EXHIBIT
4-m

       

       

      [FORM
OF FACE OF SECURITY]

      FLOATING
RATE SUBORDINATED NOTE

       

      
        	
                REGISTERED

              	
                REGISTERED

              
	
                No.
      FLR

              	
                [PRINCIPAL
      AMOUNT]

              
	 
      	
                CUSIP:

              


      

      


      Unless
this certificate is presented by an authorized representative of The Depository
Trust Company (55 Water Street, New York, New York) to the issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.1

       

      THESE
SECURITIES ARE NOT INSURED OR PROTECTED BY THE SECURITIES INVESTOR PROTECTION
CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

       

      


       

      
        _________________________________

        1 Applies
only if this Note is a Registered Global Security.

         

         

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

         

      

      MORGAN
STANLEY

      FLOATING
RATE SUBORDINATED NOTE

      SUBORDINATED
GLOBAL MEDIUM-TERM NOTE, SERIES F

      


      
        	
                BASE
      RATE:

              	
                ORIGINAL
      ISSUE DATE:

              	
                MATURITY
      DATE:

              
	
                INDEX
      MATURITY:

              	
                INTEREST
      ACCRUAL DATE:

              	
                INTEREST
      PAYMENT DATE(S):

              
	
                SPREAD
      (PLUS OR MINUS):

              	
                INITIAL
      INTEREST RATE:

              	
                INTEREST
      PAYMENT PERIOD:

              
	
                SPREAD
      MULTIPLIER:

              	
                INITIAL
      INTEREST RESET DATE:

              	
                INTEREST
      RESET PERIOD:

              
	
                REPORTING
      SERVICE:

              	
                MAXIMUM
      INTEREST RATE:

              	
                INTEREST
      RESET DATE(S):

              
	
                INDEX
      CURRENCY:

              	
                MINIMUM
      INTEREST RATE:

              	
                CALCULATION
      AGENT:

              
	
                EXCHANGE
      RATE AGENT: [MORGAN STANLEY & CO. INCORPORATED]

              	
                INITIAL
      REDEMPTION DATE:

              	
                SPECIFIED
      CURRENCY:

              
	 
      	
                INITIAL
      REDEMPTION PERCENTAGE:

              	
                IF
      SPECIFIED CURRENCY OTHER THAN U.S. DOLLARS, OPTION TO ELECT PAYMENT IN
      U.S. DOLLARS: [YES] 2

              
	 
      	
                ANNUAL
      REDEMPTION PERCENTAGE REDUCTION:

              	
                DESIGNATED
      CMT REUTERS PAGE:

              
	 
      	
                OPTIONAL
      REPAYMENT DATE(S):

              	
                DESIGNATED
      CMT MATURITY INDEX:

              
	 
      	
                REDEMPTION
      NOTICE PERIOD:3

              	 
      
	 
      	
                TAX
      REDEMPTION AND PAYMENT OF ADDITIONAL AMOUNTS: [NO]4

              	 
      
	 
      	
                IF
      YES, STATE INITIAL OFFERING DATE: [N/A]

              	
                OTHER
      PROVISIONS:

              


      

      


      Morgan
Stanley, a Delaware corporation (together with its successors and assigns, the
“Issuer”), for value received, hereby promises to
pay          to, or registered
assignees, the principal sum of [      ] on the
Maturity Date specified above (except to the extent redeemed or repaid prior to
maturity) and to pay interest thereon from and including the Interest Accrual
Date specified above at a rate per annum equal to the Initial Interest Rate
specified above or determined in accordance with the provisions specified on the
reverse hereof until the Initial Interest Reset Date specified above, and
thereafter at a rate per annum determined in accordance with the provisions
specified on 

       

      _______________________

      
        2 Applies
if this is a Registered Global Security, unless arrangements are made with DTC
outside of existing Letters of Representations, as has been the case in the
past.

        
          3
Applicable if other than 30-60 calendar days. If this is a Registered Global
Security, minimum notice period is [10] calendar days [current DTC
limitation].

        

        
          4 Default
provision is NO. Indicate YES only for certain notes issued on a global basis if
specified in pricing supplement.

        

         

         

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

       

      the
reverse hereof until the principal hereof is paid or duly made available for
payment. Unless such rate is otherwise specified on the face hereof, the
Calculation Agent shall determine the Initial Interest Rate for this Note in
accordance with the provisions specified on the reverse hereof. The Issuer will
pay interest in arrears weekly, monthly, quarterly, semiannually or annually as
specified above as the Interest Payment Period on each Interest Payment Date (as
specified above), commencing with the first Interest Payment Date next
succeeding the Interest Accrual Date specified above, and on the Maturity Date
(or any redemption or repayment date); provided, however, that if the Interest
Accrual Date occurs between a Record Date, as defined below, and the next
succeeding Interest Payment Date, interest payments will commence on the second
Interest Payment Date succeeding the Interest Accrual Date to the registered
holder of this Note on the Record Date with respect to such second Interest
Payment Date; and provided, further, that if an Interest Payment Date (other
than the Maturity Date or redemption or repayment date) would fall on a day that
is not a Business Day, as defined on the reverse hereof, such Interest Payment
Date shall be the following day that is a Business Day, except that if the Base
Rate specified above is LIBOR or EURIBOR and such next Business Day falls in the
next calendar month, such Interest Payment Date shall be the immediately
preceding day that is a Business Day; and provided, further, that if the
Maturity Date or redemption or repayment date would fall on a day that is not a
Business Day, such payment shall be made on the following day that is a Business
Day and no interest shall accrue for the period from and after such Maturity
Date or redemption or repayment date.

       

      Interest
on this Note will accrue from and including the most recent date to which
interest has been paid or duly provided for, or, if no interest has been paid or
duly provided for, from and including the Interest Accrual Date, until but
excluding the date the principal hereof has been paid or duly made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, subject to certain exceptions described herein,
be paid to the person in whose name this Note (or one or more predecessor Notes)
is registered at the close of business on the date 15 calendar days prior to
such Interest Payment Date (whether or not a Business Day) (each such date, a
“Record Date”); provided, however, that interest payable at maturity (or any
redemption or repayment date) will be payable to the person to whom the
principal hereof shall be payable.

       

      Payment of
the principal of and premium, if any, and the interest on this Note due at
maturity (or any redemption or repayment date), unless this Note is denominated
in a Specified Currency other than U.S. dollars and is to be paid in whole or in
part in such Specified Currency, will be made in immediately available funds
upon surrender of this Note at the office or agency of the Paying Agent, as
defined on the reverse hereof, maintained for that purpose in the Borough of
Manhattan, The City of New York, or at such other paying agency as the Issuer
may determine, in U.S. dollars. U.S. dollar payments of interest, other than
interest due at maturity or any date of redemption or repayment, will be made by
U.S. dollar check mailed to the address of the person entitled thereto as such
address shall appear in the Note register. A holder of U.S. $10,000,000 (or the
equivalent in a Specified Currency) or more in aggregate principal amount of
Notes having the same Interest Payment Date, the interest on which is payable in
U.S. dollars, shall be entitled to receive payments of interest, other than
interest due at maturity or on any date of redemption or repayment, by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received by the Paying Agent in writing not less than 15
calendar days prior to the applicable Interest Payment Date.

       

      If this
Note is denominated in a Specified Currency other than U.S. dollars, and the
holder does not elect (in whole or in part) to receive payment in U.S. dollars
pursuant to the next succeeding paragraph, payments of principal, premium, if
any, and interest with regard to this Note will be made by wire transfer of
immediately available funds to an account maintained by the holder hereof with a
bank located outside the United States if appropriate wire transfer instructions
have been received by the Paying Agent in writing [not less than 15 calendar
days prior to the applicable payment date]5 [, with respect to payments of interest, on or
prior to the fifth Business Day after the applicable Record Date and, with
respect to payments of principal or any premium, at least ten Business Days
prior to the Maturity Date or any redemption or repayment date, as the case may
be];6 provided that, if payment of interest,
principal or any premium with regard to this Note is payable in euro, the
account must be a euro account in a country for which the euro is the lawful
currency, provided, further, that if such wire transfer instructions are not
received, such payments will be made by check payable in such Specified Currency
mailed to 

       

      ______________________

      
        5 Applies
for a Registered Note that is not in global form.

        
          6 Applies
only for a Registered Global Security.

           

           

        

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

       

      the
address of the person entitled thereto as such address shall appear in the Note
register; and provided, further, that payment of the principal of this Note, any
premium and the interest due at maturity (or on any redemption or repayment
date) will be made upon surrender of this Note at the office or agency referred
to in the preceding paragraph.

