Document:

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

Exhibit 4.1

FORM OF FIXED RATE SENIOR NOTE

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

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

	MORGAN STANLEY 
	SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES F 
	(Fixed Rate) 
	 
	STOCK PARTICIPATION ACCRETING 
	REDEMPTION QUARTERLY-PAY SECURITIESSM (“SPARQS”) 
	 
	% SPARQS® DUE DECEMBER 20, 2007 
	MANDATORILY EXCHANGEABLE 
	FOR SHARES OF COMMON STOCK OF 
	YAHOO! INC. 

	ORIGINAL ISSUE DATE: 	INITIAL REDEMPTION

          DATE: See “Morgan

          Stanley Call Right”

          below.	INTEREST RATE: 9% per

          annum 	MATURITY DATE: See

          “Maturity Date” below. 
	INTEREST ACCRUAL

          DATE: 	INITIAL REDEMPTION

          PERCENTAGE: See

          “Morgan Stanley Call

          Right” and “Call Price”

          below.	INTEREST PAYMENT

          DATE(S): See “Interest

          Payment Dates” below. 	OPTIONAL REPAYMENT

          DATE(S): N/A 
	SPECIFIED CURRENCY:

          U.S. dollars 	ANNUAL REDEMPTION

          PERCENTAGE

          REDUCTION: N/A 	INTEREST PAYMENT

          PERIOD: Quarterly 	APPLICABILITY OF

          MODIFIED

          PAYMENT UPON

          ACCELERATION OR

          REDEMPTION: See

          “Alternate Exchange

          Calculation in Case of an

          Event of Default” below.
	IF SPECIFIED

          CURRENCY OTHER

          THAN U.S. DOLLARS,

          OPTION TO ELECT

          PAYMENT IN U.S.

          DOLLARS: N/A 	REDEMPTION NOTICE

          PERIOD: At least 10

          days but no more than 30

          days. See “Morgan

          Stanley Call Right” and

          “Morgan Stanley Notice

          Date” below.	APPLICABILITY OF

          ANNUAL INTEREST

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

          AGENT: N/A 	TAX REDEMPTION AND

          PAYMENT OF

          ADDITIONAL

          AMOUNTS: NO	PRICE APPLICABLE

          UPON OPTIONAL

          REPAYMENT: N/A 	ORIGINAL YIELD TO

          MATURITY: N/A 
	OTHER PROVISIONS: See

          below.	IF YES, STATE INITIAL

          OFFERING DATE: N/A	 	 

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	Stated Principal Amount 	 	$     per SPARQS 
	 	 	 
	Underlying Company 	 	Yahoo! Inc. (“Yahoo”) 
	 	 	 
	Underlying Stock 	 	The common stock of Yahoo 
	 	 	 
	Pricing Date 	 	 
	 	 	 
	Issue Price 	 	$             per each Stated Principal Amount of this SPARQS
	 	 	 
	Denominations

      Acceleration Trigger Price

      Exchange Ratio
	 	$     and integral multiples thereof

      The product of $         and the Exchange Ratio

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

	 	 	 
	Yield to Call

      First Call Date

      Maturity Date
	 	             % per annum

      June 20, 2007

      December 20, 2007, subject to acceleration as described below in “Price Event Acceleration” and “Alternate Exchange Calculation in Case of an Event of Default” and subject to extension if the Final Call
        Notice Date is postponed in accordance with the definition thereof. If the Final Call Notice Date is postponed because it is not a Trading Day or due to a Market Disruption Event or otherwise and the Issuer exercises the Morgan Stanley Call Right,
        the scheduled Maturity Date shall be postponed so that the Maturity Date will be the tenth calendar day following the Final Call Notice Date. See “Final Call Notice Date” below.

      In the event that the Final Call Notice Date is postponed because it is not a Trading Day or due to a Market Disruption Event or otherwise, the Issuer shall give notice of such postponement as promptly as possible, and in no
        case later than two Business Days following the scheduled Final Call Notice Date, (i) to the holder of this SPARQS by mailing notice of such postponement by first class mail, postage prepaid, to the holder’s last address as it shall appear upon
        the

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	 	 	registry books, (ii) to the Trustee by telephone or facsimile confirmed by mailing such notice to the Trustee by first class mail, postage prepaid, at its New York office and (iii) to The Depository
        Trust Company (the “Depositary”) by telephone or facsimile confirmed by mailing such notice to the Depositary by first class mail, postage prepaid. Any notice that is mailed in the manner herein provided shall be conclusively presumed to
        have been duly given, whether or not the holder of this SPARQS receives the notice. Notice of the date to which the Maturity Date has been rescheduled as a result of postponement of the Final Call Notice Date, if applicable, shall be included in the
        Issuer’s notice of exercise of the Morgan Stanley Call Right.

	 
	Interest Payment Dates
	 	March 20, 2007, June 20, 2007, September 20, 2007 and the Maturity Date.

      If the scheduled Maturity Date is postponed due to a Market Disruption Event or otherwise, the Issuer shall pay interest on the Maturity Date as postponed rather than on the scheduled Maturity Date, but no interest will accrue
        on this SPARQS or on such payment during the period from or after the scheduled Maturity Date.

	 
	Record Date
	 	Notwithstanding the definition of “Record Date” on page 25 hereof, the Record Date for each Interest Payment Date, including the Interest Payment Date scheduled to occur on the Maturity Date,
        shall be the date 5 calendar days prior to such scheduled Interest Payment Date, whether or not that date is a Business Day; provided, however, that in the event that the Issuer exercises
        the Morgan Stanley Call Right, no Interest Payment Date shall occur after the Morgan Stanley Notice Date, except for any Interest Payment Date for which the Morgan Stanley Notice Date falls on or after the “ex-interest” date for the
        related interest payment, in which case the related interest payment shall be made on such Interest Payment Date; and provided, further, that accrued but unpaid interest payable on the Call
        Date, if any, shall be payable to the person to whom the Call Price is payable. The “ex-

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		 	interest” date for any interest payment is the date on which purchase transactions in the SPARQS no longer carry the right to receive such interest payment.

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

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

      On the Morgan Stanley Notice Date, the Issuer shall give notice of the Issuer’s exercise of the Morgan Stanley Call Right (i) to the holder of this SPARQS by mailing notice of such exercise, specifying the Call Date on
        which the Issuer shall effect such exchange, by first class mail, postage prepaid, to the holder’s last address as it shall appear upon the registry books, (ii) to the Trustee by telephone or facsimile confirmed by mailing such notice to the
        Trustee by first class mail, postage prepaid, at its New York office and (iii) to the Depositary in accordance with the applicable procedures set forth in the Blanket Letter of Representations prepared by the Issuer. Any notice which is mailed in
        the manner herein provided shall be conclusively presumed to have been duly given, whether or not the holder of this SPARQS receives the notice. Failure to give notice by mail or any defect in the notice to the holder of any SPARQS shall not affect
        the validity of the proceedings for the exercise of

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		 	the Morgan Stanley Call Right with respect to any other SPARQS.

      The notice of the Issuer’s exercise of the Morgan Stanley Call Right shall specify (i) the Call Date, (ii) the Call Price payable per SPARQS, (iii) the amount of accrued but unpaid interest payable per SPARQS on the Call
        Date, (iv) whether any subsequently scheduled Interest Payment Date shall no longer be an Interest Payment Date as a result of the exercise of the Morgan Stanley Call Right, (v) the place or places of payment of such Call Price, (vi) that such
        delivery will be made upon presentation and surrender of this SPARQS, (vii) that such exchange is pursuant to the Morgan Stanley Call Right and (viii) if applicable, the date to which the Maturity Date has been extended due to a Market Disruption
        Event as described under “Maturity Date” above.

      The notice of the Issuer’s exercise of the Morgan Stanley Call Right shall be given by the Issuer or, at the Issuer’s request, by the Trustee in the name and at the expense of the Issuer.

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

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

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

	 
	Final Call Notice Date
	 	December 10, 2007; provided that if such date is not a Trading Day or if a Market Disruption Event occurs on such day, the Final Call Notice
        Date will be the immediately succeeding Trading Day on which no Market Disruption Event occurs.

