Document:

EXHIBIT 4.1

                             FIXED RATE SENIOR NOTE

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

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

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<PAGE>

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

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

                        6% SPARQS(R) DUE AUGUST 15, 2005
                            MANDATORILY EXCHANGEABLE
                         FOR SHARES OF COMMON STOCK OF
                                EMC CORPORATION

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

For the purposes of this 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.

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

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

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

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

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

Interest Payment Dates......

                              If the scheduled Maturity Date is postponed due
                              to a Market Disruption Event or otherwise, the
                              Issuer shall pay interest on the Maturity Date as
                              postponed rather than on August 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

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<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
                              January   , 2005 or on the Maturity Date
                              (including the Maturity Date as it may be
                              extended and regardless of whether the Maturity
                              Date is a Trading Day), the Issuer may call the
                              SPARQS, in whole but not in part, for mandatory
                              exchange for the Call Price paid in cash
                              (together with accrued but unpaid interest) on
                              the Call Date.

                              On the Morgan Stanley Notice Date, the Issuer
                              shall give notice of the Issuer's exercise of the
                              Morgan Stanley Call 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

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<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....... August 5, 2005; provided that if August 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 January   , 2005
                              or the Maturity Date (including the Maturity Date
                              as it may be extended and regardless of whether
                              the Maturity Date is a scheduled Trading Day).
                              See "Maturity Date" above.

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

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

                              The amount of EMC Stock to be delivered at
                              maturity

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<PAGE>

                              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 EMC 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 EMC 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
                              EMC Stock (or of any other securities included in
                              Exchange Property, if applicable); provided that
                              if the maturity date of this SPARQS is accelerated
                              (x) because of a Price Event Acceleration (as
                              described under "Price Event Acceleration" below)
                              or (y) because of an Event of Default Acceleration
                              (as defined under "Alternate Exchange Calculation
                              in Case of an Event of Default" below), the Issuer
                              shall give notice of such acceleration as promptly
                              as possible, and in no case later than (A) in the
                              case of an Event of Default Acceleration, two
                              Trading Days following such deemed maturity date
                              or (B) in the case of a Price Event Acceleration,
                              10:30 a.m. on the Trading Day immediately prior to
                              the date of acceleration (as defined under "Price
                              Event Acceleration" below), (i) to the holder of
                              this SPARQS by mailing notice of such acceleration
                              by first class mail, postage prepaid, to the
                              holder's last address as it shall appear upon the
                              registry books, (ii) to the Trustee by telephone
                              or facsimile confirmed by mailing such notice to
                              the Trustee by first class mail, postage prepaid,
                              at its New York office and (iii) to the Depositary
                              by telephone or facsimile confirmed by mailing
                              such notice to the Depositary by first class mail,
                              postage prepaid. Any notice that is mailed in the

                                      A-7
<PAGE>

                              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 EMC 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 EMC Stock
                              (or any Exchange Property) and cash in respect of
                              interest and any fractional share of EMC 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 EMC Stock (and, if
                              applicable, any Exchange Property) and any cash
                              in respect of interest and any fractional share
                              of EMC 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 EMC
                              Stock and the Exchange Ratio is less than $2.00,
                              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 EMC 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 EMC Stock due with respect to
                              this SPARQS, as described above, but the Issuer
                              shall pay cash in lieu of delivering any
                              fractional share of EMC Stock in an amount equal
                              to the corresponding fractional Closing Price of
                              such fraction of a share of EMC Stock as
                              determined by the Calculation Agent as of the
                              second scheduled Trading Day prior to maturity of
                              this SPARQS.

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

Closing Price................ The Closing Price for one share of EMC 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 EMC 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 EMC Stock (or any such
                              other security) is listed or admitted to trading,

                              o if EMC Stock (or any such other security) is a
                              security of the Nasdaq National Market (and
                              provided that the

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<PAGE>

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

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

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

                                      A-10
<PAGE>

                              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 EMC 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 EMC Stock.

