EXHIBIT 4-u


                           [FORM OF FACE OF SECURITY]

                  EURO FIXED RATE SUBORDINATED REGISTERED NOTE

REGISTERED                                                            REGISTERED
No. EFXRR                                                     [PRINCIPAL AMOUNT]

     THIS NOTE HAS NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE SECURITIES
AND EXCHANGE LAW OF JAPAN. THIS NOTE MAY NOT BE OFFERED OR SOLD, DIRECTLY OR
INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN (WHICH
TERM AS USED HEREIN MEANS ANY PERSON RESIDENT IN JAPAN INCLUDING ANY CORPORATION
OR OTHER ENTITY ORGANIZED UNDER THE LAWS OF JAPAN) OR TO OTHERS FOR THE RE
OFFERING OR RE SALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO A RESIDENT OF JAPAN
EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AND
OTHERWISE IN COMPLIANCE WITH, THE SECURITIES AND EXCHANGE LAW OF JAPAN AND OTHER
RELEVANT LAWS AND REGULATIONS OF JAPAN.(1)

     THESE SECURITIES ARE NOT INSURED OR PROTECTED BY THE SECURITIES INVESTOR
PROTECTION CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.


-----------------------
     (1) If this Note is offered in Japan or denominated in Japanese Yen,
appropriate legends need to be added.



<PAGE>


                                 MORGAN STANLEY

                     GLOBAL MEDIUM TERM NOTE, SERIES [G/H]

                  Euro Fixed Rate Subordinated Registered Note


--------------------------------------------------------------------------------
ORIGINAL ISSUE   INITIAL REDEMPTION  INTEREST RATE:      MATURITY DATE:
  DATE:            DATE:
--------------------------------------------------------------------------------
INTEREST ACCRUAL INITIAL REDEMPTION  INTEREST PAYMENT    OPTIONAL REPAYMENT
  DATE:            PERCENTAGE:         DATE(S):            DATE(S):
--------------------------------------------------------------------------------
SPECIFIED        ANNUAL REDEMPTION   EUROCLEAR NO.:      MINIMUM
CURRENCY:        PERCENTAGE                                DENOMINATIONS:
                 REDUCTION:
--------------------------------------------------------------------------------
EXCHANGE RATE    REDEMPTION NOTICE   CLEARSTREAM NO.:    APPLICABILITY OF
  AGENT:           PERIOD:(2)                              MODIFIED PAYMENT
                                                           UPON
                                                           ACCELERATION OR
                                                           REDEMPTION:
--------------------------------------------------------------------------------
                 PRICE APPLICABLE    COMMON CODE:        If yes, state Issue
                   UPON OPTIONAL                            Price:
                   REPAYMENT:(3)
--------------------------------------------------------------------------------
                                     ISIN:               ORIGINAL YIELD TO
                                                           MATURITY:
--------------------------------------------------------------------------------
                                                         OTHER PROVISIONS:
--------------------------------------------------------------------------------


     Morgan Stanley, a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to
_______________________, or registered assignees, the principal sum of
                            , on the Maturity Date specified above (except to
the extent previously redeemed or repaid) and to pay interest thereon at the
Interest Rate per annum specified above from and including the Interest Accrual
Date specified above until but excluding the date the principal hereof is paid
or duly made available for payment (except as provided below) weekly, monthly,
quarterly, semi-annually or annually in arrears on the Interest Payment Dates
specified above in each 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,



-----------------------
     (2) Applicable if other than 30-60 calendar days. Consult with Euroclear or
Clearstream if a shorter redemption is requested. A minimum of 10 calendar days
may be possible.

     (3) Applies if this Note has optional repayment and is issued with original
issue discount.


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<PAGE>


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.

     Interest on this Note will accrue from and including the most recent
Interest Payment 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 (except as provided below). 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 on the reverse
hereof)) (each such date, a "Record Date"); provided, however, that interest
payable at maturity, redemption or repayment will be payable to the person to
whom the principal hereof shall be payable.

