FIXED RATE SENIOR NOTE

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

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




                                      A-1
<PAGE>


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

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

                        7% SPARQS(R) DUE NOVEMBER 1, 2005
                            MANDATORILY EXCHANGEABLE
                        FOR AMERICAN DEPOSITARY RECEIPTS
                         REPRESENTING ORDINARY SHARES OF
                                NOKIA CORPORATION


<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>

For the purposes of this SPARQS, the tenth paragraph of Section 2.08 of the
Amended and Restated Indenture, dated as of May 1, 1999, between the Issuer and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) as Trustee,
shall not apply.

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




                                      A-2
<PAGE>


Maturity Date.............   November 1, 2005, subject to acceleration as
                             described below in "Price Event Acceleration" and
                             "Alternate Exchange Calculation in Case of an Event
                             of Default" and subject to extension if the Final
                             Call Notice Date is postponed in accordance with
                             the following paragraph.

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

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

Interest Payment Dates....   February 1, 2005, May 1, 2005, August 1, 2005 and
                             the Maturity Date.

                             If the scheduled Maturity Date is postponed due to
                             a Market Disruption Event or otherwise, the Issuer
                             shall pay interest on the Maturity Date as
                             postponed rather than on November 1, 2005, but no
                             interest will accrue on this



                                      A-3
<PAGE>


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

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

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

Morgan Stanley Call Right.   On any scheduled Trading Day on or after April ,
                             2005 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



                                      A-4
<PAGE>


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

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

                             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




                                      A-5
<PAGE>


                             cause the Calculation Agent to, deliver such cash
                             to the Trustee for delivery to the holder of this
                             SPARQS.

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

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

Final Call Notice Date....   October 22, 2005; provided that if October 22, 2005
                             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 April , 2005 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



                                      A-6
<PAGE>


                             SPARQS to the Trustee, each $      principal amount
                             of this SPARQS shall be applied by the Issuer as
                             payment for a number of American Depositary
                             Receipts representing ordinary shares of Nokia
                             Corporation ("Nokia ADRs") at the Exchange Ratio,
                             and the Issuer shall deliver with respect to each
                             $       principal amount of this SPARQS a number of
                             Nokia ADRs equal to the Exchange Ratio.

                             The number of Nokia ADRs to be delivered at
                             maturity shall be subject to any applicable
                             adjustments (i) to the Exchange Ratio (including,
                             as applicable, any New Stock Exchange Ratio or any
                             Basket Stock Exchange Ratio, each as defined in
                             paragraph 5 under "Antidilution Adjustments" below)
                             and (ii) in the Exchange Property, as defined in
                             paragraph 5 under "Antidilution Adjustments" below,
                             to be delivered instead of, or in addition to, such
                             Nokia ADRs 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 number of Nokia
                             ADRs (or the amount of Exchange Property) or cash
                             to 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
                             Nokia ADR (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



                                      A-7
<PAGE>


                             Trading Day immediately prior to the date of
                             acceleration (as defined under "Price Event
                             Acceleration" below), (i) to the holder of this
                             SPARQS by mailing notice of such acceleration by
                             first class mail, postage prepaid, to the holder's
                             last address as it shall appear upon the registry
                             books, (ii) to the Trustee by telephone or
                             facsimile confirmed by mailing such notice to the
                             Trustee by first class mail, postage prepaid, at
                             its New York office and (iii) to the Depositary by
                             telephone or facsimile confirmed by mailing such
                             notice to the Depositary by first class mail,
                             postage prepaid. Any notice that is mailed in the
                             manner herein provided shall be conclusively
                             presumed to have been duly given, whether or not
                             the holder of this SPARQS receives the notice. If
                             the maturity of this SPARQS is accelerated, no
                             interest on the amounts payable with respect to
                             this SPARQS shall accrue for the period from and
                             after such accelerated maturity date; provided that
                             the Issuer has deposited with the Trustee the Nokia
                             ADRs, 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 Nokia ADRs (or any
                             Exchange Property) and cash in respect of interest
                             and any fractional Nokia ADR (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 Nokia ADRs (and, if
                             applicable, any Exchange Property) and any cash in
                             respect of interest and any fractional Nokia ADR
                             (or any Exchange Property) and any other cash due
                             at maturity as described in the preceding paragraph
                             under this heading.