	 
	Call Date
	 	The day specified in the Issuer’s notice of mandatory exchange, on which the Issuer shall deliver cash to the holder of this SPARQS, for mandatory exchange, which day may be any scheduled Trading
        Day on or after the First Call Date or the Maturity Date (including the Maturity Date as it may be extended and regardless of whether the Maturity Date is a scheduled Trading Day). See “Maturity Date” above.

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

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

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		 	of this SPARQS an amount of the Underlying Stock equal to the Exchange Ratio.

      The amount of Underlying Stock to be delivered at maturity shall be subject to any applicable adjustments (i) to the Exchange Ratio (including, as applicable, any New Stock Exchange Ratio or any Basket Stock Exchange Ratio,
        each as defined in paragraph 5 under “Antidilution Adjustments” below) and (ii) in the Exchange Property, as defined in paragraph 5 under “Antidilution Adjustments” below, to be delivered instead of, or in addition to, such
        Underlying Stock as a result of any corporate event described under “Antidilution Adjustments” below, in each case, required to be made through the close of business on the third Trading Day prior to the scheduled Maturity Date.

      The Issuer shall, or shall cause the Calculation Agent to, provide written notice to the Trustee at its New York Office and to the Depositary, on which notice the Trustee and Depositary may conclusively rely, on or prior to
        10:30 a.m. on the Trading Day immediately prior to maturity of this SPARQS (but if such Trading Day is not a Business Day, prior to the close of business on the Business Day preceding the maturity of this SPARQS), of the amount of Underlying Stock
        (or the amount of Exchange Property) or cash to be delivered with respect to each Stated Principal Amount of this SPARQS and of the amount of any cash to be paid in lieu of any fractional share of the Underlying Stock (or of any other securities
        included in Exchange Property, if applicable); provided that if the maturity date of this SPARQS is accelerated (x) because of a Price Event Acceleration (as described under “Price
        Event Acceleration” below) or (y) because of an Event of Default Acceleration (as defined under “Alternate Exchange Calculation in Case of an Event of Default” below), the Issuer shall give notice of such acceleration as promptly as
        possible, and in no case later than (A) in the case of an Event of Default Acceleration, two Trading Days following such deemed maturity date or (B) in the case of a Price Event Acceleration, 10:30 a.m. on the Trading Day immediately prior to the
        date

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		 	of acceleration (as defined under “Price Event Acceleration” below), (i) to the holder of this SPARQS by mailing notice of such acceleration by first class mail, postage prepaid, to the
        holder’s last address as it shall appear upon the registry books, (ii) to the Trustee by telephone or facsimile confirmed by mailing such notice to the Trustee by first class mail, postage prepaid, at its New York office and (iii) to the
        Depositary by telephone or facsimile confirmed by mailing such notice to the Depositary by first class mail, postage prepaid. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or
        not the holder of this SPARQS receives the notice. If the maturity of this SPARQS is accelerated, no interest on the amounts payable with respect to this SPARQS shall accrue for the period from and after such accelerated maturity date; provided that the Issuer has deposited with the Trustee the Underlying Stock, the Exchange Property or any cash due with respect to such acceleration by such accelerated maturity
        date.

      The Issuer shall, or shall cause the Calculation Agent to, deliver any such shares of the Underlying Stock (or any Exchange Property) and cash in respect of interest and any fractional share of the Underlying Stock (or any
        Exchange Property) and cash otherwise due upon any acceleration described above to the Trustee for delivery to the holder of this Note. References to payment “per SPARQS” refer to each Stated Principal Amount of this SPARQS.

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

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

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

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

      (iii) an amount of cash as determined by the Calculation Agent equal to the sum of the present values of the remaining scheduled payments of interest on each Stated Principal Amount of this SPARQS (excluding the amounts
        included in clause (ii) above) discounted to the date of acceleration. The present value of each remaining scheduled payment will be based on the comparable yield that the Issuer would pay on a non-interest bearing, senior unsecured debt obligation
        of the Issuer having a maturity equal to the term of each such remaining scheduled payment, as determined by the Calculation Agent.

	No Fractional Shares
	 	Upon delivery of this SPARQS to the Trustee at maturity, the Issuer shall deliver the aggregate number of shares of the Underlying Stock due with respect to this SPARQS, as described above, but the
        Issuer shall pay cash in lieu of delivering any fractional share of the Underlying Stock in an amount equal to the corresponding fractional Closing Price of such fraction of a share of the Underlying Stock as determined by the Calculation Agent as
        of the second scheduled Trading Day prior to maturity of this SPARQS.

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	Closing Price
	 	The Closing Price for one share
          of the Underlying Stock (or one unit of any other security for which
          a Closing Price must be determined) on any Trading Day as of close
          means:

	 	 	 	 
	 	 	•	if the Underlying Stock (or any such other
        security) is listed or admitted to trading
        on a national securities exchange (other
        than The NASDAQ Stock Market LLC (the “NASDAQ”)), the last
        reported sale price, regular way, of the principal trading session on such
        day on the principal national securities exchange
        registered under the Securities Exchange Act
        of 1934, as amended (the “Exchange Act”), on which
        the Underlying Stock (or any such other security)
    is listed or admitted to trading,
	 	 	 	 
	 	 	•	if the Underlying Stock (or any such other
        security) is a security of the NASDAQ, the
        official closing price published by the NASDAQ    on
    such day, or
	 	 	 	 
	 	 	•	if the Underlying Stock (or any
        such other security) is neither listed
        or admitted to trading on any national
        securities exchange nor a security of the NASDAQ  but is included in the OTC
      Bulletin Board Service (the “OTC Bulletin Board”)
    operated by the National Association of Securities Dealers, Inc. (the “NASD”), the last reported
    sale price of the principal trading session on
    the OTC Bulletin Board on such day.

	 	 	If the Underlying Stock (or any
          such other security) is listed or admitted to trading on any national
          securities exchange or is a security of the NASDAQ
          but the last reported sale price or official
          closing price published by NASDAQ,  as applicable, is not available
          pursuant to the preceding sentence, then the Closing Price for one
          share of the Underlying Stock (or one unit of any such other security)
          on any Trading Day shall mean the last reported sale price of the principal
          trading session on the over-the-counter market as reported on the Nasdaq
          National Market or the OTC Bulletin Board on such day. If, because
          of a Market

 11

	 	 	Disruption Event (as defined below)
          or otherwise, the last reported sale price or the official closing
          price published by NASDAQ,  as applicable, for the Underlying Stock
          (or any such other security) is not available pursuant to either of
          the two preceding sentences, then the Closing Price for any Trading
          Day shall be the mean, as determined by the Calculation Agent, of the
          bid prices for the Underlying Stock (or any such other security) obtained
          from as many recognized dealers in such security, but not exceeding
          three, as shall make such bid prices available to the Calculation Agent.
          Bids of MS & Co.
          or any of its affiliates may be included in the calculation of such
          mean, but only to the extent that  any such bid is the highest of the
          bids obtained. The term  “OTC Bulletin Board Service” shall
          include any successor service thereto.

	 
	Trading Day
	 	A day, as determined by the Calculation
          Agent, on which trading is generally conducted on the New York Stock
          Exchange LLC (“NYSE”), the American Stock Exchange LLC,
          the NASDAQ, the Chicago Mercantile Exchange,
          the Chicago Board of Options Exchange and in the over-the-counter market
          for equity securities in the United States.

	 
	Calculation Agent
	 	Morgan Stanley & Co. Incorporated (“MS & Co.”) and its successors.

      All calculations with respect to the Exchange Ratio and Call Price for the SPARQS shall be made by the Calculation Agent and shall be rounded to the nearest one hundred-thousandth, with five one-millionths rounded upward
        (e.g., .876545 would be rounded to .87655); all dollar amounts related to the Call Price resulting from such calculations shall be rounded to the nearest ten-thousandth, with five one
        hundred- thousandths rounded upward (e.g., .76545 would be rounded to .7655); and all dollar amounts paid with respect to the Call Price on the aggregate number of SPARQS shall be rounded to
        the nearest cent, with one-half cent rounded upward.

