Document:

Exhibit
        4.1

       

    

     

    FORM
      OF FIXED RATE SENIOR NOTE

     

     

    
      	
              REGISTERED

            	
              REGISTERED

            
	
              No.
                FXR-1

            	
              U.S.
                $

            
	 	
              CUSIP:
                61747W869

            

    

     

    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

     

    PERFORMANCE
      LEVERAGED UPSIDE SECURITIES (“PLUS”)

     

    
      PLUS
        DUE FEBRUARY 20, 2009

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

    

     

    
      	
              ORIGINAL
                ISSUE DATE:

               

            	
              INITIAL
                REDEMPTION DATE: N/A

            	
              INTEREST
                RATE: None

            	
              MATURITY
                DATE: See “Maturity Date” below.

            
	
              INTEREST
                ACCRUAL DATE: N/A

            	
              INITIAL
                REDEMPTION PERCENTAGE: N/A

            	
              INTEREST
                PAYMENT DATE(S): N/A

            	
              OPTIONAL
                REPAYMENT DATE(S):  N/A

            
	
              SPECIFIED
                CURRENCY: U.S. dollars

            	
              ANNUAL
                REDEMPTION PERCENTAGE REDUCTION: N/A

            	
              INTEREST
                PAYMENT PERIOD: N/A

            	
              APPLICABILITY
                OF MODIFIED 
PAYMENT UPON ACCELERATION OR REDEMPTION: See “Alternate
                Exchange Calculation in the 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: N/A

            	
              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

              	 	
                $10

                 

              
	
                Underlying
                  Index

              	 	
                
                  
                    
                      S&P
                        500®
                        Index

                       

                    

                  

                

              
	
                Underlying
                  Index Publisher

              	 	
                
                  
                    Standard
                      & Poor's®
                      Corporation

                  

                   

                

              
	
                Initial
                  Index Value

                 

              	 	 
	
                Pricing
                  Date

                 

              	 	 
	
                Denominations

              	 	
                $10
                  and integral multiples thereof

                 

              
	
                Bull
                  Market or Bear Market PLUS

              	 	
                Bull
                  Market PLUS

              

      

       

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
 

      
        	
                Maximum
                  Payment at Maturity

              	 	
                $          per
                  Stated Principal Amount

              
	 	 	 
	
                Minimum
                  Payment at Maturity

              	 	 
	
                if
                  Bear Market PLUS

              	 	
                N/A

              
	 	 	 
	
                Leverage
                  Factor

              	 	
                          %

              
	 	 	 
	
                Index
                  Valuation Date(s)

              	 	
                February
                  18, 2009.

              
	 	 	 
	 	 	
                If
                  there is only one Index Valuation Date, the Final Index Value shall
                  be
                  determined on that Index Valuation Date.  If there are multiple
                  Index Valuation Dates, then the Final Average Index Value shall
                  be
                  determined on the last Index Valuation Date, which is referred
                  to as the
                  “Final Index Valuation Date.”

              
	 	 	 
	 	 	
                If
                  a
                  Market Disruption Event with respect to the Underlying Index occurs
                  on any
                  scheduled Index Valuation Date, or if any such Index Valuation
                  Date is not
                  an Index Business Day, the Index Closing Value for such date shall
                  be
                  determined on the immediately succeeding Index Business Day on
                  which no
                  Market Disruption Event shall have occurred; provided that the
                  Final Index Value or the Final Average Index Value, as applicable,
                  shall
                  not be determined on a date later than the fifth scheduled Index
                  Business
                  Day after the scheduled Index Valuation Date or Final Index Valuation
                  Date, as applicable, and if such date is not an Index Business
                  Day or if
                  there is a Market Disruption Event on such date, the Calculation
                  Agent
                  shall determine the Index Closing Value of the Underlying Index
                  on such
                  date in accordance with the formula for calculating such index
                  last in
                  effect prior to the commencement of the Market Disruption Event
                  (or prior
                  to the non-Index Business Day), without rebalancing or substitution,
                  using
                  the closing price (or, if trading in the relevant securities has
                  been
                  materially suspended or materially limited, its good faith estimate
                  of the
                  closing price that would have prevailed but for such suspension,
                  limitation or non-Index Business Day) on such date of each security
                  most
                  recently constituting the Underlying Index.