Price Event Acceleration..   If on any two consecutive Trading Days during the
                             period prior to and ending on the third Business
                             Day immediately preceding the Maturity Date, the
                             product of the Closing Price per Nokia ADR and the
                             Exchange Ratio is less than $2.00, the Maturity
                             Date of this SPARQS



                                      A-8
<PAGE>


                             shall be deemed to be accelerated to the third
                             Business Day immediately following such second
                             Trading Day. If Nokia ADRs are not listed on a
                             United States national securities exchange and have
                             not been replaced by Nokia ordinary shares listed
                             on a United States national securities exchange,
                             the Maturity Date of this SPARQS shall be deemed to
                             be accelerated to such date (such date or such
                             second Trading Day referred to in the previous
                             sentence, the "date of acceleration"). Upon such
                             acceleration, the holder of each $        principal
                             amount of this SPARQS shall receive per SPARQS on
                             the date of acceleration:

                                 (i) a number of Nokia ADRs at the then current
                                 Exchange Ratio;

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

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

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

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



                                      A-9
<PAGE>


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

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

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

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

                             If Nokia ADRs (or any such other security) are
                             listed or admitted to trading on any national
                             securities exchange or are securities of the Nasdaq
                             National Market but the last reported sale price or
                             Nasdaq official closing price, as applicable, is
                             not available pursuant to the preceding sentence,
                             then the Closing Price for one Nokia ADR (or one
                             unit of any such other security) on any Trading Day
                             will mean the last reported sale price of the
                             principal trading session on the over-the-counter
                             market as reported on the Nasdaq National Market or
                             the OTC Bulletin Board on such day. If, because of
                             a Market Disruption Event (as defined below) or
                             otherwise, the last reported sale price or Nasdaq
                             official closing price, as applicable, for Nokia
                             ADRs (or any such other security) is not available
                             pursuant to either of the two preceding sentences,
                             then the Closing Price for any Trading Day



                                     A-10
<PAGE>


                             will be the mean, as determined by the Calculation
                             Agent, of the bid prices for Nokia ADRs (or any
                             such other security) obtained from as many
                             recognized dealers in such security, but not
                             exceeding three, as will make such bid prices
                             available to the Calculation Agent. Bids of MS &
                             Co. or any of its affiliates may be included in the
                             calculation of such mean, but only to the extent
                             that any such bid is the highest of the bids
                             obtained. The term "security of the Nasdaq National
                             Market" will include a security included in any
                             successor to such system, and the term OTC Bulletin
                             Board Service will include any successor service
                             thereto.

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

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

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

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

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

                                 1. If Nokia ordinary shares are subject to a
                             stock split or reverse stock split, then once such
                             split has become



                                     A-11
<PAGE>


                             effective, the Exchange Ratio shall be
                             proportionally adjusted; provided, however, that if
                             (and to the extent that) Nokia or the depositary
                             for the Nokia ADRs has adjusted the number of Nokia
                             ordinary shares represented by each Nokia ADR so
                             that the price of the Nokia ADRs would not be
                             affected by such stock split or reverse stock
                             split, no adjustment to the Exchange Ratio shall be
                             made.

                                 2. If Nokia ordinary shares are subject (i) to
                             a stock dividend (issuance of additional Nokia
                             ordinary shares) that is given ratably to all
                             holders of Nokia ADRs or (ii) to a distribution of
                             Nokia ordinary shares as a result of the triggering
                             of any provision of the corporate charter of Nokia,
                             then once the dividend has become effective with
                             regard to Nokia ADRs and Nokia ADRs are trading ex-
                             dividend, the Exchange Ratio shall be
                             proportionally adjusted; provided, however, that if
                             (and to the extent that) Nokia or the depositary
                             for the Nokia ADRs has adjusted the number of Nokia
                             ordinary shares represented by each Nokia ADR so
                             that the price of the Nokia ADRs would not be
                             affected by such stock dividend or stock
                             distribution, no adjustment to the Exchange Ratio
                             shall be made.

