Exhibit 4.1


                         FORM OF 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 NOTE, SERIES C
                                  (Fixed Rate)

               1.3% CAPITAL PROTECTED NOTES DUE SEPTEMBER 30, 2012
             BASED ON THE VALUE OF COMMON STOCK OF FIFTEEN COMPANIES
                             IN THE ENERGY INDUSTRY

<TABLE>
--------------------------------------------------------------------------------------------------------------------
<S>                           <C>                          <C>                          <C>
ORIGINAL ISSUE DATE:          INITIAL REDEMPTION           INTEREST RATE:               MATURITY DATE:
                                 DATE:  N/A                   1.3% per annum               See "Maturity Date"
                                                              (equivalent to $     per     below.
                                                              annum per Note)
--------------------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL              INITIAL REDEMPTION           INTEREST PAYMENT             OPTIONAL
   DATE:                         PERCENTAGE: N/A              DATE(S):                     REPAYMENT
                                                              See "Interest Payment        DATE(S):  N/A
                                                              Dates" below.
--------------------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY:           ANNUAL REDEMPTION            INTEREST PAYMENT             APPLICABILITY OF
   U.S. dollars                  PERCENTAGE                   PERIOD:                      MODIFIED
                                 REDUCTION: N/A               Semi-annually                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:  N/A                 ANNUAL INTEREST              N/A
   THAN U.S. DOLLARS,                                         PAYMENTS: N/A
   OPTION TO ELECT
   PAYMENT IN U.S.
   DOLLARS: N/A
--------------------------------------------------------------------------------------------------------------------
EXCHANGE RATE                 TAX REDEMPTION AND           PRICE APPLICABLE             ORIGINAL YIELD TO
   AGENT: N/A                    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 Note, 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.

Maturity Date.................  September 30, 2012, subject to extension in
                                accordance with the following paragraph in the
                                event of a Market


                                      A-2
<PAGE>


                                Disruption Event on the final Determination Date
                                for calculating the Final Average Basket Value.

                                If, due to a Market Disruption Event or
                                otherwise, the final Determination Date is
                                postponed so that it falls less than two
                                scheduled Trading Days prior to the scheduled
                                Maturity Date, the Maturity Date shall be the
                                second scheduled Trading Day following the final
                                Determination Date as postponed. See
                                "Determination Dates" below.

                                In the event that the final Determination Date
                                is postponed 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 one Business Day following the
                                scheduled final Determination Date, (i) to the
                                holder of this Note 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 Note receives the notice.

Minimum Denominations.........  $10

Issue Price...................  $10

Interest Rate.................  1.3%

Interest Payment Dates........

Maturity Redemption Amount....  At maturity, upon delivery of this Note to the
                                Trustee, the Issuer shall pay with respect to
                                each $10 principal amount of this Note an amount
                                in cash equal to the greater of (i) $10 and (ii)
                                the Final Average Basket Value minus the
                                aggregate amount of interest payable on each $10
                                principal amount of this Note to and including
                                the Maturity Date. The Calculation Agent shall
                                calculate the Maturity Redemption Amount on the
                                final Determination Date.



                                      A-3
<PAGE>


                                The Issuer shall, or shall cause the Calculation
                                Agent to, (i) provide written notice to the
                                Trustee at its New York office, on which notice
                                the Trustee may conclusively rely, and to the
                                Depositary of the Maturity Redemption Amount, on
                                or prior to 10:30 a.m. on the Trading Day
                                preceding the Maturity Date (but if such Trading
                                Day is not a Business Day, prior to the close of
                                business on the Business Day preceding the
                                Maturity Date) and (ii) deliver the aggregate
                                cash amount due with respect to this Note to the
                                Trustee for delivery to the holder of this Note
                                on the Maturity Date. See "Discontinuance of the
                                Index; Alteration of Method of Calculation"
                                below.