              
	 	 	 
	
                Maturity
                  Date

              	 	
                February
                  20, 2009, subject to extension if the scheduled Index Valuation
                  Date or
                  Final Index Valuation Date, as applicable, is postponed in accordance
                  with
                  the definition thereof.  If
                  the

              

      

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                scheduled
                  Index Valuation Date or Final Index Valuation Date, as applicable,
                  is
                  postponed so that it falls less than two scheduled Trading Days
                  prior to
                  the scheduled Maturity Date, the Maturity Date shall be the second
                  scheduled Trading Day following the Index Valuation Date or Final
                  Index
                  Valuation Date, as applicable, as postponed.  See “Index
                  Valuation Date(s).”

              
	 	 	 
	 	 	
                In
                  the event that the Maturity Date of the PLUS is postponed due to
                  postponement of the Index Valuation Date or the Final Index Valuation
                  Date, as applicable, as described in the immediately preceding
                  paragraph,
                  the Issuer shall give notice of such postponement and, once it
                  has been
                  determined, of the date to which the Maturity Date has been rescheduled
                  (i) to the holder of this PLUS 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 presumed to have been duly given,
                  whether
                  or not the holder of this PLUS receives the notice.  The Issuer
                  shall give such notice as promptly as possible, and in no case
                  later than
                  (i) with respect to notice of postponement of the Maturity Date,
                  the
                  Business Day immediately following the scheduled Index Valuation
                  Date or
                  Final Index Valuation Date, as applicable, and (ii) with respect
                  to notice
                  of the date to which the Maturity Date has been rescheduled, the
                  Business
                  Day immediately following the actual Index Valuation Date or Final
                  Index
                  Valuation Date, as applicable, for determining the Final Index
                  Value (as
                  defined below) or Final Average Index Value (as defined below),
                  as
                  applicable.

              
	 	 	 
	
                Payment
                  at Maturity

              	 	
                At
                  maturity, upon delivery of this PLUS to the Trustee, the Issuer
                  shall pay
                  with respect to each Stated Principal Amount of this PLUS an amount
                  in
                  cash equal to:

              

      

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                1.  For
                  a Bull Market PLUS, (i) if the Final Index Value, or Final
                  Average Index Value, as applicable, is greater than the Initial
                  Index
                  Value, the lesser of (a) the Stated Principal Amount plus the Leveraged
                  Upside Payment and (b) the Maximum Payment at Maturity or (ii)
                  if the
                  Final Index Value or Final Average Index Value, as applicable,
                  is less
                  than or equal to the Initial Index Value, the Stated Principal
                  Amount
                  times the Index Performance Factor.

              
	 	 	 
	 	 	
                2.  For
                  a Bear Market PLUS, (i) if the Final Index Value or Final Average
                  Index Value, as applicable, is less than the Initial Index Value,
                  the
                  lesser of (a) the Stated Principal Amount plus the Enhanced Downside
                  Payment and (b) the Maximum Payment at Maturity or (ii) if the
                  Final Index
                  Value or Final Average Index Value, as applicable, is greater than
                  or
                  equal to the Initial Index Value, the Stated Principal Amount minus
                  the
                  Upside Reduction Amount, subject to the Minimum Payment at
                  Maturity.

              
	 	 	 
	 	 	
                The
                  Issuer shall, or shall cause the Calculation Agent to, (i) provide
                  written
                  notice to the Trustee and to the Depositary of the amount of cash
                  to be
                  delivered with respect to each Stated Principal Amount of this
                  PLUS, on or
                  prior to 10:30 a.m. on the Trading Day preceding the Maturity Date
                  (but if
                  such Trading Day is not a Business Day, prior to the close of business
                  on
                  the Business Day preceding the Maturity Date), and (ii) deliver
                  the
                  aggregate cash amount due with respect to this PLUS to the Trustee
                  for
                  delivery to the holder of this PLUS on the Maturity
                  Date.

