Unassociated Document


     

    Exhibit
      4.1


    FORM
      OF FIXED RATE SENIOR NOTE

     

    
      	
              REGISTERED

            	
              REGISTERED

            
	
              No.
                FXR-1

            	
              U.S.
                $

            
	 	CUSIP:
              617475645


    

     

     

    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)

     

     

    STOCK
      PARTICIPATION ACCRETING

    REDEMPTION
      QUARTERLY-PAY SECURITIESSM (“SPARQS”)

    
 

    %
      SPARQS® DUE AUGUST 20, 2008

    MANDATORILY
      EXCHANGEABLE

    FOR
      AMERICAN DEPOSITARY SHARES OF

    CEMEX,
      S.A. DE C.V.

     

    
      
        	
                ORIGINAL
                  ISSUE DATE:

              	
                INITIAL
                  REDEMPTION DATE: See “Morgan Stanley Call Right” below.

              	
                INTEREST
                  RATE:   % per annum

              	
                MATURITY
                  DATE: See “Maturity Date” below.

              
	
                INTEREST
                  ACCRUAL DATE:

              	
                INITIAL
                  REDEMPTION PERCENTAGE: See “Morgan Stanley Call Right” and “Call Price”
                  below.

              	
                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: At least 10 days but no more than 30 days.  See
                  “Morgan Stanley Call Right” and “Morgan Stanley Notice Date”
                  below.

              	
                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

            	 	
              $

            
	 	 	 
	
              Underlying
                Company

            	 	
              CEMEX,
                S.A. de C.V. (“CX”)

            


    

     

    
 

    
      
        
        

      

      
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              Underlying
                Stock

            	 	
              CEMEX,
                S.A. de C.V. American Depositary Shares (“CX ADSs”), each CX ADS
                representing ten Ordinary Participation Certificates (“CX CPOs”), each CX
                CPO representing two Series A shares and one Series B
                share.

            
	 	 	 
	
              Pricing
                Date

            	 	 
	 	 	 
	
              Issue
                Price

            	 	
              $             per
                SPARQS

            
	 	 	 
	
              Denominations

            	 	
              $             and
                integral multiples thereof

            
	 	 	 
	
              Acceleration
                Trigger Price

            	 	
              The
                product of $2.00 and the Exchange Ratio as of the Original Issue
                Date.

            
	 	 	 
	
              Exchange
                Ratio

            	 	
                  ,
                subject to adjustment for corporate events relating to the Underlying
                Stock described under “Antidilution Adjustments” below.

            
	 	 	 
	
              Yield
                to Call

            	 	
                   %
                per annum

            
	 	 	 
	
              First
                Call Date

            	 	
              February
                20, 2008

            
	 	 	 
	
              Maturity
                Date

            	 	
              August
                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 Final Call Notice Date is
                postponed in accordance with the definition thereof.  If the
                Final Call Notice Date is postponed because it is not a Trading Day
                or due
                to a Market Disruption Event and the Issuer exercises the Morgan
                Stanley
                Call Right, the scheduled Maturity Date shall be postponed so that
                the
                Maturity Date is the tenth calendar day following the Final Call
                Notice
                Date.  See “Final Call Notice Date” below.

            
	 	 	 
	 	 	
              In
                the event that the Final Call Notice Date is postponed because it
                is not a
                Trading Day or due to a Market Disruption Event or otherwise, the
                Issuer
                shall give notice of such postponement as promptly as possible, and
                in no
                case later than two Business Days following the scheduled Final Call
                Notice Date, (i) to the holder of this SPARQS 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
                

            


    

     

    
 

    
      
        
        

      

      
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      	 	 	Trustee
              by first class mail, postage prepaid, at its New York office and (iii)
              to
              The Depository Trust Company (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 SPARQS receives the notice.  Notice of
              the date to which the Maturity Date has been rescheduled as a result
              of
              postponement of the Final Call Notice Date, if applicable, shall be
              included in the Issuer’s notice of exercise of the Morgan Stanley Call
              Right.
	 	 	 
	
              Interest
                Payment Dates

            	 	
              November
                20, 2007, February 20, 2008, May 20, 2008 and the Maturity
                Date.

            
	 	 	 
	 	 	
              If
                the scheduled Maturity Date is postponed, 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 SPARQS or on such payment during
                the
                period from or after the scheduled Maturity Date.