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

	 
	Antidilution Adjustments
	 	The Exchange Ratio shall be adjusted as follows:

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

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

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

 13

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

      4. There shall be no adjustments to the Exchange Ratio to reflect cash dividends or other distributions paid with respect to the Underlying Stock other than distributions described in paragraph 2, paragraph 3 and clauses (i),
        (iv) and (v) of the first sentence of paragraph 5 and Extraordinary Dividends “Extraordinary Dividend” means each of (a) the full amount per share of Underlying Stock of any cash dividend or special dividend or distribution that is identified by the Underlying Company
        as an extraordinary or special dividend or distribution, (b) the excess of any cash dividend or other cash distribution (that is not otherwise identified by the Underlying Company as an extraordinary or special dividend or distribution) distributed
        per share of Underlying Stock over the immediately preceding cash dividend or other cash distribution, if any, per share of Underlying Stock that did not include an Extraordinary Dividend (as adjusted for any subsequent corporate event requiring an
        adjustment hereunder, such as a stock split or reverse stock split) if such excess portion of the dividend or distribution is more than 5% of the Closing Price of the Underlying Stock on the Trading Day preceding the “ex-dividend date”
        (that is, the day on and after which transactions in the Underlying Stock on an organized securities exchange or trading system no longer carry the right to receive that cash dividend or other cash distribution) for the payment of such cash dividend
        or other cash distribution (such

 14

		 	Closing Price, the “Base Closing Price”) and (c) the full cash value of any non-cash dividend or distribution per share of Underlying Stock (excluding Marketable Securities, as defined in
        paragraph 5 below). Subject to the following sentence, if any cash dividend or distribution of such other property with respect to the Underlying Stock includes an Extraordinary Dividend, the Exchange Ratio with respect to the Underlying Stock shall
        be adjusted on the ex-dividend date so that the new Exchange Ratio shall equal the product of (i) the prior Exchange Ratio and (ii) a fraction, the numerator of which is the Base Closing Price, and the denominator of which is the amount by which the
        Base Closing Price exceeds the Extraordinary Dividend. If any Extraordinary Dividend is at least 35% of the Base Closing Price, then, instead of adjusting the Exchange Ratio, the amount payable upon exchange at maturity shall be determined as
        described in paragraph 5 below, and the Extraordinary Dividend shall be allocated to Reference Basket Stocks in accordance with the procedures for a Reference Basket Event as described in clause (c)(ii) of paragraph 5 below. The value of the
        non-cash component of an Extraordinary Dividend shall be determined on the ex-dividend date for such distribution by the Calculation Agent, whose determination shall be conclusive in the absence of manifest error. A distribution on the Underlying
        Stock described in clause (i), (iv) or (v) of the first sentence of paragraph 5 below shall cause an adjustment to the Exchange Ratio pursuant only to clause (i), (iv) or (v) of the first sentence of paragraph 5, as applicable.

      5. Any of the following shall constitute a Reorganization Event: (i) the Underlying Stock is reclassified or changed, including, without limitation, as a result of the issuance of any tracking stock by the Underlying Company,
        (ii) the Underlying Company has been subject to any merger, combination or consolidation and is not the surviving entity, (iii) the Underlying Company completes a statutory exchange of securities with another corporation (other than pursuant to
        clause (ii) above), (iv) the Underlying Company is liquidated, (v) the Underlying Company issues to all of its shareholders equity securities of an

 15

		 	issuer other than the Underlying Company (other than in a transaction described in clause (ii), (iii) or (iv) above) (a “spinoff stock”)
          or (vi) the Underlying Stock is the subject of a tender or exchange
          offer or going private transaction on all of the outstanding shares.
          If any Reorganization Event occurs, in each case as a result of which
          the holders of the Underlying Stock receive any equity security listed
          on a national securities exchange (a “Marketable Security”), other securities or other property, assets or cash (collectively “Exchange Property”), the amount payable upon exchange at maturity with respect to each
        Stated Principal Amount of this SPARQS following the effective date for such Reorganization Event (or, if applicable, in the case of spinoff stock, the ex-dividend date for the distribution of such spinoff stock) and any required adjustment to the
        Exchange Ratio shall be determined in accordance with the following:

    

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

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

 16

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

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

	 	 	 	 	         
		 	 	 	(ii) if the Non-Stock Exchange Property Value is equal to or exceeds 25% of the Closing Price of Underlying Stock on the Trading Day immediately prior to the effective date relating to such Reorganization Event or, if the
        Underlying Stock is surrendered exclusively for Non-Stock Exchange Property (in each case, a
      

 17

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

 18

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

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

	 	(x)      	if applicable, the Underlying Stock at the Exchange Ratio then in effect; and 
	 	 	 
	 	(y)      	if applicable, for each New Stock, such New Stock at the New Stock Exchange Ratio then in effect for such New Stock; and 
	 	 	 
	 	(z)      	if applicable, for each Reference Basket Stock, such Reference Basket Stock at the Basket Stock Exchange Ratio then in effect for such Reference Basket Stock. 
	 	 	 

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

      For purposes of paragraph 5 above, in the case of a consummated tender or exchange offer or going- private transaction involving consideration of particular types, Exchange Property shall be deemed to include the amount of cash
        or other property delivered by the offeror in the tender or exchange offer (in an amount determined on the basis of the rate of exchange in such tender or exchange offer or going-private transaction). In the event of a tender or exchange offer or a
        going-private transaction with respect to Exchange Property in which an offeree may elect to receive cash or other property, Exchange Property shall be deemed to include the kind and amount of cash and other property received by offerees who elect
        to receive cash.

 19

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

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

      No adjustment to any Exchange Ratio (including for this purpose, any New Stock Exchange Ratio or Basket Stock Exchange Ratio) shall be required unless such adjustment would require a change of at least 0.1% in the Exchange
        Ratio then in effect. The Exchange Ratio resulting from any of the adjustments specified above will be rounded to the nearest one hundred- thousandth, with five one-millionths rounded upward. Adjustments to the Exchange Ratios will be made up to the
        close of business on the third Trading Day prior to the scheduled Maturity Date.

 20

		 	No adjustments to the Exchange Ratio or method of calculating the Exchange Ratio shall be made other than those specified above.

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

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

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

    

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

 21

	 	 	 	in the applicable market, in each case as determined by the Calculation Agent in its sole discretion; and

      (ii) a determination by the Calculation Agent in its sole discretion that any event described in clause (i) above materially interfered with the ability of the Issuer or any of its affiliates to unwind or adjust all or a
    material portion of the hedge with respect to this issuance of SPARQS.

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

    

 22

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

	 
	Treatment of SPARQS for	 	 
	    United States Federal
	 	 
	   Income Tax Purposes
	 	The Issuer, by its sale of this SPARQS, and the holder of this SPARQS (and any successor holder of, or holder of a beneficial interest in, this SPARQS), by its respective purchase hereof, agree (in the
        absence of an administrative determination or judicial ruling to the contrary) to characterize each Stated Principal Amount of this SPARQS for all tax purposes as a unit consisting of (A) a terminable contract (the “Terminable Forward
        Contract”) that (i) requires the holder of this SPARQS (subject to the Morgan Stanley Call Right) to purchase, and the Issuer to sell, for an amount equal to $       (the “Forward Price”), the Underlying Stock at maturity and (ii) allows the Issuer, upon exercise of the Morgan Stanley Call Right, to terminate the Terminable Forward Contract by returning to such holder the Deposit (as defined
        below) and paying to such holder an amount of cash equal to

 23

	 	 	the difference between the Deposit and the Call Price and (B) a deposit with the Issuer of a fixed amount of cash, equal to the Issue Price per each Stated Principal Amount of this SPARQS, to secure the
        holder’s obligation to purchase the Underlying Stock pursuant to the Terminable Forward Contract (the “Deposit”), which Deposit bears a quarterly compounded yield of             % per annum, provided, however, that any interest payments on this
        SPARQS made to non-U.S. investors will generally be withheld upon at a rate of 30%.

