Document:

EXHIBIT 10.2
------------

                            SEISMIC DATA ACQUISITION
                             AND FARM OUT AGREEMENT

         THIS AGREEMENT, made and entered into this ___ day of _______, 2007, by
and between,  NATIONAL GULF PRODUCTION,  INC., of Giddings,  Texas  (hereinafter
referred to as "NATIONAL") and TRANS ENERGY,  INC., of St. Mary's, West Virginia
(hereinafter referred to as "TRANS ENERGY"). WITNESSETH:

         WHEREAS,   National  has  acquired  a  Farmout   Agreement  from  Wevco
Production,  Inc. in and to the Oil and Gas Leases,  covering the oil and gas in
and under certain tracts of land, containing 3,120 acres, more or less, situated
in Trego  County,  Kansas,  described on Exhibit "A" attached  hereto and made a
part hereof; and,

         WHEREAS,  National is willing to Farmout to Trans  Energy 75 percent of
its rights and interests with respect to the above described  leases,  and Trans
Energy desires to acquire that 75 percent interest on the above leases, pursuant
to the provisions contained herein.

         NOW THEREFORE,  in  consideration  of the above premises and the mutual
         covenants and  agreements  set forth herein,  National and Trans Energy
         agree as follows:

    1.   National  and Trans  Energy will  acquire 3-D Seismic Data on the above
         leases , in  conjunction  with the North  Cedar  Bluff Group Shoot that
         will commence early 2007 and each will pay its  proportionate  share of
         approximately $37,000 to $39,000 per square mile.

    2.   Upon   execution  of  this   agreement,   Trans  Energy  will  pay  its
         proportionate  75  percent  of the  farmout  fee of $ 62.50 per acre on
         3,120 acres or ( $195,000 * .75 = $ 146,250 ) plus its proportionate 75
         percent  of  the  approximate  seismic  acquisition,   processing,  and
         interpretation  cost of $ 37,000 per square mile on 5 square miles or (
         $ 185,000 * .75 = $ 138,750 ) or a total of $ 285,000.The final seismic
         cost will be adjusted when complete.

    3.   The leases will have a reservation by Wevco,  of an overriding  royalty
         interest  of 3.5  percent  and the right,  but not the  obligation,  to
         participate  up to 25 percent at cost, in the wells drilled by National
         and Trans Energy.  There will also be an overriding royalty interest of
         1 percent to the  Project  Geophysicist  and  National  will  retain an
         overriding  royalty  interest of 2 percent,  resulting in an 81 percent
         working  interest.(87.5 - 6.5).  National will also earn a 6.15 percent
         carried working interest.

    4.   If Wevco elects to participate in the drilling of a well or wells, then
         the parties will pay and be entitled to receive as follows:
<TABLE>
<CAPTION>

              Wevco                   National                        Trans Energy
              -----                   --------                        ------------
<S>               <C>                <C>        <C>                   <C>       <C>
         Pay      .25                .25(.75) = .1875                 75(.75) = .5625

         Receive.25(.81) = .2025     1875+0615 =.249(.81)=.20169    501(.81) = .40581
</TABLE>

                                       -1-
<PAGE>

5.       Upon  completion of each well capable of commercial  production,  Trans
         Energy shall be entitled to receive an Assignment of its  proportionate
         share  of the 20 acre  producing  unit,  or other  unit  size as may be
         directed or allowed by the State.  This assignment will be made without
         warranty of title, express or implied.

6.       National  and  Trans  Energy  shall  have 1 year  from the date of this
         agreement to drill the first well and shall have an option for 6 months
         after  completion of any well to drill another well until all drillable
         20 acre units in the  leases are  drilled.  In the event  National  and
         Trans  Energy do not drill the  first  well  within  one year or do not
         drill  subsequent  wells within the prescribed six month periods,  then
         this agreement  terminates with respect to all undrilled areas,  unless
         such failure to perform is due to an act of God, labor disputes, riots,
         or any other cause beyond the control of the parties, in which case the
         required  time to  perform  would be  extended  for the  period  of the
         interruption.

7.       Trans  Energy shall be entitled to all data  pertaining  to the project
         area including,  but not limited to, all seismic and geologic data, and
         logs and test results on the wells drilled on the leases.

8.       National  and Trans  Energy  shall  enter  into a  mutually  acceptable
         Participation  and  Operating  Agreement  whereby  National will be the
         Operator  and will drill and  operate the wells that are drilled on the
         leases. The owners of a majority of the working interest, may, however,
         remove and  replace  National  as Operator  for  negligence  or willful
         misconduct.

9.       Should  National or Trans Energy  desire to sell any of its interest in
         the wells drilled on the leases or its interest under this agreement to
         a third party, the selling party shall present the other party with the
         bona fide  offer  and the other  party  shall  have the first  right of
         refusal  to  purchase  the wells or the  interest  under like terms and
         conditions.  If the other party  elects not to purchase  the  interest,
         then the selling  party may sell,  transfer and assign said interest to
         the third party.