                                   2. If EMC Stock is subject (i) to a stock
                              dividend (issuance of additional shares of EMC
                              Stock) that is given ratably to all holders of
                              shares of EMC Stock or (ii) to a distribution of
                              EMC Stock as a result of the triggering of any
                              provision of the corporate charter of EMC, then
                              once the dividend has become effective and EMC
                              Stock is trading ex-dividend, the Exchange Ratio
                              shall be adjusted so that the new Exchange Ratio
                              shall equal the prior Exchange Ratio plus the
                              product of (i) the number of shares issued with
                              respect to one share of EMC Stock and (ii) the
                              prior Exchange Ratio.

                                   3. If EMC issues rights or warrants to all
                              holders of EMC Stock to subscribe for or purchase
                              EMC Stock at an

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<PAGE>

                              exercise price per share less than the Closing
                              Price of EMC 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 EMC Stock
                              outstanding immediately prior to the issuance of
                              such rights or warrants plus the number of
                              additional shares of EMC Stock offered for
                              subscription or purchase pursuant to such rights
                              or warrants and the denominator of which shall be
                              the number of shares of EMC Stock outstanding
                              immediately prior to the issuance of such rights
                              or warrants plus the number of additional shares
                              of EMC Stock which the aggregate offering price
                              of the total number of shares of EMC 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 EMC 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
                              EMC Stock of any cash dividend or special
                              dividend or distribution that is identified by
                              EMC 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 EMC as an extraordinary or special
                              dividend or distribution) distributed per share
                              of EMC Stock over the immediately preceding cash
                              dividend or other cash distribution, if any, per
                              share of EMC 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 EMC Stock on the Trading Day
                              preceding the "ex-dividend date" (that is, the
                              day on and after which

                                      A-12
<PAGE>

                              transactions in EMC 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 EMC 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 EMC Stock includes an
                              Extraordinary Dividend, the Exchange Ratio with
                              respect to EMC 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 (c)(ii) of paragraph 5 below.
                              The value of the non-cash component of an
                              Extraordinary Dividend shall be determined on the
                              ex-dividend date for such distribution by the
                              Calculation Agent, whose determination shall be
                              conclusive in the absence of manifest error. A
                              distribution on EMC Stock described in clause
                              (i), (iv) or (v) of the first sentence of
                              paragraph 5 below shall cause an adjustment to
                              the Exchange Ratio pursuant only to clause (i),
                              (iv) or (v) of the first sentence of paragraph 5,
                              as applicable.

                                   5. Any of the following shall constitute a
                              Reorganization Event: (i) EMC Stock is
                              reclassified or changed, including, without
                              limitation, as a result of the issuance of any
                              tracking stock by EMC, (ii) EMC has been subject
                              to any merger, combination or consolidation and
                              is not the surviving entity, (iii) EMC completes
                              a statutory exchange of securities with another
                              corporation (other than pursuant to clause (ii)
                              above), (iv) EMC is liquidated, (v) EMC issues to
                              all of its shareholders equity securities of an
                              issuer other than EMC (other than in a
                              transaction described in clause (ii), (iii) or
                              (iv) above) (a "spinoff stock") or (vi) EMC Stock
                              is the subject of a

                                      A-13
<PAGE>

                              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 EMC Stock
                              receive any equity security listed on a national
                              securities exchange or traded on The Nasdaq
                              National Market (a "Marketable Security"), other
                              securities or other property, assets or cash
                              (collectively "Exchange Property"), the amount
                              payable upon exchange at maturity with respect to
                              each $       principal amount of this SPARQS
                              following the effective date for such
                              Reorganization Event (or, if applicable, in the
                              case of spinoff stock, the ex-dividend date for
                              the distribution of such spinoff stock) shall be
                              determined in accordance with the following:

                              (a) if EMC Stock continues to be outstanding, EMC
                              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 (c)(i) below); and

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

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

                                 (i) if the combined value of the amount of
                                 Non-Stock Exchange Property received per share
                                 of EMC 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 EMC Stock is less

