Document:

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.

<PAGE>

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

                                 % CAPITAL PROTECTED NOTE DUE SEPTEMBER 30, 2008
                                 BASED ON THE VALUE OF A BASKET OF THREE INDICES

--------------------------------------------------------------------------------------------------------------------
<S>                           <C>                          <C>                          <C>
ORIGINAL ISSUE DATE:          INITIAL REDEMPTION           INTEREST RATE:      % per    MATURITY DATE: See
                                 DATE: N/A                    annum (equivalent to $       "Maturity Date" below.
                                                              per annum per note)
--------------------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL DATE:        INITIAL REDEMPTION           INTEREST PAYMENT DATE(S):    OPTIONAL REPAYMENT
                                 PERCENTAGE: N/A              See "Interest Payment        DATE(S):  N/A
                                                              Dates" below.
--------------------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY: U.S.      ANNUAL REDEMPTION            INTEREST PAYMENT PERIOD:     APPLICABILITY OF MODIFIED
   dollars                       PERCENTAGE                   Semi-annually                PAYMENT UPON
                                 REDUCTION: N/A                                            ACCELERATION OR
                                                                                           REDEMPTION: See
                                                                                           "Alternate Exchange
                                                                                           Calculation in Case of
                                                                                           an Event of Default"
                                                                                           below.
--------------------------------------------------------------------------------------------------------------------
IF SPECIFIED CURRENCY OTHER   REDEMPTION NOTICE PERIOD:    APPLICABILITY OF ANNUAL      If yes, state Issue Price:
   THAN U.S. DOLLARS, OPTION     N/A                          INTEREST PAYMENTS: N/A       N/A
   TO ELECT PAYMENT IN U.S.
   DOLLARS: N/A
--------------------------------------------------------------------------------------------------------------------
EXCHANGE RATE AGENT: N/A      TAX REDEMPTION AND PAYMENT   PRICE APPLICABLE UPON        ORIGINAL YIELD TO
                                 OF ADDITIONAL AMOUNTS:       OPTIONAL REPAYMENT: N/A      MATURITY: N/A
                                 N/A
--------------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS: See below.  IF YES, STATE INITIAL
                                 OFFERING DATE: N/A
--------------------------------------------------------------------------------------------------------------------
</TABLE>

Maturity Date.................  September 30, 2008, subject to extension in
                                accordance with the following paragraph in the
                                event of a Market 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 with
                                respect to any Basket Index 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 latest final

                                      A-2
<PAGE>

                                Determination Date with respect to any Basket
                                Index so postponed. See "Determination Dates"
                                below.

                                In the event that the final Determination Date
                                with respect to any Basket Index 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.

Interest Payment Dates........  Each September 30 and March 30, beginning
                                September 30, 2005.

                                If the scheduled Maturity Date is postponed due
                                to a Market Disruption Event or otherwise, the
                                Issuer shall pay interest on the Maturity Date
                                as postponed rather than on September 30, 2008,
                                but no interest shall accrue on this Note or on
                                such payment during the period from or after the
                                scheduled Maturity Date.

Record Date...................  Notwithstanding the definition of "Record Date"
                                on page 13 hereof, the Record Date for each
                                Interest Payment Date, including the Interest
                                Payment Date scheduled to occur on the Maturity
                                Date, shall be the date 15 calendar days prior
                                to such scheduled Interest Payment Date, whether
                                or not that date is a Business Day.

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

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

                                      A-3
<PAGE>

Basket Indices................  The Dow Jones EURO STOXX 50 Index (the "Euro
                                STOXX 50 Index"), the Standard & Poor's 500
                                Index (the "S&P 500 Index") and the Nikkei 225
                                Index.

                                References to Basket Indices shall include any
                                Successor Indices (as defined under
                                "Discontinuance of a Basket Index; Alteration of
                                Method of Calculation" below), unless the
                                context requires otherwise.

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 $10 principal amount of
                                this Note plus the Supplemental Redemption
                                Amount, if any, as determined by the Calculation
                                Agent.

                                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 a
                                Basket Index; Alteration of Method of
                                Calculation" below.

Supplemental Redemption
  Amount......................  The Supplemental Redemption Amount shall be
                                equal to the product of $10 times the Basket
                                Percent Change; provided that the Supplemental
                                Redemption Amount shall not be less than zero.
                                The Calculation Agent shall calculate the
                                Supplemental Redemption Amount on the final
                                Determination Date.

Basket Percent Change.........  The Basket Percent Change is a fraction, the
                                numerator of which shall be the Final Average
                                Basket Value minus the Initial Basket Value and
                                the denominator of which shall be the Initial
                                Basket Value. The Basket Percent Change is
                                described by the following formula:

                           (Final Average Basket Value - Initial Basket Value)
                           ---------------------------------------------------
                                            Initial Basket Value

                                      A-4
<PAGE>

Basket Closing Value..........  The Basket Closing Value on any Determination
                                Date shall equal the sum of (i) the Euro STOXX
                                50 Index Closing Value on such Determination
                                Date times the Euro STOXX 50 Index Multiplier,
                                (ii) the S&P 500 Index Closing Value on such
                                Determination Date times the S&P 500 Index
                                Multiplier and (iii) the Nikkei 225 Index
                                Closing Value on such Determination Date times
                                the Nikkei 225 Index Multiplier. In certain
                                circumstances, the Basket Closing Value shall be
                                based on the alternate calculation of the Basket
                                Indices described under "Discontinuance of a
                                Basket Index; Alteration of Method of
                                Calculation."