              
	 
	
                Applicable
                  only for BULL MARKET PLUS  

              
	 	 	 
	
                Leveraged
                  Upside Payment

              	 	
                The
                  product of (i) the Stated Principal Amount and (ii) the Leverage
                  Factor
                  and (iii) the Index Percent Increase.

              
	 	 	 
	
                Index
                  Performance Factor

              	 	
                A
                  fraction, the numerator of which shall be the Final Index Value
                  or Final
                  Average Index Value, as applicable, and the denominator of which
                  shall be
                  the Initial Index Value.

              
	 
	
                Applicable
                  only for BEAR MARKET PLUS  

              

      

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
 

      
        	
                Enhanced
                  Downside Payment

              	 	
                The
                  product of (i) the Stated Principal Amount and (ii) the Leverage
                  Factor
                  and (iii) the Index Percent Decrease.

              
	 	 	 
	
                Upside
                  Reduction Amount

              	 	
                The
                  product of (i) the Stated Principal Amount and (ii) the Index Percent
                  Increase.

              
	 	 	 
	
                Index
                  Percent Decrease

              	 	
                A
                  fraction, the numerator of which shall be the Initial Index Value
                  minus
                  the Final Index Value or Final Average Index Value, as applicable,
                  and the
                  denominator of which shall be the Initial Index Value.

              
	 	 	 
	
                Applicable
                  for all PLUS

              	 	 
	 	 	 
	
                Index
                  Percent Increase

              	 	
                A
                  fraction, the numerator of which shall be the Final Index Value
                  or Final
                  Average Index Value, as applicable, minus the Initial Index Value
                  and the
                  denominator of which shall be the Initial Index Value.

              
	 	 	 
	
                Final
                  Index Value

              	 	
                For
                  PLUS with a single Index Valuation Date, the Index Closing Value
                  of the
                  Underlying Index on the Index Valuation Date, as determined by
                  the
                  Calculation Agent; and

              
	 	 	 
	 	 	
                for
                  PLUS with multiple Index Valuation Dates, the arithmetic average
                  of the
                  Index Closing Values of the Underlying Index on the Index Valuation
                  Dates,
                  as calculated by the Calculation Agent, which is referred to as
                  the “Final
                  Average Index Value.”

              
	 	 	 
	
                Index
                  Closing Value

              	 	
                The
                  Index Closing Value on any Index Business Day shall equal the closing
                  value of the Underlying Index or any Successor Index (as defined
                  under
                  “Discontinuance of the Underlying Index; Alteration of Method of
                  Calculation” below) published at the regular weekday close of trading on
                  that Index Business Day, as determined by the Calculation
                  Agent.  In certain circumstances, the Index Closing Value shall
                  be based on the alternate calculation of the Underlying Index described
                  under “Discontinuance of the Underlying Index; Alteration of Method of
                  Calculation.”

              
	 	 	 
	
                Price
                  Source

              	 	
                Bloomberg
                  page “SPX,” which shall be used by the Calculation Agent to determine the
                  Index Closing Value of the Underlying
                  Index.

              

      

       

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                If
                  such service or any successor service no longer displays the Index
                  Closing
                  Value of the Underlying Index, then the Calculation Agent shall
                  designate
                  an alternate source of such Index Closing Value, which shall be
                  the
                  publisher of the Underlying Index, unless the Calculation Agent,
                  in its
                  sole discretion, determines that an alternate service has become
                  the
                  market standard for transactions related to such index.

              
	 	 	 
	
                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 Stock Market LLC, the Chicago Mercantile
                  Exchange, the Chicago Board of Options Exchange and in the
                  over-the-counter market for equity securities in the United
                  States.

