Document:

<PAGE>

                                 EXHIBIT (4)(j)

                              FORM OF POLICY RIDER
                               (ENHANCEMENT RIDER)

<PAGE>

                                                      Home Office:
[LOGO] Transamerica Life                              4333 Edgewood Road N.E.
Insurance Company                                     Cedar Rapids, Iowa 52499
                                                      (319)398-8511

A Stock Company (Hereafter called the Company, we, our or us)

                                ENHANCEMENT RIDER

The Policy to which this Rider is attached is amended to include a Premium
Enhancement and to modify Surrender Charges by the following language:

PREMIUM ENHANCEMENT

When a Premium payment is paid in the first four Policy Years, an amount equal
to a percentage of that premium referred to as a Premium Enhancement will be
added to the Policy Value. The Premium Enhancement applicable to the initial
premium payment is set forth on the Policy Data Page. The amount of the Premium
Enhancement is not considered a premium payment. The Premium Enhancement may
vary from premium to premium on subsequent premium payments but will never be
less than 0% nor more than 4%. We will advise You of the amount of the Premium
Enhancement applicable to each subsequent premium payment in a confirmation that
We will send You. The Premium Enhancement will only apply to premiums received
in the first four Policy Years. Premium Enhancements will be applied using the
same allocation that applies to the corresponding premium payment. No Premium
Enhancement will apply if the Policy is cancelled pursuant to the Right to
Cancel provision.

The full dollar amount of any Premium Enhancement applied less than one year
prior to the occurrence of any of the following events will be forfeited:

         1)   Exercise of Nursing Care and Terminal Condition Withdrawal Option;
         2)   Exercise of Unemployment Waiver; or
         3)   Upon annuitization

The Lump Sum provision of Section 5, is replaced by the following language:

LUMP SUM

Beginning in the first Policy Year, You may withdraw, free of surrender Charges
(but not free of Excess Interest Adjustment (EIA)), an amount (minimum of $500)
up to 10% of the Policy Value, at the time of, but prior to, withdrawal (the 10%
is non-cumulative). Multiple distributions are allowed each Policy Year but the
total withdrawal percentage may not exceed 10% in any Policy Year.

Withdrawals from the fixed accounts will be free of EIA to the extent of any
cumulative interest credited in those accounts; however, surrender charges may
still apply. Any principal withdrawals from the fixed accounts will be subject
to the EIA.

Surrender Charge Free/EIA Free withdrawals do NOT have to be separated by a
period of 12 months.

<PAGE>

The Surrender Charge provision of Section 5, is replaced by the following
language:

SURRENDER CHARGES

Amounts withdrawn in excess of the surrender charge free amount specified in the
withdrawal provisions above are subject to a surrender charge. The amount of
this charge, if any, will be a percentage, as shown in the table below, of the
amount of premium withdrawn:

                Number of Years              Percentage of
                 Since Premium             Premium Withdrawn
                 Payment Date
                        0-1                       8%
                        1-2                       8%
                        2-3                       6%
                        3-4                       6%
                        4-5                       5%
                        5-6                       4%
                        6-7                       2%
                        7 or more                 0%

In any event, surrender charges will be waived after the tenth Policy Year.

For Surrender Charge purposes, all earnings including Premium Enhancement are
considered to be withdrawn first. After all earnings are withdrawn then the
oldest premium payment is the first premium payment considered to be withdrawn.
If the amount withdrawn exceeds this, the next oldest premium payment is
considered to be withdrawn, and so on until the most recent premium payments are
deemed to be withdrawn (the procedure being applied to Withdrawals of premium is
a "First-In, First-Out" or FIFO procedure).

                        Signed for us at our home office.

/s/ Craig D. Vermie                              /s/ Larry N Norman

     SECRETARY                                        PRESIDENT<PAGE>

                                 EXHIBIT (4)(k)

                              FORM OF POLICY RIDER
                              (ENHANCEMENT RIDER)

<PAGE>

                                                        Home Office:
[LOGO](R) Transamerica Life                             4333 Edgewood Road N.E.
          Insurance Company                             Cedar Rapids, Iowa 52499
                                                        (319)398-8511

       A Stock Company (Hereafter called the Company, we, our or us)

                               ENHANCEMENT RIDER

The Policy to which this Rider is attached is amended to include a Premium
Enhancement and to modify Surrender Charges by the following language:

