

executed and delivered by the Company, the Units to be issued thereunder

will have been duly authorized and when such Units have been established in

conformity with the provisions of the Unit Agreement Without Holders'

Obligations and delivered to and duly paid for by the purchasers thereof,

and any Warrants included in such Units have been executed by the Company

and countersigned by the Warrant Agent, such Units (including any such

Warrants contained therein) will be entitled to the benefits of the Unit

Agreement Without Holders' Obligations 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.

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

Notes and Pre-paid Purchase Contracts (whether issued alone or as part of a

Unit), the Units (including any Purchase Contracts and Warrants included

therein), the Indentures, the Unit Agreement, any Unit Agreement Without

Holders' Obligations, the Warrant Agreement and any applicable Written

Notes Terms Agreement or Written Units Terms Agreement and the performance

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

Pre-paid Purchase Contracts, the Units (including any Purchase Contracts or

Warrants included therein), the Indentures, the Unit Agreement, any Unit

Agreement Without Holders' Obligations, the Warrant Agreement and any

applicable Notes Terms Agreement or Units 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 Pre-paid

Purchase Contracts, the Units (including any Purchase Contracts or Warrants

included therein), the Indentures, the Unit Agreement, any Unit Agreement

Without Holders' Obligations, the Warrant Agreement and any applicable

Notes Terms Agreement or Units 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 Program Securities; provided,

however, that no representation is made or warranty given as to whether the

purchase of the Program Securities 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

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amended.

(l) 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.

(m) 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.

(n) 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.

(o) 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.

(p) 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.

(q) The Company is not, and after giving effect to the offering and

sale of the Program Securities 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.

Notwithstanding the foregoing, it is understood and agreed that the

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representations and warranties set forth in Section 1(b)(iii) and 1(b)(iv), 1(h)

(except as to due authorization of the Notes and Cash-settled Pre-paid Purchase

Contracts), 1(i) (except as to due authorization of the Units, Warrants,

Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase

Contracts), 1(j) (except as to due authorization of the Units and Warrants) and

1(k), when made as of the Commencement Date, or as of any date on which you

solicit offers to purchase Program Securities, with respect to any Program

Securities the payments of principal or interest on which, or any other payments

with respect to which, will be determined by reference to one or more currency

exchange rates, commodity prices, securities of entities affiliated or

unaffiliated with the Company, baskets of such securities, equity indices or

other factors, shall be deemed not to address the application of the Commodity

Exchange Act, as amended, or the rules, regulations or interpretations of the

Commodity Futures Trading Commission.

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 Program Securities 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 Program Securities. Upon receipt of at

least one business day's prior notice from the Company, you will forthwith

suspend solicitations of offers to purchase Program Securities 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) in the case of Notes issued alone or as part of a

Unit, a change in the interest rates, redemption provisions, amortization

schedules or maturities offered on the Notes, (ii) in the case of Units, a

change in the exercise price, exercise date or period or expiration of an

underlying Warrant or a change in the settlement date or purchase or sale

price of an underlying Purchase Contract or (iii) for a change you deem to

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

purchase Program Securities 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 Program Security 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 Program Security equal to between .125%

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and .750% (depending upon such Note's maturity or, in the case of Units,

any underlying Note's maturity or the terms of the Units and of the

securities comprised by such Units) of the principal amount of such Note

or, in the case of Units, the face amount of such Unit (provided that the

commission for Notes having, or Units including Notes or other securities

having, a maturity of 30 years or greater will be negotiated) or such other

discount as may be specified in the Prospectus Supplement relating to such

Note or Unit.

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

to purchase Program Securities 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 Program Securities and may reject

any offer in whole or in part. You shall have the right to reject any offer

to purchase Program Securities 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 Program Securities 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 Program Securities 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 or Units Terms Agreement that will provide for the sale of such

Program Securities to and the purchase thereof by you. Each Notes Terms

Agreement or Units 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 or Exhibit A-1 (as applicable) hereto (in the case

of Notes, a "Written Notes Terms Agreement," and in the case of Units, a

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

the Company confirmed in writing by you to the Company.

