Document:

Exhibit 4.1

FORM OF FIXED RATE SENIOR NOTE 

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

		 
		
CUSIP:
	

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

	
MORGAN STANLEY
	
	
SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES F
	
	
(Fixed Rate)
	
	 

	
	
STOCK PARTICIPATION ACCRETING
	
	
REDEMPTION QUARTERLY-PAY SECURITIESSM (“SPARQS”)
	

	
9% SPARQS® DUE
JUNE 20, 2007
	
	
MANDATORILY EXCHANGEABLE
	
	
FOR SHARES OF COMMON STOCK OF
	
	
VALERO ENERGY CORPORATION
	

	
ORIGINAL ISSUE DATE:
		
INITIAL REDEMPTION

	   DATE: See “Morgan

	
	   Stanley Call Right”

	
	   below.
		
INTEREST RATE: 9% per

	   annum
		
MATURITY DATE: See

	   “Maturity Date” below.
	
	
INTEREST ACCRUAL

	   DATE:
		
INITIAL REDEMPTION

	   PERCENTAGE: See

	   “Morgan Stanley Call

	
	   Right” and “Call Price”

	
	   below.
		
INTEREST PAYMENT

	   DATE(S): See “Interest

	
	   Payment Dates” below.
		
OPTIONAL REPAYMENT

	   DATE(S): N/A
	
	
SPECIFIED CURRENCY:

	   U.S. dollars
		
ANNUAL REDEMPTION

	   PERCENTAGE

	
	   REDUCTION: N/A
		
INTEREST PAYMENT

	   PERIOD: Quarterly
		
APPLICABILITY OF

	   MODIFIED

	
	   PAYMENT UPON

	
	   ACCELERATION OR

	
	   REDEMPTION: See

	
	   “Alternate Exchange

	
	   Calculation in Case of an

	
	   Event of Default” below.
	
	
IF SPECIFIED

	   CURRENCY OTHER

	
	   THAN U.S. DOLLARS,

	
	   OPTION TO ELECT

	   PAYMENT IN U.S.

	
	   DOLLARS: N/A
		
REDEMPTION NOTICE

	   PERIOD: At least 10

	
	   days but no more than 30

	
	   days. See “Morgan

	
	   Stanley Call Right” and

	   “Morgan Stanley Notice

	   Date” below.
		
APPLICABILITY OF

	   ANNUAL INTEREST

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

	   AGENT: N/A
		
TAX REDEMPTION AND

	   PAYMENT OF

	
	   ADDITIONAL

	
	   AMOUNTS: NO
		
PRICE APPLICABLE

	   UPON OPTIONAL

	
	   REPAYMENT: N/A
		
ORIGINAL YIELD TO

	   MATURITY: N/A
	
	
OTHER PROVISIONS: See

	   below.
		
IF YES, STATE INITIAL

	   OFFERING DATE: N/A
		 

		 

	

Stated Principal Amount                     $    per SPARQS

2 

	
Underlying Company
		 
		
Valero Energy Corporation (“Valero Energy”)
	
	 

	
	
Underlying Stock
		 
		
The common stock of Valero Energy
	
	 

	
	
Pricing Date
		 
		 

	
	 

	
	
Issue Price
		 
		 $       per each Stated Principal Amount of this SPARQS
	
	 

	
	
Denominations
		 
		
      $        and integral multiples thereof
	
	 

	
	
Acceleration Trigger Price
		 
		$

	
	 

	
	
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
		 
		
December 20, 2006
	
	 

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

	
	 

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

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		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

		 
		September 20, 2006, December 20, 2006, March 20, 2007 and the Maturity Date.

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

	
	 

	
	Record Date

		 
		Notwithstanding the definition of “Record Date” on page 24 hereof, the Record Date for each Interest Payment Date, including the Interest Payment Date scheduled to occur on
the Maturity Date, shall be the date 5 calendar days prior to such scheduled Interest Payment Date, whether or not that date is a Business Day; provided, however, that in the event that the Issuer exercises the Morgan Stanley Call Right, no Interest Payment Date shall occur after the Morgan Stanley Notice Date, except for any Interest Payment Date for which the Morgan Stanley Notice Date falls
on or after the “ex-interest” date for the related interest payment, in which case the related interest payment shall be made on such Interest Payment Date; and provided,
further, that accrued but unpaid interest payable on the Call Date, if any, shall be payable to the person to whom the Call Price is payable. The “ex- interest” date for any interest payment
is the date on which purchase transactions in the SPARQS no longer carry the right to receive such interest payment.

In the event that the Issuer exercises the Morgan Stanley Call Right and the Morgan Stanley Notice Date falls before the “ex-interest” date for an interest

	

4

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

	
	 

	
	Morgan Stanley Call Right

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

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

The notice of the Issuer’s exercise of the Morgan Stanley Call Right shall specify (i) the Call Date, (ii) the Call Price payable per SPARQS, (iii) the amount of accrued but unpaid interest payable per
SPARQS on the Call Date, (iv) whether any subsequently scheduled Interest Payment Date shall no longer be an Interest

	

5

	
		 
		Payment Date as a result of the exercise of the Morgan Stanley Call Right, (v) the place or places of payment of such Call Price, (vi) that such delivery will be made upon presentation
and surrender of this SPARQS, (vii) that such exchange is pursuant to the Morgan Stanley Call Right and (viii) if applicable, the date to which the Maturity Date has been extended due to a Market Disruption Event as described under “Maturity
Date” above.

