Document:

Exhibit
    4.1
	 	 	 
	 	FORM OF FIXED RATE
    SENIOR NOTE	 
	 	 	 
	REGISTERED 

    No. FXR-1
     	     	REGISTERED 

          U.S. $ 

          CUSIP:
                  61747S298
       

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

  MORGAN STANLEY

SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES F

(Fixed Rate)

  STOCK PARTICIPATION ACCRETING

  REDEMPTION QUARTERLY-PAY SECURITIESSM (“SPARQS”)

  

  % SPARQS® DUE JUNE 20, 2008

  MANDATORILY EXCHANGEABLE

  FOR SHARES OF COMMON STOCK OF

  INTEL CORPORATION

   

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

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

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

	
        IF SPECIFIED CURRENCY
    OTHER THAN U.S. DOLLARS, OPTION TO ELECT PAYMENT IN U.S. DOLLARS: N/A
	
        REDEMPTION NOTICE
        PERIOD: At least 10 days but no more than 30 days. See “Morgan Stanley
    Call Right” and “Morgan Stanley Notice Date” below.
	
        APPLICABILITY OF ANNUAL
    INTEREST PAYMENTS: N/A
	If yes, state Issue
    Price: N/A
	EXCHANGE RATE AGENT:
    N/A	
        TAX REDEMPTION AND
    PAYMENT OF ADDITIONAL AMOUNTS: NO
	
        PRICE APPLICABLE UPON
    OPTIONAL REPAYMENT: N/A
	
        ORIGINAL YIELD TO
    MATURITY: N/A

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

	Stated Principal Amount	 	$
	 	 	 
	Underlying Company 	 	Intel Corporation (“INTC”) 
	 	 	 
	Underlying Stock
	      	The common stock of INTC

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	Pricing Date	 	 
	 	 	 
	Issue Price	 	$                per
      SPARQS
	 	 	 
	Denominations	 	$               and integral multiples thereof
	 	 	 
	Acceleration Trigger Price
      	      	The product of $2.00
              and the Exchange Ratio as of the Original Issue Date.
  
	 	 	 
	Exchange Ratio
  	      	            , subject to adjustment
              for corporate events relating to the Underlying Stock described under “Antidilution Adjustments” below.
      
	 	 	 
	Yield to Call	 	     % per annum

	First Call Date

Maturity Date
 	      	December 20, 2007

June 20, 2008, subject to acceleration as described
    below in “Price Event Acceleration” and “Alternate Exchange Calculation in Case of an Event of Default” and subject to extension if the Final Call Notice
Date is postponed in accordance with the definition thereof. If the Final Call Notice Date is postponed because it is not a Trading Day or due to a Market Disruption Event and the Issuer exercises the Morgan Stanley Call Right, the scheduled
Maturity Date shall be postponed so that the Maturity Date is the tenth calendar day following the Final Call Notice Date. See “Final Call Notice Date” below.

In the event that the Final Call Notice Date is
    postponed because it is not a Trading Day or due to a Market Disruption Event
    or otherwise, the Issuer shall give notice of such postponement as promptly
    as possible, and in no case later than two Business Days following the scheduled
    Final Call Notice Date, (i) to the holder of this SPARQS by mailing notice
    of such postponement by first class mail, postage prepaid, to the holder’s last address as it shall appear upon
the registry books, (ii) to the Trustee by telephone or facsimile confirmed by mailing such notice to the Trustee by first class mail, postage prepaid, at its New York office and (iii) to The Depository Trust Company (the “Depositary”)
by telephone or facsimile confirmed by mailing such notice to the Depositary
by first class mail, postage prepaid. Any notice that is mailed in the manner
herein provided shall be conclusively
        

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	     	      	presumed to have been
              duly given, whether or not the holder of this SPARQS receives the notice.
              Notice of the date to which the Maturity Date has been rescheduled as
              a result of postponement of the Final Call Notice Date, if applicable,
              shall be included in the Issuer’s notice of exercise of the Morgan
              Stanley Call Right.
    
	 	 	 
	Interest Payment Dates
  	      	September 20, 2007, December 20, 2007, March 20, 2008 and the Maturity Date.

If the scheduled Maturity Date is postponed, the Issuer shall pay interest on the Maturity Date as postponed rather than on the scheduled Maturity Date, but no interest shall accrue on this SPARQS or on such payment during the
period from or after the scheduled Maturity Date.
    
	 	 	 
	Record Date
     	      	Notwithstanding the definition
              of “Record Date” below, the Record Date for each Interest Payment
              Date, including the Interest Payment Date scheduled to occur on the Maturity
              Date, shall be the date 5 calendar days prior to such scheduled Interest
              Payment Date, whether or not that date is a Business Day; provided, however,
              that in the event that the Issuer exercises the Morgan Stanley Call Right,
              no Interest Payment Date shall occur after the Morgan Stanley Notice Date,
              except for any Interest Payment Date for which the Morgan Stanley Notice
              Date falls on or after the “ex- interest” date for the related
              interest payment, in which case the related interest payment shall be
              made on such Interest Payment Date; and provided, further, that
              accrued but unpaid interest payable on the Call Date, if any, shall be
              payable to the person to whom the Call Price is payable. The “ex-interest” date
              for any interest payment is the date on which purchase transactions in
              the SPARQS no longer carry the right to receive such interest payment.

In the event that the Issuer exercises the Morgan
    Stanley Call Right and the Morgan Stanley Notice Date falls before the “ex-interest” date
    for an interest payment, so that as a result a scheduled Interest Payment
    Date does not occur, the Issuer shall cause the Calculation Agent to give
    notice to the Trustee and to the Depositary, in each case in the manner and
    at the time described in the second and third paragraphs
 

  4

	     	      	under “Morgan Stanley Call Right” below,
              that no Interest Payment Date shall occur after such Morgan Stanley Notice
              Date.
  
	 	 	 
	Morgan Stanley Call Right
       	      	On any scheduled Trading Day on or after the First Call Date or on the Maturity Date (including the Maturity Date as it may be extended and regardless of whether the Maturity Date is a Trading Day), the
Issuer may call the SPARQS, in whole but not in part, for mandatory exchange for the Call Price paid in cash (together with accrued but unpaid interest) on the Call Date.

On the Morgan Stanley Notice Date, the Issuer
    shall give notice of the Issuer’s exercise of the Morgan Stanley Call
    Right (i) to the holder of this SPARQS by mailing notice of such exercise,
    specifying the Call Date on  which the Issuer shall effect such exchange,
    by first class mail, postage prepaid, to the holder’s
last address as it shall appear upon the registry books, (ii) to the Trustee
by telephone or facsimile confirmed by mailing such notice to the Trustee by
first class mail, postage prepaid, at its New York office and (iii) to the Depositary
in accordance with the applicable procedures set forth in the Blanket Letter
of Representations prepared by the Issuer. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the holder of this SPARQS receives the notice. Failure to give
notice by mail or any defect in the notice to the holder of any SPARQS shall
not affect the validity of the proceedings for the exercise of the Morgan Stanley
Call Right with respect to any other SPARQS.
 
	 	 	 
	 	 	The notice of the Issuer’s exercise of
      the Morgan Stanley Call Right shall specify (i) the Call Date, (ii) the
      Call Price payable per SPARQS, (iii) the amount of accrued but unpaid interest
      payable per SPARQS on the Call Date, (iv) whether any subsequently scheduled
      Interest Payment Date shall no longer be an Interest Payment Date as a
      result of the exercise of the Morgan Stanley Call Right, (v) the place
      or places of payment of such Call Price, (vi) that such delivery shall
      be made upon presentation and surrender of this SPARQS, (vii) that such
    exchange is pursuant to the Morgan Stanley 

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	  	      	Call Right and (viii)
              if applicable, the date to which the Maturity Date has been extended due
              to a Market Disruption Event as described under “Maturity Date” above.

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

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

If this SPARQS is not surrendered for exchange
    on the Call Date, it shall be deemed to be no longer Outstanding under, and
    as defined in, the Senior Indenture after the Call Date, except with respect
    to the holder’s right
to receive cash due in connection with the Morgan Stanley Call Right.
        