     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 in immediately
available funds upon surrender of this Note at the office or agency of the
Principal Paying Agent, as defined on the reverse hereof, or at such other
paying agency as the Issuer may determine (each, a "Paying Agent," which term
shall include the Principal Paying Agent). Payment of the principal of and
premium, if any, and interest on this Note will be made in the Specified
Currency indicated above; provided, however, that 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 more in aggregate principal amount of Notes having the same
Interest Payment Date will 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 Principal 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,
payments of interest hereon 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, and in the case the Specified Currency is
euro, in a country for which the euro is the lawful currency, if appropriate
wire transfer instructions have been received by the Principal Paying Agent in
writing on or prior to the fifth business day after the applicable Record Date.
If such wire transfer instructions are not so received, such interest 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.

     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, as defined on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit


                                       3
<PAGE>


under the Subordinated Indenture, as defined on the reverse hereof, or be valid
or obligatory for any purpose.


                                       4
<PAGE>


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
    Subordinated Indenture.


J.P. MORGAN TRUST COMPANY,
NATIONAL ASSOCIATION,
    as Trustee


By:
    ----------------------------
    Authorized Officer


                                       5
<PAGE>


                         [FORM OF REVERSE OF SECURITY]

     This Note is one of a duly authorized issue of Subordinated Global Medium
Term Notes, Series [G/H], having maturities more than nine months from the date
of issue (the "Notes") of the Issuer. The Notes are issuable under a
Subordinated Indenture, dated as of October 1, 2004, between the Issuer and J.P.
Morgan Trust Company, National Association, as Trustee (the "Trustee," which
term includes any successor trustee under the Subordinated Indenture) (as may be
amended or supplemented from time to time, the "Subordinated Indenture"), to
which Subordinated Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities of the Issuer, the Trustee and holders of the Notes and
the terms upon which the Notes are, and are to be, authenticated and delivered.
The Issuer has appointed the Trustee acting through its principal corporate
trust office in the Borough of Manhattan, The City of New York, as a paying
agent for the Notes in the United States and has appointed the Trustee (acting
through JPMorgan Chase Bank, London Branch, ("JPMorgan Chase London") at its
corporate trust office in London as its sub-agent), as the principal paying
agent for the Notes outside the United States (the "Principal Paying Agent,"
which term includes any additional or successor principal paying agent appointed
by the Issuer). 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 Subordinated Indenture. To the extent not inconsistent herewith,
the terms of the Subordinated 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 indicated on the face hereof
in accordance with the provisions of the following two paragraphs and except as
set forth below, 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 (except as
indicated below). 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 (except as
provided below). Notice of redemption shall be mailed to the registered holders
of the Notes designated for redemption 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
Subordinated Indenture. In the event of redemption of this Note in part only, a
new Note or Notes for the amount of the unredeemed portion hereof shall be
issued in the name of the holder hereof upon the cancellation hereof.

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


                                       6
<PAGE>


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 (except as provided below), provided that if this Note is
issued with original issue discount, this Note will be repayable on the
applicable Optional Repayment Date or Dates at the price(s) specified on the
face hereof. For this Note to be repaid at the option of the holder hereof, the
Principal Paying Agent must receive at its office in London, 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 trust company in the United States, Western Europe or Japan
setting forth the principal amount of the Note, the principal amount of the Note
to be repaid, the certificate number or a description of the tenor and terms of
this Note, a statement that the Option to Elect Repayment is being exercised and
a guarantee that this Note to be repaid, together with the duly completed form
entitled Option to Elect Repayment, will be received by the principal paying
agent not later than the fifth Business Day after the date of that telegram,
telex, facsimile transmission or letter. However, the telegram, telex, facsimile
transmission or letter shall only be effective if this Note and an Option to
Elect Repayment form duly completed are received by the Paying Agent by the
fifth Business Day after the date of such telegram, telex, facsimile
transmission or letter. Unless otherwise indicated on the face of this Note,
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 specified 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.