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

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

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

	
	 

	
	Morgan Stanley Notice Date

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

	
	 

	
	Final Call Notice Date

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

	
	 

	
	Call Date

		 
		The day specified in the Issuer’s notice of mandatory exchange, on which the Issuer shall deliver cash to the

	

6

	 
		 
		holder of this SPARQS, for mandatory exchange, which day may be any scheduled Trading Day on or after the First Call Date or the Maturity Date (including the Maturity Date as it may be
extended and regardless of whether the Maturity Date is a scheduled Trading Day). See “Maturity Date” above.

	
	 

	
	Call Price

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

	
	 

	
	Exchange at Maturity

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

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

	

7

	 	 	
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
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
	

8

	
		 
		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;

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

	

9

	 
		 
		

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

	
	 

	
	No Fractional Shares

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

	
	 

	
	Closing Price

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

	
	 	 	 
	 	 	

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

	
if the Underlying Stock (or any such other security) is a security of the Nasdaq National Market (and provided
that the Nasdaq National Market is not then a national securities exchange), the Nasdaq official closing price
published by The Nasdaq Stock Market, Inc. on such day, or

10

	 	 	

	
if the Underlying Stock (or any such other security) is neither listed or admitted to trading on any national securities
exchange nor a security of the Nasdaq National Market but is included in the OTC Bulletin Board Service (the “OTC Bulletin Board”) operated by the National Association of Securities Dealers, Inc. (the “NASD”), the last reported sale price of the principal
trading session on the OTC Bulletin Board on such day.

	 	 	 
	 
		 
		If the Underlying Stock (or any such other security) is listed or admitted to trading on any national securities exchange or is a security of the Nasdaq National Market but the last
reported sale price or Nasdaq official closing price, 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 will
mean the last reported sale price of the principal trading session on the over-the-counter market as reported on the Nasdaq National Market or the OTC Bulletin Board on such day. If, because of a Market Disruption Event (as defined below) or
otherwise, the last reported sale price or Nasdaq official closing price, 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 will be the mean, as determined by the Calculation Agent, of the bid prices for the Underlying Stock (or any such other security) obtained from as many recognized dealers in such security, but not exceeding three, as will make such bid prices
available to the Calculation Agent. Bids of MS & Co. or any of its affiliates may be included in the calculation of such mean, but only to the extent that any such bid is the highest of the bids obtained. The term “security of the Nasdaq
National Market” will include a security included in any successor to such system, and the term OTC Bulletin Board Service will 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, Inc. (“NYSE”), the American Stock Exchange LLC, the
Nasdaq National Market, the Chicago Mercantile Exchange, the Chicago Board of

	

11

	 
		 
		Options Exchange and in the over-the-counter market for equity securities in the United States.

	
	 

	
	Calculation Agent

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

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

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

	
	 

	
	Antidilution Adjustments

		 
		The Exchange Ratio shall be adjusted as follows:

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

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

	

12

	 	 	
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.
	
	 	 	 

	
	 	 	
4. There shall be no adjustments to the Exchange
Ratio to reflect cash dividends or other distributions
paid with respect to the Underlying Stock other than
distributions described in paragraph 2, paragraph 3 and
clauses (i), (iv) and (v) of the first sentence of
paragraph
5
and
Extraordinary
Dividends.
“Extraordinary Dividend” means each of (a) the full
amount per share of Underlying Stock of any cash
dividend or special dividend or distribution that is
identified by the Underlying Company as an
extraordinary or special dividend or distribution, (b)
the excess of any cash dividend or other cash
distribution (that is not otherwise identified by the
	

13

	 	 	
Underlying Company as an extraordinary or special
dividend or distribution) distributed per share of
Underlying Stock over the immediately preceding cash
dividend or other cash distribution, if any, per share of
Underlying Stock that did not include an Extraordinary
Dividend (as adjusted for any subsequent corporate
event requiring an adjustment hereunder, such as a
stock split or reverse stock split) if such excess portion
of the dividend or distribution is more than 5% of the
Closing Price of the Underlying Stock on the Trading
Day preceding the “ex-dividend date” (that is, the day
on and after which transactions in the Underlying
Stock on an organized securities exchange or trading
system no longer carry the right to receive that cash
dividend or other cash distribution) for the payment of
such cash dividend or other cash distribution (such
Closing Price, the “Base Closing Price”) and (c) the
full cash value of any non-cash dividend or distribution
per share of Underlying Stock (excluding Marketable
Securities, as defined in paragraph 5 below). Subject
to the following sentence, if any cash dividend or
distribution of such other property with respect to the
Underlying Stock includes an Extraordinary Dividend,
the Exchange Ratio with respect to the Underlying
Stock shall be adjusted on the ex-dividend date so that
the new Exchange Ratio shall equal the product of (i)
the prior Exchange Ratio and (ii) a fraction, the
numerator of which is the Base Closing Price, and the
denominator of which is the amount by which the Base
Closing Price exceeds the Extraordinary Dividend. If
any Extraordinary Dividend is at least 35% of the Base
Closing Price, then, instead of adjusting the Exchange
Ratio, the amount payable upon exchange at maturity
shall be determined as described in paragraph 5 below,
and the Extraordinary Dividend shall be allocated to
Reference Basket Stocks in accordance with the
procedures for a Reference Basket Event as described
in clause (c)(ii) of paragraph 5 below. The value of the
non-cash component of an Extraordinary Dividend
shall be determined on the ex-dividend date for such
distribution by the Calculation Agent, whose
determination shall be conclusive in the absence of
manifest error. A distribution on the Underlying Stock
described in clause (i), (iv) or (v) of the first sentence
of paragraph 5 below shall cause an adjustment to the
	

