Exhibit 4.1

                         FORM OF FIXED RATE SENIOR NOTE

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

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


<PAGE>


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

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

                                           % SPARQS(R) DUE JANUARY 15, 2007
                                               MANDATORILY EXCHANGEABLE
                                            FOR SHARES OF COMMON STOCK OF
                                                     COACH, INC.

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


                                                          2
<PAGE>


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

Maturity Date.................  January 15, 2007, subject to acceleration as
                                described below in "Price Event Acceleration"
                                and "Alternate Exchange Calculation in Case of
                                an Event of Default" and subject to extension if
                                the Final Call Notice Date is postponed in
                                accordance with the 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.


                                       3
<PAGE>


Interest Payment Dates........  April 15, 2006, July 15, 2006, October 15, 2006
                                and the Maturity Date.

                                If the scheduled Maturity Date is postponed due
                                to a Market Disruption Event or otherwise, the
                                Issuer shall pay interest on the Maturity Date
                                as postponed rather than on January 15, 2007,
                                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 23 hereof, the Record Date for each
                                Interest Payment Date, including the Interest
                                Payment Date scheduled to occur on the Maturity
                                Date, shall be the date 5 calendar days prior to
                                such scheduled Interest Payment Date, whether or
                                not that date is a Business Day; provided,
                                however, that in the event that the Issuer
                                exercises the Morgan Stanley Call Right, no
                                Interest Payment Date shall occur after the
                                Morgan Stanley Notice Date, except for any
                                Interest Payment Date for which the Morgan
                                Stanley Notice Date falls on or after the
                                "ex-interest" date for the related interest
                                payment, in which case the related interest
                                payment shall be made on such Interest Payment
                                Date; and provided, further, that accrued but
                                unpaid interest payable on the Call Date, if
                                any, shall be payable to the person to whom the
                                Call Price is payable. The "ex-interest" date
                                for any interest payment is the date on which
                                purchase transactions in the SPARQS no longer
                                carry the right to receive such interest
                                payment.

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


                                       4
<PAGE>


Morgan Stanley Call Right.....  On any scheduled Trading Day on or after July
                                15, 2006 or on the Maturity Date (including the
                                Maturity Date as it may be extended and
                                regardless of whether the Maturity Date is a
                                Trading Day), the Issuer may call the SPARQS, in
                                whole but not in part, for mandatory exchange
                                for the Call Price paid in cash (together with
                                accrued but unpaid interest) on the Call Date.

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

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


                                       5
<PAGE>


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

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

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

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

Final Call Notice Date........  January 5, 2007; provided that if January 5,
                                2007 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 July 15, 2006
                                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,


                                       6
<PAGE>


                                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 common stock of Coach, Inc.
                                ("Coach Stock") at the Exchange Ratio, and the
                                Issuer shall deliver with respect to each $
                                principal amount of this SPARQS an amount of
                                Coach Stock equal to the Exchange Ratio.

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

                                The Issuer shall, or shall cause the Calculation
                                Agent to, provide written notice to the Trustee
                                at its New York Office and to the Depositary, on
                                which notice the Trustee and Depositary may
                                conclusively rely, on or prior to 10:30 a.m. on
                                the Trading Day immediately prior to maturity of
                                this SPARQS (but if such Trading Day is not a
                                Business Day, prior to the close of business on
                                the Business Day preceding the maturity


                                       7
<PAGE>


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


                                       8
<PAGE>


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

Price Event Acceleration......  If on any two consecutive Trading Days during
                                the period prior to and ending on the third
                                Business Day immediately preceding the Maturity
                                Date, the product of the Closing Price of Coach
                                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 Coach Stock at the
                                   then current Exchange Ratio;

                                   (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.


                                       9
<PAGE>


No Fractional Shares..........  Upon delivery of this SPARQS to the Trustee at
                                maturity, the Issuer shall deliver the aggregate
                                number of shares of Coach Stock due with respect
                                to this SPARQS, as described above, but the
                                Issuer shall pay cash in lieu of delivering any
                                fractional share of Coach Stock in an amount
                                equal to the corresponding fractional Closing
                                Price of such fraction of a share of Coach 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 Coach Stock described under
                                "Antidilution Adjustments" below.

