EXHIBIT 4.1


                             FIXED RATE SENIOR NOTE

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

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


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<PAGE>


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

                         STOCK PARTICIPATION ACCRETING
                REDEMPTION QUARTERLY-PAY SECURITIESSM ("SPARQS")

                       8% SPARQS(R) DUE DECEMBER 30, 2004
                            MANDATORILY EXCHANGEABLE
                         FOR SHARES OF COMMON STOCK OF
                                  XILINX, INC.

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

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

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


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

                             If the Final Call Notice Date is postponed because
                             it is not a Trading Day or due to a Market
                             Disruption Event or otherwise and the Issuer
                             exercises the Morgan Stanley Call Right, the
                             Maturity Date shall be postponed so that the
                             Maturity Date will be the tenth calendar day
                             following the Final Call Notice Date. See "Final
                             Call Notice Date" below.

                             In the event that the Final Call Notice Date is
                             postponed because it is not a Trading Day or due
                             to a Market Disruption Event or otherwise, the
                             Issuer shall give notice of such postponement as
                             promptly as possible, and in no case later than
                             two Business Days following the scheduled Final
                             Call Notice Date, (i) to the holder of this SPARQS
                             by mailing notice of such postponement by first
                             class mail, postage prepaid, to the holder's last
                             address as it shall appear upon the registry
                             books, (ii) to the Trustee by telephone or
                             facsimile confirmed by mailing such notice to the
                             Trustee by first class mail, postage prepaid, at
                             its New York office and (iii) to The Depository
                             Trust Company (the "Depositary") by telephone or
                             facsimile confirmed by mailing such notice to the
                             Depositary by first class mail, postage prepaid.
                             Any notice that is mailed in the manner herein
                             provided shall be conclusively presumed to have
                             been duly given, whether or not the holder of this
                             SPARQS receives the notice. Notice of the date to
                             which the Maturity Date has been rescheduled as a
                             result of postponement of the Final Call Notice
                             Date, if applicable, shall be included in the
                             Issuer's notice of exercise of the Morgan Stanley
                             Call Right.

Interest Payment Dates......

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

Record Date................. Notwithstanding the definition of "Record Date" on
                             page 21 hereof, the Record Date for each Interest
                             Payment Date, including the Interest Payment Date
                             scheduled to occur on the Maturity Date, shall be
                             the date 5 calendar


                                      A-3
<PAGE>


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

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

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

Morgan Stanley Call Right... On any scheduled Trading Day on or after June   ,
                             2004 or on the Maturity Date (including the
                             Maturity Date as it may be extended and regardless
                             of whether the Maturity Date is a Trading Day),
                             the Issuer may call the SPARQS, in whole but not
                             in part, for mandatory exchange for the Call Price
                             paid in cash (together with accrued but unpaid
                             interest) on the Call Date.

                             On the Morgan Stanley Notice Date, the Issuer
                             shall give notice of the Issuer's exercise of the
                             Morgan Stanley Call Right (i) to the holder of
                             this SPARQS by mailing notice of such exercise,
                             specifying the Call Date on which the Issuer shall
                             effect such exchange, by first class mail, postage
                             prepaid, to the holder's last address as it shall
                             appear upon the registry books, (ii) to the
                             Trustee by telephone or facsimile confirmed by
                             mailing such notice to the Trustee by first class
                             mail, postage prepaid, at its New York office and
                             (iii) to the Depositary in accordance


                                      A-4
<PAGE>


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

                             The notice of the Issuer's exercise of the Morgan
                             Stanley Call Right shall specify (i) the Call
                             Date, (ii) the Call Price payable per SPARQS,
                             (iii) the amount of accrued but unpaid interest
                             payable per SPARQS on the Call Date, (iv) whether
                             any subsequently scheduled Interest Payment Date
                             shall no longer be an Interest Payment Date as a
                             result of the exercise of the Morgan Stanley Call
                             Right, (v) the place or places of payment of such
                             Call Price, (vi) that such delivery will be made
                             upon presentation and surrender of this SPARQS,
                             (vii) that such exchange is pursuant to the Morgan
                             Stanley Call Right and (viii) if applicable, the
                             date to which the Maturity Date has been extended
                             due to a Market Disruption Event as described
                             under "Maturity Date" above.