Basket Stocks.................  The Basket Stocks are the stocks of the fifteen
                                issuers set forth in the table below. The table
                                also indicates the ticker symbol for each Basket
                                Stock, the U.S. exchange on which each Basket
                                Stock is listed, the proportion of the Initial
                                Basket Value represented by the shares of each
                                Basket Stock contained in the Basket, the
                                Exchange Ratio with respect to each Basket
                                Stock, the initial price of each Basket Stock
                                used to calculate its Exchange Ratio and the
                                value of the fractional share of each Basket
                                Stock contained in the Basket.

<TABLE>
                                                                             Proportion            Initial    Initial
                                                                             of Initial            Price of  Value per
                                Issuer of                  Ticker              Basket    Exchange   Basket    Basket
                                Basket Stock               Symbol  Exchange    Value       Ratio    Stock      Stock
                                -----------                ------  --------  ----------  --------  --------  ---------
<S>                             <C>                          <C>     <C>       <C>                            <C>
                                Apache Corporation           APA     NYSE      1/15th                         $.66667
                                Baker Hughes Incorporated    BHI     NYSE      1/15th                         $.66667
                                Chesapeake Energy
                                    Corporation              CHK     NYSE      1/15th                         $.66667
                                ConocoPhillips               COP     NYSE      1/15th                         $.66667
                                Devon Energy
                                    Corporation              DVN     AMEX      1/15th                         $.66667
                                Exxon Mobil Corporation      XOM     NYSE      1/15th                         $.66667
                                Halliburton Company          HAL     NYSE      1/15th                         $.66667
                                Premcor Inc.                 PCO     NYSE      1/15th                         $.66667
                                Royal Dutch Petroleum
                                    Company                  RD*     NYSE      1/15th                         $.66667
                                Schlumberger Limited         SLB     NYSE      1/15th                         $.66667
                                Suncor Energy Inc.           SU      NYSE      1/15th                         $.66667
                                Valero Energy Corporation    VLO     NYSE      1/15th                         $.66667
                                Weatherford International
                                    Ltd.                     WFT     NYSE      1/15th                         $.66667
                                The Shalliams Companies,
                                    Inc.                     WMB     NYSE      1/15th                         $.66667
                                XTO Energy Inc.              XTO     NYSE      1/15th                         $.66667

                                * Trades as American depositary receipts.
</TABLE>

Basket........................  The Basket is initially composed of the common
                                stock of fifteen companies in the energy
                                industry, and shall


                                      A-4
<PAGE>


                                consist of a number of shares of each Basket
                                Stock equal to the Exchange Ratio with respect
                                to such Basket Stock.

Exchange Ratio................  The Exchange Ratio for each Basket Stock is set
                                forth in the table under "Basket Stocks" above
                                and shall remain constant for the term of the
                                Notes, subject to adjustment for certain
                                corporate and other events relating to the
                                issuer of that Basket Stock and for adjustments
                                relating to the Basket. See "Adjustments to the
                                Exchange Ratios."

Initial Basket Value..........  $10

Final Average Basket Value....  The arithmetic average of the Basket Values on
                                each of the Determination Dates, as calculated
                                by the Calculation Agent.

Basket Value..................  The Basket Value of any date shall equal the sum
                                of the products of the Closing Price and the
                                Exchange Ratio for each Basket Stock, each
                                determined as of such date by the Calculation
                                Agent.

Determination Dates...........  The Determination Dates shall be September 30,
                                2005, September 30, 2006, September 30, 2007,
                                September 30, 2008, September 30, 2009,
                                September 30, 2010, September 30, 2011 and
                                September 27, 2012, in each such case subject to
                                adjustment for Market Disruption Events as
                                described in the two following paragraphs.

                                If any of the first seven scheduled
                                Determination Dates is not a Trading Day or if a
                                Market Disruption Event occurs on any such date,
                                such Determination Date shall be the immediately
                                succeeding Trading Day during which no Market
                                Disruption Event shall have occurred; provided
                                that if a Market Disruption Event has occurred
                                on each of the five Trading Days immediately
                                succeeding any of the first seven scheduled
                                Determination Dates, then such fifth succeeding
                                Trading Day shall be deemed to be the relevant
                                Determination Date, notwithstanding the
                                occurrence of a Market Disruption Event on such
                                day.

