-- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing






	 
	 
	Exhibit 4.1
	 
	 
	 
		FORM OF FIXED RATE SENIOR NOTE

	 		 
	REGISTERED

	  No.
    FXR-1
		REGISTERED

    U.S. $

    CUSIP:
	





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



















	
MORGAN STANLEY
	
	
SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES F
	
	
(Fixed Rate)
	
	 

	
	
HIGH INCOME TRIGGER SECURITIES
	
	 

	
	
          % HITS DUE JANUARY 20, 2008	
	
MANDATORILY EXCHANGEABLE
	
	
FOR SHARES OF COMMON STOCK OF
	
	
ARCHER-DANIELS-MIDLAND COMPANY (the “HITS”)
	



	
ORIGINAL ISSUE DATE:		
INITIAL REDEMPTION

    DATE: N/A		
INTEREST RATE:	      %

    per annum	
MATURITY DATE: See

    “Maturity Date” below.
	
INTEREST ACCRUAL

    DATE:	
INITIAL REDEMPTION

    PERCENTAGE: N/A	
INTEREST PAYMENT

    DATE(S): See “Interest

     Payment Dates” below.	
OPTIONAL REPAYMENT

    DATE(S): N/A	
	
SPECIFIED CURRENCY:

    U.S. dollars	
ANNUAL REDEMPTION

    PERCENTAGE

     REDUCTION: N/A	
INTEREST PAYMENT

    PERIOD: Quarterly	
APPLICABILITY OF

    MODIFIED

     PAYMENT UPON

     ACCELERATION OR

     REDEMPTION: See

     “Alternate Exchange

     Calculation in Case of an

     Event of Default” below.
	
IF SPECIFIED

    CURRENCY OTHER

     THAN U.S. DOLLARS,

     OPTION TO ELECT

     PAYMENT IN U.S.

     DOLLARS: N/A	
REDEMPTION NOTICE

    PERIOD: N/A	
APPLICABILITY OF

    ANNUAL INTEREST

     PAYMENTS: N/A	
If yes, state Issue Price: N/A
	
EXCHANGE RATE

    AGENT: N/A	
TAX REDEMPTION AND

    PAYMENT OF

     ADDITIONAL

     AMOUNTS: NO	
PRICE APPLICABLE

    UPON OPTIONAL

     REPAYMENT: N/A	
ORIGINAL YIELD TO

    MATURITY: N/A
	
OTHER PROVISIONS: See

    below.	
IF YES, STATE INITIAL

    OFFERING DATE: N/A	 		 	




	
Stated Principal Amount		 		
$	    per HITS
	 	 	 
	Underlying Company  
		 		Archer-Daniels-Midland Company (“ADM”) 
	
	 	 	 
	Underlying Stock	 	The common stock of ADM
	 	 	 
	Pricing Date	 	 





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Denominations		 		
$           and integral multiples
thereof
	 	
	Initial Share Price

Trigger Level

Trigger Price

Acceleration Trigger Price

Exchange Ratio
		 		$

                % of the Initial Share Price

$

$

     , which is equal to the Stated Principal Amount divided by the Initial Share Price
	
	 	
	Exchange Factor
		 		     , subject to adjustment upon the occurrence of certain extraordinary dividends and corporate events affecting the Underlying Stock through and including the Determination Date, as described under
“Antidilution Adjustments” below.
	
	 	
	Interest Payment Dates
		 		April 20, 2007, July 20, 2007, October 20, 2007 and the Maturity Date.

If the scheduled Maturity Date is postponed due to a Market Disruption Event or otherwise, the Issuer shall pay interest on the Maturity Date as postponed rather than on the scheduled Maturity Date, but no interest shall accrue
on this HITS or on such payment during the period from or after the scheduled Maturity Date.
	
	 	
	Maturity Date
		 		January 20, 2008, subject to acceleration as described below in “Price Event Acceleration” and “Alternate Exchange Calculation in Case of an Event of Default” and subject to
extension if the Determination Date is postponed in accordance with the following paragraph.

If the Determination Date is postponed due to a Market Disruption Event or otherwise, the Maturity Date shall be postponed so that the Maturity Date shall be the second Trading Day following the Determination Date.
	
	 	
	Determination Date
		 		January 17, 2008; provided that if such date is not a Trading Day or if a Market Disruption Event occurs on such day, the Determination Date
shall be the immediately succeeding Trading Day on which no Market Disruption Event occurs.
	





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		In the event that the Determination Date and Maturity Date are postponed as described in the two immediately preceding paragraphs, the Issuer shall, or shall cause the Calculation Agent to, give notice
of such postponement and, once it has been determined, of the date to which the Maturity Date has been rescheduled, as promptly as possible, and in no case later than 10:30 a.m. on the Trading Day immediately prior to the Maturity Date (but if such
Trading Day is not a Business Day, prior to the close of business on the Business Day preceding the Maturity Date) (i) to the holder of this HITS by mailing notice of such postponement by first class mail, postage prepaid, to the holder’s last
address as it shall appear upon the registry books, (ii) to the Trustee by telephone or facsimile confirmed by mailing such notice to the Trustee by first class mail, postage prepaid, at its New York office and (iii) to the Depositary by telephone
or facsimile confirmed by mailing such notice to the Depositary by first class mail, postage prepaid. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the holder of this
HITS receives the notice.


	
	 

	
	Record Date


		 
		Notwithstanding the definition of “Record Date” on page 20 hereof, the Record Date for each Interest Payment Date, including the Interest Payment Date scheduled to occur on the Maturity Date,
shall be the date 5 calendar days prior to such scheduled Interest Payment Date, whether or not that date is a Business Day.


