FORM OF FIXED RATE SENIOR NOTE

	REGISTERED 	REGISTERED 
	No. FXR-1 	U.S. $ 
	 	CUSIP: 617475405 




      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
          JUNE 20, 2008 
	MANDATORILY EXCHANGEABLE 
	FOR SHARES OF COMMON
          STOCK OF 
	VALERO ENERGY CORPORATION 




	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

    Underlying Stock
	 	$

      Valero Energy Corporation (“VLO”)

      The
    common stock of VLO





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	Pricing Date

      Issue Price

      Denominations

      Acceleration Trigger Price
	 	 

      $           per SPARQS

      $           and integral multiples thereof

      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

      First Call Date

      Maturity Date
	 	             % per annum

      December 20, 2007

      June 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 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





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	 	 	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
	 	September 20, 2007, December
          20, 2007, March 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 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





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	 	 	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 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





 5
















		 	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
	 	June 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 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.





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	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 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





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		 	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 share of the 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 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





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		 	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 (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:





	 	 	 	(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 



 9















	 	 	 	 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 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.





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	 	 	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 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





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

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

	 
	 	 	3. If the Underlying
          Company issues rights or warrants to all holders of the Underlying
          Stock to subscribe for or purchase Underlying Stock at an exercise
          price per share less than the Closing Price of the Underlying Stock
          on both (i) the date the exercise price of such rights or warrants
          is determined and (ii) the expiration date of such rights or warrants,
          and if the





 12
















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

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





 13
















		 	an Extraordinary Dividend
          occurs with respect to the Underlying Stock, the Exchange Ratio with
          respect to the Underlying Stock 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 Underlying Stock shall equal (i) in the case of cash
        dividends or other distributions that constitute regular dividends, the
        amount per share of such Extraordinary Dividend minus the amount per
        share of the immediately preceding non-Extraordinary Dividend for the
        Underlying Stock or (ii) in the case of cash dividends or other distributions
        that do not constitute regular dividends, the amount per share of such
        Extraordinary Dividend. The value of the non- cash component of an Extraordinary
        Dividend shall be determined on the ex-dividend date for such distribution
        by the Calculation Agent, whose determination shall be conclusive in
        the absence of manifest error. A distribution on the Underlying Stock
        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) the Underlying Stock is 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





 14
















	 	 	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) the Underlying
          Stock is the subject of a tender or exchange offer or going private
          transaction on all of the outstanding shares. If any Reorganization
          Event occurs, in each case as a result of which the holders of the
          Underlying Stock 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 Underlying Stock continues to be outstanding, the Underlying
          Stock (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 

      (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 Underlying Stock, the number of shares of the New Stock received
        with respect to one share of Underlying Stock multiplied by the Exchange
        Ratio for Underlying Stock 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



 15
















	 	 	(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 share of Underlying Stock, 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 the Underlying
      Stock is less than 25% of the Closing Price of the Underlying Stock on
      the Trading Day immediately prior to the effective date of such Reorganization
      Event, a number of shares of the Underlying Stock, 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 Underlying
      Stock 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 Underlying Stock 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 Underlying Stock 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 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 Underlying Stock on the Trading Day immediately
          prior to the effective date relating to such Reorganization Event or,
          if the Underlying Stock is surrendered exclusively for Non-Stock Exchange
          Property (in each case, a “Reference Basket Event”), an initially
    equal-dollar weighted basket of three Reference 



 16
















	 	 	 	 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 Underlying
          Stock 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 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 Underlying
          Stock on the Trading Day immediately prior to the effective date of
    such Reorganization Event and (c) 0.3333333.



 17
















	 	 	 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 Underlying Stock
        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 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” 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 



 18
















		 	SPARQS to “Underlying
          Stock” 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 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.

      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 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





 19
















		 	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 the Underlying Stock:





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

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



 20
















	 	 	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 or the Securities and
          Exchange Commission of scope similar to NYSE Rule 80A as determined
          by the Calculation Agent) on trading during significant market fluctuations
          shall constitute a suspension, absence or material limitation of trading,
          (4) a suspension of trading in options contracts on the Underlying
          Stock by the primary securities market trading in such options, if
          available, by reason of (x) a price change exceeding limits set by
          such securities exchange or market, (y) an imbalance of orders relating
          to such contracts or (z) a disparity in bid and ask quotes relating
          to such contracts shall constitute a suspension, absence or material
          limitation of trading in options contracts related to the Underlying
          Stock and (5) a suspension, absence or material limitation of trading
          on the primary securities market on which options contracts related
          to the Underlying Stock are traded shall not include any time when
          such securities market is itself closed for trading under ordinary
          circumstances.

