Document:

FIXED RATE SENIOR NOTE

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

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

                                      A-1

<PAGE>

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

       PROTECTED PERFORMANCE EQUITY LINKED SECURITIES(SM) ("PROPELS(SM)")

                       PROPELS(SM) DUE DECEMBER 30, 2011
         BASED ON THE VALUE OF A BASKET OF THREE INTERNATIONAL INDICES

<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:                         PERCENTAGE: N/A.             DATE(S): See "Interest       REPAYMENT
                                                              Payment Dates" below.        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 OR
                                                                                           REDEMPTION: See
                                                                                           "Alternate Exchange
                                                                                           Calculation in Case of
                                                                                           an Event of Default"
                                                                                           below.

IF SPECIFIED                  REDEMPTION NOTICE            APPLICABILITY OF             If yes, state Issue Price:
   CURRENCY OTHER                PERIOD: N/A.                 ANNUAL INTEREST              N/A
   THAN U.S. DOLLARS,                                         PAYMENTS: N/A
   OPTION TO ELECT
   PAYMENT IN U.S.
   DOLLARS: N/A

EXCHANGE RATE                 TAX REDEMPTION               PRICE APPLICABLE             ORIGINAL YIELD TO
   AGENT: N/A                    AND PAYMENT OF            UPON OPTIONAL                   MATURITY: N/A
                                 ADDITIONAL                REPAYMENT: N/A
                                 AMOUNTS: N/A

OTHER PROVISIONS:             IF YES, STATE INITIAL
   See below.                 OFFERING DATE: N/A
</TABLE>

For the purposes of this note, paragraph number 10 of Section 2.08 of the
Amended and Restated Indenture, dated as of May 1, 1999, between the Issuer and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) as Trustee,
shall not apply.

Maturity Date............  December 30, 2011, subject to extension in
                           accordance with the following paragraph in the event
                           of a Market

                                      A-2

<PAGE>

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

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

                            In the event that the final Determination Date is
                            postponed due to a Market Disruption Event or
                            otherwise, the Issuer shall give notice of such
                            postponement as promptly as possible, and in no
                            case later than one Business Day following the
                            scheduled final Determination Date, (i) to the
                            holder of this PROPELS 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 PROPELS receives the notice.

Minimum Denominations.....  $10

Basket Indices............  The Dow Jones Euro STOXX 50 Index (the "Euro STOXX
                            50 Index"), the Financial Times-Stock Exchange 100
                            Share Index (the "FTSE 100 Index") and the NIKKEI
                            225 Index (the "Nikkei 225 Index"). References to
                            Basket Indices 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 PROPELS to the
                            Trustee, the Issuer shall pay with respect to each
                            $10 principal amount of this PROPELS an amount in
                            cash equal to $10 plus the Supplemental Redemption
                            Amount, if any, as determined by the Calculation
                            Agent. See

                                      A-3

<PAGE>

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

                            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 PROPELS, 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 PROPELS to the
                            Trustee for delivery to the Depositary, as holder
                            of this PROPELS, on the Maturity Date.

Supplemental Redemption
Amount....................  The greater of (i) zero and (ii) the product of $10
                            times the Basket Percent Change. 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 Average Protected
                            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:

                           Average Protected Basket Value - Initial Basket Value
                           -----------------------------------------------------
                                            Initial Basket Value

Basket Closing Value......  The Basket Closing Value shall equal the sum of (i)
                            the Euro STOXX 50 Index Closing Value times the
                            Euro STOXX 50 Index Multiplier, (ii) the FTSE 100
                            Index Closing Value times the FTSE 100 Index
                            Multiplier and (iii) the Nikkei 225 Index Closing
                            Value times the Nikkei 225 Index Multiplier, each
                            as determined on the applicable Determination Date
                            for such Basket Index. 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......        , which equals the Basket Closing Value
                            calculated as of the Trading Day immediately
                            succeeding the day the Issuer offered this PROPELS
                            for initial sale to the public.

                                      A-4

<PAGE>

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

Protected Basket Closing
Value.....................  The Protected Basket Closing Value on any
                            Determination Date shall be determined by the
                            Calculation Agent and shall equal the greater of
                            (i) the Basket Closing Value on such Determination
                            Date and (ii) the highest Basket Closing Value on
                            any previous Determination Date, as determined by
                            the Calculation Agent; provided that the Protected
                            Basket Closing Value on December 30, 2004 shall
                            equal the Basket Closing Value on such date.

Euro STOXX 50 Index
Closing Value.............  The Euro STOXX 50 Index Closing Value on any
                            Trading Day shall be determined by the Calculation
                            Agent and 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) disseminated after
                            the regular index dissemination period 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."