	 	 	 
	Morgan Stanley Notice Date
      	      	The scheduled Trading Day on which the Issuer issues its notice of mandatory exchange, which must be at least 10 but not more than 30 calendar days prior to the Call Date.
     
	 	 	 
	Final Call Notice Date
  	      	June 10, 2008; provided that if such date is not a Trading Day or if a Market Disruption Event occurs on such day, the Final Call Notice Date
shall be the immediately succeeding Trading Day on which no Market Disruption Event occurs.
   
	 	 	 
	Call Date
       	      	The day specified in
              the Issuer’s notice of mandatory exchange, on which the Issuer shall deliver cash to the holder of this SPARQS, for mandatory exchange, which day may be any scheduled Trading
Day on or after the First Call Date or the Maturity Date (including the Maturity Date as it may be extended and regardless of whether the Maturity Date is a scheduled Trading Day). See “Maturity Date” above.
    

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	Call
    Price	 	The Call Price with respect to
        any Call Date is an amount of cash per each Stated Principal Amount of
        this SPARQS, as calculated by the Calculation Agent, such that the sum
        of the present values of all cash flows on each Stated Principal Amount
        of this SPARQS to and including the Call Date (i.e.,
        the Call Price and all of the interest payments, including accrued and
        unpaid interest payable on the Call Date), discounted to the Original
        Issue Date from the applicable payment date at the Yield to Call rate
        computed on the basis of a 360-day year of twelve 30-day months, equals
    the Stated Principal Amount, as determined by the Calculation Agent. 
	 	 	 
	Exchange
    at Maturity	 	At maturity,
          subject to a prior call of this SPARQS for cash in an amount equal
          to the Call Price by the Issuer as described under “Morgan Stanley
          Call Right” above or any acceleration of the SPARQS, upon delivery
          of this SPARQS to the Trustee, each Stated Principal Amount of this
          SPARQS shall be applied by the Issuer as payment for a number of shares
          of the Underlying Stock at the Exchange Ratio, and the Issuer shall
          deliver with respect to each Stated Principal Amount of this SPARQS
          an amount of the Underlying Stock equal to the Exchange Ratio. 

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

       The Issuer shall, or shall
          cause the Calculation Agent to, provide written notice to the Trustee
          at its New York Office and to the Depositary, on which notice the Trustee
          and Depositary may conclusively rely, on or prior to 10:30 a.m. on
    the Trading Day immediately

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	  	      	prior to maturity of this SPARQS (but if such Trading Day is not a Business Day, prior to the close of business on the Business Day preceding the maturity of this SPARQS), of the amount of Underlying
Stock (or the amount of Exchange Property) or cash to be delivered with respect to each Stated Principal Amount of this SPARQS and of the amount of any cash to be paid in lieu of any fractional share of the Underlying Stock (or of any other
securities included in Exchange Property, if applicable); provided that
if the maturity date of this SPARQS is accelerated (x) because of a Price Event
Acceleration (as described under
“Price Event Acceleration” below) or (y) because of an Event of Default Acceleration (as defined under “Alternate Exchange Calculation in Case of an Event of Default” below), the Issuer shall give notice of such acceleration as
promptly as possible, and in no case later than (A) in the case of an Event of Default Acceleration, two Trading Days following such deemed maturity date or (B) in the case of a Price Event Acceleration, 10:30 a.m. on the Trading Day immediately
prior to the date of acceleration (as defined under “Price Event Acceleration” below), (i) to the holder of this SPARQS by mailing notice of such acceleration by first class mail, postage prepaid, to the holder’s
last address as it shall appear upon the registry books, (ii) to the Trustee
by telephone or facsimile confirmed by mailing such notice to the Trustee by
first class mail, postage prepaid, at its New York office and (iii) to the Depositary
by telephone or facsimile confirmed by mailing such notice to the Depositary
by first class mail, postage prepaid. Any notice that is mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the holder of this SPARQS receives the notice. If the maturity of this
SPARQS is accelerated, no interest on the amounts payable with respect to this
SPARQS shall accrue for the period from and after such accelerated maturity date; provided
that the Issuer has deposited with the Trustee the Underlying Stock, the Exchange Property or any cash due with respect to such acceleration by such accelerated maturity date.

The Issuer shall, or shall cause the Calculation Agent to, deliver any such shares of the Underlying Stock (or any Exchange Property) and cash in respect of interest
 

  8

	  	      	and any fractional share
              of the Underlying Stock (or any Exchange Property) and cash otherwise
              due upon any acceleration described above to the Trustee for delivery
              to the holder of this Note. References to payment “per SPARQS” refer
              to each Stated Principal Amount of this SPARQS.

If this SPARQS is not surrendered for exchange
    at maturity, it shall be deemed to be no longer Outstanding under, and as
    defined in, the Senior Indenture, except with respect to the holder’s
    right to receive Underlying Stock (and, if applicable, any Exchange Property)
    and any cash in respect of interest and any fractional share of the Underlying
    Stock (or any Exchange Property) and any other cash due at maturity as described
    in the preceding paragraph under this heading.
   
	 	 	 
	Price Event Acceleration
        	      	If on any two consecutive
              Trading Days during the period prior to and ending on the third Business
              Day immediately preceding the Maturity Date, the product of the Closing
              Price of the Underlying Stock and the Exchange Ratio is less than the
              Acceleration Trigger Price, the Maturity Date of this SPARQS shall be
              deemed to be accelerated to the third Business Day immediately following
              such second Trading Day (the “date of acceleration”).
Upon such acceleration, the holder of each Stated Principal Amount of this SPARQS
              shall receive per SPARQS on the date of acceleration:

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

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

    (iii) an amount of cash as determined by the
      Calculation Agent equal to the sum of the present values of the remaining
      scheduled payments of interest on each Stated Principal Amount of this
      SPARQS (excluding the amounts included in clause (ii) above) discounted
      to the date of acceleration. The present value of each remaining scheduled
      payment shall be based on the comparable yield that the Issuer would
      pay on a

  

  9

	 	 	
    non-interest bearing, senior unsecured debt
      obligation of the Issuer having a maturity equal to the term of each such
      remaining scheduled payment, as determined by the Calculation Agent.

  

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

	 	 	• 	if the Underlying Stock (or any
      such other security) is listed or admitted
      to trading on a national securities
      exchange (other than The NASDAQ Stock
      Market LLC (the “NASDAQ”)), the last reported
      sale price, regular way, of the principaltrading session on such day on
      the principalnational securities exchange registered under theSecurities
      Exchange Act of 1934, as amended (the“Exchange Act”), on which
      the Underlying Stock(or any such other security) is listed or admitted
    totrading,
	 	 	 	 
	 	 	• 	if the Underlying Stock (or any
      such other security) is a security of
      the NASDAQ, the official closing price
    published by the NASDAQ on such day, or
	 	 	 	 
	 	 	• 	if the Underlying Stock (or any such other
      security) is not listed or admitted
      to trading on any national securities
      exchange but is included in the OTC Bulletin Board Service (the “OTC Bulletin Board”) operated
      by the National Association of SecuritiesDealers, Inc., the last reported
    sale price of the

10

  

	 	 	 	principal trading session on
    the OTC Bulletin Board on such day.

	     	      	If the Underlying Stock
              (or any such other security) is listed or admitted to trading on any national
              securities exchange but the last reported sale price or the official closing
              price published by NASDAQ, as applicable, is not available pursuant to
              the preceding sentence, then the Closing Price for one share of the Underlying
              Stock (or one unit of any such other security) on any Trading Day shall
              mean the last reported sale price of the principal trading session on
              the over-the-counter market as reported on the NASDAQ or the OTC Bulletin
              Board on such day. If a Market Disruption Event occurs with respect to
              the Underlying Stock (or any such other security) or the last reported
              sale price or the official closing price published by NASDAQ, as applicable,
              for the Underlying Stock (or any such other security) is not available
              pursuant to either of the two preceding sentences, then the Closing Price
              for any Trading Day shall be the mean, as determined by the Calculation
              Agent, of the bid prices for the Underlying Stock (or any such other security)
              for such Trading Day obtained from as many recognized dealers in such
              security, but not exceeding three, as shall make such bid prices available
              to the Calculation Agent. Bids of MS & Co. or any of its affiliates may be included in the calculation of such mean, but only to the extent that any such bid is the highest of the bids obtained. The term “OTC Bulletin Board
Service” shall include any successor service thereto.
   