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 24

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

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

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

 25

 in U.S. dollars. U.S. dollar payments of interest, other than interest due at maturity or on any date of redemption or repayment, will be made by U.S. dollar check mailed to the address of the person entitled thereto as such
  address shall appear in the Note register.  A holder of U.S. $10,000,000 (or the equivalent in a Specified Currency) or more in aggregate principal amount of Notes having the same Interest Payment Date, the interest on which is payable in U.S.
  dollars, shall be entitled to receive payments of interest, other than interest due at maturity or on any date of redemption or repayment, by wire transfer of immediately available funds if appropriate wire transfer instructions have been received
  by the Paying Agent in writing not less than 15 calendar days prior to the applicable Interest Payment Date.

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

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

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

 26

 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.

 

 

 

 27

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

 DATED:

  	MORGAN STANLEY 
	 	 	 
	By:	 
	 	

	 	Name:	Jai Sooklal 
	 	Title:	Assistant Treasurer 

 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 
	 	 
	 	 
	 	 
	 	 

 

 28

 REVERSE OF SECURITY

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

      Unless otherwise indicated on the face hereof, this Note will not be subject to any sinking fund and, unless otherwise provided on the face hereof in accordance with the provisions of the following
  two paragraphs, will not be redeemable or subject to repayment at the option of the holder prior to maturity.

      If so indicated on the face hereof, this Note may be redeemed in whole or in part at the option of the Issuer on or after the Initial Redemption Date specified on the face hereof on the terms set
  forth on the face hereof, together with interest accrued and unpaid hereon to the date of redemption. If this Note is subject to “Annual Redemption Percentage Reduction,” the Initial Redemption Percentage indicated on the face hereof will
  be reduced on each anniversary of the Initial Redemption Date by the Annual Redemption Percentage Reduction specified on the face hereof until the redemption price of this Note is 100% of the principal amount hereof, together with interest accrued
  and unpaid hereon to the date of redemption. If the face hereof indicates that this Note is subject to “Modified Payment upon Acceleration or Redemption”, the amount of principal payable upon redemption will be limited to the aggregate
  principal amount hereof multiplied by the sum of the Issue Price specified on the face hereof (expressed as a percentage of the aggregate principal amount) plus the original issue discount accrued from the Interest Accrual Date to the date of
  redemption (expressed as a percentage of the aggregate principal amount), with the amount of original issue discount accrued being calculated using a constant yield method (as described below).  Notice of redemption shall be mailed to the registered
  holders of the Notes designated for redemption at their addresses as the same shall appear on the Note register not less than 30 nor more than 60 calendar days prior to the date fixed for redemption or within the Redemption Notice Period specified
  on the face hereof, subject to all the conditions and provisions of the Senior Indenture. In the event of redemption of this Note in 

 29

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

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

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

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

 30

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

      This Note and all the obligations of the Issuer hereunder are direct, unsecured obligations of the Issuer and rank without preference or priority among themselves and pari
  passu with all other existing and future unsecured and unsubordinated indebtedness of the Issuer, subject to certain statutory exceptions in the event of liquidation upon insolvency.

      This Note, and any Note or Notes issued upon transfer or exchange hereof, is issuable only in fully registered form, without coupons, and, if denominated in U.S. dollars, unless otherwise stated
  above, is issuable only in denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess thereof. If this Note is denominated in a Specified Currency other than U.S. dollars, then, unless a higher minimum denomination is
  required by applicable law, it is issuable only in denominations of the equivalent of U.S. $1,000 (rounded to an integral multiple of 1,000 units of such Specified Currency), or any amount in excess thereof which is an integral multiple of 1,000
  units of such Specified Currency, as determined by reference to the noon dollar buying rate in The City of New York for cable transfers of such Specified Currency published by the Federal Reserve Bank of New York (the “Market Exchange Rate”) on the Business Day immediately preceding the date of issuance.

      The Trustee has been appointed registrar for the Notes, and the Trustee will maintain at its office in The City of New York a register for the registration and transfer of Notes. This Note may be
  transferred at the aforesaid office of the Trustee by surrendering this Note for cancellation, accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Trustee and duly executed by the registered holder hereof in
  person or by the holder’s attorney duly authorized in writing, and thereupon the Trustee shall issue in the name of the transferee or transferees, in exchange herefor, a new Note or Notes having identical terms and provisions and having a like
  aggregate principal amount in authorized denominations, subject to the terms and conditions set forth herein; provided, however, that the Trustee will not be required (i) to register the
  transfer of or exchange any Note that has been called for redemption in whole or in part, except the unredeemed portion of Notes being redeemed in part, (ii) to register the transfer of or exchange any Note if the holder thereof has exercised his
  right, if any, to require the Issuer to repurchase such Note in whole or in part, except the portion of such Note not required to be repurchased, or (iii) to register the transfer of or exchange Notes to the extent and during the period so provided
  in the Senior Indenture with respect to the redemption of Notes. Notes are exchangeable at said office for other Notes of other authorized denominations of equal aggregate principal amount having identical terms and provisions.  All such exchanges
  and transfers of Notes will be free of charge, but the Issuer may require payment of a sum sufficient 

 31

 to cover any tax or other governmental charge in connection therewith. All Notes surrendered for exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Trustee and executed by
  the registered holder in person or by the holder’s attorney duly authorized in writing. The date of registration of any Note delivered upon any exchange or transfer of Notes shall be such that no gain or loss of interest results from such
  exchange or transfer.

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

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

 32

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

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

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

 33

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

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

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

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

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

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

 34

 avoid U.S. federal income tax or as a private foundation or other tax-exempt organization or a bank receiving interest under Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended;

      (d)    any tax, assessment or other governmental charge that is payable otherwise than by withholding or deduction from payments on or in respect of this Note;

      (e)    any tax, assessment or other governmental charge required to be withheld by any Paying Agent from any payment of principal of, or interest on, this Note, if such payment can be made without such
  withholding by any other Paying Agent in a city in Western Europe;

      (f)    any tax, assessment or other governmental charge that would not have been imposed but for the failure to comply with certification, information or other reporting requirements concerning the
  nationality, residence or identity of the holder or beneficial owner of this Note, if such compliance is required by statute or by regulation of the United States or of any political subdivision or taxing authority thereof or therein as a
  precondition to relief or exemption from such tax, assessment or other governmental charge;

      (g)    any tax, assessment or other governmental charge imposed by reason of such holder’s past or present status as the actual or constructive owner of 10% or more of the total combined voting
  power of all classes of stock entitled to vote of the Issuer or as a direct or indirect subsidiary of the Issuer; or

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

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

      The Senior Indenture permits the Issuer and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of the debt securities of all series issued under the
  Senior Indenture then outstanding and affected (voting as one class), to execute supplemental indentures adding any provisions to or changing in any manner the rights of the holders of each series so affected; provided that the Issuer and the Trustee may not, without the 

 35

 consent of the holder of each outstanding debt security affected thereby, (a) extend the final maturity of any such debt security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of
  interest thereon, or reduce any amount payable on redemption thereof, or change the currency of payment thereof, or modify or amend the provisions for conversion of any currency into any other currency, or modify or amend the provisions for
  conversion or exchange of the debt security for securities of the Issuer or other entities or for other property or the cash value of the property (other than as provided in the antidilution provisions or other similar adjustment provisions of the
  debt securities or otherwise in accordance with the terms thereof), or impair or affect the rights of any holder to institute suit for the payment thereof or (b) reduce the aforesaid percentage in principal amount of debt securities the consent of
  the holders of which is required for any such supplemental indenture.

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

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

 36

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

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

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

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

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

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

 37

 whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue
  hereof, expressly waived and released.

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

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

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

 

 

 

 

 38

 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.

 ______________________________

  

 39

 

 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.

 40

 

 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. 

 41Exhibit 4.1

	
      FIXED RATE SENIOR NOTE
	
	 	 	 
	
REGISTERED
		 

		
REGISTERED
	
	
No. FXR-1
		 

		
U.S. $
	
	 

		 

		
CUSIP:
	

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

MORGAN STANLEY

SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES F 

(Fixed Rate)

     STOCK PARTICIPATION ACCRETING

REDEMPTION QUARTERLY-PAY SECURITIESSM (“SPARQS”)

	
% SPARQS® DUE DECEMBER 20, 2007
	
	
MANDATORILY EXCHANGEABLE
	
	
FOR SHARES OF COMMON STOCK OF
	
	
APPLE COMPUTER, INC.
	