Euro STOXX 50 Index
Multiplier................  The Euro STOXX 50 Index Multiplier shall be equal
                            to the Index Representation divided by the Euro
                            STOXX 50 Index Closing Value on the Trading Day
                            immediately succeeding the day the Issuer first
                            offers this PROPELS for initial sale to the public.

FTSE 100 Index Closing
Value.....................  The FTSE 100 Index Closing Value on any Trading Day
                            shall equal the closing value of such FTSE 100
                            Index or any Successor Index (as defined under
                            "-Discontinuance of a Basket Index; Alteration of
                            Method of Calculation" below) published at the
                            regular official weekday close of trading on that
                            Trading Day. In certain circumstances, the FTSE 100
                            Index Closing Value shall be based on the alternate
                            calculation of the FTSE 100 Index described under
                            "-Discontinuance of a Basket Index; Alteration of
                            Method of Calculation."

                                      A-5

<PAGE>

FTSE 100 Index
Multiplier................  The FTSE 100 Index Multiplier shall be equal to the
                            Index Representation divided by the FTSE 100 Index
                            Closing Value on the Trading Day immediately
                            succeeding the day the Issuer first offers this
                            PROPELS for initial sale to the public.

Nikkei 225 Index Closing
Value.....................  The Nikkei 225 Index Closing Value on any Trading
                            Day shall equal the official closing value (2nd
                            session) of the Nikkei 225 Index or any Successor
                            Index (as defined under "-Discontinuance of a
                            Basket Index; Alteration of Method of Calculation"
                            below) published by NIKKEI 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."

Nikkei 225 Index
Multiplier................  The Nikkei 225 Index Multiplier shall be equal to
                            the Index Representation divided by the Nikkei 225
                            Index Closing Value on the Trading Day immediately
                            succeeding the day the Issuer first offers this
                            PROPELS for initial sale to the public.

Index Representation......  3.333

Determination Dates.......  The Determination Dates shall be the 30th of each
                            December, beginning with December 30, 2004 to and
                            including December 30, 2010, and December 28, 2011;
                            provided that the Determination date used to
                            calculate that portion of the Basket Closing Value
                            related to any Basket Index be subject to
                            postponement if a Market Disruption Events occurs
                            with respect to that Basket Index on the related
                            Determination Dates as described in the two
                            following paragraphs.

                            If any of the first seven scheduled Determination
                            Dates is not a Trading Day or if a Market
                            Disruption Event occurs on any such date with
                            respect to a Basket Index, the related
                            Determination Date with respect to that Basket
                            Index shall be postponed until there has been a
                            Trading Day on which no Market Disruption Event
                            shall have occurred, but in no case shall a
                            Determination Date be later than the fifth Trading
                            Day

                                      A-6

<PAGE>

                            following the scheduled Determination Date, and any
                            such Determination Date, as postponed, with respect
                            to any affected Basket Index shall be deemed the
                            Determination Date for determining the applicable
                            Index Closing Value (as defined under
                            "-Discontinuance of a Basket Index; Alteration of a
                            Method of Calculation" below); provided that, with
                            respect to any Basket Index, if as of the fifth
                            Trading Day following the applicable scheduled
                            Determination Date there have not been any Trading
                            Days on which no Market Disruption Event has
                            occurred with respect to such Basket Index, the
                            Calculation Agent shall determine the applicable
                            Index Closing Value on such 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 Trading Day
                            of each security most recently comprising the
                            Basket Indices.

                            If December 28, 2011 (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 for securities underlying the
                            applicable Basket Index.

Market Disruption Event...  "Market Disruption Event" means, with respect any
                            Basket Index, a suspension, absence or material
                            limitation of trading of stocks then constituting
                            20 percent or more of the value of such Basket
                            Index on the Relevant Exchanges for such securities
                            for more than two hours of trading or during the
                            one-half hour period preceding the close of the
                            principal trading

                                      A-7

<PAGE>

                            session on such Relevant Exchange; 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 value of
                            such Basket Index during the last one-half hour
                            preceding the close of the principal trading
                            session on such Relevant Exchange are materially
                            inaccurate; or the suspension, absence or material
                            limitation of trading on the primary securities
                            market for trading in futures or options contracts
                            related to such Basket Index 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 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

                                      A-8

<PAGE>

                            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 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
                            PROPELS shall have occurred and be continuing, the
                            amount declared due and payable for each PROPELS
                            upon any acceleration of this PROPELS (the
                            "Acceleration Amount") shall be equal to $10 plus
                            the Supplemental Redemption Amount, if any,
                            determined as though the Basket Closing Value for
                            any Determination Date scheduled to occur on or
                            after such date of acceleration were the Basket
                            Closing Value on the date of acceleration.