              
	 	 	 
	
                Index
                  Business Day

              	 	
                A
                  day, as determined by the Calculation Agent, on which trading is
                  generally
                  conducted on each of the Relevant Exchange(s) for the Underlying
                  Index,
                  other than a day on which trading on such exchange(s) is scheduled
                  to
                  close prior to the time of the posting of its regular final weekday
                  closing price.

              
	 	 	 
	
                Relevant
                  Exchange

              	 	
                Relevant
                  Exchange means the primary exchange(s) or market(s) of trading
                  for (i) any
                  security then included in the Underlying Index, or any Successor
                  Index,
                  and (ii) any futures or options contracts related to the Underlying
                  Index
                  or to any security then included in the Underlying
                  Index.

              
	 	 	 
	
                Calculation
                  Agent

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

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

              
	 	 	 
	 	 	
                All
                  calculations with respect to the Payment at Maturity shall be rounded
                  to
                  the nearest one billionth, with five ten-billionths rounded upward
                  (e.g., .9876543215 would be rounded to .987654322); all dollar
                  amounts related to determination of the
                  amount

              

      

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                of
                  cash payable for each Stated Principal Amount of this PLUS shall
                  be
                  rounded to the nearest ten-thousandth, with five one hundred-thousandths
                  rounded upward (e.g., .76545 would be rounded up to .7655); and
                  all dollar amounts paid on the aggregate number of PLUS shall be
                  rounded
                  to the nearest cent, with one-half cent rounded upward.

              
	 	 	 
	
                Market
                  Disruption Event

              	 	
                Market
                  Disruption Event means, with respect to the Underlying Index, the
                  occurrence or existence of any of the following events, as determined
                  by
                  the Calculation Agent in its sole discretion:

              
	 	 	 
	 	 	
                (i)(a)
                  a suspension, absence or material limitation of trading of stocks
                  then
                  constituting 20 percent or more of the value of the Underlying
                  Index (or
                  the Successor Index) on the Relevant Exchanges for such securities
                  for
                  more than two hours of trading or during the one-half hour period
                  preceding the close of the principal trading session on such Relevant
                  Exchange; or

              
	 	 	 
	 	 	
                (b)
                  a breakdown or failure in the price and trade reporting systems
                  of any
                  Relevant Exchange as a result of which the reported trading prices
                  for
                  stocks then constituting 20 percent or more of the value of the
                  Underlying
                  Index (or the Successor Index) during the last one-half hour preceding
                  the
                  close of the principal trading session on such Relevant Exchange
                  are
                  materially inaccurate; or

              
	 	 	 
	 	 	
                (c)
                  the suspension, material limitation or absence of trading on any
                  major
                  U.S. securities market for trading in futures or options contracts
                  or
                  exchange traded funds related to the Underlying Index (or the Successor
                  Index) for more than two hours of trading or during the one-half
                  hour
                  period preceding the close of the principal trading session on
                  such
                  market; 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 position with respect to this issuance
                  of
                  PLUS.

              

      

       

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                For
                  the purpose of determining whether a Market Disruption Event exists
                  at any
                  time, if trading in a security included in the Underlying Index
                  is
                  materially suspended or materially limited at that time, then the
                  relevant
                  percentage contribution of that security to the value of the Underlying
                  Index shall be based on a comparison of (x) the portion of the
                  value of
                  the Underlying Index attributable to that security relative to
                  (y) the
                  overall value of the Underlying Index, in each case immediately
                  before
                  that suspension or limitation.