                                If September 27, 2012 (the final scheduled
                                Determination Date) is not a Trading Day or if
                                there is a Market Disruption Event on such day,
                                the final Determination Date shall be the
                                immediately succeeding Trading Day


                                      A-5
<PAGE>


                                during which no Market Disruption Event shall
                                have occurred.

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

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

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

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

                                If a Basket Stock (or any such other security)
                                is listed or admitted to trading on any national
                                securities exchange or is a security of the
                                Nasdaq National Market but the last reported
                                sale price or Nasdaq official closing price, as
                                applicable, is not available pursuant to the
                                preceding sentence, then the Closing Price for
                                one share of such Basket Stock (or one unit of
                                any such other security) on any Trading Day
                                shall 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


                                      A-6
<PAGE>


                                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 a Basket Stock (or any such other security)
                                is not available pursuant to either of the two
                                preceding sentences, then the Closing Price for
                                any Trading Day shall be the mean, as determined
                                by the Calculation Agent, of the bid prices for
                                such Basket Stock (or any such other security)
                                obtained from as many recognized dealers in such
                                security, but not exceeding three, as shall 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" shall include a
                                security included in any successor to such
                                system, and the term "OTC Bulletin Board
                                Service" shall include any successor service
                                thereto.

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

Market Disruption Event.......  "Market Disruption Event" means, with respect to
                                any Basket Stock (or the ordinary shares of
                                Royal Dutch Petroleum Company): (i) the
                                occurrence or existence of a suspension, absence
                                or material limitation of trading of such Basket
                                Stock (or ordinary shares of Royal Dutch
                                Petroleum Company) on the primary market for
                                such Basket Stock for more than two hours of
                                trading or during the one-half hour period
                                preceding the close of the principal trading
                                session on such market; or a breakdown or
                                failure in the price and trade reporting systems
                                of the primary market for such Basket Stock as a
                                result of which the reported trading prices for
                                such Basket Stock (or ordinary shares of Royal
                                Dutch Petroleum Company) during the last
                                one-half hour preceding the close of the
                                principal trading session in such market are
                                materially inaccurate; or the suspension,
                                material limitation or absence of trading on the
                                primary market for trading in options contracts
                                related to such Basket Stock (or ordinary shares
                                of Royal Dutch Petroleum Company), if available,

                                      A-7
<PAGE>


                                during the one-half hour period preceding the
                                close of the principal trading session in the
                                applicable market, in each case as determined by
                                the Calculation Agent in its sole discretion;
                                and (ii) a determination by the Calculation
                                Agent in its sole discretion that any event
                                described in clause (i) above materially
                                interfered with the ability of the Issuer or any
                                of its affiliates to unwind or adjust all or a
                                material portion of the hedge position in such
                                Basket Stock with respect to the Notes.

                                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 or
                                market, (2) a decision to permanently
                                discontinue trading in the relevant futures or
                                options contract or exchange traded fund shall
                                not constitute a Market Disruption Event, (3)
                                limitations pursuant to the rules of any
                                Relevant Exchange similar to NYSE Rule 80A (or
                                any applicable rule or regulation enacted or
                                promulgated by any other self-regulatory
                                organization or any government agency 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 futures
                                or options contracts on the DJIA by the primary
                                securities market trading in such contracts by
                                reason of (a) a price change exceeding limits
                                set by such exchange or market, (b) an imbalance
                                of orders relating to such contracts or (c) a
                                disparity in bid and ask quotes relating to such
                                contracts shall constitute a suspension, absence
                                or material limitation of trading in futures or
                                options contracts related to the DJIA and (5) a
                                "suspension, absence or material limitation of
                                trading" on any Relevant Exchange or on the
                                primary market on which futures or options
                                contracts related to the DJIA are traded shall
                                not include any time when such 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
                                Notes shall have occurred and be continuing, the
                                amount declared due and payable for each $10
                                principal amount of this Note upon any
                                acceleration of the Notes (the "Acceleration
                                Amount") shall be equal to greater of (i) $10
                                plus the