                            If the maturity of this PROPELS 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 DTC of the
                            Acceleration Amount and the aggregate cash amount
                            due with respect to this PROPELS 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.")

                                      A-9

<PAGE>

                            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 PROPELS, the Trustee and the Issuer.

                            All calculations with respect to the Average
                            Protected Basket Value and the Supplemental
                            Redemption Amount, if any, be made by the
                            Calculation Agent and shall be rounded to the
                            nearest one hundred-thousandth, with five
                            one-millionths rounded upward (e.g., .876545 would
                            be rounded to .87655); all dollar amounts related
                            to determination of the amount of cash payable per
                            PROPELS 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 PROPELS 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"), then any subsequent Euro STOXX 50 Index
                            Closing Value, FTSE 100 Index Closing Value or
                            Nikkei 225 Index Closing Value (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 holder of this
                            PROPELS within three Trading Days of such
                            selection.

                                      A-10

<PAGE>

                            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 that no Successor
                            Index is available at such time, then, on such
                            date, the Calculation Agent shall determine the
                            Index Closing Value 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
                            limitation) at the close of the principal trading
                            session on such date of each security most recently
                            comprising the 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 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 Average
                            Protected 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

                                     A-12
<PAGE>

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 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

                                     A-13
<PAGE>

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.

     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: April    , 2004
                                           MORGAN STANLEY

                                           By:
                                                 -------------------------------
                                                 Name: Jai Sooklal
                                                 Title:  Assistant Treasurer

TRUSTEE'S CERTIFICATE
      OF AUTHENTICATION

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

JPMORGAN CHASE BANK,
      as Trustee

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

                                     A-15
<PAGE>

                              REVERSE OF SECURITY

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

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

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

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

                                     A-16
<PAGE>

the holder hereof at a price equal to 100% of the principal amount to be
repaid, together with interest accrued and unpaid hereon to the date of
repayment, provided that if this Note is issued with original issue discount,
this Note will be repayable on the applicable Optional Repayment Date or Dates
at 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

                                     A-17
<PAGE>

only in denominations of the equivalent of U.S. $1,000 (rounded to an integral
multiple of 1,000 units of such Specified Currency), or any amount in excess
thereof which is an integral multiple of 1,000 units of such Specified
Currency, as determined by reference to the noon dollar buying rate in The City
of New York for cable transfers of such Specified Currency published by the
Federal Reserve Bank of New York (the "Market Exchange Rate") on the Business
Day immediately preceding the date of issuance.

     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

                                     A-18
<PAGE>

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

                                     A-19
<PAGE>

Date to the date of redemption, which amortization shall be calculated using
the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of redemption) (the "Amortized
Amount")), if the Issuer determines that, as a result of any change in or
amendment to the laws, or any regulations or rulings promulgated thereunder, of
the United States or of any political subdivision or taxing authority thereof
or therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which
change or amendment becomes effective on or after the Initial Offering Date
hereof, the Issuer has or will become obligated to pay Additional Amounts, as
defined below, with respect to this Note as described below. Prior to the
giving of any notice of redemption pursuant to this paragraph, the Issuer shall
deliver to the Trustee (i) a certificate stating that the Issuer is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Issuer to so redeem have occurred, and
(ii) an opinion of independent legal counsel satisfactory to the Trustee to
such effect based on such statement of facts; provided that no such 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;

                                     A-20
<PAGE>

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

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

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

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

          (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.

                                     A-21
<PAGE>

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

     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.

                                     A-22
<PAGE>

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

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

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

     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,

                                     A-23
<PAGE>

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-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 will be issued for the portion not
being repaid)_______________________:.

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

                                      A-27FIXED RATE SENIOR NOTE

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

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

                                      A-1

<PAGE>

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

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

                        6.25% SPARQS(R) DUE MAY 15, 2005
                            MANDATORILY EXCHANGEABLE
                         FOR SHARES OF COMMON STOCK OF
                           NEWMONT MINING CORPORATION

<TABLE>
<S>                                    <C>                       <C>                         <C>
ORIGINAL ISSUE DATE:          INITIAL REDEMPTION           INTEREST RATE:   % per       MATURITY DATE:
                                 DATE: See "Morgan            annum (equivalent            See "Maturity Date"
                                 Stanley Call Right"          to $      per annum per      below.
                                 below.                       SPARQS)

INTEREST ACCRUAL              INITIAL REDEMPTION           INTEREST PAYMENT             OPTIONAL
   DATE:                         PERCENTAGE: See              DATE(S): See "Interest       REPAYMENT
                                 "Morgan Stanley Call         Payment Dates" below.        DATE(S):  N/A
                                 Right" and "Call Price"
                                 below.