                                      A-14
<PAGE>

                                 than 25% of the Closing Price of EMC Stock on
                                 the Trading Day immediately prior to the
                                 effective date of such Reorganization Event, a
                                 number of shares of EMC 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 EMC 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 EMC 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 EMC Stock or any New Stock
                                 determined in accordance with this clause
                                 (c)(i) shall be added at the time of such
                                 adjustment to the Exchange Ratio in
                                 subparagraph (a) above and/or the New Stock
                                 Exchange Ratio in subparagraph (b) above, as
                                 applicable, or

                                 (ii) if the Non-Stock Exchange Property Value
                                 is equal to or exceeds 25% of the Closing
                                 Price of EMC Stock on the Trading Day
                                 immediately prior to the effective date
                                 relating to such Reorganization Event or, if
                                 EMC Stock is surrendered exclusively for Non-
                                 Stock Exchange Property (in each case, a
                                 "Reference Basket Event"), an initially
                                 equal-dollar weighted basket of three
                                 Reference Basket Stocks (as defined below)
                                 with an aggregate value on the effective date
                                 of such Reorganization Event equal to the
                                 Non-Stock Exchange Property Value multiplied
                                 by the Exchange Ratio in effect for EMC 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 EMC;
                                 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

                                      A-15
<PAGE>

                                 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 EMC. 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 EMC 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:

                                   (x)  if applicable, EMC Stock at the
                                        Exchange Ratio then in effect; and

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

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

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

                                      A-16
<PAGE>

                              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 "EMC 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 "EMC 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 EMC
                              Stock shall be deemed to refer to the applicable
                              unit or units of such Exchange Property,
                              including any New Stock or Reference Basket
                              Stock, unless the context otherwise requires. The
                              New Stock Exchange Ratio(s) or Basket Stock
                              Exchange Ratios resulting from any Reorganization
                              Event described in paragraph 5 above or similar
                              adjustment under paragraph 4 above shall be
                              subject to the adjustments set forth in
                              paragraphs 1 through 5 hereof.

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

                              No adjustment to any Exchange Ratio (including
                              for this purpose, any New Stock Exchange Ratio or
                              Basket Stock Exchange Ratio) shall be required
                              unless such adjustment would require a change of
                              at least 0.1% in the Exchange

                                      A-17
<PAGE>

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

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

                                 (i) a suspension, absence or material
                                 limitation of trading of EMC Stock on the
                                 primary market for EMC 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 EMC Stock as
                                 a result of which the reported trading prices
                                 for EMC 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 EMC Stock, if available, during the
                                 one-half hour period

                                      A-18
<PAGE>

                                 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 August 15, 2005,
                                 Mandatorily Exchangeable for Shares of Common
                                 Stock of EMC.

                              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 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 EMC 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 EMC Stock and (v) a
                              suspension, absence or material limitation of
                              trading on the primary securities market on which
                              options contracts related to EMC 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

                                      A-19
<PAGE>

                              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 EMC 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 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"), EMC 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 EMC Stock
                              pursuant to the Terminable Forward Contract (the
                              "Deposit"), which Deposit bears a quarterly
                              compounded yield of     % per annum.

                                      A-20
<PAGE>

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

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

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

                                      A-21
<PAGE>

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

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

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

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

                                      A-22
<PAGE>

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

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

                                      A-23
<PAGE>

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

DATED:
                                           MORGAN STANLEY

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

TRUSTEE'S CERTIFICATE
    OF AUTHENTICATION

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

JPMORGAN CHASE BANK,
    as Trustee

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

                                      A-24
<PAGE>

                              REVERSE OF SECURITY

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

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

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

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

                                      A-25
<PAGE>

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

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

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

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

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

                                      A-26
<PAGE>

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

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

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

                                      A-27
<PAGE>

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

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

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

                                      A-28
<PAGE>

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

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

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

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

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

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

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

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

                                      A-29
<PAGE>

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

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

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

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

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

                                      A-30
<PAGE>

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

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

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

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

                                      A-31
<PAGE>

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

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

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

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

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

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

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

                                      A-32
<PAGE>

                                 ABBREVIATIONS

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

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

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

     Under Uniform Gifts to Minors Act _________________________________
                                                    (State)