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

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

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

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


                                       10
<PAGE>


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

Trading Day...................  A day, as determined by the Calculation Agent,
                                on which trading is generally conducted on the
                                New York Stock Exchange, Inc. ("NYSE"), the
                                American Stock Exchange LLC, the Nasdaq National
                                Market, the Chicago Mercantile Exchange 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
                                made by the Calculation Agent and shall be
                                rounded to the nearest one hundred-thousandth,
                                with five one-millionths rounded upward (e.g.,
                                .876545 would be rounded to .87655); all dollar
                                amounts related to the Call Price


                                       11
<PAGE>


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

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

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

                                1. If Coach 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 Coach Stock.

                                2. If Coach Stock is subject (i) to a stock
                                dividend (issuance of additional shares of Coach
                                Stock) that is given ratably to all holders of
                                shares of Coach Stock or (ii) to a distribution
                                of Coach Stock as a result of the triggering of
                                any provision of the corporate charter of Coach,
                                Inc. ("Coach"), then once the dividend has
                                become effective and Coach 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 Coach Stock and (ii) the prior
                                Exchange Ratio.

                                3. If Coach issues rights or warrants to all
                                holders of Coach Stock to subscribe for or
                                purchase Coach Stock at an exercise price per
                                share less than the Closing Price of Coach 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


                                       12
<PAGE>


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

                                4. There shall be no adjustments to the Exchange
                                Ratio to reflect cash dividends or other
                                distributions paid with respect to Coach 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 Coach Stock of any cash dividend or
                                special dividend or distribution that is
                                identified by Coach 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 Coach as an
                                extraordinary or special dividend or
                                distribution) distributed per share of Coach
                                Stock over the immediately preceding cash
                                dividend or other cash distribution, if any, per
                                share of Coach Stock that did not include an
                                Extraordinary Dividend (as adjusted for any
                                subsequent corporate event requiring an
                                adjustment hereunder, such as a stock split or
                                reverse stock split) if such excess portion of
                                the dividend or distribution is more than 5% of
                                the Closing Price of Coach Stock on the Trading
                                Day preceding the "ex-dividend date" (that is,
                                the day on and after which transactions in Coach
                                Stock on an organized securities exchange or
                                trading system no longer carry the right to
                                receive that cash dividend or other cash
                                distribution) for the payment of such cash
                                dividend or other cash distribution (such
                                Closing Price, the "Base Closing


                                       13
<PAGE>


                                Price") and (c) the full cash value of any
                                non-cash dividend or distribution per share of
                                Coach 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 Coach Stock includes an Extraordinary
                                Dividend, the Exchange Ratio with respect to
                                Coach Stock shall be adjusted on the ex-dividend
                                date so that the new Exchange Ratio shall equal
                                the product of (i) the prior Exchange Ratio and
                                (ii) a fraction, the numerator of which is the
                                Base Closing Price, and the denominator of which
                                is the amount by which the Base Closing Price
                                exceeds the Extraordinary Dividend. If any
                                Extraordinary Dividend is at least 35% of the
                                Base Closing Price, then, instead of adjusting
                                the Exchange Ratio, the amount payable upon
                                exchange at maturity shall be determined as
                                described in paragraph 5 below, and the
                                Extraordinary Dividend shall be allocated to
                                Reference Basket Stocks in accordance with the
                                procedures for a Reference Basket Event as
                                described in clause (c)(ii) of paragraph 5
                                below. The value of the non-cash component of an
                                Extraordinary Dividend shall be determined on
                                the ex-dividend date for such distribution by
                                the Calculation Agent, whose determination shall
                                be conclusive in the absence of manifest error.
                                A distribution on Coach 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) Coach Stock is
                                reclassified or changed, including, without
                                limitation, as a result of the issuance of any
                                tracking stock by Coach, (ii) Coach has been
                                subject to any merger, combination or
                                consolidation and is not the surviving entity,
                                (iii) Coach completes a statutory exchange of
                                securities with another corporation (other than
                                pursuant to clause (ii) above), (iv) Coach is
                                liquidated, (v) Coach issues to all of its
                                shareholders equity securities of an issuer
                                other than Coach (other than in a transaction
                                described in clause (ii), (iii) or (iv) above)
                                (a "spinoff stock") or (vi) Coach Stock is the
                                subject of a tender or exchange offer or going
                                private transaction on all of the


                                       14
<PAGE>


                                outstanding shares. If any Reorganization Event
                                occurs, in each case as a result of which the
                                holders of Coach 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 amount of this SPARQS following the
                                effective date for such Reorganization Event
                                (or, if applicable, in the case of spinoff
                                stock, the ex-dividend date for the distribution
                                of such spinoff stock) and any required
                                adjustment to the Exchange Ratio shall be
                                determined in accordance with the following:

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

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

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

                                      (i) if the combined value of the amount of
                                      Non-Stock Exchange Property received per
                                      share of Coach Stock, as determined by the