	
	 

	
	Payment at Maturity


		 
		Unless the maturity of the HITS has been accelerated, on the Maturity Date, upon delivery of this HITS to the Trustee, each Stated Principal Amount of this HITS shall be applied by the Issuer as payment
for, and the Issuer shall deliver, either:

(i) if the Trading Price of the Underlying Stock has not decreased to or below the Trigger Price at any time on any Trading Day from and including the Pricing Date to and including the Determination Date, an amount in cash
equal to the Stated Principal Amount per HITS, or


	




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		(ii) if the Trading Price of the Underlying Stock has decreased to or below the Trigger Price at any time on any Trading Day from and including the Pricing Date to and including the Determination Date,
a number of shares of the Underlying Stock equal to the product of the Exchange Ratio and the Exchange Factor, each determined as of the Determination Date by the Calculation Agent. See “Exchange Factor” above and “Antidilution
Adjustments” below.

The number of any shares of the Underlying Stock to be delivered at maturity shall be subject to any applicable adjustments (i) to the Exchange Factor and (ii) in the Exchange Property, as defined in paragraph 5 under
“Antidilution Adjustments” below, to be delivered instead of, or in addition to, such Underlying Stock as a result of any corporate event described under “Antidilution Adjustments” below, in each case, required to be made up to
the close of business on the Determination Date.

The Issuer shall, or shall cause the Calculation Agent to, provide written notice to the Trustee at its New York Office and to the Depositary, on which notice the Trustee and Depositary may conclusively rely, on or prior to
10:30 a.m. on the Trading Day immediately prior to the Maturity Date (but if such Trading Day is not a Business Day, prior to the close of business on the Business Day preceding the Maturity Date), of the amount of cash or Underlying Stock (or the
amount of Exchange Property), as applicable, to be delivered with respect to each Stated Principal Amount of this HITS and, in the event of a delivery of the Underlying Stock, of the amount of any cash to be paid in lieu of any fractional share of
the Underlying Stock (or of any other securities included in Exchange Property, if applicable); provided that, if the Maturity Date of this HITS is accelerated because of a Price Event
Acceleration (as defined below) or because of an Event of Default Acceleration (as defined in “Alternate Exchange Calculation in Case of an Event of Default” below), the Issuer shall, or shall cause the Calculation Agent to, give notice of
such acceleration and of the amount of cash or Underlying Stock (or any Exchange


	




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		Property) payable in connection therewith as promptly as possible and in no event later than (A) in the case of an Event of Default Acceleration, two Trading Days after the date of such acceleration
(but if such second Trading Day is not a Business Day, prior to the close of business on the Business Day preceding such second Trading Day) and (B) in the case of a Price Event Acceleration, 10:30 a.m. on the Trading Day immediately prior to the
date of acceleration (but if such Trading Day is not a Business Day, prior to the close of business on the Business Day preceding the date of acceleration), (i) to the holder of this HITS by mailing notice of such acceleration by first class mail,
postage prepaid, to the holder’s last address as it shall appear upon the registry books, and (ii) to the Trustee by telephone or facsimile confirmed by mailing such notice to the Trustee by first class mail, postage prepaid, at its New York
office and (iii) to the Depositary by telephone or facsimile confirmed by mailing such notice to the Depositary by first class mail, postage prepaid. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the holder of this HITS receives the notice. If the maturity of this HITS is accelerated in the manner described above, no interest on the amounts payable with respect to this HITS shall accrue for the period from and
after such accelerated maturity date; provided that the Issuer has deposited with the Trustee the Underlying Stock, the Exchange Property or any cash due with respect to such acceleration by
such accelerated maturity date.

The Issuer shall, or shall cause the Calculation Agent to, deliver any such cash or shares of Underlying Stock (or any Exchange Property), as applicable, and cash in respect of interest and any fractional shares of Underlying
Stock (or any Exchange Property) and cash otherwise due upon any acceleration described above to the Trustee for delivery to the holder of this HITS. The Calculation Agent shall determine the Exchange Factor applicable at the maturity of this
HITS.


	




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		If this HITS is not surrendered for exchange at maturity or upon acceleration, it shall be deemed to be no longer Outstanding under, and as defined in, the Senior Indenture, except with respect to the
holder’s right to receive the Underlying Stock (and, if applicable, any Exchange Property) and any cash in respect of interest and any fractional shares of Underlying Stock (or any Exchange Property) and any other cash due at maturity as
described in the preceding paragraph under this heading.

References to payment “per HITS” refer to each Stated Principal Amount of this HITS.


	
	 

	
	Price Event Acceleration


		 
		If on any two consecutive Trading Days during the period prior to and ending on the third Business Day immediately preceding the Maturity Date, the product of the Closing Price per share of Underlying
Stock, as determined by the Calculation Agent, and the Exchange Factor is less than the Acceleration Trigger Price, the Maturity Date of this HITS shall be deemed to be accelerated to the third Business Day immediately following such second Trading
Day (the “date of acceleration”). Upon such acceleration, the holder of this HITS shall receive per Stated Principal Amount of this HITS on the date of acceleration:





	 	 	 	(i) a
          number of shares of Underlying Stock equal to the product of the Exchange
          Ratio and the Exchange Factor, as of such date of acceleration; and

      (ii) accrued but unpaid interest to but excluding
          the date of acceleration plus an amount of cash, as determined by the Calculation
          Agent, equal to the sum of the present values of the remaining scheduled
          payments of interest on this HITS (excluding any portion of such payments
          of interest accrued to the date of acceleration) discounted to the date
          of acceleration based on the comparable yield that the Issuer would pay
          on a non-interest bearing, senior unsecured debt obligation of the Issuer
    having a maturity equal to the term of each




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	 	 	 	such remaining
    scheduled payment, as determined by the Calculation Agent.