SPECIFIED CURRENCY:           ANNUAL REDEMPTION            INTEREST PAYMENT             APPLICABILITY OF
   U.S. dollars                  PERCENTAGE                   PERIOD: Quarterly            MODIFIED
                                 REDUCTION: N/A                                            PAYMENT UPON
                                                                                           ACCELERATION OR
                                                                                           REDEMPTION: See
                                                                                           "Alternate Exchange
                                                                                           Calculation in Case of
                                                                                           an Event of Default"
                                                                                           below.

IF SPECIFIED                  REDEMPTION NOTICE            APPLICABILITY OF             If yes, state Issue Price:
   CURRENCY OTHER                PERIOD: At least 10          ANNUAL INTEREST              N/A
   THAN U.S. DOLLARS,            days but no more than        PAYMENTS: N/A
   OPTION TO ELECT               30 days.  See "Morgan
   PAYMENT IN U.S.               Stanley Call Right" and
   DOLLARS: N/A                  "Morgan Stanley Notice
                                 Date" below.

EXCHANGE RATE                 TAX REDEMPTION               PRICE APPLICABLE             ORIGINAL YIELD TO
   AGENT: N/A                    AND PAYMENT OF            UPON OPTIONAL                   MATURITY: N/A
                                 ADDITIONAL                REPAYMENT: N/A
                                 AMOUNTS: N/A

OTHER PROVISIONS:             IF YES, STATE INITIAL
   See below.                 OFFERING DATE: N/A
</TABLE>

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

Maturity Date..................     May 15, 2005, subject to acceleration as
                                    described below in "Price Event
                                    Acceleration" and "Alternate Exchange
                                    Calculation in Case of an Event of Default"
                                    and subject

                                      A-2

<PAGE>

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

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

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

Interest Payment Dates.........

                                    If the scheduled Maturity Date is postponed
                                    due to a Market Disruption Event or
                                    otherwise, the Issuer shall pay interest on
                                    the Maturity Date as postponed rather than
                                    on May 15, 2005, but no interest will
                                    accrue on this SPARQS or on such payment
                                    during the period from or after the
                                    scheduled Maturity Date.

Record Date....................     Notwithstanding the definition of "Record
                                    Date" on page 22 hereof, the Record Date
                                    for each Interest Payment Date, including
                                    the Interest Payment Date scheduled to

                                      A-3

<PAGE>

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

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

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

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

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

                                      A-4

<PAGE>

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

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

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

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

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

                                                        A-5

<PAGE>

                                    Call Right.

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

Final Call Notice Date..........    May 5, 2005; provided that if May 5, 2005
                                    is not a Trading Day or if a Market
                                    Disruption Event occurs on such day, the
                                    Final Call Notice Date will be the
                                    immediately succeeding Trading Day on which
                                    no Market Disruption Event occurs.

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

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

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

                                    The amount of Newmont Mining Stock to be
                                    delivered at

                                      A-6

<PAGE>

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

                                    The Issuer shall, or shall cause the
                                    Calculation Agent to, provide written
                                    notice to the Trustee at its New York
                                    Office and to the Depositary, on which
                                    notice the Trustee and Depositary may
                                    conclusively rely, on or prior to 10:30
                                    a.m. on the Trading Day immediately prior
                                    to maturity of this SPARQS (but if such
                                    Trading Day is not a Business Day, prior to
                                    the close of business on the Business Day
                                    preceding maturity of this SPARQS), of the
                                    amount of Newmont Mining Stock (or the
                                    amount of Exchange Property) or cash to be
                                    delivered with respect to each $
                                    principal amount of this SPARQS and of the
                                    amount of any cash to be paid in lieu of
                                    any fractional share of Newmont Mining
                                    Stock (or of any other securities included
                                    in Exchange Property, if applicable);
                                    provided that if the maturity date of this
                                    SPARQS is accelerated (x) because of a
                                    Price Event Acceleration (as described
                                    under "Price Event Acceleration" below) or
                                    (y) because of an Event of Default
                                    Acceleration (as defined under "Alternate
                                    Exchange Calculation in Case of an Event of
                                    Default" below), the Issuer shall give
                                    notice of such acceleration as promptly as
                                    possible, and in no case later than (A) in
                                    the case of an Event of Default
                                    Acceleration, two Trading Days following
                                    such deemed maturity date or (B) in the
                                    case of a Price Event Acceleration, 10:30
                                    a.m. on the Trading Day immediately prior
                                    to the date of acceleration (as defined
                                    under "Price Event Acceleration" below),
                                    (i) to the holder of this SPARQS by mailing
                                    notice of such acceleration by first class
                                    mail, postage prepaid, to the holder's last
                                    address as it shall appear upon the
                                    registry books, (ii) to the Trustee by
                                    telephone or facsimile confirmed by mailing
                                    such notice to the Trustee by first class
                                    mail, postage prepaid, at its New York
                                    office and (iii) to the Depositary by
                                    telephone or facsimile confirmed by mailing
                                    such notice