                                       15
<PAGE>


                                      Calculation Agent in its sole discretion
                                      on the effective date of such
                                      Reorganization Event (the "Non-Stock
                                      Exchange Property Value"), by holders of
                                      Coach Stock is less than 25% of the
                                      Closing Price of Coach Stock on the
                                      Trading Day immediately prior to the
                                      effective date of such Reorganization
                                      Event, a number of shares of Coach Stock,
                                      if applicable, and of any New Stock
                                      received in connection with such
                                      Reorganization Event, if applicable, in
                                      proportion to the relative Closing Prices
                                      of Coach Stock and any such New Stock, and
                                      with an aggregate value equal to the
                                      Non-Stock Exchange Property Value
                                      multiplied by the Exchange Ratio in effect
                                      for Coach Stock on the Trading Day
                                      immediately prior to the effective date of
                                      such Reorganization Event, based on such
                                      Closing Prices, in each case as determined
                                      by the Calculation Agent in its sole
                                      discretion on the effective date of such
                                      Reorganization Event; and the number of
                                      such shares of Coach Stock or any New
                                      Stock determined in accordance with this
                                      clause (c)(i) shall be added at the time
                                      of such adjustment to the Exchange Ratio
                                      in subparagraph (a) above and/or the New
                                      Stock Exchange Ratio in subparagraph (b)
                                      above, as applicable, or

                                      (ii) if the Non-Stock Exchange Property
                                      Value is equal to or exceeds 25% of the
                                      Closing Price of Coach Stock on the
                                      Trading Day immediately prior to the
                                      effective date relating to such
                                      Reorganization Event or, if Coach Stock is
                                      surrendered exclusively for Non-Stock
                                      Exchange Property (in each case, a
                                      "Reference Basket Event"), an initially
                                      equal-dollar weighted basket of three
                                      Reference Basket Stocks (as defined below)
                                      with an aggregate value on the effective
                                      date of such Reorganization Event equal to
                                      the Non-Stock Exchange Property Value
                                      multiplied by the Exchange Ratio in effect
                                      for Coach Stock on the Trading Day
                                      immediately prior to the effective date of
                                      such Reorganization Event. The "Reference
                                      Basket Stocks" shall be the three stocks
                                      with the largest market


                                       16
<PAGE>


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

                                  (x) if applicable, Coach Stock at the
                                      Exchange Ratio then in effect; and


                                       17
<PAGE>


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

                                  (z) if applicable, for each Reference Basket
                                      Stock, such Reference Basket Stock at the
                                      Basket Stock Exchange Ratio then in effect
                                      for such Reference Basket Stock.

                                In each case, the applicable Exchange Ratio
                                (including for this purpose, any New Stock
                                Exchange Ratio or Basket Stock Exchange Ratio)
                                shall be determined by the Calculation Agent on
                                the third Trading Day prior to the scheduled
                                Maturity Date.

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

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


                                       18
<PAGE>


                                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 scheduled
                                Maturity Date.

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

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

                                The Calculation Agent shall provide information
                                as to any adjustments to the Exchange Ratio, or
                                to the method of calculating the amount payable
                                upon


                                       19
<PAGE>


                                exchange at maturity of the SPARQS made pursuant
                                to paragraph 5 above, upon written request by
                                the holder of this SPARQS.

Market Disruption Event.......  Market Disruption Event means, with respect to
                                Coach Stock:

                                   (i) a suspension, absence or material
                                   limitation of trading of Coach Stock on the
                                   primary market for Coach 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
                                   Coach Stock as a result of which the reported
                                   trading prices for Coach 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 Coach Stock, if
                                   available, during the one-half hour period
                                   preceding the close of the principal trading
                                   session in the applicable market, in each
                                   case as determined by the Calculation Agent
                                   in its sole discretion; and

                                   (ii) a determination by the Calculation Agent
                                   in its sole discretion that any event
                                   described in clause (i) above materially
                                   interfered with the ability of the Issuer or
                                   any of its affiliates to unwind or adjust all
                                   or a material portion of the hedge with
                                   respect to the SPARQS due January 15, 2007,
                                   Mandatorily Exchangeable for Shares of Common
                                   Stock of Coach, Inc.