14

	 	 	
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 The Nasdaq National
Market (a “Marketable Security”), other securities or
other property, assets or cash (collectively “Exchange
Property”), the amount payable upon exchange at
maturity with respect to each Stated Principal Amount
of this SPARQS following the effective date for such
Reorganization Event (or, if applicable, in the case of
spinoff stock, the ex-dividend date for the distribution
of such spinoff stock) and any required adjustment to
the Exchange Ratio shall be determined in accordance
with the following:
	
	 	 	 

	
	 	 	

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

	
	 	 	 

	
	 	 	

(b) for each Marketable Security received in such
Reorganization Event (each a “New Stock”),

	

15

	 	 	

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
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

	

16

	 	 	

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
comprise the S&P 500 Index (or, if publication
of such index is discontinued, any successor or
substitute index selected by the Calculation
Agent in its sole discretion) with the same
primary Standard Industrial Classification Code
(“SIC Code”) as the Underlying Company;
provided, however, that a Reference Basket
Stock shall not include any stock that is subject
to a trading restriction under the trading
restriction policies of Morgan Stanley or any of
its affiliates that would materially limit the
ability of Morgan Stanley or any of its affiliates
to hedge the SPARQS with respect to such
stock (a “Hedging Restriction”); provided
further that if three Reference Basket Stocks
cannot be identified from the S&P 500 Index
by primary SIC Code for which a Hedging
Restriction does not exist, the remaining
Reference Basket Stock(s) shall be selected by
the Calculation Agent from the largest market
capitalization stock(s) within the same Division
and Major Group classification (as defined by
the Office of Management and Budget) as the

	

17

	 	 	

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

	
	 	 	 

	
	 	 	

(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
	

18

	 	 	
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
Stock
Exchange
Ratios
resulting
from
any
Reorganization Event described in paragraph 5 above
or similar adjustment under paragraph 4 above shall be
subject to the adjustments set forth in paragraphs 1
through 5 hereof.
	
	 	 	 

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

	
	 	 	
No adjustment to any Exchange Ratio (including for
this purpose, any New Stock Exchange Ratio or Basket
Stock Exchange Ratio) shall be required unless such
adjustment would require a change of at least 0.1% in
the Exchange Ratio then in effect. The Exchange
Ratio resulting from any of the adjustments specified
above will be rounded to the nearest one hundred-
thousandth, with five one-millionths rounded upward.
	

19

	 	 	
Adjustments to the Exchange Ratios will be made up
to the close of business on the third Trading Day prior
to the scheduled Maturity Date.
	
	 	 	 

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

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

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

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

	
	 	 	

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

	

20

 

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

21

	
Alternate Exchange Calculation

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

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

22

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

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, 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

24

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

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

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

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

25

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.
	
	 	 

	
	
    JPMORGAN CHASE BANK, N.A.,	
	 	
  as Trustee
	
	 	 

	
	 	 

	
	By: 	 

	 	
    
	 	
 Authorized Officer
	

27

FORM OF REVERSE OF SECURITY

     This Note is one of a duly authorized issue of Senior Global Medium-Term Notes, Series F, having maturities more than nine months from the date of issue (the “Notes”) of the Issuer. The Notes are issuable under a Senior Indenture, dated as of November 1, 2004, between the Issuer and 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 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. 

28

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

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

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

29

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

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

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

30

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

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

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

31

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

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

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

32

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

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

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

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

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

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

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

33

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

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

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

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

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

34

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, 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

35

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. 

36

ABBREVIATIONS

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

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

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

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

	 	 	 	 
	 	 	 
	 
		 		

37

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

____________________________________________
 [PLEASE INSERT SOCIAL SECURITY OR OTHER

      IDENTIFYING NUMBER OF ASSIGNEE]

	 

	 
	 

	 
	 

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

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

Dated: _______________________

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

38

OPTION TO ELECT REPAYMENT

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

	 

	 
	 

	 
	 

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

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

	 	 	 
	
Dated:
________________________
		 
		_________________________________________
			
NOTICE: The signature on this Option
to Elect
			
Repayment must correspond with the
name as
			
written upon the face of the within
instrument in
			
every particular without alteration
or enlargement.

39Exhibit 4.1

     FORM OF FIXED RATE SENIOR NOTE 

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

        	 
        	
          CUSIP:
          

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

     MORGAN STANLEY 

SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES F 

(Fixed Rate) 

     HIGH INCOME TRIGGER SECURITIES 

          % HITS DUE JUNE 20, 2007 

MANDATORILY EXCHANGEABLE

FOR SHARES OF COMMON
STOCK OF 

NEWMONT MINING CORPORATION (the “HITS”) 

	
          ORIGINAL ISSUE DATE:
        	
          INITIAL REDEMPTION 

  DATE: N/A
        	
          INTEREST RATE:       % per

  annum	
          MATURITY DATE: See

            “Maturity
Date” below.
        