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

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

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


                                      A-5
<PAGE>


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

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

Call Date................... The day specified in the Issuer's notice of
                             mandatory exchange, on which the Issuer shall
                             deliver cash to the holder of this SPARQS, for
                             mandatory exchange, which day may be any scheduled
                             Trading Day on or after June   , 2004 or the
                             Maturity Date (including the Maturity Date as it
                             may be extended and regardless of whether the
                             Maturity Date is a scheduled Trading Day). See
                             "Maturity Date" above.

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

Exchange at Maturity........ At maturity, subject to a prior call of this
                             SPARQS for cash in an amount equal to the Call
                             Price by the Issuer as described under "Morgan
                             Stanley Call Right" above or any acceleration of
                             the SPARQS, upon delivery of this SPARQS to the
                             Trustee, each $     principal amount of this SPARQS
                             shall be applied by the Issuer as payment for a
                             number of shares of the common stock of Xilinx,
                             Inc. ("Xilinx Stock") at the Exchange Ratio, and
                             the Issuer shall deliver with respect to each $
                             principal amount of this SPARQS an amount of
                             Xilinx Stock equal to the Exchange Ratio.

                             The amount of Xilinx Stock to be delivered at
                             maturity shall be subject to any applicable
                             adjustments (i) to the


                                      A-6
<PAGE>


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

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


                                      A-7
<PAGE>


                             to have been duly given, whether or not the holder
                             of this SPARQS receives the notice. If the
                             maturity of this SPARQS is accelerated, no
                             interest on the amounts payable with respect to
                             this SPARQS shall accrue for the period from and
                             after such accelerated maturity date; provided
                             that the Issuer has deposited with the Trustee the
                             Xilinx 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 Xilinx Stock
                             (or any Exchange Property) and cash in respect of
                             interest and any fractional share of Xilinx Stock
                             (or any Exchange Property) and cash otherwise due
                             upon any acceleration described above to the
                             Trustee for delivery to the holder of this Note.
                             References to payment "per SPARQS" refer to each $
                             principal amount of this SPARQS.

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

Price Event Acceleration.... If on any two consecutive Trading Days during the
                             period prior to and ending on the third Business
                             Day immediately preceding the Maturity Date, the
                             product of the Market Price per share of Xilinx
                             Stock and the Exchange Ratio is less than $1.00,
                             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"). At the current Exchange
                             Ratio of .5, a Price Event Acceleration will occur
                             if the Market Price per share of Xilinx Stock is
                             less than $2.00 for two consecutive Trading Days.
                             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 Xilinx Stock at the
                                then current Exchange Ratio;


                                      A-8
<PAGE>


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

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

No Fractional Shares........ Upon delivery of this SPARQS to the Trustee at
                             maturity, the Issuer shall deliver the aggregate
                             number of shares of Xilinx Stock due with respect
                             to this SPARQS, as described above, but the Issuer
                             shall pay cash in lieu of delivering any
                             fractional share of Xilinx Stock in an amount
                             equal to the corresponding fractional Market Price
                             of such fraction of a share of Xilinx Stock as
                             determined by the Calculation Agent as of the
                             second scheduled Trading Day prior to maturity of
                             this SPARQS.

Exchange Ratio.............. .5, subject to adjustment for corporate events
                             relating to Xilinx, Inc. ("Xilinx") described
                             under "Antidilution Adjustments" below.