              
	 	 	 
	 	 	
                For
                  the purpose of determining whether a Market Disruption Event has
                  occurred:  (1) a limitation on the hours or number of days of
                  trading shall not constitute a Market Disruption Event if it results
                  from
                  an announced change in the regular business hours of the Relevant
                  Exchange
                  or market, (2) a decision to permanently discontinue trading in
                  the
                  relevant futures or options contract or exchange traded fund shall
                  not
                  constitute a Market Disruption Event, (3) limitations pursuant
                  to the
                  rules of any Relevant Exchange similar to NYSE Rule 80A (or any
                  applicable
                  rule or regulation enacted or promulgated by any other self-regulatory
                  organization or any government agency of scope similar to NYSE
                  Rule 80A as
                  determined by the Calculation Agent) on trading during significant
                  market
                  fluctuations shall constitute a suspension, absence or material
                  limitation
                  of trading, (4) a suspension of trading in futures or options contracts
                  or
                  exchange traded funds on the Underlying Index by the primary securities
                  market trading in such contracts or funds by reason of (a) a price
                  change
                  exceeding limits set by such securities exchange or market, (b)
                  an
                  imbalance of orders relating to such contracts or funds, or (c)
                  a
                  disparity in bid and ask quotes relating to such contracts or funds
                  shall
                  constitute a suspension, absence or material limitation of trading
                  in
                  futures or options contracts or exchange traded funds related to
                  the
                  Underlying Index and (5) a “suspension, absence or material limitation of
                  trading” on any Relevant Exchange or on the primary market on which
                  futures or options contracts or exchange traded funds related to
                  the
                  Underlying Index are traded shall not
                  include

              

      

       

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                any
                  time when such securities market is itself closed for trading under
                  ordinary circumstances.

              
	 	 	 
	
                Alternate
                  Exchange Calculation

              	 	 
	
                in
                  the Case of an Event of Default

              	 	
                In
                  case an event of default with respect to the PLUS shall have occurred
                  and
                  be continuing, the amount declared due and payable for each Stated
                  Principal Amount of this PLUS upon any acceleration of this PLUS
                  shall be
                  determined by the Calculation Agent and shall be an amount in cash
                  equal
                  to the Payment at Maturity calculated using the Index Closing Value
                  as of
                  the date of such acceleration as the Final Index Value or Final
                  Average
                  Index Value, as applicable, plus, if applicable, any accrued but
                  unpaid
                  interest as of the date of such acceleration.

              
	 	 	 
	 	 	
                If
                  the maturity of the PLUS is accelerated because of an event of
                  default as
                  described above, the Issuer shall, or shall cause the Calculation
                  Agent
                  to, provide written notice to the Trustee at its New York office,
                  on which
                  notice the Trustee may conclusively rely, and to the Depositary
                  of the
                  cash amount due with respect to each Stated Principal Amount of
                  this PLUS
                  as promptly as possible and in no event later than two Business
                  Days after
                  the date of acceleration.

              
	 	 	 
	
                Discontinuance
                  of the

              	 	 
	
                Underlying
                  Index;

              	 	 
	
                Alteration
                  of  Method of

              	 	 
	
                Calculation

              	 	
                If
                  the Underlying Index Publisher discontinues publication of the
                  Underlying
                  Index and the Underlying Index Publisher or another entity (including
                  MS
                  & Co.) publishes a successor or substitute index that the Calculation
                  Agent determines, in its sole discretion, to be comparable to the
                  discontinued Underlying Index (such index being referred to herein
                  as a
                  “Successor Index”), then any subsequent Index Closing Value shall be
                  determined by reference to the published value of such Successor
                  Index at
                  the regular weekday close of trading on any Index Business Day
                  that the
                  Index Closing Value is to be determined.

              
	 	 	 
	 	 	
                Upon
                  any selection by the Calculation Agent of a Successor Index, the
                  Calculation Agent shall cause

              

      

       

       

      
        
          
          

        

        
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                written
                  notice thereof to be furnished to the Trustee, to the Issuer and
                  to the
                  Depositary, as holder of the PLUS, within three Trading Days of
                  such
                  selection.

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

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

              

      

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                reference
                  to the Underlying Index or such Successor Index, as
                  adjusted.  Accordingly, if the method of calculating the
                  Underlying Index or a Successor Index is modified so that the value
                  of
                  such index is a fraction of what it would have been if it had not
                  been
                  modified (e.g., due to a split in the index), then the Calculation
                  Agent
                  shall adjust such index in order to arrive at a value of the Underlying
                  Index or such Successor Index as if it had not been modified (e.g.,
                  as if
                  such split had not occurred).