		 	 
			 		The holder of this HITS shall not be entitled to receive the return of each Stated Principal Amount of this HITS upon a Price Event Acceleration.
	
	 	
	No Fractional Shares
		 		Upon delivery of this HITS to the Trustee at maturity (including as a result of acceleration other than an acceleration resulting from an Event of Default), and if applicable, the Issuer shall deliver
the aggregate number of shares of Underlying Stock due with respect to this HITS, as described above, but the Issuer shall pay cash in lieu of delivering any fractional share of Underlying Stock in an amount equal to the corresponding fractional
Closing Price of such fraction of a share of Underlying Stock as determined by the Calculation Agent as of the Determination Date.
	
	 	
	Closing Price
		 		The Closing Price for one share of the Underlying Stock (or one unit of any other security for which a Closing Price must be determined) on any Trading Day (as defined below) means:
	




	 	 	•	if the
          Underlying Stock (or any such other security) is
          listed or admitted to trading on a national securities
          exchange (other than The NASDAQ Stock Market LLC (the “NASDAQ”)),
          the lastreported sale price, regular way,
          of the principaltrading session on such
          day on the principalnational securities exchange registered under theSecurities
          Exchange Act of 1934, as amended (the“Exchange
          Act”), on which the Underlying Stock(or
    any such other security) is listed or admitted to trading,

	 	 	 	 
	 	 	•	if the Underlying
          Stock (or any such other security) is
          a security of the NASDAQ, the official closing price
    published by the NASDAQ on such day, or

	 	 	 	 
	 	 	•	if the Underlying
          Stock (or any such other security) is
          neither listed or admitted to trading on any national
    securities exchange nor a security of the NASDAQ but is included in the OTC Bulletin




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	 	 	 	Board
          Service (the “OTC Bulletin Board”) operated by the National Association
          of Securities Dealers, Inc. (the “NASD”), the last reported sale
          price of the principal trading session on the OTC Bulletin Board on such
    day.



		 	 
			 		If the Underlying Stock (or any such other security) is listed or admitted to trading on any national securities exchange or is a security of the NASDAQ but the last reported sale price or official closing price published by
NASDAQ, as applicable, is not available pursuant to the preceding sentence, then the Closing Price for one share of the Underlying Stock (or one unit of any such other security) on any Trading Day shall mean the last reported sale price of the
principal trading session on the over-the-counter market as reported on the NASDAQ or the OTC Bulletin Board on such day. If, because of a Market Disruption Event (as defined below) or otherwise, the last reported sale price or the official closing
price published by NASDAQ, as applicable, for the Underlying Stock (or any such other security) is not available pursuant to either of the two preceding sentences, then the Closing Price for any Trading Day shall be the mean, as determined by the
Calculation Agent, of the bid prices for the Underlying Stock (or any such other security) for such Trading Day obtained from as many recognized dealers in such security, but not exceeding three, as shall make such bid prices available to the
Calculation Agent. Bids of MS & Co. or any of its affiliates may be included in the calculation of such mean, but only to the extent that any such bid is the highest of the bids obtained. The term “OTC Bulletin Board Service” shall
include any successor service thereto.
	
	 	
	Intraday Price
		 		The Intraday Price for one share of the Underlying Stock (or one unit of any other security for which an Intraday Price must be determined) at any time during any Trading Day (including at the close)
means:






	 	 	 	(i) if
          the Underlying Stock (or any such other security) is listed or admitted
          to trading on a national securities exchange, the most recently reported
    sale price, regular way, at such time during




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	 	 	 	the principal
          trading session on such day on the principal United States securities exchange
          registered under the Exchange Act on which the Underlying Stock (or any
          such other security) is listed or admitted to trading,

      (ii) if the Underlying Stock (or any such other
          security) is a security of NASDAQ, the most recently reported sale price
          at such time quoted by NASDAQ on such day, or

      (iii) if the Underlying Stock (or any such other
          security) is not listed or admitted to trading on any national securities
          exchange but is included in the OTC Bulletin Board, the most recently reported
          sale price at such time during the principal trading session on the OTC
    Bulletin Board on such day.





	Trading Price
		 		Trading Price means the product of (i) the Intraday Price of one share of the Underlying Stock and (ii) the Exchange Factor, each as determined by the Calculation Agent at any time on any Trading
Day.
	
	 	
	Trading Day
		 		A day, as determined by the Calculation Agent, on which trading is generally conducted on the New York Stock Exchange LLC (“NYSE”), the American Stock Exchange LLC, the NASDAQ, the Chicago
Mercantile Exchange, the Chicago Board of Options Exchange and in the over-the-counter market for equity securities in the United States and, if the principal trading market for the Underlying Stock is outside the United States, in such principal
trading market.
	
	 	
	Calculation Agent
		 		Morgan Stanley & Co. Incorporated (“MS & Co.”) and its successors.

All determinations made by the Calculation Agent shall be at the sole discretion of the Calculation Agent and shall, in the absence of manifest error, be conclusive for all purposes and binding on the holder of this HITS, the
Trustee and the Issuer.

All calculations with respect to the Exchange Ratio and the Exchange Factor for this HITS shall be made by the Calculation Agent and shall be rounded to the
	





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		nearest one hundred-thousandth, with five one- millionths rounded upward (e.g., .876545 would be rounded to .87655), and all dollar amounts
paid to the holder of this HITS in the aggregate related to interest payments or the payment at maturity resulting from such calculations shall be rounded to the nearest cent with one-half cent rounded upward.