	ORIGINAL
    ISSUE DATE:
	      INITIAL
    REDEMPTION DATE: See “Morgan Stanley Call Right” below.
	      INTEREST
    RATE:      % per annum
	      MATURITY
    DATE: See “Maturity Date” below.

	INTEREST
    ACCRUAL DATE:
	INITIAL
          REDEMPTION PERCENTAGE: See “Morgan Stanley Call Right” and “Call
    Price” below.
	INTEREST
    PAYMENT DATE(S): See “Interest Payment Dates” below.
	OPTIONAL
    REPAYMENT DATE(S): N/A 

	SPECIFIED
    CURRENCY: U.S. dollars
	ANNUAL
    REDEMPTION PERCENTAGE REDUCTION: N/A
	INTEREST
    PAYMENT PERIOD: Quarterly
	APPLICABILITY
    OF MODIFIED PAYMENT UPON ACCELERATION OR
          REDEMPTION: See “Alternate Exchange Calculation in Case of an
    Event of Default” below.

	
    IF SPECIFIED CURRENCY OTHER THAN U.S. DOLLARS,
      OPTION TO ELECT PAYMENT IN U.S. DOLLARS: N/A
	REDEMPTION
          NOTICE PERIOD: At least 10 days but no more than 30 days. See “Morgan
    Stanley Call Right” and “Morgan Stanley Notice Date” below.
	APPLICABILITY
    OF ANNUAL INTEREST PAYMENTS: N/A
	If
    yes, state Issue Price: N/A

	EXCHANGE RATE AGENT: N/A
    	TAX REDEMPTION AND PAYMENT OF ADDITIONAL AMOUNTS:
    NO
	PRICE APPLICABLE UPON OPTIONAL REPAYMENT: N/A
	ORIGINAL YIELD TO MATURITY: N/A

	OTHER PROVISIONS: See below.
    
	IF YES, STATE INITIAL OFFERING DATE: N/A
	 	 

2

  

	
Stated Principal Amount		 	$     per
    SPARQS 
	 	 	 
	
Underlying Company		 	Apple Computer, Inc. (“Apple”) 
	 	 	 
	
Underlying Stock		 	The common stock of Apple 
	 	 	 
	
Pricing Date		 		 	
	 	 	 
	
Issue Price		 		$           per
    each Stated Principal Amount of this SPARQS  
	 		 	 	
	
Denominations		 	$           and
        integral multiples thereof
	 	 	 
	
Acceleration Trigger Price		 	
      The product of $              and the Exchange
Ratio	
	 	 	 
	Exchange Ratio
		
		             , subject
        to adjustment for corporate events relating to the Underlying Stock described
        under “Antidilution Adjustments” below.
	 	 	 
	Yield to Call	 	     % per annum
	 	 	 
	First Call Date	 	June 20, 2007
	 	 	 
	Maturity Date
	
	December 20, 2007,
          subject to acceleration as described below in “Price Event Acceleration” and “Alternate Exchange
          Calculation in Case of an Event of Default” and subject to extension
          if the Final Call Notice Date is postponed in accordance with the definition
          thereof. If the Final Call Notice Date is postponed because it is not
          a Trading Day or due to a Market Disruption Event or otherwise and
          the Issuer exercises the Morgan Stanley Call Right, the scheduled Maturity
          Date shall be postponed so that the Maturity Date will be the tenth
          calendar day following the Final Call Notice Date. See “Final
      Call Notice Date” below.

      In the event that the Final Call Notice
          Date is postponed because it is not a Trading Day or due to a Market
          Disruption Event or otherwise, the Issuer shall give notice of such
          postponement as promptly as possible, and in no case later than two
          Business Days following the scheduled Final Call Notice Date, (i) to
          the holder of this SPARQS by mailing notice of such postponement by
          first class mail, postage prepaid, to the holder’s last address
    as it shall appear upon the

3

	 
		 	registry books, (ii)
	      to the Trustee by telephone or facsimile confirmed by mailing such notice
	      to the Trustee by first class mail, postage prepaid, at its New York office
	      and (iii) to The Depository Trust Company (the “Depositary”) by telephone or facsimile confirmed by mailing such notice to the Depositary by first class mail, postage prepaid. Any notice that is mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the holder of this SPARQS receives the notice. Notice of the date to which the Maturity Date has been rescheduled as a result of postponement of the Final Call Notice Date, if applicable, shall be included in the
Issuer’s notice of exercise of the Morgan Stanley Call Right.

	
	 	 	 
	Interest Payment Dates

		 	March 20, 2007, June 20, 2007, September 20, 2007 and the Maturity Date.

If the scheduled Maturity Date is postponed due to a Market Disruption Event or otherwise, the Issuer shall pay interest on the Maturity Date as postponed rather than on the scheduled Maturity Date, but no interest will accrue
on this SPARQS or on such payment during the period from or after the scheduled Maturity Date.

	
	 	 	 
	Record Date

		 	Notwithstanding the definition
	      of “Record Date” on page 25 hereof, the Record Date for each
	      Interest Payment Date, including the Interest Payment Date scheduled to
	      occur on the Maturity Date, shall be the date 5 calendar days prior to
	      such scheduled Interest Payment Date, whether or not that date is a Business
	      Day; provided, however,
	      that in the event that the Issuer exercises the Morgan Stanley Call Right,
	      no Interest Payment Date shall occur after the Morgan Stanley Notice Date,
	      except for any Interest Payment Date for which the Morgan Stanley Notice
	      Date falls on or after the “ex-interest” date for the
related interest payment, in which case the related interest payment shall be
	      made on such Interest Payment Date; and provided, further, that
	      accrued but unpaid interest payable on the Call Date, if any, shall be
	      payable to the person to whom the Call Price is payable. The “ex-

	

4

	
		 	interest” date for
	      any interest payment is the date on which purchase transactions in the
	      SPARQS no longer carry the right to receive such interest payment.

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

	
	 	 	 
	Morgan Stanley Call Right

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

On the Morgan Stanley Notice Date, the Issuer
    shall give notice of the Issuer’s exercise of the Morgan Stanley Call Right (i) to the holder of this SPARQS by mailing notice of such exercise, specifying the Call Date on
which the Issuer shall effect such exchange, by first class mail, postage prepaid, to the holder’s
last address as it shall appear upon the registry books, (ii) to the Trustee
by telephone or facsimile confirmed by mailing such notice to the Trustee by
first class mail, postage prepaid, at its New York office and (iii) to the Depositary
in accordance with the applicable procedures set forth in the Blanket Letter
of Representations prepared by the Issuer. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the holder of this SPARQS receives the notice. Failure to give
notice by mail or any defect in the notice to the holder of any SPARQS shall
not affect the validity of the proceedings for the exercise of

	

  5

	
		 	the Morgan Stanley Call Right with respect to any other SPARQS.

The notice of the Issuer’s exercise of the Morgan Stanley Call Right shall specify (i) the Call Date, (ii) the Call Price payable per SPARQS, (iii) the amount of accrued but unpaid interest payable per SPARQS on the Call
Date, (iv) whether any subsequently scheduled Interest Payment Date shall no longer be an Interest Payment Date as a result of the exercise of the Morgan Stanley Call Right, (v) the place or places of payment of such Call Price, (vi) that such
delivery will be made upon presentation and surrender of this SPARQS, (vii) that such exchange is pursuant to the Morgan Stanley Call Right and (viii) if applicable, the date to which the Maturity Date has been extended due to a Market Disruption
Event as described under “Maturity Date” above.

The notice of the Issuer’s exercise of the Morgan Stanley Call Right shall be given by the Issuer or, at the Issuer’s
    request, by the Trustee in the name and at the expense of the Issuer.

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

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

	

  6

	Morgan Stanley Notice Date

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

	
	 	 	 
	Final Call Notice Date

		 	December 10, 2007; provided that if such date is not a Trading Day or if a Market Disruption Event occurs on such day, the Final Call Notice
Date will be the immediately succeeding Trading Day on which no Market Disruption Event occurs.

	
	 	 	 
	Call Date

		 	The day specified in
	      the Issuer’s notice of mandatory exchange, on which the Issuer shall deliver cash to the holder of this SPARQS, for mandatory exchange, which day may be any scheduled Trading
Day on or after the First Call Date or the Maturity Date (including the Maturity Date as it may be extended and regardless of whether the Maturity Date is a scheduled Trading Day). See “Maturity Date” above.