              

      

    

     

     

     

     

    
      
        
        

      

      
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    Morgan
      Stanley, a Delaware corporation (together with its successors and assigns,
      the
“Issuer”), for value received, hereby promises to pay to CEDE
& Co., or registered assignees, the amount of cash, as determined
      in
      accordance with the provisions set forth under “Payment 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 

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

     

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

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

     

    quoting
      dealer of the Specified Currency for U.S. dollars for settlement on such payment
      date in the amount of the Specified Currency payable in the absence of such
      an
      election to such holder and at which the applicable dealer commits to execute
      a
      contract.  If such bid quotations are not available, such payment will
      be made in the Specified Currency.  All currency exchange costs will
      be borne by the holder of this Note by deductions from such
      payments.

     

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

     

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

     

     

     

    
      
        
        

      

      
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    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

            

    

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
 

    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.

     

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    
 

     

    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 

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

     

    payment
      shall accrue for the period from and after the Interest Payment Date or the
      Maturity Date (or any redemption or repayment date) to such next succeeding
      Business Day.

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

     

    transfer
      of Notes shall be such that no gain or loss of interest results from such
      exchange or transfer.

     

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

     

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

     

    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 

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

     

    original
      issue discount accrued being calculated using a constant yield method (as
      described in the next paragraph), (ii) for the purpose of any vote of
      securityholders taken pursuant to the Senior Indenture prior to the acceleration
      of payment of this Note, the principal amount hereof shall equal the amount
      that
      would be due and payable hereon, calculated as set forth in clause (i) above,
      if
      this Note were declared to be due and payable on the date of any such vote
      and
      (iii) for the purpose of any vote of securityholders taken pursuant to the
      Senior Indenture following the acceleration of payment of this Note, the
      principal amount hereof shall equal the amount of principal due and payable
      with
      respect to this Note, calculated as set forth in clause (i) above.

     

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

     

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

     

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

     

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

     

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

     

    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, 

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

     

    maintain
      a
      Paying Agent in a member state of the European Union that will not be obligated
      to withhold or deduct tax pursuant to any such Directive or any law implementing
      or complying with, or introduced in order to conform to, such
      Directive.

     

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

     

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

     

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

     

    No
      recourse shall be had for the payment of the principal of, premium, if any,
      or
      the interest on this Note, for any claim based hereon, or otherwise in respect
      hereof, or based on or in respect of the Senior Indenture or any indenture
      supplemental thereto, against any incorporator, shareholder, officer or
      director, as such, past, present or future, of the Issuer or of any successor
      corporation, either directly or through the Issuer or any successor corporation,
      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.

     

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
       

      
        
           

          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.

           

          _______________________

           

         

        
          
            
            

          

          
            26

            
              

            

          

          
            
            

          

        

        
           

           

          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.

                  

 

          
            
              
              

            

            
              27

              
                

              

            

            
              
              

            

          

           

           

          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.

                  

          

           

           

           

          28Exhibit
      4.1

     

    FORM
      OF FIXED RATE SENIOR NOTE

    
       

      
        	
                REGISTERED

              	
                REGISTERED

              
	
                No.
                  FXR-1

              	
                U.S.
                  $

              
	 	
                
                  CUSIP:
                    61747W372

                

              

      

    

     

    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
      FEBRUARY 20, 2009

    MANDATORILY
      EXCHANGEABLE

    FOR
      SHARES OF COMMON STOCK OF

    TARGET
      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

              	 	
                Target
                  Corporation (“TGT”)

              

      

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
 

      
        	
                Underlying
                  Stock

              	 	
                The
                  common stock of TGT

              
	 	 	 
	
                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

              	 	
                August
                  20, 2008

              
	 	 	 
	
                Maturity
                  Date

              	 	
                February
                  20, 2009, 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 

              

      

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
 

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

              
	 	 	 
	
                Interest
                  Payment Dates

              	 	
                May
                  20, 2008, August 20,
                  2008, November
                  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

              

      

       

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      
 

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

              
	 	 	 
	
                Morgan
                  Stanley Call Right

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

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

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

              

      

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                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 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

              	 	
                February
                  10, 2009; 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.