	 	 	 
	Trading Day
     	      	A day, as determined
              by the Calculation Agent, on which trading is generally conducted on the
              New York Stock Exchange LLC (“NYSE”), the American Stock Exchange
              LLC, the NASDAQ, the Chicago Mercantile Exchange, the Chicago Board of
              Options Exchange and in the over-the-counter market for equity securities
              in the United States and, if the principal trading market of the Underlying
              Stock is outside the United States, in such principal trading market.
  
	 	 	 
	Calculation Agent
       	      	Morgan Stanley & Co. Incorporated (“MS & Co.”)
              and its successors.

All calculations with respect to the Exchange Ratio and Call Price for the SPARQS shall be made by the
        

  11

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

All determinations made by the Calculation Agent shall be at the sole discretion of the Calculation Agent and shall, in the absence of manifest error, be conclusive for all purposes and binding on the holder of this SPARQS, the
Trustee and the Issuer.
      
	 	 	 
	Antidilution Adjustments
        	      	The Exchange Ratio shall be adjusted as follows:

1. If the 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
       

  12

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

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

  13

	  	      	Extraordinary Dividend
              (such closing price, the “Base Closing Price”). Subject to the following sentence, if an Extraordinary Dividend occurs with respect to the Underlying Stock, the Exchange
Ratio with respect to the Underlying Stock shall be adjusted on the ex- dividend date with respect to such Extraordinary Dividend so that the new Exchange Ratio shall equal the product of (i) the then current Exchange Ratio and (ii) a fraction, the
numerator of which is the Base Closing Price, and the denominator of which is the amount by which the Base Closing Price exceeds the Extraordinary Dividend Amount. If any Extraordinary Dividend Amount is at least 35% of the Base Closing Price, then,
instead of adjusting the Exchange Ratio, the amount payable upon exchange at maturity shall be determined as described in paragraph 5 below, and the Extraordinary Dividend shall be allocated to Reference Basket Stocks in accordance with the
procedures for a Reference Basket Event as described in clause (c)(ii) of paragraph 5 below. The “Extraordinary Dividend Amount” with
respect to an Extraordinary Dividend for the Underlying Stock shall equal (i)
in the case of cash dividends or other distributions that constitute regular
dividends, the amount per share of such Extraordinary Dividend minus the amount
per share of the immediately preceding non-Extraordinary Dividend for the Underlying
Stock or (ii) in the case of cash dividends or other distributions that do not
constitute regular dividends, the amount per share of such Extraordinary Dividend.
The value of the non- cash component of an Extraordinary Dividend shall be determined
on the ex-dividend date for such distribution by the Calculation Agent, whose
determination shall be conclusive in the absence of manifest error. A distribution
on the Underlying Stock described in clause (i), (iv) or (v) of the first sentence
of paragraph 5 below shall cause an adjustment to the Exchange Ratio pursuant
only to clause (i), (iv) or (v) of the first sentence of paragraph 5, as applicable.

5. Any of the following shall constitute a Reorganization Event: (i) the Underlying Stock is reclassified or changed, including, without limitation, as a result of the issuance of any tracking stock by the Underlying Company,
(ii) the Underlying Company has been subject to any merger, combination or
   

  14

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

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

    (b) for each Marketable Security received
      in such Reorganization Event (each a “New Stock”), including
      the issuance of any tracking stock or spinoff stock or the receipt of
      any stock received in exchange for the Underlying Stock, the number of
      shares of the New Stock received with respect to one share of Underlying
      Stock multiplied by the Exchange Ratio for Underlying Stock on the Trading
      Day immediately prior to the effective date of the Reorganization Event
      (the “New Stock Exchange Ratio”), as adjusted to the third
      Trading

  

  15

	  	      	 	Day prior to the scheduled Maturity Date (taking into account any adjustments for distributions described under clause (c)(i) below); and
         (c) for any cash and any other property or securities
    other than Marketable Securities received in such Reorganization Event (the “Non-Stock Exchange Property”),

		 	 	 	 
		 	 	 	(i) if the combined value of the amount of
      Non-Stock Exchange Property received per 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

  16

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

  17

	  	      	 	 	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.
     Following the occurrence of
        any Reorganization Event referred to in paragraphs 4 or 5 above, (i)
    references to

18

	  	      	“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 shall be rounded to the nearest one hundred- thousandth, with five one-millionths rounded upward. Adjustments to the Exchange Ratios shall be made up to
the close of business on the third Trading Day prior to the scheduled Maturity Date.

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

The Calculation Agent shall be solely responsible for the determination and calculation of any adjustments to the Exchange Ratio, any New Stock Exchange Ratio or
     

  19

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

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

  20

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

	      	In case an event of default
              with respect to the SPARQS shall have occurred and be continuing, the
              amount declared due and payable per each Stated Principal Amount of this
              SPARQS upon any acceleration of this SPARQS (an “Event of Default Acceleration”)
              shall be determined by the Calculation Agent and shall be an amount in
              cash equal to the lesser of (i) the product of (x) the Closing Price of
              the Underlying Stock (and/or the value of any Exchange Property) as of
              the date of such acceleration and (y) the then current Exchange Ratio
              and (ii) the Call Price calculated as though the date of acceleration
              were the Call Date (but in no event less than the Call Price for the first
              Call Date), in each
    

  21

	     	      	case plus accrued but unpaid interest to but excluding the date of acceleration; provided that
                if the Issuer has called the SPARQS in accordance with the Morgan Stanley
                Call Right, the amount declared due and payable upon any such acceleration
                shall be an amount in cash for each Stated Principal Amount of this
                SPARQS equal to the Call Price for the Call Date specified in the Issuer’s
                notice of mandatory exchange, plus accrued but unpaid interest to but
                excluding the date of acceleration.
   

  22

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

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

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

  23

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

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

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

       If the holder elects to receive all or a portion of payments of principal of, premium, if any, and interest on this Note, if denominated in a Specified Currency other than U.S. dollars, in U.S.
dollars, the Exchange Rate Agent (as defined on the reverse hereof) will convert such payments into U.S. dollars. In the event of such an election, payment in respect of this Note will be based upon the exchange rate as determined by the Exchange
Rate Agent based on the highest bid quotation in The City of New York received by such Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the second Business Day preceding the applicable payment date from three recognized
foreign exchange dealers (one of which may be the Exchange Rate Agent unless such Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the quoting dealer of the Specified Currency for U.S. dollars for settlement on such payment
date in the amount of the Specified Currency payable in the absence of such an election to such holder

  24

  and at which the applicable dealer commits to execute a contract. If such bid quotations are not available, such payment will be made in the Specified Currency. All currency exchange costs will be borne by the holder of this Note
by deductions from such payments.

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

       Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Senior
Indenture, as defined on the reverse hereof, or be valid or obligatory for any purpose.

  25

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

	DATED: 	 	MORGAN STANLEY 
	 	 	 	 	 
	 	 	By:	 
	 	 	 	

	 	 	 	Name:	 
	 	 	 	Title:	 

TRUSTEE’S CERTIFICATE

    OF
AUTHENTICATION

 This is one of the
    Notes referred

      to
  in the within-mentioned

      Senior
  Indenture.

  	THE BANK OF NEW YORK,
      as
	      Trustee 
	 	 	 
	By:	 
	 	

	 	Authorized Signatory  

 

  26

  FORM OF REVERSE OF SECURITY

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

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

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

  27

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

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

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

  28

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

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

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

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

  29

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

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

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

  30

  acceleration of payment of this Note, the principal amount hereof shall equal the amount of principal due and payable with respect to this Note, calculated as set forth in clause (i) above.