       

      If so
indicated on the face hereof, the holder of this Note, if denominated in a
Specified Currency other than U.S. dollars, may elect to receive all or a
portion of payments on this Note in U.S. dollars by transmitting a written
request to the Paying Agent, on or prior to the fifth Business Day after such
Record Date or at least ten Business Days prior to the Maturity Date or on any
redemption or repayment date, as the case may be. Such election shall remain in
effect unless such request is revoked by written notice to the Paying Agent as
to all or a portion of payments on this Note at least five Business Days prior
to such Record Date, for payments of interest, or at least ten calendar days
prior to the Maturity Date or any redemption or repayment date, for payments of
principal, as the case may be.

       

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

       

      Reference
is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place, including, without limitation, the provisions
relating to the subordination of this Note to the Issuer's Senior Indebtedness,
as defined on the reverse hereof.

       

      Unless the
certificate of authentication hereon has been executed by the Trustee referred
to on the reverse hereof by manual signature, this Note shall not be entitled to
any benefit under the Subordinated Indenture, as defined on the reverse hereof,
or be valid or obligatory for any purpose.

       

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

       

      IN WITNESS
WHEREOF, the Issuer has caused this Note to be duly executed.

       

      
        	 
      	 
      	
                MORGAN
      STANLEY

                 

              	 
	
                DATED

              	 
      	 
      	
                By:

              	 
      	 
	 
      	 
      	 
      	 
      	
                Name:

              	 
      	 
	 
      	 
      	 
      	 
      	
                Title:

              	 
      	 


      

      


      


       

      
        	
                TRUSTEE’S
      CERTIFICATE

                OF
      AUTHENTICATION

                 

                This
      is one of the Notes referred to in the within-mentioned Subordinated
      Indenture.

                 

                THE
      BANK OF NEW YORK MELLON,

                as
      Trustee

                 

              
	
                By:

              	 
      
	 
      	
                Authorized
      Signatory

              


      

      


      


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

       

      [FORM
OF REVERSE OF SECURITY]

      SUBORDINATED
GLOBAL MEDIUM-TERM NOTE, SERIES F

       

      This Note
is one of a duly authorized issue of Subordinated Global Medium-Term Notes,
Series F (the “Notes”), of the Issuer. The Notes are issuable under a
Subordinated Indenture, dated as of October 1, 2004, between the Issuer and The
Bank of New York Mellon, a New York banking corporation (as successor Trustee to
J.P. Morgan Trust Company, National Association), as Trustee (the “Trustee,”
which term includes any successor trustee under the Subordinated Indenture) (as
may be amended or supplemented from time to time, the “Subordinated Indenture”),
to which Subordinated Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities of the Issuer, the Trustee and holders of the
Notes and the terms upon which the Notes are, and are to be, authenticated and
delivered. The Issuer has appointed The Bank of New York Mellon (as successor to
J.P. Morgan Trust Company, National Association), at its corporate trust office
in The City of New York as the paying agent (the “Paying Agent,” which term
includes any additional or successor Paying Agent appointed by the Issuer) with
respect to the Notes. The terms of individual Notes may vary with respect to
interest rates, interest rate formulas, issue dates, maturity dates, or
otherwise, all as provided in the Subordinated Indenture. To the extent not
inconsistent herewith, the terms of the Subordinated Indenture are hereby
incorporated by reference herein.

       

      Unless
otherwise indicated on the face hereof, this Note will not be subject to any
sinking fund and, unless otherwise provided on the face hereof in accordance
with the provisions of the following two paragraphs, will not be redeemable or
subject to repayment at the option of the holder prior to maturity.

       

      If so
indicated on the face hereof, this Note may be redeemed in whole or in part at
the option of the Issuer on or after the Initial Redemption Date specified on
the face hereof on the terms set forth on the face hereof, together with
interest accrued and unpaid hereon to the date of redemption. If this Note is
subject to “Annual Redemption Percentage Reduction,” the Initial Redemption
Percentage indicated on the face hereof will be reduced on each anniversary of
the Initial Redemption Date by the Annual Redemption Percentage Reduction
specified on the face hereof until the redemption price of this Note is 100% of
the principal amount hereof, together with interest accrued and unpaid hereon to
the date of redemption. Notice of redemption shall be mailed to the registered
holders of the Notes designated for redemption at their addresses as the same
shall appear on the Note register not less than 30 nor more than 60 calendar
days prior to the date fixed for redemption or within the Redemption Notice
Period specified on the face hereof, subject to all the conditions and
provisions of the Subordinated Indenture. In the event of redemption of this
Note in part only, a new Note or Notes for the amount of the unredeemed portion
hereof shall be issued in the name of the holder hereof upon the cancellation
hereof.

       

      If so
indicated on the face of this Note, this Note will be subject to repayment at
the option of the holder on the Optional Repayment Date or Dates specified on
the face hereof on the terms set forth herein. On any Optional Repayment Date,
this Note will be repayable in whole or in part in increments of $1,000 or, if
this Note is denominated in a Specified Currency other than U.S. dollars, in
increments of 1,000 units of such Specified Currency (provided that any
remaining principal amount hereof shall not be less than the minimum authorized
denomination hereof) at the option of the holder hereof at a price equal to 100%
of the principal amount to be repaid, together with interest accrued and unpaid
hereon to the date of repayment. For this Note to be repaid at the option of the
holder hereof, the Paying Agent must receive at its corporate trust office in
the Borough of Manhattan, The City of New York, at least 15 but not more than 30
calendar days prior to the date of repayment, (i) this Note with the form
entitled “Option to Elect Repayment” below duly completed or (ii) a telegram,
telex, facsimile transmission or a letter from a member of a national securities
exchange or the Financial Industry Regulatory Authority, Inc. or a commercial
bank or a trust company in the United States setting forth the name of the
holder of this Note, the principal amount hereof, the certificate number of this
Note or a description of this Note's tenor and terms, the principal amount
hereof to be repaid, a statement that the option to elect repayment is being
exercised thereby and a guarantee that this Note, together with the form
entitled “Option to Elect Repayment” duly completed, will be received by the
Paying Agent not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter; provided, that such telegram,
telex, facsimile transmission or letter shall only be effective if this Note and
form duly completed are received by the Paying Agent by such fifth Business Day.
Exercise of such repayment option by the holder hereof shall be irrevocable. In
the event of repayment of this Note 

       

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

       

      in part
only, a new Note or Notes for the amount of the unpaid portion hereof shall be
issued in the name of the holder hereof upon the cancellation
hereof.

       

      This Note
will bear interest at the rate determined in accordance with the applicable
provisions below by reference to the Base Rate shown on the face hereof based on
the Index Maturity, if any, shown on the face hereof (i) plus or minus the
Spread, if any, and/or (ii) multiplied by the Spread Multiplier, if any,
specified on the face hereof. Commencing with the Initial Interest Reset Date
specified on the face hereof, the rate at which interest on this Note is payable
shall be reset as of each Interest Reset Date specified on the face hereof (as
used herein, the term “Interest Reset Date” shall include the Initial Interest
Reset Date). For the purpose of determining the Initial Interest Rate,
references in this paragraph, the next succeeding paragraph and, if applicable,
clauses (i) and (ii) under “Determination of EURIBOR” below to Interest Reset
Date shall be deemed to mean the Original Issue Date. The determination of the
rate of interest at which this Note will be reset on any Interest Reset Date
shall be made on the Interest Determination Date (as defined below) pertaining
to such Interest Reset Dates. The Interest Reset Dates will be the Interest
Reset Dates specified on the face hereof; provided, however, that (a) the
interest rate in effect for the period from the Interest Accrual Date to the
Initial Interest Reset Date will be the Initial Interest Rate and (b) unless
otherwise specified on the face hereof, the interest rate in effect for the ten
calendar days immediately prior to maturity, redemption or repayment will be
that in effect on the tenth calendar day preceding such maturity, redemption or
repayment date. If any Interest Reset Date would otherwise be a day that is not
a Business Day, such Interest Reset Date shall be postponed to the immediately
succeeding day that is a Business Day, except that if the Base Rate specified on
the face hereof is LIBOR or EURIBOR and such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day. As used herein, “Business Day” means any day, other than
a Saturday or Sunday, (a) that is neither a legal holiday nor a day on which
banking institutions are authorized or required by law or regulation to close
(x) in The City of New York or (y) if this Note is denominated in a Specified
Currency other than U.S. dollars, euro or Australian dollars, in the principal
financial center of the country of the Specified Currency, or (z) if this Note
is denominated in Australian dollars, in Sydney and (b) if this Note is
denominated in euro, that is also a day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer payment system (“TARGET”) , which
utilizes a single shared platform and was launched on November 19, 2007, is open
for the settlement of payment in euro (a “TARGET Settlement Day”).