                                 3. If Nokia issues rights or warrants to all
                             holders of Nokia ordinary shares to subscribe for
                             or purchase Nokia ordinary shares at an exercise
                             price per share less than the Closing Price of
                             Nokia ordinary shares 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
                             proportionally adjusted to the extent such rights
                             or warrants are passed through to the holders of
                             Nokia ADRs or the holders of Nokia ADRs receive
                             cash or other property as a consequence of the
                             issuance of such rights or warrants; provided,
                             however, that if (and to the extent that) Nokia or
                             the depositary for the Nokia ADRs has adjusted the
                             number of Nokia ordinary shares represented by each
                             Nokia ADR so that the price of the Nokia ADRs would
                             not be affected by the issuance of such rights or
                             warrants, no adjustment to the Exchange Ratio shall
                             be made.

                                 4. There shall be no adjustments to the
                             Exchange Ratio to reflect cash dividends or other
                             distributions paid



                                     A-12
<PAGE>


                             with respect to Nokia ordinary shares other than
                             distributions described in paragraph 2, paragraph 3
                             and clauses (i), (iv) and (v) of the first sentence
                             of paragraph 5 and cash dividends or other
                             distributions that when passed through to holders
                             of Nokia ADRs constitute Extraordinary ADR
                             Dividends. "Extraordinary ADR Dividend" means, in
                             respect of Nokia ADRs, each of (a) the full amount
                             per Nokia ADR of any cash dividend or special
                             dividend or distribution that is identified by
                             Nokia 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 Nokia as an extraordinary or special
                             dividend or distribution) distributed per Nokia ADR
                             over the immediately preceding cash dividend or
                             other cash distribution, if any, per Nokia ADR that
                             did not include an Extraordinary ADR Dividend (as
                             adjusted for any subsequent corporate event
                             requiring an adjustment hereunder, such as a stock
                             split or reverse stock split) if such excess
                             portion of the dividend or distribution is more
                             than 5% of the Closing Price of Nokia ADRs on the
                             Trading Day preceding the "ex-dividend date" (that
                             is, the day on and after which transactions in
                             Nokia ADRs on an organized securities exchange or
                             trading system no longer carry the right to receive
                             that cash dividend or other cash distribution) for
                             the payment of such cash dividend or other cash
                             distribution (such Closing Price, the "Base Closing
                             Price") and (c) the full cash value of any non-cash
                             dividend or distribution per Nokia ADR (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 Nokia ADRs includes an
                             Extraordinary ADR Dividend, the Exchange Ratio with
                             respect to Nokia ADRs shall be adjusted on the
                             ex-dividend date so that the new Exchange Ratio
                             shall equal the product of (i) the prior Exchange
                             Ratio and (ii) a fraction, the numerator of which
                             is the Base Closing Price, and the denominator of
                             which is the amount by which the Base Closing Price
                             exceeds the Extraordinary ADR Dividend. If any
                             Extraordinary ADR Dividend is at least 35% of the
                             Base Closing Price, then, instead of adjusting the
                             Exchange Ratio, the amount payable upon exchange at
                             maturity shall be determined as described in
                             paragraph 5 below, and the Extraordinary ADR
                             Dividend shall be allocated to Reference Basket
                             Stocks in accordance with the



                                     A-13
<PAGE>


                             procedures for a Reference Basket Event as
                             described in clause (c)(ii) of paragraph 5 below.
                             The value of the non-cash component of an
                             Extraordinary ADR 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 Nokia ADRs 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) Nokia ordinary shares are
                             reclassified or changed, including, without
                             limitation, as a result of the issuance of any
                             tracking stock by Nokia, (ii) Nokia has been
                             subject to any merger, combination or consolidation
                             and is not the surviving entity, (iii) Nokia
                             completes a statutory exchange of securities with
                             another corporation (other than pursuant to clause
                             (ii) above), (iv) Nokia is liquidated, (v) Nokia
                             issues to all of its shareholders equity securities
                             of an issuer other than Nokia (other than in a
                             transaction described in clause (ii), (iii) or (iv)
                             above) (a "spinoff stock") or (vi) Nokia ordinary
                             shares are 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 Nokia ADRs 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) if Nokia ADRs continue to be outstanding, Nokia
                             ADRs (if applicable, as reclassified upon the
                             issuance of any tracking stock) at the Exchange
                             Ratio in effect on the third Trading Day prior to
                             the scheduled Maturity Date (taking into account
                             any adjustments for any distributions described
                             under clause (c)(i) below); and