                                      A-8
<PAGE>


                                aggregate amount of interest payable on each $10
                                principal amount of this Note to and including
                                the Maturity Date and (ii) the Final Average
                                Basket Value determined as though the Basket
                                Value for any Determination Date scheduled to
                                occur on or after such date of acceleration were
                                the Basket Value on the date of acceleration.

                                If the maturity of the Notes is accelerated
                                because of an event of default as described
                                above, 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
                                the Depositary of the Acceleration Amount and
                                the aggregate cash amount due with respect to
                                this Note as promptly as possible and in no
                                event later than two Business Days after the
                                date of acceleration.

Calculation Agent.............  Morgan Stanley & Co. Incorporated and its
                                successors ("MS & Co.")

                                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 Note and on
                                the Issuer.

                                All calculations with respect to the Exchange
                                Ratio for each Basket Stock and the Final
                                Average Basket Value shall be made by the
                                Calculation Agent and shall be rounded to the
                                nearest one billionth, with five ten-billionths
                                rounded upward (e.g., .8765432105 would be
                                rounded to .876543211); all dollar amounts
                                related to determination of the amount of cash
                                payable per Note shall be rounded to the nearest
                                ten-thousandth, with five one
                                hundred-thousandths rounded upward (e.g., .76545
                                would be rounded up to .7655); and all dollar
                                amounts related to payouts at maturity shall be
                                rounded to the nearest cent, with one-half cent
                                rounded upward.
Adjustments to the Exchange
Ratios........................  The Exchange Ratio with respect to a Basket
                                Stock shall be adjusted as follows:

                                1. If a Basket Stock (or the ordinary shares of
                                Royal Dutch Petroleum Company) is subject to a
                                stock split or reverse stock split, then once
                                such split has become


                                      A-9
<PAGE>


                                effective, the Exchange Ratio for such Basket
                                Stock shall be adjusted to equal the product of
                                the prior Exchange Ratio for such Basket Stock
                                and the number of shares issued in such stock
                                split or reverse stock split with respect to one
                                share of such Basket Stock; provided, however,
                                that, with respect to Royal Dutch Petroleum
                                Company's Basket Stock that trades as American
                                depositary receipts (the "Royal Dutch ADRs"), if
                                (and to the extent that) Royal Dutch Petroleum
                                Company or the depositary for the Royal Dutch
                                ADRs has adjusted the number of ordinary shares
                                represented by each Royal Dutch ADRs so that the
                                price of the Royal Dutch ADRs would not be
                                affected by such stock split or reverse stock
                                split, no adjustment to the Exchange Ratio shall
                                be made.

                                2. If a Basket Stock (or the ordinary shares of
                                Royal Dutch Petroleum Company) is subject (i) to
                                a stock dividend (issuance of additional shares
                                of such Basket Stock or ordinary shares of Royal
                                Dutch Petroleum Company) that is given ratably
                                to all holders of shares of such Basket Stock or
                                ordinary shares of Royal Dutch Petroleum Company
                                or (ii) to a distribution of such Basket Stock
                                or ordinary shares of Royal Dutch Petroleum
                                Company as a result of the triggering of any
                                provision of the corporate charter of the issuer
                                of such Basket Stock or such ordinary shares,
                                then once the dividend has become effective and
                                such Basket Stock (or ordinary shares of the
                                Royal Dutch Petroleum Company) is trading
                                ex-dividend, the Exchange Ratio for such Basket
                                Stock shall be adjusted so that the new Exchange
                                Ratio for such Basket Stock shall equal the
                                prior Exchange Ratio for such Basket Stock plus
                                the product of (i) the number of shares issued
                                with respect to one share of such Basket Stock
                                and (ii) the prior Exchange Ratio for such
                                Basket Stock; provided, however, that, with
                                respect to the Royal Dutch ADRs, if (and to the
                                extent that) Royal Dutch Petroleum Company or
                                thed epositary for the Royal Dutch ADRs has
                                adjusted the number of ordinary shares
                                represented by each Royal Dutch ADRs so that the
                                price of the Royal Dutch ADRs would not be
                                affected by such stock dividend or distribution,
                                no adjustment to the Exchange Ratio shall be
                                made.