Your commitment to purchase Program Securities as principal pursuant

to a Notes Terms Agreement or Units 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 (i) 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 and (ii) Units Terms Agreement shall

specify (a) the information set forth in (i) above with respect to any

Notes issued as part of a Unit, (b) with respect to any Warrants issued as

part of a Unit, the exercise price, the exercise date or period, the

expiration date and any other terms of such Warrants

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and (c) with respect to any Purchase Contracts issued as part of a Unit,

the settlement date, the purchase or sale price or any other terms of such

Purchase Contracts. Each such Notes Terms Agreement or Units 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 and a Unit

Terms Agreement may also specify certain provisions relating to the

reoffering of such Notes or Units, as the case may be, by you.

Each Notes Terms Agreement and each Units Terms Agreement shall specify

the time and place of delivery of and payment for such Notes or Units, as the

case may be. Unless otherwise specified in a Notes Terms Agreement or a Units

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

Notes or Units, as the case may be, 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 Program Securities to be purchased by you

as principal pursuant to a Notes Terms Agreement or a Units Terms Agreement, as

the case may be, is referred to herein as a "Settlement Date."

Unless otherwise specified in a Notes Terms Agreement or a Units Terms

Agreement, if you are purchasing Program Securities as principal you may resell

such Program Securities 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 or Units.

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

the respective duties and obligations specifically provided to be performed

in the Global Medium-Term Notes, Series F, and Global Units, Series F,

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 Program Securities 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 Program Securities

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

purchase Program Securities 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:

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(a) Prior to the termination of the offering of the Program Securities

pursuant to this Agreement or pursuant to any Notes Terms Agreement or

Units Terms Agreement, the Company will not file any Prospectus Supplement

relating to the Program Securities or any amendment to the Registration

Statement relating to the Program Securities 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

Program Securities 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 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 Program Securities so long as you are not

reasonably satisfied with such document.

(b) If, at any time when a prospectus relating to the Program

Securities 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 Program Securities and, if so

12

<PAGE>

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 Program

Securities hereunder. Notwithstanding any other provision of this Section

3(b), until the distribution of any Program Securities 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.

(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 Program Securities. 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

13

<PAGE>

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 Program Securities pursuant to a Notes Terms

Agreement or Units Terms Agreement or solicits an offer to purchase Program

Securities 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 Units 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 Program Securities to be purchased

pursuant to such Notes Terms Agreement or Units 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 Indentures, the Unit Agreement, any Unit Agreement Without

Holders' Obligations, the Warrant Agreement, the Notes, the Units, the

Warrants, the Purchase Contracts, this Agreement, the Administrative

Procedures, any Notes Terms Agreement or Units 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.

(h) The Company will, whether or not any sale of Program Securities is

consummated, pay all expenses incident to the performance of its

obligations under this Agreement and any Notes Terms Agreement or Units

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

Program Securities, (iii) the fees and disbursements of the Company's

counsel and accountants, of the Trustees and their counsel, of the Unit

Agent and its counsel, and of the Warrant Agent and its counsel, (iv) the

qualification of the Notes and Units (and of any securities comprised

14

<PAGE>

thereby) 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 Indentures, the Unit Agreement, any Unit

Agreement Without Holders' Obligations, the Warrant Agreement and any Blue

Sky or Legal Investment Memoranda, (vii) any fees charged by rating

agencies for the rating of the Program Securities, (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

Program Securities, 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 or Units Terms Agreement relating to either Notes or Units, as

the case may be, and continuing to and including the Settlement Date with

respect to such Notes Terms Agreement or Units Terms Agreement, the Company

will not, without your prior consent, offer, sell, contract to sell or

otherwise dispose of (i) in the case of Notes, 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)

or (ii) in the case of Units, any securities substantially similar to such

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

Agreement or (B) Units previously agreed to be sold by the Company), in

each case, except as may otherwise be provided in the applicable Notes

Terms Agreement or Units Terms Agreement.