            
	 	 	 
	
              Record
                Date

            	 	
              Notwithstanding
                the definition of “Record Date” below, 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; provided, however, that in the event that the Issuer
                exercises the Morgan Stanley Call Right, no Interest Payment Date
                shall
                occur after the Morgan Stanley Notice Date, except for any Interest
                Payment Date for which the Morgan Stanley Notice Date falls on or
                after
                the “ex-interest” date for the related interest payment, in which case the
                related interest payment shall be made on such Interest Payment Date;
                and provided, further, that accrued but unpaid interest payable
                on the Call Date, if any, shall be payable to the person to whom
                the Call
                Price is payable.  The “ex-interest” date for any interest
                payment is the date on which purchase transactions in the SPARQS
                no longer
                carry the right to receive such interest payment.

            
	 	 	 
	 	 	
              In
                the event that the Issuer exercises the Morgan Stanley Call Right
                and the
                Morgan Stanley Notice 

            


    

     

     

    
      
        
        

      

      
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      	 	 	Date
              falls before the “ex-interest” date for an interest payment, so that as a
              result a scheduled Interest Payment Date does not occur, the Issuer
              shall
              cause the Calculation Agent to give notice to the Trustee and to the
              Depositary, in each case in the manner and at the time described in
              the
              second and third paragraphs under “Morgan Stanley Call Right” below, that
              no Interest Payment Date shall occur after such Morgan Stanley Notice
              Date.
	 	 	 
	
              Morgan
                Stanley Call Right

            	 	
              On
                any scheduled Trading Day on or after the First Call Date or on the
                Maturity Date (including the Maturity Date as it may be extended
                and
                regardless of whether the Maturity Date is a Trading Day), the Issuer
                may
                call the SPARQS, in whole but not in part, for mandatory exchange
                for the
                Call Price paid in cash (together with accrued but unpaid interest)
                on the
                Call Date.

            
	 	 	 
	 	 	
              On
                the Morgan Stanley Notice Date, the Issuer shall give notice of the
                Issuer’s exercise of the Morgan Stanley Call Right (i) to the holder of
                this SPARQS by mailing notice of such exercise, specifying the Call
                Date
                on which the Issuer shall effect such exchange, 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 in accordance
                with the
                applicable procedures set forth in the Blanket Letter of Representations
                prepared by the Issuer.  Any notice which is mailed in the
                manner herein provided shall be conclusively presumed to have been
                duly
                given, whether or not the holder of this SPARQS receives the
                notice.  Failure to give notice by mail or any defect in the
                notice to the holder of any SPARQS shall not affect the validity
                of the
                proceedings for the exercise of the Morgan Stanley Call Right with
                respect
                to any other SPARQS.

            
	 	 	 
	 	 	
              The
                notice of the Issuer’s exercise of the Morgan Stanley Call Right shall
                specify (i) the Call Date, (ii) the Call Price payable per SPARQS,
                (iii)
                the amount of accrued but unpaid interest payable per SPARQS on the
                Call
                Date, (iv) whether any subsequently scheduled


            


    

     

     

    
      
        
        

      

      
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      	 	 	Interest
              Payment Date shall no longer be an Interest Payment Date as a result
              of
              the exercise of the Morgan Stanley Call Right, (v) the place or places
              of
              payment of such Call Price, (vi) that such delivery shall be made upon
              presentation and surrender of this SPARQS, (vii) that such exchange
              is
              pursuant to the Morgan Stanley Call Right and (viii) if applicable,
              the
              date to which the Maturity Date has been extended due to a Market
              Disruption Event as described under “Maturity Date” above.
	 	 	 
	 	 	
              The
                notice of the Issuer’s exercise of the Morgan Stanley Call Right shall be
                given by the Issuer or, at the Issuer’s request, by the Trustee in the
                name and at the expense of the Issuer.

            
	 	 	 
	 	 	
              If
                this SPARQS is so called for mandatory exchange by the Issuer, then
                the
                cash Call Price and any accrued but unpaid interest on this SPARQS
                to be
                delivered to the holder of this SPARQS shall be delivered on the
                Call Date
                fixed by the Issuer and set forth in its notice of its exercise of
                the
                Morgan Stanley Call Right, upon delivery of this SPARQS to the
                Trustee.  The Issuer shall, or shall cause the Calculation Agent
                to, deliver such cash to the Trustee for delivery to the holder of
                this
                SPARQS.

            
	 	 	 
	 	 	
              If
                this SPARQS is not surrendered for exchange on the Call Date, it
                shall be
                deemed to be no longer Outstanding under, and as defined in, the
                Senior
                Indenture after the Call Date, except with respect to the holder’s right
                to receive cash due in connection with the Morgan Stanley Call
                Right.

            
	 	 	 
	
              Morgan
                Stanley Notice Date

            	 	
              The
                scheduled Trading Day on which the Issuer issues its notice of mandatory
                exchange, which must be at least 10 but not more than 30 calendar
                days
                prior to the Call Date.