PREMIUM ENHANCEMENT

When a Premium payment is paid in the first four Policy Years, an amount equal
to a percentage of that premium referred to as a Premium Enhancement will be
added to the Policy Value. The Premium Enhancement applicable to the initial
premium payment is set forth on the Policy Data Page. The amount of the Premium
Enhancement is not considered a premium payment. The Premium Enhancement may
vary from premium to premium on subsequent premium payments but will never be
less than 0% nor more than 4%. We will advise You of the amount of the Premium
Enhancement applicable to each subsequent premium payment in a confirmation that
We will send You. The Premium Enhancement will only apply to premiums received
in the first four Policy Years. Premium Enhancements will be applied using the
same allocation that applies to the corresponding premium payment. No Premium
Enhancement will apply if the Policy is cancelled pursuant to the Right to
Cancel provision.

The full dollar amount of any Premium Enhancement applied less than one year
prior to the occurrence of any of the following events will be forfeited:

     1)   Exercise of Nursing Care and Terminal Condition Withdrawal Option;
     2)   Exercise of Unemployment Waiver; or
     3)   Upon annuitization

The Lump Sum provision of Section 5, is replaced by the following language:

LUMP SUM

Beginning in the first Policy Year, You may withdraw, free of surrender Charges
(but not free of Excess Interest Adjustment (EIA)), an amount (minimum of $500)
up to 10% of the Policy Value, at the time of, but prior to, withdrawal (the 10%
is non-cumulative). Multiple distributions are allowed each Policy Year but the
total withdrawal percentage may not exceed 10% in any Policy Year.

Withdrawals from the fixed accounts will be free of EIA to the extent of any
cumulative interest credited in those accounts; however, surrender charges may
still apply. Any principal withdrawals from the fixed accounts will be subject
to the EIA.

Surrender Charge Free/EIA Free withdrawals do NOT have to be separated by a
period of 12 months.

RER 502

<PAGE>

The Surrender Charge provision of Section 5, is replaced by the following
language:

SURRENDER CHARGES

Amounts withdrawn in excess of the surrender charge free amount specified in the
withdrawal provisions above are subject to a surrender charge. The amount of
this charge, if any, will be a percentage, as shown in the table below, of the
amount of premium withdrawn:

                           Number of Years             Percentage of
                             Since Premium           Premium Withdrawn
                             Payment Date
                                   0-1                      8%
                                   1-2                      8%
                                   2-3                      6%
                                   3-4                      6%
                                   4-5                      5%
                                   5-6                      4%
                                   6-7                      2%
                                   7 or more                0%

In any event, surrender charges will be waived after the tenth Policy Year.

For Surrender Charge purposes, all earnings including Premium Enhancement are
considered to be withdrawn first. After all earnings are withdrawn then the
oldest premium payment is the first premium payment considered to be withdrawn.
If the amount withdrawn exceeds this, the next oldest premium payment is
considered to be withdrawn, and so on until the most recent premium payments are
deemed to be withdrawn (the procedure being applied to Withdrawals of premium is
a "First-In, First-Out" or FIFO procedure).

                        Signed for us at our home office.

        /s/ ILLEGIBLE                              /s/ ILLEGIBLE

          SECRETARY                                   PRESIDENT

RER 502 (B)FIXED RATE SENIOR NOTE

REGISTERED                                                   REGISTERED
No. FXR                                                      $
                                                             CUSIP:

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

                                       A-1
<PAGE>

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

                          BRIDGES DUE OCTOBER 30, 2009
           BASED ON THE VALUE OF COMMON STOCK OF FIFTEEN AEROSPACE AND
                                DEFENSE COMPANIES

<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:             DATE(S): N/A            REPAYMENT
                             N/A                                             DATE(S):  N/A
------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY:      ANNUAL REDEMPTION       INTEREST PAYMENT        APPLICABILITY OF
    U.S. Dollars             PERCENTAGE              PERIOD: N/A             MODIFIED
                             REDUCTION:  N/A                                 PAYMENT
                                                                             UPON
                                                                             ACCELERATION:
                                                                             See "Alternate
                                                                             Exchange Calculation
                                                                             in Case of an Event of
                                                                             Default" below.
------------------------------------------------------------------------------------------------------
IF SPECIFIED             REDEMPTION NOTICE       APPLICABILITY OF        If yes, state Issue Price:
    CURRENCY                 PERIOD: N/A             ANNUAL                  N/A
    OTHER THAN                                       INTEREST
    U.S. DOLLARS,                                    PAYMENTS: N/A
    OPTION TO
    ELECT
    PAYMENT IN
    U.S. DOLLARS:
    N/A
------------------------------------------------------------------------------------------------------
EXCHANGE RATE                                                            ORIGINAL YIELD TO
    AGENT:  N/A                                                              MATURITY: N/A
------------------------------------------------------------------------------------------------------
OTHER PROVISIONS:
    (see below)
======================================================================================================
</TABLE>