                                3. There shall be no adjustments to the Exchange
                                Ratio for any Basket Stock to reflect cash
                                dividends or other


                                      A-10
<PAGE>


                                distributions paid with respect to the Basket
                                Stock (or the ordinary shares of Royal Dutch
                                Petroleum Company) other than distributions
                                described in clauses (i), (iv) and (v) of
                                paragraph 5 below and Extraordinary Dividends as
                                described below. For Royal Dutch Petroleum
                                Company's Basket Stock that is traded as ADRs,
                                cash dividends or other distributions paid on
                                the ordinary shares represented by such ADRs
                                shall not be considered Extraordinary Dividends
                                unless such cash dividends or other
                                distributions, when passed through to the holder
                                of such shares, would constitute Extraordinary
                                Dividends as described below. A cash dividend or
                                other distribution with respect to a Basket
                                Stock shall be deemed to be an "Extraordinary
                                Dividend" if such dividend or other distribution
                                exceeds the immediately preceding
                                non-Extraordinary Dividend for such Basket Stock
                                by an amount equal to at least 5% of the Closing
                                Price of such Basket Stock (as adjusted for any
                                subsequent corporate event requiring an
                                adjustment hereunder, such as a stock split or
                                reverse stock split) by an amount equal to at
                                least 5% of the Closing Price of such Basket
                                Stock on the Trading Day preceding the
                                "ex-dividend date" (that is, the day on and
                                after which transactions in a Basket Stock on
                                the primary United States organized securities
                                exchange or trading system for such Basket Stock
                                no longer carry the right to receive that cash
                                dividend or other cash distribution) for the
                                payment of such Extraordinary Dividend. If an
                                Extraordinary Dividend occurs with respect to a
                                Basket Stock, the Exchange Ratio with respect to
                                such Basket Stock shall be adjusted on the
                                ex-dividend date with respect to such
                                Extraordinary Dividend so that the new Exchange
                                Ratio for such Basket Stock shall equal the
                                product of (i) the then current Exchange Ratio
                                for such Basket Stock and (ii) a fraction, the
                                numerator of which is the Closing Price of the
                                Basket Stock on the Trading Day preceding the
                                ex-dividend date, and the denominator of which
                                is the amount by which the Closing Price of the
                                Basket Stock on the Trading Day preceding the
                                ex-dividend date exceeds the Extraordinary
                                Dividend Amount. The "Extraordinary Dividend
                                Amount" with respect to an Extraordinary
                                Dividend for a Basket Stock shall equal (i) in
                                the case of cash dividends or other
                                distributions that constitute regular dividends,
                                the amount per share of such Extraordinary
                                Dividend minus the amount per share of the
                                immediately preceding non-Extraordinary


                                      A-11
<PAGE>


                                Dividend for such Basket Stock or (ii) in the
                                case of cash dividends or other distributions
                                that do not constitute regular dividends, the
                                amount per share of such Extraordinary Dividend.
                                To the extent an Extraordinary Dividend is not
                                paid in cash, the value of the non-cash
                                component shall be determined by the Calculation
                                Agent, whose determination shall be conclusive.
                                A distribution on a Basket Stock described in
                                clause (i), (iv) or (v) of paragraph 5 below
                                that also constitutes an Extraordinary Dividend
                                shall cause an adjustment to the Exchange Ratio
                                pursuant only to clause (i), (iv) or (v) of
                                paragraph 5, as applicable.