            
	 	 	 
	
              Final
                Call Notice Date

            	 	
              August
                10, 2008; provided that if such date is not a Trading Day or if a
                Market Disruption Event occurs on such day, the Final Call Notice
                Date
                shall be the immediately succeeding Trading Day on which no Market
                Disruption Event occurs.

            
	 	 	 
	
              Call
                Date

            	 	
              The
                day specified in the Issuer’s notice of mandatory exchange, on which the
                Issuer shall deliver cash to the 

            


    

     

     

    
      
        
        

      

      
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      	 	 	holder
              of this SPARQS, for mandatory exchange, which day may be any scheduled
              Trading Day on or after the First Call Date or the Maturity Date
              (including the Maturity Date as it may be extended and regardless of
              whether the Maturity Date is a scheduled Trading Day).  See
              “Maturity Date” above.
	 	 	 
	
              Call
                Price

            	 	
              The
                Call Price with respect to any Call Date is an amount of cash per
                each
                Stated Principal Amount of this SPARQS, as calculated by the Calculation
                Agent,  such that the sum of the present values of all cash
                flows on each Stated Principal Amount of this SPARQS to and including
                the
                Call Date (i.e., the Call Price and all of the interest payments,
                including accrued and unpaid interest payable on the Call Date),
                discounted to the Original Issue Date from the applicable payment
                date at
                the Yield to Call rate computed on the basis of a 360-day year of
                twelve
                30-day months, equals the Stated Principal Amount, as determined
                by the
                Calculation Agent.

            
	 	 	 
	
              Exchange
                at Maturity

            	 	
              At
                maturity, subject to a prior call of this SPARQS for cash in an amount
                equal to the Call Price by the Issuer as described under “Morgan Stanley
                Call Right” above or any acceleration of the SPARQS, upon delivery of this
                SPARQS to the Trustee, each Stated Principal Amount of this SPARQS
                shall
                be applied by the Issuer as payment for a number of shares of the
                Underlying Stock at the Exchange Ratio, and the Issuer shall deliver
                with
                respect to each Stated Principal Amount of this SPARQS an amount
                of the
                Underlying Stock equal to the Exchange Ratio.

            
	 	 	 
	 	 	
              The
                amount of Underlying Stock to be delivered at maturity shall be subject
                to
                any applicable adjustments (i) to the Exchange Ratio (including,
                as
                applicable, any New Stock Exchange Ratio or any Basket Stock Exchange
                Ratio, each as defined in paragraph 5 under “Antidilution Adjustments”
                below) 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 through the close of business on


            


    

     

    
 

    
      
        
        

      

      
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      	 	 	the
              third Trading Day prior to the scheduled Maturity 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 maturity of
                this
                SPARQS (but if such Trading Day is not a Business Day, prior to the
                close
                of business on the Business Day preceding the maturity of this SPARQS),
                of
                the amount of Underlying Stock (or the amount of Exchange Property)
                or
                cash to be delivered with respect to each Stated Principal Amount
                of this
                SPARQS and of the amount of any cash to be paid in lieu of any fractional
                Underlying Stock (or of any other securities included in Exchange
                Property, if applicable); provided that if the Maturity Date of
                this SPARQS is accelerated (x) because of a Price Event Acceleration
                (as
                described under “Price Event Acceleration” below) or (y) because of an
                Event of Default Acceleration (as defined under “Alternate Exchange
                Calculation in Case of an Event of Default” below), the Issuer shall give
                notice of such acceleration as promptly as possible, and in no case
                later
                than (A) in the case of an Event of Default Acceleration, two Trading
                Days
                following such deemed Maturity Date or (B) in the case of a Price
                Event
                Acceleration, 10:30 a.m. on the Trading Day immediately prior to
                the date
                of acceleration (as defined under “Price Event Acceleration” below), (i)
                to the holder of this SPARQS 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, (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
                SPARQS
                receives the notice.  If the maturity of this SPARQS is
                accelerated, no interest on the amounts payable with respect to this
                SPARQS shall accrue for the period from and after such
                

            


    

     

     

    
      
        
        

      

      
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      	 	 	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
                shares of the Underlying Stock (or any Exchange Property) and cash
                in
                respect of interest and any fractional share of the 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
                Note.  References to payment “per SPARQS” refer to each Stated
                Principal Amount of this SPARQS.