10.      It is understood that National and Trans Energy will be responsible for
         the  payment of all delay  rentals  due on the leases  from the date of
         this agreement.

         This  Agreement  sets forth the  understandings  and  agreements of the
parties  hereto  and  shall  be  binding  upon and  inure  to  their  respective
successors or assigns.

         NATIONAL GULF PRODUCTION , INC.        TRANS ENERGY, INC.

         By: _____________________________      By_____________________________
               Tom Hollingsworth,
               President

                                      -2-
<PAGE>

                                                EXHIBIT A

         REMIS W. and MARYLIN D. SCHNEIDER                      1840 acres
         ---------------------------------

         N/2 and SW/4 of  Section  19-14S-22W  except a Tract,  SE/4 of  Section
         2-14S-23W,  SW/4  of  Section  10-14S-23W,  N/2  and  SE/4  of  Section
         10-14S-23W,  N/2 of the  NE/4 of  Section  11-14S-23W,  S/2 of  Section
         14-14S-23W  less a Tract,  NW/4 of Section  15-14S-23W of the 6th P.M.,
         Trego County, Kansas

         KARLYNN K. YANKE,f/k/a KARLYNN K. FABRIZIUS and ALBERT YANKE
         ------------------------------------------------------------

                                                                 320 acres

         West Half (W/2) of Section  Twenty-five  (25),  Township  Thirteen (13)
         South,  Range  Twenty-three  (23) West of the 6th P.M.,  Trego  County,
         Kansas

         RONALD R. LYNN and CONSTANCE ANN  LYNN                  320 acres
         --------------------------------------

         North Half (N/2) of Section  Thirty-five  (35),  Township Thirteen (13)
         South,  Range  Twenty-  three (23) West of the 6th P.M.,  Trego County,
         Kansas

         LAURA M. SCHNEIDER                                      480 acres
         ------------------

         NW/4 and NE/4 and SW/4 of  Section  36-13S-23W  of the 6th P.M.,  Trego
         County, Kansas

         WILMA A. PEIL, TRUSTEE                                  160 acres
         ----------------------

         SW/4 of Section 2-14S-23W of the 6th P.M., Trego County, Kansas

                                                                  3,120 acres

                                      -3-FORM OF FLOATING RATE SENIOR NOTE

	
REGISTERED		
REGISTERED	
	
No. FLR-1		
U.S.$	
	 		
CUSIP: 61750V790	

     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 NOTES, SERIES
F

(Floating Rate)

PROTECTED
ABSOLUTE RETURN BARRIER NOTE DUE JULY 20, 2008

BASED ON THE VALUE OF THE S&P
500® INDEX

	BASE RATE: None 	 ORIGINAL
    ISSUE DATE: 
	MATURITY DATE:

         July
    20, 2008
	 INDEX
    MATURITY: 

    N/A 
	 INTEREST
    ACCRUAL DATE:

    N/A
	 INTEREST PAYMENT

    DATE(S):
    N/A

	SPREAD (PLUS OR 

   MINUS): N/A	INITIAL INTEREST RATE:

   N/A	INTEREST PAYMENT 

         PERIOD: N/A
	SPREAD MULTIPLIER:

   N/A	INITIAL INTEREST
    RESET

   DATE: N/A	INTEREST RESET PERIOD:

   N/A
	REPORTING SERVICE:
        

   N/A	MAXIMUM INTEREST RATE: 

       N/A	INTEREST RESET DATE(S):

       N/A
	INDEX CURRENCY: N/A	MINIMUM INTEREST RATE: 

   N/A	CALCULATION AGENT: See

       “Calculation Agent” below.
	EXCHANGE RATE

       AGENT: N/A
    	INITIAL REDEMPTION

      DATE: N/A	SPECIFIED CURRENCY:

   U.S. dollars
	APPLICABILITY OF 

         MODIFIED PAYMENT

         UPON ACCELERATION:

         See “Alternate
    Exchange

       Calculation in Case of an

       Event of
    Default” below.	INITIAL REDEMPTION

       PERCENTAGE:
    N/A	IF SPECIFIED CURRENCY

         OTHER THAN U.S.

         DOLLARS,
    OPTION TO

       ELECT PAYMENT IN U.S.

         DOLLARS:
    N/A 
	 	ANNUAL REDEMPTION

         PERCENTAGE

         REDUCTION: N/A
	DESIGNATED CMT

         TELERATE PAGE: N/A

	 	OPTIONAL REPAYMENT

         DATE(S): N/A
	DESIGNATED CMT

         MATURITY INDEX: N/A

	 	REDEMPTION NOTICE

         PERIOD: N/A
	 
	 	TAX REDEMPTION AND

         PAYMENT OF

         ADDITIONAL AMOUNTS:

         N\A
	 
	 	IF YES, STATE INITIAL

       OFFERING DATE: N/A 	OTHER PROVISIONS: See

         below.