	
          INTEREST ACCRUAL

   DATE: 
        	
          INITIAL REDEMPTION

   PERCENTAGE:
N/A
        	
          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:
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	 	$           per
          HITS
	 	 	 
	Underlying Company	 	Newmont Mining Corporation
                    (“Newmont
          Mining”) 
	 	 	 
	Underlying Stock	 	The common stock of Newmont Mining
	 	 	 
	Pricing Date 	 	 
	 	 	 
	Denominations	 	$           and
          integral multiples thereof 

 2 

	Initial Share Price	 	$
	 	 	 
	Trigger Level	 	      %
          of the Initial Share Price
	 	 	 
	Trigger Price	 	$
	 	 	 
	Acceleration Trigger Price	 	$
	 	 	 
	Exchange Ratio	 	                    ,
                    which is equal to the Stated Principal Amount divided by
          the Initial Share Price 
	 	 	 
	Exchange Factor	 	                    , subject to adjustment
                    upon the occurrence of certain extraordinary dividends and
                    corporate events affecting the Underlying Stock through and
                    including the Determination Date, as described under “Antidilution
          Adjustments” below. 
	 	 	 
	Interest Payment Dates	 	September 20, 2006, December
                         20, 2006, March 20, 2007 and the Maturity Date. 

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

	 	 	 
	Maturity Date	 	June 20, 2007, subject
                         to acceleration as described below in “Price Event Acceleration” and “Alternate
                         Exchange Calculation in Case of an Event of Default” and
                         subject to extension if the Determination Date is postponed
               in accordance with the following paragraph.

               If the Determination
                              Date is postponed due to a Market Disruption Event
                         or otherwise, the Maturity Date shall be postponed so
                         that the Maturity Date shall be the second Trading Day
          following the Determination Date. 

	 	 	 
	Determination Date 	 	June 18, 2007; provided that
                         if such date is not a Trading Day or if a Market Disruption
                         Event occurs on such day, the Determination Date shall
                         be the immediately succeeding Trading Day on which no
                         Market Disruption Event occurs. 

                In the event that the Determination Date
                         and Maturity Date are postponed as described in the
          two 

 

     

      3 

     

	 	 	immediately preceding paragraphs,
                    the Issuer shall, or shall cause the Calculation Agent to,
                    give notice of such postponement and, once it has been determined,
                    of the date to which the Maturity Date has been rescheduled,
                    as promptly as possible, and in no case later than 10:30
                    a.m. on the Trading Day immediately prior to 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) (i) to the holder of this HITS 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 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 HITS receives
          the notice. 
	 	 	 
	Record Date	 	Notwithstanding the definition
                    of “Record
                    Date” on page 20 hereof, the Record Date for each Interest
                    Payment Date, including the Interest Payment Date scheduled
                    to occur on the Maturity Date, shall be the date 5 calendar
                    days prior to such scheduled Interest Payment Date, whether
          or not that date is a Business Day.
	 	 	 
	Payment at Maturity	 	Unless the maturity of the HITS
                    has been accelerated, on the Maturity Date, upon delivery
                    of this HITS to the Trustee, each Stated Principal Amount
                    of this HITS shall be applied by the Issuer as payment for,
          and the Issuer shall deliver, either: 
               (i) if the Trading Price of the Underlying
                         Stock has not decreased to or below the Trigger Price
                         at any time on any Trading Day from and including the
                         Pricing Date to and including the Determination Date,
                         an amount in cash equal to the Stated Principal Amount
                         per HITS, or 

                (ii) if the Trading Price of the Underlying
                         Stock has decreased to or below the Trigger Price at
                         any time on 
          

4

  

 

	 	 	any Trading Day from
                         and including the Pricing Date to and including the
                         Determination Date, a number of shares of the Underlying
                         Stock equal to the product of the Exchange Ratio and
                         the Exchange Factor, each determined as of the Determination
                         Date by the Calculation Agent. See “Exchange Factor” above
                         and “Antidilution Adjustments” below. 

                The number of any shares of the
                         Underlying Stock to be delivered at maturity shall be
                         subject to any applicable adjustments (i) to the Exchange
                         Factor and (ii) in the Exchange Property, as defined
                         in paragraph 5 under “Antidilution Adjustments” below,
                         to be delivered instead of, or in addition to, such
                         Underlying Stock as a result of any corporate event
                         described under “Antidilution Adjustments” below,
                         in each case, required to be made up to the close of
                         business on the Determination 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 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), of
                         the amount of cash or Underlying Stock (or the amount
                         of Exchange Property), as applicable, to be delivered
                         with respect to each Stated Principal Amount of this
                         HITS and, in the event of a delivery of the Underlying
                         Stock, 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 HITS is accelerated because
                         of a Price Event Acceleration (as defined below) or
                         because of an Event of Default Acceleration (as defined
                         in “Alternate Exchange Calculation in Case of an
                         Event of Default” below), the Issuer shall, or
                         shall cause the Calculation Agent to, give notice of
                         such acceleration and of the amount of cash or Underlying
                         Stock (or any Exchange Property) payable in connection
                         therewith as promptly as possible and in no event later
          than (A) in the case of 