            
	 	 	 
	 	 	
              If
                this SPARQS is not surrendered for exchange at maturity, 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 Underlying
                Stock (and, if applicable, any Exchange Property) and any cash in
                respect
                of interest and any fractional share of the Underlying Stock (or
                any
                Exchange Property) and any other cash due at maturity as described
                in the
                preceding paragraph under this heading.

            
	 	 	 
	
              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 of the Underlying Stock and the Exchange
                Ratio is less than the Acceleration Trigger Price, the Maturity Date
                of
                this SPARQS shall be deemed to be accelerated to the third Business
                Day
                immediately following such second Trading Day.  If on any day CX
                ADSs are not listed on a United States national securities exchange
                and
                have not been replaced by CX CPOs or ordinary shares listed on a
                United
                States national securities exchange, the Maturity Date of this SPARQS
                shall be deemed to be accelerated to the third Business Day following
                such
                date (such date or such second Trading Day referred to in the previous
                sentence, the “date of acceleration”).  Upon such acceleration,
                the holder of each Stated Principal Amount of this SPARQS shall receive
                per SPARQS on the date of
                acceleration:

            


    

    
 

    
      
        
        

      

      
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              (i)
                a number of shares of the Underlying Stock at the then current Exchange
                Ratio;

            
	 	 	 
	 	 	
              (ii)
                accrued but unpaid interest on each Stated Principal Amount of this
                SPARQS
                to but excluding the date of acceleration; and

            
	 	 	 
	 	 	
              (iii)
                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 each Stated Principal Amount of this SPARQS (excluding the amounts
                included in clause (ii) above) discounted to the date of
                acceleration.  The present value of each remaining scheduled
                payment shall be 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 such remaining scheduled
                payment, as determined by the Calculation Agent.

            
	 	 	 
	 	 	
              The
                holder of this SPARQS shall not be entitled to receive the return
                of each
                Stated Principal Amount of this SPARQS upon a Price Event
                Acceleration.

            
	 	 	 
	
              No
                Fractional Shares

            	 	
              Upon
                delivery of this SPARQS to the Trustee at maturity, the Issuer shall
                deliver the aggregate number of shares of the Underlying Stock due
                with
                respect to this SPARQS, as described above, but the Issuer shall
                pay cash
                in lieu of delivering any fractional share of the Underlying Stock
                in an
                amount equal to the corresponding fractional Closing Price of such
                fraction of a share of the Underlying Stock as determined by the
                Calculation Agent as of the second scheduled Trading Day prior to
                maturity
                of this SPARQS.

            
	 	 	 
	
              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 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 last reported sale price, regular way, of
                the principal trading session on such day on the principal
                

            


    

     

    
 

    
      
        
        

      

      
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              national
                securities exchange registered under the Securities 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 not listed
                or
                admitted to trading on any national securities exchange but is included
                in
                the OTC Bulletin Board Service (the “OTC Bulletin Board”) operated by the
                National Association of Securities Dealers, Inc., 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 but the last reported
                sale
                price or the 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 a
                Market Disruption Event occurs with respect to the Underlying Stock
                (or
                any such other security) or 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
                

            


    

     

    
 

    
      
        
        

      

      
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      	 	 	obtained.  The
              term “OTC Bulletin Board Service” shall include any successor service
              thereto.
	 	 	 
	
              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
                of
                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
                calculations with respect to the Exchange Ratio and Call Price for
                the
                SPARQS shall be made by the Calculation Agent and shall be rounded
                to the
                nearest one hundred-thousandth, with five one-millionths rounded
                upward
                (e.g., .876545 would be rounded to .87655); all dollar amounts
                related to the Call Price resulting from such calculations shall
                be
                rounded to the nearest ten-thousandth, with five one hundred-thousandths
                rounded upward (e.g., .76545 would be rounded to .7655); and all
                dollar amounts paid with respect to the Call Price on the aggregate
                number
                of SPARQS shall be rounded to the nearest cent, with one-half cent
                rounded
                upward.

            
	 	 	 
	 	 	
              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
                SPARQS, the Trustee and the Issuer.

            
	 	 	 
	
              Antidilution
                Adjustments

            	 	
              The
                Exchange Ratio shall be adjusted as follows:

            
	 	 	 
	 	 	
              1.
                If the CX CPOs or ordinary shares are subject to a stock split or
                reverse
                stock split, then once such split has become effective, the Exchange
                Ratio
                shall be proportionally adjusted; provided, however, that if (and
                to the
                extent that) the Underlying Company or the depositary for the CX
                ADSs has
                adjusted the number of CX CPOs or ordinary shares represented by
                each CX
                ADS so that the price of the CX ADSs would not


            


    

     

     

    
      
        
        

      

      
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      	 	 	be
              affected by such stock split or reverse stock split, no adjustment
              to the
              Exchange Ratio shall be made.
	 	 	 