                                4. If the issuer of a Basket Stock issues rights
                                or warrants to all holders of a Basket Stock to
                                subscribe for or purchase such Basket Stock at
                                an exercise price per share less than the
                                Closing Price of such Basket Stock on both (i)
                                the date the exercise price of such rights or
                                warrants is determined and (ii) the expiration
                                date of such rights or warrants, and if the
                                expiration date of such rights or warrants
                                precedes the maturity of the Notes, then the
                                Exchange Ratio for such Basket Stock shall be
                                adjusted to equal the product of the prior
                                Exchange Ratio for such Basket Stock and a
                                fraction, the numerator of which shall be the
                                number of shares of such Basket Stock
                                outstanding immediately prior to the issuance of
                                such rights or warrants plus the number of
                                additional shares of such Basket Stock offered
                                for subscription or purchase pursuant to such
                                rights or warrants and the denominator of which
                                shall be the number of shares of such Basket
                                Stock outstanding immediately prior to the
                                issuance of such rights or warrants plus the
                                number of additional shares of such Basket Stock
                                which the aggregate offering price of the total
                                number of shares of such Basket Stock so offered
                                for subscription or purchase pursuant to such
                                rights or warrants would purchase at the Closing
                                Price on the expiration date of such rights or
                                warrants, which shall be determined by
                                multiplying such total number of shares offered
                                by the exercise price of such rights or warrants
                                and dividing the product so obtained by such
                                Closing Price.

                                5. Any of the following shall constitute a
                                Reorganization Event: (i) there occurs any
                                reclassification or change of a Basket Stock (or
                                ordinary shares of Royal Dutch Petroleum
                                Company), including, without limitation, as a


                                      A-12
<PAGE>


                                result of the issuance of any tracking stock by
                                the issuer of such Basket Stock or such ordinary
                                shares, (ii) the issuer of a Basket Stock or any
                                surviving entity or subsequent surviving entity
                                of the issuer of such Basket Stock (an "Issuer
                                Successor") has been subject to a merger,
                                combination or consolidation and is not the
                                surviving entity, (iii) any statutory exchange
                                of securities of the issuer of a Basket Stock or
                                any Issuer Successor with another corporation
                                occurs (other than pursuant to clause (ii)
                                above), (iv) the issuer of a Basket Stock is
                                liquidated, (v) the issuer of a Basket Stock
                                issues to all of its shareholders equity
                                securities of an issuer other than the issuer of
                                such Basket Stock (other than in a transaction
                                described in clause (ii), (iii) or (iv) above)
                                (a "Spinoff Event") or (vi) a tender or exchange
                                offer or going-private transaction is
                                consummated for all the outstanding shares of
                                such Basket Stock (or the ordinary shares of
                                Royal Dutch Petroleum Company). If any
                                Reorganization Event occurs, in each case as a
                                result of which the holders of a Basket Stock
                                are entitled to receive stock, other securities
                                or other property or assets (including, without
                                limitation, cash or other classes of securities
                                of the issuer of such Basket Stock and including
                                (x) in the case of the issuance of tracking
                                stock, the reclassified share of the Basket
                                Stock, (y) in the case of a Spin-off Event, the
                                share of the Basket Stock with respect to which
                                the spun-off security was issued and (z) in the
                                case of any other Reorganization Event where the
                                Basket Stock continues to be held by the holders
                                receiving such distribution, the Basket Stock)
                                (collectively, "Exchange Property") with respect
                                to or in exchange for such Basket Stock, then in
                                lieu of using the product of the Closing Price
                                and the Exchange Ratio for such Basket Stock to
                                calculate the Basket Value on any date, the
                                Calculation Agent shall use the Exchange
                                Property Value on such date. The Exchange
                                Property Value at any date means (i) for any
                                cash received per share of Basket Stock, the
                                amount of cash received per share of Basket
                                Stock as adjusted by the applicable Exchange
                                Ratio for such Basket Stock on the date of such
                                Reorganization Event, (ii) for any property
                                other than cash or securities received in such
                                distribution, the market value, as determined by
                                the Calculation Agent, as of the date of
                                receipt, of such Exchange Property received for
                                each share of Basket Stock, as adjusted by the
                                Exchange Ratio for such Basket Stock on the date
                                of