Maturity Date.........................  October 30, 2009, subject to extension
                                        in the event of a Market Disruption
                                        Event on the sixth Determination Date
                                        for calculating the Final Average Basket
                                        Value.

                                       A-2
<PAGE>

                                        If, due to a Market Disruption Event or
                                        otherwise, the sixth 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 sixth
                                        Determination Date as postponed. See
                                        "Determination Dates" below.

                                        In the event that the sixth
                                        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 sixth
                                        Determination Date, (i) to the holder of
                                        this BRIDGES 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
                                        BRIDGES receives the notice.

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

Maturity Redemption Amount............  At maturity the holder of this BRIDGES
                                        shall receive for each $10 principal
                                        amount of this BRIDGES the greater of
                                        (i) $10 or (ii) the Final Average Basket
                                        Value. The Calculation Agent shall
                                        calculate the Maturity Redemption Amount
                                        on the sixth Determination Date.

                                        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 11:00 a.m. on the
                                        Trading Day preceding the Maturity Date
                                        and (ii) deliver the aggregate cash
                                        amount due with respect to this BRIDGES
                                        to the Trustee for delivery to the
                                        holders on the Maturity Date.

                                       A-3
<PAGE>

Basket Stocks.........................  The Basket Stocks are the fifteen stocks
                                        set forth in the table below. The table
                                        also indicates the ticker symbol for
                                        each Basket Stock, the exchange on which
                                        each Basket Stock is listed and the
                                        Exchange Ratio with respect to each
                                        Basket Stock.

<TABLE>
                                        Issuer of                     Ticker                     Exchange
                                        Basket Stock                  Symbol       Exchange        Ratio
                                        -------------                --------     --------      ----------
<S>                                                                   <C>         <C>             <C>
                                        Alliant Techsystems Inc.       ATK          NYSE
                                        The Boeing Company              BA          NYSE
                                        Engineered Support
                                          Systems, Inc.                EASI         NASDAQ
                                        Embraer-Empresa
                                           Brasiliera de
                                           Aeronautica S.A.            ERJ*         NYSE
                                        FLIR Systems, Inc.             FLIR        NASDAQ
                                        General Dynamics
                                           Corporation                  GD          NYSE
                                        Goodrich Corporation            GR          NYSE
                                        Honeywell
                                           International Inc.          HON          NYSE
                                        ITT Industries, Inc.           ITT          NYSE
                                        L-3 Communications
                                           Holdings,  Inc.             LLL          NYSE
                                        Lockheed Martin
                                           Corporation                 LMT          NYSE
                                        Northrop Grumman
                                           Corporation                 NOC          NYSE
                                        Raytheon Company               RTN          NYSE
                                        United Defense
                                           Industries, Inc.            UDI          NYSE
                                        United Technologies
                                           Corporation                 UTX          NYSE
</TABLE>

Basket................................  The Basket is initially a portfolio of
                                        fifteen aerospace and defense industry
                                        Basket Stocks and shall consist of a
                                        number of shares of each Basket Stock
                                        equal to the Exchange Ratio with respect
                                        to such Basket Stock. The issuers of the
                                        Basket Stocks are a selection of
                                        companies engaged in the aerospace and
                                        defense industry. The issuers of the
                                        Basket Stocks represent a range of
                                        market capitalizations within the
                                        aerospace and defense industry and a
                                        variety of businesses within that
                                        industry. The Basket Stocks have been
                                        weighted within the Basket to give the
                                        greatest weight to the largest market
                                        capitalization companies.

Exchange Ratio........................  The Exchange Ratio for each Basket Stock
                                        is set forth in the table under "Basket
                                        Stocks" above, subject to adjustment for
                                        certain corporate events relating to the
                                        issuer of that Basket Stock. See
                                        "Adjustments to the Exchange Ratios"
                                        below.