	 	 	
              2.
                If the CX CPOs or ordinary shares are subject (i) to a stock dividend
                (issuance of additional CX CPOs or ordinary shares) that is given
                ratably
                to all holders of CX CPOs or ordinary shares or (ii) to a distribution
                of
                CX CPOs or ordinary shares 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 CX CPOs or ordinary shares are trading
                ex-dividend, the Exchange Ratio shall be proportionally adjusted;
                provided, however, that if (and to the extent that) the Underlying
                Company
                or the depositary for the CX ADSs has adjusted the number of CX CPOs
                or
                ordinary shares represented by each CX ADS so that the price of the
                CX
                ADSs would not be affected by such stock dividend or stock distribution,
                no adjustment to the Exchange Ratio shall be made.

            
	 	 	 
	 	 	
              3.
                If the Underlying Company issues rights or warrants to all holders
                of the
                CX CPOs or ordinary shares to subscribe for or purchase CX CPOs or
                ordinary shares at an exercise price per share less than the Closing
                Price
                of the CX CPOs or ordinary shares, as applicable, 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 SPARQS, then
                the
                Exchange Ratio shall be proportionally adjusted; provided, however,
                that
                if (and to the extent that) the Underlying Company or the depositary
                for
                the CX ADSs has adjusted the number of CX CPOs or ordinary shares
                represented by each CX ADS so that the price of the CX ADSs would
                not be
                affected by such rights or warrants, no adjustment to the Exchange
                Ratio
                shall be made.

            
	 	 	 
	 	 	4.
              There shall be no adjustments to the Exchange Ratio to reflect cash
              dividends or other distributions paid with respect to the CX ADSs,
              CX CPOs
              or ordinary shares other than distributions described in paragraph
              2,
              paragraph 3 and clauses (i), (iv) and (v) of the first sentence of
              paragraph 5 and Extraordinary Dividends.  A cash dividend or
              other distribution with 


    

     

     

    
      
        
        

      

      
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              respect
                to CX ADSs shall be deemed to be an “Extraordinary Dividend” if such cash
                dividend or distribution exceeds the immediately preceding
                non-Extraordinary Dividend for CX ADSs by an amount equal to at least
                10%
                of the Closing Price of CX ADSs (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 CX ADSs on the primary
                U.S.
                organized securities exchange or trading system on which the CX ADSs
                are
                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 (such Closing Price, the “Base Closing Price”). Subject to the
                following sentence, if an Extraordinary Dividend occurs with respect
                to CX
                ADSs, the Exchange Ratio with respect to CX ADSs shall be adjusted
                on the
                ex-dividend date with respect to such Extraordinary Dividend so that
                the
                new Exchange Ratio shall equal the product of (i) the then current
                Exchange Ratio and (ii) a fraction, the numerator of which is the
                Base
                Closing Price, and the denominator of which is the amount by which
                the
                Base Closing Price exceeds the Extraordinary Dividend
                Amount.  If any Extraordinary Dividend Amount is at least 35% of
                the Base Closing Price, then, instead of adjusting the Exchange Ratio,
                the
                amount payable upon exchange at maturity shall be determined as described
                in paragraph 5 below, and the Extraordinary Dividend shall be allocated
                to
                Reference Basket Stocks in accordance with the procedures for a Reference
                Basket Event as described in clause (c)(ii) of paragraph 5
                below.  The “Extraordinary Dividend Amount” with respect to an
                Extraordinary Dividend for the CX ADSs shall equal (i) in the case
                of cash
                dividends or other distributions that constitute regular dividends,
                the
                amount per CX ADS of such Extraordinary Dividend minus the amount
                per CX
                ADS of the immediately preceding non-Extraordinary Dividend for CX
                ADSs or
                (ii) in the case of cash dividends or other distributions that do
                not
                constitute regular dividends, the amount per CX ADS of such Extraordinary
                Dividend. The value of the non-cash component of an Extraordinary
                Dividend
                shall be determined on the ex-dividend date for such
                

            


    

     

     

    
      
        
        

      

      
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      	 	 	distribution
              by the Calculation Agent, whose determination shall be conclusive in
              the
              absence of manifest error.  A distribution on CX ADSs described
              in clause (i), (iv) or (v) of the first sentence of paragraph 5 below
              shall cause an adjustment to the Exchange Ratio pursuant only to clause
              (i), (iv) or (v) of the first sentence of paragraph 5, as
              applicable.
	 	 	 