                                      A-7

<PAGE>

                                    to the Depositary by first class mail,
                                    postage prepaid. Any notice that is mailed
                                    in the manner herein provided shall be
                                    conclusively presumed to have been duly
                                    given, whether or not the holder of this
                                    SPARQS receives the notice. If the maturity
                                    of this SPARQS is accelerated, no interest
                                    on the amounts payable with respect to this
                                    SPARQS shall accrue for the period from and
                                    after such accelerated maturity date;
                                    provided that the Issuer has deposited with
                                    the Trustee the Newmont Mining Stock, the
                                    Exchange Property or any cash due with
                                    respect to such acceleration by such
                                    accelerated maturity date.

                                    The Issuer shall, or shall cause the
                                    Calculation Agent to, deliver any such
                                    shares of Newmont Mining Stock (or any
                                    Exchange Property) and cash in respect of
                                    interest and any fractional share of
                                    Newmont Mining Stock (or any Exchange
                                    Property) and cash otherwise due upon any
                                    acceleration described above to the Trustee
                                    for delivery to the holder of this Note.
                                    References to payment "per SPARQS" refer to
                                    each $      principal amount of this SPARQS.

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

Price Event Acceleration.......     If on any two consecutive Trading Days
                                    during the period prior to and ending on
                                    the third Business Day immediately
                                    preceding the Maturity Date, the product of
                                    the Closing Price per share of Newmont
                                    Mining Stock and the Exchange Ratio is less
                                    than $1.00, the Maturity Date of this
                                    SPARQS shall be deemed to be accelerated to
                                    the third Business Day immediately
                                    following such second Trading Day (the
                                    "date of acceleration"). Upon such
                                    acceleration, the holder of each $
                                    principal amount of this SPARQS shall
                                    receive per SPARQS on the date of
                                    acceleration:

                                        (i) a number of shares of Newmont
                                        Mining Stock at the then current
                                        Exchange Ratio;

                                      A-8

<PAGE>

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

                                        (iii) an amount of cash as determined
                                        by the Calculation Agent equal to the
                                        sum of the present values of the
                                        remaining scheduled payments of
                                        interest on each $      principal amount

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

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

Exchange Ratio.................     0.5, subject to adjustment for corporate
                                    events relating to Newmont Mining
                                    Corporation ("Newmont Mining") described
                                    under "Antidilution Adjustments" below.

Closing Price..................     The Closing Price for one share of Newmont
                                    Mining 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 Newmont Mining Stock (or any such
                                    other security) is listed or admitted to
                                    trading on a national securities exchange,
                                    the last reported sale price, regular way,
                                    of the principal trading session on such
                                    day on the principal United States
                                    securities exchange registered under the
                                    Securities Exchange Act of 1934, as amended
                                    (the "Exchange Act"), on which Newmont
                                    Mining Stock (or any such other security)
                                    is listed or admitted to trading,

                                      A-9

<PAGE>

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

                                    o  if Newmont Mining Stock (or any such
                                    other security) is not listed or admitted
                                    to trading on any national securities
                                    exchange or a security of the Nasdaq
                                    National Market but is included in the OTC
                                    Bulletin Board Service (the "OTC Bulletin
                                    Board") operated by the National
                                    Association of Securities Dealers, Inc.
                                    (the "NASD"), the last reported sale price
                                    of the principal trading session on the OTC
                                    Bulletin Board on such day.

                                    If Newmont Mining 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 Newmont Mining Stock (or one unit
                                    of any such other security) on any Trading
                                    Day will mean the last reported sale price
                                    of the principal trading session on the
                                    over-the-counter market as reported on the
                                    Nasdaq National Market or the OTC Bulletin
                                    Board on such day. If, because of a Market
                                    Disruption Event (as defined below) or
                                    otherwise, the last reported sale price or
                                    Nasdaq official closing price, as
                                    applicable, for Newmont Mining Stock (or
                                    any such other security) is not available
                                    pursuant to either of the two preceding
                                    sentences, then the Closing Price for any
                                    Trading Day will be the mean, as determined
                                    by the Calculation Agent, of the bid prices
                                    for Newmont Mining 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.

