Document:

EXHIBIT 10.26

                                                               EXECUTION VERSION

                            STOCK PURCHASE AGREEMENT

            This STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as
of this 31st day of May, 2007 (the "Effective Date"), by and among Arrow
Partners LP, a Delaware limited partnership ("Arrow LP"), Arrow Capital
Management LLC, a Delaware limited liability company ("Arrow Capital"), and
Arrow Offshore Ltd., a Cayman Islands exempted company ("Arrow Cayman," and
together with Arrow LP, the "Buyers"), on the one hand, and SOF U.S. Hotel Co
Invest Holdings, L.L.C., a Delaware limited liability company ("SOF"), and
Rivacq LLC, a Delaware limited liability company ("Rivacq"), on the other hand.

                                    Recitals

            WHEREAS, Rivacq, SOF, Arrow LP, and Arrow Capital are parties to
that certain Option and Voting Agreement, dated as of August 3, 2006 (the
"Option Agreement"), pursuant to which, among other things, SOF granted to Arrow
Capital an option (the "Option") to purchase a 49% interest in Rivacq (the
"Minority Rivacq Interest").

            WHEREAS, pursuant to that certain Assignment and Assumption
Agreement, dated December __, 2006, Arrow Capital assigned all of its rights in,
and delegated all of its duties under, the Option Agreement, jointly and
severally, to the Buyers, except that with respect to the Option, Arrow Capital
assigned all of its right, title and interest to purchase (a) 15% of the Rivacq
Minority Interest to Arrow Cayman, and (b) 34% of the Rivacq Minority Interest
to Arrow LP.

            WHEREAS, the Buyers desire to purchase from Rivacq, and Rivacq
desires to sell to the Buyers, an aggregate of 307,447 shares (the "Shares") of
Common Stock of Riviera Holdings Corporation, a Nevada corporation ("Riviera"),
in exchange for the Purchase Price, as defined in Section 2.2 below (the
"Sale").

            WHEREAS, concurrently with the Sale, the parties hereto desire to
terminate the Option Agreement and the Option.

            NOW, THEREFORE, in consideration of the covenants set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Defined Terms. Each capitalized term used, but not specifically defined
herein shall have the meaning set forth in the Option Agreement.

2. Sale and Purchase; Closing.

      2.1 Sale and Purchase. On the Closing Date (as defined in Section 2.4),
Rivacq shall sell, transfer, convey, and assign (a) to Arrow LP, all right,
title and interest in and to 213,331 Shares, and (b) to Arrow Cayman, all right,
title and interest in and to 94,116 Shares, in each case, free and clear of any
and all Encumbrances, in exchange for the delivery by the Buyers of the Purchase
Price (as defined in Section 2.2).

      2.2 Purchase Price. In consideration for the sale of the Shares pursuant
to Section 2.1, on the Closing Date, Arrow LP shall deliver to Rivacq the sum of
$3,451,825.02, and Arrow Cayman shall deliver to Rivacq the sum of $1,522,863.98
(collectively, the "Purchase Price"). The Purchase Price shall be delivered by
wire transfer of immediately available funds to an account designated by Rivacq.

      2.3 Delivery. On the Closing, Rivacq shall deliver to the Buyers (a) a
certificate or certificates representing the Shares, and (b) all documents,
instruments, certificates and stock powers, necessary to transfer and assign the
Shares to the Buyers, against payment of the Purchase Price.

      2.4 Closing. The Sale shall take place no later than two (2) business days
after the Legal Opinion (as defined in Section 4) has been delivered to, and
accepted by, the Buyers, Riviera and its transfer agent (the "Closing Date").
The closing of the Sale shall take place at such place and time as is mutually
agreeable to the parties hereto.

3. Reimbursement of Expenses. The parties acknowledge and agree that $362,984,
of the Purchase Price represents out-of-pocket and documented expenses incurred
by Rivacq to date in connection with the Merger and its merger negotiations with
Riviera (the "Expense Amount"). In the event that Rivacq receives, directly or
indirectly, from Riviera a topping fee, break-up fee, termination fee, or
similar fee in respect of the Merger or a merger agreement (each, a "Riviera
Fee"), Rivacq shall pay to the Buyers, no later than 5 business days after
receipt, 49% of the Riviera Fee; provided, that in no event shall the amount
payable by Rivacq pursuant to this Section 3 exceed the Expense Amount. As
between the Buyers, any amounts paid pursuant to this Section 3 shall be divided
in the same proportion as the Purchase Price was paid by the Buyers.

4. Covenants to Close. Rivacq, on the one hand, and the Buyers, on the other
hand, will each use their commercially reasonable to cause the Sale to be
consummate as soon as reasonably practicable after the date hereof. Without
limiting the generality of the foregoing, Rivacq shall cause to be delivered to
the Buyers, Riviera, and its transfer agent, a legal opinion (the "Legal
Opinion"), in form and substance reasonably satisfactory to such parties, that
the Sale of the Shares does not require registration under the Securities Act of
1933, as amended (the "Act").

5. Representations and Warranties of Rivacq. SOF and Rivacq, jointly and
severally, hereby represent and warrant to each Buyer that, as of the date
hereof and as of the Closing Date:

      5.1 Rivacq is the record and beneficial owner of the Shares, has all
right, title, and interest in and to the Shares, and has all requisite power and
authority to sell, assign, transfer, and deliver the Shares to the Buyers, free
and clear of all Encumbrances. Upon payment by the Buyers of the Purchase Price
in accordance with this Agreement, and assuming that the Buyers are acting in
good faith and without any notice of any adverse claim (as defined in Section
8-102 of the New York Commercial Code), the Buyers will acquire the Shares free
of any adverse claim.