	 	 	
              5.
                Any of the following shall constitute a “Reorganization
                Event”:  (i) CX CPOs or ordinary shares are reclassified or
                changed, including, without limitation, as a result of the issuance
                of any
                tracking stock by the Underlying Company, (ii) the Underlying Company
                has
                been subject to any merger, combination or consolidation and is not
                the
                surviving entity, (iii) the Underlying Company completes a statutory
                exchange of securities with another corporation (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 “spinoff stock”) or (vi)
                CX CPOs or ordinary shares are the subject of a tender or exchange
                offer
                or going private transaction on all of the outstanding CX CPOs or
                ordinary
                shares.  If any Reorganization Event occurs, in each case as a
                result of which the holders of CX ADSs receive any equity security
                listed
                on a national securities exchange or traded on NASDAQ (a “Marketable
                Security”), other securities or other property, assets or cash
                (collectively “Exchange Property”), the amount payable upon exchange at
                maturity with respect to each Stated Principal Amount of this SPARQS
                following the effective date for such Reorganization Event (or, if
                applicable, in the case of spinoff stock, the ex-dividend date for
                the
                distribution of such spinoff stock) and any required adjustment to
                the
                Exchange Ratio shall be determined in accordance with the
                following:

            
	 	 	 
	 	 	
              (a)  if
                the CX ADSs continue to be outstanding, the CX ADSs (if applicable,
                as
                reclassified upon the issuance of any tracking stock) at the Exchange
                Ratio in effect on the third Trading Day prior to the scheduled Maturity
                Date (taking into account any adjustments for any distributions described
                under clause (c)(i) below); and

            


    

    
 

    
      
        
        

      

      
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              (b)  for
                each Marketable Security received in such Reorganization Event (each
                a
                “New Stock”), including the issuance of any tracking stock or spinoff
                stock or the receipt of any stock received in exchange for the CX
                ADSs,
                the number of shares of the New Stock received with respect to one
                share
                of the CX ADSs multiplied by the Exchange Ratio for the CX ADSs on
                the
                Trading Day immediately prior to the effective date of the Reorganization
                Event (the “New Stock Exchange Ratio”), as adjusted to the third Trading
                Day prior to the scheduled Maturity Date (taking into account any
                adjustments for distributions described under clause (c)(i) below);
                and

            
	 	 	 
	 	 	
              (c)  for
                any cash and any other property or securities other than Marketable
                Securities received in such Reorganization Event (the “Non-Stock Exchange
                Property”),

            
	 	 	 
	 	 	
              (i)  if
                the combined value of the amount of Non-Stock Exchange Property received
                per CX ADS, as determined by the Calculation Agent in its sole discretion
                on the effective date of such Reorganization Event (the “Non-Stock
                Exchange Property Value”), by holders of CX ADSs is less than 25% of the
                Closing Price of the CX ADSs on the Trading Day immediately prior
                to the
                effective date of such Reorganization Event, a number of CX ADSs,
                if
                applicable, and of any New Stock received in connection with such
                Reorganization Event, if applicable, in proportion to the relative
                Closing
                Prices of the CX ADSs and any such New Stock, and with an aggregate
                value
                equal to the Non-Stock Exchange Property Value multiplied by the
                Exchange
                Ratio in effect for the CX ADSs on the Trading Day immediately prior
                to
                the effective date of such Reorganization Event, based on such Closing
                Prices, in each case as determined by the Calculation Agent in its
                sole
                discretion on the effective date of such Reorganization Event; and
                the
                number of such shares of the CX ADSs or any New Stock determined
                in
                accordance with this clause (c)(i) shall be added at the time of
                such
                adjustment to the Exchange Ratio in subparagraph (a) above
                

            


    

    
 

    
      
        
        

      

      
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              and/or
                the New Stock Exchange Ratio in subparagraph (b) above, as applicable,
                or

            
	 	 	 