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

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

Euro STOXX 50
  Index Closing Value.........  The Euro STOXX 50 Index Closing Value on any
                                Trading Day shall equal the closing value of the
                                Euro STOXX 50 Index or any Successor Index (as
                                defined under "Discontinuance of a Basket Index;
                                Alteration of Method of Calculation" below)
                                published at the regular weekday close of
                                trading on that Trading Day. In certain
                                circumstances, the Euro STOXX 50 Index Closing
                                Value shall be based on the alternate
                                calculation of the Euro STOXX 50 Index described
                                under "Discontinuance of a Basket Index;
                                Alteration of Method of Calculation."

                                In this Note, references to the Euro STOXX 50
                                Index shall include any Successor Index, unless
                                the context requires otherwise.

Euro STOXX 50
  Index Multiplier............

S&P 500 Index Closing Value...  The S&P 500 Index Closing Value on any Trading
                                Day shall equal the closing value of the S&P 500
                                Index or any Successor Index (as defined under
                                "Discontinuance of a Basket Index; Alteration of
                                Method of Calculation" below) published at the
                                regular weekday close of trading on that Trading
                                Day. In

                                      A-5
<PAGE>

                                certain circumstances, the S&P 500 Index Closing
                                Value shall be based on the alternate
                                calculation of the S&P 500 Index described under
                                "Discontinuance of a Basket Index; Alteration of
                                Method of Calculation."

                                In this Note, references to the S&P 500 Index
                                shall include any Successor Index, unless the
                                context requires otherwise.

S&P 500 Index Multiplier......

Nikkei 225 Index
  Closing Value...............  The Nikkei 225 Index Closing Value on any
                                Trading Day shall equal the closing value of the
                                Nikkei 225 Index or any Successor Index (as
                                defined under "Discontinuance of a Basket Index;
                                Alteration of Method of Calculation" below)
                                published at the regular weekday close of
                                trading on that Trading Day. In certain
                                circumstances, the Nikkei 225 Index Closing
                                Value shall be based on the alternate
                                calculation of the Nikkei 225 Index described
                                under "Discontinuance of a Basket Index;
                                Alteration of Method of Calculation."

                                In this Note, references to the Nikkei 225 Index
                                shall include any Successor Index, unless the
                                context requires otherwise.

Nikkei 225 Index Multiplier...

Determination Dates...........  The Determination Dates shall be September 30,
                                2005, September 30, 2006, September 30, 2007 and
                                September 26, 2008, in each such case subject to
                                adjustment for non-Trading Days or Market
                                Disruption Events with respect to a Basket Index
                                as described in the two following paragraphs in
                                this section.

                                If any of the first three scheduled
                                Determination Dates is not a Trading Day or if a
                                Market Disruption Event occurs on any such date
                                with respect to a Basket Index, such
                                Determination Date with respect to that Basket
                                Index shall be the immediately succeeding
                                Trading Day during which no Market Disruption
                                Event shall have occurred; provided that, with
                                respect to any Basket Index, if a Market
                                Disruption Event has occurred on each of the
                                five Trading Days immediately succeeding any of
                                the first three scheduled Determination Dates,
                                the Calculation Agent shall

                                      A-6
<PAGE>

                                determine the applicable Index Closing Value on
                                such fifth succeeding Trading Day in accordance
                                with the formula for calculating the value of
                                the applicable Basket Index last in effect prior
                                to the commencement of the Market Disruption
                                Event, without rebalancing or substitution,
                                using the closing price (or, if trading in the
                                relevant securities has been materially
                                suspended or materially limited, its good faith
                                estimate of the closing price that would have
                                prevailed but for such suspension or limitation)
                                on such fifth succeeding Trading Day of each
                                security most recently comprising the applicable
                                Basket Index.

                                If September 26, 2008 (the final scheduled
                                Determination Date) is not a Trading Day or if
                                there is a Market Disruption Event with respect
                                to any Basket Index on such day, the final
                                Determination Date for such Basket Index shall
                                be the immediately succeeding Trading Day during
                                which no Market Disruption Event shall have
                                occurred.

Trading Day...................  A day, as determined by the Calculation Agent,
                                on which trading is generally conducted on the
                                Relevant Exchange(s) for securities underlying
                                the applicable Basket Index.

Market Disruption Event.......  Market Disruption Event means, with respect to
                                any Basket Index, the occurrence or existence of
                                a suspension, absence or material limitation of
                                trading of stocks then constituting 20 percent
                                or more of the level of such Basket Index (or
                                the Successor Index) on the Relevant Exchange(s)
                                for such securities for more than two hours of
                                trading or during the one-half hour period
                                preceding the close of the principal trading
                                session on such Relevant Exchange(s); or a
                                breakdown or failure in the price and trade
                                reporting systems of any Relevant Exchange as a
                                result of which the reported trading prices for
                                stocks then constituting 20 percent or more of
                                the level of such Basket Index (or the Successor
                                Index) during the last one-half hour preceding
                                the close of the principal trading session on
                                such Relevant Exchange(s) are materially
                                inaccurate; or the suspension, material
                                limitation or absence of trading on any major
                                securities market for trading in futures or
                                options contracts or exchange traded funds
                                related to such Basket Index (or the Successor
                                Index)

                                      A-7
<PAGE>

                                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, in
                                each case as determined by the Calculation Agent
                                in its sole discretion.