                                      A-10

<PAGE>

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

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

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

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

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

                                         1. If Newmont Mining Stock is subject
                                    to a stock split or reverse stock split,
                                    then once such split has become effective,
                                    the Exchange Ratio shall be adjusted to
                                    equal the product of the prior Exchange
                                    Ratio and the number of shares issued in
                                    such stock split or reverse stock split
                                    with respect to one share of Newmont Mining
                                    Stock.

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

                                      A-11

<PAGE>

                                    Exchange Ratio shall be adjusted so that
                                    the new Exchange Ratio shall equal the
                                    prior Exchange Ratio plus the product of
                                    (i) the number of shares issued with
                                    respect to one share of Newmont Mining
                                    Stock and (ii) the prior Exchange Ratio.

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

                                         4. There shall be no adjustments to
                                    the Exchange Ratio to reflect cash
                                    dividends or other distributions paid with
                                    respect to Newmont Mining Stock other than
                                    distributions described in paragraph 2,
                                    paragraph 3 and clauses (i), (iv) and (v)
                                    of the first sentence of paragraph 5 and
                                    Extraordinary Dividends. "Extraordinary
                                    Dividend" means each of (a) the full amount
                                    per share of Newmont Mining Stock of any
                                    cash dividend or special dividend or
                                    distribution that is identified by Newmont
                                    Mining 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

                                      A-12

<PAGE>

                                    Newmont Mining as an extraordinary or
                                    special dividend or distribution)
                                    distributed per share of Newmont Mining
                                    Stock over the immediately preceding cash
                                    dividend or other cash distribution, if
                                    any, per share of Newmont Mining Stock that
                                    did not include an Extraordinary Dividend
                                    (as adjusted for any subsequent corporate
                                    event requiring an adjustment hereunder,
                                    such as a stock split or reverse stock
                                    split) if such excess portion of the
                                    dividend or distribution is more than 5% of
                                    the Closing Price of Newmont Mining Stock
                                    on the Trading Day preceding the
                                    "ex-dividend date" (that is, the day on and
                                    after which transactions in Newmont Mining
                                    Stock on an organized securities exchange
                                    or trading system no longer carry the right
                                    to receive that cash dividend or other cash
                                    distribution) for the payment of such cash
                                    dividend or other cash distribution (such
                                    Closing Price, the "Base Closing Price")
                                    and (c) the full cash value of any non-
                                    cash dividend or distribution per share of
                                    Newmont Mining 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 Newmont
                                    Mining Stock includes an Extraordinary
                                    Dividend, the Exchange Ratio with respect
                                    to Newmont Mining Stock shall be adjusted
                                    on the ex-dividend date so that the new
                                    Exchange Ratio shall equal the product of
                                    (i) the prior Exchange Ratio and (ii) a
                                    fraction, the numerator of which is the
                                    Base Closing Price, and the denominator of
                                    which is the amount by which the Base
                                    Closing Price exceeds the Extraordinary
                                    Dividend. If any Extraordinary Dividend is
                                    at least 35% of the Base Closing Price,
                                    then, instead of adjusting the Exchange
                                    Ratio, the amount payable upon exchange at
                                    maturity shall be determined as described
                                    in paragraph 5 below, and the Extraordinary
                                    Dividend shall be allocated to Reference
                                    Basket Stocks in accordance with the
                                    procedures for a Reference Basket Event as
                                    described in clause 3(b) of paragraph 5
                                    below. The value of the non-cash component
                                    of an Extraordinary Dividend shall be
                                    determined on the ex-dividend date for such
                                    distribution by the Calculation Agent,
                                    whose determination shall be conclusive in
                                    the absence of manifest error. A
                                    distribution on Newmont Mining 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.