Minimum Denominations..............

2

	Maturity Date	 	July 20,
        2008, subject to extension if the Index Valuation
        Date is postponed in accordance with the definition thereof. If the Index
        Valuation Date is postponed so that it falls less than two scheduled
        Index Business Days prior to the scheduled Maturity Date, the Maturity
        Date shall be the second scheduled Business Day following the Index Valuation
    Date, as postponed.
	 	 	 
	Observation Period	 	The period of regular
    trading hours on each day beginning on and including
          the day following the Pricing Date and ending on and including the
    Index Valuation Date.
	 	 	 
	Pricing
    Date	 	 
	 	 	 
	Issue Price	 	$
	 	 	 
	Index	 	S&P 500® Index 
	 	 	 
	Maturity Redemption
    Amount	 	At maturity, upon
    delivery of this Note to the Trustee, the Issuer shall pay
    with respect to each $10 stated principal
    amount of this Note an amount in cash equal to $10 plus the
    Supplemental Redemption Amount, if any, as determined by
    the Calculation Agent.
	 	 	 
	 	 	The Issuer shall,
        or shall cause the Calculation Agent to (i) provide written notice to
        the Trustee and to The Depository Trust Company (the “Depositary”)
        of the amount of cash to be delivered with respect to each
  $10 stated principal amount of this Note, on or prior to 10:30 a.m. on
  the Business Day preceding the Maturity Date, and (ii) deliver the aggregate
  cash amount due with respect to this Note to the Trustee for delivery to the
  Depositary on the Maturity Date.
	 	 	 
	Supplemental Redemption
    Amount	 	The Supplemental
    Redemption Amount shall equal:
	 	 	 
	 	 	If at all times during
        the Observation Period the Index Value is within the Index Range, $10
    times the Absolute Index Return; or
	 	 	 
	 	 	If at any time on
        any day during the Observation Period the Index Value is outside the
    Index Range, $0.
	 	 	 
	 	 	The Calculation Agent
    shall calculate the Supplemental Redemption Amount on the Index

 3

	 	 	Valuation Date.
	 	 	 	 
	Index Value	 	The Index Value at any
    time on any day during the Observation
    Period shall equal the value of the Index or any Successor Index (as defined
    below) published by the publisher of the Index at such time on such day.
	 	 	 	 

	Index Range	 	The Index Range includes
    any value of the Index that is:
	 	 	 	 
	 	 	(i) greater than or
    equal to the Initial Index Value times         % and 
	 	 	 	 
	 	 	(ii) less than or
    equal to the Initial Index Value times         %.
	 	 	 	 
	 	 	The Index Range can
    also be expressed as follows:
	 	 	 	 
	 	 	Index Range =
	 	 	 	> (Initial
    Index Value x         %); and
	 	 	 	< (Initial
    Index Value x         %)
	 	 	 	 
	Absolute Index Return	 	The Absolute Index Return is the
    absolute value of the following formula:
	 	 	Final Index Value – Initial
    Index Value

    Initial Index Value
	 	 	 
	Initial Index Value	 	         ,
    the Index Closing Value on the Pricing Date. 
	 	 	 
	Index Closing Value	 	The Index Closing
    Value on any Index Business Day shall equal the closing
          value of the Index or any Successor Index (as defined below) published
          at the regular weekday close of trading on that Index Business Day.
          In certain circumstances, the Index Closing Value shall be based on
          the alternate calculation of the Index described under “— Discontinuance
    of the Index; Alteration of Method of Calculation.”
	 	 	 
	Final Index Value	 	The Index
    Closing Value on the Index Valuation Date.
	 	 	 
	Index Valuation Date	 	July
    17, 2008, subject to adjustment for Market Disruption Events
    as described in the following paragraph.

 4

	 	 	If there is a Market
          Disruption Event on the scheduled Index Valuation Date or if the scheduled
          Index Valuation Date is not otherwise an Index Business Day, the Index
          Valuation Date shall be the immediately succeeding Index Business Day
    during which no Market Disruption Event shall have occurred.

	 	 	 
	Index Business Day	 	Index Business Day
        means a day, for the Index, as determined
        by the Calculation Agent, on which trading is generally conducted on
        each of the Relevant Exchange(s) for the Index, and on each exchange
        on which futures or options contracts related to the Index (or successor
        index) are traded, other than a day on which trading on such Relevant
        Exchange(s) is scheduled to close prior to the time of the posting of
        its regular final weekday closing price.
	 	 	 

	Trustee	 	The Bank of New York,
    a New York banking corporation (as successor
    Trustee to JPMorgan Chase Bank, N.A.) 
	 	 	 

	Agent	 	Morgan Stanley & Co.
    Incorporated and its successors (“MS & Co.”)
	 	 	 
	Calculation Agent	 	MS & Co.
	 	 	 
	 	 	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 Note, the Trustee and
    the Issuer.
	 	 	 