                                For the purpose of determining whether a Market
                                Disruption Event exists at any time, if trading
                                in a security included in a Basket Index is
                                materially suspended or materially limited at
                                that time, then the relevant percentage
                                contribution of that security to the value of
                                such Basket Index shall be based on a comparison
                                of (x) the portion of the value of such Basket
                                Index attributable to that security relative to
                                (y) the overall value of such Basket Index, in
                                each case immediately before that suspension or
                                limitation.

                                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 a Basket Index 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 a Basket Index 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 a Basket

                                      A-8
<PAGE>

                                Index are traded shall not include any time when
                                such market is itself closed for trading under
                                ordinary circumstances.

Relevant Exchange.............  Relevant Exchange means the primary exchange or
                                market of trading for any security then included
                                in any Basket Index or any Successor Index.

Alternate Exchange
  Calculation in Case of
  an Event of Default.........  In case an event of default with respect to this
                                Note shall have occurred and be continuing, the
                                amount declared due and payable for each $10
                                principal amount of this Note upon any
                                acceleration of this Note (the "Acceleration
                                Amount") shall be equal to such $10 principal
                                amount plus the Supplemental Redemption Amount,
                                if any, determined as though the Basket Closing
                                Value for any Determination Date scheduled to
                                occur on or after the date of such acceleration
                                were the Basket Closing Value on the date of
                                acceleration.

                                If the maturity of this Note 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, the
                                Trustee and the Issuer.

                                All calculations with respect to the Basket
                                Closing Value on each Determination Date, the
                                Final Average Basket Value and the Supplemental
                                Redemption Amount, if any, shall be made by the
                                Calculation Agent and shall be rounded to the
                                nearest one hundred-thousandth, with five
                                one-millionths rounded upward

                                      A-9
<PAGE>

                                (e.g., .876545 would be rounded to .87655); 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 paid on the aggregate principal amount
                                of this Note shall be rounded to the nearest
                                cent, with one-half cent rounded upward.

Discontinuance of a Basket
  Index; Alteration of Method
  of Calculation..............  If the publication of any Basket Index is
                                discontinued and a successor or substitute index
                                that MS & Co., as the Calculation Agent,
                                determines, in its sole discretion, to be
                                comparable to the discontinued Basket Index
                                (such index being referred to herein as a
                                "Successor Index") is published, then any
                                subsequent Euro STOXX 50 Index Closing Value,
                                S&P 500 Index Closing Value or Nikkei 225 Index
                                Closing Value, as applicable (each, an "Index
                                Closing Value"), shall be determined by
                                reference to the value of such Successor Index
                                at the regular official weekday close of the
                                principal trading session of the Relevant
                                Exchange or market for the Successor Index on
                                the date that any Index Closing Value is to be
                                determined.

                                Upon any selection by the Calculation Agent of a
                                Successor Index, the Calculation Agent shall
                                cause written notice thereof to be furnished to
                                the Trustee, to the Issuer and to the
                                Depositary, as holder of this Note, within three
                                Trading Days of such selection.

                                If the publication of a Basket Index is
                                discontinued prior to, and such discontinuance
                                is continuing on, the date that any Index
                                Closing Value is to be determined and MS & Co.,
                                as the Calculation Agent, determines, in its
                                sole discretion, that no Successor Index is
                                available at such time, then the Calculation
                                Agent shall determine the relevant Index Closing
                                Value for such date in accordance with the
                                formula for calculating such Basket Index last
                                in effect prior to such discontinuance, without
                                rebalancing or substitution, using the closing
                                price (or, if trading in the relevant securities
                                has been materially suspended or materially
                                limited, its good faith estimate of the closing
                                price that would have prevailed but for such
                                suspension or

                                      A-10
<PAGE>

                                limitation) at the close of the principal
                                trading session on such date of each security
                                most recently comprising such Basket Index on
                                the Relevant Exchange.

                                If at any time the method of calculating a
                                Basket Index or a Successor Index, or the value
                                thereof, is changed in a material respect, or if
                                a Basket Index or a Successor Index is in any
                                other way modified so that such index does not,
                                in the opinion of MS & Co., as the Calculation
                                Agent, fairly represent the value of such Basket
                                Index or such Successor Index had such changes
                                or modifications not been made, then, from and
                                after such time, the Calculation Agent shall, at
                                the close of business in New York City on each
                                date on which the Index Closing Value for such
                                Basket Index is to be determined, make such
                                calculations and adjustments as, in the good
                                faith judgment of the Calculation Agent, may be
                                necessary in order to arrive at a value of a
                                stock index comparable to such Basket Index or
                                such Successor Index, as the case may be, as if
                                such changes or modifications had not been made,
                                and the Calculation Agent shall determine the
                                Final Average Basket Value with reference to
                                such Basket Index or such Successor Index, as
                                adjusted. Accordingly, if the method of
                                calculating such Basket Index or a Successor
                                Index is modified so that the value of such
                                index is a fraction of what it would have been
                                if it had not been modified (e.g., due to a
                                split in the index), then the Calculation Agent
                                shall adjust such index in order to arrive at a
                                value of such Basket Index or such Successor
                                Index as if it had not been modified (i.e., as
                                if such split had not occurred).

