EXHIBIT 4.1

                             FIXED RATE SENIOR NOTE

REGISTERED                                                    REGISTERED
No. FXR                                                       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.






                                      A-1

<PAGE>

<TABLE>
                                                  MORGAN STANLEY
                                     SENIOR GLOBAL MEDIUM-TERM NOTES, SERIES C
                                                   (Fixed Rate)

                                           STOCK PARTICIPATION ACCRETING
                                REDEMPTION QUARTERLY-PAY SECURITIES(SM) ("SPARQS")

                                          8% SPARQS(R) DUE NOVEMBER 30, 2004
                                             MANDATORILY EXCHANGEABLE
                                           FOR SHARES OF COMMON STOCK OF
                                          TEXAS INSTRUMENTS INCORPORATED

------------------------------------------------------------------------------------------------------------------
<S>                           <C>                          <C>                          <C>
ORIGINAL ISSUE DATE:          INITIAL REDEMPTION           INTEREST RATE:   % per       MATURITY DATE:
                                 DATE: See "Morgan            annum (equivalent            See "Maturity Date"
                                 Stanley Call Right"          to $     per annum per       below.
                                 below.                       SPARQS)
------------------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL              INITIAL REDEMPTION           INTEREST PAYMENT             OPTIONAL
   DATE:                         PERCENTAGE: See              DATE(S): See "Interest       REPAYMENT
                                 "Morgan Stanley Call         Payment Dates" below.        DATE(S):  N/A
                                 Right" and "Call Price"
                                 below.
------------------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY:           ANNUAL REDEMPTION            INTEREST PAYMENT             APPLICABILITY OF
   U.S. dollars                  PERCENTAGE                   PERIOD: Quarterly            MODIFIED
                                 REDUCTION: N/A                                            PAYMENT UPON
                                                                                           ACCELERATION OR
                                                                                           REDEMPTION: See
                                                                                           "Alternate Exchange
                                                                                           Calculation in Case of
                                                                                           an Event of Default"
                                                                                           below.
------------------------------------------------------------------------------------------------------------------
IF SPECIFIED                  REDEMPTION NOTICE            APPLICABILITY OF             If yes, state Issue Price:
   CURRENCY OTHER                PERIOD: At least 10          ANNUAL INTEREST              N/A
   THAN U.S. DOLLARS,            days but no more than        PAYMENTS: N/A
   OPTION TO ELECT               30 days.  See "Morgan
   PAYMENT IN U.S.               Stanley Call Right" and
   DOLLARS: N/A                  "Morgan Stanley Notice
                                 Date" below.
------------------------------------------------------------------------------------------------------------------
EXCHANGE RATE                 TAX REDEMPTION               PRICE APPLICABLE             ORIGINAL YIELD TO
   AGENT: N/A                    AND PAYMENT OF               UPON OPTIONAL                MATURITY: N/A
                                 ADDITIONAL                   REPAYMENT: N/A
                                 AMOUNTS: N/A
------------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS:             IF YES, STATE INITIAL
   See below.                    OFFERING DATE: N/A
------------------------------------------------------------------------------------------------------------------
</TABLE>

Issue Price.........................    $      per each $       principal amount
                                        of this SPARQS

Maturity Date.......................    November 30, 2004, subject to
                                        acceleration as described below in
                                        "Price Event Acceleration" and
                                        "Alternate Exchange Calculation in Case
                                        of an Event of Default"


                                       A-2
<PAGE>


                                        and subject to extension if the Final
                                        Call Notice Date is postponed in
                                        accordance with the following paragraph.

                                        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
                                        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 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..............    If the scheduled Maturity Date is
                                        postponed due to a Market Disruption
                                        Event or otherwise, the Issuer will pay
                                        interest on the Maturity Date as
                                        postponed, 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 21 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


                                       A-3
<PAGE>


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

                                        In the event that the Issuer exercises
                                        the Morgan Stanley Call Right and the
                                        Morgan Stanley Notice Date falls before
                                        the "ex-interest" date for an interest
                                        payment, so that as a result a scheduled
                                        Interest Payment Date 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.

Denominations.......................    $         and integral multiples thereof

Morgan Stanley Call Right...........    On any scheduled Trading Day on or after
                                        June    , 2004 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


                                       A-4
<PAGE>


                                        with the applicable procedures set forth
                                        in the Blanket Letter of Representations
                                        prepared by the Issuer. Any notice which
                                        is mailed in the manner herein provided
                                        shall be conclusively presumed to have
                                        been duly given, whether or not the
                                        holder of this SPARQS receives the
                                        notice. Failure to give notice by mail
                                        or any defect in the notice to the
                                        holder of any SPARQS shall not affect
                                        the validity of the proceedings for the
                                        exercise of the Morgan Stanley Call
                                        Right with respect to any other SPARQS.