	 	 	All calculations with respect
        to the Payment at Maturity, if any, shall be rounded to the nearest one
        hundred-thousandth, with five one-millionths rounded upward (e.g.,
        .876545 would be rounded to .87655); all dollar amounts related to determination
        of the amount of cash payable per Note shall be rounded to the nearest
        ten-thousandth, with five one hundred-thousandths rounded upward (e.g.,
        .76545 would be rounded up to .7655); and all dollar amounts paid on
        the principal amount of this Note shall be rounded to the nearest cent,
    with one-half cent rounded upward.
	 	 	 
	Market Disruption Event	 	Market Disruption Event means, with respect to the
        Index: 

 5

	 	 	 	(i) the occurrence or existence
        of a suspension, absence or material limitation of trading of stocks
        then constituting 20 percent or more of the level of the Index (or the
        Successor Index) on the Relevant Exchanges for such securities for more
        than two hours of trading or during the one-half hour period preceding
        the close of the principal trading session on such Relevant Exchange;
        or a breakdown or failure in the price and trade reporting systems of
        any Relevant Exchange as a result of which the reported trading prices
        for stocks then constituting 20 percent or more of the level of the Index
        (or the Successor Index) during the last one-half hour preceding the
        close of the principal trading session on such Relevant Exchange are
        materially inaccurate; or the suspension, material limitation or absence
        of trading on any major U.S. securities market for trading in futures
        or options contracts or exchange traded funds related to the Index (or
        the Successor Index) for more than two hours of trading or during the
        one-half hour period preceding the close of the principal trading session
        on such 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 Issuer’s ability or the ability of
        any of the Issuer’s affiliates to unwind or adjust all or a material
    portion of the hedge position with respect to this Note.
	 	 	 	 
	 	 	For the purpose of determining
        whether a Market Disruption Event exists at any time, if trading in a
        security included in the Index is materially suspended or materially
        limited at that time, then the relevant percentage contribution of that
        security to the level of the Index shall be based on a comparison of
        (x) the portion of the value of the Index attributable to that security
        relative to (y) the overall value of the Index, in each case immediately
    before that suspension or limitation.
	 	 	 	 
	 	 	For the purpose of determining
    whether a Market Disruption Event has occurred: (1) a limitation on the 

 6

	 	 	hours or number of
        days of trading shall not constitute a Market Disruption Event if it
        results from an announced change in the regular business hours of the
        relevant exchange or market, (2) a decision to permanently discontinue
        trading in the relevant futures or options contract or exchange traded
        fund shall not constitute a Market Disruption Event, (3) limitations
        pursuant to the rules of any Relevant Exchange similar to NYSE Rule 80A
        (or any applicable rule or regulation enacted or promulgated by any other
        self-regulatory organization or any government agency 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 futures
        or options contracts on the Index by the primary securities market trading
        in such contracts by reason of (a) a price change exceeding limits set
        by such securities exchange or market, (b) an imbalance of orders relating
        to such contracts or (c) a disparity in bid and ask quotes relating to
        such contracts shall constitute a suspension, absence or material limitation
        of trading in futures or options contracts related to the Index and (5)
        a “suspension, absence or material limitation of trading” on
        any Relevant Exchange or on the primary market on which futures or options
        contracts related to the Index are traded shall not include any time
        when such securities market is itself closed for trading under ordinary
    circumstances.
	 	 	 
	Relevant Exchange	 	Relevant Exchange means, with
    respect to the Index or any Successor Index
          (as defined below), the primary exchange or market of trading for (i)
          any security then included in the Index, or any Successor Index, and
          (ii) any futures or options contracts related to the Index, or any
          Successor Index, or to any security then included in the Index, or
    any Successor Index.
	 	 	 
	Alternate Exchange Calculation	 	 

 7

	in Case of an Event
    of Default	 	In case an event of
    default with respect to this Note shall
    have occurred and be continuing, the amount declared due and payable for
    each $10 principal amount of this Note upon any acceleration of this
    Note (the “Acceleration Amount”) shall equal $10 principal
    amount plus the Supplemental Redemption Amount, if any, determined as though
    the Observation Period ended at 4:00 p.m. on the date of acceleration and
    using the Index Closing Value on the date of such acceleration as the Final
    Index Value.
		 	 
		 	If the maturity of this Note is accelerated
            because of an event of default as described above, 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 the Depositary of the Acceleration Amount
            and the aggregate cash amount due with respect to this Note as promptly
            as possible and in no event later than two Business Days after the
            date of acceleration.
        
		 	 
	Discontinuance of the
    Index;	 	 
	      Alteration
    of Method of Calculation	 	If the publisher of the Index
    discontinues publication of the Index and the
          publisher of the Index or another entity (including MS & Co.) publishes
          a successor or substitute index that MS & Co., as the Calculation
          Agent, determines, in its sole discretion, to be comparable to the
          discontinued Index (such index being referred to herein as a “Successor
          Index”), then any subsequent Index Closing Value shall be determined
          by reference to the published value of such Successor Index at the
          regular weekday close of trading on the Index Business Day that any
    Index Closing Value is to be determined.
		 	 