                                     A-14
<PAGE>


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

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

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




                                     A-15
<PAGE>


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



                                     A-16
<PAGE>


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

                                 (x)  if applicable, Nokia ADRs at the Exchange
                                      Ratio then in effect; and

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

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

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

                             For purposes of paragraph 5 above, in the case of a
                             consummated tender or exchange offer or
                             going-private transaction involving 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 "Nokia ADRs" under "No Fractional
                             Shares," "Closing Price" and "Market Disruption
                             Event" shall be deemed to also refer to any New
                             Stock or Reference Basket Stock, and (ii) all other
                             references in this SPARQS to "Nokia



                                     A-17
<PAGE>


                             ADRs" shall be deemed to refer to the Exchange
                             Property into which this SPARQS is thereafter
                             exchangeable and references to a "share" or
                             "shares" of Nokia ADRs 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.

                             In the event that Nokia or the depositary for Nokia
                             ADRs elects, in the absence of any of the events
                             described in paragraph 1, 2, 3, 4 or 5 above, to
                             change the number of Nokia ordinary shares that are
                             represented by each Nokia ADR, the Exchange Ratio
                             on any Trading Day after the change becomes
                             effective shall be proportionally adjusted.

                             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.




                                     A-18
<PAGE>


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

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

Market Disruption Event...   "Market Disruption Event" means, with respect to
                             Nokia ADRs (or, if applicable, Nokia ordinary
                             shares):

                                 (i) a suspension, absence or material
                                 limitation of trading of Nokia ADRs or Nokia
                                 ordinary shares on the primary market for Nokia
                                 ADRs or Nokia ordinary shares 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 Nokia ADRs or
                                 Nokia ordinary shares as a result of which the
                                 reported trading prices for Nokia ADRs or Nokia
                                 ordinary shares 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 Nokia ADRs or Nokia ordinary shares, 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



                                     A-19
<PAGE>


                                 Issuer or any of its affiliates to unwind or
                                 adjust all or a material portion of the hedge
                                 with respect to the SPARQS due November 1,
                                 2005, Mandatorily Exchangeable for American
                                 Depositary Receipts representing ordinary
                                 shares of Nokia Corporation.

                             For purposes of determining whether a Market
                             Disruption Event has occurred: (1) a limitation on
                             the hours or number of days of trading shall not
                             constitute a Market Disruption Event if it results
                             from an announced change in the regular business
                             hours of the relevant exchange, (2) a decision to
                             permanently discontinue trading in the relevant
                             options contract shall not constitute a Market
                             Disruption Event, (3) limitations pursuant to NYSE
                             Rule 80A (or any applicable rule or regulation
                             enacted or promulgated by the NYSE, any other
                             United States self-regulatory organization, the
                             Securities and Exchange Commission, the Helsinki
                             Stock Exchange or any other relevant authority of
                             scope similar to NYSE Rule 80A as determined by the
                             Calculation Agent) on trading during significant
                             market fluctuations shall constitute a suspension,
                             absence or material limitation of trading, (4) a
                             suspension of trading in options contracts on Nokia
                             ADRs or Nokia ordinary shares by the primary
                             securities market trading in such options, if
                             available, by reason of (x) a price change
                             exceeding limits set by such securities exchange or
                             market, (y) an imbalance of orders relating to such
                             contracts or (z) a disparity in bid and ask quotes
                             relating to such contracts shall constitute a
                             suspension, absence or material limitation of
                             trading in options contracts related to Nokia ADRs
                             or Nokia ordinary shares and (5) a suspension,
                             absence or material limitation of trading on the
                             primary securities market on which options
                             contracts related to Nokia ADRs or Nokia ordinary
                             shares are traded shall not include any time when
                             such securities market is itself closed for trading
                             under ordinary circumstances.