     This Note and all other obligations of the Issuer hereunder will constitute
part of the subordinated debt of the Issuer, will be issued under the
Subordinated Indenture and will be subordinate and junior in right of payment,
to the extent and in the manner set forth in the Subordinated Indenture, to all
"Senior Indebtedness" of the Issuer. The Subordinated Indenture defines "Senior
Indebtedness" as (i) obligations (other than non recourse obligations, the debt


                                       7
<PAGE>


securities, including this Note, issued under the Subordinated Indenture or any
other obligations specifically designated as being subordinate in right of
payment to Senior Indebtedness) of, or guaranteed or assumed by, the Issuer for
borrowed money or evidenced by bonds, debentures, notes or other similar
instruments, and amendments, renewals, extensions, modifications and refundings
of any such indebtedness or obligation and (ii) if provided in the supplemental
indenture under which a series of Securities is issued or in the form of
Security for such series, any additional obligations that the Issuer determines
to include within the definition of Senior Indebtedness in order to assure that
the Securities of such series will be accorded the regulatory capital
recognition desired by the Issuer in accordance with Rule 15c3-1 under the
Securities Exchange Act of 1934, as amended, or any other rule or regulation
governing the definition of capital that is applicable to the Issuer or its
affiliates.

     This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and is issuable only
in the minimum denominations set forth on the face hereof or any amount in
excess thereof which is an integral multiple of 1,000 units of the Specified
Currency set forth on the face hereof.

     The Trustee has been appointed registrar for the Notes in the United States
(the "U.S. Registrar," which term includes any successor registrar appointed by
the Issuer), and the U.S. Registrar will maintain at its office in The City of
New York, a register for the registration and transfer of Notes. The Trustee
(acting through JPMorgan Chase London as its sub-agent) has been appointed
registrar for the registration and transfer of Notes outside the United States
(the "Non-U.S. Registrar," which term includes any successor registrar appointed
by the Issuer), and the Non-U.S. Registrar will maintain in London (through the
London office of its sub-agent), a register for the registration and transfer of
Notes. This Note may be transferred at either the aforesaid New York office of
the U.S. Registrar or at the London office of the sub-agent of the Non-U.S.
Registrar by surrendering this Note for cancellation, accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Registrar and
duly executed by the registered holder hereof in person or by the holder's
attorney duly authorized in writing, and thereupon the Registrar 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 Registrar 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
Subordinated Indenture with respect to the redemption of Notes. Notes are
exchangeable at said offices for other Notes of other authorized denominations
of equal aggregate principal amount having identical terms and provisions. All
such registrations, exchanges and transfers of Notes will be free of service
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 Registrar and executed by the registered
holder in person or by the holder's


                                       8
<PAGE>


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 Registrar, the Issuer in its discretion will execute a new Note
of like tenor in exchange for this Note, but, if this Note has been destroyed,
lost or stolen, only upon receipt of evidence satisfactory to the Registrar 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 Subordinated Indenture provides that, (a) if an Event of Default (as
defined in the Subordinated Indenture) pursuant to Section 5.01(c) of the
Subordinated Indenture is provided in the supplemental indenture relating to the
series of Subordinated Medium-Term Notes of which this Note forms a part or in
the form of debt security for such series (if such Event of Default is with
respect to less than all outstanding debt securities issued under the
Subordinated Indenture) and such Event of Default 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 certain events of bankruptcy,
insolvency or reorganization of the Issuer shall have occurred and be continuing
or if an Event of Default pursuant to Section 5.01(c) of the Subordinated
Indenture is provided in the supplemental indenture relating to the series of
Subordinated Medium-Term Notes of which this Note forms a part or in the form of
debt security for such series (if such Event of Default is with respect to all
outstanding debt securities issued under the Subordinated Indenture) and such
Event of Default 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 Subordinated 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, premium, if any, or
interest on such debt securities) by the holders of a majority in aggregate
principal amount of all 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


                                       9
<PAGE>


amount) plus the original issue discount amortized from the Interest Accrual
Date to the date of declaration, which amortization shall be calculated using
the "interest method" (computed in accordance with generally accepted accounting
principles in effect on the date of declaration), (ii) for the purpose of any
vote of securityholders taken pursuant to the Subordinated 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 Subordinated 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.