	
	 	 	 
	Call Price

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

	
	 	 	 
	Exchange at Maturity

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

	

  7

	
		 	of this SPARQS an amount of the Underlying Stock equal to the Exchange Ratio.

The amount of Underlying Stock to be delivered at maturity shall be subject to any applicable adjustments (i) to the Exchange Ratio (including, as applicable, any New Stock Exchange Ratio or any Basket Stock Exchange Ratio,
each as defined in paragraph 5 under “Antidilution Adjustments” below) and (ii) in the Exchange Property, as defined in paragraph 5 under “Antidilution Adjustments” below, to be delivered instead of, or in addition to, such
Underlying Stock as a result of any corporate event described under “Antidilution Adjustments” below, in each case, required to be made through the close of business on the third Trading Day prior to the scheduled Maturity Date.

The Issuer shall, or shall cause the Calculation Agent to, provide written notice to the Trustee at its New York Office and to the Depositary, on which notice the Trustee and Depositary may conclusively rely, on or prior to
10:30 a.m. on the Trading Day immediately prior to maturity of this SPARQS (but if such Trading Day is not a Business Day, prior to the close of business on the Business Day preceding the maturity of this SPARQS), of the amount of Underlying Stock
(or the amount of Exchange Property) or cash to be delivered with respect to each Stated Principal Amount of this SPARQS and of the amount of any cash to be paid in lieu of any fractional share of the Underlying Stock (or of any other securities
included in Exchange Property, if applicable); provided that if the maturity date of this SPARQS is accelerated (x) because of a Price Event Acceleration (as described under “Price
Event Acceleration” below) or (y) because of an Event of Default Acceleration (as defined under “Alternate Exchange Calculation in Case of an Event of Default” below), the Issuer shall give notice of such acceleration as promptly as
possible, and in no case later than (A) in the case of an Event of Default Acceleration, two Trading Days following such deemed maturity date or (B) in the case of a Price Event Acceleration, 10:30 a.m. on the Trading Day immediately prior to the
date

	

8

		
		of acceleration (as defined
	      under “Price Event Acceleration” below), (i) to the holder of this SPARQS by mailing notice of such acceleration by first class mail, postage prepaid, to the
holder’s last address as it shall appear upon the registry books, (ii) to
the Trustee by telephone or facsimile confirmed by mailing such notice to the
Trustee by first class mail, postage prepaid, at its New York office and (iii)
to the Depositary by telephone or facsimile confirmed by mailing such notice
to the Depositary by first class mail, postage prepaid. Any notice that is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the holder of this SPARQS receives the notice. If the maturity
of this SPARQS is accelerated, no interest on the amounts payable with respect
to this SPARQS shall accrue for the period from and after such accelerated maturity
date; provided that the Issuer has deposited with the Trustee the Underlying Stock, the Exchange Property or any cash due with respect to such acceleration by such accelerated maturity
date.

The Issuer shall, or shall cause the Calculation
    Agent to, deliver any such shares of the Underlying Stock (or any Exchange
    Property) and cash in respect of interest and any fractional share of the
    Underlying Stock (or any Exchange Property) and cash otherwise due upon any
    acceleration described above to the Trustee for delivery to the holder of
    this Note. References to payment “per SPARQS” refer to each Stated
    Principal Amount of this SPARQS.

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

	

  9

  

  

	Price Event Acceleration

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

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

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

(iii) an amount of cash as determined by the Calculation Agent equal to the sum of the present values of the remaining scheduled payments of interest on each Stated Principal Amount of this SPARQS (excluding the amounts
included in clause (ii) above) discounted to the date of acceleration. The present value of each remaining scheduled payment will be based on the comparable yield that the Issuer would pay on a non-interest bearing, senior unsecured debt obligation
of the Issuer having a maturity equal to the term of each such remaining scheduled payment, as determined by the Calculation Agent.

	
	 	 	 
	No Fractional Shares

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

	

  10

	Closing Price

		 	The Closing Price for
	      one share of the Underlying Stock (or one unit of any other security
	      for which a Closing Price must be determined) on any Trading Day as
	      of close means:

	

	 	 

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

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

	
	 	 

		
      •
		
      if the Underlying Stock (or any such other security) is
      neither listed or admitted to trading on any national securities exchange
      nor a security of the NASDAQ but is included in the OTC Bulletin Board
      Service (the “OTC Bulletin Board”) operated by the National Association
      of Securities Dealers, Inc. (the “NASD”), the last reported sale
      price of the principal trading session on the OTC Bulletin Board on such
      day.
	
	 	 	 	 
	 	 	If the
      Underlying Stock (or any such other security) is listed or admitted to
      trading on any national securities exchange or is a security of the NASDAQ
      but the last reported sale price or official closing price published by
      NASDAQ, as applicable, is not available pursuant to the preceding sentence,
      then the Closing Price for one share of the Underlying Stock (or one unit
      of any such other security) on any Trading Day shall mean the last reported
      sale price of the principal trading session on the over-the-counter market
      as reported on the NASDAQ or the OTC Bulletin Board on such day. If, because
      of a Market Disruption Event (as defined below) or otherwise, the last
    reported sale price or the

  11

	 
		 	official closing price
	      published by NASDAQ, as applicable, for the Underlying Stock (or any
	      such other security) is not available pursuant to either of the two
	      preceding sentences, then the Closing Price for any Trading Day shall
	      be the mean, as determined by the Calculation Agent, of the bid prices
	      for the Underlying Stock (or any such other security) for such Trading
	      Day obtained from as many recognized dealers in such security, but
	      not exceeding three, as shall make such bid prices available to the
	      Calculation Agent. Bids of MS & Co. or any of its affiliates may be
	      included in the calculation of such mean, but only to the extent that
	      any such bid is the highest of the bids obtained. The term “OTC Bulletin
	      Board Service” shall
	      include any successor service thereto.

	
	 	 	 
	Trading Day

		 	A day, as determined
	      by the Calculation Agent, on which trading is generally conducted on
	      the New York Stock Exchange LLC (“NYSE”), the American Stock
	      Exchange LLC, the NASDAQ, the Chicago Mercantile Exchange, the Chicago
	      Board of Options Exchange and in the over-the-counter market for equity
	      securities in the United States.

	
	 	 	 
	Calculation Agent

		 	Morgan Stanley & Co. Incorporated (“MS & Co.”)
	      and its successors.

All calculations with respect to the Exchange Ratio and Call Price for the SPARQS shall be made by the Calculation Agent and shall be rounded to the nearest one hundred-thousandth, with five one-millionths rounded upward
(e.g., .876545 would be rounded to .87655); all dollar amounts related to the Call Price resulting from such calculations shall be rounded to the nearest ten-thousandth, with five one
hundred- thousandths rounded upward (e.g., .76545 would be rounded to .7655); and all dollar amounts paid with respect to the Call Price on the aggregate number of SPARQS shall be rounded to
the nearest cent, with one-half cent rounded upward.

All determinations made by the Calculation Agent shall be at the sole discretion of the Calculation Agent and shall, in the absence of manifest error, be

	

  12

	 	 	conclusive for all purposes and
    binding on the holder of this SPARQS, the Trustee and the Issuer.
	 	 	 
	Antidilution Adjustments 	 	The Exchange Ratio shall be adjusted as follows:
	 	 	 
	 	 	1. If the Underlying Stock
          is subject to a stock split or reverse stock split, then once such
          split has become effective, the Exchange Ratio shall be adjusted to
          equal the product of the prior Exchange Ratio and the number of shares
          issued in such stock split or reverse stock split with respect to one
          share of the Underlying Stock.