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

offers to purchase Program Securities as agents of the Company, your obligation

to purchase Program Securities as principals pursuant to any Notes Terms

Agreement or Units Terms Agreement and the obligation of any other purchaser to

purchase Program Securities 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 Program Securities, at the time of such solicitation, and, in

the case of your or any other purchaser's obligation to purchase Program

Securities, at the

15

<PAGE>

time the Company accepts the offer to purchase such Program Securities and at

the time of issuance and delivery) 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 Program Securities 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, if the relevant Program Securities are denominated in a

currency other than U.S. dollars, any change in currency exchange

rates or controls) 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 Program Securities 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

16

<PAGE>

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 Program Securities, before the offer to purchase such

Program Securities was made or (B) 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 Program Securities, before the

offer to purchase such Program Securities was made.

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

Agreement or Units 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

17

<PAGE>

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, license and

use its properties and assets and to conduct its business in the

manner described in the Prospectus, as amended or supplemented,

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;

(D) each of this Agreement and any applicable Written Notes

Terms Agreement or Written Units Terms Agreement has been duly

authorized, executed and delivered by the Company;

(E) each Indenture has been duly qualified under the Trust

Indenture Act and each of the Senior Indenture, the Subordinated

Indenture, the Unit Agreement and the Warrant Agreement 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;

(F) the Unit Agreement Without Holders' Obligations, if any,

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 forms of Notes (including the form

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<PAGE>

of Cash-settled Pre-paid Purchase Contracts), whether issued

alone or as part of a Unit, have been duly authorized and

established in conformity with the provisions of the relevant

Indenture and, if the Notes and the Cash-settled Pre-paid

Purchase Contracts, had been executed by the Company and

authenticated by the relevant Trustee or its duly appointed agent

in accordance with the provisions of the relevant Indenture and

delivered to and duly paid for by the purchasers thereof on the

date of such opinion, such Notes and the Cash-settled Pre-paid

Purchase Contracts would be entitled to the benefits of such

Indenture and would 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;

(H) the forms of Units under the Unit Agreement, including

the forms of Warrants, Physically-settled Pre-paid Purchase

Contracts and Non-Pre-paid Purchase Contracts, have been duly

authorized and established in conformity with the provisions of

(i) in the case of Units under the Unit Agreement,

Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid

Purchase Contracts, the Unit Agreement and (ii) in the case of

the Warrants, the Warrant Agreement. If such Units (including the

Warrants, the Physically-settled Pre-paid Purchase Contracts and

the Non-Pre-paid Purchase Contracts) had been delivered to and

duly paid for by the purchasers thereof (and any Purchase

Contracts included therein had been executed by the Company and

countersigned by the Unit Agent and any Warrants included therein

had been executed by the Company and countersigned by the Warrant

Agent) on the date of such opinion, such Units (including the

Physically-settled Pre-paid Purchase Contracts, the Non-Pre-paid

Purchase Contracts and the Warrants contained therein) would be

entitled to the benefits of the Unit Agreement and, in the case

of the Warrants, the Warrant Agreement, and would 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,

19

<PAGE>

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;

(I) the Units under the Unit Agreement Without Holders'

Obligations have been duly authorized (and the forms of any

Warrants included therein have been duly authorized and

established in conformity with the provisions of the Warrant

Agreement), and if such Units (including any such Warrants

included therein) had been delivered to and duly paid for by the

purchasers thereof (and any Warrants included therein had been

executed by the Company and countersigned by the Warrant Agent)

on the date of such opinion, such Units (including the Warrants

contained therein) would be entitled to the benefits of the Unit

Agreement Without Holders' Obligations and in the case of the

Warrants, the Warrant Agreement, and would 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;