                                        The notice of the Issuer's exercise of
                                        the Morgan Stanley Call Right shall
                                        specify (i) the Call Date, (ii) the Call
                                        Price payable per SPARQS, (iii) the
                                        amount of accrued but unpaid interest
                                        payable per SPARQS on the Call Date,
                                        (iv) whether any subsequently scheduled
                                        Interest Payment Date shall no longer be
                                        an Interest Payment Date as a result of
                                        the exercise of the Morgan Stanley Call
                                        Right, (v) the place or places of
                                        payment of such Call Price, (vi) that
                                        such delivery 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.


                                       A-5
<PAGE>


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 days prior to the Call
                                        Date.

Final Call Notice Date..............    November 20, 2004; provided that if
                                        November 20, 2004 is not a Trading Day
                                        or if a Market Disruption Event occurs
                                        on such day, the Final Call Notice Date
                                        will be the immediately succeeding
                                        Trading Day on which no Market
                                        Disruption Event occurs.

Call Date...........................    The day specified in the Issuer's notice
                                        of mandatory exchange, on which the
                                        Issuer shall deliver cash to the holder
                                        of this SPARQS, for mandatory exchange,
                                        which day may be any scheduled Trading
                                        Day on or after June    , 2004 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 $
                                        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 $ 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
                                        of    % per annum 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 $     principal amount
                                        of this SPARQS shall be applied by the
                                        Issuer as payment for a number of shares
                                        of the common stock of Texas Instruments
                                        Incorporated ("Texas Instruments Stock")
                                        at the Exchange Ratio, and the Issuer
                                        shall deliver with respect to each $
                                        principal amount of this SPARQS an
                                        amount of Texas Instruments Stock equal
                                        to the Exchange Ratio.

                                        The amount of Texas Instruments Stock to
                                        be delivered


                                       A-6
<PAGE>


                                        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 Texas Instruments Stock as a result
                                        of any corporate event described under
                                        "Antidilution Adjustments" below, in
                                        each case, required to be made through
                                        the close of business on the third
                                        Trading Day prior to maturity.

                                        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 maturity of this
                                        SPARQS), of the amount of Texas
                                        Instruments Stock (or the amount of
                                        Exchange Property) or cash to be
                                        delivered with respect to each $
                                        principal amount of this SPARQS and of
                                        the amount of any cash to be paid in
                                        lieu of any fractional share of Texas
                                        Instruments 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


                                       A-7
<PAGE>


                                        to the Depositary by first class mail,
                                        postage prepaid. Any notice that is
                                        mailed in the manner herein provided
                                        shall be conclusively presumed to have
                                        been duly given, whether or not the
                                        holder of this SPARQS receives the
                                        notice. If the maturity of this SPARQS
                                        is accelerated, no interest on the
                                        amounts payable with respect to this
                                        SPARQS shall accrue for the period from
                                        and after such accelerated maturity
                                        date; provided that the Issuer has
                                        deposited with the Trustee the Texas
                                        Instruments 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 Texas Instruments Stock (or
                                        any Exchange Property) and cash in
                                        respect of interest and any fractional
                                        share of Texas Instruments 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
                                        $       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 the Texas Instruments
                                        Stock (and, if applicable, any Exchange
                                        Property) and any cash in respect of
                                        interest and any fractional share of
                                        Texas Instruments 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 Market Price per share of Texas
                                        Instruments Stock and the Exchange Ratio
                                        is less than $2.00, 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 $      principal
                                        amount of this SPARQS shall receive per
                                        SPARQS on the date of acceleration:

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


                                       A-8
<PAGE>


                                           (ii) accrued but unpaid interest on
                                           each $      principal amount of this
                                           SPARQS to but excluding the date of
                                           acceleration; and

                                           (iii) an amount of cash as determined
                                           by the Calculation Agent equal to the
                                           sum of the present values of the
                                           remaining scheduled payments of
                                           interest on each $        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 Texas Instruments Stock due with
                                        respect to this SPARQS, as described
                                        above, but the Issuer shall pay cash in
                                        lieu of delivering any fractional share
                                        of Texas Instruments Stock in an amount
                                        equal to the corresponding fractional
                                        Market Price of such fraction of a share
                                        of Texas Instruments Stock as determined
                                        by the Calculation Agent as of the
                                        second scheduled Trading Day prior to
                                        maturity of this SPARQS.