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

       If the face
  hereof indicates that this Note is subject to “Tax Redemption and Payment of Additional Amounts,” this Note may be redeemed, as a whole, at the option of the Issuer at any time
prior to maturity, upon the giving of a notice of redemption as described below, at a redemption price equal to 100% of the principal amount hereof, together with accrued interest to the date fixed for redemption (except that if this Note is subject
to “Modified Payment upon Acceleration or Redemption,” the amount of
principal so payable will be limited to the aggregate principal amount hereof
multiplied by the sum of the Issue Price specified on the face hereof (expressed
as a percentage of the aggregate principal amount) plus the original issue discount
accrued from the Interest Accrual Date to the date of redemption (expressed as
a percentage of the aggregate principal amount), with the amount of original
issue discount accrued being calculated using a constant yield method (as described
above)), if the Issuer determines that, as a result of any change in or amendment
to the laws (including a holding, judgment or as ordered by a court of competent
jurisdiction), or any regulations or rulings promulgated thereunder, of the United
States or of any political subdivision or taxing authority thereof or therein
affecting taxation, or any change in official position regarding the application
or interpretation of such laws, regulations or rulings, which change or amendment
occurs, becomes effective or, in the case of a change in official position, is
announced on or after the Initial Offering Date hereof, the Issuer has or will
become obligated to pay Additional Amounts, as defined below, with respect to
this Note as described below. Prior to the giving of any notice of redemption
pursuant to this paragraph, the Issuer shall deliver to the Trustee (i) a certificate
stating that the Issuer is entitled to effect such redemption and setting forth
a statement of facts showing that the conditions precedent to the right of the
Issuer to so redeem have occurred, and (ii) an opinion of independent legal counsel
satisfactory to the Trustee to such effect based on such statement of facts; provided that no such notice of redemption shall be given earlier than 60 calendar days prior to the earliest date on which the Issuer would be obligated to
pay such Additional Amounts if a payment in respect of this Note were then due.

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

  31

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

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

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

       (c) any tax,
  assessment or other governmental charge imposed by reason of such holder’s
  past or present status as a controlled foreign corporation or passive foreign
  investment company with respect to the United States or as a corporation which
  accumulates earnings to avoid U.S. federal income tax or as a private foundation
  or other tax-exempt organization or a bank receiving interest under Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended;

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

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

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

  32

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

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

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

       The Senior Indenture permits the Issuer and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of the debt securities of all series issued under the
Senior Indenture then outstanding and affected (voting as one class), to execute supplemental indentures adding any provisions to or changing in any manner the rights of the holders of each series so affected; provided that the Issuer and the Trustee may not, without the consent of the holder of each outstanding debt security affected thereby, (a) extend the final maturity of any such debt security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof, or change the currency of payment thereof, or modify or amend the provisions for conversion of any
currency into any other currency, or modify or amend the provisions for conversion or exchange of the debt security for securities of the Issuer or other entities or for other property or the cash value of the property (other than as provided in the
antidilution provisions or other similar adjustment provisions of the debt securities or otherwise in accordance with the terms thereof), or impair or affect the rights of any holder to institute suit for the payment thereof or (b) reduce the
aforesaid percentage in principal amount of debt securities the consent of the holders of which is required for any such supplemental indenture.

       Except as set forth below, if the principal of, premium, if any, or interest on this Note is payable in a Specified Currency other than U.S. dollars and such Specified Currency is not available to the
Issuer for making payments hereon due to the imposition of exchange controls or other circumstances beyond the control of the Issuer or is no longer used by the government of the country issuing such currency or for the settlement of transactions by
public institutions within the international banking community, then the Issuer will be entitled to satisfy its obligations to the holder of this Note by making such payments in U.S. dollars on the basis of the Market Exchange Rate on the date of
such payment or, if the Market Exchange Rate is not available on such date, as of the most recent practicable date; provided, however, that if the euro

  33

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

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

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

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

       With respect to moneys paid by the Issuer and held by the Trustee or any Paying Agent for payment of the principal of or interest or premium, if any, on any Notes that remain unclaimed at the end of
two years after such principal, interest or premium shall have become due and payable (whether at maturity or upon call for redemption or otherwise), (i) the Trustee or such Paying Agent shall notify the holders of such Notes that such moneys shall
be repaid to the Issuer and any person claiming such moneys shall thereafter look only to the Issuer for payment thereof and (ii) such moneys shall be so repaid to the Issuer. Upon such repayment all liability

  34

  of the Trustee or such Paying Agent with respect to such moneys shall thereupon cease, without, however, limiting in any way any obligation that the Issuer may have to pay the principal of or interest or premium, if any, on this
Note as the same shall become due.

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

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

       No recourse shall be had for the payment of the principal of, premium, if any, or the interest on this Note, for any claim based hereon, or otherwise in respect hereof, or based on or in respect of
the Senior Indenture or any indenture supplemental thereto, against any incorporator, shareholder, officer or director, as such, past, present or future, of the Issuer or of any successor corporation, either directly or through the Issuer or any
successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

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

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

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

  35

ABBREVIATIONS

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

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

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

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

	 	 	 	 
	 	 	 
	 
				

 

  36

     FOR
    VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
    unto

 ____________________________________________

  [PLEASE INSERT SOCIAL SECURITY OR OTHER

        IDENTIFYING
  NUMBER OF ASSIGNEE]

	 

	 
	 

	 
	 

	[PLEASE PRINT
          OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

the within Note and
    all rights thereunder, hereby irrevocably constituting and appointing such
    person attorney to transfer such note on the books of the Issuer, with full
    power of substitution in the premises.

 Dated: _______________________

 

	NOTICE:	 The signature
        to this assignment must correspond with the name as written upon the
        face of the within Note in every particular without alteration or enlargement
        or any change whatsoever.

  37

  OPTION TO ELECT REPAYMENT

      The
    undersigned hereby irrevocably requests and instructs the Issuer to repay
    the within Note (or portion thereof specified below) pursuant to its terms
    at a price equal to the principal amount thereof, together with interest
    to the Optional Repayment Date, to the undersigned at

	 

	 
	 

	 
	 

	(Please print
        or typewrite name and address of the undersigned)

       If
  less than the entire principal amount of the within Note is to be repaid, specify
  the portion thereof which the holder elects to have repaid: _________________;
  and specify the denomination or denominations (which shall not be less than
  the minimum authorized denomination) of the Notes to be issued to the holder
  for the portion of the within Note not being repaid (in the absence of any
  such specification, one such Note will be issued for the portion not being
  repaid): __________________.

	 	 	 
	Dated:
        ________________________ 	 	_________________________________________
			NOTICE: The signature
        on this Option to Elect 

      Repayment must correspond with the name as 

      written upon the face of the within instrument in 

      every particular without alteration or enlargement.

 38Exhibit 4.1
	 	 	 
	 	FORM OF FIXED RATE SENIOR NOTE	 
	 	 	 
	REGISTERED No. 

          FXR-1
  	     	REGISTERED 

          U.S. $ 

          CUSIP: 61750V162
       

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

MORGAN STANLEY

SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES F

(Fixed Rate)

     STOCK PARTICIPATION ACCRETING 

REDEMPTION QUARTERLY-PAY SECURITIESSM (“SPARQS”)

% SPARQS® DUE JUNE 20, 2008

MANDATORILY EXCHANGEABLE

FOR SHARES OF COMMON STOCK OF

LYONDELL CHEMICAL COMPANY

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

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

    N/A

    
	
        SPECIFIED CURRENCY:
          

      U.S. dollars

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

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

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

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

	Stated Principal Amount	 	$
	 	 	 
	Underlying Company 	 	Lyondell Chemical Company (“LYO”)
	 	 	 
	Underlying Stock

	      	The common stock of LYO

2

 

	Pricing Date	 	 
	 	 	 
	Issue Price	 	$                    per
        SPARQS
	 	 	 
	Denominations	 	$                    and
        integral multiples thereof
	 	 	 
	Acceleration Trigger Price 	 	The product of $2.00 and the Exchange
        Ratio as of the Original Issue Date.
	 	 	 