		 	Upon any selection by the Calculation
        Agent of a Successor Index, the Calculation Agent shall cause written
        notice thereof to be furnished to the Trustee, to Morgan Stanley and
        to the Depositary, as holder of this Note, within three Index Business
        Days of such selection. The Issuer expects that such notice shall be
        passed on to the holder of this Note, as a beneficial owner of this Note,
        in accordance with the standard rules and procedures of the Depositary
    and its direct and indirect participants.

 8

		 	If the publisher of the Index
        discontinues publication of the Index prior to, and such discontinuance
        is continuing on, the Index Valuation Date or the date of acceleration
        and MS & Co., as the Calculation Agent, determines, in its sole discretion,
        that no Successor Index is available at such time, then the Calculation
        Agent shall determine the Index Closing Value for such date. The Index
        Closing Value shall be computed by the Calculation Agent in accordance
        with the formula for calculating the Index last in effect prior to such
        discontinuance, using the closing price (or, if trading in the relevant
        securities has been materially suspended or materially limited, its good
        faith estimate of the closing price that would have prevailed but for
        such suspension or limitation) at the close of the principal trading
        session of the Relevant Exchange on such date of each security most recently
        constituting the Index without any rebalancing or substitution of such
        securities following such discontinuance. Notwithstanding these alternative
        arrangements, discontinuance of the publication of the Index may adversely
    affect the value of this Note.
		 	 

		 	If at any time the method of
        calculating the Index or a Successor Index, or the value thereof, is
        changed in a material respect, or if the Index or a Successor Index is
        in any other way modified so that such index does not, in the opinion
        of MS & Co., as the Calculation Agent, fairly represent the value
        of the Index or such Successor Index had such changes or modifications
        not been made, then, from and after such time, the Calculation Agent
        shall, at the close of business in New York City on each date on which
        the Index Closing Value is to be determined, make such calculations and
        adjustments as, in the good faith judgment of the Calculation Agent,
        may be necessary in order to arrive at a value of a stock index comparable
        to the Index or such Successor Index, as the case may be, as if such
        changes or modifications had not been made, and the Calculation Agent
        shall calculate the Final Index Value with reference to the Index or
        such Successor Index, as adjusted. Accordingly, if the method of calculating
        the Index or a Successor Index is modified so that the value of such
    index is a fraction of what it would have been if it had

 9

		 	not been modified
          (e.g.,
          due to a split in the index), then the Calculation Agent shall adjust
          such index in order to arrive at a value of the Index or such Successor
          Index as if it had not been modified (e.g.,
          as if such split had not occurred).

		 	 

 10

      Morgan
    Stanley, a Delaware corporation (together with its successors and assigns,
    the “Issuer”),
    for value received, hereby promises to pay to CEDE & CO., or registered
    assignees, the amount of cash, as determined in accordance with the provisions
    set forth under “Maturity Redemption Amount” 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 the
    maturity) and to pay interest thereon from and including the Interest Accrual
    Date specified above at a rate per annum equal to the Initial Interest Rate
    specified above or determined in accordance with the provisions specified
    on the reverse hereof until the Initial Interest Reset Date specified above,
    and thereafter at a rate per annum determined in accordance with the provisions
    specified on the reverse hereof until the principal hereof is paid or duly
    made available for payment. Unless such rate is otherwise specified on the
    face hereof, the Calculation Agent shall determine the Initial Interest Rate
    for this Note in accordance with the provisions specified on the reverse
    hereof. The Issuer will pay interest in arrears weekly, monthly, quarterly,
    semiannually or annually as specified above as the Interest Payment Period
    on each Interest Payment Date (as specified above), commencing with the first
    Interest Payment Date next succeeding the Interest Accrual Date specified
    above, and on the Maturity Date (or any redemption or repayment date); provided, however,
    that if the Interest Accrual Date occurs between a Record Date, as defined
    below, and the next succeeding Interest Payment Date, interest payments will
    commence on the second Interest Payment Date succeeding the Interest Accrual
    Date to the registered holder of this Note on the Record Date with respect
    to such second Interest Payment Date; and provided, further,
    that if an Interest Payment Date (other than the Maturity Date or redemption
    or repayment date) would fall on a day that is not a Business Day, as defined
    on the reverse hereof, such Interest Payment Date shall be the following
    day that is a Business Day, except that if the Base Rate specified above
    is LIBOR or EURIBOR and such next Business Day falls in the next calendar
    month, such Interest Payment Date shall be the immediately preceding day
    that is a Business Day; and provided, further,
    that if the Maturity Date or redemption or repayment date would fall on a
    day that is not a Business Day, such payment shall be made on the following
    day that is a Business Day and no interest shall accrue for the period from
    and after such Maturity Date or redemption or repayment date.