Exchange Ratio......................    1.0, subject to adjustment for corporate
                                        events relating to Texas Instruments
                                        Incorporated ("Texas Instruments")
                                        described under "Antidilution
                                        Adjustments" below.

Market Price........................    If Texas Instruments Stock (or any other
                                        security for which a Market Price must
                                        be determined) is listed on a national
                                        securities exchange, is a security of
                                        the Nasdaq National Market or is
                                        included in the OTC Bulletin Board
                                        Service ("OTC Bulletin Board") operated
                                        by the National Association of
                                        Securities Dealers, Inc. (the "NASD"),
                                        the Market Price for one share of Texas
                                        Instruments Stock (or one unit of any
                                        such other security) on any Trading Day
                                        means (i) 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 Texas Instruments Stock
                                        is listed or admitted to trading (which
                                        may be the Nasdaq National Market if it
                                        is then a national securities


                                       A-9
<PAGE>



                                        exchange) or (ii) if not listed or
                                        admitted to trading on any such
                                        securities exchange or if such last
                                        reported sale price is not obtainable
                                        (even if Texas Instruments Stock is
                                        listed or admitted to trading on such
                                        securities exchange), the last reported
                                        sale price of the principal trading
                                        session on the over-the-counter market
                                        as reported on the Nasdaq National
                                        Market (if it is not then a national
                                        securities exchange) or OTC Bulletin
                                        Board on such day. If the last reported
                                        sale price of the principal trading
                                        session is not available pursuant to
                                        clause (i) or (ii) of the preceding
                                        sentence because of a Market Disruption
                                        Event or otherwise, the Market Price for
                                        any Trading Day shall be the mean, as
                                        determined by the Calculation Agent, of
                                        the bid prices for Texas Instruments
                                        Stock obtained from as many dealers in
                                        such security, but not exceeding three,
                                        as will make such bid prices available
                                        to the Calculation Agent. Bids of Morgan
                                        Stanley & Co. Incorporated ("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. A
                                        "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.

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

Calculation Agent...................    MS & Co. and its successors.

                                        All calculations with respect to the
                                        Exchange Ratio and Call Price for the
                                        SPARQS 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.


                                      A-10
<PAGE>


                                        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 and
                                        the Issuer.

Antidilution Adjustments............    The Exchange Ratio shall be adjusted as
                                        follows:

                                           1. If Texas Instruments 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 Texas
                                        Instruments Stock.

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

                                           3. If Texas Instruments issues rights
                                        or warrants to all holders of Texas
                                        Instruments Stock to subscribe for or
                                        purchase Texas Instruments Stock at an
                                        exercise price per share less than the
                                        Market Price of Texas Instruments 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 Texas Instruments Stock
                                        outstanding immediately prior to the
                                        issuance of such rights or warrants plus
                                        the number of additional shares of Texas
                                        Instruments Stock offered for
                                        subscription or purchase pursuant to
                                        such rights or warrants and the
                                        denominator of which shall be the number
                                        of shares of Texas Instruments Stock
                                        outstanding


                                      A-11
<PAGE>


                                        immediately prior to the issuance of
                                        such rights or warrants plus the number
                                        of additional shares of Texas
                                        Instruments Stock which the aggregate
                                        offering price of the total number of
                                        shares of Texas Instruments Stock so
                                        offered for subscription or purchase
                                        pursuant to such rights or warrants
                                        would purchase at the Market 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 Market
                                        Price.

                                           4. There shall be no adjustments to
                                        the Exchange Ratio to reflect cash
                                        dividends or other distributions paid
                                        with respect to Texas Instruments 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 Texas Instruments Stock of any
                                        cash dividend or special dividend or
                                        distribution that is identified by Texas
                                        Instruments 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 Texas Instruments as an
                                        extraordinary or special dividend or
                                        distribution) distributed per share of
                                        Texas Instruments Stock over the
                                        immediately preceding cash dividend or
                                        other cash distribution, if any, per
                                        share of Texas Instruments 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 Market Price of
                                        Texas Instruments Stock on the Trading
                                        Day preceding the "ex-dividend date"
                                        (that is, the day on and after which
                                        transactions in Texas Instruments 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 Market Price, the
                                        "Base Market Price") and (c) the full
                                        cash value of any non-cash dividend or
                                        distribution per share of Texas
                                        Instruments 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 Texas Instruments Stock
                                        includes an Extraordinary Dividend, the
                                        Exchange Ratio with respect


                                      A-12
<PAGE>


                                        to Texas Instruments 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 Market Price, and
                                        the denominator of which is the amount
                                        by which the Base Market Price exceeds
                                        the Extraordinary Dividend. If any
                                        Extraordinary Dividend is at least 35%
                                        of the Base Market 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 3(b) 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 Texas
                                        Instruments Stock described in clause
                                        (i), (iv) or (v) of the first sentence
                                        of paragraph 5 below shall cause an
                                        adjustment to the Exchange Ratio
                                        pursuant only to clause (i), (iv) or (v)
                                        of the first sentence of paragraph 5, as
                                        applicable.