	Exchange Ratio	 	           ,
        subject to adjustment for corporate events relating to the Underlying
        Stock described under “Antidilution Adjustments” below
	 	 	 
	Yield to Call	 	      % per
        annum
	 	 	 
	First Call Date

        Maturity Date
	 	December 20, 2007

        June 20, 2008, subject to acceleration
            as described below in “Price Event Acceleration” and “Alternate
            Exchange Calculation in Case of an Event of Default” and subject
            to extension if the Final Call Notice Date is postponed in accordance
            with the definition thereof. If the Final Call Notice Date is postponed
            because it is not a Trading Day or due to a Market Disruption Event
            and the Issuer exercises the Morgan Stanley Call Right, the scheduled
            Maturity Date shall be postponed so that the Maturity Date is the
            tenth calendar day following the Final Call Notice Date. See “Final
            Call Notice Date” below.

      In the event that the Final Call Notice
          Date is postponed because it is not a Trading Day or due to a Market
          Disruption Event or otherwise, the Issuer shall give notice of such
          postponement as promptly as possible, and in no case later than two
          Business Days following the scheduled Final Call Notice Date, (i) to
          the holder of this SPARQS by mailing notice of such postponement by
          first class mail, postage prepaid, to the holder’s last address
          as it shall appear upon the registry books, (ii) to the Trustee by
          telephone or facsimile confirmed by mailing such notice to the Trustee
          by first class mail, postage prepaid, at its New York office and (iii)
          to The Depository Trust Company (the “Depositary”) by telephone
          or facsimile confirmed by mailing such notice to the Depositary by
          first class mail, postage prepaid. Any notice that is mailed in the
          manner herein provided shall be conclusively

3

	     	      	presumed to have been duly given, whether or not the holder of this SPARQS receives the notice. Notice of the date to which the Maturity Date has been rescheduled as a result of postponement of the
Final Call Notice Date, if applicable, shall be included in the Issuer’s notice of exercise of the Morgan Stanley Call Right.
   
	 	 	 
	Interest Payment Dates
    	      	September 20, 2007, December 20, 2007, March 20, 2008 and the Maturity Date.

If the scheduled Maturity Date is postponed, the Issuer shall pay interest on the Maturity Date as postponed rather than on the scheduled Maturity Date, but no interest shall accrue on this SPARQS or on such payment during the
period from or after the scheduled Maturity Date.
    
	 	 	 
	Record Date
       	      	Notwithstanding the definition of “Record Date” below, the Record Date for each Interest Payment Date, including the Interest Payment Date scheduled to occur on the Maturity Date, shall be the
date 5 calendar days prior to such scheduled Interest Payment Date, whether or not that date is a Business Day; provided, however, that in the event that the Issuer exercises the Morgan
Stanley Call Right, no Interest Payment Date shall occur after the Morgan Stanley Notice Date, except for any Interest Payment Date for which the Morgan Stanley Notice Date falls on or after the “ex- interest” date for the related interest
payment, in which case the related interest payment shall be made on such Interest Payment Date; and provided, further, that accrued but unpaid interest payable on the Call Date, if any,
shall be payable to the person to whom the Call Price is payable. The “ex-interest” date for any interest payment is the date on which purchase transactions in the SPARQS no longer carry the right to receive such interest
payment.

In the event that the Issuer exercises the Morgan Stanley Call Right and the Morgan Stanley Notice Date falls before the “ex-interest” date for an interest payment, so that as a result a scheduled Interest Payment
Date does not occur, the Issuer shall cause the Calculation Agent to give notice to the Trustee and to the Depositary, in each case in the manner and at the time described in the second and third paragraphs
       

4

	     	      	under “Morgan Stanley Call Right” below, that no Interest Payment Date shall occur after such Morgan Stanley Notice Date.
       
	 	 	 
	Morgan Stanley Call Right
 	      	On any scheduled Trading Day on or after the First Call Date or on the Maturity Date (including the Maturity Date as it may be extended and regardless of whether the Maturity Date is a Trading Day), the
Issuer may call the SPARQS, in whole but not in part, for mandatory exchange for the Call Price paid in cash (together with accrued but unpaid interest) on the Call Date.

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

The notice of the Issuer’s exercise of the Morgan Stanley Call Right shall specify (i) the Call Date, (ii) the Call Price payable per SPARQS, (iii) the amount of accrued but unpaid interest payable per SPARQS on the Call
Date, (iv) whether any subsequently scheduled Interest Payment Date shall no longer be an Interest Payment Date as a result of the exercise of the Morgan Stanley Call Right, (v) the place or places of payment of such Call Price, (vi) that such
delivery shall be made upon presentation and surrender of this SPARQS, (vii) that such exchange is pursuant to the Morgan Stanley
    

5

	  	      	Call Right and (viii) if applicable, the date to which the Maturity Date has been extended due to a Market Disruption Event as described under “Maturity Date” above.

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

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

If this SPARQS is not surrendered for exchange on the Call Date, it shall be deemed to be no longer Outstanding under, and as defined in, the Senior Indenture after the Call Date, except with respect to the holder’s right
to receive cash due in connection with the Morgan Stanley Call Right.
        
	 	 	 
	Morgan Stanley Notice Date
        	      	The scheduled Trading Day on which the Issuer issues its notice of mandatory exchange, which must be at least 10 but not more than 30 calendar days prior to the Call Date.
       
	 	 	 
	Final Call Notice Date
    	      	June 10, 2008; provided that if such date is not a Trading Day or if a Market Disruption Event occurs on such day, the Final Call Notice Date
shall be the immediately succeeding Trading Day on which no Market Disruption Event occurs.
  
	 	 	 
	Call Date
 	      	The day specified in the Issuer’s notice of mandatory exchange, on which the Issuer shall deliver cash to the holder of this SPARQS, for mandatory exchange, which day may be any scheduled Trading
Day on or after the First Call Date or the Maturity Date (including the Maturity Date as it may be extended and regardless of whether the Maturity Date is a scheduled Trading Day). See “Maturity Date” above.
    

6

	Call Price	 	The Call Price with respect to
        any Call Date is an amount of cash per each Stated Principal Amount of
        this SPARQS, as calculated by the Calculation Agent, such that the sum
        of the present values of all cash flows on each Stated Principal Amount
        of this SPARQS to and including the Call Date (i.e.,
        the Call Price and all of the interest payments, including accrued and
        unpaid interest payable on the Call Date), discounted to the Original
        Issue Date from the applicable payment date at the Yield to Call rate
        computed on the basis of a 360-day year of twelve 30-day months, equals
    the Stated Principal Amount, as determined by the Calculation Agent. 
	 	 	 
	Exchange at Maturity 	 	At maturity, subject
          to a prior call of this SPARQS for cash in an amount equal to the Call
          Price by the Issuer as described under “Morgan Stanley Call Right” above
          or any acceleration of the SPARQS, upon delivery of this SPARQS to
          the Trustee, each Stated Principal Amount of this SPARQS shall be applied
          by the Issuer as payment for a number of shares of the Underlying Stock
          at the Exchange Ratio, and the Issuer shall deliver with respect to
          each Stated Principal Amount of this SPARQS an amount of the Underlying
          Stock equal to the Exchange Ratio. 