	
	 

	
	Antidilution Adjustments


		 
		The Exchange Factor shall be adjusted as follows:

1. If the Underlying Stock is subject to a stock split or reverse stock split, then once such split has become effective, the Exchange Factor shall be adjusted to equal the product of the prior Exchange Factor and the number of
shares issued in such stock split or reverse stock split with respect to one share of the Underlying Stock.

2. If the Underlying Stock is subject (i) to a stock dividend (issuance of additional shares of the Underlying Stock) that is given ratably to all holders of shares of the Underlying Stock or (ii) to a distribution of the
Underlying Stock as a result of the triggering of any provision of the corporate charter of the Underlying Company, then once the dividend has become effective and the Underlying Stock is trading ex-dividend, the Exchange Factor shall be adjusted so
that the new Exchange Factor shall equal the prior Exchange Factor plus the product of (i) the number of shares issued with respect to one share of the Underlying Stock and (ii) the prior Exchange Factor.

3. If the Underlying Company issues rights or warrants to all holders of the Underlying Stock to subscribe for or purchase the Underlying Stock at an exercise price per share less than the Closing Price of the Underlying Stock
on both (i) the date the exercise price of such rights or warrants is determined and (ii) the expiration date of such rights or warrants, and if the expiration date of such rights or warrants precedes the maturity of this HITS, then the Exchange
Factor shall be adjusted to equal the product of the prior Exchange Factor and a fraction, the numerator of which shall be the number of shares of the Underlying Stock


	




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		outstanding immediately prior to the issuance of such rights or warrants plus the number of additional shares of the Underlying Stock offered for subscription or purchase pursuant to such rights or
warrants and the denominator of which shall be the number of shares of the Underlying Stock outstanding immediately prior to the issuance of such rights or warrants plus the number of additional shares of the Underlying Stock which the aggregate
offering price of the total number of shares of the Underlying Stock so offered for subscription or purchase pursuant to such rights or warrants would purchase at the Closing Price on the expiration date of such rights or warrants, which shall be
determined by multiplying such total number of shares offered by the exercise price of such rights or warrants and dividing the product so obtained by such Closing Price.

4. There shall be no adjustments to the Exchange Factor to reflect cash dividends or other distributions paid with respect to the Underlying Stock other than distributions described in paragraph 2, paragraph 3 and clauses (i),
(iv) and (v) of paragraph 5 below and Extraordinary Dividends as described below. A cash dividend or other distribution with respect to the Underlying Stock shall be deemed to be an “Extraordinary Dividend” if such cash dividend or
distribution exceeds the immediately preceding non- Extraordinary Dividend for the Underlying Stock by an amount equal to at least 10% of the Closing Price of the Underlying Stock (as adjusted for any subsequent corporate event requiring an
adjustment hereunder, such as a stock split or reverse stock split) on the Trading Day preceding the ex-dividend date (that is, the day on and after which transactions in the Underlying Stock on the primary U.S. organized securities exchange or
trading system on which the Underlying Stock is traded or trading system no longer carry the right to receive that cash dividend or that cash distribution) for the payment of such Extraordinary Dividend. If an Extraordinary Dividend occurs with
respect to the Underlying Stock, the Exchange Factor with respect to the Underlying Stock shall be adjusted on the ex-dividend date with respect to such Extraordinary Dividend so that the new


	




12



















	
		 
		Exchange Factor shall equal the product of (i) the then current Exchange Factor and (ii) a fraction, the numerator of which is the Closing Price on the Trading Day preceding the ex-dividend date, and
the denominator of which is the amount by which the Closing Price on the Trading Day preceding the ex- dividend date exceeds the Extraordinary Dividend Amount. The “Extraordinary Dividend Amount” with respect to an Extraordinary Dividend
for the Underlying Stock shall equal (i) in the case of cash dividends or other distributions that constitute regular dividends, the amount per share of such Extraordinary Dividend minus the amount per share of the immediately preceding
non-Extraordinary Dividend for the Underlying Stock or (ii) in the case of cash dividends or other distributions that do not constitute regular dividends, the amount per share of such Extraordinary Dividend. To the extent an Extraordinary Dividend
is not paid in cash, the value of the non-cash component shall be determined by the Calculation Agent, whose determination shall be conclusive. A distribution on the Underlying Stock described in clause (i), (iv) or (v) of paragraph 5 below that
also constitutes an Extraordinary Dividend shall cause an adjustment to the Exchange Factor pursuant only to clause (i), (iv) or (v) of paragraph 5, as applicable.

5. If (i) there occurs any reclassification or change of the Underlying Stock, including, without limitation, as a result of the issuance of any tracking stock by the Underlying Company, (ii) the Underlying Company or any
surviving entity or subsequent surviving entity of the Underlying Company (an “Underlying Company Successor”) has been subject to a merger, combination or consolidation and is not the surviving entity, (iii) any statutory exchange of
securities of the Underlying Company or any Underlying Company Successor with another corporation occurs (other than pursuant to clause (ii) above), (iv) the Underlying Company is liquidated, (v) the Underlying Company issues to all of its
shareholders equity securities of an issuer other than the Underlying Company (other than in a transaction described in clause (ii), (iii) or (iv) above) (a “Spin-off


	




13



















	
		 