                                For purposes of determining whether a Market
                                Disruption Event has occurred: (1) a limitation
                                on the hours or number of days of trading shall
                                not constitute a Market Disruption Event if it
                                results from an announced change in the regular
                                business hours of the relevant exchange, (2) a
                                decision to permanently discontinue trading in
                                the relevant options contract shall not
                                constitute a Market Disruption Event, (3)
                                limitations pursuant to NYSE Rule 80A (or any
                                applicable rule or regulation enacted or
                                promulgated


                                       20
<PAGE>


                                by the NYSE, any other self-regulatory
                                organization or the Securities and Exchange
                                Commission of scope similar to NYSE Rule 80A as
                                determined by the Calculation Agent) on trading
                                during significant market fluctuations shall
                                constitute a suspension, absence or material
                                limitation of trading, (4) a suspension of
                                trading in options contracts on Coach Stock by
                                the primary securities market trading in such
                                options, if available, by reason of (x) a price
                                change exceeding limits set by such securities
                                exchange or market, (y) an imbalance of orders
                                relating to such contracts or (z) a disparity in
                                bid and ask quotes relating to such contracts
                                shall constitute a suspension, absence or
                                material limitation of trading in options
                                contracts related to Coach Stock and (5) a
                                suspension, absence or material limitation of
                                trading on the primary securities market on
                                which options contracts related to Coach 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 Closing Price of Coach 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.


                                       21
<PAGE>


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 a
                                unit consisting of (A) a terminable contract
                                (the "Terminable Forward Contract") that (i)
                                requires the holder of this SPARQS (subject to
                                the Morgan Stanley Call Right) to purchase, and
                                the Issuer to sell, for an amount equal to
                                $      (the "Forward Price"), Coach 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 Coach Stock pursuant to the
                                Terminable Forward Contract (the "Deposit"),
                                which Deposit bears a quarterly compounded yield
                                of % per annum.


                                       22
<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 Coach Stock (or other Exchange
Property), as determined in accordance with the provisions set forth under
"Exchange at Maturity" above, due with respect to the principal sum of U.S.
$               (UNITED STATES DOLLARS                 ) on the Maturity Date
specified above (except to the extent redeemed or repaid prior to maturity) and
to pay interest thereon at the Interest Rate per annum specified above, from and
including the Interest Accrual Date specified above until the principal hereof
is paid or duly made available for payment weekly, monthly, quarterly,
semiannually or annually in arrears as specified above as the Interest Payment
Period on each Interest Payment Date (as specified above), commencing on the
Interest Payment Date next succeeding the Interest Accrual Date specified above,
and at maturity (or on any redemption or repayment date); provided, however,
that if the Interest Accrual Date occurs between a Record Date, as defined
below, and the next succeeding Interest Payment Date, interest payments will
commence on the second Interest Payment Date succeeding the Interest Accrual
Date to the registered holder of this Note on the Record Date with respect to
such second Interest Payment Date; and provided, further, that if this Note is
subject to "Annual Interest Payments," interest payments shall be made annually
in arrears and the term "Interest Payment Date" shall be deemed to mean the
first day of March in each year.

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

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


                                       23
<PAGE>


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

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

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

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


                                       24
<PAGE>


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

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

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


                                       25
<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, N.A.,
  as Trustee

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


                                       26
<PAGE>


                           FORM OF REVERSE OF SECURITY

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

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

     If so indicated on the face hereof, this Note may be redeemed in whole or
in part at the option of the Issuer on or after the Initial Redemption Date
specified on the face hereof on the terms set forth on the face hereof, together
with interest accrued and unpaid hereon to the date of redemption. If this Note
is subject to "Annual Redemption Percentage Reduction," the Initial Redemption
Percentage indicated on the face hereof will be reduced on each anniversary of
the Initial Redemption Date by the Annual Redemption Percentage Reduction
specified on the face hereof until the redemption price of this Note is 100% of
the principal amount hereof, together with interest accrued and unpaid hereon to
the date of redemption. 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


                                       27
<PAGE>


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 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


                                       28
<PAGE>


integral multiple of 1,000 units of such Specified Currency, as determined by
reference to the noon dollar buying rate in The City of New York for cable
transfers of such Specified Currency published by the Federal Reserve Bank of
New York (the "Market Exchange Rate") on the Business Day immediately preceding
the date of issuance.

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

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


                                       29
<PAGE>


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

     If the face hereof indicates that this Note is subject to "Modified Payment
upon Acceleration or Redemption," then (i) if the principal hereof is declared
to be due and payable as described in the preceding paragraph, the amount of
principal due and payable with respect to this Note shall be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount 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


                                       30
<PAGE>


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 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;


                                       31
<PAGE>


          (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;

          (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


                                       32
<PAGE>


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

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


                                       33
<PAGE>


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

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

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


                                       34
<PAGE>


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.


                                       35
<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.


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




                                       36
<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.

                                        .


                                       37
<PAGE>


                            OPTION TO ELECT REPAYMENT

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


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

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

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


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


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


                                       38