	 	 	
              (ii)  if
                the Non-Stock Exchange Property Value is equal to or exceeds 25%
                of the
                Closing Price of the CX ADSs on the Trading Day immediately prior
                to the
                effective date relating to such Reorganization Event or, if the CX
                ADSs
                are surrendered exclusively for Non-Stock Exchange Property (in each
                case,
                a “Reference Basket Event”), an initially equal-dollar weighted basket of
                three Reference Basket Stocks (as defined below) with an aggregate
                value
                on the effective date of such Reorganization Event equal to the Non-Stock
                Exchange Property Value multiplied by the Exchange Ratio in effect
                for the
                CX ADSs on the Trading Day immediately prior to the effective date
                of such
                Reorganization Event.  The “Reference Basket Stocks” shall be
                the three stocks with the largest market capitalization among the
                stocks
                that then constitute the S&P 500 Index (or, if publication of such
                index is discontinued, any successor or substitute index selected
                by the
                Calculation Agent in its sole discretion) with the same primary Standard
                Industrial Classification Code (“SIC Code”) as the Underlying Company;
                provided, however, that a Reference Basket Stock shall not include
                any
                stock that is subject to a trading restriction under the trading
                restriction policies of Morgan Stanley or any of its affiliates that
                would
                materially limit the ability of Morgan Stanley or any of its affiliates
                to
                hedge the SPARQS with respect to such stock (a “Hedging Restriction”);
                provided further that if three Reference Basket Stocks cannot be
                identified from the S&P 500 Index by primary SIC Code for which a
                Hedging Restriction does not exist, the remaining Reference Basket
                Stock(s) shall be selected by the Calculation Agent from the largest
                market capitalization stock(s) within the same Division and Major
                Group
                classification (as defined by the Office of Management and Budget)
                as the
                primary SIC Code for the Underlying Company.  Each
                

            


    

     

     

    
      
        
        

      

      
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              Reference
                Basket Stock shall be assigned a Basket Stock Exchange Ratio equal
                to the
                number of shares of such Reference Basket Stock with a Closing Price
                on
                the effective date of such Reorganization Event equal to the product
                of
                (a) the Non-Stock Exchange Property Value, (b) the Exchange Ratio
                in
                effect for the CX ADSs on the Trading Day immediately prior to the
                effective date of such Reorganization Event and (c)
                0.3333333.

            
	 	 	 
	 	 	
              Following
                the allocation of any Extraordinary Dividend to Reference Basket
                Stocks
                pursuant to paragraph 4 above or any Reorganization Event described
                in
                this paragraph 5, the amount payable upon exchange at maturity with
                respect to each Stated Principal Amount of this SPARQS shall be the
                sum
                of:

            


    

    


    
      	 	 	
              (x)
                

            	if
              applicable, the CX ADSs at the Exchange Ratio then in effect;
              and
	 	 	 	 
	 	 	
              (y)
                

            	if
              applicable, for each New Stock, such New Stock at the New Stock Exchange
              Ratio then in effect for such New Stock; and
	 	 	 	 
	 	 	
              (z)
                

            	if
              applicable, for each Reference Basket Stock, such Reference Basket
              Stock
              at the Basket Stock Exchange Ratio then in effect for such Reference
              Basket Stock.


    

    


    
      	 	 	
              In
                each case, the applicable Exchange Ratio (including for this purpose,
                any
                New Stock Exchange Ratio or Basket Stock Exchange Ratio) shall be
                determined by the Calculation Agent on the third Trading Day prior
                to the
                scheduled Maturity Date.

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

            


    

     

     

    
      
        
        

      

      
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      	 	 	property
              received by offerees who elect to receive cash.
	 	 	 
	 	 	
              Following
                the occurrence of any Reorganization Event referred to in paragraphs
                4 or
                5 above, (i) references to “Underlying Stock,” “CX ADSs” or “CX CPOs or
                ordinary shares” under “No Fractional Shares,” “Closing Price” and “Market
                Disruption Event” shall be deemed to also refer to any New Stock or
                Reference Basket Stock, and (ii) all other references in this SPARQS
                to
                “Underlying Stock,” “CX ADSs” or “CX CPOs or ordinary shares” shall be
                deemed to refer to the Exchange Property into which this SPARQS is
                thereafter exchangeable and references to a “share” or “shares” of
                Underlying Stock, CX ADSs or CX CPOs or ordinary shares shall be
                deemed to
                refer to the applicable unit or units of such Exchange Property,
                including
                any New Stock or Reference Basket Stock, unless the context otherwise
                requires.  The New Stock Exchange Ratio(s) or Basket Stock
                Exchange Ratios resulting from any Reorganization Event described
                in
                paragraph 5 above or similar adjustment under paragraph 4 above shall
                be
                subject to the adjustments set forth in paragraphs 1 through 5
                hereof.

            
	 	 	 
	 	 	
              If
                a
                Reference Basket Event occurs, the Issuer shall, or shall cause the
                Calculation Agent to, provide written notice to the Trustee at its
                New
                York office, on which notice the Trustee may conclusively rely, and
                to DTC
                of the occurrence of such Reference Basket Event and of the three
                Reference Basket Stocks selected as promptly as possible and in no
                event
                later than five Business Days after the date of the Reference Basket
                Event.