Market Price................ If Xilinx Stock (or any other security for which a
                             Market Price must be determined) is listed on a
                             national securities exchange, is a security of the
                             Nasdaq National Market or is included in the OTC
                             Bulletin Board Service ("OTC Bulletin Board")
                             operated by the National Association of Securities
                             Dealers, Inc. (the "NASD"), the Market Price for
                             one share of Xilinx Stock (or one unit of any such
                             other security) on any Trading Day means (i) the
                             last reported sale price, regular way, of the
                             principal trading session on such day on the
                             principal United States securities exchange
                             registered under the Securities Exchange Act of
                             1934, as amended (the "Exchange Act"), on which
                             Xilinx Stock is listed or admitted to trading
                             (which may be the Nasdaq National Market if it is
                             then a national securities exchange), (ii) for a
                             security of the Nasdaq National Market (and if the
                             Nasdaq National


                                      A-9
<PAGE>


                             Market if not a national securities exchange), the
                             Nasdaq official closing price on such day or (iii)
                             if not listed or admitted to trading on any such
                             securities exchange, or if a Nasdaq official
                             closing price is not obtainable, or if such last
                             reported sale price is not obtainable (even if
                             Xilinx Stock is listed or admitted to trading on
                             such securities exchange), the last reported sale
                             price of the principal trading session on the
                             over-the-counter market as reported on the Nasdaq
                             National Market (if it is not then a national
                             securities exchange) or OTC Bulletin Board on such
                             day. If the last reported sale price or official
                             closing price, as applicable, of the principal
                             trading session is not available pursuant to
                             clause (i), (ii) or (iii) of the preceding
                             sentence because of a Market Disruption Event or
                             otherwise, the Market Price for any Trading Day
                             shall be the mean, as determined by the
                             Calculation Agent, of the bid prices for Xilinx
                             Stock obtained from as many dealers in such
                             security, but not exceeding three, as will make
                             such bid prices available to the Calculation
                             Agent. Bids of Morgan Stanley & Co. Incorporated
                             ("MS & Co.") or any of its affiliates may be
                             included in the calculation of such mean, but only
                             to the extent that any such bid is the highest of
                             the bids obtained. A "security of the Nasdaq
                             National Market" shall include a security included
                             in any successor to such system, and the term "OTC
                             Bulletin Board Service" shall include any
                             successor service thereto.

Trading Day................. A day, as determined by the Calculation Agent, on
                             which trading is generally conducted on the New
                             York Stock Exchange, Inc. ("NYSE"), the American
                             Stock Exchange LLC, the Nasdaq National Market,
                             the Chicago Mercantile Exchange and the Chicago
                             Board of Options Exchange and in the
                             over-the-counter market for equity securities in
                             the United States.

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

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


                                      A-10
<PAGE>


                             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 and the Issuer.

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

                                  1. If Xilinx 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 Xilinx Stock.

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

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


                                      A-11
<PAGE>


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

                                  4. There shall be no adjustments to the
                             Exchange Ratio to reflect cash dividends or other
                             distributions paid with respect to Xilinx 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 Xilinx Stock of
                             any cash dividend or special dividend or
                             distribution that is identified by Xilinx 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
                             Xilinx as an extraordinary or special dividend or
                             distribution) distributed per share of Xilinx
                             Stock over the immediately preceding cash dividend
                             or other cash distribution, if any, per share of
                             Xilinx Stock that did not include an Extraordinary
                             Dividend (as adjusted for any subsequent corporate
                             event requiring an adjustment hereunder, such as a
                             stock split or reverse stock split) if such excess
                             portion of the dividend or distribution is more
                             than 5% of the Market Price of Xilinx Stock on the
                             Trading Day preceding the "ex-dividend date" (that
                             is, the day on and after which transactions in
                             Xilinx Stock on an organized securities exchange
                             or trading system no longer carry the right to
                             receive that cash dividend or other cash
                             distribution) for the payment of such cash
                             dividend or other cash distribution (such Market
                             Price, the "Base Market Price") and (c) the full
                             cash value of any non-cash dividend or
                             distribution per share of Xilinx 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 Xilinx Stock includes an
                             Extraordinary Dividend, the Exchange Ratio with
                             respect to Xilinx 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-12
<PAGE>