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

                               ________________

                                      A-33
<PAGE>

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

_________________________________________
[PLEASE INSERT SOCIAL SECURITY OR OTHER
   DENTIFYING NUMBER OF ASSIGNEE]

_______________________________________________________________________________

_______________________________________________________________________________

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

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

Dated: ______________________

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

                                      A-34
<PAGE>

                           OPTION TO ELECT REPAYMENT

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

_______________________________________________________________________________

_______________________________________________________________________________

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

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

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

                                      A-35EXHIBIT 4.1

                         FORM OF FIXED RATE SENIOR NOTE

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

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

                                      A-1

<PAGE>

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

                                   CAPITAL PROTECTED NOTES DUE JANUARY 30, 2011
                                     BASED ON THE VALUE OF THE S&P 500(R) INDEX

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

For the purposes of this note, 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..................    January 30, 2011, subject to extension in
                                   accordance with the following paragraph in
                                   the event of a Market Disruption Event on
                                   the Determination Date for calculating the
                                   Final Index Value.

                                      A-2

<PAGE>

                                   If, due to a Market Disruption Event or
                                   otherwise, the 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 Date" below.

                                   In the event that the 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
                                   Determination Date, (i) to the holder of
                                   this Note by mailing notice of such
                                   postponement by first class mail, postage
                                   prepaid, to the holder's last address as it
                                   shall appear upon the registry books, (ii)
                                   to the Trustee by telephone or facsimile
                                   confirmed by mailing such notice to the
                                   Trustee by first class mail, postage
                                   prepaid, at its New York office and (iii) to
                                   The Depository Trust Company (the
                                   "Depositary") by telephone or facsimile
                                   confirmed by mailing such notice to the
                                   Depositary by first class mail, postage
                                   prepaid. Any notice that is mailed in the
                                   manner herein provided shall be conclusively
                                   presumed to have been duly given, whether or
                                   not the holder of this Note receives the
                                   notice.

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

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

Maturity Redemption Amount.....    At maturity, upon delivery of this Note to
                                   the Trustee, the Issuer shall pay with
                                   respect to each $10 principal amount of this
                                   Note an amount in cash equal to the $10
                                   principal amount of this Note plus the
                                   Supplemental Redemption Amount, if any.

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

                                      A-3
<PAGE>

                                   Note to the Trustee for delivery to the
                                   holder of this Note on the Maturity Date.
                                   See "Discontinuance of the Index; Alteration
                                   of Method of Calculation" below.

Supplemental Redemption
Amount.........................    The Supplemental Redemption Amount shall be
                                   equal to the product of (i) $10 times (ii)
                                   the S&P 500 Index Percent Change times (iii)
                                   the Participation Rate; provided that the
                                   Supplemental Redemption Amount will not be
                                   less than zero. The Calculation Agent shall
                                   calculate the Supplemental Redemption Amount
                                   on the Determination Date.

S&P 500 Index Percent Change...    The S&P 500 Index Percent Change is a
                                   fraction, the numerator of which shall be
                                   the Final Index Value minus the Initial
                                   Index Value and the denominator of which
                                   shall be the Initial Index Value. The Index
                                   Percent Change is described by the following
                                   formula:

<TABLE>
<S>                                <C>                    <C>
                                   Index Percent Change = Final Index Value - Initial Index Value
                                                          ---------------------------------------
                                                                   Initial Index Value
</TABLE>

Participation Rate.............       %

Initial Index Value............

Final Index Value..............    The Index Closing Value of the S&P 500 Index
                                   on the Determination Date.

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

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

Determination Date.............    The Determination Date shall be the second
                                   scheduled Trading Day prior to the Maturity
                                   Date, subject to adjustment for Market
                                   Disruption Events as described in the
                                   following paragraph in this section.