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

                                       A-4
<PAGE>

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

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

Determination Dates...................  The Determination Dates shall be October
                                        30, 2004, October 30, 2005, October 30,
                                        2006, October 30, 2007, October 30, 2008
                                        and October 28, 2009, in each such case
                                        subject to adjustment for Market
                                        Disruption Events as described in the
                                        two following paragraphs.

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

                                        If October 28, 2009 (the sixth scheduled
                                        Determination Date) is not a Trading Day
                                        or if there is a Market Disruption Event
                                        on such day, the sixth Determination
                                        Date shall be the immediately succeeding
                                        Trading Day during which no Market
                                        Disruption Event shall have occurred.

Market Price..........................  If a Basket Stock (or any other security
                                        for which a Market Price must be
                                        determined) is listed on a national
                                        securities exchange, is a security of
                                        the Nasdaq National Market or is
                                        included in the OTC Bulletin Board
                                        Service ("OTC Bulletin Board") operated
                                        by the National Association of
                                        Securities Dealers, Inc. (the "NASD"),
                                        the Market Price for one share of such
                                        Basket Stock (or one unit of any such
                                        other security) on any Trading Day means
                                        (i) the last reported sale price,
                                        regular way, of the principal trading
                                        session on such day on the principal
                                        United States securities exchange
                                        registered under the Securities Exchange
                                        Act of 1934, as amended (the "Exchange
                                        Act"), on which such Basket Stock (or
                                        any

                                       A-5
<PAGE>

                                        such other security) is listed or
                                        admitted to trading (which may be the
                                        Nasdaq National Market if it is then a
                                        national securities exchange) or (ii) if
                                        not listed or admitted to trading on any
                                        such securities exchange or if such last
                                        reported sale price is not obtainable
                                        (even if such Basket Stock (or such
                                        other security) is listed or admitted to
                                        trading on such securities exchange),
                                        the last reported sale price of the
                                        principal trading session on the
                                        over-the- counter market as reported on
                                        the Nasdaq National Market (if it is not
                                        then a national securities exchange) or
                                        OTC Bulletin Board on such day. If the
                                        last reported sale price of the
                                        principal trading session is not
                                        available pursuant to clause (i) or (ii)
                                        of the preceding sentence because of a
                                        Market Disruption Event or otherwise,
                                        the Market Price for any Trading Day
                                        shall be the mean, as determined by the
                                        Calculation Agent, of the bid prices for
                                        such Basket Stock (or any such other
                                        security) obtained from as many 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. A "security of the Nasdaq
                                        National Market" shall include a
                                        security included in any successor to
                                        such system and the term "OTC Bulletin
                                        Board Service" shall include any
                                        successor service thereto.

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

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 BRIDGES
                                        and on the Issuer.

                                        All calculations with respect to the
                                        Exchange Ratio for each Basket Stock and
                                        the Final Average Basket Value will be
                                        rounded to the nearest one billionth,

                                       A-6
<PAGE>

                                        with five ten-billionths rounded upward
                                        (e.g., .8765432105 would be rounded to
                                        .876543211); all dollar amounts related
                                        to determination of the amount of cash
                                        payable per BRIDGES will be rounded to
                                        the nearest ten-thousandth, with five
                                        one hundred-thousandths rounded upward
                                        (e.g., .76545 would be rounded up to
                                        .7655); and all dollar amounts paid on
                                        the aggregate number of BRIDGES will be
                                        rounded to the nearest cent, with
                                        one-half cent rounded upward.

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

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

                                        2. If a Basket Stock is subject (i) to a
                                        stock dividend (issuance of additional
                                        shares of such Basket Stock) that is
                                        given ratably to all holders of shares
                                        of such Basket Stock or (ii) to a
                                        distribution of such Basket Stock as a
                                        result of the triggering of any
                                        provision of the corporate charter of
                                        the issuer of such Basket Stock, then
                                        once the dividend has been declared and
                                        the Basket Stock is trading ex-dividend,
                                        the Exchange Ratio for such Basket Stock
                                        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 such Basket Stock and
                                        (ii) the prior Exchange Ratio for such
                                        Basket Stock.