       

      The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to the Federal Funds Rate, Federal
Funds (Open) Rate and Prime Rate shall be on the Business Day prior to the
Interest Reset Date. The Interest Determination Date pertaining to an Interest
Reset Date for Notes bearing interest calculated by reference to the CD Rate,
Commercial Paper Rate and CMT Rate will be the second Business Day prior to such
Interest Reset Date. The Interest Determination Date pertaining to an Interest
Reset Date for Notes bearing interest calculated by reference to EURIBOR (or to
LIBOR when the Index Currency is euros) shall be the second TARGET Settlement
Day prior to such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for Notes bearing interest calculated by
reference to LIBOR (other than for LIBOR Notes for which the Index Currency is
euros) shall be the second London Banking Day prior to such Interest Reset Date,
except that the Interest Determination Date pertaining to an Interest Reset Date
for a LIBOR Note for which the Index Currency is pounds sterling will be such
Interest Reset Date. As used herein, “London Banking Day” means any day on which
dealings in deposits in the Index Currency (as defined herein) are transacted in
the London interbank market. The Interest Determination Date pertaining to an
Interest Reset Date for Notes bearing interest calculated by reference to the
Treasury Rate shall be the day of the week in which such Interest Reset Date
falls on which Treasury bills normally would be auctioned. Treasury Bills are
normally sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is normally held on the following Tuesday,
except that the auction may be held on the preceding Friday; provided, however,
that if an auction is held on the Friday of the week preceding such Interest
Reset Date, the Interest Determination Date shall be such preceding Friday; and
provided, further, that if an auction shall fall on any Interest Reset Date,
then the Interest Reset Date shall instead be the first Business Day following
the date of such auction. The Interest Determination Date pertaining to an
Interest Reset Date for Notes bearing interest calculated by reference to two or
more base rates will be the latest Business Day that is at least two Business
Days before the Interest Reset Date for the applicable Note on which each base
rate is determinable.

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

       

      Unless
otherwise specified on the face hereof, the “Calculation Date” pertaining to an
Interest Determination Date, including the Interest Determination Date as of
which the Initial Interest Rate is determined, will be the earlier of (i) the
tenth calendar day after such Interest Determination Date or, if such day is not
a Business Day, the next succeeding Business Day, or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or Maturity Date (or,
with respect to any principal amount to be redeemed or repaid, any redemption or
repayment date), as the case may be.

       

      Determination
of CD Rate. If the Base Rate specified on the face hereof is the “CD Rate,” for
any Interest Determination Date, the CD Rate with respect to this Note shall be
the rate on that date for negotiable U.S. dollar certificates of deposit having
the Index Maturity specified on the face hereof as published by the Board of
Governors of the Federal Reserve System in “Statistical Release H.15(519),
Selected Interest Rates,” or any successor publication of the Board of Governors
of the Federal Reserve System (“H.15(519)”) under the heading “CDs (Secondary
Market).”

       

      The
following procedures shall be followed if the CD Rate cannot be determined as
described above:

       

      (i) If the
above rate is not published in H.15(519) by 3:00 p.m., New York City time, on
the Calculation Date, the CD Rate shall be the rate on that Interest
Determination Date set forth in the daily update of H.15(519), available through
the world wide website of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov/releases/h15/update, or any successor site or
publication (“H.15 Daily Update”) for the Interest Determination Date for
certificates of deposit having the Index Maturity specified on the face hereof,
under the caption “CDs (Secondary Market).”

       

      (ii) If
the above rate is not yet published in either H.15(519) or the H.15 Daily Update
by 3:00 p.m., New York City time, on the Calculation Date, the Calculation Agent
shall determine the CD Rate to be the arithmetic mean of the secondary market
offered rates as of 10:00 a.m., New York City time, on that Interest
Determination Date of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York, which may include the initial
dealer and its affiliates, selected by the Calculation Agent (after consultation
with the Issuer), for negotiable U.S. dollar certificates of deposit of major
U.S. money center banks of the highest credit standing in the market for
negotiable certificates of deposit with a remaining maturity closest to the
Index Maturity specified on the face hereof in an amount that is representative
for a single transaction in that market at that time.

       

      “Initial
dealer” with respect to this Note means Morgan Stanley & Co.
Incorporated.

       

      (iii) If
the dealers selected by the Calculation Agent are not quoting as set forth above
in (ii), the CD Rate for that Interest Determination Date shall remain the CD
Rate for the immediately preceding Interest Reset Period, or, if there was no
Interest Reset Period, the rate of interest payable shall be the Initial
Interest Rate.

       

      Determination
of Commercial Paper Rate. If the Base Rate specified on the face hereof is the
“Commercial Paper Rate,” for any Interest Determination Date, the Commercial
Paper Rate with respect to this Note shall be the Money Market Yield (as defined
herein), calculated as described below, of the rate on that date for U.S. dollar
commercial paper having the Index Maturity specified on the face hereof, as that
rate is published in H.15(519), under the heading “Commercial Paper --
Nonfinancial.”

       

      The
following procedures shall be followed if the Commercial Paper Rate cannot be
determined as described above:

       

      (i) If the
above rate is not published by 3:00 p.m., New York City time, on the Calculation
Date, then the Commercial Paper Rate shall be the Money Market Yield of the rate
on that Interest Determination Date for commercial paper of the Index Maturity
specified on the face hereof as published in the H.15 Daily Update, or other
recognized electronic source used for the purpose of displaying the applicable
rate, under the heading “Commercial Paper -- Nonfinancial.”

       

      (ii) If by
3:00 p.m., New York City time, on that Calculation Date the rate is not yet
published in either H.15(519) or the H.15 Daily Update, or other recognized
electronic source used for the purpose of displaying the applicable rate, then
the Calculation Agent shall determine the Commercial Paper Rate to be the Money
Market 

       

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

       

      Yield of
the arithmetic mean of the offered rates as of 11:00 a.m., New York City time,
on that Interest Determination Date of three leading dealers of U.S. dollar
commercial paper in The City of New York, which may include the initial dealer
and its affiliates, selected by the Calculation Agent (after consultation with
the Issuer), for commercial paper of the Index Maturity specified on the face
hereof, placed for an industrial issuer whose bond rating is “Aa,” or the
equivalent, from a nationally recognized statistical rating agency.

       

      (iii) If
the dealers selected by the Calculation Agent are not quoting as set forth
above, the Commercial Paper Rate for that Interest Determination Date shall
remain the Commercial Paper Rate for the immediately preceding Interest Reset
Period, or, if there was no Interest Reset Period, the rate of interest payable
shall be the Initial Interest Rate.

       

      The “Money
Market Yield” shall be a yield calculated in accordance with the following
formula:

       

      

       

      where ‘D”
refers to the applicable per year rate for commercial paper quoted on a bank
discount basis and expressed as a decimal and “M” refers to the actual number of
days in the interest period for which interest is being calculated.

       

      Determination
of EURIBOR. If the Base Rate specified on the face hereof is “EURIBOR,” for any
Interest Determination Date, EURIBOR with respect to this Note shall be the rate
for deposits in euros as sponsored, calculated and published jointly by the
European Banking Federation and ACI — The Financial Market Association, or any
company established by the joint sponsors for purposes of compiling and
publishing those rates, for the Index Maturity specified on the face hereof as
that rate appears on the display on Reuters 3000 Xtra Service (“Reuters”), or
any successor service, on page EURIBOR01 or any other page as may replace page
EURIBOR01 on that service (“Reuters Page EURIBOR01”) as of 11:00 a.m., Brussels
time.