                                      A-13

<PAGE>

                                         5. Any of the following shall
                                    constitute a Reorganization Event: (i)
                                    Newmont Mining Stock is reclassified or
                                    changed, including, without limitation, as
                                    a result of the issuance of any tracking
                                    stock by Newmont Mining, (ii) Newmont
                                    Mining has been subject to any merger,
                                    combination or consolidation and is not the
                                    surviving entity, (iii) Newmont Mining
                                    completes a statutory exchange of
                                    securities with another corporation (other
                                    than pursuant to clause (ii) above), (iv)
                                    Newmont Mining is liquidated, (v) Newmont
                                    Mining issues to all of its shareholders
                                    equity securities of an issuer other than
                                    Newmont Mining (other than in a transaction
                                    described in clause (ii), (iii) or (iv)
                                    above) (a "spinoff stock") or (vi) Newmont
                                    Mining Stock is the subject of a tender or
                                    exchange offer or going private transaction
                                    on all of the outstanding shares. If any
                                    Reorganization Event occurs, in each case
                                    as a result of which the holders of Newmont
                                    Mining Stock receive any equity security
                                    listed on a national securities exchange or
                                    traded on The Nasdaq National Market (a
                                    "Marketable Security"), other securities or
                                    other property, assets or cash
                                    (collectively "Exchange Property"), the
                                    amount payable upon exchange at maturity
                                    with respect to each $      principal amount
                                    of this SPARQS following the effective date
                                    for such Reorganization Event (or, if
                                    applicable, in the case of spinoff stock,
                                    the ex-dividend date for the distribution
                                    of such spinoff stock) shall be determined
                                    in accordance with the following:

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

                                    (2) for each Marketable Security received
                                    in such Reorganization Event (each a "New
                                    Stock"), including the issuance of any
                                    tracking stock or spinoff stock or the
                                    receipt of any stock received in exchange
                                    for Newmont Mining Stock where Newmont
                                    Mining is not the surviving entity, the
                                    number of shares of the New Stock received
                                    with respect to one share of Newmont Mining
                                    Stock multiplied by the Exchange Ratio for
                                    Newmont Mining Stock on the Trading Day
                                    immediately prior to the effective date of
                                    the Reorganization Event (the "New

                                      A-14

<PAGE>

                                    Stock Exchange Ratio"), as adjusted to the
                                    third Trading Day prior to the scheduled
                                    Maturity Date (taking into account any
                                    adjustments for distributions described
                                    under clause (3)(a) below); and

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

                                        (a) if the combined value of the amount
                                        of Non-Stock Exchange Property received
                                        per share of Newmont Mining 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 Newmont Mining Stock is
                                        less than 25% of the Closing Price of
                                        Newmont Mining Stock on the Trading Day
                                        immediately prior to the effective date
                                        of such Reorganization Event, a number
                                        of shares of Newmont Mining 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 Newmont Mining 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 Newmont
                                        Mining Stock on the Trading Day
                                        immediately prior to the effective date
                                        of such Reorganization Event, based on
                                        such Closing Prices, in each case as
                                        determined by the Calculation Agent in
                                        its sole discretion on the effective
                                        date of such Reorganization Event; and
                                        the number of such shares of Newmont
                                        Mining Stock or any New Stock
                                        determined in accordance with this
                                        clause (3)(a) shall be added at the
                                        time of such adjustment to the Exchange
                                        Ratio in subparagraph (1) above and/or
                                        the New Stock Exchange Ratio in
                                        subparagraph (2) above, as applicable,
                                        or

                                        (b) if the Non-Stock Exchange Property
                                        Value is equal to or exceeds 25% of the
                                        Closing Price of Newmont Mining Stock
                                        on the Trading Day immediately prior to
                                        the effective date relating to such
                                        Reorganization Event or, if Newmont
                                        Mining Stock is surrendered exclusively
                                        for Non-Stock Exchange Property (in
                                        each case, a "Reference Basket Event"),

                                      A-15

<PAGE>

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

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

                                      A-16

<PAGE>

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

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

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

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

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

                                    Following the occurrence of any
                                    Reorganization Event referred to in
                                    paragraphs 4 or 5 above, (i) references to
                                    "Newmont Mining Stock" under "No Fractional
                                    Shares," "Closing Price" and "Market
                                    Disruption Event" shall be deemed to also
                                    refer to any New Stock or Reference Basket
                                    Stock, and (ii) all other references in
                                    this SPARQS to "Newmont Mining Stock" shall
                                    be deemed to refer to the Exchange Property
                                    into which this SPARQS is thereafter
                                    exchangeable and references to a "share" or
                                    "shares" of Newmont Mining Stock shall be
                                    deemed to refer to the applicable unit or
                                    units of such Exchange Property, including
                                    any New Stock or Reference Basket Stock,
                                    unless the context otherwise requires. The
                                    New Stock Exchange Ratio(s) or Basket

                                      A-17

<PAGE>

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

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

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

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

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

                                    The Calculation Agent shall provide
                                    information as to any adjustments to the
                                    Exchange Ratio or to the method of
                                    calculating the amount payable upon
                                    exchange at maturity of the SPARQS made
                                    pursuant to paragraphs 1 through

                                      A-18

<PAGE>

                                    5 above upon written request by any holder
                                    of this SPARQS.