                             a fraction, the numerator of which is the Base
                             Market Price, and the denominator of which is
                             the amount by which the Base Market Price exceeds
                             the Extraordinary Dividend. If any Extraordinary
                             Dividend is at least 35% of the Base Market Price,
                             then, instead of adjusting the Exchange Ratio, the
                             amount payable upon exchange at maturity shall be
                             determined as described in paragraph 5 below, and
                             the Extraordinary Dividend shall be allocated to
                             Reference Basket Stocks in accordance with the
                             procedures for a Reference Basket Event as
                             described in clause 3(b) of paragraph 5 below. The
                             value of the non-cash component of an
                             Extraordinary Dividend shall be determined on the
                             ex-dividend date for such distribution by the
                             Calculation Agent, whose determination shall be
                             conclusive in the absence of manifest error. A
                             distribution on Xilinx 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) Xilinx Stock is
                             reclassified or changed, including, without
                             limitation, as a result of the issuance of any
                             tracking stock by Xilinx, (ii) Xilinx has been
                             subject to any merger, combination or
                             consolidation and is not the surviving entity,
                             (iii) Xilinx completes a statutory exchange of
                             securities with another corporation (other than
                             pursuant to clause (ii) above), (iv) Xilinx is
                             liquidated, (v) Xilinx issues to all of its
                             shareholders equity securities of an issuer other
                             than Xilinx (other than in a transaction described
                             in clause (ii), (iii) or (iv) above) (a "spinoff
                             stock") or (vi) Xilinx Stock is the subject of a
                             tender or exchange offer or going private
                             transaction on all of the outstanding shares. If
                             any Reorganization Event occurs, in each case as a
                             result of which the holders of Xilinx 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) shall be determined in accordance
                             with the following:


                                      A-13
<PAGE>


                             (1) if Xilinx Stock continues to be outstanding,
                             Xilinx Stock (if applicable, as reclassified upon
                             the issuance of any tracking stock) at the
                             Exchange Ratio in effect on the third Trading Day
                             prior to the scheduled Maturity Date (taking into
                             account any adjustments for any distributions
                             described under clause (3)(a) below); and

                             (2) for each Marketable Security received in such
                             Reorganization Event (each a "New Stock"),
                             including the issuance of any tracking stock or
                             spinoff stock or the receipt of any stock received
                             in exchange for Xilinx Stock where Xilinx is not
                             the surviving entity, the number of shares of the
                             New Stock received with respect to one share of
                             Xilinx Stock multiplied by the Exchange Ratio for
                             Xilinx Stock on the Trading Day immediately prior
                             to the effective date of the Reorganization Event
                             (the "New Stock Exchange Ratio"), as adjusted to
                             the third Trading Day prior to the scheduled
                             Maturity Date (taking into account any adjustments
                             for distributions described under clause (3)(a)
                             below); and

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

                                (a) if the combined value of the amount of
                                Non-Stock Exchange Property received per share
                                of Xilinx Stock, as determined by the
                                Calculation Agent in its sole discretion on the
                                effective date of such Reorganization Event
                                (the "Non-Stock Exchange Property Value"), by
                                holders of Xilinx Stock is less than 25% of the
                                Market Price of Xilinx Stock on the Trading Day
                                immediately prior to the effective date of such
                                Reorganization Event, a number of shares of
                                Xilinx Stock, if applicable, and of any New
                                Stock received in connection with such
                                Reorganization Event, if applicable, in
                                proportion to the relative Market Prices of
                                Xilinx Stock and any such New Stock, and with
                                an aggregate value equal to the Non- Stock
                                Exchange Property Value based on such Market
                                Prices, in each case as determined by the
                                Calculation Agent in its sole discretion on the
                                effective date of such Reorganization Event;
                                and the number of such shares of Xilinx Stock
                                or any New Stock determined in accordance with
                                this clause (3)(a) shall be added at the time
                                of such adjustment to the Exchange Ratio in


                                      A-14
<PAGE>


                                subparagraph (1) above and/or the New Stock
                                Exchange Ratio in subparagraph (2) above, as
                                applicable, or