(J) the execution and delivery by the Company of the Notes

and Cash-settled Pre-paid Purchase Contracts (whether issued

alone or as part of a Unit), the Units (including any Purchase

Contract or Warrant included therein), the Indentures, the Unit

Agreement, any Unit Agreement Without Holders' Obligations, the

Warrant Agreement and any applicable Written Notes Terms

Agreement or Written Units Terms Agreement and the performance by

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

the Units, the Indentures, the Unit Agreement, any Unit Agreement

Without Holders' Obligations, the Warrant Agreement and any

applicable Notes Terms Agreement or Units Terms Agreement will

not contravene any provision of applicable law or the certificate

of incorporation or by-laws of the Company or, to the best of

such counsel's knowledge, any agreement or other instrument

binding upon the Company or any of its subsidiaries that is

material to the Company and its consolidated subsidiaries,

20

<PAGE>

taken as a whole, or, to the best of such counsel's knowledge,

any judgment, order or decree of any U.S. governmental body,

agency or court having jurisdiction over the Company or any of

its consolidated subsidiaries, and no consent, approval,

authorization or order of or qualification with any U.S.

governmental body or agency is required for the performance by

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

the Cash-settled Pre-paid Purchase Contracts, the Units

(including any Purchase Contracts or Warrants included therein),

the Indentures, the Unit Agreement, any Unit Agreement Without

Holders' Obligations, the Warrant Agreement and any applicable

Notes Terms Agreement or Units 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 Program

Securities; provided, however, that no opinion is expressed on

whether the purchase of the Program Securities 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;

(K) the statements (1) in the Prospectus, as then amended or

supplemented, under the captions "Description of Notes" (in the

Prospectus Supplement), "Description of Debt Securities" (in the

Basic Prospectus), "Description of Units" (in the Prospectus

Supplement and in the Basic Prospectus), "Plan of Distribution"

(in the Prospectus Supplement and in the Basic Prospectus),

"Description of Purchase Contracts" (in the Basic Prospectus) and

"Description of Warrants" (in the Basic Prospectus), (2) in the

Registration Statement, as then amended or supplemented, under

Item 15, (3) in "Item 3. Legal Proceedings" of the most recent

annual report on Form 10-K incorporated by reference in the

Prospectus and (4) in "Item 1. Legal Proceedings" of Part II of

the quarterly reports on Form 10-Q, if any, filed since such

annual report and incorporated by reference in the Prospectus, in

each case insofar as such statements constitute summaries of the

legal matters, documents or proceedings referred to therein,

fairly present the information called for with respect to such

legal matters, documents and proceedings and fairly summarize the

matters referred to therein;

(L) after due inquiry, such counsel does not

21

<PAGE>

know of any 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, as then amended or supplemented, and are not so

described or of any U.S. federal or state statutes, regulations,

contracts or other documents governed by U.S. federal or state

law that are required to be described in the Registration

Statement or the Prospectus, as then amended or supplemented, or

to be filed or incorporated by reference as exhibits to such

Registration Statement that are not described, filed or

incorporated by reference as required;

(M) the Company is not, and after giving effect to the

offering and sale of the Program Securities 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; and