		Event”) or (vi) a tender or exchange offer or going- private transaction is consummated for all the outstanding shares of the Underlying Stock (any such event in clauses (i) through (vi), a
“Reorganization Event”), the method of determining the amount payable upon exchange at maturity for each HITS shall be adjusted to provide that holders shall be entitled to receive at maturity, in respect of the stated principal amount of
each HITS either:





	 	 	 	(a) if
          (x) the trading price of the Underlying Stock at any time on any Trading
          Day from and including the Pricing Date to and including the effective
          date of the Reorganization Event, or (y) the Exchange Property Value (as
          defined below) at any time on any Trading Day from and including the effective
          date of the Reorganization Event to and including the Determination Date
          has not decreased to or below the Trigger Price, and amount of cash equal
          to the stated principal amount of each HITS, or

      (b) if (x) the trading price of the Underlying
          Stock at any time on any Trading Day from and including the Pricing Date
          to and including the effective date of the Reorganization Event, or (y)
          the Exchange Property Value (as defined below) at any time on any Trading
          Day from and including the effective date of the Reorganization Event to
          and including the Determination Date has decreased to or below the Trigger
          Price, securities, cash or any other assets distributed to holders of the
          Underlying Stock in or as a result of any such Reorganization Event, including
          (A) in the case of the issuance of tracking stock, the reclassified share
          of the Underlying Stock, (B) in the case of a Spin-off Event, the share
          of the Underlying Stock with respect to which the spun-off security was
          issued, and (C) in the case of any other Reorganization Event where the
          Underlying Stock continues to be held by the holders receiving such distribution,
          the Underlying Stock (collectively, the “Exchange Property”),
          in an amount equal to the amount of Exchange Property delivered with respect
    to a number of shares of the Underlying Stock equal to




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	 	 	 	the Exchange
          Ratio times the Exchange Factor each determined at the time of the Reorganization
    Event.




		 	 
			 		If Exchange Property consists of more than one type of property, the Issuer shall deliver to the Depositary, as holder of the HITS, at maturity a pro rata share of each such type of Exchange Property. If Exchange Property
includes a cash component, holders shall not receive any interest accrued on such cash component. In the event Exchange Property consists of securities, such securities shall, in turn, be subject to the antidilution adjustments set forth in
paragraphs 1 through 5.

For purposes of determining whether or not the Exchange Property Value has decreased to or below the Trigger Level at any time on any Trading Day from and including the time of the Reorganization Event to and including the
Determination Date, “Exchange Property Value” means (i) for any cash received in any Reorganization Event, the value, as determined by the Calculation Agent, as of the date of receipt, of such cash received for one share of the Underlying
Stock, as adjusted by the Exchange Factor as the time of such Reorganization Event, (ii) for any property other than cash or securities received in any such Reorganization Event, the market value, as determined by the Calculation Agent in its sole
discretion, as of the date of receipt, of such Exchange Property received for one share of the Underlying Stock, as adjusted by the Exchange Factor at the time of such Reorganization Event and (iii) for any security received in any such
Reorganization Event, an amount equal to the Intraday Price, as of the time at which the Exchange Property Value is determined, per share of such security multiplied by the quantity of such security received for each share of the Underlying Stock,
as adjusted by the Exchange Factor at the time of such Reorganization Event.

For purposes of paragraph 5 above, in the case of a consummated tender or exchange offer or going- private transaction involving consideration of
	





15



















	
		 
		particular types, Exchange Property shall be deemed to include the amount of cash or other property delivered by the offeror in the tender or exchange offer (in an amount determined on the basis of the
rate of exchange in such tender or exchange offer or going-private transaction). In the event of a tender or exchange offer or a going-private transaction with respect to Exchange Property in which an offeree may elect to receive cash or other
property, Exchange Property shall be deemed to include the kind and amount of cash and other property received by offerees who elect to receive cash.

Following the occurrence of any Reorganization Event referred to in paragraph 5 above, (i) references to the “Underlying Stock” under “No Fractional Shares,” “Price Event Acceleration” and
“Alternate Exchange Calculation in Case of an Event of Default” shall be deemed to also refer to any other security received by holders of the Underlying Stock in any such Reorganization Event, and (ii) all other references in this HITS to
“Underlying Stock” shall be deemed to refer to the Exchange Property into which this HITS is thereafter exchangeable and references to a “share” or “shares” of the Underlying Stock shall be deemed to refer to the
applicable unit or units of such Exchange Property, unless the context otherwise requires.

No adjustment to the Exchange Factor shall be required unless such adjustment would require a change of at least 0.1% in the Exchange Factor then in effect. The Exchange Factor resulting from any of the adjustments specified
above shall be rounded to the nearest one hundred-thousandth, with five one- millionths rounded upward. Adjustments to the Exchange Factor shall be made up to the close of business on the Determination Date.

No adjustments to the Exchange Factor or method of calculating the Exchange Factor shall be required other than as specified above.


	




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		The Calculation Agent shall be solely responsible for the determination and calculation of any adjustments to the Exchange Factor or method of calculating the Exchange Factor and of any related
determinations and calculations with respect to any distributions of stock, other securities or other property or assets (including cash) in connection with any corporate event described in paragraphs 1 through 5 above, and its determinations and
calculations with respect thereto shall be conclusive in the absence of manifest error.

The Calculation Agent shall provide information as to any adjustments to the Exchange Factor or to the method of calculating the amount payable at maturity of this HITS made pursuant to paragraph 5 above upon written request by
any holder of this HITS.