                                (b) if the Non-Stock Exchange Property Value is
                                equal to or exceeds 25% of the Market Price of
                                Xilinx Stock on the Trading Day immediately
                                prior to the effective date relating to such
                                Reorganization Event or, if Xilinx Stock is
                                surrendered exclusively for Non- Stock Exchange
                                Property (in each case, a "Reference Basket
                                Event"), an initially equal-dollar weighted
                                basket of three Reference Basket Stocks (as
                                defined below) with an aggregate value on the
                                effective date of such Reorganization Event
                                equal to the Non-Stock Exchange Property Value.
                                The "Reference Basket Stocks" shall be the
                                three stocks with the largest market
                                capitalization among the stocks that then
                                comprise the S&P 500 Index (or, if publication
                                of such index is discontinued, any successor or
                                substitute index selected by the Calculation
                                Agent in its sole discretion) with the same
                                primary Standard Industrial Classification Code
                                ("SIC Code") as Xilinx; 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 Xilinx. Each Reference Basket Stock shall
                                be assigned a Basket Stock Exchange Ratio equal
                                to the number of shares of such Reference
                                Basket Stock with a Market Price on the
                                effective date of such Reorganization Event
                                equal to the product of (a) the Non-Stock
                                Exchange Property Value, (b) the Exchange Ratio
                                in effect for Xilinx Stock on the Trading Day
                                immediately prior to the effective date of such
                                Reorganization Event and (c) 0.3333333.


                                      A-15
<PAGE>


                             Following the allocation of any Extraordinary
                             Dividend to Reference Basket Stocks pursuant to
                             paragraph 4 above or any Reorganization Event
                             described in this paragraph 5, the amount payable
                             upon exchange at maturity with respect to each
                             $       principal amount of this SPARQS shall be
                             the sum of:

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

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

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

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

                             For purposes of paragraph 5 above, in the case of
                             a consummated tender or exchange offer or
                             going-private transaction involving Exchange
                             Property of a particular type, Exchange Property
                             shall be deemed to include the amount of cash or
                             other property paid by the offeror in the tender
                             or exchange offer with respect to such Exchange
                             Property (in an amount determined on the basis of
                             the rate of exchange in such tender or exchange
                             offer or going- private transaction). In the event
                             of a tender or exchange offer or a going-private
                             transaction with respect to 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 "Xilinx Stock" under "No Fractional
                             Shares," "Market Price" and "Market Disruption
                             Event" shall be deemed to also refer to any New
                             Stock or Reference Basket Stock, and (ii) all
                             other references in this SPARQS to "Xilinx Stock"
                             shall be deemed to refer to the Exchange Property


                                      A-16
<PAGE>


                             into which this SPARQS is thereafter exchangeable
                             and references to a "share" or "shares" of Xilinx
                             Stock shall be deemed to refer to the applicable
                             unit or units of such Exchange Property, including
                             any New Stock or Reference Basket Stock, unless
                             the context otherwise requires. The New Stock
                             Exchange Ratio(s) or Basket Stock Exchange Ratios
                             resulting from any Reorganization Event described
                             in paragraph 5 above or similar adjustment under
                             paragraph 4 above shall be subject to the
                             adjustments set forth in paragraphs 1 through 5
                             hereof.

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

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

                             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.


                                      A-17
<PAGE>


                             The Calculation Agent shall provide information as
                             to any adjustments to the Exchange Ratio or to the
                             method of calculating the amount payable upon
                             exchange at maturity of the SPARQS made pursuant
                             to paragraphs 1 through 5 above upon written
                             request by any holder of this SPARQS.

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

                                (i) a suspension, absence or material
                                limitation of trading of Xilinx Stock on the
                                primary market for Xilinx 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
                                Xilinx Stock as a result of which the reported
                                trading prices for Xilinx 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 Xilinx 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 December 30, 2004, Mandatorily
                                Exchangeable for Shares of Common Stock of
                                Xilinx, Inc.