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

       The Issuer shall, or shall cause
          the Calculation Agent to, provide written notice to the Trustee at
          its New York Office and to the Depositary, on which notice the Trustee
          and Depositary may conclusively rely, on or prior to 10:30 a.m. on
    the Trading Day immediately 

 

 

7

	
        	      	prior to maturity of this SPARQS (but if such Trading Day is not a Business Day, prior to the close of business on the Business Day preceding the maturity of this SPARQS), of the amount of Underlying
Stock (or the amount of Exchange Property) or cash to be delivered with respect to each Stated Principal Amount of this SPARQS and of the amount of any cash to be paid in lieu of any fractional share of the Underlying Stock (or of any other
securities included in Exchange Property, if applicable); provided that if the maturity date of this SPARQS is accelerated (x) because of a Price Event Acceleration (as described under
“Price Event Acceleration” below) or (y) because of an Event of Default Acceleration (as defined under “Alternate Exchange Calculation in Case of an Event of Default” below), the Issuer shall give notice of such acceleration as
promptly as possible, and in no case later than (A) in the case of an Event of Default Acceleration, two Trading Days following such deemed maturity date or (B) in the case of a Price Event Acceleration, 10:30 a.m. on the Trading Day immediately
prior to the date of acceleration (as defined under “Price Event Acceleration” below), (i) to the holder of this SPARQS by mailing notice of such acceleration by first class mail, postage prepaid, to the holder’s last address as it
shall appear upon the registry books, (ii) to the Trustee by telephone or facsimile confirmed by mailing such notice to the Trustee by first class mail, postage prepaid, at its New York office and (iii) to the Depositary by telephone or facsimile
confirmed by mailing such notice to the Depositary by first class mail, postage prepaid. Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the holder of this SPARQS
receives the notice. If the maturity of this SPARQS is accelerated, no interest on the amounts payable with respect to this SPARQS shall accrue for the period from and after such accelerated maturity date; provided
that the Issuer has deposited with the Trustee the Underlying Stock, the Exchange Property or any cash due with respect to such acceleration by such accelerated maturity date.

The Issuer shall, or shall cause the Calculation Agent to, deliver any such shares of the Underlying Stock (or any Exchange Property) and cash in respect of interest

        

8

	  	      	and any fractional share of the Underlying Stock (or any Exchange Property) and cash otherwise due upon any acceleration described above to the Trustee for delivery to the holder of this Note.
References to payment “per SPARQS” refer to each Stated Principal Amount of this SPARQS.

If this SPARQS is not surrendered for exchange at maturity, it shall be deemed to be no longer Outstanding under, and as defined in, the Senior Indenture, except with respect to the holder’s right to receive Underlying
Stock (and, if applicable, any Exchange Property) and any cash in respect of interest and any fractional share of the Underlying Stock (or any Exchange Property) and any other cash due at maturity as described in the preceding paragraph under this
heading.
     
	 	 	 
	Price Event Acceleration
  	      	If on any two consecutive Trading Days during the period prior to and ending on the third Business Day immediately preceding the Maturity Date, the product of the Closing Price of the Underlying Stock
and the Exchange Ratio is less than the Acceleration Trigger Price, the Maturity Date of this SPARQS shall be deemed to be accelerated to the third Business Day immediately following such second Trading Day (the “date of acceleration”).
Upon such acceleration, the holder of each Stated Principal Amount of this SPARQS shall receive per SPARQS on the date of acceleration:

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

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

    (iii) an amount of cash as determined by the
      Calculation Agent equal to the sum of the present values of the remaining
      scheduled payments of interest on each Stated Principal Amount of this
      SPARQS (excluding the amounts included in clause (ii) above) discounted
      to the date of acceleration. The present value of each remaining scheduled
      payment shall be based on the comparable yield that the Issuer would
      pay on a

  

9

	  	      	
          non-interest bearing, senior unsecured debt obligation of the Issuer having a maturity equal to the term of each such remaining scheduled payment, as determined by the Calculation Agent.

    

	 	 	 
	 	 	The holder of this SPARQS shall not be entitled
      to receive the return of each Stated Principal Amount of this SPARQS upon
    a Price Event Acceleration.
	 	 	 
	No Fractional Shares
      	      	Upon delivery of this SPARQS to the Trustee at maturity, the Issuer shall deliver the aggregate number of shares of the Underlying Stock due with respect to this SPARQS, as described above, but the
Issuer shall pay cash in lieu of delivering any fractional share of the Underlying Stock in an amount equal to the corresponding fractional Closing Price of such fraction of a share of the Underlying Stock as determined by the Calculation Agent as
of the second scheduled Trading Day prior to maturity of this SPARQS.
        
	 	 	 
	Closing Price
     	      	The Closing Price for one share of the Underlying Stock (or one unit of any other security for which a Closing Price must be determined) on any Trading Day means:
        
	 	 	 
	 	 		 if the Underlying Stock (or any such other
        security) is listed or admitted to trading
        on a national securities exchange (other
        than The NASDAQ Stock Market LLC (the “NASDAQ”)),
        the last reported sale price, regular
        way, of the principal trading session
        on such day on the principal national securities exchange registered under theSecurities
        Exchange Act of 1934, as amended (the “Exchange
        Act”), on which the Underlying Stock (or
        any such other security) is listed or admitted to trading,

        

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

	 if the Underlying Stock (or any such other
        security) is not listed or admitted
        to trading on any national securities
        exchange but is included in the OTC
         Bulletin Board Service (the “OTC Bulletin
        Board”) operated by the National
        Association of Securities Dealers, Inc.,
        the last reported sale price of the principal trading session on the OTC Bulletin
                Board
        on such day.

  

10

	     	      	If the Underlying Stock (or any such other security) is listed or admitted to trading on any national securities exchange but the last reported sale price or the official closing price published by
NASDAQ, as applicable, is not available pursuant to the preceding sentence, then the Closing Price for one share of the Underlying Stock (or one unit of any such other security) on any Trading Day shall mean the last reported sale price of the
principal trading session on the over-the-counter market as reported on the NASDAQ or the OTC Bulletin Board on such day. If a Market Disruption Event occurs with respect to the Underlying Stock (or any such other security) or the last reported sale
price or the official closing price published by NASDAQ, as applicable, for the Underlying Stock (or any such other security) is not available pursuant to either of the two preceding sentences, then the Closing Price for any Trading Day shall be the
mean, as determined by the Calculation Agent, of the bid prices for the Underlying Stock (or any such other security) for such Trading Day obtained from as many recognized dealers in such security, but not exceeding three, as shall make such bid
prices available to the Calculation Agent. Bids of MS & Co. or any of its affiliates may be included in the calculation of such mean, but only to the extent that any such bid is the highest of the bids obtained. The term “OTC Bulletin Board
Service” shall include any successor service thereto.
   
	 	 	 
	Trading Day
       	      	A day, as determined by the Calculation Agent, on which trading is generally conducted on the New York Stock Exchange LLC (“NYSE”), the American Stock Exchange LLC, the NASDAQ, the Chicago
Mercantile Exchange, the Chicago Board of Options Exchange and in the over-the-counter market for equity securities in the United States and, if the principal trading market of the Underlying Stock is outside the United States, in such principal
trading market.
      
	 	 	 
	Calculation Agent
 	      	Morgan Stanley & Co. Incorporated (“MS & Co.”) and its successors.

All calculations with respect to the Exchange Ratio and Call Price for the SPARQS shall be made by the Calculation Agent and shall be rounded to the nearest one hundred-thousandth, with five one-millionths
   

11

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

All determinations made by the Calculation Agent shall be at the sole discretion of the Calculation Agent and shall, in the absence of manifest error, be conclusive for all purposes and binding on the holder of this SPARQS, the
Trustee and the Issuer.
      
	 	 	 
	Antidilution Adjustments
  	      	The Exchange Ratio shall be adjusted as follows:

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

2. If the Underlying Stock is subject (i) to a stock
    dividend (issuance of additional shares of the Underlying Stock) that is
    given ratably to all holders of shares of the Underlying Stock or (ii) to
    a distribution of the  Underlying Stock as a result of the triggering of
    any provision of the corporate charter of the Underlying Company, then once
    the dividend has become effective and the Underlying Stock is trading ex-dividend,
    the Exchange Ratio shall be adjusted so  that the new Exchange Ratio shall
    equal the prior Exchange Ratio plus the product of (i) the number of shares
issued with respect to one share of the Underlying
Stock and (ii) the prior Exchange Ratio.
     