5 

	 	 	an Event of Default
                         Acceleration, two Trading Days after the date of such
                         acceleration (but if such second Trading Day is not
                         a Business Day, prior to the close of business on the
                         Business Day preceding such second Trading Day) and
                         (B) in the case of a Price Event Acceleration, 10:30
                         a.m. on the Trading Day immediately prior to the date
                         of acceleration (but if such Trading Day is not a Business
                         Day, prior to the close of business on the Business
                         Day preceding the date of acceleration), (i) to the
                         holder of this HITS 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,
                         and (ii) to the Trustee by telephone or facsimile confirmed
                         by mailing such notice to the Trustee by first class
                         mail, postage prepaid, at its New York office and (iii)
                         to the Depositary by telephone or facsimile confirmed
                         by mailing such notice to the Depositary by first class
                         mail, postage prepaid. Any notice that is mailed in
                         the manner herein provided shall be conclusively presumed
                         to have been duly given, whether or not the holder of
                         this HITS receives the notice. If the maturity of this
                         HITS is accelerated in the manner described above, no
                         interest on the amounts payable with respect to this
                         HITS 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 cash or shares of Underlying
                         Stock (or any Exchange Property), as applicable, and
                         cash in respect of interest and any fractional shares
                         of 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 HITS.
                         The Calculation Agent shall determine the Exchange Factor
                         applicable at the maturity of this HITS.

                If this HITS is not surrendered
                         for exchange at maturity or upon acceleration, it shall
                         be deemed to be no longer Outstanding under, and as
                         defined in, the Senior Indenture, except with respect
          to the holder’s 

6 

	 	 	right to receive the Underlying
                         Stock (and, if applicable, any Exchange Property) and
                         any cash in respect of interest and any fractional shares
                         of Underlying Stock (or any Exchange Property) and any
                         other cash due at maturity as described in the preceding
                         paragraph under this heading. 

                References to payment “per HITS” refer
          to each Stated Principal Amount of this HITS.

	 	 	 
	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 per share of Underlying
                    Stock, as determined by the Calculation Agent, and the Exchange
                    Factor is less than the Acceleration Trigger Price, the Maturity
                    Date of this HITS 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 this HITS shall receive per Stated Principal
          Amount of this HITS on the date of acceleration: 
	 	 	 
	 	 	
               (i) a number of shares of Underlying
                                   Stock equal to the product of the Exchange Ratio and
                                   the Exchange Factor, as of such date of acceleration;
                                   and 

                (ii) accrued but unpaid interest to but
                                   excluding the date of acceleration plus 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 this HITS (excluding any portion
                                   of such payments of interest accrued to the date of
                                   acceleration) discounted to the date of acceleration
                                   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 HITS shall not
                    be entitled to receive the return of each Stated Principal
          Amount of this HITS upon a Price Event Acceleration. 

7 

	No Fractional Shares	 	Upon delivery of this HITS to the
                    Trustee at maturity (including as a result of acceleration
                    other than an acceleration resulting from an Event of Default),
                    and if applicable, the Issuer shall deliver the aggregate
                    number of shares of Underlying Stock due with respect to
                    this HITS, as described above, but the Issuer shall pay cash
                    in lieu of delivering any fractional share of Underlying
                    Stock in an amount equal to the corresponding fractional
                    Closing Price of such fraction of a share of Underlying Stock
                    as determined by the Calculation Agent as of the Determination
          Date. 
	 	 	 
	Closing Price	 	The Closing Price for one share
                    of Underlying Stock (or one unit of any other security for
                    which a Closing Price must be determined) on any Trading
          Day (as defined below) means: 
	 	 	 
	 	 	
               (i) if the Underlying Stock (or
                                   any such other security) is listed or admitted
                         to trading on a national securities exchange, the last
                         reported sale price, regular way, of the principal trading
                         session on such day on the principal United States securities
                                   exchange registered under the Securities Exchange
                         Act of 1934, as amended (the “Exchange Act”),
                                   on which the Underlying Stock (or any such
                         other security) is listed or admitted to trading, 

                (ii) if the Underlying Stock (or any such
                                   other security) is a security of the Nasdaq National
                                   Market (and provided that the Nasdaq National Market
                                   is not then a national securities exchange), the Nasdaq
                                   official closing price published by The Nasdaq Stock
                                   Market, Inc. on such day, or 

                (iii) if the Underlying Stock
                         (or any such other security) is neither listed or admitted
                         to trading on any national securities exchange nor a
                         security of the Nasdaq National Market 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. 