      5.2 The Sale may be effectuated under the Act, and applicable state
securities laws without registering or qualifying the Shares thereunder.

      5.3 Rivacq is not an "affiliate" of Riviera, as that term is defined in
paragraph (a)(1) of Rule 144 promulgated under the Act (Rule 144").

      5.4 Rivacq purchased the Shares from an "affiliate" of Riviera, as that
term is defined in paragraph (a)(1) of Rule 144, and fully paid for 147,000 of
the Shares on January 6, 2006 and 160,447 of the Shares on August 4, 2006 and,
in each case, has held the Shares continuously since that time. The Shares were
acquired in a private transaction separate from any public offering and Rivacq
did not purchase such Shares with a view to distribution of the Shares in
violation of the Act.

      5.5 Rivacq has not entered into any agreements with Riviera or any other
person or entity that would prohibit or limit Rivacq from selling, transferring,
or entering into any contracts or hedging activities relating to the Shares.

      5.6 Rivacq has made no offers to sell the Shares, other than to the
Buyers.

      5.7 Rivacq has not offered or sold the Shares by any form of general
solicitation or advertising.

6. Investment Representations and Warranties. Each Buyer hereby makes to Rivacq,
as of the date hereof and as of the Closing Date, the representations and
warranties set forth below (and agrees that (a) Riviera's transfer agent may
rely on the same for the purposes of transferring the Shares on the books and
records of the Company, and (b) Rivacq's counsel may rely on the same for the
purposes of rendering the Legal Opinion):

      6.1 It has been informed that the Shares have not been registered under
the Act, or any state securities ("Blue Sky") law, are "restricted securities"
as defined in Rule 144, and must be held by it indefinitely at its economic risk
unless they are registered under the Act and applicable Blue Sky laws, or
exemptions from such registration are available.

      6.2 It understands that Riviera is under no obligation to register the
sale, transfer or other disposition by it or on its behalf of the Shares under
the Act or any applicable Blue Sky law, or take any other action necessary in
order to make compliance with an exemption from registration available.

      6.3 The Shares were offered and will be transferred by Rivacq to such
Buyer without any general solicitation or general advertising, including, but
not limited to, any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.

      6.4 It has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of investing in the
Shares, and that it is able to bear the economic risk of this investment.

      6.5 It is an "accredited investor" within the meaning of Rule 501 of
Regulation D promulgated by the Securities and Exchange Commission under the
Act.

      6.6 The Shares are being acquired by it for investment and not with a view
to, or in connection with, any distribution thereof nor with any present
intention of distributing such Shares.

      6.7 It has been provided with copies of Riviera's Form 10-K for its latest
fiscal year, Riviera's Form 10-Q for its latest fiscal quarter, and any Forms
8-K prepared by Riviera since the date of such Form 10-Q, all as filed by
Riviera with the Securities and Exchange Commission.

7. Termination of Option Agreement. Arrow LP, Arrow Capital, Arrow Cayman, SOF
and Rivacq hereby mutually agree that, effective concurrently with the Closing
Date, the Option Agreement and the Option are hereby terminated and no longer
have any force or effect, including, without limitation, any provision of the
Option Agreement that purports to survive a termination of that agreement.

8. Mutual Release. Effective concurrently with the Closing Date, each of Rivacq
and SOF, on the one hand, and Arrow LP, Arrow Capital, and Arrow Cayman, on the
other hand, hereby fully and forever releases and discharges the other, together
with any and all of the other parties' present or former agents, stockholders,
members, partners, directors, officers, employees, principals, successors and
assigns (collectively the "Released Parties"), from and against any and all
claims, actions, suits, causes of action, judgments, liens, promises,
executions, debts, damages, demands, liabilities and controversies whatsoever,
or every nature and description, in law or in equity, whether known or unknown
and whether arising by statute, at common law or otherwise, which such party
ever had or now has against the Released Parties, from the beginning of the
world to the date of this Agreement, and which arise out of, or relate to, the
Option or the Option Agreement, but specifically excluding those arising out of
this Agreement.

9. Subsequent Transfers. Each Buyer hereby covenants and agrees that the Shares
will not be offered for sale, sold, delivered after sale, transferred, pledged
or hypothecated in the absence of an effective registration statement for such
Shares under the Act and applicable Blue Sky laws or an opinion of counsel
satisfactory in form and substance to Riviera that registration is not required
under the Act and applicable Blue Sky laws.

10. General Terms.

      10.1 Expenses. Except as otherwise specified in this Agreement, all costs
and expenses, including fees and disbursements of counsel, financial advisors
and accountants, incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such costs
and expenses.