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


                                      A-18
<PAGE>


                             promulgated by the NYSE, any other self-regulatory
                             organization or the Securities and Exchange
                             Commission of scope similar to NYSE Rule 80A as
                             determined by the Calculation Agent) on trading
                             during significant market fluctuations shall
                             constitute a suspension, absence or material
                             limitation of trading, (iv) a suspension of
                             trading in options contracts on Xilinx Stock by
                             the primary securities market trading in such
                             options, if available, by reason of (a) a price
                             change exceeding limits set by such securities
                             exchange or market, (b) an imbalance of orders
                             relating to such contracts or (c) a disparity in
                             bid and ask quotes relating to such contracts
                             shall constitute a suspension, absence or material
                             limitation of trading in options contracts related
                             to Xilinx Stock and (v) a suspension, absence or
                             material limitation of trading on the primary
                             securities market on which options contracts
                             related to Xilinx Stock are traded shall not
                             include any time when such securities market is
                             itself closed for trading under ordinary
                             circumstances.

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

Treatment of SPARQS for
United States Federal
Income Tax Purposes......... The Issuer, by its sale of this SPARQS, and the
                             holder of this SPARQS (and any successor holder
                             of, or holder of


                                      A-19
<PAGE>


                             a beneficial interest in, this SPARQS), by its
                             respective purchase hereof, agree (in the absence
                             of an administrative determination or judicial
                             ruling to the contrary) to characterize each
                             $         principal amount of this SPARQS for all
                             tax purposes as an investment unit consisting of
                             (A) a terminable contract (the "Terminable Forward
                             Contract") that (i) requires the holder of this
                             SPARQS (subject to the Morgan Stanley Call Right)
                             to purchase, and the Issuer to sell, for an amount
                             equal to $         (the "Forward Price"), Xilinx
                             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
                             Xilinx Stock pursuant to the Terminable Forward
                             Contract (the "Deposit"), which Deposit bears an
                             annually compounded yield of %     per annum.


                                      A-20
<PAGE>


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

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

     Payment of the principal of this Note, any premium and the interest due at
maturity (or any redemption or repayment date), unless this Note is denominated
in a Specified Currency other than U.S. dollars and is to be paid in whole or
in part in such Specified Currency, will be made in immediately available funds
upon surrender of this Note at the office or agency of the Paying Agent, as
defined on the reverse hereof, maintained for that purpose in the Borough of
Manhattan, The City of New York, or at such other paying agency as the Issuer
may determine, in U.S. dollars. U.S. dollar payments of interest, other than
interest due at maturity or on any date of redemption or repayment, will be
made by U.S. dollar check mailed to the address of the person entitled thereto
as such address shall appear in the Note register. A holder of U.S. $10,000,000
(or the equivalent in a Specified Currency) or more in aggregate principal
amount of Notes having the same Interest


                                      A-21
<PAGE>


Payment Date, the interest on which is payable in U.S. dollars, shall be
entitled to receive payments of interest, other than interest due at maturity
or on any date of redemption or repayment, by wire transfer of immediately
available funds if appropriate wire transfer instructions have been received by
the Paying Agent in writing not less than 15 calendar days prior to the
applicable Interest Payment Date.

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

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

     If the holder elects to receive all or a portion of payments of principal
of, premium, if any, and interest on this Note, if denominated in a Specified
Currency other than U.S. dollars, in U.S. dollars, the Exchange Rate Agent (as
defined on the reverse hereof) will convert such payments into U.S. dollars. In
the event of such an election, payment in respect of this Note will be based
upon the exchange rate as determined by the Exchange Rate Agent based on the
highest bid quotation in The City of New York received by such Exchange Rate
Agent at approximately 11:00 a.m., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign
exchange dealers (one of which may be the Exchange Rate Agent unless such
Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the
quoting dealer of the Specified Currency for U.S. dollars for settlement on
such payment date in the amount of the Specified Currency payable in the
absence of such an election to such holder and at which the applicable dealer
commits to execute a contract. If such bid quotations are not available, such
payment will be made in the Specified Currency. All currency exchange costs
will be borne by the holder of this Note by deductions from such payments.