          

     8 

	 	 	If the Underlying Stock
                    (or any such other security) is listed or admitted to trading
                    on any national securities exchange or is a security of the
                    Nasdaq National Market but the last reported sale price or
                    Nasdaq official closing price, as applicable, is not available
                    pursuant to the preceding sentence, then the Closing Price
                    for one share of Underlying Stock (or one unit of any such
                    other security) on any Trading Day shall mean the last reported
                    sale price of the principal trading session on the over-the-counter
                    market as reported on the Nasdaq National Market or the OTC
                    Bulletin Board on such day. If, because of a Market Disruption
                    Event (as defined below) or otherwise, the last reported
                    sale price or Nasdaq official closing price, as applicable,
                    for the Underlying Stock (or any such other security) is
                    not available pursuant to either of the two preceding sentences,
                    then the Closing Price for any Trading Day shall be the mean,
                    as determined by the Calculation Agent, of the bid prices
                    for the Underlying Stock (or any such other security) for
                    such Trading Day obtained from as many recognized dealers
                    in such security, but not exceeding three, as shall make
                    such bid prices available to the Calculation Agent. Bids
                    of MS & Co. or any of its affiliates may be included
                    in the calculation of such mean, but only to the extent that
                    any such bid is the highest of the bids obtained. The term “security
                    of the Nasdaq National Market” shall include a security
                    included in any successor to such system, and the term “OTC
                    Bulletin Board Service” shall include any successor
          service thereto.
	 	 	 
	Intraday Price	 	The Intraday Price for one share
                         of the Underlying Stock (or one unit of any other security
                         for which an Intraday Price must be determined) at any time
                         during any Trading Day (including at the close) means:

               
                     (i)
                                        if the Underlying Stock (or any such other security)
                                   is listed or admitted to trading on a national securities
                                   exchange, the most recently reported sale price, regular
                                   way, at such time during the principal trading session
                                   on such day on the principal United States securities
                                   exchange registered under the Exchange Act on which
                    the

          

     9 

	 	 	
               Underlying Stock (or any such
                                   other security) is listed or admitted to trading,

               (ii)
                                     if the Underlying Stock (or any such other
                     security) is a security of the Nasdaq National Market (and
                     provided that the Nasdaq National Market is not then a national
                                     securities exchange), the most recently
                   reported sale price at such time quoted by The Nasdaq Stock
                   Market, Inc. on such day, or 

                (iii) if the Underlying Stock (or any such
                                   other security) is neither listed or admitted to trading
                                   on any national securities exchange nor a security of
                                   the Nasdaq National Market but is included in the OTC
                                   Bulletin Board, the most recently reported sale price
                                   at such time during the principal trading session on
                    the OTC Bulletin Board on such day. 

          

	 	 	 
	Trading Price	 	Trading Price means the product
                    of (i) the Intraday Price of one share of the Underlying
                    Stock and (ii) the Exchange Factor, each as determined by
          the Calculation Agent at any time on any Trading Day. 
	 	 	 
	Trading Day	 	A day, as determined by
                    the Calculation Agent, on which trading is generally conducted
                    on the New York Stock Exchange, Inc. (“NYSE”),
                    the American Stock Exchange LLC, the Nasdaq National Market,
                    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
                    for 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 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 HITS, the Trustee and the Issuer. 

          

10 

	 	 	All calculations with respect to
                    the Exchange Ratio and the Exchange Factor for this HITS
                    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), and all dollar amounts
                    paid to the holder of this HITS in the aggregate related
                    to interest payments or the payment at maturity resulting
                    from such calculations shall be rounded to the nearest cent
          with one-half cent rounded upward. 
	 	 	 
	Antidilution Adjustments	 	The Exchange Factor 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 Factor shall
                         be adjusted to equal the product of the prior Exchange
                         Factor and the number of shares issued in such stock
                         split or reverse stock split with respect to one share
                         of the Underlying Stock. 

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

                3. If the Underlying Company issues rights
                         or warrants to all holders of the Underlying Stock to
                         subscribe for or purchase the 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 HITS, then the Exchange Factor
                         shall be adjusted to equal the product of the prior
          Exchange

11 
     

     

     

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

                4. There shall be no adjustments to the
                         Exchange Factor 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 paragraph 5 below 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 (a) is defined by
                         the Underlying Company as an extraordinary or special
                         dividend or distribution, or (b) exceeds the immediately
                         preceding non-Extraordinary Dividend for the Underlying
                         Stock by an amount equal to at least 5% 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. If an Extraordinary
          Dividend 

       

12 

	 	 	occurs with respect
                         to the Underlying Stock, the Exchange Factor 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 Factor shall equal the product
                         of (i) the then current Exchange Factor and (ii) a fraction,
                         the numerator of which is the Closing Price on the Trading
                         Day preceding the ex-dividend date, and the denominator
                         of which is the amount by which the Closing Price on
                         the Trading Day preceding the ex-dividend date exceeds
                         the Extraordinary Dividend Amount. The “Extraordinary Dividend Amount” with
                         respect to an Extraordinary Dividend for the Underlying
                         Stock shall equal (i) in the case of cash dividends
                         or other distributions that constitute regular dividends,
                         the amount per share of such Extraordinary Dividend
                         minus the amount per share of the immediately preceding
                         non-Extraordinary Dividend for the Underlying Stock
                         or (ii) in the case of cash dividends or other distributions
                         that do not constitute regular dividends, the amount
                         per share of such Extraordinary Dividend. To the extent
                         an Extraordinary Dividend is not paid in cash, the value
                         of the non-cash component shall be determined by the
                         Calculation Agent, whose determination shall be conclusive.
                         A distribution on the Underlying Stock described in
                         clause (i), (iv) or (v) of paragraph 5 below that also
                         constitutes an Extraordinary Dividend shall cause an
                         adjustment to the Exchange Factor pursuant only to clause
                         (i), (iv) or (v) of paragraph 5, as applicable. 