	
	 

	
	Market Disruption Event


		 
		Market Disruption Event means, with respect to the Underlying Stock:





	 	 	 	(i) a
          suspension, absence or material limitation of trading of the Underlying
          Stock on the primary market for the Underlying Stock for more than two
          hours of trading or during the one-half hour period preceding the close
          of the principal trading session in such market; or a breakdown or failure
          in the price and trade reporting systems of the primary market for the
          Underlying Stock as a result of which the reported trading prices for the
          Underlying Stock during the last one-half hour preceding the close of the
          principal trading session in such market are materially inaccurate; or
          the suspension, absence or material limitation of trading on the primary
          market for trading in options contracts related to the Underlying Stock,
          if available, during the one-half hour period preceding the close of the
          principal trading session in the applicable market, in each case as determined
          by the Calculation Agent in its sole discretion; and

      (ii) a determination by the Calculation Agent
          in its sole discretion that any event described in clause (i) above materially
    interfered with the ability of





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	 	 	 	the Issuer
          or any of its affiliates to unwind or adjust all or a material portion
    of the hedge with respect to the HITS.




		 	 
			 		For purposes of determining whether a Market Disruption Event has occurred: (1) a limitation on the hours or number of days of trading shall not constitute a Market Disruption Event if it results from an announced change in the
regular business hours of the relevant exchange, (2) a decision to permanently discontinue trading in the relevant options contract shall not constitute a Market Disruption Event, (3) limitations pursuant to NYSE Rule 80A (or any applicable rule or
regulation enacted or promulgated by the NYSE, any other self-regulatory organization or the Securities and Exchange Commission of scope similar to NYSE Rule 80A as determined by the Calculation Agent) on trading during significant market
fluctuations shall constitute a suspension, absence or material limitation of trading, (4) a suspension of trading in options contracts on the Underlying Stock by the primary securities market trading in such options, if available, by reason of (x)
a price change exceeding limits set by such securities exchange or market, (y) an imbalance of orders relating to such contracts or (z) a disparity in bid and ask quotes relating to such contracts shall constitute a suspension, absence or material
limitation of trading in options contracts related to the Underlying Stock and (5) a suspension, absence or material limitation of trading on the primary securities market on which options contracts related to the Underlying Stock are traded shall
not include any time when such securities market is itself closed for trading under ordinary circumstances.
	
	 	
	Alternate Exchange Calculation
	 	 
	    in Case of an Event of Default
		 		In case an Event of Default with respect to the HITS shall have occurred and be continuing, the amount declared due and payable per each Stated Principal Amount of this HITS upon any acceleration of
this HITS (an “Event of Default Acceleration”) shall be determined by the Calculation Agent and shall be an amount in cash equal to either (i) the Stated Principal
	





18



















	 		 		Amount of this HITS plus accrued but unpaid interest to but excluding the date of such acceleration or (ii) if the Trading Price of the Underlying Stock has decreased to or below the Trigger Price at
any time on any Trading Day from and including the Pricing Date to and including the date of such acceleration, (x) the value, as determined based on the Closing Price of the Underlying Stock on the date of such acceleration, of a number of shares
of the Underlying Stock at the Exchange Ratio multiplied by the Exchange Factor as of the date of acceleration and (y) accrued but unpaid interest to but excluding the date of such acceleration.
	
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 





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     Morgan Stanley, a Delaware corporation (together with its successors and assigns, the “Issuer”), for value received, hereby
promises to pay to CEDE & CO., or registered assignees, the amount of cash or Underlying Stock (or the amount of Exchange Property), as applicable, as determined in accordance with the provisions set forth under “Payment at Maturity”
above, due with respect to the principal sum of U.S.$           (UNITED STATES DOLLARS             ) on the Maturity Date specified above (except to the extent redeemed or repaid prior to maturity) and to pay interest thereon at the Interest Rate per annum specified
above, from and including the Interest Accrual Date specified above until the principal hereof is paid or duly made available for payment weekly, monthly, quarterly, semiannually or annually in arrears as specified above as the Interest Payment
Period on each Interest Payment Date (as specified above), commencing on the Interest Payment Date next succeeding the Interest Accrual Date specified above, and at maturity (or on any redemption or repayment date); provided, however, that if the Interest Accrual Date occurs between a Record Date, as defined below, and the next succeeding Interest Payment Date, interest payments will commence on the second Interest
Payment Date succeeding the Interest Accrual Date to the registered holder of this Note on the Record Date with respect to such second Interest Payment Date; and provided, further, that if
this Note is subject to “Annual Interest Payments,” interest payments shall be made annually in arrears and the term “Interest Payment
Date” shall be deemed to mean the first day of March in each year.


     Interest on this Note will accrue from and including the most recent date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for, from and
including the Interest Accrual Date, until but excluding the date the principal hereof has been paid or duly made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, subject to
certain exceptions described herein, be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the date 15 calendar days prior to such Interest Payment Date (whether or not a Business
Day (as defined below)) (each such date, a “Record Date”); provided, however, that interest payable at maturity (or any
redemption or repayment date) will be payable to the person to whom the principal hereof shall be payable. As used herein, “Business Day” means any day, other than a Saturday or
Sunday, (a) that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close (x) in The City of New York or (y) if this Note is denominated in a Specified Currency other than U.S.
dollars, euro or Australian dollars, in the principal financial center of the country of the Specified Currency, or (z) if this Note is denominated in Australian dollars, in Sydney and (b) if this Note is denominated in euro, that is also a day on
which the Trans-European Automated Real-time Gross Settlement Express Transfer System (“TARGET”) is operating (a “TARGET Settlement
Day”).