       

      The
following procedures shall be followed if the rate cannot be determined as
described above:

       

      (i) If the
above rate does not appear, the Calculation Agent shall request the principal
Euro-zone office of each of four major banks in the Euro-zone interbank market,
as selected by the Calculation Agent (after consultation with the Issuer), to
provide the Calculation Agent with its offered rate for deposits in euros, at
approximately 11:00 a.m., Brussels time, on the Interest Determination Date, to
prime banks in the Euro-zone interbank market for the Index Maturity specified
on the face hereof commencing on the applicable Interest Reset Date, and in a
principal amount not less than the equivalent of U.S. $1 million in euro that is
representative of a single transaction in euro, in that market at that time. If
at least two quotations are provided, EURIBOR shall be the arithmetic mean of
those quotations.

       

      (ii) If
fewer than two quotations are provided, EURIBOR shall be the arithmetic mean of
the rates quoted by four major banks in the Euro-zone interbank market, as
selected by the Calculation Agent (after consultation with the Issuer), at
approximately 11:00 a.m., Brussels time, on the applicable Interest Reset Date
for loans in euro to leading European banks for a period of time equivalent to
the Index Maturity specified on the face hereof commencing on that Interest
Reset Date in a principal amount not less than the equivalent of U.S. $1 million
in euro.

       

      (iii) If
the banks so selected by the Calculation Agent are not quoting as set forth
above, EURIBOR for that Interest Determination Date shall remain EURIBOR for the
immediately preceding Interest Reset Period, or, if there was no Interest Reset
Period, the rate of interest payable shall be the Initial Interest
Rate.

       

      “Euro-zone”
means the region comprised of Member States of the European Union that adopt the
single currency in accordance with the relevant treaty of the European Union, as
amended.

       

      Determination
of the Federal Funds Rate. If the Base Rate specified on the face hereof is the
“Federal Funds Rate,” for any Interest Determination Date, the Federal Funds
Rate with respect to this Note shall be the rate on that date for U.S. dollar
federal funds as published in H.15(519) under the heading “Federal Funds
(Effective)” as 

       

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

       

      displayed
on Reuters, or any successor service, on page FEDFUNDS1 or any other page as may
replace the applicable page on that service (“Reuters Page
FEDFUNDS1”).

       

      The
following procedures shall be followed if the Federal Funds Rate cannot be
determined as described above:

       

      (i) If the
above rate is not published by 3:00 p.m., New York City time, on the Calculation
Date, the Federal Funds Rate shall be the rate on that Interest Determination
Date as published in the H.15 Daily Update, or other recognized electronic
source used for the purpose of displaying the applicable rate, under the heading
“Federal Funds (Effective).”

       

      (ii) If
the above rate is not yet published in either H.15(519) or the H.15 Daily
Update, or other recognized electronic source used for the purpose of displaying
the applicable rate, by 3:00 p.m., New York City time, on the Calculation Date,
the Calculation Agent shall determine the Federal Funds Rate to be the
arithmetic mean of the rates for the last transaction in overnight U.S. dollar
federal funds prior to 9:00 a.m., New York City time, on that Interest
Determination Date, by each of three leading brokers of U.S. dollar federal
funds transactions in The City of New York, which may include the initial dealer
and its affiliates, selected by the Calculation Agent (after consultation with
the Issuer).

       

      (iii) If
the brokers selected by the Calculation Agent are not quoting as set forth in
(ii) above, the Federal Funds Rate for that Interest Determination Date shall
remain the Federal Funds Rate for the immediately preceding Interest Reset
Period, or, if there was no Interest Reset Period, the rate of interest payable
shall be the Initial Interest Rate.

       

      Determination
of Federal Funds (Open) Rate. If the Base Rate specified on the face hereof is
the “Federal Funds (Open) Rate”, for any Interest Determination Date, the
Federal Funds (Open) Rate with respect to this Note shall be the rate on that
date for U.S. dollar federal funds as published in H.15(519) under the heading
“Federal Funds (Open)” as displayed on Reuters, or any successor service, on
page 5 or any other page as may replace the applicable page on that service
(“Reuters Page 5”).

       

      The
following procedures shall be followed if the Federal Funds (Open) Rate cannot
be determined as described above:

       

      
        	
                 
      

              	
                ·

              	
                If
      the above rate is not published by 3:00 p.m., New York City time, on the
      Calculation Date, the Federal Funds (Open) Rate will be the rate on that
      Interest Determination Date as published in the H.15 Daily Update, or
      other recognized electronic source used for the purpose of displaying the
      applicable rate, under the heading “Federal Funds
  (Open).”

              


      

       

      
        	
                 
      

              	
                ·

              	
                If
      the above rate is not yet published in either H.15(519) or the H.15 Daily
      Update, or other recognized electronic source used for the purpose of
      displaying the applicable rate, by 3:00 p.m., New York City time, on the
      Calculation Date, the Calculation Agent will determine the Federal Funds
      (Open) Rate to be the arithmetic mean of the rates for the last
      transaction in overnight U.S. dollar federal funds (based on the Federal
      Funds (Open) Rate) prior to 9:00 a.m., New York City time, on that
      Interest Determination Date, by each of three leading brokers of U.S.
      dollar federal funds transactions in The City of New York, which may
      include the agent and its affiliates, selected by the Calculation Agent,
      after consultation with the Issuer.

              


      

       

      
        	
                 
      

              	
                ·

              	
                If
      the brokers selected by the Calculation Agent are not quoting as set forth
      above, the Federal Funds (Open) Rate for that Interest Determination Date
      shall remain the Federal Funds (Open) Rate for the immediately preceding
      Interest Reset Period, or, if there was no Interest Reset Period, the rate
      of interest payable will be the Initial Interest
  Rate.

              


      

       

      Determination
of LIBOR. If the Base Rate specified on the face hereof is “LIBOR,” LIBOR with
respect to this Note shall be based on London Interbank Offered Rate. The
Calculation Agent shall determine LIBOR for each Interest Determination Date as
follows:

       

      (i) LIBOR
means, for any Interest Determination Date, the arithmetic mean of the offered
rates for deposits in the Index Currency having the Index Maturity designated on
the face hereof, commencing on the second London 

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

       

      Banking
Day immediately following that Interest Determination Date or, if pounds
sterling is the Index Currency, commencing on that Interest Determination Date,
that appear on the Designated LIBOR Page as of 11:00 a.m., London time, on that
Interest Determination Date, if at least two offered rates appear on the
Designated LIBOR Page (as defined below), provided that if the specified
Designated LIBOR Page by its terms provides only for a single rate, that single
rate shall be used.

       

      (ii) If
(a) fewer than two offered rates appear or (b) no rate appears and the
Designated LIBOR Page by its terms provides only for a single rate, then the
Calculation Agent shall request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent, after consultation with the Issuer, to provide the
Calculation Agent with its offered quotation for deposits in the Index Currency
for the period of the Index Maturity specified on the face hereof commencing on
the second London Banking Day immediately following the Interest Determination
Date or, if pounds sterling is the Index Currency, commencing on that Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on that Interest Determination Date and
in a principal amount that is representative of a single transaction in that
Index Currency in that market at that time. If at least two quotations are
provided, LIBOR determined on that Interest Determination Date shall be the
arithmetic mean of those quotations.

       

      (iii) If
fewer than two quotations are provided, as described in the prior paragraph,
LIBOR shall be determined for the applicable Interest Reset Date as the
arithmetic mean of the rates quoted at approximately 11:00 a.m., or some other
time specified on the face hereof, in the applicable principal financial center
for the country of the Index Currency on that Interest Reset Date, by three
major banks in that principal financial center selected by the Calculation Agent
(after consultation with the Issuer) for loans in the Index Currency to leading
European banks, having the Index Maturity specified on the face hereof and in a
principal amount that is representative of a single transaction in that Index
Currency in that market at that time.

       

      (iv) If
the banks so selected by the Calculation Agent are not quoting as set forth
above, LIBOR for that Interest Determination Date shall remain LIBOR for the
immediately preceding Interest Reset Period, or, if there was no Interest Reset
Period, the rate of interest payable shall be the Initial Interest
Rate.