(N) such counsel (1) believes that each document, if any,

filed pursuant to the Exchange Act and incorporated by reference

in the Prospectus as then amended or supplemented (except as to

financial statements and schedules and other financial and

statistical data included therein, as to which such counsel need

not express any belief) complied when so filed as to form in all

material respects with the Exchange Act and the applicable rules

and regulations of the Commission thereunder, (2) has no reason

to believe that any part of the Registration Statement (except as

to financial statements and schedules and other financial and

statistical data included therein, as to which such counsel need

not express any belief, and except for that part of the

Registration Statement that constitutes the Forms T-1 heretofore

referred to), as then amended, if applicable, when such part

became effective contained, and the Registration Statement

(except as to financial statements and schedules and other

financial and statistical data included therein, as to which such

counsel need not express any belief, and except for the part of

the Registration Statement that constitutes the Forms T-1) as of

the date such opinion is delivered contains, any untrue statement

of a material fact or omitted or omits to state a material fact

required to be stated therein or necessary to

22

<PAGE>

make the statements therein not misleading, (3) believes that the

Registration Statement and Prospectus, as then amended or

supplemented, if applicable (except as to financial statements

and schedules and other financial and statistical data included

therein, as to which such counsel need not express any belief),

complied as to form in all material respects with the Securities

Act and the applicable rules and regulations of the Commission

thereunder and (4) has no reason to believe that the Prospectus,

as then amended or supplemented, if applicable (except as to

financial statements and schedules and other financial and

statistical data included therein, as to which such counsel need

not express any belief), as of the date such opinion is delivered

contains any untrue statement of a material fact or omits to

state a material fact necessary in order to make the statements

therein, in the light of the circumstances under which they were

made, not misleading; provided that in the case of an opinion

delivered on the Commencement Date or pursuant to Section 5(b),

the opinion and belief set forth in clauses (3) and (4) above

shall be deemed not to cover information concerning an offering

of particular Notes or Units to the extent such information will

be set forth in a supplement to the Basic Prospectus.

(ii) The opinion, dated as of such date, of Davis Polk &

Wardwell, your special counsel, covering the matters in subparagraphs

(D), (E), (F), (G), (H), (I) and (K) (with respect to statements in

the Prospectus, as then amended or supplemented, under the captions

"Description of Notes" (in the Prospectus Supplement), "Description of

Debt Securities" (in the Basic Prospectus), "Description of Units" (in

the Prospectus Supplement and the Basic Prospectus), "Plan of

Distribution" (in the Prospectus Supplement and in the Basic

Prospectus), "Description of Purchase Contracts" (in the Basic

Prospectus) and "Description of Warrants" (in the Basic Prospectus))

and clauses (2), (3) and (4) of subparagraph (N) in paragraph (b)(i)

above.

The opinions described in subparagraphs (F) and (I) need only be contained

in an opinion delivered on a Settlement Date related to an offering of Units

under a Unit Agreement Without Holders' Obligations to be executed on or prior

to such Settlement Date.

Notwithstanding the foregoing, the opinions described in subparagraphs (G)

(except as to due authorization of the Notes and Cash-settled Pre-paid Purchase

Contracts), (H) (except as to due authorization of the Units, Warrants,

Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase

23

<PAGE>

Contracts), (I) (except as to due authorization of the Units and Warrants), (J),

(K)(1) and (N)(3) and (4) of paragraph (b)(i) above, when contained in an

opinion delivered on the Commencement Date or pursuant to Section 5(b), shall be

deemed not to address the application of the Commodity Exchange Act, as amended,

or the rules, regulations or interpretations of the Commodity Futures Trading

Commission to Program Securities the payments of principal or interest on which,

or any other payments with respect to which, will be determined by reference to

one or more currency exchange rates, commodity prices, securities of entities

affiliated or unaffiliated with the Company, baskets of such securities, equity

indices or other factors.

With respect to subparagraph (N) of paragraph (b)(i) above, if such

opinion is given by counsel who is also an officer of the Company, such counsel

may state that his or her opinion and belief are based upon his or her

participation, or the participation of someone under his or her supervision, in

the preparation of the Registration Statement and Prospectus and any amendments

or supplements thereto and documents incorporated therein by reference and

review and discussion of the contents thereof, but are without independent

check or verification, except as specified. With respect to subparagraph (N) of

paragraph (b)(i) above, Davis Polk & Wardwell and, if Sidley Austin Brown &

Wood LLP is giving such opinion, Sidley Austin Brown & Wood LLP may state that

their opinion and belief are based upon their participation in the preparation

of the Registration Statement and Prospectus and any amendments or supplements

thereto (but not including documents incorporated therein by reference) and

review and discussion of the contents thereof (including documents incorporated

therein by reference), but are without independent check or verification,

except as specified.

(iii) The opinion, dated as of such date, of Sidley Austin Brown

& Wood LLP, special counsel to the Company, to the effect that the

statements set forth under the caption "United States Federal

Taxation" in th