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

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

                                        (ii) a determination by the Calculation
                                        Agent in its sole discretion that any
                                        event described in clause (i) above
                                        materially interfered with the ability
                                        of the Issuer or any of its affiliates
                                        to unwind or adjust all or a material
                                        portion of the hedge with respect to
                                        the SPARQS due May 15, 2005,
                                        Mandatorily Exchangeable for Shares of
                                        Common Stock of Newmont Mining.

                                    For purposes of determining whether a
                                    Market Disruption Event has occurred: (i) a
                                    limitation on the hours or number of days
                                    of trading shall not constitute a Market
                                    Disruption Event if it results from an
                                    announced change in the regular business
                                    hours of the relevant exchange, (ii) a
                                    decision to permanently discontinue trading
                                    in the relevant options contract shall not
                                    constitute a Market Disruption Event, (iii)
                                    limitations pursuant to NYSE Rule 80A (or
                                    any applicable rule or regulation enacted
                                    or promulgated by the NYSE, any other
                                    self-regulatory organization or the
                                    Securities and Exchange Commission of scope
                                    similar to NYSE Rule 80A as determined by
                                    the

                                      A-19

<PAGE>

                                    Calculation Agent) on trading during
                                    significant market fluctuations shall
                                    constitute a suspension, absence or
                                    material limitation of trading, (iv) a
                                    suspension of trading in options contracts
                                    on Newmont Mining Stock by the primary
                                    securities market trading in such options,
                                    if available, by reason of (a) a price
                                    change exceeding limits set by such
                                    securities exchange or market, (b) an
                                    imbalance of orders relating to such
                                    contracts or (c) a disparity in bid and ask
                                    quotes relating to such contracts shall
                                    constitute a suspension, absence or
                                    material limitation of trading in options
                                    contracts related to Newmont Mining Stock
                                    and (v) a suspension, absence or material
                                    limitation of trading on the primary
                                    securities market on which options
                                    contracts related to Newmont Mining Stock
                                    are traded shall not include any time when
                                    such securities market is itself closed for
                                    trading under ordinary circumstances.

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

Treatment of SPARQS for
United States Federal
Income Tax Purposes............     The Issuer, by its sale of this SPARQS, and
                                    the holder of this SPARQS (and any
                                    successor holder of, or holder of a
                                    beneficial interest in, this SPARQS), by
                                    its respective purchase hereof, agree (in
                                    the absence of an

                                      A-20

<PAGE>

                                    administrative determination or judicial
                                    ruling to the contrary) to characterize
                                    each $       principal amount of this SPARQS
                                    for all tax purposes as an investment unit
                                    consisting of (A) a terminable contract
                                    (the "Terminable Forward Contract") that
                                    (i) requires the holder of this SPARQS
                                    (subject to the Morgan Stanley Call Right)
                                    to purchase, and the Issuer to sell, for an
                                    amount equal to $     (the "Forward Price"),
                                    Newmont Mining Stock at maturity and (ii)
                                    allows the Issuer, upon exercise of the
                                    Morgan Stanley Call Right, to terminate the
                                    Terminable Forward Contract by returning to
                                    such holder the Deposit (as defined below)
                                    and paying to such holder an amount of cash
                                    equal to the difference between the Deposit
                                    and the Call Price and (B) a deposit with
                                    the Issuer of a fixed amount of cash, equal
                                    to the Issue Price per each $      principal
                                    amount of this SPARQS, to secure the
                                    holder's obligation to purchase Newmont
                                    Mining Stock pursuant to the Terminable
                                    Forward Contract (the "Deposit"), which
                                    Deposit bears a quarterly compounded yield
                                    of    % per annum.

                                      A-21

<PAGE>

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

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

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

                                      A-22

<PAGE>

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

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

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

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

                                      A-23

<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-24

<PAGE>

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

DATED:
                                           MORGAN STANLEY

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

TRUSTEE'S CERTIFICATE
  OF AUTHENTICATION

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

JPMORGAN CHASE BANK,
  as Trustee

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

                                      A-25

<PAGE>

                              REVERSE OF SECURITY

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

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

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

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

                                      A-26

<PAGE>

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

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

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

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

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

                                      A-27

<PAGE>

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

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

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

                                      A-28

<PAGE>

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

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

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

                                      A-29

<PAGE>

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

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

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

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

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

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

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

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

                                      A-30

<PAGE>

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

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

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

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

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

                                      A-31

<PAGE>

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

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

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

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

                                      A-32

<PAGE>

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

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

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

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

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

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

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

                                      A-33

<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-34

<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-35

<PAGE>

                           OPTION TO ELECT REPAYMENT

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

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

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

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

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

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

                                      A-36

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