Alternate Exchange
Calculation in Case of an
Event of Default..........   In case an event of default with respect to the
                             SPARQS shall have occurred and be continuing, the
                             amount declared due and payable per each $
                             principal amount of this SPARQS upon any
                             acceleration of this SPARQS (an "Event of Default
                             Acceleration") shall be determined by the
                             Calculation Agent and shall be an amount in cash
                             equal to the lesser of (i) the product of (x) the
                             Closing



                                     A-20
<PAGE>


                             Price of Nokia ADRs (and/or the value of any
                             Exchange Property) as of the date of such
                             acceleration and (y) the then current Exchange
                             Ratio and (ii) the Call Price calculated as though
                             the date of acceleration were the Call Date (but in
                             no event less than the Call Price for the first
                             Call Date), in each case plus accrued but unpaid
                             interest to but excluding the date of acceleration;
                             provided that if the Issuer has called the SPARQS
                             in accordance with the Morgan Stanley Call Right,
                             the amount declared due and payable upon any such
                             acceleration shall be an amount in cash for each
                             $      principal amount of this SPARQS equal to the
                             Call Price for the Call Date specified in the
                             Issuer's notice of mandatory exchange, plus accrued
                             but unpaid interest to but excluding the date of
                             acceleration.

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


                                     A-21
<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 number of Nokia ADRs (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



                                     A-22
<PAGE>


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

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

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

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



                                     A-23
<PAGE>


payment will be made in the Specified Currency. All currency exchange costs will
be borne by the holder of this Note by deductions from such payments.

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

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



                                     A-24
<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-25
<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




                                     A-26
<PAGE>


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

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

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

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

     This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and, if denominated
in U.S. dollars, unless otherwise stated above, is issuable only in
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. If this Note is denominated in a Specified Currency other than U.S.
dollars, then, unless a higher minimum denomination is required by applicable
law, it is issuable only in denominations of the equivalent of U.S. $1,000
(rounded to an integral multiple of 1,000 units of such Specified Currency), or
any amount in excess thereof which is an 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



                                     A-27
<PAGE>


Reserve Bank of New York (the "Market Exchange Rate") on the Business Day
immediately preceding the date of issuance.

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

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

     The Senior Indenture provides that (a) if an Event of Default (as defined
in the Senior Indenture) due to the default in payment of principal of, premium,
if any, or interest on, any series of debt securities issued under the Senior
Indenture, including the series of Senior Medium-Term Notes of which this Note
forms a part, or due to the default in the performance or breach of any other
covenant or warranty of the Issuer applicable to the debt securities of such
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



                                     A-28
<PAGE>


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

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

     If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption (except that if this Note is subject to "Modified Payment upon
Acceleration or Redemption," such redemption price would be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of redemption, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of redemption) (the "Amortized
Amount")), if the Issuer determines that, as a result of any change in or
amendment to the laws, or any regulations or rulings promulgated 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



                                     A-29
<PAGE>


as described below. Prior to the giving of any notice of redemption pursuant to
this paragraph, the Issuer shall deliver to the Trustee (i) a certificate
stating that the Issuer is entitled to effect such redemption and setting forth
a statement of facts showing that the conditions precedent to the right of the
Issuer to so redeem have occurred, and (ii) an opinion of independent legal
counsel satisfactory to the Trustee to such effect based on such statement of
facts; provided that no such notice of redemption shall be given earlier than 60
calendar days prior to the earliest date on which the Issuer would be obligated
to pay such Additional Amounts if a payment in respect of this Note were then
due.

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

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

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

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

          (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;



                                     A-30
<PAGE>


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

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

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

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

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

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

     The Senior Indenture permits the Issuer and the Trustee, with the consent
of the holders of not less than a majority in aggregate principal amount of the
debt securities of all series issued under the Senior Indenture then outstanding
and affected (voting as one class), to execute 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



                                     A-31
<PAGE>


than as provided in the antidilution provisions or other similar adjustment
provisions of the debt securities or otherwise in accordance with the terms
thereof), or impair or affect the rights of any holder to institute suit for the
payment thereof or (b) reduce the aforesaid percentage in principal amount of
debt securities the consent of the holders of which is required for any such
supplemental indenture.

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

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

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

     So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as 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



                                     A-32
<PAGE>


there shall be such an agency, the Issuer shall keep the Trustee advised of the
names and locations of such agencies, if any are so designated. If any European
Union Directive on the taxation of savings comes into force, the Issuer will, to
the extent possible as a matter of law, maintain a Paying Agent in a member
state of the European Union that will not be obligated to withhold or deduct tax
pursuant to any such Directive or any law implementing or complying with, or
introduced in order to conform to, such Directive.

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

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

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

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

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

     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.



                                     A-33
<PAGE>


     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-34
<PAGE>


                                  ABBREVIATIONS

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



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


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

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

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

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





                                     A-35
<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-36
<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-37
<PAGE>