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


                                      A-13
<PAGE>


                                        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)
                                        shall be determined in accordance with
                                        the following:

                                        (1) if Texas Instruments Stock continues
                                        to be outstanding, Texas Instruments
                                        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 (3)(a) below);
                                        and

                                        (2) for each Marketable Security
                                        received in such Reorganization Event
                                        (each a "New Stock"), including the
                                        issuance of any tracking stock or
                                        spinoff stock or the receipt of any
                                        stock received in exchange for Texas
                                        Instruments Stock where Texas
                                        Instruments is not the surviving entity,
                                        the number of shares of the New Stock
                                        received with respect to one share of
                                        Texas Instruments Stock multiplied by
                                        the Exchange Ratio for Texas Instruments
                                        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 (3)(a) below); and

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

                                           (a) if the combined value of the
                                           amount of Non-Stock Exchange Property
                                           received per share of Texas
                                           Instruments 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 Texas Instruments Stock
                                           is less than 25% of the Market Price
                                           of Texas Instruments Stock on the
                                           Trading Day immediately prior to the
                                           effective date of such Reorganization
                                           Event, a number of shares of Texas
                                           Instruments Stock, if applicable, and
                                           of any New Stock received in
                                           connection with such Reorganization
                                           Event, if applicable, in proportion
                                           to the relative Market Prices of
                                           Texas Instruments Stock


                                      A-14
<PAGE>


                                           and any such New Stock, and with an
                                           aggregate value equal to the
                                           Non-Stock Exchange Property Value
                                           based on such Market 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 Texas Instruments Stock or any New
                                           Stock determined in accordance with
                                           this clause (3)(a) shall be added at
                                           the time of such adjustment to the
                                           Exchange Ratio in subparagraph (1)
                                           above and/or the New Stock Exchange
                                           Ratio in subparagraph (2) above, as
                                           applicable, or

                                           (b) if the Non-Stock Exchange
                                           Property Value is equal to or exceeds
                                           25% of the Market Price of Texas
                                           Instruments Stock on the Trading Day
                                           immediately prior to the effective
                                           date relating to such Reorganization
                                           Event or, if Texas Instruments 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. 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 Texas
                                           Instruments; 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


                                      A-15
<PAGE>


                                           Management and Budget) as the primary
                                           SIC Code for Texas Instruments. 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
                                           Market 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 Texas
                                           Instruments 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 $       principal
                                        amount of this SPARQS shall be the sum
                                        of:

                                           (i)  if applicable, Texas Instruments
                                                Stock at the Exchange Ratio then
                                                in effect; and

                                           (ii) if applicable, for each New
                                                Stock, such New Stock at the New
                                                Stock Exchange Ratio then in
                                                effect for such New Stock; and

                                          (iii) 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 Exchange Property
                                        of a particular type, Exchange Property
                                        shall be deemed to include the amount of
                                        cash or other property paid by the
                                        offeror in the tender or exchange offer
                                        with respect to such Exchange Property
                                        (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


                                      A-16
<PAGE>


                                        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 "Texas Instruments Stock" under "No
                                        Fractional Shares," "Market 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
                                        "Texas Instruments 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 Texas Instruments Stock
                                        shall be deemed to refer to the
                                        applicable unit or units of such
                                        Exchange Property, including any New
                                        Stock or Reference Basket Stock, unless
                                        the context otherwise requires. The New
                                        Stock Exchange Ratio(s) or Basket Stock
                                        Exchange Ratios resulting from any
                                        Reorganization Event described in
                                        paragraph 5 above or similar adjustment
                                        under paragraph 4 above shall be subject
                                        to the adjustments set forth in
                                        paragraphs 1 through 5 hereof.

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

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


                                      A-17
<PAGE>


                                        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 paragraphs 1 through 5 above
                                        upon written request by any holder of
                                        this SPARQS.