       

      The “Index
Currency” means the currency specified on the face hereof as the currency for
which LIBOR shall be calculated, or, if the euro is substituted for that
currency, the Index Currency shall be the euro. If that currency is not
specified on the face hereof, the Index Currency shall be U.S.
dollars.

       

      “Designated
LIBOR Page” means the display on Reuters, or any successor service, on page
LIBOR01, or any other page as may replace that page on that service, for the
purpose of displaying the London interbank rates of major banks for the
applicable Index Currency.

       

      Determination
of Prime Rate. If the Base Rate specified on the face hereof is “Prime Rate,”
for any Interest Determination Date, the Prime Rate with respect to this Note
shall be the rate on that date as published in H.15(519) under the heading “Bank
Prime Loan.”

       

      The
following procedures shall be followed if the Prime Rate cannot be determined as
described above:

       

      (i) If the
above rate is not published prior to 3:00 p.m., New York City time, on the
Calculation Date, then the Prime Rate shall be the rate on that Interest
Determination Date as published in the H.15 Daily Update under the heading “Bank
Prime Loan.”

       

      (ii) If
the above rate is not published in either H.15(519) or the H.15 Daily Update by
3:00 p.m., New York City time, on the Calculation Date, the Calculation Agent
shall determine the Prime Rate to be the arithmetic mean of the rates of
interest publicly announced by each bank that appears on the Reuters Page US
PRIME 1, as defined below, as that bank’s Prime Rate or base lending rate as in
effect for that Interest Determination Date.

       

      (iii) If
fewer than four rates for that Interest Determination Date appear on the Reuters
Page US PRIME 1 by 3:00 p.m., New York City time, on the Calculation Date, the
Calculation Agent shall determine the Prime Rate to be the arithmetic mean of
the Prime Rates quoted on the basis of the actual number of days in the year
divided by 360 as of the close of business on that Interest Determination Date
by at least three major banks in The City of New 

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

       

      York,
which may include affiliates of the initial dealer, selected by the Calculation
Agent (after consultation with the Issuer).

       

      (iv) If
the banks selected by the Calculation Agent are not quoting as set forth above,
the Prime Rate for that Interest Determination Date shall remain the Prime Rate
for the immediately preceding Interest Reset Period, or, if there was no
Interest Reset Period, the rate of interest payable shall be the Initial
Interest Rate.

       

      “Reuters
Page US PRIME 1” means the display designated as page “US PRIME 1” on Reuters,
or any successor service, or any other page as may replace the US PRIME 1 page
on that service for the purpose of displaying prime rates or base lending rates
of major U.S. banks.

       

      Determination
of Treasury Rate. If the Base Rate specified on the face hereof is “Treasury
Rate,” the Treasury Rate with respect to this Note shall be:

       

      (i) the
rate from the Auction held on the applicable Interest Determination Date (the
“Auction”) of direct obligations of the United States (“Treasury Bills”) having
the Index Maturity specified on the face hereof as that rate appears under the
caption “INVESTMENT RATE” on the display on Reuters, or any successor service,
on page USAUCTION10 or any other page as may replace page USAUCTION10 on that
service (“Reuters Page USAUCTION10”), or on page USAUCTION11 or any other page
as may replace page USAUCTION11 on that service (“Reuters Page USAUCTION11”);
or

       

      (ii) if
the rate described in (i) above is not published by 3:00 p.m., New York City
time, on the Calculation Date, the Bond Equivalent Yield of the Auction rate for
the applicable Treasury Bills as published in the H.15 Daily Update, or other
recognized electronic source used for the purpose of displaying the applicable
rate, under the caption “U.S. Government Securities/Treasury Bills/Auction
High”; or

       

      (iii) if
the rate described in (ii) above is not published by 3:00 p.m., New York City
time, on the related Calculation Date, the Bond Equivalent Yield of the Auction
rate of the applicable Treasury Bills, announced by the United States Department
of the Treasury; or

       

      (iv) if
the rate described in (iii) above is not announced by the United States
Department of the Treasury, or if the Auction is not held, the Bond Equivalent
Yield of the Auction rate on the applicable Interest Determination Date of
Treasury Bills having the Index Maturity specified on the face hereof published
in H.15(519) under the caption “U.S. Government Securities/Treasury
Bills/Secondary Market”; or

       

      (v) if the
rate described in (iv) above is not so published by 3:00 p.m., New York City
time, on the related Calculation Date, the rate on the applicable Interest
Determination Date of the applicable Treasury Bills as published in the H.15
Daily Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption “U.S. Government
Securities/Treasury Bills/Secondary Market”; or

       

      (vi) if
the rate described in (v) above is not so published by 3:00 p.m., New York City
time, on the related Calculation Date, the rate on the applicable Interest
Determination Date calculated by the Calculation Agent as the Bond Equivalent
Yield of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 p.m., New York City time, on the applicable Interest
Determination Date, of three primary U.S. government securities dealers, which
may include the initial dealer and its affiliates, selected by the Calculation
Agent, for the issue of Treasury Bills with a remaining maturity closest to the
Index Maturity specified on the face hereof; or

       

      (vii) if
the dealers selected by the Calculation Agent are not quoting as described in
(vi), the Treasury Rate for the immediately preceding Interest Reset Period, or,
if there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.

       

      The “Bond
Equivalent Yield” means a yield calculated in accordance with the following
formula and expressed as a percentage:

       

      

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

       

      where “D”
refers to the applicable per annum rate for Treasury Bills quoted on a bank
discount basis, “N” refers to 365 or 366, as the case may be, and “M” refers to
the actual number of days in the interest period for which interest is being
calculated.

       

      Determination
of CMT Rate. If the Base Rate specified on the face hereof is the “CMT Rate,”
for any Interest Determination Date, the CMT Rate with respect to this Note
shall be any of the following rates displayed on the Designated CMT Reuters Page
(as defined below) under the caption “. . . Treasury Constant Maturities . . .
Federal Reserve Board Release H.15. . . Mondays Approximately 3:45 p.m.,” under
the column for the Designated CMT Maturity Index, as defined below,
for:

       

      (1) the
rate on that Interest Determination Date, if the Designated CMT Reuters Page is
FRBCMT; and

       

      (2) the
week or the month, as applicable, ended immediately preceding the week in which
the related Interest Determination Date occurs, if the Designated CMT Reuters
Page is FEDCMT.

       

      The
following procedures shall be followed if the CMT Rate cannot be determined as
described above:

       

      (i) If the
above rate is no longer displayed on the relevant page, or if not displayed by
3:00 p.m., New York City time, on the related Calculation Date, then the CMT
Rate shall be the Treasury Constant Maturities rate for the Designated CMT
Maturity Index as published in the relevant H.15(519).

       

      (ii) If
the rate described in (i) above is no longer published, or if not published by
3:00 p.m., New York City time, on the related Calculation Date, then the CMT
Rate shall be the Treasury Constant Maturities Rate for the Designated CMT
Maturity Index or other U.S. Treasury rate for the Designated CMT Maturity Index
on the Interest Determination Date for the related Interest Reset Date as may
then be published by either the Board of Governors of the Federal Reserve System
or the United States Department of the Treasury that the Calculation Agent
determines to be comparable to the rate formerly displayed on the Designated CMT
Reuters Page and published in the relevant H.15(519).

       

      (iii) If
the rate described in (ii) above is not provided by 3:00 p.m., New York City
time, on the related Calculation Date, then the Calculation Agent shall
determine the CMT Rate to be a yield to maturity, based on the arithmetic mean
of the secondary market closing offer side prices as of approximately 3:30 p.m.,
New York City time, on the Interest Determination Date, reported, according to
their written records, by three leading primary U.S. government securities
dealers (“Reference Dealers”) in The City of New York, which may include the
initial dealer or another affiliate, selected by the Calculation Agent as
described in the following sentence. The Calculation Agent shall select five
Reference Dealers (after consultation with the Issuer) and shall eliminate the
highest quotation or, in the event of equality, one of the highest, and the
lowest quotation or, in the event of equality, one of the lowest, for the most
recently issued direct noncallable fixed rate obligations of the United States
(“Treasury Notes”) with an original maturity of approximately the Designated CMT
Maturity Index, a remaining term to maturity of no more than 1 year shorter than
that Designated CMT Maturity Index and in a principal amount that is
representative for a single transaction in the securities in that market at that
time. If two Treasury Notes with an original maturity as described above have
remaining terms to maturity equally close to the Designated CMT Maturity Index,
the quotes for the Treasury Note with the shorter remaining term to maturity
shall be used.