                                      A-4
<PAGE>

                                   If a Market Disruption Event occurs on the
                                   scheduled Determination Date, or the
                                   scheduled Determination Date is not
                                   otherwise a Trading Day, the Determination
                                   Date 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 New York Stock Exchange,
                                   Inc. ("NYSE"), the American Stock Exchange
                                   LLC, the Nasdaq National Market, the Chicago
                                   Mercantile Exchange and the Chicago Board of
                                   Options Exchange and in the over-the-counter
                                   market for equity securities in the United
                                   States.

Market Disruption Event........    "Market Disruption Event" means, with respect
                                   to the S&P 500 Index the occurrence or
                                   existence of a suspension, absence or
                                   material limitation of trading of stocks
                                   then constituting 20 percent or more of the
                                   level of the S&P 500 Index (or the Successor
                                   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
                                   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 Component Securities then
                                   constituting 20 percent or more of the value
                                   of the level of the S&P 500 Index (or the
                                   Successor 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, material limitation or absence
                                   of trading on any major U.S. securities
                                   market for trading in futures or options
                                   contracts or exchange traded funds related
                                   to the S&P 500 Index (or the Successor
                                   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 the S&P
                                   500 Index is materially suspended or
                                   materially limited at that time, then the
                                   relevant percentage contribution of that
                                   security to the value of the S&P 500 Index
                                   shall be based on a comparison of (x) the

                                      A-5
<PAGE>

                                   portion of the value of the S&P 500 Index
                                   attributable to that security relative to
                                   (y) the overall value of the S&P 500 Index,
                                   in each case immediately before that
                                   suspension or limitation.

                                   For purposes of determining whether a Market
                                   Disruption Event has occurred: (1) a
                                   limitation on the hours or number of days of
                                   trading shall not constitute a Market
                                   Disruption Event if it results from an
                                   announced change in the regular business
                                   hours of the relevant exchange or market,
                                   (2) a decision to permanently discontinue
                                   trading in the relevant futures or options
                                   contract or exchange traded fund shall not
                                   constitute a Market Disruption Event, (3)
                                   limitations pursuant to the rules of any
                                   Relevant Exchange similar to NYSE Rule 80A
                                   (or any applicable rule or regulation
                                   enacted or promulgated by any other
                                   self-regulatory organization or any
                                   government agency of scope similar to NYSE
                                   Rule 80A as determined by the Calculation
                                   Agent) on trading during significant market
                                   fluctuations shall constitute a suspension,
                                   absence or material limitation of trading,
                                   (4) a suspension of trading in futures or
                                   options contracts on the S&P 500 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 the S&P 500 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 the S&P 500
                                   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 the S&P 500 Index
                                   or any Successor Index.

Alternate Exchange
Calculation in Case of an
Event of Default...............    In case an event of default with respect to
                                   the Notes shall have occurred and be
                                   continuing, the amount declared due and
                                   payable for each $10 principal amount of
                                   this Note upon any acceleration of the Notes
                                   (the "Acceleration

                                      A-6
<PAGE>

                                   Amount") shall be equal to the $10 principal
                                   amount of this Note plus the Supplemental
                                   Redemption Amount, if any, determined as
                                   though the Index Closing Value on the date
                                   of such acceleration were the Final Index
                                   Value.

                                   If the maturity of the Notes is accelerated
                                   because of an event of default as described
                                   above, the Issuer shall, or shall cause the
                                   Calculation Agent to, provide written notice
                                   to the Trustee at its New York office, on
                                   which notice the Trustee may conclusively
                                   rely, and to the Depositary of the
                                   Acceleration Amount and the aggregate cash
                                   amount due with respect to this Note as
                                   promptly as possible and in no event later
                                   than two Business Days after the date of
                                   acceleration.