	 
	Alternate Exchange Calculation
	 	 
	   in Case of an Event of Default
	 	In case an event of
          default with respect to the 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





 21
















	 	 	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.



 

 

 

 

 





 22
















      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 

 23
















 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.

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      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.

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

      The
    Senior Indenture provides that (a) if an Event of Default (as defined in
    the Senior Indenture) due to the default in payment of principal of, premium,
    if any, or interest on, any series of debt securities issued under the Senior
    Indenture, including the series of Senior Medium-Term Notes of which this
    Note forms a part, or due to the default in the performance or breach of
    any other covenant or warranty of the Issuer applicable to the debt securities
    of such series but not applicable to all outstanding debt securities issued
    under the Senior Indenture shall have occurred and be continuing, either
    the Trustee or the holders of not less than 25% in aggregate principal amount
    of the outstanding debt securities of each affected series, voting as one
    class, by notice in writing to the Issuer and to the Trustee, if given by
    the securityholders, may then declare the principal of all debt securities
    of all such series and interest accrued thereon to be due and payable immediately
    and (b) if an Event of Default due to a default in the performance of any
    other of the covenants or agreements in the Senior Indenture applicable to
    all outstanding debt securities issued thereunder, including this Note, or
    due to certain events of bankruptcy, insolvency or reorganization of the
    Issuer, shall have occurred and be continuing, either the Trustee or the
    holders of not less than 25% in aggregate principal amount of all outstanding
    debt securities issued under the Senior Indenture, voting as one class, by
    notice in writing to the Issuer and to the Trustee, if given by the securityholders,
    may declare the principal of all such debt securities and interest accrued
    thereon to be due and payable immediately, but upon certain conditions such
    declarations may be annulled and past defaults may be waived (except a continuing
    default in payment of principal or premium, if any, or interest on such debt
    securities) by the holders of a majority in aggregate principal amount of
    the debt securities of all affected series then outstanding.

      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) 

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 above, if this Note were declared
    to be due and payable on the date of any such vote and (iii) for the purpose
    of any vote of securityholders taken pursuant to the Senior Indenture following
    the acceleration of payment of this Note, the principal amount hereof shall
    equal the amount of principal due and payable with respect to this Note,
    calculated as set forth in clause (i) above.

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

      If the
    face hereof indicates that this Note is subject to “Tax Redemption and
    Payment of Additional Amounts,” this Note may be redeemed, as a whole,
    at the option of the Issuer at any time prior to maturity, upon the giving
    of a notice of redemption as described below, at a redemption price equal
    to 100% of the principal amount hereof, together with accrued interest to
    the date fixed for redemption (except that if this Note is subject to “Modified
    Payment upon Acceleration or Redemption,” the amount of principal so
    payable will be limited to the aggregate principal amount hereof multiplied
    by the sum of the Issue Price specified on the face hereof (expressed as
    a percentage of the aggregate principal amount) plus the original issue discount
    accrued from the Interest Accrual Date to the date of redemption (expressed
    as a percentage of the aggregate principal amount), with the amount of original
    issue discount accrued being calculated using a constant yield method (as
    described above)), if the Issuer determines that, as a result of any change
    in or amendment to the laws (including a holding, judgment or as ordered
    by a court of competent jurisdiction), or any regulations or rulings promulgated
    thereunder, of the United States or of any political subdivision or taxing
    authority thereof or therein affecting taxation, or any change in official
    position regarding the application or interpretation of such laws, regulations
    or rulings, which change or amendment occurs, becomes effective or, in the
    case of a change in official position, is announced on or after the Initial
    Offering Date hereof, the Issuer has or will become obligated to pay Additional
    Amounts, as defined below, with respect 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.

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      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;

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      (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.

 

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 ABBREVIATIONS

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

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


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


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




  

 

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.
     



  

 

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