                                      A-11
<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

                                      A-12
<PAGE>

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

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

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

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

                                      A-13
<PAGE>

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

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

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

                                      A-14
<PAGE>

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

DATED:                              MORGAN STANLEY
                                    By:
                                         ---------------------------------------
                                         Name:
                                         Title:

TRUSTEE'S CERTIFICATE
    OF AUTHENTICATION

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

JPMORGAN CHASE BANK, N.A.,
    as Trustee

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

                                      A-15
<PAGE>

                               REVERSE OF SECURITY

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

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

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

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

                                      A-16
<PAGE>

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

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

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

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

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

                                      A-17
<PAGE>

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

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

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

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

                                      A-18
<PAGE>

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

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

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

                                      A-19
<PAGE>

thereunder, of the United States or of any political subdivision or taxing
authority thereof or therein affecting taxation, or any change in official
position regarding the application or interpretation of such laws, regulations
or rulings, which change or amendment becomes effective on or after the Initial
Offering Date hereof, the Issuer has or will become obligated to pay Additional
Amounts, as defined below, with respect to this Note as described below. Prior
to the giving of any notice of redemption pursuant to this paragraph, the Issuer
shall deliver to the Trustee (i) a certificate stating that the Issuer is
entitled to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Issuer to so redeem
have occurred, and (ii) an opinion of independent legal counsel satisfactory to
the Trustee to such effect based on such statement of facts; provided that no
such notice of redemption shall be given earlier than 60 calendar days prior to
the earliest date on which the Issuer would be obligated to pay such Additional
Amounts if a payment in respect of this Note were then due.

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

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

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

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

          (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

                                      A-20
<PAGE>

     company or controlled foreign corporation or passive foreign investment
     company with respect to the United States or as a corporation which
     accumulates earnings to avoid United States federal income tax or as a
     private foundation or other tax-exempt organization or a bank receiving
     interest under Section 881(c)(3)(A) of the Internal Revenue Code of 1986,
     as amended;

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

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

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

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

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

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

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

                                      A-21
<PAGE>

consent of the holder of each outstanding debt security affected thereby, (a)
extend the final maturity of any such debt security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any amount payable on redemption thereof, or change the
currency of payment thereof, or modify or amend the provisions for conversion of
any currency into any other currency, or modify or amend the provisions for
conversion or exchange of the debt security for securities of the Issuer or
other entities or for other property or the cash value of the property (other
than as provided in the antidilution provisions or other similar adjustment
provisions of the debt securities or otherwise in accordance with the terms
thereof), or impair or affect the rights of any holder to institute suit for the
payment thereof or (b) reduce the aforesaid percentage in principal amount of
debt securities the consent of the holders of which is required for any such
supplemental indenture.

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

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

     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

                                      A-22
<PAGE>

absence of manifest error, be conclusive for all purposes and binding on holders
of Notes and coupons.

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

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

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

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

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

                                      A-23
<PAGE>

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

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

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

                                      A-24
<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-25
<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-26
<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-27FORM 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 NOTES, SERIES F

                                PERFORMANCE LEVERAGED UPSIDE SECURITIES ("PLUS")

                                              PLUS DUE JUNE 30, 2006
                                             MANDATORILY EXCHANGEABLE
                                       FOR AN AMOUNT PAYABLE IN U.S. DOLLARS
                                       BASED ON THE VALUE OF COMMON STOCK OF
                                           TWO PHARMACEUTICAL COMPANIES

<TABLE>
-------------------------------------------------------------------------------------------------------------------
<S>                           <C>                          <C>                          <C>
ORIGINAL ISSUE DATE:          INITIAL REDEMPTION           INTEREST RATE: None          MATURITY DATE:
                                 DATE: N/A                                                 See "Maturity Date"
                                                                                           below.
-------------------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL              INITIAL REDEMPTION           INTEREST PAYMENT             OPTIONAL
   DATE: N/A                     PERCENTAGE: N/A              DATES: N/A                   REPAYMENT
                                                                                           DATE(S):  N/A
-------------------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY:           ANNUAL REDEMPTION            INTEREST PAYMENT             APPLICABILITY OF
   U.S. dollars                  PERCENTAGE                   PERIOD: N/A                  MODIFIED
                                 REDUCTION: N/A                                            PAYMENT UPON
                                                                                           ACCELERATION: 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                                            ORIGINAL YIELD TO
   AGENT: N/A                    AND PAYMENT OF                                            MATURITY: N/A
                                 ADDITIONAL
                                 AMOUNTS: N/A
-------------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS:             If yes, state Initial Offering
   See below                  Date: N/A
-------------------------------------------------------------------------------------------------------------------
</TABLE>

Maturity Date..........       June 30, 2006, subject to extension in accordance
                              with the following paragraph in the event of a
                              Market Disruption Event on any Basket Valuation
                              Date (as defined below).

                              If due to a Market Disruption Event with respect
                              to a Basket Stock or otherwise, any Basket
                              Valuation Date

                                      A-2
<PAGE>

                              occurs on or after June 29, 2006, the Maturity
                              Date shall be the second scheduled Trading Day
                              following the final Basket Valuation Date as
                              postponed. See "Basket Valuation Dates" below.