                                        3. There shall be no adjustments to any
                                        Exchange Ratio to reflect cash dividends
                                        or other distributions paid with respect
                                        to a Basket Stock other than
                                        distributions described in clauses (i),
                                        (iv) and (v) of paragraph 5 below and
                                        Extraordinary Dividends as described
                                        below. A cash dividend or other
                                        distribution with respect to a Basket
                                        Stock shall be deemed to be an
                                        "Extraordinary Dividend" if such
                                        dividend or other distribution exceeds
                                        the immediately preceding
                                        non-Extraordinary Dividend for such
                                        Basket Stock by an amount equal to at
                                        least 10% of the Market Price of such
                                        Basket Stock (as adjusted for any
                                        subsequent corporate event requiring an
                                        adjustment

                                       A-7
<PAGE>

                                        hereunder, such as a stock split or
                                        reverse stock split) on the Trading Day
                                        preceding the ex-dividend date for the
                                        payment of such Extraordinary Dividend
                                        (the "ex-dividend date"). If an
                                        Extraordinary Dividend occurs with
                                        respect to a Basket Stock, the Exchange
                                        Ratio with respect to such Basket Stock
                                        shall be adjusted on the ex- dividend
                                        date with respect to such Extraordinary
                                        Dividend so that the new Exchange Ratio
                                        shall equal the product of (i) the then
                                        current Exchange Ratio and (ii) a
                                        fraction, the numerator of which is the
                                        Market Price of the Basket Stock on the
                                        Trading Day preceding the ex- dividend
                                        date, and the denominator of which is
                                        the amount by which the Market Price of
                                        the Basket Stock on the Trading Day
                                        preceding the ex-dividend date exceeds
                                        the Extraordinary Dividend Amount. The
                                        "Extraordinary Dividend Amount" with
                                        respect to an Extraordinary Dividend for
                                        a Basket Stock shall equal (i) in the
                                        case of cash dividends or other
                                        distributions that constitute regular
                                        dividends, the amount per share of such
                                        Extraordinary Dividend minus the amount
                                        per share of the immediately preceding
                                        non-Extraordinary Dividend for such
                                        Basket Stock or (ii) in the case of cash
                                        dividends or other distributions that do
                                        not constitute regular dividends, the
                                        amount per share of such Extraordinary
                                        Dividend. To the extent an Extraordinary
                                        Dividend is not paid in cash, the value
                                        of the non-cash component shall be
                                        determined by the Calculation Agent,
                                        whose determination shall be conclusive.
                                        A distribution on a Basket Stock
                                        described in clause (i), (iv) or (v) of
                                        paragraph 5 below that also constitutes
                                        an Extraordinary Dividend shall cause an
                                        adjustment to the Exchange Ratio
                                        pursuant only to clause (i), (iv) or (v)
                                        of paragraph 5, as applicable.

                                        4. If an issuer of a Basket Stock issues
                                        rights or warrants to all holders of a
                                        Basket Stock to subscribe for or
                                        purchase such Basket Stock at an
                                        exercise price per share less than the
                                        Market Price of such Basket Stock on
                                        both (i) the date the exercise price of
                                        such rights or warrants is determined
                                        and (ii) the expiration date of such
                                        rights or warrants, and if the
                                        expiration date of such rights or
                                        warrants precedes the maturity of the
                                        BRIDGES, then the Exchange Ratio for
                                        such Basket Stock shall be adjusted to
                                        equal the product of the prior Exchange
                                        Ratio for such Basket Stock and a
                                        fraction, the numerator of which shall
                                        be the number of shares of such Basket
                                        Stock outstanding immediately prior to
                                        the issuance of such rights or

                                       A-8
<PAGE>

                                        warrants plus the number of additional
                                        shares of such Basket Stock offered for
                                        subscription or purchase pursuant to
                                        such rights or warrants and the
                                        denominator of which shall be the number
                                        of shares of such Basket Stock
                                        outstanding immediately prior to the
                                        issuance of such rights or warrants plus
                                        the number of additional shares of such
                                        Basket Stock which the aggregate
                                        offering price of the total number of
                                        shares of such Basket Stock so offered
                                        for subscription or purchase pursuant to
                                        such rights or warrants would purchase
                                        at the Market 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 Market Price.