                                      A-13
<PAGE>


                                such Reorganization Event, (iii) for any
                                security received in any such distribution, an
                                amount equal to the Closing Price, as of the
                                date on which the Exchange Property Value is
                                determined, per share of such security
                                multiplied by the quantity of such security
                                received for each share of Basket Stock, as
                                adjusted by the Exchange Ratio for such Basket
                                Stock on the date of the initial distribution of
                                such Exchange Property (such as-adjusted
                                quantity, a "New Exchange Ratio") and (iv) if
                                the Exchange Property was distributed with
                                respect to, rather than in exchange for, a
                                Basket Stock, an amount equal to the Closing
                                Price, as of the date on which the Exchange
                                Property Value is determined, for such Basket
                                Stock multiplied by the Exchange Ratio as of the
                                date on which the Exchange Property Value is
                                determined. Holders of Notes shall not receive
                                any interest accrued on the cash component of
                                any Exchange Property. Any New Exchange Ratio
                                shall also be subject to the adjustments set
                                forth in paragraphs 1 through 5 hereof.

                                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.

                                6. In the event of a public announcement that a
                                Basket Stock shall no longer be listed on the
                                NYSE or any other primary U.S. securities
                                exchange or traded through the facilities of a
                                U.S. national securities system, that Basket
                                Stock shall be removed from the Basket (the
                                "Removed Basket Stock") effective as of the
                                Trading Day prior to the first date on which
                                such Basket Stock is no longer listed on the
                                NYSE or any other primary U.S. securities
                                exchange or traded through the facilities of a
                                U.S. national securities system (the "Delisting
                                Date"), and the


                                      A-14
<PAGE>


                                Exchange Ratio of each remaining Basket Stock
                                shall be adjusted as described in the following
                                sentence. The Calculation Agent shall, as of the
                                close of trading on the Trading Day prior to the
                                Delisting Date (if the announcement of an actual
                                delisting is made after trading hours on a
                                Trading Day or on a non-Trading Day, "the
                                Trading Day prior to the Delisting Date" shall
                                be deemed to have occurred on the next Trading
                                Day), increase the Exchange Ratio of each
                                remaining Basket Stock by a number of shares of
                                such Basket Stock equal to the amount obtained
                                by multiplying (A) the product of the Closing
                                Price of the Removed Basket Stock and the
                                Exchange Ratio of the Removed Basket Stock, each
                                determined by the Calculation Agent on such
                                Trading Day, by (B) a fraction the numerator of
                                which is the product of the Closing Price of
                                such Basket Stock and the Exchange Ratio of such
                                Basket Stock each as of such Trading Day and the
                                denominator of which is the sum of the products
                                of the Closing Price of each of the Basket
                                Stocks other than the Removed Basket Stock and
                                the corresponding Exchange Ratio of such Basket
                                Stock, each determined by the Calculation Agent
                                on such Trading Day. The Calculation Agent shall
                                make, and shall not reverse, this adjustment,
                                even if the Removed Basket Stock is subsequently
                                listed on the NYSE or other primary U.S.
                                securities exchange or traded through the
                                facilities of a U.S. national securities system
                                at a later date.

                                No adjustment shall be made to the Basket
                                pursuant to paragraph 6 above if the Calculation
                                Agent determines that any such adjustment is not
                                necessary in light of adjustments made, or to be
                                made, pursuant to paragraph 5 above, and its
                                determinations with respect thereto shall be
                                conclusive in the absence of manifest error.