                              In the event that the Maturity Date of the PLUS is
                              postponed due to postponement of any Basket
                              Valuation Date as described in the immediately
                              preceding paragraph, the Issuer shall give notice
                              of such postponement and, once it has been
                              determined, of the date to which the Maturity Date
                              has been rescheduled (i) to the holder of this
                              PLUS 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
                              PLUS receives the notice. The Issuer shall give
                              such notice as promptly as possible, and in no
                              case later than (i) with respect to notice of
                              postponement of the Maturity Date, the Business
                              Day immediately following June 28, 2006, and (ii)
                              with respect to notice of the date to which the
                              Maturity Date has been rescheduled, the Business
                              Day immediately following the actual final Basket
                              Valuation Date for determining the Final Average
                              Basket Value (as defined below).

Denominations..........       $10 and integral multiples thereof

Payment at Maturity....       At maturity, upon delivery of this PLUS to the
                              Trustee, the Issuer shall pay with respect to each
                              $10 principal amount of this PLUS an amount in
                              cash equal to (i) if the Final Average Basket
                              Value is greater than the Initial Basket Value (as
                              defined below), the lesser of (a) $10 plus the
                              Leveraged Upside Payment (as defined below) and
                              (b) the Maximum Payment at Maturity (as defined
                              below) or (ii) if the Final Average Basket Value
                              is less than or equal to the Initial Basket Value,
                              $10 times the Basket Performance Factor (as
                              defined below).

                                       A-3
<PAGE>

                              The Issuer shall, or shall cause the Calculation
                              Agent to, (i) provide written notice to the
                              Trustee and to the Depositary of the amount of
                              cash to be delivered with respect to each $10
                              principal amount of this PLUS, 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 PLUS to the Trustee for delivery
                              to the holder of this PLUS on the Maturity Date.

Leveraged Upside
Payment ...............       The product of (i) $10 and (ii) 300% and (iii) the
                              Basket Percent Increase (as defined below).

Maximum Payment at
Maturity...............       $

Basket Stocks..........       The Basket Stocks are the common stocks of the two
                              issuers set forth in the table below. The table
                              also indicates the ticker symbol for each Basket
                              Stock, the securities exchange on which each
                              Basket Stock is listed, the percentage 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.

                        Issuer of            Ticker                     Exchange
                        Basket Stock         Symbol     Exchange         Ratio
                        ------------         ------     --------        --------
                        Merck & Co., Inc.     MRK         NYSE
                        Pfizer Inc.           PFE         NYSE

Basket                        The Basket is initially composed of thcommon stock
                              of two pharmaceutical companies, and consists of a
                              number of shares of each Basket Stock equal t 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 will remain constant for the term of the PLUS,
                              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" below.

                                      A-4

<PAGE>

Basket Percent Increase.........  A fraction, the numerator of which shall be
                                  the Final Average Basket Value minus the
                                  Initial Basket Value and the denominator of
                                  which shall be the Initial Basket Value.

Basket Performance Factor.......  A fraction, the numerator of which shall be
                                  the Final Average Basket Value and the
                                  denominator of which shall be the Initial
                                  Basket Value.

Final Average Basket Value......  The arithmetic average of the Basket Values on
                                  each of the Basket Valuation Dates.

Basket Valuation Dates..........  June 26, 2006, June 27, 2006 and June 28,
                                  2006; provided that if any such date is not a
                                  Trading Day or if a Market Disruption Event
                                  occurs on any scheduled Basket Valuation Date
                                  with respect to any Basket Stock, the Basket
                                  Valuation Dates will be the first three
                                  Trading Days occurring on or after June 26,
                                  2006 during which no Market Disruption Event
                                  shall have occurred with respect to any Basket
                                  Stock.

Initial Basket Value............

Basket Value....................  The Basket Value on 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.

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 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

                                      A-5
<PAGE>

                                     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
                                  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 will make such bid prices
                                  available to the Calculation Agent. Bids of MS
                                  & Co. or any of its affiliates may be included
                                  in the calculation of such mean, but only to
                                  the extent that any such bid is the highest of
                                  the bids obtained. The term "security of the
                                  Nasdaq National Market" will include a
                                  security included in any successor to such
                                  system, and the term "OTC Bulletin Board
                                  Service" will include any successor service
                                  thereto.

Trading Day.....................  A day, as determined by the Calculation Agent,
                                  on which trading is generally conducted on the
                                  New York Stock Exchange, Inc. ("NYSE"), the
                                  American Stock Exchange LLC, the Nasdaq
                                  National Market, the Chicago Mercantile
                                  Exchange and the Chicago

                                      A-6
<PAGE>

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

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 PLUS, the
                                  Trustee and the Issuer.

                                  All calculations with respect to the Payment
                                  at Maturity shall be rounded to the nearest
                                  one hundred-thousandth, with five
                                  one-millionths rounded upward (e.g., .876545
                                  would be rounded to .87655); all dollar
                                  amounts related to determination of the amount
                                  of cash payable for each $10 principal amount
                                  of this PLUS 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 paid on the aggregate number of
                                  PLUS shall be rounded to the nearest cent,
                                  with one-half cent rounded upward.