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

 11

 “Record
      Date”); provided, however,
      that interest payable at maturity (or any redemption or repayment date)
      will be payable to the person to whom the principal hereof shall be payable.

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

      If
    this Note is denominated in a Specified Currency other than U.S. dollars,
    and the holder does not elect (in whole or in part) to receive payment in
    U.S. dollars pursuant to the next succeeding paragraph, payments of principal,
    premium, if any, and interest with regard to this Note will be made by wire
    transfer of immediately available funds to an account maintained by the holder
    hereof with a bank located outside the United States if appropriate wire
    transfer instructions have been received by the Paying Agent in writing,
    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.

 12

      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 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.

 13

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

 DATED:

  	MORGAN STANLEY
	 	 	 
	By:	 
	 	

	 	Name:	 
	 	Title:	Authorized Signatory 

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

 14

 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 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, 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. Notice of redemption shall be
    mailed to the registered holders of the Notes designated for redemption at
    their addresses as the same shall appear on the Note register not less than
    30 nor more than 60 calendar days prior to the date fixed for redemption
    or within the Redemption Notice Period specified on the face hereof, subject
    to all the conditions and provisions of the Senior Indenture. In the event
    of redemption of this Note in part only, a new Note or Notes for the amount
    of the unredeemed portion hereof shall be issued in the name of the holder
    hereof upon the cancellation hereof.

      If
    so indicated on the face of this Note, this Note will be subject to repayment
    at the option of the holder on the Optional Repayment Date or Dates specified
    on 

 15

 the face hereof on the terms set
    forth herein. On any Optional Repayment Date, this Note will be repayable
    in whole or in part in increments of $1,000 or, if this Note is denominated
    in a Specified Currency other than U.S. dollars, in increments of 1,000 units
    of such Specified Currency (provided that any remaining principal amount
    hereof shall not be less than the minimum authorized denomination hereof)
    at the option of the holder hereof at a price equal to 100% of the principal
    amount to be repaid, together with interest accrued and unpaid hereon to
    the date of repayment. For this Note to be repaid at the option of the holder
    hereof, the Paying Agent must receive at its corporate trust office in the
    Borough of Manhattan, The City of New York, at least 15 but not more than
    30 calendar days prior to the date of repayment, (i) this Note with the form
    entitled “Option to Elect Repayment” below duly completed or (ii)
    a telegram, telex, facsimile transmission or a letter from a member of a
    national securities exchange or the 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.

      If
    the face hereof indicates that this Note is subject to “Tax Redemption
    and Payment of Additional Amounts,” this Note may be redeemed, as a
    whole, at the option of the Issuer at any time prior to maturity, upon the
    giving of a notice of redemption as described below, at a redemption price
    equal to 100% of the principal amount hereof, together with accrued interest
    to the date fixed for redemption, if the Issuer determines that, as a result
    of any change in or amendment to the laws (including a holding, judgment
    or as ordered by a court of competent jurisdiction), or any regulations or
    rulings promulgated thereunder, of the United States or of any political
    subdivision or taxing authority thereof or therein affecting taxation, or
    any change in official position regarding the application or interpretation
    of such laws, regulations or rulings, which change or amendment occurs, becomes
    effective or, in the case of a change in official position, is announced
    on or after the Initial Offering Date hereof, the Issuer has or will become
    obligated to pay Additional Amounts, as defined below, with respect to this
    Note as described below. Prior to the giving of any notice of redemption
    pursuant to this paragraph, the Issuer shall deliver to the Trustee (i) a 

 16

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

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

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

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

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

       (c) any tax, assessment or other
  governmental charge imposed by reason of such holder’s past or present status as
  a controlled foreign corporation or passive foreign investment company with
  respect to the United States or as a corporation 

 17

 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; 

       (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.

      This
    Note will bear interest at the rate determined in accordance with the applicable
    provisions below by reference to the Base Rate shown on the face 

 18

 hereof based on the Index Maturity,
    if any, shown on the face hereof (i) plus or minus the Spread, if any, and/or
    (ii) multiplied by the Spread Multiplier, if any, specified on the face hereof.
    Commencing with the Initial Interest Reset Date specified on the face hereof,
    the rate at which interest on this Note is payable shall be reset as of each
    Interest Reset Date specified on the face hereof (as used herein, the term “Interest
    Reset Date” shall include the
    Initial Interest Reset Date). For the purpose of determining the Initial
    Interest Rate, references in this paragraph, the next succeeding paragraph
    and, if applicable, clauses (i) and (ii) under “Determination of EURIBOR” below
    to Interest Reset Date shall be deemed to mean the Original Issue Date. The
    determination of the rate of interest at which this Note will be reset on
    any Interest Reset Date shall be made on the Interest Determination Date
    (as defined below) pertaining to such Interest Reset Dates. The Interest
    Reset Dates will be the Interest Reset Dates specified on the face hereof; provided, however,
    that (a) the interest rate in effect for the period from the Interest Accrual
    Date to the Initial Interest Reset Date will be the Initial Interest Rate
    and (b) unless otherwise specified on the face hereof, the interest rate
    in effect for the ten calendar days immediately prior to maturity, redemption
    or repayment will be that in effect on the tenth calendar day preceding such
    maturity, redemption or repayment date. If any Interest Reset Date would
    otherwise be a day that is not a Business Day, such Interest Reset Date shall
    be postponed to the next succeeding day that is a Business Day, except that
    if the Base Rate specified on the face hereof is LIBOR or EURIBOR and such
    Business Day is in the next succeeding calendar month, such Interest Reset
    Date shall be the immediately preceding Business Day. 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”).