      10.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by an internationally recognized overnight courier service, by facsimile
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties hereto at the following addresses (or at such other
address for a party as shall be specified in a notice given in accordance with
this Section 10.2):

            If to Arrow LP, Arrow Capital, or Arrow Cayman:

            499 Park Avenue
            10th  Floor
            New York, NY 10022
            Facsimile: (212) 243-1620
            Attention: Mal Serure

            with a copy to:

            Eisner & Frank
            9601 Wilshire Boulevard
            Suite 700
            Beverly Hills, CA 90210
            Facsimile: (310) 855-3201
            Attention: Michael Eisner

            If to SOF or Rivacq:

            SOF U.S. Hotel Co Invest Holdings, L.L.C.
            591 West Putnam Avenue
            Greenwich, CT 06830
            Facsimile: (203) 422-7873
            Attention: Ellis Rinaldi

            with a copy to:

            Cadwalader, Wickersham & Taft LLP
            One World Financial Center
            New York, NY 10281
            Facsimile: (212) 504-6666
            Attention: Andrew J. Perel

      10.3 Public Announcements. No party to this Agreement shall make, or cause
to be made, any press release or public announcement in respect of this
Agreement or the transactions contemplated hereby or otherwise communicate with
any news media without the prior written consent of the other parties, unless
otherwise required by law or applicable stock exchange regulation, and the
parties shall cooperate as to the timing and contents of any such press release,
public announcement or communication.

      10.4 Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral, among the parties
hereto with respect to the subject matter hereof, including, but not limited to,
the Option Agreement.

      10.5 Headings. The headings in this Agreement are for reference purposes
only and do not affect in any way the meaning or interpretation of this
Agreement.

      10.6 Assignment. This Agreement may not be assigned by operation of law or
otherwise (a) by Arrow LP, Arrow Capital, or Arrow Cayman, without the express
written consent of Rivacq and SOF (which consent may be granted or withheld in
the sole discretion of Rivacq and SOF) or (b) by SOF or Rivacq without the
express written consent of Arrow LP (which consent may be granted or withheld in
the sole discretion of Arrow LP).

      10.7 Amendment. This Agreement may not be amended or modified except (a)
by an instrument in writing signed by, or on behalf of, SOF, Rivacq, Arrow LP,
Arrow Capital, and Arrow Cayman or (b) by a written waiver executed by Arrow,
Arrow Capital, or Arrow Cayman, on the one hand, or by SOF and Rivacq, on the
other hand.

      10.8 No Third Party Beneficiaries. Except for the provisions of Section 8,
this Agreement shall be binding upon and inure solely to the benefit of the
parties hereto and their respective successors and permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other person
any legal or equitable right, benefit or remedy of any nature whatsoever.

      10.9 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts
executed in and to be performed in that state and without regard to any
applicable conflicts of law principles. All actions or disputes arising out of
or relating to this Agreement shall be heard and determined exclusively in any
New York federal court sitting in the Borough of Manhattan of The City of New
York, provided, however, that if such federal court does not have jurisdiction
over such action or dispute, it shall be heard and determined exclusively in any
New York state court sitting in the Borough of Manhattan of The City of New
York. Consistent with the preceding sentence, the parties hereto hereby (a)
submit to the exclusive jurisdiction of any federal or state court sitting in
the Borough of Manhattan of The City of New York for the purpose of any action
or dispute arising out of or relating to this Agreement brought by any party
hereto and (b) irrevocably waive, and agree not to assert by way of motion,
defense, or otherwise, in any such action or dispute, any claim that it is not
subject personally to the jurisdiction of the above named courts, that its
property is exempt or immune from attachment or execution, that the action or
dispute is brought in an inconvenient forum, that the venue of the action or
dispute is improper, or that this Agreement or the transactions contemplated by
this Agreement may not be enforced in or by any of the above named courts. In
the event of a dispute arising out of this Agreement, the prevailing party shall
be entitled to its reasonable attorney's fees and costs.

      10.10 Waiver of Jury Trial. Each of the parties hereto hereby waives to
the fullest extent permitted by applicable law any right it may have to a trial
by jury with respect to any litigation directly or indirectly arising out of,
under, or in connection with this Agreement or the transactions contemplated
hereby. Each of the parties hereto hereby (a) certifies that no representative,
agent or attorney of the other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it has been induced to enter into
this Agreement and the transactions contemplated by this Agreement, as
applicable, by, among other things, the mutual waivers and certifications in
this Section 10.10.

      10.11 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.

                            [SIGNATURE PAGE FOLLOWS]

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.

                                    SOF U.S. HOTEL CO-INVEST HOLDINGS, L.L.C.

                                       By: SOF-VII U.S. Hotel Holdings,
                                           ----------------------------
                                           L.L.C.
                                           ----------------------------

                                          By:
                                              -------------------------
                                          Name: Barry S. Sternlicht
                                          Title: Chief Executive Officer

                                       By: I-1/I-2 U.S. Holdings, L.L.C.
                                           -----------------------------
                                          By:
                                              -------------------------
                                          Name: Barry S. Sternlicht
                                          Title: Chief Executive Officer

                                    RIVACQ LLC

                                    By: SOF U.S. Hotel Co-Invest Holdings,
                                        ----------------------------------
                                        L.L.C.
                                        ----------------------------------

                                       By: SOF-VII U.S. Hotel Holdings,
                                           ----------------------------
                                           L.L.C.
                                           ----------------------------

                                          By:
                                             --------------------------
                                          Name: Barry S. Sternlicht
                                          Title: Chief Executive Officer

                                       By: I-1/I-2 U.S. Holdings, L.L.C.
                                           -----------------------------

                                          By:
                                             ---------------------------
                                          Name: Barry S. Sternlicht
                                          Title: Chief Executive Officer