Market Disruption Event.........  Market Disruption Event means, with respect to
                                  any Basket Stock:

                                     (i) the occurrence or existence of a
                                     suspension, absence or material limitation
                                     of trading of such Basket Stock 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 in
                                     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 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 of trading
                                     on the primary market for trading in
                                     options contracts related to such Basket
                                     Stock, if available, during the one-half
                                     hour period preceding the close of the
                                     principal trading session in the applicable
                                     market, in each case as determined by the
                                     Calculation Agent in its sole discretion;
                                     and

                                      A-7
<PAGE>

                                     (ii) a determination by the Calculation
                                     Agent in its sole discretion that any event
                                     described in clause (i) above materially
                                     interfered with the ability of the Issuer
                                     or any of its affiliates to unwind or
                                     adjust all or a material portion of the
                                     hedge position with respect to the PLUS due
                                     June 30, 2006, Mandatorily Exchangeable for
                                     an Amount Payable in U.S. Dollars Based on
                                     the Value of Common Stock of Two
                                     Pharmaceutical Companies.

                                  For the purpose 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 any Basket Stock by the primary
                                  securities market trading in such contracts by
                                  reason of (a) a price change exceeding limits
                                  set by such securities exchange or market, (b)
                                  an imbalance of orders relating to such
                                  contracts or (c) a disparity in bid and ask
                                  quotes relating to such contracts shall
                                  constitute a suspension, absence or material
                                  limitation of trading in futures or options
                                  contracts related to such Basket Stock and (5)
                                  a suspension, absence or material limitation
                                  of trading on the primary securities market on
                                  which options contracts related to any Basket
                                  Stock are traded shall not include any time
                                  when such securities market is itself closed
                                  for trading under ordinary circumstances.

Relevant Exchange...............  Relevant Exchange means the primary exchange
                                  or market of trading for any security (or any
                                  combination thereof) then included in the
                                  Basket.

Alternate Exchange Calculation
in Case of an Event of
Default.......................... In case an event of default with respect to
                                  the PLUS shall have occurred and be
                                  continuing, the amount

                                      A-8
<PAGE>

                                  declared due and payable for each $10
                                  principal amount of this PLUS upon any
                                  acceleration of this PLUS shall be determined
                                  by the Calculation Agent and shall be an
                                  amount in cash equal to the Payment at
                                  Maturity calculated as though the Basket Value
                                  for any Basket Valuation 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 PLUS 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 aggregate
                                  cash amount due with respect to each $10
                                  principal amount of this PLUS as promptly as
                                  possible and in no event later than two
                                  Business Days after the date of acceleration.

Adjustments to the Exchange
Ratios..........................  The Exchange Ratio with respect to a Basket
                                  Stock shall be adjusted as follows:

                                  1. If a Basket Stock is subject to a stock
                                  split or reverse stock split, then once such
                                  split has become 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.

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

                                  3. 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

                                      A-9
<PAGE>

                                  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 PLUS, 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.

                                  4. There shall be no adjustments to the
                                  Exchange Ratio for any Basket Stock to reflect
                                  cash dividends or other distributions paid
                                  with respect to the Basket Stock other than
                                  distributions described in paragraph 2,
                                  paragraph 3 and clauses (i), (iv) and (v) of
                                  paragraph 5 below and Extraordinary Dividends.
                                  "Extraordinary Dividend" means each of (a) the
                                  full amount per share of a Basket Stock of any
                                  cash dividend or special dividend or
                                  distribution that is identified by the issuer
                                  of a Basket Stock as an extraordinary or
                                  special dividend or distribution, (b) the
                                  excess of any cash dividend or other cash
                                  distribution (that is not otherwise identified
                                  by the issuer of a Basket Stock as an
                                  extraordinary or special dividend or
                                  distribution) distributed per share of a
                                  Basket Stock over the immediately preceding
                                  cash dividend or other cash distribution, if
                                  any, per share of such Basket Stock that did
                                  not include an Extraordinary Dividend (as
                                  adjusted for any subsequent corporate event
                                  requiring an adjustment hereunder, such as a
                                  stock split or reverse stock split) if such
                                  excess portion of the dividend or distribution

                                      A-10
<PAGE>

                                  is more than 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 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 cash dividend or other cash distribution
                                  (such Closing Price, the "Base Closing Price")
                                  and (c) the full cash value of any non-cash
                                  dividend or distribution per share of a Basket
                                  Stock (excluding Marketable Securities, as
                                  defined in paragraph 5 below). Subject to the
                                  following sentence, if any cash dividend or
                                  distribution of such other property with
                                  respect to a Basket Stock includes an
                                  Extraordinary Dividend, the Exchange Ratio
                                  with respect to such Basket Stock shall be
                                  adjusted on the ex-dividend date so that the
                                  new Exchange Ratio shall equal the product of
                                  (i) the prior Exchange Ratio and (ii) a
                                  fraction, the numerator of which is the Base
                                  Closing Price, and the denominator of which is
                                  the amount by which the Base Closing Price
                                  exceeds the Extraordinary Dividend. If an
                                  Extraordinary Dividend is at least 35% of the
                                  Base Closing Price, then, instead of adjusting
                                  the Exchange Ratio as described above, the
                                  calculation of the basket value on any basket
                                  determination date occurring on or after the
                                  ex-dividend date shall be determined as
                                  described in paragraph 5 below, and the
                                  Extraordinary Dividend shall be allocated to
                                  Reference Basket Stocks in accordance with the
                                  procedures for a Reference Basket Event as
                                  described in clause (c)(ii) of paragraph 5
                                  below. The value of the non-cash component of
                                  an Extraordinary Dividend shall be determined
                                  on the ex-dividend date for such distribution
                                  by the Calculation Agent, whose determination
                                  shall be conclusive in the absence of manifest
                                  error. A distribution on a Basket Stock
                                  described in clause (i), (iv) or (v) of the
                                  first sentence of paragraph 5 below shall
                                  cause an adjustment to the Exchange Ratio
                                  pursuant only to clause (i), (iv) or (v) of
                                  the first sentence of paragraph 5, as
                                  applicable.