       

      (iv) If
the Calculation Agent cannot obtain three Treasury Notes quotations as described
in (iii) above, the Calculation Agent shall determine the CMT Rate to be a yield
to maturity based on the arithmetic mean of the secondary market offer side
prices as of approximately 3:30 p.m., New York City time, on the Interest
Determination Date of three Reference Dealers in The City of New York, selected
using the same method described in (iii) above, for Treasury Notes with an
original maturity equal to the number of years closest to but not less than the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in a principal amount that is representative
for a single transaction in the securities in that market at that
time.

       

      (v) If
three or four, and not five, of the Reference Dealers are quoting as described
in (iv) above, then the CMT Rate for that Interest Determination Date shall be
based on the arithmetic mean of the offer prices obtained and neither the
highest nor the lowest of those quotes shall be eliminated.

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

       

      (vi)  If
fewer than three Reference Dealers selected by the Calculation Agent are quoting
as described in (iv) above, the CMT Rate for that Interest Determination Date
shall be the CMT Rate for the immediately preceding Interest Reset Period, or,
if there was no Interest Reset Period, the rate of interest payable shall be the
Initial Interest Rate.

       

      “Designated
CMT Reuters Page” means the display on Reuters, or any successor service, on the
page designated on the face hereof or any other page as may replace that page on
that service for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519). If no Reuters page is specified on the face hereof, the
Designated CMT Reuters Page shall be FEDCMT, for the most recent
week.

       

      “Designated
CMT Maturity Index” means the original period to maturity of the U.S. Treasury
securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30 years, as specified on
the face hereof, for which the CMT Rate shall be calculated. If no maturity is
specified on the face hereof, the Designated CMT Maturity Index shall be two
years.

       

      Notwithstanding
the foregoing, the interest rate hereon shall not be greater than the Maximum
Interest Rate, if any, or less than the Minimum Interest Rate, if any, specified
on the face hereof. The Calculation Agent shall calculate the interest rate
hereon in accordance with the foregoing on or before each Calculation Date. The
interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States Federal
law of general application.

       

      At the
request of the holder hereof, the Calculation Agent will provide to the holder
hereof the interest rate hereon then in effect and, if determined, the interest
rate that will become effective as of the next Interest Reset Date.

       

      Unless
otherwise indicated on the face hereof, interest payments on this Note shall be
the amount of interest accrued from and including the Interest Accrual Date or
from and including the last date to which interest has been paid or duly
provided for to but excluding the Interest Payment Dates or the Maturity Date
(or any earlier redemption or repayment date), as the case may be. Accrued
interest hereon shall be an amount calculated by multiplying the face amount
hereof by an accrued interest factor. Such accrued interest factor shall be
computed by adding the interest factor calculated for each day in the period for
which interest is being paid. The interest factor for each such date shall be
computed by dividing the interest rate applicable to such day (i) by 360 if the
Base Rate is CD Rate, Commercial Paper Rate, EURIBOR, Federal Funds Rate,
Federal Funds (Open) Rate, Prime Rate or LIBOR (except if the Index Currency is
pounds sterling); (ii) by 365 if the Base Rate is LIBOR and the Index Currency
is pounds sterling; or (iii) by the actual number of days in the year if the
Base Rate is the Treasury Rate or the CMT Rate. All percentages resulting from
any calculation of the rate of interest on this Note will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point (with
..000005% being rounded up to .00001%) and all U.S. dollar amounts used in or
resulting from such calculation on this Note will be rounded to the nearest
cent, with one-half cent rounded upward. All Japanese Yen amounts used in or
resulting from such calculations will be rounded downwards to the next lower
whole Japanese Yen amount. All amounts denominated in any other currency used in
or resulting from such calculations will be rounded to the nearest two decimal
places in such currency, with .005 being rounded up to .01. The interest rate in
effect on any Interest Reset Date will be the applicable rate as reset on such
date. The interest rate applicable to any other day is the interest rate from
the immediately preceding Interest Reset Date (or, if none, the Initial Interest
Rate).

       

      This Note
and all other obligations of the Issuer hereunder will constitute part of the
subordinated debt of the Issuer, will be issued under the Subordinated Indenture
and will be subordinate and junior in right of payment, to the extent and in the
manner set forth in the Subordinated Indenture, to all “Senior Indebtedness” of
the Issuer. The Subordinated Indenture defines “Senior Indebtedness” as (i)
obligations (other than non-recourse obligations, the debt securities, including
this Note, issued under the Subordinated Indenture or any other obligations
specifically designated as being subordinate in right of payment to Senior
Indebtedness) of, or guaranteed or assumed by, the Issuer for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments, and
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligation and (ii) if provided in the supplemental indenture
under which a series of Securities is issued or in the form of Security for such
series, any additional obligations that the Issuer determines to include within
the definition of Senior Indebtedness in order to assure that the Securities of
such series will be accorded the regulatory capital recognition desired by the
Issuer in

       

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

       

      accordance
with Rule 15c3-1 under the Securities Exchange Act of 1934, as amended, or any
other rule or regulation governing the definition of capital that is applicable
to the Issuer or its affiliates.

       

      This Note,
and any Note or Notes issued upon transfer or exchange hereof, is issuable only
in fully registered form, without coupons, and, if denominated in U.S. dollars,
is issuable only in denominations of U.S. $1,000 and any integral multiple of
U.S. $1,000 in excess thereof. If this Note is denominated in a Specified
Currency other than U.S. dollars, then, unless a higher minimum denomination is
required by applicable law, it is issuable only in denominations of the
equivalent of U.S. $1,000 (rounded down to an integral multiple of 1,000 units
of such Specified Currency), or any amount in excess thereof which is an
integral multiple of 1,000 units of such Specified Currency, as determined by
reference to the noon dollar buying rate in The City of New York for cable
transfers of such Specified Currency published by the Federal Reserve Bank of
New York (the “Market Exchange Rate”) on the Business Day immediately preceding
the date of issuance.

       

      The
Trustee has been appointed registrar for the Notes (the “Registrar,” which term
includes any successor registrar appointed by the Issuer), and the Registrar
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Registrar by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the Registrar and duly executed by the registered holder hereof in
person or by the holder's attorney duly authorized in writing, and thereupon the
Registrar shall issue in the name of the transferee or transferees, in exchange
herefor, a new Note or Notes having identical terms and provisions and having a
like aggregate principal amount in authorized denominations, subject to the
terms and conditions set forth herein; provided, however, that the Registrar
will not be required (i) to register the transfer of or exchange any Note that
has been called for redemption in whole or in part, except the unredeemed
portion of Notes being redeemed in part, (ii) to register the transfer of or
exchange any Note if the holder thereof has exercised his right, if any, to
require the Issuer to repurchase such Note in whole or in part, except the
portion of such Note not required to be repurchased, or (iii) to register the
transfer of or exchange Notes to the extent and during the period so provided in
the Subordinated Indenture with respect to the redemption of Notes. Notes are
exchangeable at said office for other Notes of other authorized denominations of
equal aggregate principal amount having identical terms and provisions. All such
exchanges and transfers of Notes will be free of charge, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge in connection therewith. All Notes surrendered for exchange shall be
accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the Registrar and executed by the registered holder in person or by
the holder's attorney duly authorized in writing. The date of registration of
any Note delivered upon any exchange or transfer of Notes shall be such that no
gain or loss of interest results from such exchange or transfer.