                                      A-22
<PAGE>


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

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


                                      A-23
<PAGE>


     IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.

DATED:                                       MORGAN STANLEY


                                             By:
                                                --------------------------------
                                                Name:
                                                Title:

TRUSTEE'S CERTIFICATE
  OF AUTHENTICATION

This is one of the Notes referred
  to in the within-mentioned
  Senior Indenture.

JPMORGAN CHASE BANK,
  as Trustee


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


                                      A-24
<PAGE>


                              REVERSE OF SECURITY

     This Note is one of a duly authorized issue of Senior Global Medium-Term
Notes, Series C, having maturities more than nine months from the date of issue
(the "Notes") of the Issuer. The Notes are issuable under an Amended and
Restated Senior Indenture, dated as of May 1, 1999, between the Issuer and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee
(the "Trustee," which term includes any successor trustee under the Senior
Indenture) (as may be amended or supplemented from time to time, the "Senior
Indenture"), to which Senior Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities of the Issuer, the Trustee and holders of the
Notes and the terms upon which the Notes are, and are to be, authenticated and
delivered. The Issuer has appointed JPMorgan Chase Bank at its corporate trust
office in The City of New York as the paying agent (the "Paying Agent," which
term includes any additional or successor Paying Agent appointed by the Issuer)
with respect to the Notes. The terms of individual Notes may vary with respect
to interest rates, interest rate formulas, issue dates, maturity dates, or
otherwise, all as provided in the Senior Indenture. To the extent not
inconsistent herewith, the terms of the Senior Indenture are hereby
incorporated by reference herein.

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

     If so indicated on the face hereof, this Note may be redeemed in whole or
in part at the option of the Issuer on or after the Initial Redemption Date
specified on the face hereof on the terms set forth on the face hereof,
together with interest accrued and unpaid hereon to the date of redemption. If
this Note is subject to "Annual Redemption Percentage Reduction," the Initial
Redemption Percentage indicated on the face hereof will be reduced on each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction specified on the face hereof until the redemption price of this Note
is 100% of the principal amount hereof, together with interest accrued and
unpaid hereon to the date of redemption. Notice of redemption shall be mailed
to the registered holders of the Notes designated for redemption at their
addresses as the same shall appear on the Note register not less than 30 nor
more than 60 calendar days prior to the date fixed for redemption or within the
Redemption Notice Period specified on the face hereof, subject to all the
conditions and provisions of the Senior Indenture. In the event of redemption
of this Note in part only, a new Note or Notes for the amount of the unredeemed
portion hereof shall be issued in the name of the holder hereof upon the
cancellation hereof.

     If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments
of $1,000 or, if this Note is denominated in a Specified Currency other than
U.S. dollars, in increments of 1,000 units of such Specified Currency (provided
that any remaining principal amount hereof shall not be less than the minimum
authorized denomination hereof) at the option of the holder hereof at a price
equal to 100% of the principal amount to be repaid, together with interest
accrued and unpaid hereon to the date of repayment, provided that if this Note
is issued with original issue discount, this Note will be repayable on the
applicable Optional Repayment Date or Dates at


                                      A-25
<PAGE>


the price(s) specified on the face hereof. For this Note to be repaid at the
option of the holder hereof, the Paying Agent must receive at its corporate
trust office in the Borough of Manhattan, The City of New York, at least 15 but
not more than 30 calendar days prior to the date of repayment, (i) this Note
with the form entitled "Option to Elect Repayment" below duly completed or (ii)
a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc. or a commercial bank or a trust company in the United States setting forth
the name of the holder of this Note, the principal amount hereof, the
certificate number of this Note or a description of this Note's tenor and
terms, the principal amount hereof to be repaid, a statement that the option to
elect repayment is being exercised thereby and a guarantee that this Note,
together with the form entitled "Option to Elect Repayment" duly completed,
will be received by the Paying Agent not later than the fifth Business Day
after the date of such telegram, telex, facsimile transmission or letter;
provided, that such telegram, telex, facsimile transmission or letter shall
only be effective if this Note and form duly completed are received by the
Paying Agent by such fifth Business Day. Exercise of such repayment option by
the holder hereof shall be irrevocable. In the event of repayment of this Note
in part only, a new Note or Notes for the amount of the unpaid portion hereof
shall be issued in the name of the holder hereof upon the cancellation hereof.