<PAGE>

                                    ARROW CAPITAL MANAGEMENT LLC

                                       By:
                                           ------------------------------
                                       Name: Mal Serure
                                             ----------------------------
                                       Title: Managing Member
                                              ---------------------------

                                    ARROW PARTNERS LP

                                       By:
                                           ------------------------------
                                       Name: Mal Serure
                                             ----------------------------
                                       Title: General Partner
                                             ----------------------------

                                    ARROW OFFSHORE LTD

                                       By:
                                           ------------------------------
                                       Name: Mal Serure
                                             ----------------------------
                                       Title: Director
                                             ----------------------------Unassociated Document

     

     

    
 

     EXHIBIT
      4.1

     

    

     

    [FORM
      OF FACE OF SECURITY]

    EURO
      SENIOR REGISTERED FLOATING RATE NOTE

     

     

    
      	REGISTERED	 REGISTERED
	No.
              EFLRR	 [PRINCIPAL
              AMOUNT]

    

     

                                                                                                   

                                                                                                   

    

    THIS
      NOTE
      HAS NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE SECURITIES AND EXCHANGE
      LAW
      OF JAPAN. THIS NOTE MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN
      JAPAN
      OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN (WHICH TERM AS USED HEREIN
      MEANS ANY PERSON RESIDENT IN JAPAN INCLUDING ANY CORPORATION OR OTHER ENTITY
      ORGANIZED UNDER THE LAWS OF JAPAN) OR TO OTHERS FOR THE RE-OFFERING OR RE-SALE,
      DIRECTLY OR INDIRECTLY, IN JAPAN OR TO A RESIDENT OF JAPAN EXCEPT PURSUANT
      TO AN
      EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AND OTHERWISE IN COMPLIANCE
      WITH, THE SECURITIES AND EXCHANGE LAW OF JAPAN AND OTHER RELEVANT LAWS AND
      REGULATIONS OF JAPAN.1

     

     

     

     

     

    

      

    

    
      1  If
        this
        Note is offered in Japan or denominated in Japanese Yen, appropriate legends
        need to be added.

    

    
      
                

        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    MORGAN
      STANLEY

     

    GLOBAL
      MEDIUM-TERM NOTE, SERIES [G/H]

     

    Euro
      Senior Registered Floating Rate Note

     

    
      	
              ORIGINAL
                ISSUE DATE:

            	
              INTEREST
                ACCRUAL DATE:

            	
              INTEREST
                PAYMENT DATE(S):

               

            
	
              MATURITY
                DATE:

            	
              INITIAL
                INTEREST RATE:

            	
              INTEREST
                PAYMENT PERIOD:

               

            
	
              BASE
                RATE:

            	
              INITIAL
                INTEREST RESET

              DATE:

            	
              INTEREST
                RESET DATE(S):

            
	
              INDEX
                MATURITY:

            	
              MAXIMUM
                INTEREST RATE:

            	
              INTEREST
                RESET PERIOD:

            
	
              SPREAD
                (PLUS OR MINUS):

            	
              MINIMUM
                INTEREST RATE:

            	
              CALCULATION
                AGENT:

            
	
              SPREAD
                MULTIPLIER:

            	
              INITIAL
                REDEMPTION DATE:

            	
              EUROCLEAR
                NO:

            
	
              SPECIFIED
                CURRENCY:

            	
              INITIAL
                REDEMPTION

              PERCENTAGE:

            	
              CLEARSTREAM
                NO:

            
	
              INDEX
                CURRENCY:

            	
              ANNUAL
                REDEMPTION

              PERCENTAGE
                REDUCTION:

            	
              COMMON
                CODE:

            
	
              DESIGNATED
                CMT TELERATE

              PAGE:

            	
              REDEMPTION
                NOTICE

              PERIOD:2

            	
              ISIN:

            
	
              DESIGNATED
                CMT MATURITY

              INDEX:

            	
              OPTIONAL
                REPAYMENT

              DATE(S):

            	
              MINIMUM
                DENOMINATIONS:

            
	
              REPORTING
                SERVICE:

            	
              INITIAL
                OFFERING DATE:

            	
              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
      previously redeemed or repaid) 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 on and after at a rate per annum determined in accordance
      with the provisions specified on the reverse hereof until but excluding the
      date
      such principal amount 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, semi-annually or annually as
      specified above as the Interest Payment Period on each Interest Payment Dates
      specified above in each year, commencing with the first Interest Payment Date
      next succeeding the Interest Accrual Date specified above, and on the Maturity
      Date specified above (or on any

     

    

      

    

    
      2  Applicable
        if other than 30-60 calendar days.  Consult with Euroclear or
        Clearstream if a shorter redemption is requested.  A minimum of 10
        calendar days may be possible.