       

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

       

      The
Subordinated Indenture provides that, (a) if an Event of Default (as defined in
the Subordinated Indenture) pursuant to Section 5.01(c) of the Subordinated
Indenture is provided in the supplemental indenture relating to the series of
Subordinated Medium-Term Notes of which this Note forms a part or in the form of
debt security for such series (if such Event of Default is with respect to less
than all outstanding debt securities issued under the Subordinated Indenture)
and such Event of Default shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
outstanding debt securities of each affected series, voting as one class, by
notice in writing to the Issuer and to the Trustee, if given by the
securityholders, may then declare the principal of all debt securities of all
such series and interest accrued thereon to be due and payable immediately and
(b) if an Event of Default due to certain events of bankruptcy, insolvency or
reorganization of the Issuer shall have occurred and be continuing or if an
Event of Default pursuant to Section 5.01(c) of the Subordinated Indenture is
provided in the supplemental indenture relating to the series of Subordinated
Medium-

       

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

       

      Term Notes
of which this Note forms a part or in the form of debt security for such series
(if such Event of Default is with respect to all outstanding debt securities
issued under the Subordinated Indenture) and such Event of Default shall have
occurred and be continuing, either the Trustee or the holders of not less than
25% in aggregate principal amount of all outstanding debt securities issued
under the Subordinated Indenture, voting as one class, by notice in writing to
the Issuer and to the Trustee, if given by the securityholders, may declare the
principal of all such debt securities and interest accrued thereon to be due and
payable immediately, but upon certain conditions such declarations may be
annulled and past defaults may be waived (except a continuing default in payment
of principal or premium, if any, or interest on such debt securities) by the
holders of a majority in aggregate principal amount of all the debt securities
of all affected series then outstanding.

       

      If the
face hereof indicates that this Note is subject to “Tax Redemption and Payment
of Additional Amounts,” this Note may be redeemed, as a whole, at the option of
the Issuer at any time prior to maturity, upon the giving of a notice of
redemption as described below, at a redemption price equal to 100% of the
principal amount hereof, together with accrued interest to the date fixed for
redemption, if the Issuer determines that, as a result of any change in or
amendment to the laws (including a holding, judgment or as ordered by a court of
competent jurisdiction), or any regulations or rulings promulgated thereunder,
of the United States or of any political subdivision or taxing authority thereof
or therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which change
or amendment occurs, becomes effective or, in the case of a change in official
position, is announced on or after the Initial Offering Date hereof, the Issuer
has or will become obligated to pay Additional Amounts, as defined below, with
respect to this Note as described below. Prior to the giving of any notice of
redemption pursuant to this paragraph, the Issuer shall deliver to the Trustee
(i) a certificate stating that the Issuer is entitled to effect such redemption
and setting forth a statement of facts showing that the conditions precedent to
the right of the Issuer to so redeem have occurred, and (ii) an opinion of
independent legal counsel satisfactory to the Trustee to such effect based on
such statement of facts; provided that no such notice of redemption shall be
given earlier than 60 calendar days prior to the earliest date on which the
Issuer would be obligated to pay such Additional Amounts if a payment in respect
of this Note were then due.

       

      Notice of
redemption will be given not less than 30 nor more than 60 calendar days prior
to the date fixed for redemption or within the Redemption Notice Period
specified on the face hereof, which date and the applicable redemption price
will be specified in the notice.

       

      If the
face hereof indicates that this Note is subject to “Tax Redemption and Payment
of Additional Amounts,” the Issuer will, subject to certain exceptions and
limitations set forth below, pay such additional amounts (the “Additional
Amounts”) to the holder of this Note with respect to any interest in this Note
held by a beneficial owner who is a U.S. Alien as may be necessary in order that
every net payment of the principal of and interest on this Note and any other
amounts payable on this Note, after withholding or deduction for or on account
of any present or future tax, assessment or governmental charge imposed upon or
as a result of such payment by the United States, or any political subdivision
or taxing authority of or in the United States, will not be less than the amount
provided for in this Note to be then due and payable. The Issuer will not,
however, make any payment of Additional Amounts to the holder of this Note with
respect to any interest in this Note held by any beneficial owner who is a U.S.
Alien for or on account of:

       

      
        	
                 
      

              	
                ·

              	
                any
      present or future tax, assessment or other governmental charge that would
      not have been so imposed but for

              


      

       

      
        	
                 
      

              	
                o

              	
                the
      existence of any present or former connection between the beneficial owner
      of an interest in this Note, or between a fiduciary, settlor, beneficiary,
      member or shareholder of the beneficial owner, if the beneficial owner is
      an estate, a trust, a partnership or a corporation for U.S. federal income
      tax purposes, and the United States, including, without limitation, the
      beneficial owner, or the fiduciary, settlor, beneficiary, member or
      shareholder, being or having been a citizen or resident of the United
      States or being or having been engaged in the conduct of a trade or
      business or present in the United States or having, or having had, a
      permanent establishment in the United States;
or

              


      

       

      
        	
                 
      

              	
                o

              	
                the
      presentation by or on behalf of the beneficial owner of an interest in
      this Note for payment on a date more than 15 days after the date on which
      payment became due and payable or the date on which payment of this Note
      is duly provided for, whichever occurs
later;

              


      

       

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

       

      
        	
                 
      

              	
                ·

              	
                any
      estate, inheritance, gift, sales, transfer, excise or personal property
      tax or any similar tax, assessment or governmental
  charge;

              


      

       

      
        	
                 
      

              	
                ·

              	
                any
      tax, assessment or other governmental charge imposed by reason of the
      beneficial owner’s past or present status as a controlled foreign
      corporation or passive foreign investment company with respect to the
      United States or as a corporation that accumulates earnings to avoid U.S.
      federal income tax or as a private foundation or other tax-exempt
      organization;

              


      

       

      
        	
                 
      

              	
                ·

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

              


      

       

      
        	
                 
      

              	
                ·

              	
                any
      tax, assessment or other governmental charge required to be withheld by
      any Paying Agent from any payment of principal of, or interest on, this
      Note, if payment can be made without withholding by at least one other
      Paying Agent;

              


      

       

      
        	
                 
      

              	
                ·

              	
                any
      tax, assessment or other governmental charge imposed solely because the
      beneficial owner of an interest in this Note (1) is a bank purchasing this
      Note in the ordinary course of its lending business or (2) is a bank that
      is neither (A) buying this Note for investment purposes nor (B) buying
      this Note for resale to a third party that either is not a bank or holding
      this Note for investment purposes
only;

              


      

       

      
        	
                 
      

              	
                ·

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

              


      

       

      
        	
                 
      

              	
                ·

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

              


      

       

      
        	
                 
      

              	
                ·

              	
                any
      combination of the items listed
above.

              


      

       

      In
addition, the Issuer will not be required to make any payment of Additional
Amounts with respect to any interest in this Note presented for
payment:

       

      
        	
                 
      

              	
                ·

              	
                where
      such withholding or deduction is imposed on a payment to an individual and
      is required to be made pursuant to any law implementing or complying with,
      or introduced in order to conform to, any European Union Directive on the
      taxation of savings; or

              


      

       

      
        	
                 
      

              	
                ·

              	
                by
      or on behalf of a beneficial owner who would have been able to avoid such
      withholding or deduction by presenting this Note or the relevant coupon to
      another Paying Agent in a member state of the European
    Union.

              


      

       

      Nor will
the Issuer pay Additional Amounts with respect to any payment with respect to
any interest in this Note to a U.S. Alien who is a fiduciary or partnership or
other than the sole beneficial owner of the payment to the extent the payment
would be required by the laws of the United States (or any political subdivision
of the United States) to be included in the income, for tax purposes, of a
beneficiary or settlor with respect to the fiduciary or a member of the
partnership or a beneficial owner who would not have been entitled to the
Additional Amounts had the beneficiary, settlor, member or beneficial owner held
its interest in this Note directly.

       

      The
Subordinated Indenture permits the Issuer and the Trustee, with the consent of
the holders of not less than a majority in aggregate principal amount of the
debt securities of all series issued under the Subordinated Indenture then
outstanding and affected (voting as one class), to execute supplemental
indentures adding any provisions to or changing in any manner the rights of the
holders of each series so affected; provided that the Issuer and the Trustee may
not, without the consent of the holder of each outstanding debt security
affected thereby, (i) extend the final 

       

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

       

      maturity
of any such debt security, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof, or change the currency of payment thereof, or
reduce the amount of any original issue discount security payable upon
acceleration or provable in bankruptcy, or modify or amend the provisions for
conversion of any currency into any other currency, or modify or amend the
provisions for conversion or exchange of the debt security for securities of the
Issuer or other entities or for other property or the cash value of the property
(other than as provided in the anti-dilution provisions or other similar
adjustment provisions of the debt securities or otherwise in accordance with the
terms thereof), or alter certain provisions of the Subordinated Indenture
relating to debt securities not denominated in U.S. dollars, or impair or affect
the rights of any holder to institute suit for the payment thereof or (ii)
reduce the aforesaid percentage in principal amount of debt securities the of
any series consent of the holders of which is required for any such supplemental
indenture; provided, however, that neither this Note nor the Subordinated
Indenture may be amended to alter the subordination provisions hereof or thereof
without the written consent of each holder of Senior Indebtedness then
outstanding that would be adversely affected thereby.