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

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

13

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

4. There shall be no adjustments to the Exchange
    Ratio to reflect cash dividends or other distributions paid with respect
    to the Underlying Stock other than distributions described in paragraph 2,
    paragraph 3 and clauses (i), (iv) and (v) of the first sentence of paragraph
    5 and Extraordinary Dividends. “Extraordinary
    Dividend” means each of (a) the full amount per share of Underlying
    Stock of any cash dividend or special dividend or distribution that is identified
    by the Underlying Company as an extraordinary or special dividend or distribution,
    (b) the excess of any cash dividend or other cash distribution (that is not
    otherwise identified by the Underlying Company as an extraordinary or special
    dividend or distribution) distributed per share of Underlying Stock over
    the immediately preceding cash dividend or other cash distribution, if any,
    per share of Underlying Stock that did not include an Extraordinary Dividend
    (as adjusted for any subsequent corporate event requiring an adjustment hereunder,
    such as a stock split or reverse stock split) if such excess portion of the
    dividend or distribution is more than 5% of the Closing Price of the Underlying
    Stock on the Trading Day preceding the “ex-dividend date” (that
    is, the day on and after which transactions in the Underlying Stock on an
    organized securities exchange or trading system no longer carry the right
    to receive that cash dividend or other cash distribution) for the payment
    of such cash dividend or other cash distribution (such Closing Price, the “Base
    Closing Price”) and (c) the full cash value of any non-cash dividend
    or distribution per share of Underlying Stock (excluding Marketable 

	

  14

	
		 	Securities, as defined in paragraph 5 below). Subject to the following sentence, if any cash dividend or distribution of such other property with respect to the Underlying Stock includes an
Extraordinary Dividend, the Exchange Ratio with respect to the Underlying Stock shall be adjusted on the ex-dividend date so that the new Exchange Ratio shall equal the product of (i) the prior Exchange Ratio and (ii) a fraction, the numerator of
which is the Base Closing Price, and the denominator of which is the amount by which the Base Closing Price exceeds the Extraordinary Dividend. If any Extraordinary Dividend is at least 35% of the Base Closing Price, then, instead of adjusting the
Exchange Ratio, the amount payable upon exchange at maturity shall be determined as described in paragraph 5 below, and the Extraordinary Dividend shall be allocated to Reference Basket Stocks in accordance with the procedures for a Reference Basket
Event as described in clause (c)(ii) of paragraph 5 below. The value of the non-cash component of an Extraordinary Dividend shall be determined on the ex-dividend date for such distribution by the Calculation Agent, whose determination shall be
conclusive in the absence of manifest error. A distribution on the Underlying Stock described in clause (i), (iv) or (v) of the first sentence of paragraph 5 below shall cause an adjustment to the Exchange Ratio pursuant only to clause (i), (iv) or
(v) of the first sentence of paragraph 5, as applicable.

5. Any of the following shall constitute a Reorganization
    Event: (i) the Underlying Stock is reclassified or changed, including, without
    limitation, as a result of the issuance of any tracking stock by the Underlying
    Company, (ii) the Underlying Company has been subject to any merger, combination
    or consolidation and is not the surviving entity, (iii) the Underlying Company
    completes a statutory exchange of securities with another corporation (other
    than pursuant to clause (ii) above), (iv) the Underlying Company is liquidated,
    (v) the Underlying Company issues to all of its shareholders equity securities
    of an issuer other than the Underlying Company (other than in a transaction
    described in clause (ii), (iii) or (iv) above) (a “spinoff stock”)
    or (vi) the Underlying Stock

	

  15

		
		is the subject of a tender
	      or exchange offer or going private transaction on all of the outstanding
	      shares. If any Reorganization Event occurs, in each case as a result
	      of which the holders of the Underlying Stock receive any equity security
	      listed on a national securities exchange (a “Marketable Security”), other securities or other property, assets or cash (collectively “Exchange
Property”), the amount payable upon exchange at maturity with respect to
each Stated Principal Amount of this SPARQS following the effective date for
such Reorganization Event (or, if applicable, in the case of spinoff stock, the
ex-dividend date for the distribution of such spinoff stock) and any required
adjustment to the Exchange Ratio shall be determined in accordance with the following:

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

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

(c) for any cash and any other property or securities other than Marketable Securities received

  16

	
		 	in such Reorganization
	      Event (the “Non-Stock Exchange Property”),

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

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

		  

		 	 

  17

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

	

18

			 	date of such Reorganization Event
    and (c) 0.3333333.
			 	 	 
			Following the allocation of any Extraordinary
      Dividend to Reference Basket Stocks pursuant to paragraph 4 above or any
      Reorganization Event described in this paragraph 5, the amount payable
      upon exchange at maturity with respect to each Stated Principal Amount
    of this SPARQS shall be the sum of:
			 	 	 
			 	(x)	if applicable, the Underlying Stock
    at the Exchange Ratio then in effect; and
			 	 	 
			 	(y)	if applicable, for each New Stock,
      such New Stock at the New Stock Exchange Ratio then in effect for such
    New Stock; and
			 	 	 
			 	(z)	if applicable, for each Reference
      Basket Stock, such Reference Basket Stock at the Basket Stock Exchange
    Ratio then in effect for such Reference Basket Stock.
			 	 	 
		
		In each case, the applicable Exchange Ratio (including for this purpose, any New Stock Exchange Ratio or Basket Stock Exchange Ratio) shall be determined by the Calculation Agent on the third Trading Day prior to the scheduled
  Maturity Date.
	  For purposes of paragraph 5 above, in the case of a consummated tender or exchange offer or going- private transaction involving consideration of particular types, Exchange Property shall be deemed to include the amount of cash
  or other property delivered by the offeror in the tender or exchange offer (in an amount determined on the basis of the rate of exchange in such tender or exchange offer or going-private transaction). In the event of a tender or exchange offer or a
  going-private transaction with respect to Exchange Property in which an offeree may elect to receive cash or other property, Exchange Property shall be deemed to include the kind and amount of cash and other property received by offerees who elect
  to receive cash.

  19

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

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

No adjustment to any Exchange Ratio (including for this purpose, any New Stock Exchange Ratio or Basket Stock Exchange Ratio) shall be required unless such adjustment would require a change of at least 0.1% in the Exchange
Ratio then in effect. The Exchange Ratio resulting from any of the adjustments specified above will be rounded to the nearest one hundred- thousandth, with five one-millionths rounded upward. Adjustments to the Exchange Ratios will be made up to the
close of business on the third Trading Day prior to the scheduled Maturity Date.

	

  20

	
		 	No adjustments to the Exchange Ratio or method of calculating the Exchange Ratio shall be made other than those specified above.

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

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

	
	 	 	 
	Market Disruption Event

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

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

  21

	
		 	
	in the applicable market, in each case as determined by the Calculation Agent in its sole discretion; and

(ii) a determination by the Calculation Agent in its sole discretion that any event described in clause (i) above materially interfered with the ability of the Issuer or any of its affiliates to unwind or adjust all or a
material portion of the hedge with respect to this issuance of SPARQS.

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

	

  22

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

	
	 	 	 
	Treatment of SPARQS for United States 	 	 
	   Federal Income
        Tax Purposes
    	 

	The Issuer, by its sale
	      of this SPARQS, and the holder of this SPARQS (and any successor holder
	      of, or holder of a beneficial interest in, this SPARQS), by its respective
	      purchase hereof, agree (in the absence of an administrative determination
	      or judicial ruling to the contrary) to characterize each Stated Principal
	      Amount of this SPARQS for all tax purposes as a unit consisting of
	      (A) a terminable contract (the “Terminable Forward
Contract”) that (i) requires the holder of this SPARQS (subject to the Morgan
Stanley Call Right) to purchase, and the Issuer to sell, for an amount equal
to $                                       (the “Forward Price”),
the Underlying Stock at maturity and (ii) allows the Issuer, upon exercise of
the Morgan Stanley Call Right, to terminate the Terminable Forward Contract by
returning to such holder the Deposit (as defined below) and paying to such holder
an amount of cash equal to

	
	 	 
		 

	

  23

	 	 
		the difference between
	      the Deposit and the Call Price and (B) a deposit with the Issuer of
	      a fixed amount of cash, equal to the Issue Price per each Stated Principal
	      Amount of this SPARQS, to secure the holder’s obligation to purchase
	      the Underlying Stock pursuant to the Terminable Forward Contract (the “Deposit”),
	      which Deposit bears a quarterly compounded yield of ___% per annum,
	      provided, however, that any interest payments on this SPARQS made to
	      non-U.S. investors will generally be withheld upon at a rate of 30%.