                                        5. Any of the following shall constitute
                                        a Reorganization Event: (i) there occurs
                                        any reclassification or change of a
                                        Basket Stock, including, without
                                        limitation, as a result of the issuance
                                        of any tracking stock by the issuer of
                                        such Basket Stock, (ii) the issuer of a
                                        Basket Stock or any surviving entity or
                                        subsequent surviving entity of the
                                        issuer of such Basket Stock (an "Issuer
                                        Successor") has been subject to a
                                        merger, combination or consolidation and
                                        is not the surviving entity, (iii) any
                                        statutory exchange of securities of the
                                        issuer of a Basket Stock or any Issuer
                                        Successor with another corporation
                                        occurs (other than pursuant to clause
                                        (ii) above), (iv) the issuer of a Basket
                                        Stock is liquidated, (v) the issuer of a
                                        Basket Stock issues to all of its
                                        shareholders equity securities of an
                                        issuer other than the issuer of such
                                        Basket Stock (other than in a
                                        transaction described in clause (ii),
                                        (iii) or (iv) above) (a "Spinoff Event")
                                        or (vi) a tender or exchange offer or
                                        going-private transaction is consummated
                                        for all the outstanding shares of such
                                        Basket Stock. If any Reorganization
                                        Event occurs, in each case as a result
                                        of which the holders of a Basket Stock
                                        are entitled to receive stock, other
                                        securities or other property or assets
                                        (including, without limitation, cash or
                                        other classes of securities of the
                                        issuer of such Basket Stock and
                                        including (x) in the case of the
                                        issuance of tracking stock, the
                                        reclassified share of the Basket Stock,
                                        (y) in the case of a Spin-off Event, the
                                        share of the Basket Stock with respect
                                        to which the spun-off security was
                                        issued and (z) in the case of any other
                                        Reorganization Event where the Basket
                                        Stock continues to be held by the
                                        holders receiving such distribution, the
                                        Basket Stock) (collectively, "Exchange

                                       A-9
<PAGE>

                                        Property") with respect to or in
                                        exchange for such Basket Stock, then in
                                        lieu of using the product of the Market
                                        Price and the Exchange Ratio for such
                                        Basket Stock to calculate the Basket
                                        Value on any date, the Calculation Agent
                                        shall use the Exchange Property Value on
                                        such date. The Exchange Property Value
                                        at any date means (i) for any cash
                                        received per share of Basket Stock, the
                                        amount of cash received per share of
                                        Basket Stock as adjusted by the
                                        applicable Exchange Ratio for such
                                        Basket Stock on the date of such
                                        Reorganization Event, (ii) for any
                                        property other than cash or securities
                                        received in such distribution, the
                                        market value, as determined by the
                                        Calculation Agent, as of the date of
                                        receipt, of such Exchange Property
                                        received for each share of Basket Stock,
                                        as adjusted by the Exchange Ratio for
                                        such Basket Stock on the date of such
                                        Reorganization Event, (iii) for any
                                        security received in any such
                                        distribution, an amount equal to the
                                        Market Price, as of the date on which
                                        the Exchange Property Value is
                                        determined, per share of such security
                                        multiplied by the quantity of such
                                        security received for each share of
                                        Basket Stock, as adjusted by the
                                        Exchange Ratio for such Basket Stock on
                                        the date of the initial distribution of
                                        such Exchange Property (such as-adjusted
                                        quantity, a "New Exchange Ratio") and
                                        (iv) if the Exchange Property was
                                        distributed with respect to, rather than
                                        in exchange for, a Basket Stock, an
                                        amount equal to the Market Price, as of
                                        the date on which the Exchange Property
                                        Value is determined, for such Basket
                                        Stock multiplied by the Exchange Ratio
                                        as of the date on which the Exchange
                                        Property Value is determined. Holders of
                                        BRIDGES shall not receive any interest
                                        accrued on the cash component of any
                                        Exchange Property. Any New Exchange
                                        Ratio shall also be subject to the
                                        adjustments set forth in paragraphs 1
                                        through 5 hereof.

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

                                      A-10
<PAGE>

                                        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.

                                        If a Market Price for a Basket Stock is
                                        no longer available for a Basket Stock
                                        for whatever reason, including the
                                        liquidation of the issuer of such Basket
                                        Stock or the subjection of such issuer
                                        to a proceeding under any applicable
                                        bankruptcy, insolvency or other similar
                                        law, then the value of such Basket Stock
                                        shall equal zero for so long as no
                                        Market Price is available. There shall
                                        be no substitution for any such Basket
                                        Stock.