            
	 	 	 
	 	 	
              In
                the event that the Underlying Company or the depositary for CX ADSs
                elects, in the absence of any of the events described in paragraph
                1, 2,
                3, 4 or 5 above, to change the number of CX CPOs or ordinary shares
                that
                are represented by each CX ADS, the Exchange Ratio on any Trading
                Day
                after the change becomes effective will be proportionately
                adjusted.

            
	 	 	 
	 	 	
              No
                adjustment to any Exchange Ratio (including for this purpose, any
                New
                Stock Exchange Ratio or Basket Stock Exchange Ratio) shall be required
                unless such adjustment would require a change of at least 0.1% in
                

            


    

     

    
 

    
      
        
        

      

      
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      	 	 	the
              Exchange Ratio then in effect.  The Exchange Ratio 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 Ratios shall be made up to
              the close of business on the third Trading Day prior to the scheduled
              Maturity Date.
	 	 	 
	 	 	
              No
                adjustments to the Exchange Ratio or method of calculating the Exchange
                Ratio shall be made other than those specified above.

            
	 	 	 
	 	 	
              The
                Calculation Agent shall be solely responsible for the determination
                and
                calculation of any adjustments to the Exchange Ratio, any New Stock
                Exchange Ratio or Basket Stock Exchange Ratio or method of calculating
                the
                Exchange Property Value 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 Ratio, or to the method of calculating the amount payable
                upon
                exchange at maturity of the SPARQS made pursuant to paragraph 5 above,
                upon written request by the holder of this SPARQS.

            
	 	 	 
	
              Market
                Disruption Event

            	 	
              Market
                Disruption Event means, with respect to CX ADSs (or, if applicable,
                CX
                CPOs):

            
	 	 	 
	 	 	
              (i)
                a suspension, absence or material limitation of trading of CX ADSs
                or CX
                CPOs on the primary market for CX ADSs or CX CPOs 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 CX ADSs
                or CX
                CPOs as a result of which the reported trading prices for CX ADSs
                or CX
                CPOs during the last one-half hour preceding the close of the principal
                trading session in such market are materially inaccurate; or the
                

            


    

     

     

    
      
        
        

      

      
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              suspension,
                absence or material limitation of trading on the primary market for
                trading in options contracts related to CX ADSs or CX CPOs, 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 the Issuer or any of its affiliates to unwind or adjust all or
                a
                material portion of the hedge with respect to this issuance of
                SPARQS.

            
	 	 	 
	 	 	
              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 primary market, (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, the Securities
                and
                Exchange Commission or the Mexican Stock Exchange 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 CX ADSs or CX CPOs 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 CX
                ADSs or
                CX CPOs and (5) a suspension, absence or material limitation of trading
                on
                the primary securities market on which options contracts related
                to CX
                ADSs or CX CPOs are traded shall not include any time when such
                

            


    

    
 

    
      
        
        

      

      
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      	 	 	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 SPARQS shall have occurred
                and be continuing, the amount declared due and payable per each Stated
                Principal Amount of this SPARQS upon any acceleration of this SPARQS
                (an
                “Event of Default Acceleration”) shall be determined by the Calculation
                Agent and shall be an amount in cash equal to the lesser of (i) the
                product of (x) the Closing Price of the Underlying Stock (and/or
                the value
                of any Exchange Property) as of the date of such acceleration and
                (y) the
                then current Exchange Ratio and (ii) the Call Price calculated as
                though
                the date of acceleration were the Call Date (but in no event less
                than the
                Call Price for the first Call Date), in each case plus accrued but
                unpaid
                interest to but excluding the date of acceleration; provided that
                if the Issuer has called the SPARQS in accordance with the Morgan
                Stanley
                Call Right, the amount declared due and payable upon any such acceleration
                shall be an amount in cash for each Stated Principal Amount of this
                SPARQS
                equal to the Call Price for the Call Date specified in the Issuer’s notice
                of mandatory exchange, plus accrued but unpaid interest to but excluding
                the date of 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 Underlying Stock
      (or other
      Exchange Property), as determined in accordance with the provisions set forth
      under “Exchange 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,
      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

     

     

    
      
        
        

      

      
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    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 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

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    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.

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

       

    

    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

              	 


      

       

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

    

    


    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 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.


     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

       

    

    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 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.

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

       

    

    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 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 

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

       

      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.

     

    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 

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

       

      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 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.

     

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

       

    

    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 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;

     

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

       

    

    (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
      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

     

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

       

      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 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.

     

    


    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    
       

      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.  


      

       

      
        

      

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

                                                            

      
        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.

                


        

         

        
          
            
            

          

          
            37

            
              

            

          

          
            
            

          

        

      

       

      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.

                	 


        

         

         

        
          38