                                  5. Any of the following shall constitute a
                                  Reorganization Event: (i) a Basket Stock is
                                  reclassified or changed, including, without
                                  limitation, as a result of the issuance of any
                                  tracking stock by the issuer of such Basket
                                  Stock, (ii) the issuer of a Basket Stock or
                                  any surviving entity or subsequent surviving
                                  entity of the issuer of such Basket Stock (an
                                  "Issuer

                                      A-11
<PAGE>

                                  Successor") has been subject to any merger,
                                  combination or consolidation and is not the
                                  surviving entity, (iii) the issuer of a Basket
                                  Stock or any Issuer Successor completes a
                                  statutory exchange of securities with another
                                  corporation (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 stock") or (vi) the
                                  issuer of a Basket Stock or any Issuer
                                  Successor is the subject of a tender or
                                  exchange offer or going-private transaction on
                                  all of the outstanding shares of such Basket
                                  Stock. If any Reorganization Event occurs, in
                                  each case as a result of which the holders of
                                  a Basket Stock receive any equity security
                                  listed on a national securities exchange or
                                  traded on the Nasdaq National Market (a
                                  "Marketable Security"), other securities or
                                  other property, assets or cash (collectively,
                                  "Exchange Property"), the Exchange Ratio for
                                  such Basket Stock and/or any for any New Stock
                                  or Reference Basket Stock (each as defined
                                  below) on any Basket Valuation Date following
                                  the effective date for such Reorganization
                                  Event (or, if applicable, in the case of
                                  spinoff stock, the ex-dividend date for the
                                  distribution of such spinoff stock) shall be
                                  determined in accordance with the following:

                                     (a) if such Basket Stock continues to be
                                     outstanding (if applicable, as reclassified
                                     upon the issuance of any tracking stock),
                                     the Exchange Ratio in effect on such Basket
                                     Valuation Date (taking into account any
                                     adjustments for any distributions described
                                     under clause (c)(i) below); and

                                     (b) for each Marketable Security received
                                     in such Reorganization Event (each a "New
                                     Stock"), including the issuance of any
                                     tracking stock or spinoff stock or the
                                     receipt of any stock received in exchange
                                     for such Basket Stock, the number of shares
                                     of the New Stock received with respect to
                                     one share of the Basket Stock multiplied by
                                     the Exchange Ratio in effect for such
                                     Basket Stock on the Trading Day immediately
                                     prior to the effective date of the
                                     Reorganization Event (the "New Stock
                                     Exchange Ratio"), as adjusted to such
                                     Basket Valuation Date (taking into account
                                     any

                                      A-12
<PAGE>

                                     adjustments for distributions described
                                     under clause (c)(i) below); and

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

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

                                        (ii) if the Non-Stock Exchange Property
                                        Value is equal to or exceeds 25% of the
                                        Closing Price of such Basket Stock on
                                        the Trading Day immediately prior to the
                                        effective date of the Reorganization
                                        Event or, if the Basket Stock is
                                        surrendered exclusively for Non-Stock
                                        Exchange Property (in each case, a
                                        "Reference Basket Event"), an initially
                                        equal-dollar weighted basket of three
                                        Reference

                                      A-13
<PAGE>

                                        Basket Stocks (as defined below) with an
                                        aggregate value on the effective date of
                                        such Reorganization Event equal to the
                                        Non-Stock Exchange Property Value
                                        multiplied by the Exchange Ratio in
                                        effect for such Basket Stock on the
                                        Trading Day immediately prior to the
                                        effective date of the Reorganization
                                        Event. The "Reference Basket Stocks"
                                        shall be the three stocks with the
                                        largest market capitalization among the
                                        stocks that then comprise the S&P 500
                                        Index (or, if publication of such index
                                        is discontinued, any successor or
                                        substitute index selected by the
                                        Calculation Agent in its sole
                                        discretion) with the same primary
                                        Standard Industrial Classification Code
                                        ("SIC Code") as the issuer of such
                                        Basket Stock; provided, however, that a
                                        Reference Basket Stock shall not include
                                        any stock that is subject to a trading
                                        restriction under the trading
                                        restriction policies of Morgan Stanley
                                        or any of its affiliates that would
                                        materially limit the ability of Morgan
                                        Stanley or any of its affiliates to
                                        hedge the Notes with respect to such
                                        stock (a "Hedging Restriction");
                                        provided further that, if three
                                        Reference Basket Stocks cannot be
                                        identified from the S&P 500 Index by
                                        primary SIC Code for which a Hedging
                                        Restriction does not exist, the
                                        remaining Reference Basket Stock(s)
                                        shall be selected by the Calculation
                                        Agent from the largest market
                                        capitalization stock(s) within the same
                                        Division and Major Group classification
                                        (as defined by the Office of Management
                                        and Budget) as the primary SIC Code as
                                        the issuer of such Basket Stock. Each
                                        Reference Basket Stock shall be assigned
                                        a Reference Basket Stock Exchange Ratio
                                        equal to the number of shares of such
                                        Reference Basket Stock with a Closing
                                        Price on the effective date of such
                                        Reorganization Event equal to the
                                        product of (a) the Non-Stock Exchange
                                        Property Value, (b) the Exchange Ratio
                                        in effect for such Basket Stock on the
                                        Trading Day immediately prior to the
                                        effective date of such Reorganization
                                        Event and (c) 0.3333333.