       

      Except as
set forth below, if the principal of, premium, if any, or interest, if any, on
this Note is payable in a Specified Currency other than  U.S. dollars
and such Specified Currency is not available to the Issuer for making payments
hereon due to the imposition of exchange controls or other circumstances beyond
the control of the Issuer or is no longer used by the government of the country
issuing such currency or for the settlement of transactions by public
institutions within the international banking community, then the Issuer will be
entitled to satisfy its obligations to the holder of this Note by making such
payments in U.S. dollars on the basis of the Market Exchange Rate on the date of
such payment or, if the Market Exchange Rate is not available on such date, as
of the most recent practicable date; provided, however, that if the euro has
been substituted for such Specified Currency, the Issuer may at its option (or
shall, if so required by applicable law) without the consent of the holder of
this Note effect the payment of principal of, premium, if any, or interest on
any Note denominated in such Specified Currency in euro in lieu of such
Specified Currency in conformity with legally applicable measures taken pursuant
to, or by virtue of, the Treaty establishing the European Community, as amended.
Any payment made under such circumstances in U.S. dollars or euro where the
required payment is in an unavailable Specified Currency will not constitute an
Event of Default. If such Market Exchange Rate is not then available to the
Issuer or is not published for a particular Specified Currency, the Market
Exchange Rate will be based on the highest bid quotation in The City of New York
received by the Exchange Rate Agent at approximately 11:00 a.m., New York City
time, on the second Business Day preceding the date of such payment from three
recognized foreign exchange dealers (the “Exchange Dealers”) for the purchase by
the quoting Exchange Dealer of the Specified Currency for U.S. dollars for
settlement on the payment date, in the aggregate amount of the Specified
Currency payable to those holders or beneficial owners of Notes and at which the
applicable Exchange Dealer commits to execute a contract. One of the Exchange
Dealers providing quotations may be the Exchange Rate Agent unless the Exchange
Rate Agent is an affiliate of the Issuer. If those bid quotations are not
available, the Exchange Rate Agent shall determine the market exchange rate at
its sole discretion.

       

      The
“Exchange Rate Agent” shall be Morgan Stanley & Co. Incorporated, unless
otherwise indicated on the face hereof.

       

      All
determinations referred to above made by, or on behalf of, the Issuer or by, or
on behalf of, the Exchange Rate Agent shall be at such entity's sole discretion
and shall, in the absence of manifest error, be conclusive for all purposes and
binding on holders of Notes.

       

      So long as
this Note shall be outstanding, the Issuer will cause to be maintained an office
or agency for the payment of the principal of and premium, if any, and interest
on this Note as herein provided in the Borough of Manhattan, The City of New
York, and an office or agency in said Borough of Manhattan for the registration,
transfer and exchange as aforesaid of the Notes. The Issuer may designate other
agencies for the payment of said principal, premium and interest at such place
or places (subject to applicable laws and regulations) as the Issuer may decide.
So long as there shall be such an agency, the Issuer shall keep the Trustee
advised of the names and locations of such agencies, if any are so designated.
If any European Union Directive on the taxation of savings comes into force, the
Issuer will, to the extent possible as a matter of law, maintain a Paying Agent
in a Member State of the European Union that will not be obligated to withhold
or deduct tax pursuant to any such Directive or any law implementing or
complying with, or introduced in order to conform to, such
Directive.

       

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

       

      With
respect to moneys paid by the Issuer and held by the Trustee or any Paying Agent
for payment of the principal of or interest or premium, if any, on any Notes
that remain unclaimed at the end of two years after such principal, interest or
premium shall have become due and payable (whether at maturity or upon call for
redemption or otherwise), (i) the Trustee or such Paying Agent shall notify the
holders of such Notes that such moneys shall be repaid to the Issuer and any
person claiming such moneys shall thereafter look only to the Issuer for payment
thereof and (ii) such moneys shall be so repaid to the Issuer. Upon such
repayment all liability of the Trustee or such Paying Agent with respect to such
moneys shall thereupon cease, without, however, limiting in any way any
obligation that the Issuer may have to pay the principal of or interest or
premium, if any, on this Note as the same shall become due.

       

      No
provision of this Note or of the Subordinated Indenture shall alter or impair
the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Note at the time, place, and
rate, and in the coin or currency, herein prescribed unless otherwise agreed
between the Issuer and the registered holder of this Note.

       

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

       

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

       

      This Note
shall for all purposes be governed by, and construed in accordance with, the
laws of the State of New York.

       

      As used
herein, the term “U.S. Alien” means any person who is, for U.S. federal income
tax purposes, (i) a non-resident alien individual, (ii) a foreign corporation,
(iii) a non-resident alien fiduciary of a foreign estate or trust or (iv) a
foreign partnership one or more members of which is, for U.S. federal income tax
purposes, a non-resident alien individual, a foreign corporation or a
non-resident alien fiduciary of a foreign estate or trust.

       

      All terms
used in this Note which are defined in the Subordinated Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Subordinated Indenture.

       

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

       

      
         

        
           

          
            
              
                 

                ABBREVIATIONS

                 

                The
following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

                 

                TEN
COM   –   as tenants in common

                 

                TEN
ENT    –   as tenants by the
entireties

                 

                
                  JT
TEN        –   as joint
tenants with right of survivorship and not as tenants in
common

                

                 

                UNIF GIFT
MIN ACT – ______________________Custodian
__________________________

                (Minor)                                                      (Cust)

                 

                Under
Uniform Gifts to Minors Act ______________________________

                (State)

                 

                Additional
abbreviations may also be used though not in the above list.

                 

                _______________________

                 



               

              
                
                  
                  

                

                
                  20

                  
                    

                  

                

                
                  
                  

                

              

              
                 

                 

                FOR VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

                 

                ____________________________________________

                [PLEASE
INSERT SOCIAL SECURITY OR OTHER

                IDENTIFYING
NUMBER OF ASSIGNEE] 

                   

                   

                    
                      

                    

                  

                   

                    
                      

                       

                        
                          
[PLEASE
PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE]

                      

                    

                  

                

                 

                the within
Note and all rights thereunder, hereby irrevocably constituting and
appointing  ____________  attorney to transfer such note on the books
of the Issuer, with full power of substitution in the premises.

                 

                Dated:_______________________

                 

                
                  	
                          NOTICE:

                        	
                          The
      signature to this assignment must correspond with the name as written upon
      the face of the within Note in every particular without alteration or
      enlargement or any change
whatsoever.

                        

 

                
                  
                    
                    

                  

                  
                    21

                    
                      

                    

                  

                  
                    
                    

                  

                

                 

                OPTION TO ELECT
REPAYMENT

                 

                The
undersigned hereby irrevocably requests and instructs the Issuer to repay the
within Note (or portion thereof specified below) pursuant to its terms at a
price equal to the principal amount thereof, together with interest to the
Optional Repayment Date, to the undersigned at

                 

                  
                    

                  

                

                 

                  
                    

                  

                

                 

                  
                    

                  

                

                (Please
print or typewrite name and address of the undersigned)

                 

                If less
than the entire principal amount of the within Note is to be repaid, specify the
portion thereof which the holder elects to have repaid: _________________; and
specify the denomination or denominations (which shall not be less than the
minimum authorized denomination) of the Notes to be issued to the holder for the
portion of the within Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid):
__________________.

                 

                Dated:________________________                                _______________________________________

                
                  	
                           

                        	
                          NOTICE:  The
      signature on this Option to Elect Repayment must correspond with the name
      as written upon the face of the within instrument in every particular
      without alteration or enlargement.

                        


                

                 

                 

                 

                22