                                        No adjustment to the Exchange Ratio of a
                                        Basket Stock shall be required unless
                                        such adjustment would require a change
                                        of at least 0.1% in the Exchange Ratio
                                        of such Basket Stock then in effect. The
                                        Exchange Ratio resulting from any of the
                                        adjustments specified above shall be
                                        rounded to the nearest one
                                        hundred-thousandth, with five
                                        one-millionths rounded upward.
                                        Adjustments to the Exchange Ratio of a
                                        Basket Stock shall be made up to and
                                        including the sixth scheduled
                                        Determination Date.

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

                                        The Calculation Agent shall provide
                                        information as to any adjustments to any
                                        Exchange Ratio upon written request by
                                        any holder of the BRIDGES.

Alternate Exchange Calculation
in Case of an Event of Default .......  In case an event of default with respect
                                        to this BRIDGES shall have occurred and
                                        be continuing, the amount declared due
                                        and payable for this BRIDGES upon any
                                        acceleration of this BRIDGES shall be
                                        determined by the Calculation Agent and
                                        shall be equal to the greater of (i) $10
                                        (the principal amount of this BRIDGES)
                                        and (ii) the Final Average Basket Value
                                        determined as though the Basket Value
                                        for any Determination Date scheduled to

                                      A-11
<PAGE>

                                        occur on or after such date of
                                        acceleration were the Basket Value on
                                        the date of acceleration.

                                        If the maturity of this BRIDGES is so
                                        accelerated, the Issuer shall provide
                                        such notice as promptly as possible and
                                        in no event later than two Business Days
                                        after the date of acceleration.

Market Disruption Event...............  "Market Disruption Event" means the
                                        occurrence or existence of any of the
                                        following events with respect to any
                                        Basket Stock:

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

                                            (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
                                            Morgan Stanley or any of its
                                            affiliates to unwind or adjust all
                                            or a material portion of the hedge
                                            position in such Basket Stocks with
                                            respect to the BRIDGES.

                                        For purposes of determining whether a
                                        Market Disruption Event has occurred:
                                        (1) a limitation on the hours or number
                                        of days of trading shall not constitute
                                        a Market Disruption Event if it results
                                        from an announced change in the regular
                                        business hours of the relevant exchange,
                                        (2) a decision to permanently
                                        discontinue trading in the relevant
                                        options contract shall not constitute a
                                        Market Disruption Event, (3) limitations
                                        pursuant to NYSE Rule 80A (or any
                                        applicable rule or regulation enacted or

                                      A-12
<PAGE>

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

                                      A-13
<PAGE>

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

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

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

                                      A-14
<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 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 and any premium 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
U.S. dollars for the Specified Currency 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-15
<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-16
<PAGE>

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

DATED:          , 200[ ]                     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-17
<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

                                      A-18
<PAGE>

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

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

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

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

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

                                      A-19
<PAGE>

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

     The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
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 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

                                      A-20
<PAGE>

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 principal amount of the debt securities of each affected series (voting
as a single class) 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 or insolvency of the Issuer, shall have occurred
and be continuing, either the Trustee or the holders of not less than 25% in
principal amount of all debt securities issued under the Senior Indenture then
outstanding (treated as one class) 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
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," 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

                                      A-21
<PAGE>

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 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 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 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, be required to make any payment of
Additional Amounts to any such holder for or on account of:

          (a) any such 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) and the United States and
     its possessions, 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 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 or personal
     property tax or any similar tax, assessment or governmental charge;

                                      A-22
<PAGE>

          (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 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 European
Union Directive on the taxation of savings implementing the agreement reached in
the ECOFIN Council meeting of 13 December 2001 or any law implementing or
complying with, or introduced in order to conform to, such Directive; 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 Additional Amounts be paid
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

                                      A-23
<PAGE>

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 or repayment 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 (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 without the consent of the holder of
each debt security so affected 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

                                      A-24
<PAGE>

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 implementing the agreement reached in the ECOFIN Council
meeting of 13 December 2001 or any law implementing or complying with, or
introduced in order to conform to, such Directive is introduced and a Paying
Agent has been designated within the European Union, the Issuer will 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 law.

     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

                                      A-25
<PAGE>

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, for
United States federal income tax purposes, is a foreign corporation, a
non-resident alien individual, a non- resident alien fiduciary of a foreign
estate or trust, or a foreign partnership one or more of the members of which is
a foreign corporation, a non-resident alien individual or a non-resident 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-26
<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-27
<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-28
<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-29

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