     Payment of the principal of this Note, any premium and the interest due at maturity (or any redemption or repayment date), unless this Note is denominated in a Specified Currency other than U.S.
dollars and is to be paid in whole or in part in such Specified Currency, will be made in immediately available funds upon surrender of this Note at the office or agency of the Paying Agent, as defined on the reverse hereof, maintained for that
purpose in the Borough of Manhattan, The City of New York, or at such other paying agency as the Issuer may determine,


20




















in U.S. dollars. 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 the equivalent in a Specified Currency) or more in aggregate principal amount of Notes having the same Interest Payment Date, the interest on which is payable in U.S.
dollars, shall be entitled to receive payments of interest, other than interest due at maturity or on any date of redemption or repayment, by wire transfer of immediately available funds if appropriate wire transfer instructions have been received
by the Paying Agent in writing not less than 15 calendar days prior to the applicable Interest Payment Date.


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


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


     If the holder elects to receive all or a portion of payments of principal of, premium, if any, and interest on this Note, if denominated in a Specified Currency other than U.S. dollars, in U.S.
dollars, the Exchange Rate Agent (as defined on the reverse hereof) will convert such payments into U.S. dollars. In the event of such an election, payment in respect of this Note will be based upon the exchange rate as determined by the Exchange
Rate Agent based on the highest bid quotation in The City of New York received by such Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the second Business Day preceding the applicable payment


21




















date from three recognized foreign exchange dealers (one of which may be the Exchange Rate Agent unless such Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the quoting dealer of the Specified Currency for
U.S. dollars for settlement on such payment date in the amount of the Specified Currency payable in the absence of such an election to such holder and at which the applicable dealer commits to execute a contract. If such bid quotations are not
available, such payment will be made in the Specified Currency. All currency exchange costs will be borne by the holder of this Note by deductions from such payments.


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


     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.


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      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 Officer 




 




23



















FORM OF REVERSE OF SECURITY
  


     This Note is one of a duly authorized issue of Senior Global Medium-Term Notes, Series F, (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. (formerly known as JPMorgan Chase Bank)), 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 (as successor to JPMorgan Chase Bank, N.A.) at its corporate trust
office in The City of New York as the paying agent (the “Paying Agent,” which term includes any additional or successor Paying Agent appointed by the Issuer) with respect to the
Notes. The terms of individual Notes may vary with respect to interest rates, interest rate formulas, issue dates, maturity dates, or otherwise, all as provided in the 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 provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or subject to repayment at the option of the holder prior to maturity.


     If so indicated on the face hereof, this Note may be redeemed in whole or in part at the option of the Issuer on or after the Initial Redemption Date specified on the face hereof on the terms set
forth on the face hereof, together with interest accrued and unpaid hereon to the date of redemption. If this Note is subject to “Annual Redemption Percentage Reduction,” the Initial Redemption Percentage indicated on the face hereof will
be reduced on each anniversary of the Initial Redemption Date by the Annual Redemption Percentage Reduction specified on the face hereof until the redemption price of this Note is 100% of the principal amount hereof, together with interest accrued
and unpaid hereon to the date of redemption. If the face hereof indicates that this Note is subject to “Modified Payment upon Acceleration or Redemption”, the amount of principal payable upon redemption will be limited to the aggregate
principal amount hereof multiplied by the sum of the Issue Price specified on the face hereof (expressed as a percentage of the aggregate principal amount) plus the original issue discount accrued from the Interest Accrual Date to the date of
redemption (expressed as a percentage of the aggregate principal amount), with the amount of original issue discount accrued being calculated using a constant yield method (as described below).  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


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


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


     Interest payments on this Note will include interest accrued to but excluding the Interest Payment Dates or the Maturity Date (or any earlier redemption or repayment date), as the case may be. Unless
otherwise provided on the face hereof, interest payments for this Note will be computed and paid on the basis of a 360-day year of twelve 30-day months.


     In the case where the Interest Payment Date or the Maturity Date (or any redemption or repayment date) does not fall on a Business Day, payment of interest, premium, if any, or


25




















principal otherwise payable on such date need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or on the Maturity Date (or any
redemption or repayment date), and no interest on such payment shall accrue for the period from and after the Interest Payment Date or the Maturity Date (or any redemption or repayment date) to such next succeeding Business Day.


     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, if denominated in U.S. dollars, unless otherwise stated
above, is issuable only in denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess thereof. If this Note is denominated in a Specified Currency other than U.S. dollars, then, unless a higher minimum denomination is
required by applicable law, it is issuable only in denominations of the equivalent of U.S. $1,000 (rounded to an integral multiple of 1,000 units of such Specified Currency), or any amount in excess thereof which is an integral multiple of 1,000
units of such Specified Currency, as determined by reference to the noon dollar buying rate in The City of New York for cable transfers of such Specified Currency published by the Federal Reserve Bank of New York (the “Market Exchange Rate”) on the Business Day immediately preceding the date of issuance.


     The Trustee has been appointed registrar for the Notes, 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 the aforesaid 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 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 office for other Notes of other authorized denominations of equal aggregate principal amount having identical terms and provisions.  All such exchanges
and transfers of Notes will be free of charge, but the Issuer may require payment of a sum sufficient


26




















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


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


27




















     If the face hereof indicates that this Note is subject to “Modified Payment upon Acceleration or Redemption,” then (i) if the principal hereof is declared to be due and payable as described
in the preceding paragraph, the amount of principal due and payable with respect to this Note shall be limited to the aggregate principal amount hereof multiplied by the sum of the Issue Price specified on the face hereof (expressed as a percentage
of the aggregate principal amount) plus the original issue discount accrued from the Interest Accrual Date to the date of declaration (expressed as a percentage of the aggregate principal amount), with the amount of original issue discount accrued
being calculated using a constant yield method (as described in the next paragraph), (ii) for the purpose of any vote of securityholders taken pursuant to the Senior Indenture prior to the acceleration of payment of this Note, the principal amount
hereof shall equal the amount that would be due and payable hereon, calculated as set forth in clause (i) above, if this Note were declared to be due and payable on the date of any such vote and (iii) for the purpose of any vote of securityholders
taken pursuant to the Senior Indenture following the acceleration of payment of this Note, the principal amount hereof shall equal the amount of principal due and payable with respect to this Note, calculated as set forth in clause (i)
above.