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

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

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

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


                                      A-26
<PAGE>


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

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

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


                                      A-27
<PAGE>


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

     If the face hereof indicates that this Note is subject to "Modified
Payment upon Acceleration or Redemption," then (i) if the principal hereof is
declared to be due and payable as described in the preceding paragraph, the
amount of principal due and payable with respect to this Note shall be limited
to the aggregate principal amount hereof multiplied by the sum of the Issue
Price specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of declaration, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of declaration), (ii) for the
purpose of any vote of securityholders taken pursuant to the Senior Indenture
prior to the acceleration of payment of this Note, the principal amount hereof
shall equal the amount that would be due and payable hereon, calculated as set
forth in clause (i) above, if this Note were declared to be due and payable on
the date of any such vote and (iii) for the purpose of any vote of
securityholders taken pursuant to the Senior Indenture following the
acceleration of payment of this Note, the principal amount hereof shall equal
the amount of principal due and payable with respect to this Note, calculated
as set forth in clause (i) above.

     If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption (except that if this Note is subject to "Modified Payment upon
Acceleration or Redemption," such redemption price would be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of redemption, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of redemption) (the "Amortized
Amount")), if the Issuer determines that, as a result of any change in or
amendment to the laws, or any regulations or rulings promulgated thereunder, of
the United States or of any political subdivision or taxing authority thereof
or therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which
change or amendment becomes effective on or after the Initial Offering Date
hereof, the Issuer has or will become obligated to pay Additional Amounts, as
defined below, with respect to this Note as described below. Prior to the
giving of any notice of redemption pursuant to this paragraph, the Issuer shall
deliver to the Trustee (i) a certificate stating that the Issuer is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Issuer to so redeem have occurred, and
(ii) an opinion of independent legal counsel satisfactory to the Trustee to
such effect based on such statement of facts; provided that no such


                                      A-28
<PAGE>


notice of redemption shall be given earlier than 60 calendar days prior to the
earliest date on which the Issuer would be obligated to pay such Additional
Amounts if a payment in respect of this Note were then due.

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

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

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

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

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

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

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


                                      A-29
<PAGE>


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

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

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

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

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


                                      A-30
<PAGE>


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

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

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

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


                                      A-31
<PAGE>


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

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

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

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

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

     As used herein, the term "United States Alien" means any person who is,
for United States federal income tax purposes, (i) a nonresident alien
individual, (ii) a foreign corporation, (iii) a nonresident alien fiduciary of
a foreign estate or trust or (iv) a foreign partnership one or more of the
members of which is, for United States federal income tax purposes, a
nonresident alien individual, a foreign corporation or a nonresident alien
fiduciary of a foreign estate or trust.

     All terms used in this Note which are defined in the Senior Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Senior Indenture.


                                      A-32
<PAGE>


                                 ABBREVIATIONS

                                 ABBREVIATIONS

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

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


     UNIF GIFT MIN ACT - _____________________ Custodian ______________________
                                (Minor)                          (Cust)

     Under Uniform Gifts to Minors Act __________________________________
                                                    (State)

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

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


                                      A-33
<PAGE>


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


__________________________________________
[PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE]


_______________________________________________________________________________

_______________________________________________________________________________

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

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



Dated:__________________________


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


                                      A-34
<PAGE>


                           OPTION TO ELECT REPAYMENT

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


_______________________________________________________________________________

_______________________________________________________________________________

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


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


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


                                      A-35