      The
    Interest Determination Date pertaining to an Interest Reset Date for Notes
    bearing interest calculated by reference to the Federal Funds Rate, Federal
    Funds (Open) Rate and Prime Rate shall be on the Business Day prior to the
    Interest Reset Date. The Interest Determination Date pertaining to an Interest
    Reset Date for Notes bearing interest calculated by reference to the CD Rate,
    Commercial Paper Rate and CMT Rate will be the second Business Day prior
    to such Interest Reset Date. The Interest Determination Date pertaining to
    an Interest Reset Date for Notes bearing interest calculated by reference
    to EURIBOR (or to LIBOR when the Index Currency is euros) shall be the second
    TARGET Settlement Day prior such Interest Reset Date. The Interest Determination
    Date pertaining to an Interest Reset Date for Notes bearing interest calculated
    by reference to LIBOR 

 19

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

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

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

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

       (i) If the above rate is not published
  in H.15(519) by 3:00 p.m., New York City time, on the Calculation Date, the
  CD Rate shall be the rate on that Interest Determination Date set forth in
  the daily update of H.15(519), available through 

 20

 the world wide website of the Board
    of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/h15/update,
    or any successor site or publication (“H.15
    Daily Update”) for the Interest
    Determination Date for certificates of deposit having the Index Maturity
    specified on the face hereof, under the caption “CDs (Secondary Market).” 

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

      “Initial
    dealer” with respect to this Note means either Morgan Stanley & Co.
    Incorporated or Morgan Stanley DW Inc., as applicable.

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

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

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

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

       (ii)
If by 3:00 p.m., New York City time, on that Calculation Date the rate
is not yet published in either H.15(519) or the H.15 Daily Update, or other 

 21

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

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

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

	 	 	D x 360 	 	 
	Money Market Yield  	=	
	x	 100 
	 	 	360 – (D x M) 	 	 

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

      Determination
      of EURIBOR. If the Base Rate specified
      on the face hereof is “EURIBOR,” for
      any Interest Determination Date, EURIBOR with respect to this Note shall
      be the rate for deposits in euros as sponsored, calculated and published
      jointly by the European Banking Federation and ACI - The Financial Market
      Association, or any company established by the joint sponsors for purposes
      of compiling and publishing those rates, for the Index Maturity specified
      on the face hereof as that rate appears on the display on Moneyline Telerate,
      or any successor service, on page 248 or any other page as may replace
      page 248 on that service (“Telerate
      Page 248”) as of 11:00 a.m.,
      Brussels time.

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

       (i) If the above rate does not appear,
  the Calculation Agent shall request the principal Euro-zone office of each
  of four major banks in the Euro-zone interbank market, as selected by the
  Calculation Agent (after consultation with the Issuer), to provide the Calculation
  Agent with its offered rate for deposits in euros, at approximately 11:00
  a.m., Brussels time, on the Interest Determination Date, to 

 22

 prime banks in the Euro-zone interbank
    market for the Index Maturity specified on the face hereof commencing on
    the applicable Interest Reset Date, and in a principal amount not less than
    the equivalent of U.S.$1 million in euro that is representative of a
    single transaction in euro, in that market at that time. If at least two
    quotations are provided, EURIBOR shall be the arithmetic mean of those quotations.

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

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

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

      Determination
      of the Federal Funds Rate. If the
      Base Rate specified on the face hereof is the “Federal
      Funds Rate,” for any Interest
      Determination Date, the Federal Funds Rate with respect to this Note shall
      be the rate on that date for U.S. dollar federal funds as published in
      H.15(519) under the heading “Federal Funds (Effective)”
  as displayed on Moneyline Telerate, or any successor service, on page 120 or
  any other page as may replace page 120 on that service (“Telerate
  Page 120”).

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

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

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

 23

 mean of the rates for the last transaction
    in overnight U.S. dollar federal funds prior to 9:00 a.m., New York City
    time, on that Interest Determination Date, by each of three leading brokers
    of U.S. dollar federal funds transactions in The City of New York, which
    may include the initial dealer and its affiliates, selected by the Calculation
    Agent (after consultation with the Issuer).

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

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

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

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

      

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

      

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

 24

             Interest Reset Period, the rate
of interest payable will be the Initial Interest Rate.