                5. If (i) there occurs any reclassification
                         or change of the Underlying Stock, including, without
                         limitation, as a result of the issuance of any tracking
                         stock by the Underlying Company, (ii) the Underlying
                         Company or any surviving entity or subsequent surviving
                         entity of the Underlying Company (an “Underlying
                         Company Successor”) has been subject to a merger,
                         combination or consolidation and is not the surviving
                         entity, (iii) any statutory exchange of securities of
                         the Underlying Company or any Underlying Company Successor
                         with another corporation occurs (other than pursuant
          to clause (ii) above), (iv) the Underlying Company is 

13 

	 	 	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 “Spin-off Event”)
                         or (vi) a tender or exchange offer or going-private
                         transaction is consummated for all the outstanding shares
                         of the Underlying Stock (any such event in clauses (i)
                         through (vi), a “Reorganization Event”), the
                         method of determining the amount payable upon exchange
                         at maturity for each HITS shall be adjusted to provide
                         that holders shall be entitled to receive at maturity,
                         in respect of the stated principal amount of each HITS
                         either: 
                         

                         
                               (a) if (x) the trading price
                                   of the Underlying Stock at any time on any Trading Day
                                   from and including the Pricing Date to and including
                                   the effective date of the Reorganization Event, or (y)
                                   the Exchange Property Value (as defined below) at any
                                   time on any Trading Day from and including the effective
                                   date of the Reorganization Event to and including the
                                   Determination Date has not decreased to or below the
                                   Trigger Price, and amount of cash equal to the stated
                                   principal amount of each HITS, or 

                               (b) if (x) the trading price
                                   of the Underlying Stock at any time on any Trading Day
                                   from and including the Pricing Date to and including
                                   the effective date of the Reorganization Event, or (y)
                                   the Exchange Property Value (as defined below) at any
                                   time on any Trading Day from and including the effective
                                   date of the Reorganization Event to and including the
                                   Determination Date has decreased to or below the Trigger
                                   Price, securities, cash or any other assets distributed
                                   to holders of the Underlying Stock in or as a result
                                   of any such Reorganization Event, including (A) in the
                                   case of the issuance of tracking stock, the reclassified
                                   share of the Underlying Stock, (B) in the case of a
                                   Spin-off Event, the share of the Underlying Stock with
                                   respect to which the spun-off security was issued, and
                                   (C) in the case of any other Reorganization Event where
                                   the Underlying Stock continues to be held by the holders
                    receiving such distribution, the 

          

14 

	 	 	
            Underlying
                             Stock (collectively, the “Exchange Property”),
                             in an amount equal to the amount of Exchange Property
                             delivered with respect to a number of shares of the
                             Underlying Stock equal to the Exchange Ratio times the
                             Exchange Factor each determined at the time of the Reorganization
                             Event.

          
             If Exchange Property consists
                         of more than one type of property, the Issuer shall
                         deliver to the Depositary, as holder of the HITS, at
                         maturity a pro rata share of each such type of Exchange
                         Property. If Exchange Property includes a cash component,
                         holders shall not receive any interest accrued on such
                         cash component. In the event Exchange Property consists
                         of securities, such securities shall, in turn, be subject
                         to the antidilution adjustments set forth in paragraphs
                         1 through 5.

                For purposes of determining
                         whether or not the Exchange Property Value has decreased
                         to or below the Trigger Level at any time on any Trading
                         Day from and including the time of the Reorganization
                         Event to and including the Determination Date, “Exchange
                         Property Value” means (i) for any cash received
                         in any Reorganization Event, the value, as determined
                         by the Calculation Agent, as of the date of receipt,
                         of such cash received for one share of the Underlying
                         Stock, as adjusted by the Exchange Factor as the time
                         of such Reorganization Event, (ii) for any property
                         other than cash or securities received in any such Reorganization
                         Event, the market value, as determined by the Calculation
                         Agent in its sole discretion, as of the date of receipt,
                         of such Exchange Property received for one share of
                         the Underlying Stock, as adjusted by the Exchange Factor
                         at the time of such Reorganization Event and (iii) for
                         any security received in any such Reorganization Event,
                         an amount equal to the Intraday Price, as of the time
                         at which the Exchange Property Value is determined,
                         per share of such security multiplied by the quantity
                         of such security received for each share of the Underlying
                         Stock, as adjusted by the Exchange Factor at the time
          of such Reorganization Event.

     15 

	 	 	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 paragraph 5 above,
                         (i) references to the “Underlying Stock” under “No Fractional
                         Shares,” “Price Event Acceleration” and “Alternate
                         Exchange Calculation in Case of an Event of Default” shall
                         be deemed to also refer to any other security received
                         by holders of the Underlying Stock in any such Reorganization
                         Event, and (ii) all other references in this HITS to “Underlying
                         Stock” shall be deemed to refer to the Exchange
                         Property into which this HITS is thereafter exchangeable
                         and references to a “share” or “shares” of
                         the Underlying Stock shall be deemed to refer to the
                         applicable unit or units of such Exchange Property,
                         unless the context otherwise requires.

                No adjustment to the Exchange Factor shall
                         be required unless such adjustment would require a change
                         of at least 0.1% in the Exchange Factor then in effect.
                         The Exchange Factor 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 Factor shall be
                         made up to the close of business on the Determination
                         Date.