                                  Following the allocation of any Extraordinary
                                  Dividend to Reference Basket Stocks pursuant
                                  to

                                      A-14
<PAGE>

                                  paragraph 4 above or any Reorganization Event
                                  described in this paragraph 5, the Basket
                                  Value on any Basket Valuation Date determined
                                  by the Calculation Agent shall be an amount
                                  equal to:

                                        (x) if applicable, the Closing Price of
                                        each Basket Stock times the Exchange
                                        Ratio then in effect for such Basket
                                        Stock; and

                                        (y) if applicable, for each New Stock,
                                        the Closing Price of such New Stock
                                        times the New Stock Exchange Ratio then
                                        in effect for such New Stock; and

                                        (z) if applicable, for each Reference
                                        Basket Stock, the Closing Price of such
                                        Reference Basket Stock times the
                                        Reference Basket Stock Exchange Ratio
                                        then in effect for such Reference Basket
                                        Stock.

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

                                  Following the occurrence of any Reorganization
                                  Event referred to in paragraphs 4 or 5 above,
                                  (i) references to "Basket Stock" under
                                  "Closing Price" and "Market Disruption Event"
                                  shall be deemed to also refer to any New Stock
                                  or Reference Basket Stock, and (ii) all other
                                  references in this pricing supplement to
                                  "Basket Stock" shall be deemed to refer to,
                                  applicable, any New Stock or Reference Basket
                                  Stock and references to a "share" or "shares"
                                  of a Basket Stock shall be deemed to refer to
                                  the applicable unit or units of such Exchange
                                  Property, including any New Stock or Reference
                                  Basket Stock, unless the context otherwise
                                  requires. The New Stock

                                      A-15
<PAGE>

                                  Exchange Ratio(s) or Reference Basket Stock
                                  Exchange Ratios resulting from any
                                  Reorganization Event described in paragraph 5
                                  above or similar adjustment under paragraph 4
                                  above shall be subject to the adjustments set
                                  forth in paragraphs 1 through 5 hereof.

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

                                  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 the 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.

                                  No adjustment to any Exchange Ratio for any
                                  Basket Stock (including for this purpose, any
                                  New Stock Exchange Ratio or Reference Basket
                                  Stock Exchange Ratio) 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 Ratios shall be made up to and
                                  including the final scheduled Basket Valuation
                                  Date.

                                  No adjustments to the Exchange Ratio for any
                                  Basket Stock or method of calculating the
                                  Exchange Ratio 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.

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

                                      A-16
<PAGE>

                                  Exchange Ratio or method of calculating the
                                  Non-Stock Exchange Property Value and of any
                                  related determinations and calculations with
                                  respect to any distributions of stock, other
                                  securities or other property or assets
                                  (including cash) in connection with any
                                  corporate event described in paragraphs 1
                                  through 5 above, and its determinations and
                                  calculations with respect thereto shall be
                                  conclusive in the absence of manifest error.

                                  The Calculation Agent shall provide
                                  information as to any adjustments to any
                                  Exchange Ratio, or to the method of
                                  calculating the Basket Value on any Basket
                                  Valuation Date made pursuant to paragraph 5
                                  above, upon written request by any investor in
                                  the PLUS.

Treatment of PLUS for
United States Federal
Income Tax Purposes.............  The Issuer, by its sale of this PLUS, and the
                                  holder of this PLUS (and any successor holder
                                  of, or holder of a beneficial interest in,
                                  this PLUS), by its respective purchase hereof,
                                  agree (in the absence of an administrative
                                  determination or judicial ruling to the
                                  contrary) to characterize each $10 principal
                                  amount of this PLUS for all tax purposes as a
                                  single financial contract with respect to the
                                  Basket Stocks that (i) requires the holder of
                                  this PLUS to pay to the Issuer at inception an
                                  amount equal to $10 and (ii) entitles the
                                  holder to receive at maturity an amount in
                                  cash based upon the performance of the Basket
                                  Stocks.

                                      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 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 Payment Date, the interest on which is payable in
U.S. dollars, shall be entitled to receive payments

                                      A-18
<PAGE>

of interest, other than interest due at maturity or on any date of redemption or
repayment, by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received by the Paying Agent in writing not less
than 15 calendar days prior to the applicable Interest Payment Date.

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

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

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

                                      A-19
<PAGE>

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

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

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

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

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

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

                                      A-23
<PAGE>

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

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

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

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

                                      A-24
<PAGE>

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 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

                                      A-25
<PAGE>

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;

          (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;

                                      A-26
<PAGE>

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

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

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

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

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

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

                                      A-27
<PAGE>

amount of debt securities the consent of the holders of which is required for
any such supplemental indenture.

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

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

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

     So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the Notes.
The Issuer may designate other agencies for the payment of said principal,
premium and interest at such place or places (subject to applicable laws and
regulations) as the Issuer may decide. So long as 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

                                      A-28
<PAGE>

pursuant to any such Directive or any law implementing or complying with, or
introduced in order to conform to, such Directive.

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

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

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

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

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

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

     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-29
<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-30
<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-31
<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-32

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]