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

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

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

      (iii)
    If at least two quotations are provided, LIBOR determined on that Interest
    Determination Date shall be the arithmetic mean of those quotations. If fewer
    than two quotations are provided, LIBOR shall be determined for the applicable
    Interest Reset Date as the arithmetic mean of the rates quoted at approximately
    11:00 a.m., London time, or some other time specified on the face hereof,
    in the applicable principal financial center for the country of the Index
    Currency on that 

 25

 Interest Reset Date, by three major
    banks in that principal financial center selected by the Calculation Agent
    (after consultation with the Issuer) for loans in the Index Currency to leading
    European banks, having the Index Maturity specified on the face hereof and
    in a principal amount that is representative of a single transaction in that
    Index Currency in that market at that time. 

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

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

      “Designated
      LIBOR Page” means either: (a)
      if LIBOR Reuters is designated as the Reporting Service on the face hereof,
      the display on the Reuters Money 3000 Service for the purpose of displaying
      the London interbank rates of major banks for the applicable Index Currency
      or its designated successor, or (b) if LIBOR Telerate is designated as
      the Reporting Service on the face hereof, the display on Moneyline Telerate,
      or any successor service, on the page specified on the face hereof, or
      any other page as may replace that page on that service, for the purpose
      of displaying the London interbank rates of major banks for the applicable
      Index Currency.

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

      Determination
      of Prime Rate. If the Base Rate
      specified on the face hereof is “Prime
      Rate,” for any Interest Determination
      Date, the Prime Rate with respect to this Note shall be the rate on that
      date as published in H.15(519) under the heading “Bank Prime Loan.” The
      following procedures shall be followed if the Prime Rate cannot be determined
      as described above: 

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

       (ii) If
the above rate is not published in either H.15(519) or the H.15 Daily Update
by 3:00 p.m., New York City time, on the Calculation Date, then the Calculation
Agent shall determine the Prime Rate to be the arithmetic mean of the

 26

 rates of interest publicly announced
    by each bank that appears on the Reuters Screen USPRIME 1 Page, as defined
    below, as that bank’s Prime Rate or base lending rate as in effect for
    that Interest Determination Date.

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

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

      “Reuters
      Screen USPRIME 1 Page” means
      the display designated as page “USPRIME 1” on the Reuters Money
      3000 Service, or any successor service, or any other page as may replace
      the USPRIME 1 Page on that service for the purpose of displaying prime
      rates or base lending rates of major U.S. banks.

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

       (i) the rate from the
Auction held on the applicable Interest Determination Date (the “Auction”)
    of direct obligations of the United States (“Treasury
      Bills”) having the Index Maturity
        specified on the face hereof as that rate appears under the caption “INVESTMENT
        RATE” on the display on Moneyline Telerate, or any successor service,
        on page 56 or any other page as may replace page 56 on that service (“Telerate
          Page 56”) or page 57 or any other
            page as may replace page 57 on that service (“Telerate
              Page 57”); or 

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

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

 27

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

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

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

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

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

	 	 	D x N	 	 
	Bond Equivalent Yield	=	
	x	 100 
	 	 	360 – (D
        x M) 	 	 

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

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

 28

      (1)
    the rate on that Interest Determination Date, if the Designated CMT Telerate
    Page is 7051; and 

       (2) the week or the month, as applicable,
  ended immediately preceding the week in which the related Interest Determination
  Date occurs, if the Designated CMT Telerate Page is 7052.

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

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

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

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

 29

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

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

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

      “Designated
      CMT Telerate Page” means the
      display on Moneyline Telerate, or any successor service, on the page designated
      on the face hereof or any other page as may replace that page on that service
      for the purpose of displaying Treasury Constant Maturities as reported
      in H.15(519). If no page is specified on the face hereof, the Designated
      CMT Telerate Page shall be 7052, for the most recent week.

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

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

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

 30

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

      This
    Note and all 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 

 31

 New York (the “Market
      Exchange Rate”) on the Business
      Day immediately preceding the date of issuance.

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

      In
    case this Note shall at any time become mutilated, defaced or be destroyed,
    lost or stolen and this Note or evidence of the loss, theft or destruction
    thereof (together with the 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.

 32

      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 or premium,
    if any, or interest on, any series of debt securities issued under the Senior
    Indenture, including the series of 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.

      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, (i) 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 (ii) reduce the aforesaid percentage in principal amount of debt
    securities the consent of the holders of which is required for any such supplemental
    indenture.

 33

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

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

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

      So
    long as this Note shall be outstanding, the Issuer will cause to be maintained
    an office or agency for the payment of the principal of and premium, if any,
    and interest on this Note as herein provided in the Borough of Manhattan,
    The City of New York, and an office or agency in said Borough of Manhattan
    for 

 34

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

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

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

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

      No
    recourse shall be had for the payment of the principal of or 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.

 35

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

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

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

 36

 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.
	 	 
	 	 	 
	 

 

37

  

     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.

 

  38

  

 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.

 

39

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