	  	     	 
	     	      	3. If the Underlying Company issues rights or warrants to all holders of the Underlying Stock to subscribe for or purchase Underlying Stock at an exercise price per share less than the Closing Price of
the Underlying Stock on both (i) the date the exercise price of such rights or warrants is determined and (ii) the expiration date of such rights or warrants, and if the
    

12

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

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

        

13

	
        	      	an Extraordinary Dividend occurs with respect to the Underlying Stock, the Exchange Ratio with respect to the Underlying Stock shall be adjusted on the ex- dividend date with respect to such
Extraordinary Dividend so that the new Exchange Ratio shall equal the product of (i) the then current Exchange Ratio and (ii) a fraction, the numerator of which is the Base Closing Price, and the denominator of which is the amount by which the Base
Closing Price exceeds the Extraordinary Dividend Amount. If any Extraordinary Dividend Amount is at least 35% of the Base Closing Price, then, instead of adjusting the Exchange Ratio, the amount payable upon exchange at maturity shall be determined
as described in paragraph 5 below, and the Extraordinary Dividend shall be allocated to Reference Basket Stocks in accordance with the procedures for a Reference Basket Event as described in clause (c)(ii) of paragraph 5 below. The
“Extraordinary Dividend Amount” with respect to an Extraordinary Dividend for the Underlying Stock shall equal (i) in the case of cash dividends or other distributions that constitute regular dividends, the amount per share of such
Extraordinary Dividend minus the amount per share of the immediately preceding non-Extraordinary Dividend for the Underlying Stock or (ii) in the case of cash dividends or other distributions that do not constitute regular dividends, the amount per
share of such Extraordinary Dividend. The value of the non- cash component of an Extraordinary Dividend shall be determined on the ex-dividend date for such distribution by the Calculation Agent, whose determination shall be conclusive in the
absence of manifest error. A distribution on the Underlying Stock described in clause (i), (iv) or (v) of the first sentence of paragraph 5 below shall cause an adjustment to the Exchange Ratio pursuant only to clause (i), (iv) or (v) of the first
sentence of paragraph 5, as applicable.

5. Any of the following shall constitute a Reorganization Event: (i) the Underlying Stock is reclassified or changed, including, without limitation, as a result of the issuance of any tracking stock by the Underlying Company,
(ii) the Underlying Company has been subject to any merger, combination or consolidation and is not the surviving entity, (iii) the Underlying Company completes a statutory exchange

        

14

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

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

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

  

15

	     	      	 	into account any adjustments
          for distributions described under clause (c)(i) below); and
           (c) for
            any cash and any other property or securities other than Marketable
            Securities received in such Reorganization Event (the “Non-Stock
    Exchange Property”),

	 	 	 	 	 
	 	 	 	 	(i) if the combined value of the amount of Non-Stock
      Exchange Property received per 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-
        

16

	     	      	 	 	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 constitute the S&P 500 Index (or, if publication of such index is discontinued, any successor or substitute index selected by the Calculation Agent in its sole discretion) with the same primary Standard
Industrial Classification Code (“SIC Code”) as the Underlying Company; provided, however, that a Reference Basket Stock shall not include any stock that is subject to a trading
restriction under the trading restriction policies of Morgan Stanley or any of its affiliates that would materially limit the ability of Morgan Stanley or any of its affiliates to hedge the SPARQS with respect to such stock (a “Hedging
Restriction”); provided further that if three Reference Basket Stocks cannot be identified from the S&P 500 Index by primary SIC Code for which a Hedging Restriction does not exist,
the remaining Reference Basket Stock(s) shall be selected by the Calculation Agent from the largest market capitalization stock(s) within the same Division and Major Group classification (as defined by the Office of Management and Budget) as the
primary SIC Code for the Underlying Company. Each Reference Basket Stock shall be assigned a Basket Stock Exchange Ratio equal to the number of shares of such Reference Basket Stock with a Closing Price on the effective date of such Reorganization
Event equal to the product of (a) the Non-Stock Exchange Property Value, (b) the Exchange Ratio in effect for the Underlying Stock on the Trading Day immediately prior to the effective date of such Reorganization Event and (c) 0.3333333.
        

17

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

        

	 	 	
(x)	
if applicable, the Underlying Stock at the Exchange Ratio then in effect; and  
	 
	 	 	
(y)       	
if applicable, for each New Stock, such New Stock at the New Stock Exchange Ratio then in effect for such New Stock; and       
	 
	 	 	
(z)	
if applicable, for each Reference Basket Stock, such Reference Basket Stock at the Basket Stock Exchange Ratio then in effect for such Reference Basket Stock. 
	 	 	 	 
	 	 	In each case, the applicable
        Exchange Ratio (including for this purpose, any New Stock Exchange Ratio
        or Basket Stock Exchange Ratio) shall be determined by the Calculation
        Agent on the third Trading Day prior to the scheduled Maturity Date.

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

     Following the occurrence of any
        Reorganization Event referred to in paragraphs 4 or 5 above, (i) references
        to “Underlying Stock” under “No Fractional Shares,” “Closing
        Price” and “Market Disruption Event” shall be deemed to
        also refer to any New Stock or Reference Basket Stock, and (ii) all other
    references in this

18

	
        	      	SPARQS to “Underlying Stock” shall be deemed to refer to the Exchange Property into which this SPARQS is thereafter exchangeable and references to a “share” or “shares” of
Underlying Stock shall be deemed to refer to the applicable unit or units of such Exchange Property, including any New Stock or Reference Basket Stock, unless the context otherwise requires. The New Stock Exchange Ratio(s) or Basket Stock Exchange
Ratios resulting from any Reorganization Event described in paragraph 5 above or similar adjustment under paragraph 4 above shall be subject to the adjustments set forth in paragraphs 1 through 5 hereof.

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

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

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

The Calculation Agent shall be solely responsible for the determination and calculation of any adjustments to the Exchange Ratio, any New Stock Exchange Ratio or Basket Stock Exchange Ratio or method of calculating the Exchange
Property Value and of any related determinations and calculations with respect to any distributions of stock, other securities or other property

        

19

	  	      	or assets (including cash) in connection with any corporate event described in paragraphs 1 through 5 above, and its determinations and calculations with respect thereto shall be conclusive in the
absence of manifest error.

The Calculation Agent shall provide information as to any adjustments to the Exchange Ratio, or to the method of calculating the amount payable upon exchange at maturity of the SPARQS made pursuant to paragraph 5 above, upon
written request by the holder of this SPARQS.
        
	 	 	 
	Market Disruption Event	 	Market Disruption Event means, with respect to
    the Underlying Stock:
	 	 	 
	 
     	      	
          (i) a suspension, absence or material limitation of trading of the Underlying Stock on the primary market for the Underlying Stock for more than two hours of trading or during the one-half hour period preceding the close of the
            principal trading session in such market; or a breakdown or failure in the price and trade reporting systems of the primary market for the Underlying Stock as a result of which the reported trading prices for the Underlying Stock during the last
            one-half hour preceding the close of the principal trading session in such market are materially inaccurate; or the suspension, absence or material limitation of trading on the primary market for trading in options contracts related to the
            Underlying Stock, if available, during the one-half hour period preceding the close of the principal trading session in the applicable market, in each case as determined by the Calculation Agent in its sole discretion; and

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

    

20

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

	      	In case an event of default with respect to the SPARQS shall have occurred and be continuing, the amount declared due and payable per each Stated Principal Amount of this SPARQS upon any acceleration of
this SPARQS (an “Event of Default Acceleration”) shall be determined by the Calculation Agent and shall be an amount in cash equal to the lesser of (i) the product of (x) the Closing Price of the Underlying Stock (and/or the value of any
Exchange Property) as of the date of such acceleration and (y) the then current Exchange Ratio and (ii) the Call Price calculated as though the date of acceleration were the Call Date (but in no event less than the Call Price for the first Call
Date), in each
       

21

	 
        	      	case plus accrued but unpaid interest to but excluding the date of acceleration; provided that if the Issuer has called the SPARQS in
accordance with the Morgan Stanley Call Right, the amount declared due and payable upon any such acceleration shall be an amount in cash for each Stated Principal Amount of this SPARQS equal to the Call Price for the Call Date specified in the
Issuer’s notice of mandatory exchange, plus accrued but unpaid interest to but excluding the date of acceleration.