    

    
      
                  

        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

    Payment
      of
      the principal of and premium, if any, and interest on this Note due at maturity
      (or on any redemption or repayment date) will be made in immediately available
      funds upon surrender of this Note at the office or agency of the Principal
      Paying Agent, as defined on the reverse hereof, or at such other paying agency
      as the Issuer may determine (each, a “Paying Agent,” which term
      shall include the Principal Paying Agent). Payment of the principal of and
      premium, if any, and interest on this Note will be made in the Specified
      Currency indicated above, except as provided on the reverse hereof; provided,
      however, that U.S. dollar payments of interest, other than interest due at
      maturity or on any date of redemption or repayment, will be made by U.S. dollar
      check mailed to the address of the person entitled thereto as such address
      shall
      appear in the Note register. A holder of U.S. $10,000,000 or more in aggregate
      principal amount of Notes having the same Interest Payment Date will be entitled
      to receive payments of interest, other than interest due at maturity or on
      any
      date of redemption or repayment, by wire transfer of immediately available
      funds
      if appropriate wire transfer instructions have been received by the Principal
      Paying Agent in writing not less than 15 calendar days prior to the applicable
      Interest Payment Date. If this Note is denominated in a Specified Currency
      other
      than U.S. dollars, payments of interest hereon will be made by wire transfer
      of
      immediately available funds to an account maintained by the holder hereof with
      a
      bank located outside the United States, and in the case the Specified Currency
      is euro, in a country for which the euro is the lawful currency, if appropriate
      wire transfer instructions have been received by the Principal Paying Agent
      in
      writing on or prior to the fifth business day after the applicable Record
      Date.  If

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    such
      wire
      transfer instructions are not so received, such interest payments will be made
      by check payable in such Specified Currency mailed to the address of the person
      entitled thereto as such address shall appear in the Note register.

     

    Reference
      is hereby made to the further provisions of this Note set forth on the reverse
      hereof, which further provisions shall for all purposes have the same effect
      as
      if set forth at this place.

     

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

     

     

     

     

     

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

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

     

    
      	
              DATED:

            	 	
              MORGAN
                STANLEY

            	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	
              By:

            	 	 
	 	 	 	 	
              Name:

            	 	 
	 	 	 	 	
              Title:

            	 	 

    

     

    
 

    
      	
              TRUSTEE’S
                CERTIFICATE

              OF
                AUTHENTICATION

               

               

              This
                is one of the Notes referred

              to
                in the within-mentioned

              Senior
                Indenture.

               

               

              THE
                BANK OF NEW YORK,

              as
                Trustee

               

            	 
	
              By:

            	 	 
	 	
              Authorized
                Signatory

            	 

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    [FORM
      OF REVERSE OF SECURITY]

     

    This
      Note
      is one of a duly authorized issue of Senior Global Medium-Term Notes, Series
      [G/H], having maturities more than nine months from the date of issue (the
      “Notes”) of the Issuer. The Notes are issuable under a Senior
      Indenture, dated as of November 1, 2004, between the Issuer and The Bank of
      New
      York, a New York banking corporation (as successor Trustee to JPMorgan Chase
      Bank, N.A.), as Trustee (the “Trustee,” which term includes any
      successor trustee under the Senior Indenture) (as may be amended or supplemented
      from time to time, the “Senior Indenture”), to which Senior
      Indenture and all indentures supplemental thereto reference is hereby made
      for a
      statement of the respective rights, limitations of rights, duties and immunities
      of the Issuer, the Trustee and holders of the Notes and the terms upon which
      the
      Notes are, and are to be, authenticated and delivered. The Issuer has appointed
      The Bank of New York, acting through its principal corporate trust office in
      the
      Borough of Manhattan, The City of New York, as a paying agent for the Notes
      in
      the United States and The Bank of New York, London Branch, at its corporate
      trust office in London, as its principal paying agent for the Notes outside
      the
      United States (the “Principal Paying Agent,” which term
      includes any additional or successor Principal Paying Agent appointed by the
      Issuer). The terms of individual Notes may vary with respect to interest rates,
      interest rate formulas, issue dates, maturity dates, or otherwise, all as
      provided in the Senior Indenture. To the extent not inconsistent herewith,
      the
      terms of the Senior Indenture are hereby incorporated by reference
      herein.

     

    Unless
      otherwise indicated on the face hereof, this Note will not be subject to any
      sinking fund and, unless otherwise indicated on the face hereof in accordance
      with the provisions of the following two paragraphs and except as set forth
      below, 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 (except as indicated below). If this Note is subject
      to
“Annual Redemption Percentage Reduction,” the Initial
      Redemption Percentage indicated on the face hereof will be reduced on each
      anniversary of the Initial Redemption Date by the Annual Redemption Percentage
      Reduction specified on the face hereof until the redemption price of this Note
      is 100% of the principal amount hereof, together with interest accrued and
      unpaid hereon to the date of redemption.  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 Senior Indenture.  In the event of
      redemption of this Note in part only, a new Note or Notes for the amount of
      the
      unredeemed portion hereof shall be issued in the name of the holder hereof
      upon
      the cancellation hereof.

    

    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

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    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 Principal Paying Agent must receive at its office in London, 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 National Association of
      Securities Dealers, Inc. or a commercial bank or a trust company in the United
      States, Western Europe or Japan 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 Principal 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 Principal Paying Agent by such fifth
      Business Day.  Unless otherwise indicated on the face of this Note,
      exercise of such repayment option by the holder hereof shall be irrevocable.
      In
      the event of repayment of this Note in part only, a new Note or Notes for the
      amount of the unpaid portion hereof shall be issued in the name of the holder
      hereof upon the cancellation hereof.

    

    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, 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 Date.  The Interest Reset
      Dates will be the Interest Reset Dates specified on the face hereof;
provided, however, that 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.  If any Interest Reset Date would otherwise be a day
      that is not a Business Day (as defined below), such Interest Reset Date shall
      be
      postponed to the next 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.

     

    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

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    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.

     

    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).”

     

    
      
        
        

      

      
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    (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. International
      plc.

     

    (iii)
      If
      the dealers selected by the Calculation Agent are not quoting as set forth
      in
      (ii) above, 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 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
      in
      (ii) 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.