                No adjustments to the Exchange Factor or
                         method of calculating the Exchange Factor shall be required
          other than as specified above.

16 

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

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

          

17 

	 	 	
               all or a material portion of the
                    hedge with respect to the HITS.

          

	 	 	 
	 	 	For purposes of determining whether
                    a Market Disruption Event has occurred: (1) a limitation
                    on the hours or number of days of trading shall not constitute
                    a Market Disruption Event if it results from an announced
                    change in the regular business hours of the relevant exchange,
                    (2) a decision to permanently discontinue trading in the
                    relevant options contract shall not constitute a Market Disruption
                    Event, (3) limitations pursuant to NYSE Rule 80A (or any
                    applicable rule or regulation enacted or promulgated by the
                    NYSE, any other self-regulatory organization or the Securities
                    and Exchange Commission of scope similar to NYSE Rule 80A
                    as determined by the Calculation Agent) on trading during
                    significant market fluctuations shall constitute a suspension,
                    absence or material limitation of trading, (4) a suspension
                    of trading in options contracts on the Underlying Stock by
                    the primary securities market trading in such options, if
                    available, by reason of (x) a price change exceeding limits
                    set by such securities exchange or market, (y) an imbalance
                    of orders relating to such contracts or (z) a disparity in
                    bid and ask quotes relating to such contracts shall constitute
                    a suspension, absence or material limitation of trading in
                    options contracts related to the Underlying Stock and (5)
                    a suspension, absence or material limitation of trading on
                    the primary securities market on which options contracts
                    related to the Underlying Stock are traded shall not include
                    any time when such securities market is itself closed for
          trading under ordinary circumstances.
	 	 	 
	Alternate
          Exchange Calculation	 	 
	    in
              Case of an Event of Default	 	In case an Event of Default
                    with respect to the HITS shall have occurred and be continuing,
                    the amount declared due and payable per each Stated Principal
                    Amount of this HITS upon any acceleration of this HITS (an “Event
                    of Default Acceleration”) shall be determined by the
                    Calculation Agent and shall be an amount in cash equal to
                    either (i) the Stated Principal Amount of this HITS plus
          accrued but unpaid interest

18 

	 	 	to but excluding the date of such
                    acceleration or (ii) if the Trading Price of the Underlying
                    Stock has decreased to or below the Trigger Price at any
                    time on any Trading Day from and including the Pricing Date
                    to and including the date of such acceleration, (x) the value,
                    as determined based on the Closing Price of the Underlying
                    Stock on the date of such acceleration, of a number of shares
                    of the Underlying Stock at the Exchange Ratio multiplied
                    by the Exchange Factor as of the date of acceleration and
                    (y) accrued but unpaid interest to but excluding the date
          of such acceleration.
	 	 	 
	Treatment of HITS for	 	 
	    United
       States Federal	 	 
	    Income
              Tax Purposes	 	The Issuer, by its sale
                    of this HITS, and the holder of this HITS (and any successor
                    holder of, or holder of a beneficial interest in, this HITS),
                    by its respective purchase hereof, agree (in the absence
                    of an administrative determination or judicial ruling to
                    the contrary) to characterize each Stated Principal Amount
                    of this HITS for all tax purposes as a unit consisting of
                    (i) an option (the “Option”) granted by the holder
                    to enter into a forward contract (the “Forward Contract”),
                    pursuant to which Forward Contract the holder of this HITS
                    will be required to purchase from us the Underlying Stock,
                    for an amount equal to the Stated Principal Amount (the “Forward
                    Price”) at maturity or, alternatively, upon an earlier
                    redemption of this HITS and (ii) a deposit with the Issuer
                    of a fixed amount of cash, equal to the issue price per each
                    Stated Principal Amount of this HITS, to secure the holder’s
                    obligation to purchase the Underlying Stock pursuant to the
                    Forward Contract (the “Deposit”). The Issuer has
                    determined that the Deposit bears a quarterly compounded
                    yield of     % per annum, and the remainder of the interest payments
                    on this HITS (    % per annum) is attributable
                    to premiums on the Option. Notwithstanding the foregoing,
                    any interest payments on this HITS made to non-U.S. investors
          will generally be withheld upon at a rate of 30%.

19 

          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 or Underlying Stock (or the amount of Exchange
     Property), as applicable, 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, 

     20 

     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 

     21 

     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. 

     22 

     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. 

     JPMORGAN CHASE BANK, N.A., 

     as
Trustee 

	By:	 
	 
        	

	 
        	 Authorized
                  Officer
        
	 
        	  

 

23

     FORM OF REVERSE OF SECURITY 

          This Note
     is one of a duly authorized issue of Senior Global Medium-Term Notes, Series
     F, having maturities more than nine months from the date of issue (the “Notes”)
     of the Issuer. The Notes are issuable under a Senior Indenture, dated as
     of November 1, 2004, between the Issuer and 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 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 

     24 

     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 

     25 

     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 

     26 

     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 

     27 

     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 computing 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 

     28 

     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; 

     29 

          (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 

     30 

     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 

     31 

     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. 

     32

          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. 

     33

     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.

	 	 	 	 
	 	 	 
	 
		 		

34

     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.

35

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.

 

     36

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