Market Disruption Event.............    "Market Disruption Event" means, with
                                        respect to Texas Instruments Stock:

                                           (i) a suspension, absence or material
                                           limitation of trading of Texas
                                           Instruments Stock on the primary
                                           market for Texas Instruments 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 Texas Instruments
                                           Stock as a result of which the
                                           reported trading prices for Texas
                                           Instruments 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 Texas
                                           Instruments 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


                                      A-18
<PAGE>


                                           (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
                                           the SPARQS due November 30, 2004,
                                           Mandatorily Exchangeable for Shares
                                           of Common Stock of Texas Instruments
                                           Incorporated.

                                        For purposes of determining whether a
                                        Market Disruption Event has occurred:
                                        (i) 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,
                                        (ii) a decision to permanently
                                        discontinue trading in the relevant
                                        options contract shall not constitute a
                                        Market Disruption Event, (iii)
                                        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, (iv) a suspension
                                        of trading in options contracts on Texas
                                        Instruments Stock by the primary
                                        securities market trading in such
                                        options, if available, by reason of (a)
                                        a price change exceeding limits set by
                                        such securities exchange or market, (b)
                                        an imbalance of orders relating to such
                                        contracts or (c) 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 Texas
                                        Instruments Stock and (v) a suspension,
                                        absence or material limitation of
                                        trading on the primary securities market
                                        on which options contracts related to
                                        Texas Instruments Stock are traded shall
                                        not include any time when such
                                        securities market is itself closed for
                                        trading under ordinary circumstances.

Alternate Exchange Calculation
in Case of an Event of Default......    In case an event of default with respect
                                        to the SPARQS shall have occurred and be
                                        continuing, the amount declared due and
                                        payable per each $        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
                                        Market


                                      A-19
<PAGE>


                                        Price of Texas Instruments 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 $      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 $
                                        principal amount of this SPARQS for all
                                        tax purposes as an investment 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"), Texas Instruments
                                        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 cash, equal to the Issue
                                        Price per each $       principal amount
                                        of this SPARQS, to secure the holder's
                                        obligation to purchase Texas Instruments
                                        Stock pursuant to the Terminable Forward
                                        Contract (the "Deposit"), which Deposit
                                        bears an annually compounded yield of
                                           % per annum.


                                      A-20
<PAGE>


         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 Texas Instruments 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 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


                                      A-21
<PAGE>


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 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.


                                      A-22
<PAGE>


         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.






                                      A-23
<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
   Senior Indenture.


JPMORGAN CHASE BANK,
   as Trustee



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





                                      A-24
<PAGE>


                               REVERSE OF SECURITY

         This Note is one of a duly authorized issue of Senior Global
Medium-Term Notes, Series C, having maturities more than nine months from the
date of issue (the "Notes") of the Issuer. The Notes are issuable under an
Amended and Restated Senior Indenture, dated as of May 1, 1999, between the
Issuer and JPMorgan Chase Bank (formerly known as The Chase Manhattan 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 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. 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.

         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 this Note
is issued with original issue discount, this Note will be repayable on the
applicable Optional Repayment Date or Dates at


                                      A-25

<PAGE>


the price(s) specified on the face hereof. 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.

         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.


                                      A-26
<PAGE>


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

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


                                      A-27
<PAGE>


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 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 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.

         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," 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) (the
"Amortized Amount")), if the Issuer determines that, as a result of any change
in or amendment to the laws, 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 becomes effective 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


                                      A-28
<PAGE>


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 United States
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 United States 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 United States
     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 personal holding company or
     foreign personal holding company or controlled foreign corporation or
     passive foreign investment company with respect to the United States or as
     a corporation which accumulates earnings to avoid United States 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;


                                      A-29
<PAGE>


         (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 United States 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.


                                      A-30
<PAGE>


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

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

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

         So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the
Notes. The Issuer may designate other agencies for the payment of said
principal, premium and interest at such place or places (subject to applicable
laws and regulations) as the Issuer may decide. So long as there shall be such
an agency, the Issuer shall keep the Trustee advised of the names and locations
of such agencies, if any are so designated. If any European Union Directive on
the taxation of savings comes into force, the Issuer will, to the extent
possible as a matter of law, 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.


                                      A-31
<PAGE>


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

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

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

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

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

         As used herein, the term "United States Alien" means any person who
is, for United States 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 United States 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.


                                      A-32
<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 - ____________________  Custodian ___________________
                                   (Minor)                       (Cust)

         Under Uniform Gifts to Minors Act _____________________________________
                                                        (State)

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

                             -----------------------





                                      A-33
<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.





                                      A-34
<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


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         (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.





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