     

    
      
        
        

      

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

     

    Money
      Market Yield =        D x
      360       x  100

     

    360
 –  (D
      x M)

     

    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
      Moneyline Telerate, or any successor service, on page 248 or any other page
      as
      may replace page 248 on that service (“Telerate Page 248”) 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
      in
      (ii) above, EURIBOR in effect for the applicable period shall be the same as
      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.

     

    
      
        
        

      

      
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    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 displayed on
      Moneyline Telerate, or any successor service, on page 120 or any other page
      as
      may replace page 120 on that service (“Telerate Page
      120”).

     

    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 Moneyline
      Telerate, or any successor service, on page 5 or any other page as may replace
      page 5 on that service, (“Telerate 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.,

     

    
      
        
        

      

      
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    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)
      As of
      the Interest Determination Date, LIBOR shall be either: (a) if “LIBOR
      Reuters” is specified as the Reporting Service on the face hereof, 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 Banking Day immediately following that Interest Determination Date,
      that
      appear on the Designated LIBOR Page, as defined below, 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; except that if the specified Designated LIBOR
      Page, by its terms provides only for a single rate, that single rate shall
      be
      used; or (b) if “LIBOR Telerate” is specified as the Reporting
      Service on the face hereof, the rate for deposits in the Index Currency having
      the Index Maturity designated on the face hereof, commencing on the second
      London Banking Day immediately following that Interest Determination Date or,
      if
      pounds sterling is the Index Currency, commencing on that Interest Determination
      Date, that appears on the Designated LIBOR Page at approximately 11:00 a.m.,
      London time, on that Interest Determination Date.

     

    (ii)
      If
      (a) fewer than two offered rates appear and LIBOR Reuters is specified on the
      face hereof, or (b) no rate appears and the face hereof specifies either (x)
      LIBOR Telerate or (y) LIBOR Reuters 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.

     

    (iii)
      If
      at least two quotations are provided, LIBOR determined on that Interest
      Determination Date shall be the arithmetic mean of those
      quotations.  If fewer than two quotations are provided, LIBOR shall be
      determined for the applicable Interest Reset Date as the arithmetic mean of
      the
      rates quoted at approximately 11:00 a.m., London time, 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

     

    
      
        
        

      

      
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    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 described
      in
      (iii) above, LIBOR in effect for the applicable period shall be the same as
      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 either: (a) if LIBOR Reuters is designated as the
      Reporting Service on the face hereof, the display on the Reuters Money 3000
      Service for the purpose of displaying the London interbank rates of major banks
      for the applicable Index Currency or its designated successor, or (b) if LIBOR
      Telerate is designated as the Reporting Service on the face hereof, the display
      on Moneyline Telerate, or any successor service, on the page specified on the
      face hereof, 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.

     

    If
      neither
      LIBOR Reuters nor LIBOR Telerate is specified on the face hereof, LIBOR for
      the
      applicable Index Currency shall be determined as if LIBOR Telerate were
      specified, and, if the U.S. dollar is the Index Currency, as if Page 3750 had
      been specified.

     

    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 Screen
      USPRIME 1 Page, 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
      Screen USPRIME 1 Page 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, which may include affiliates of the

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    initial
      dealer, in The City of New York 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 in
      (iii) 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
      Screen USPRIME 1 Page” means the display designated as page “USPRIME 1”
on the Reuters Money 3000 Service, or any successor service, or any
      other page
      as may replace the USPRIME 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 Moneyline Telerate, or any successor service, on page 56 or any
      other
      page as may replace page 56 on that service (“Telerate Page
      56”) or page 57 or any other page as may replace page 57 on that
      service (“Telerate Page 57”); 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 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 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

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    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:

     

    Bond
      Equivalent Yield =         D x
      N    x  100

     

    360
−
(D
      x M)

     

    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 the rate displayed on the Designated
      CMT
      Telerate 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 Telerate Page
      is
      7051; 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 Telerate
      Page is 7052.

     

    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 Maturity rate for the Designated CMT
      Maturity Index as published in the relevant H.15(519).

     

    (ii)
      If
      the rate as 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 Maturity Rate for the Designated CMT
      Maturity Index or other U.S. Treasury rate for the Designated CMT Maturity
      Index
      on the Interest Determination 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 Telerate Page and published in the
      relevant H.15(519).

     

    (iii)
      If
      the information set forth above in (ii) 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

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    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 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.

     

    (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 remain 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 Telerate Page” means the display on Moneyline Telerate, 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 page is specified
      on the face hereof, the Designated CMT Telerate Page shall be 7052, 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 in the applicable pricing supplement 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

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    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 will
      include interest accrued to but excluding the Interest Payment Date 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 principal 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.  Unless otherwise specified on the face hereof, 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 used in or 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 calculations 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 the obligations of the Issuer hereunder are direct, unsecured
      obligations of the Issuer and rank without preference or priority among
      themselves and pari passu with all other existing and future
      unsecured and unsubordinated indebtedness of the Issuer, subject to certain
      statutory exceptions in the event of liquidation upon insolvency.

     

    This
      Note,
      and any Note or Notes issued upon transfer or exchange hereof, is issuable
      only
      in fully registered form, without coupons, and is issuable only in the minimum
      denominations set forth on the face hereof or any amount in excess thereof
      which
      is an integral multiple of 1,000 units of the Specified Currency set forth
      on
      the face hereof.