        

22

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

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

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

23

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

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

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

     If the holder elects to receive all or a portion of payments of principal of, premium, if any, and interest on this Note, if denominated in a Specified Currency other than U.S. dollars, in U.S.
dollars, the Exchange Rate Agent (as defined on the reverse hereof) will convert such payments into U.S. dollars. In the event of such an election, payment in respect of this Note will be based upon the exchange rate as determined by the Exchange
Rate Agent based on the highest bid quotation in The City of New York received by such Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the second Business Day preceding the applicable payment date from three recognized
foreign exchange dealers (one of which may be the Exchange Rate Agent unless such Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the quoting dealer of the Specified Currency for U.S. dollars for settlement on such payment
date in the amount of the Specified Currency payable in the absence of such an election to such holder

24

and at which the applicable dealer commits to execute a contract. If such bid quotations are not available, such payment will be made in the Specified Currency. All currency exchange costs will be borne by the holder of this Note
by deductions from such payments.

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

     Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Senior
Indenture, as defined on the reverse hereof, or be valid or obligatory for any purpose.

25

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

	DATED: 	 	MORGAN STANLEY 
	 	 	 	 	 
	 	 	By:	 
	 	 	 	

	 	 	 	Name:	 
	 	 	 	Title:	 

TRUSTEE’S CERTIFICATE

    OF
AUTHENTICATION

 This is one of the
    Notes referred

      to
  in the within-mentioned

      Senior
  Indenture.

  	THE BANK OF NEW YORK, as 
	      Trustee 
	 	 	 
	By:	 
	 	

	 	Authorized Signatory 

26

FORM OF REVERSE OF SECURITY

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

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

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

27

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

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

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

28

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

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

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

29

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

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

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

30

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

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

     If the face hereof indicates that this Note is subject to “Tax Redemption and Payment of Additional Amounts,” this Note may be redeemed, as a whole, at the option of the Issuer at any time
prior to maturity, upon the giving of a notice of redemption as described below, at a redemption price equal to 100% of the principal amount hereof, together with accrued interest to the date fixed for redemption (except that if this Note is subject
to “Modified Payment upon Acceleration or Redemption,” the amount of principal so payable will be limited to the aggregate principal amount hereof multiplied by the sum of the Issue Price specified on the face hereof (expressed as a
percentage of the aggregate principal amount) plus the original issue discount accrued from the Interest Accrual Date to the date of redemption (expressed as a percentage of the aggregate principal amount), with the amount of original issue discount
accrued being calculated using a constant yield method (as described above)), if the Issuer determines that, as a result of any change in or amendment to the laws (including a holding, judgment or as ordered by a court of competent jurisdiction), or
any regulations or rulings promulgated thereunder, of the United States or of any political subdivision or taxing authority thereof or therein affecting taxation, or any change in official position regarding the application or interpretation of such
laws, regulations or rulings, which change or amendment occurs, becomes effective or, in the case of a change in official position, is announced on or after the Initial Offering Date hereof, the Issuer has or will become obligated to pay Additional
Amounts, as defined below, with respect to this Note as described below. Prior to the giving of any notice of redemption pursuant to this paragraph, the Issuer shall deliver to the Trustee (i) a certificate stating that the Issuer is entitled to
effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer to so redeem have occurred, and (ii) an opinion of independent legal counsel satisfactory to the Trustee to such effect
based on such statement of facts; provided that no such notice of redemption shall be given earlier than 60 calendar days prior to the earliest date on which the Issuer would be obligated to
pay such Additional Amounts if a payment in respect of this Note were then due.

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

31

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

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

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

     (c) any tax, assessment or other governmental charge imposed by reason of such holder’s past or present status as a controlled foreign corporation or passive foreign investment company with
respect to the United States or as a corporation which accumulates earnings to avoid U.S. federal income tax or as a private foundation or other tax-exempt organization or a bank receiving interest under Section 881(c)(3)(A) of the Internal Revenue
Code of 1986, as amended;

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

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

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

32

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

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

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

     The Senior Indenture permits the Issuer and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of the debt securities of all series issued under the
Senior Indenture then outstanding and affected (voting as one class), to execute supplemental indentures adding any provisions to or changing in any manner the rights of the holders of each series so affected; provided that the Issuer and the Trustee may not, without the consent of the holder of each outstanding debt security affected thereby, (a) extend the final maturity of any such debt security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof, or change the currency of payment thereof, or modify or amend the provisions for conversion of any
currency into any other currency, or modify or amend the provisions for conversion or exchange of the debt security for securities of the Issuer or other entities or for other property or the cash value of the property (other than as provided in the
antidilution provisions or other similar adjustment provisions of the debt securities or otherwise in accordance with the terms thereof), or impair or affect the rights of any holder to institute suit for the payment thereof or (b) reduce the
aforesaid percentage in principal amount of debt securities the consent of the holders of which is required for any such supplemental indenture.

     Except as set forth below, if the principal of, premium, if any, or interest on this Note is payable in a Specified Currency other than U.S. dollars and such Specified Currency is not available to the
Issuer for making payments hereon due to the imposition of exchange controls or other circumstances beyond the control of the Issuer or is no longer used by the government of the country issuing such currency or for the settlement of transactions by
public institutions within the international banking community, then the Issuer will be entitled to satisfy its obligations to the holder of this Note by making such payments in U.S. dollars on the basis of the Market Exchange Rate on the date of
such payment or, if the Market Exchange Rate is not available on such date, as of the most recent practicable date; provided, however, that if the euro 

33

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

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

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

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

     With respect to moneys paid by the Issuer and held by the Trustee or any Paying Agent for payment of the principal of or interest or premium, if any, on any Notes that remain unclaimed at the end of
two years after such principal, interest or premium shall have become due and payable (whether at maturity or upon call for redemption or otherwise), (i) the Trustee or such Paying Agent shall notify the holders of such Notes that such moneys shall
be repaid to the Issuer and any person claiming such moneys shall thereafter look only to the Issuer for payment thereof and (ii) such moneys shall be so repaid to the Issuer. Upon such repayment all liability

34

of the Trustee or such Paying Agent with respect to such moneys shall thereupon cease, without, however, limiting in any way any obligation that the Issuer may have to pay the principal of or interest or premium, if any, on this
Note as the same shall become due.

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

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

     No recourse shall be had for the payment of the principal of, premium, if any, or the interest on this Note, for any claim based hereon, or otherwise in respect hereof, or based on or in respect of
the Senior Indenture or any indenture supplemental thereto, against any incorporator, shareholder, officer or director, as such, past, present or future, of the Issuer or of any successor corporation, either directly or through the Issuer or any
successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

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

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

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

35

ABBREVIATIONS

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

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

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

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

	 	 	 	 
	 	 	 
	 
				

36

     FOR
    VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
    unto

 ____________________________________________

  [PLEASE INSERT SOCIAL SECURITY OR OTHER

        IDENTIFYING
  NUMBER OF ASSIGNEE]

	 

	 
	 

	 
	 

	[PLEASE PRINT
          OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

the within Note and
    all rights thereunder, hereby irrevocably constituting and appointing such
    person attorney to transfer such note on the books of the Issuer, with full
    power of substitution in the premises.

 Dated: _______________________

 

	NOTICE:	 The signature
        to this assignment must correspond with the name as written upon the
        face of the within Note in every particular without alteration or enlargement
        or any change whatsoever.

37

OPTION TO ELECT
      REPAYMENT

      The
    undersigned hereby irrevocably requests and instructs the Issuer to repay
    the within Note (or portion thereof specified below) pursuant to its terms
    at a price equal to the principal amount thereof, together with interest
    to the Optional Repayment Date, to the undersigned at

	 

	 
	 

	 
	 

	(Please print
        or typewrite name and address of the undersigned)

       If
  less than the entire principal amount of the within Note is to be repaid, specify
  the portion thereof which the holder elects to have repaid: _________________;
  and specify the denomination or denominations (which shall not be less than
  the minimum authorized denomination) of the Notes to be issued to the holder
  for the portion of the within Note not being repaid (in the absence of any
  such specification, one such Note will be issued for the portion not being
  repaid): __________________.

	 	 	 
	Dated:
        ________________________ 	 	_________________________________________
			NOTICE: The signature
        on this Option to Elect 

      Repayment must correspond with the name as 

      written upon the face of the within instrument in 

      every particular without alteration or enlargement.

38

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