                                If a Closing Price for a Basket Stock is no
                                longer available for a Basket Stock for whatever
                                reason, including the liquidation of the issuer
                                of such Basket Stock or the subjection of such
                                issuer to a proceeding under any applicable
                                bankruptcy, insolvency or other similar law,
                                then the value of such Basket Stock shall equal
                                zero for so long as no Closing Price is
                                available. There shall be no substitution for
                                any such Basket Stock. In the event that the
                                Royal Dutch ADRs are no longer listed on a
                                primary U.S. securities exchange or traded


                                      A-15
<PAGE>


                                through the facilities of a U.S. national
                                securities system and the underlying ordinary
                                shares are then listed on a primary U.S.
                                securities exchange or traded through the
                                facilities of a U.S. national securities system,
                                the Calculation Agent in its sole discretion
                                shall adjust the Exchange Ratio for the Royal
                                Dutch ADRs such that the product of the last
                                reported sale price of the Royal Dutch ADRs and
                                its Exchange Ratio at the last time the Royal
                                Dutch ADRs was listed or traded equals the
                                product of the last reported sale price of the
                                related ordinary share and such adjusted
                                Exchange Ratio at such time.

                                With respect to the Royal Dutch ADRs, in the
                                event that Royal Dutch Petroleum Company or the
                                depositary for the Royal Dutch ADRs elects, in
                                the absence of any of the events described
                                above, to change the number of ordinary shares
                                that are represented by the Royal Dutch ADRs,
                                the Exchange Ratio for the Royal Dutch ADRs on
                                any Trading Day after the change becomes
                                effective shall be proportionately adjusted.

                                No adjustment to the Exchange Ratio for any
                                Basket Stock shall be required unless such
                                adjustment would require a change of at least
                                .1% in the Exchange Ratio of such Basket Stock
                                then in effect. The Exchange Ratio resulting
                                from any of the adjustments specified above
                                shall be rounded to the nearest one billionth,
                                with five ten-billionths rounded upward.
                                Adjustments to the Exchange Ratio of a Basket
                                Stock shall be made up to and including the
                                scheduled final Determination Date.

                                No adjustments to the Exchange Ratio for any
                                Basket Stock shall be required other than those
                                specified above. The adjustments specified above
                                do not cover all of the events that could affect
                                the Closing Price of a Basket Stock, including,
                                without limitation, a partial tender or exchange
                                offer for a Basket Stock or the ordinary shares
                                of Royal Dutch Petroleum Company.

                                The Calculation Agent shall be solely
                                responsible for the determination and
                                calculation of any adjustments to any Exchange
                                Ratio for a Basket Stock 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


                                      A-16
<PAGE>


                                any corporate event described in paragraph 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 any Exchange Ratio upon
                                written request by any investor in the Notes.


                                      A-17
<PAGE>


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

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

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


                                      A-18
<PAGE>


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

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

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

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


                                      A-19
<PAGE>


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-20
<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-21
<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-22
<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 Reserve


                                      A-23
<PAGE>


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 shall be free of charge, but the Issuer may require payment
of a sum sufficient to cover any tax or other governmental charge in connection
therewith. All Notes surrendered for exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Trustee and
executed by the registered holder in person or by the holder's attorney duly
authorized in writing. The date of registration of any Note delivered upon any
exchange or transfer of Notes shall be such that no gain or loss of interest
results from such exchange or transfer.

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

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


                                      A-24
<PAGE>


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-25
<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-26
<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


                                      A-27
<PAGE>


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

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

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

     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


                                      A-28
<PAGE>

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

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

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

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

     No recourse shall be had for the payment of the principal of, premium, if
any, or the interest on this Note, for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Senior Indenture or any
indenture supplemental thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any 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


                                      A-29
<PAGE>


members of which is, for United States federal income tax purposes, a
nonresident alien individual, a foreign corporation or a nonresident alien
fiduciary of a foreign estate or trust.

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


                                      A-30
<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-31
<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-32
<PAGE>


                            OPTION TO ELECT REPAYMENT

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


________________________________________________________________________________


________________________________________________________________________________


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


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


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


                                      A-33