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

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

                                   All calculations with respect to the Final
                                   Index Value and the Supplemental Redemption
                                   Amount, if any, shall be made by the
                                   Calculation Agent and shall be rounded to
                                   the nearest one hundred-thousandth, with
                                   five one- millionths rounded upward (e.g.,
                                   .876545 would be rounded to .87655); all
                                   dollar amounts related to determination of
                                   the amount of cash payable per Note shall be
                                   rounded to the nearest ten-thousandth, with
                                   five one hundred-thousandths rounded upward
                                   (e.g., .76545 would be rounded up to .7655);
                                   and all dollar amounts related to payouts at
                                   maturity shall be rounded to the nearest
                                   cent, with one-half cent rounded upward.

Discontinuance of the S&P 500
Index; Alteration of Method of
Calculation....................    If S&P discontinues publication of the S&P
                                   500 Index and S&P or another entity
                                   publishes a successor or substitute index
                                   that MS & Co., as the Calculation Agent,
                                   determines, in its sole discretion, to be
                                   comparable to the discontinued S&P 500 Index
                                   (such index being referred to herein as a
                                   "Successor Index"), then any subsequent
                                   Index

                                      A-7
<PAGE>

                                   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
                                   NYSE, the AMEX, the Nasdaq National Market
                                   or 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 Morgan Stanley
                                   and to DTC, as holder of the PLUS, within
                                   three Trading Days of such selection.

                                   If S&P discontinues publication of the S&P
                                   500 Index prior to, and such discontinuance
                                   is continuing on, the Index Valuation Date
                                   and MS & Co., as the Calculation Agent,
                                   determines, in its sole discretion, that no
                                   Successor Index is available at such time,
                                   then the Calculation Agent shall determine
                                   the Index Closing Value for such date. The
                                   Index Closing Value shall be computed by the
                                   Calculation Agent in accordance with the
                                   formula for calculating the S&P 500 Index
                                   last in effect prior to such discontinuance,
                                   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 of the Relevant Exchange on
                                   such date of each security most recently
                                   comprising the S&P 500 Index without any
                                   rebalancing or substitution of such
                                   securities following such discontinuance.

                                   If at any time the method of calculating the
                                   S&P 500 Index or a Successor Index, or the
                                   value thereof, is changed in a material
                                   respect, or if the S&P 500 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 the S&P 500
                                   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 the 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-8
<PAGE>

                                   a value of a stock index comparable to the
                                   S&P 500 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 calculate the Final
                                   Index Value and the Initial Index Value with
                                   reference to the S&P 500 Index or such
                                   Successor Index, as adjusted. Accordingly,
                                   if the method of calculating the S&P 500
                                   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 the S&P 500 Index or such Successor
                                   Index as if it had not been modified (e.g.,
                                   as if such split had not occurred).

                                      A-9

<PAGE>

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

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

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

                                      A-10
<PAGE>

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

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

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

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

                                      A-11
<PAGE>

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-12
<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-13
<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

                                      A-14
<PAGE>

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

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

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

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

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

                                      A-15
<PAGE>

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

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

     The Senior Indenture provides that (a) if an Event of Default (as defined
in the Senior Indenture) due to the default in payment of principal of,
premium, if any, or interest on, any series of debt securities issued under the
Senior Indenture, including the series of Senior Medium-Term Notes of which
this Note forms a part, or due to the default in the performance or breach of
any other covenant or warranty of the Issuer applicable to the debt securities
of such series but not applicable

                                      A-16
<PAGE>

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

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

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

                                      A-17
<PAGE>

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

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

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

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

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

          (c) any tax, assessment or other governmental charge imposed by
     reason of such holder's past or present status as a personal holding
     company or foreign personal holding

                                      A-18
<PAGE>

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

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

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

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

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

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

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

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

                                      A-19
<PAGE>

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.

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

                                      A-20
<PAGE>

     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, 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,

                                      A-21
<PAGE>

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-22
<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-23
<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-24
<PAGE>

                           OPTION TO ELECT REPAYMENT

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

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

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

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

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

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

                                      A-25

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