              

      

       

       

      
        
          
          

        

        
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                Call
                  Date

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

              
	 	 	 
	
                Call
                  Price

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

              

      

       

       

      
        
          
          

        

        
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                “Antidilution
                  Adjustments” below, in each case, required to be made through the close of
                  business on the third Trading Day prior to the scheduled Maturity
                  Date.

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

              

      

       

       

      
        
          
          

        

        
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                holder
                  of this SPARQS receives the notice.  If the maturity of this
                  SPARQS is accelerated, no interest on the amounts payable with
                  respect to
                  this SPARQS shall accrue for the period from and after such accelerated
                  maturity date; provided that the Issuer has deposited with the
                  Trustee the Underlying Stock, the Exchange Property or any cash
                  due with
                  respect to such acceleration by such accelerated maturity
                  date.

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

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

              
	 	 	 
	
                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;

              

      

       

       

      
        
          
          

        

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

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

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

              
	 	 	 
	
                No
                  Fractional Shares

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

              
	 	 	 
	
                Closing
                  Price

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

              
	 	 	 
	
                 

              	
                 

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

                

              

      

       

       

      
        
          
          

        

        
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                Securities
                  Exchange Act of 1934, as amended (the “Exchange Act”), on which the
                  Underlying Stock (or any such other security) is listed or admitted
                  to
                  trading,

              
	 	 	 
	
                 

              	
                 

                 

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

                

                 

              
	
                 

              	
                 

                 

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

                

              
	 	 	 
	 	 	
                If
                  the Underlying Stock (or any such other security) is listed or
                  admitted to
                  trading on any national securities exchange but the last reported
                  sale
                  price or the official closing price published by NASDAQ, as applicable,
                  is
                  not available pursuant to the preceding sentence, then the Closing
                  Price
                  for one share of the Underlying Stock (or one unit of any such
                  other
                  security) on any Trading Day shall mean the last reported sale
                  price of
                  the principal trading session on the over-the-counter market as
                  reported
                  on the NASDAQ or the OTC Bulletin Board on such day.  If a
                  Market Disruption Event occurs with respect to the Underlying Stock
                  (or
                  any such other security) or the last reported sale price or the
                  official
                  closing price published by NASDAQ, as applicable, for the Underlying
                  Stock
                  (or any such other security) is not available pursuant to either
                  of the
                  two preceding sentences, then the Closing Price for any Trading
                  Day shall
                  be the mean, as determined by the Calculation Agent, of the bid
                  prices for
                  the Underlying Stock (or any such other security) for such Trading
                  Day
                  obtained from as many recognized dealers in such security, but
                  not
                  exceeding three, as shall make such bid prices available to the
                  Calculation Agent.  Bids of MS & Co. or any of its
                  affiliates may be included in the calculation of such mean, but
                  only to
                  the extent that any such bid is the highest of the bids
                  obtained.  The

              

      

       

       

      
        
          
          

        

        
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                term
                  “OTC Bulletin Board Service” shall include any successor service
                  thereto.

              
	 	 	 
	
                Trading
                  Day

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

              
	 	 	 
	
                Calculation
                  Agent

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

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

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

              
	 	 	 
	
                Antidilution
                  Adjustments

              	 	
                The
                  Exchange Ratio shall be adjusted as follows:

              
	 	 	 
	 	 	
                1.
                  If the 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.

              

      

       

       

      
        
          
          

        

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

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

              

      

       

       

      
        
          
          

        

        
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                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 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

              

      

       

       

      
        
          
          

        

        
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                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 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

              

      

       

       

      
        
          
          

        

        
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                Reorganization
                  Event (or, if applicable, in the case of spinoff stock, the ex-dividend
                  date for the distribution of such spinoff stock) and any required
                  adjustment to the Exchange Ratio shall be determined in accordance
                  with
                  the following:

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

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

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

              

      

       

       

      
        
          
          

        

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

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

              

      

       

       

      
        
          
          

        

        
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                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.