	

  24

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

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

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

  25

  in U.S. dollars. U.S. dollar payments of interest,
  other than interest due at maturity or on any date of redemption or repayment,
  will be made by U.S. dollar check mailed to the address of the person entitled
  thereto as such address shall appear in the Note register. A holder of U.S. $10,000,000
  (or the equivalent in a Specified Currency) or more in aggregate principal
  amount of Notes having the same Interest Payment Date, the interest on which
  is payable in U.S. dollars, shall be entitled to receive payments of interest,
  other than interest due at maturity or on any date of redemption or repayment,
  by wire transfer of immediately available funds if appropriate wire transfer
  instructions have been received by the Paying Agent in writing not less than
15 calendar days prior to the applicable Interest Payment Date.

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

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

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

  26

  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.

  27

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

 DATED:

  	MORGAN STANLEY 
	 	 	 
	By:	 
	 	

	 	Name:	 
	 	Title:	 

 TRUSTEE’S CERTIFICATE

   OF AUTHENTICATION

  

  This is one of the Notes referred

   to in the within-mentioned

   Senior Indenture.

  

  THE BANK OF NEW YORK as

   Trustee

	 By: 	  
	 	 
 
	  	  Authorized Signatory 
	 	 
	 	 
	 	 
	 	 

 

 28

REVERSE OF SECURITY

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

       Unless otherwise indicated on the face hereof, this Note will not be subject to any sinking fund and, unless otherwise provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or subject to repayment at the option of the holder prior to maturity.

       If so indicated
  on the face hereof, this Note may be redeemed in whole or in part at the option
  of the Issuer on or after the Initial Redemption Date specified on the face
  hereof on the terms set forth on the face hereof, together with interest accrued
  and unpaid hereon to the date of redemption. If this Note is subject to “Annual Redemption Percentage Reduction,” the Initial Redemption Percentage indicated on the face hereof will
be reduced on each anniversary of the Initial Redemption Date by the Annual Redemption Percentage Reduction specified on the face hereof until the redemption price of this Note is 100% of the principal amount hereof, together with interest accrued
and unpaid hereon to the date of redemption. If the face hereof indicates that this Note is subject to “Modified Payment upon Acceleration or Redemption”,
the amount of principal payable upon redemption will be limited to the aggregate
principal amount hereof multiplied by the sum of the Issue Price specified on
the face hereof (expressed as a percentage of the aggregate principal amount)
plus the original issue discount accrued from the Interest Accrual Date to the
date of redemption (expressed as a percentage of the aggregate principal amount),
with the amount of original issue discount accrued being calculated using a constant
yield method (as described below). Notice of redemption shall be mailed to the
registered holders of the Notes designated for redemption at their addresses
as the same shall appear on the Note register not less than 30 nor more than
60 calendar days prior to the date fixed for redemption or within the Redemption
Notice Period specified on the face hereof, subject to all the conditions and
provisions of the Senior Indenture. In the event of redemption of this Note in

  29

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

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

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

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

  30

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

       This Note and all the obligations of the Issuer hereunder are direct, unsecured obligations of the Issuer and rank without preference or priority among themselves and pari
passu with all other existing and future unsecured and unsubordinated indebtedness of the Issuer, subject to certain statutory exceptions in the event of liquidation upon insolvency.

       This Note,
  and any Note or Notes issued upon transfer or exchange hereof, is issuable
  only in fully registered form, without coupons, and, if denominated in U.S.
  dollars, unless otherwise stated above, is issuable only in denominations of
  U.S. $1,000 and any integral multiple of U.S. $1,000 in excess thereof. If this Note is denominated in a Specified Currency other than U.S. dollars, then, unless a higher minimum denomination is
required by applicable law, it is issuable only in denominations of the equivalent of U.S. $1,000
(rounded to an integral multiple of 1,000 units of such Specified Currency),
or any amount in excess thereof which is an integral multiple of 1,000 units
of such Specified Currency, as determined by reference to the noon dollar buying
rate in The City of New York for cable transfers of such Specified Currency published
by the Federal Reserve Bank of New York (the “Market Exchange Rate”)
on the Business Day immediately preceding the date of issuance.

       The Trustee
  has been appointed registrar for the Notes, and the Trustee will maintain at
  its office in The City of New York a register for the registration and transfer
  of Notes. This Note may be transferred at the aforesaid office of the Trustee
  by surrendering this Note for cancellation, accompanied by a written instrument
  of transfer in form satisfactory to the Issuer and the Trustee and duly executed
  by the registered holder hereof in person or by the holder’s attorney
  duly authorized in writing, and thereupon the Trustee shall issue in the name
  of the transferee or transferees, in exchange herefor, a new Note or Notes
  having identical terms and provisions and having a like aggregate principal
  amount in authorized denominations, subject to the terms and conditions set
  forth herein; provided, however, that the Trustee will not be required (i) to register the
transfer of or exchange any Note that has been called for redemption in whole or in part, except the unredeemed portion of Notes being redeemed in part, (ii) to register the transfer of or exchange any Note if the holder thereof has exercised his
right, if any, to require the Issuer to repurchase such Note in whole or in part, except the portion of such Note not required to be repurchased, or (iii) to register the transfer of or exchange Notes to the extent and during the period so provided
in the Senior Indenture with respect to the redemption of Notes. Notes are exchangeable at said office for other Notes of other authorized denominations of equal aggregate principal amount having identical terms and provisions.  All such exchanges
and transfers of Notes will be free of charge, but the Issuer may require payment of a sum sufficient

  31

  to cover any tax or other governmental charge in
  connection therewith. All Notes surrendered for exchange shall be accompanied
  by a written instrument of transfer in form satisfactory to the Issuer and
  the Trustee and executed by the registered holder in person or by the holder’s
  attorney duly authorized in writing. The date of registration of any Note delivered
  upon any exchange or transfer of Notes shall be such that no gain or loss of
interest results from such exchange or transfer.

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

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

  32

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

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

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

  33

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

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

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

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

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

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

  34

  avoid U.S. federal income tax or as a private foundation or other tax-exempt organization or a bank receiving interest under Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended;

       (d) any tax, assessment or other governmental charge that is payable otherwise than by withholding or deduction from payments on or in respect of this Note;

       (e) any tax, assessment or other governmental charge required to be withheld by any Paying Agent from any payment of principal of, or interest on, this Note, if such payment can be made without such
withholding by any other Paying Agent in a city in Western Europe;

       (f) any tax, assessment or other governmental charge that would not have been imposed but for the failure to comply with certification, information or other reporting requirements concerning the
nationality, residence or identity of the holder or beneficial owner of this Note, if such compliance is required by statute or by regulation of the United States or of any political subdivision or taxing authority thereof or therein as a
precondition to relief or exemption from such tax, assessment or other governmental charge;

       (g) any tax,
  assessment or other governmental charge imposed by reason of such holder’s
  past or present status as the actual or constructive owner of 10% or more of
  the total combined voting power of all classes of stock entitled to vote of
the Issuer or as a direct or indirect subsidiary of the Issuer; or

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

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

       The Senior Indenture permits the Issuer and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of the debt securities of all series issued under the
Senior Indenture then outstanding and affected (voting as one class), to execute supplemental indentures adding any provisions to or changing in any manner the rights of the holders of each series so affected; provided that the Issuer and the Trustee may not, without the

  35

  consent of the holder of each outstanding debt security affected thereby, (a) extend the final maturity of any such debt security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable on redemption thereof, or change the currency of payment thereof, or modify or amend the provisions for conversion of any currency into any other currency, or modify or amend the provisions for
conversion or exchange of the debt security for securities of the Issuer or other entities or for other property or the cash value of the property (other than as provided in the antidilution provisions or other similar adjustment provisions of the
debt securities or otherwise in accordance with the terms thereof), or impair or affect the rights of any holder to institute suit for the payment thereof or (b) reduce the aforesaid percentage in principal amount of debt securities the consent of
the holders of which is required for any such supplemental indenture.

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

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

  36

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

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

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

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

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

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

  37

  whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

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

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

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

  38

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.

 ______________________________

  

 39

 

      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.

40

    

 

 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.
		
		
		

 41

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