     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," such
redemption price would 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 amortized from the Interest Accrual Date to the date of redemption,
which amortization shall be calculated using the "interest method" (computed in
accordance with generally accepted accounting principles in effect on the date
of redemption)), if the Issuer determines that, as a result of any change in or
amendment to the laws (including a holding, judgment or as ordered by a court of
competent jurisdiction), or any regulations or rulings promulgated thereunder,
of the United States or of any political subdivision or taxing authority thereof
or therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which change
or amendment occurs, becomes effective or, in the case of a change in official
position, is announced on or after the Original Issue 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.

     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 defined below) 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


                                       10
<PAGE>


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;


                                       11
<PAGE>


          (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 Subordinated 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 Subordinated Indenture
then outstanding and affected (voting as one class), to execute supplemental
indentures adding any provisions to or changing in any manner the rights of the
holders of each series so affected; provided that the Issuer and the Trustee may
not, without the consent of the holder of each outstanding debt security
affected thereby, (i) extend the final maturity of any such debt security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof,
or change the currency of payment thereof, or modify or amend the provisions for
conversion of any currency into any other currency, or modify or amend the
provisions for conversion or exchange of the debt security for securities of the
Issuer or other entities or for other property or the cash value of the property
(other than as provided in the antidilution provisions or other similar
adjustment provisions of the debt securities or otherwise in accordance with the
terms thereof), or impair or affect the rights of any holder to institute suit
for the payment thereof or (ii) reduce the aforesaid percentage in principal
amount of debt securities the consent of the holders of which is required for
any such supplemental indenture; provided, however, that neither this Note nor
the Subordinated Indenture may be amended to alter the subordination provisions
hereof or thereof without the written consent of each holder of Senior
Indebtedness then outstanding that would potentially be adversely affected
thereby.

     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


                                       12
<PAGE>


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 (as
defined below) 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 (as
defined below) 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 (as defined below) 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. International
Limited, 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.
If this Note is listed on the London Stock Exchange plc and such exchange so
requires, the Issuer shall maintain a Paying Agent in London. 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. The Issuer may designate
other agencies for the payment of said principal, premium and interest at such
place or places outside the United States (subject to applicable laws and
regulations) as the Issuer may decide. So long as there


                                       13
<PAGE>


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.

     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 Subordinated 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 Subordinated 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:

          (a) the term "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 in London 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


                                       14
<PAGE>


     Automated Real-time Gross Settlement Express Transfer System ("TARGET") is
     operating (a "TARGET Settlement Day");

          (b) the term "Market Exchange Rate" means the noon U.S. dollar buying
     rate in The City of New York for cable transfers of the Specified Currency
     indicated on the face hereof published by the Federal Reserve Bank of New
     York;

          (c) the term "Notices" refers to notices to the holders of the Notes
     at each holder's address as that address appears in the register for the
     Notes by first class mail, postage prepaid, and to be given by publication
     in an authorized newspaper in the English language and of general
     circulation in the Borough of Manhattan, The City of New York, and London
     or, if publication in London is not practical, in an English language
     newspaper with general circulation in Western Europe; provided that notice
     may be made, at the option of the Issuer, through the customary notice
     provisions of the clearing system or systems through which beneficial
     interests in this Note are owned. Such notices will be deemed to have been
     given on the date of such publication (or other transmission, as
     applicable) or, if published in such newspapers on different dates, on the
     date of the first such publication;

          (d) the term "United States" means the United States of America
     (including the States and the District of Columbia), its territories, its
     possessions and other areas subject to its jurisdiction; and

          (e) 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 other terms used in this Note which are defined in the Subordinated
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Subordinated Indenture.


                                       15
<PAGE>


                                 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 A              Custodian
                    -------------          ------------------------
                        (Minor)                    (Cust)

Under Uniform Gifts to Minors Act
                                  -------------------------------------
                                               (State)

     Additional abbreviations may also be used though not in the above list.


                                       16
<PAGE>


     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.


                                       17
<PAGE>


                           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.


                                       18