     

    The
      Trustee has been appointed registrar for the Notes, and the Trustee will
      maintain at its office in The City of New York, a register for the registration
      and transfer of Notes. This Note may be transferred at either the aforesaid
      New
      York office or at the London office of the Trustee by surrendering this Note
      for
      cancellation, accompanied by a written instrument of transfer in form
      satisfactory to the Issuer and the Trustee and duly executed by the registered
      holder hereof in person or by the holder’s attorney duly authorized in writing,
      and thereupon the Trustee shall issue in the name of the transferee or
      transferees, in exchange herefor, a new Note or Notes

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    having
      identical terms and provisions and having a like aggregate principal amount
      in
      authorized denominations, subject to the terms and conditions set forth herein;
      provided, however, that the Trustee will not be required (i)
      to register the transfer of or exchange any Note that has been called for
      redemption in whole or in part, except the unredeemed portion of Notes being
      redeemed in part, (ii) to register the transfer of or exchange any Note if
      the holder thereof has exercised his right, if any, to require the Issuer to
      repurchase such Note in whole or in part, except the portion of such Note not
      required to be repurchased, or (iii) to register the transfer of or exchange
      Notes to the extent and during the period so provided in the Senior Indenture
      with respect to the redemption of Notes.  Notes are exchangeable at
      said offices for other Notes of other authorized denominations of equal
      aggregate principal amount having identical terms and provisions. All such
      registrations, exchanges and transfers of Notes will be free of service 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 Trustee and executed by the registered holder in person
      or by
      the holder’s attorney duly authorized in writing. The date of registration of
      any Note delivered upon any exchange or transfer of Notes shall be such that
      no
      gain or loss of interest results from such exchange or transfer.

     

    In
      case
      this Note shall at any time become mutilated, defaced or be destroyed, lost
      or
      stolen and such Note or evidence of the loss, theft or destruction thereof
      (together with the indemnity hereinafter referred to and such other documents
      or
      proof as may be required in the premises) shall be delivered to the Trustee,
      the
      Issuer in its discretion may execute a new Note of like tenor in exchange for
      this Note, but, in the case of any destroyed or lost or stolen Note, only upon
      receipt of evidence satisfactory to the Trustee and the Issuer that 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.

     

    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

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    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.

     

    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 who is a U.S. Alien (as defined below) 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 thereof or therein, 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 any such holder who
      is a
      U.S. Alien for or on account of:

     

    (a) any
      present or future tax, assessment or other governmental charge that would not
      have been so imposed but for (i) the existence of any present or former
      connection between such holder, or between a fiduciary, settlor, beneficiary,
      member or shareholder of such holder, if such holder is an estate, a trust,
      a
      partnership or a corporation for U.S. federal income tax purposes, and the
      United States, including, without limitation, such holder, or such fiduciary,
      settlor, beneficiary, member or shareholder, being or having been a citizen
      or
      resident thereof or being or having been engaged in a trade or business or
      present therein or having, or having had, a permanent establishment therein
      or
      (ii) the presentation by or on behalf of the holder of this Note for payment
      on
      a date more than 15 calendar days after the date on which such payment became
      due and payable or the date on which payment thereof is duly provided for,
      whichever occurs later;

     

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

     

    (c) any
      tax, assessment or other governmental charge imposed by reason of such holder’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 which
      accumulates earnings to avoid U.S. federal income tax or as a private foundation
      or other tax-exempt organization or a bank receiving interest under Section
      881(c)(3)(A) of the Internal Revenue Code of 1986, as amended;

     

    (d) 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;

     

    (e) 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
      such payment can be made without such withholding by any other Paying Agent
      in a
      city in Western Europe;

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (f) 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 or identity of the holder
      or
      beneficial owner of this Note, if such compliance is required by statute or
      by
      regulation of the United States or of any political subdivision or taxing
      authority thereof or therein as a precondition to relief or exemption from
      such
      tax, assessment or other governmental charge;

     

    (g) any
      tax, assessment or other governmental charge imposed by reason of such holder’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

     

    (h) any
      combination of items (a), (b), (c), (d), (e), (f) or (g).

     

    In
      addition, the Issuer shall not be required to make any payment of Additional
      Amounts (i) to any such holder 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 (ii) by or on behalf
      of
      a holder who would have been able to avoid such withholding or deduction by
      presenting this Note to another Paying Agent in a member state of the European
      Union. Nor shall the Issuer pay Additional Amounts with respect to any payment
      on this Note to a U.S. Alien who is a fiduciary or partnership or other than
      the
      sole beneficial owner of such payment to the extent such payment would be
      required by the laws of the United States (or any political subdivision thereof)
      to be included in the income, for tax purposes, of a beneficiary or settlor
      with
      respect to such fiduciary or a member of such partnership or a beneficial owner
      who would not have been entitled to the Additional Amounts had such beneficiary,
      settlor, member or beneficial owner been the holder of this Note.