     The constant yield shall be calculated using a 30-day month, 360-day year convention, a compounding period that, except for the initial period (as defined below), corresponds to the shortest period
between Interest Payment Dates (with ratable accruals within a compounding period), and an assumption that the maturity will not be accelerated. If the period from the Original Issue Date to the first Interest Payment Date (the “initial
period”) is shorter than the compounding period for this Note, a proportionate amount of the yield for an entire compounding period will be accrued. If the initial period is longer than the compounding period, then the period will be divided
into a regular compounding period and a short period with the short period being treated as provided in the preceding sentence.


     If the face hereof indicates that this Note is subject to “Tax Redemption and Payment of Additional Amounts,” this Note may be redeemed, as a whole, at the option of the Issuer at any time
prior to maturity, upon the giving of a notice of redemption as described below, at a redemption price equal to 100% of the principal amount hereof, together with accrued interest to the date fixed for redemption (except that if this Note is subject
to “Modified Payment upon Acceleration or Redemption,” the amount of principal so payable will be limited to the aggregate principal amount hereof multiplied by the sum of the Issue Price specified on the face hereof (expressed as a
percentage of the aggregate principal amount) plus the original issue discount accrued from the Interest Accrual Date to the date of redemption (expressed as a percentage of the aggregate principal amount), with the amount of original issue discount
accrued being calculated using a constant yield method (as described above)), 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 


28




















to this Note as described below. Prior to the giving of any notice of redemption pursuant to this paragraph, the Issuer shall deliver to the Trustee (i) a certificate stating that the Issuer is entitled to effect such redemption
and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer to so redeem have occurred, and (ii) an opinion of independent legal counsel satisfactory to the Trustee to such effect based on such statement
of facts; provided that no such notice of redemption shall be given earlier than 60 calendar days prior to the earliest date on which the Issuer would be obligated to pay such Additional
Amounts if a payment in respect of this Note were then due.


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


     If the face hereof indicates that this Note is subject to “Tax Redemption and Payment of Additional Amounts,” the Issuer will, subject to certain exceptions and limitations set forth below,
pay such additional amounts (the “Additional Amounts”) to the holder of this Note who is a U.S. Alien as may be necessary in order that every net payment of the principal of and
interest on this Note and any other amounts payable on this Note, after withholding or deduction for or on account of any present or future tax, assessment or governmental charge imposed upon or as a result of such payment by the United States, or
any political subdivision or taxing authority 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


29




















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;


     (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 or the relevant coupon 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 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


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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 on the date of
such payment or, if the Market Exchange Rate is not available on such date, as of the most recent practicable date; provided, however, that if the euro has been substituted for such Specified Currency, the Issuer may at its option (or shall, if so required by applicable law) without the consent of the holder of this Note effect the payment of principal of, premium,
if any, or interest on any Note denominated in such Specified Currency in euro in lieu of such Specified Currency in conformity with legally applicable measures taken pursuant to, or by virtue of, the Treaty establishing the European Community, as
amended. Any payment made under such circumstances in U.S. dollars or euro where the required payment is in an unavailable Specified Currency will not constitute an Event of Default.  If such Market Exchange Rate is not then available to the Issuer
or is not published for a particular Specified Currency, the Market Exchange Rate will be based on the highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the second
Business Day preceding the date of such payment from three recognized foreign exchange dealers (the “Exchange Dealers”) for the purchase by the quoting Exchange Dealer of the
Specified Currency for U.S. dollars for settlement on the payment date, in the aggregate amount of the Specified Currency payable to those holders or beneficial owners of Notes and at which the applicable Exchange Dealer commits to execute a
contract. One of the Exchange Dealers providing quotations may be the Exchange Rate Agent unless the Exchange Rate Agent is an affiliate of the Issuer. If those bid quotations are not available, the Exchange Rate Agent shall determine the market
exchange rate at its sole discretion.


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


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     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 and coupons.


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


     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, 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


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incorporator, shareholder, officer or director, as such, past, present or future, of the Issuer or of any successor corporation, either directly or through the Issuer or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.


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


     As used herein, the term “U.S. Alien” means any person who is, for U.S. federal income tax purposes, (i) a 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.


     All 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.


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  ABBREVIATIONS


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

	 	 TEN
        COM 	 – 	 as tenants
        in common 
	 	 	 	 
	 	 TEN
        ENT 	 – 	 as tenants
        by the entireties 
	 	 	 	 
	 	 JT TEN 	 – 	 as joint
        tenants with right of survivorship and not as tenants in common 
	 	  	  	 


	 	UNIF
        GIFT MIN ACT – 	 
	Custodian	 
	 
	 	 	 (Minor)	 	 (Cust)	 
	 	 	 	 	 	 






	 	Under
        Uniform Gifts to Minors Act	 
	 
		 		
	 	  	(State)	 
	 	 	 	 
	 	 Additional
        abbreviations may also be used though not in the above list.
	 


	



 

 

 

 

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     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.





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  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.





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