              
	 	 	 
	 	 	
                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

              

      

       

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                (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 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

              

      

       

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                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 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.

              

      

       

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                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.

              
	 	 	 
	 	 	
                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
                  

              

      

       

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                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 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 

              

      

       

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      
 

      
        	 	 	
                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.

              

      

    

     

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

     

    

    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,
      

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

     

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

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

     

    Agent
      unless such Exchange Rate Agent
      is
      an affiliate of the Issuer) for the purchase by the quoting dealer of the
      Specified Currency for U.S. dollars for settlement on such payment date in
      the
      amount of the Specified Currency payable in the absence of such an election
      to
      such holder and at which the applicable dealer commits to execute a
      contract.  If such bid quotations are not available, such payment will
      be made in the Specified Currency.  All currency exchange costs will
      be borne by the holder of this Note by deductions from such
      payments.

     

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

     

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

     

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

     

    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

            

    

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    
 

    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 

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

     

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

     

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

     

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

     

    In
      the
      case where the Interest Payment Date or the Maturity Date (or any redemption
      or
      repayment date) does not fall on a Business Day, payment of interest, premium,
      if any, or principal otherwise payable on such date need not be made on such
      date, but may be made on the 

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

     

    next
      succeeding Business Day with the same force and effect as if made on the
      Interest Payment Date or on the Maturity Date (or any redemption or repayment
      date), and no interest on such payment shall accrue for the period from and
      after the Interest Payment Date or the Maturity Date (or any redemption or
      repayment date) to such next succeeding Business Day.

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

     

    Issuer
      and
      the Trustee and executed by the registered holder in person or by the holder’s
      attorney duly authorized in writing.  The date of registration of any
      Note delivered upon any exchange or transfer of Notes shall be such that no
      gain
      or loss of interest results from such exchange or transfer.

     

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

     

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

     

    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 

     

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

     

    independent
      legal counsel satisfactory to the Trustee to such effect based on such statement
      of facts; provided that no such notice of redemption shall be given
      earlier than 60 calendar days prior to the earliest date on which the Issuer
      would be obligated to pay such Additional Amounts if a payment in respect of
      this Note were then due.

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

     

    conversion
      or exchange of the debt security for securities of the Issuer or other entities
      or for other property or the cash value of the property (other than as provided
      in the antidilution provisions or other similar adjustment provisions of the
      debt securities or otherwise in accordance with the terms thereof), or impair
      or
      affect the rights of any holder to institute suit for the payment thereof or
      (b)
      reduce the aforesaid percentage in principal amount of debt securities the
      consent of the holders of which is required for any such supplemental
      indenture.

     

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

     

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

     

    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 

     

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

     

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

     

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

     

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

     

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

     

    No
      recourse shall be had for the payment of the principal of, premium, if any,
      or
      the interest on this Note, for any claim based hereon, or otherwise in respect
      hereof, or based on or in respect of the Senior Indenture or any indenture
      supplemental thereto, against any incorporator, shareholder, officer or
      director, as such, past, present or future, of the Issuer or of any successor
      corporation, either directly or through the Issuer or any successor corporation,
      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.

     

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

     

    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.

     

     

     

     

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    
 

    
      
         

        
          
             

            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.

             

            _______________________

             

           

          
            
              
              

            

            
              38

              
                

              

            

            
              
              

            

          

          
             

             

            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.

                    

 

            
              
                
                

              

              
                39

                
                  

                

              

              
                
                

              

            

             

             

            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.

                    

            

             

             

             

            40

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