     

    The
      Senior
      Indenture provides that (a) if an Event of Default (as defined in the
      Senior Indenture) due to the default in payment of principal of, premium, if
      any, or interest on, any series of debt securities issued under the Senior
      Indenture, including the series of Senior Global Medium-Term Notes of which
      this
      Note forms a part, or due to the default in the performance or breach of any
      other covenant or warranty of the Issuer applicable to the debt securities
      of
      such series but not applicable to all outstanding debt securities issued under
      the Senior Indenture, shall have occurred and be continuing, either the Trustee
      or the holders of not less than 25% in 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 a default in the performance of any other
      of the covenants or agreements in the Senior Indenture applicable to all
      outstanding debt securities issued thereunder, including this Note, or due
      to
      certain events of bankruptcy, insolvency or reorganization of the Issuer, 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 Senior 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

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    (except
      a
      continuing default in payment of principal, premium, if any, or interest on
      such
      debt securities) by the holders of a majority in aggregate principal amount
      of
      the debt securities of all affected series then outstanding.

     

    The
      Senior
      Indenture permits the Issuer and the Trustee, with the consent of the holders
      of
      not less than a majority in aggregate principal amount of the debt securities
      of
      all series issued under the Senior Indenture then outstanding and affected
      (voting as one class), to execute supplemental indentures adding any provisions
      to or changing in any manner the rights of the holders of each series so
      affected; provided that the Issuer and the Trustee may not, without the
      consent of the holder of each outstanding debt security affected thereby, (a)
      extend the final maturity of any such debt security, or reduce the principal
      amount thereof, or reduce the rate or extend the time of payment of interest
      thereon, or reduce any amount payable on redemption thereof, or change the
      currency of payment thereof, 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 antidilution provisions or other similar adjustment
      provisions of the debt securities or otherwise in accordance with the terms
      thereof), or impair or affect the rights of any holder to institute suit for
      the
      payment thereof or (b) reduce the aforesaid percentage in principal amount
      of
      debt securities the consent of the holders of which is required for any such
      supplemental indenture.

     

    Except
      as
      set forth below, if the principal of, premium, if any, or interest on this
      Note
      is payable in a Specified Currency other than U.S. dollars and such Specified
      Currency is not available to the Issuer for making payments hereon due to the
      imposition of exchange controls or other circumstances beyond the control of
      the
      Issuer or is no longer used by the government of the country issuing such
      currency or for the settlement of transactions by public institutions within
      the
      international banking community, then the Issuer will be entitled to satisfy
      its
      obligations to the holder of this Note by making such payments in U.S. dollars
      on the basis of the Market Exchange Rate (as defined below) 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 (as defined below)
      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 (as defined
      below) unless the Exchange Rate Agent is an affiliate of the

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    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.
      International plc, 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. If this Note is listed on
      the
      London Stock Exchange plc and such exchange so requires, the Issuer shall
      maintain a Paying Agent in London.  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.  The Issuer may designate other
      agencies for the payment of said principal, premium and interest at such place
      or places outside the United States (subject to applicable laws and regulations)
      as the Issuer may decide. So long as there shall be such an agency, the Issuer
      shall keep the Trustee advised of the names and locations of such agencies,
      if
      any are so designated.

     

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

     

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

     

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

     

    No
      recourse shall be had for the payment of the principal of, premium, if any,
      or
      the interest on this Note, for any claim based hereon, or otherwise in respect
      hereof, or based on or in respect of the Senior Indenture or any indenture
      supplemental thereto, against any incorporator,

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    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:

     

    (a) the
      term “Business Day” means any day, other than a Saturday or
      Sunday, (i) 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 London 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 (ii) if this Note is
      denominated in euro, that is also a day on which the Trans-European Automated
      Real-time Gross Settlement Express Transfer System (“TARGET”)
      is operating (a “TARGET Settlement
      Day”);

     

    (b) the
      term “Market Exchange Rate” means the noon U.S. dollar buying
      rate in The City of New York for cable transfers of the Specified Currency
      indicated on the face hereof published by the Federal Reserve Bank of New
      York;

     

    (c) the
      term “Notices” refers to notices to the holders of the Notes at
      each holder’s address as that address appears in the register for the Notes by
      first class mail, postage prepaid, and to be given by publication in an
      authorized newspaper in the English language and of general circulation in
      the
      Borough of Manhattan, The City of New York, and London or, if publication in
      London is not practical, in an English language newspaper with general
      circulation in Western Europe; provided that notice may be made, at the
      option of the Issuer, through the customary notice provisions of the clearing
      system or systems through which beneficial interests in this Note are
      owned.  Such Notices will be deemed to have been given on the date of
      such publication (or other transmission, as applicable), or if published in
      such
      newspapers on different dates, on the date of the first such
      publication;

     

    (d) the
      term “United States” means the United States of America
      (including the States and the District of Columbia), its territories, its
      possessions and other areas subject to its jurisdiction; and

     

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

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

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

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    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	
              B

            	as
              tenants in common
	 	TEN
              ENT	
              B

            	as
              tenants by the entireties
	
               

            	
              JT
                TEN

            	
              B

            	
              as
                joint tenants with right of survivorship and not as tenants
                in

              common

            

    

     

    UNIF
      GIFT
      MIN ACT B                                                                Custodian                                           
      

    (Minor)                                                        (Cust)

    

    Under
      Uniform Gifts to Minors
      Act                                                                                     

    (State)

    

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

    __________________

    

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

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

     

    
      	
               

            	 

    

    [PLEASE
      INSERT SOCIAL SECURITY OR OTHER

    IDENTIFYING
      NUMBER OF ASSIGNEE]

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

            

    

     

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

     

    Dated:                                           

     

    
      	
              NOTICE:

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

            

    

     

     

    
 

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    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.
	 	 	 	 

    

     

     

     

     

     27

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