Document:

FIXED RATE SENIOR NOTE

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

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

                                      A-1
<PAGE>

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

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

                         6% SPARQS(R) DUE APRIL 1, 2005
                            MANDATORILY EXCHANGEABLE
                          FOR SHARES OF COMMON STOCK OF
                                      WYETH

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

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

Maturity Date.................     April 1, 2005, subject to acceleration as
                                   described below in "Price Event Acceleration"
                                   and "Alternate Exchange Calculation in Case
                                   of an Event of Default" and subject

                                      A-2
<PAGE>

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

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

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

Interest Payment Dates........

                                   If the scheduled Maturity Date is postponed
                                   due to a Market Disruption Event or
                                   otherwise, the Issuer shall pay interest on
                                   the Maturity Date as postponed rather than on
                                   April 1, 2005, but no interest will accrue on
                                   this SPARQS or on such payment during the
                                   period from or after the scheduled Maturity
                                   Date.

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

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<PAGE>

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

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

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

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

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

                                      A-4
<PAGE>

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

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

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

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

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

                                      A-5
<PAGE>

                                   Call Right.

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

Final Call Notice Date........     March 22, 2005; provided that if March 22,
                                   2005 is not a Trading Day or if a Market
                                   Disruption Event occurs on such day, the
                                   Final Call Notice Date will be the
                                   immediately succeeding Trading Day on which
                                   no Market Disruption Event occurs.

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

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

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

                                   The amount of Wyeth Stock to be delivered at
                                   maturity

                                      A-6
<PAGE>

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

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

                                      A-7
<PAGE>

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

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

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

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

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

                                      A-8
<PAGE>

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

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

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

Exchange Ratio................     0.5, subject to adjustment for corporate
                                   events relating to Wyeth described under
                                   "Antidilution Adjustments" below.

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

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

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

                                      A-9
<PAGE>

                                   that the Nasdaq National Market is not then a
                                   national securities exchange), the Nasdaq
                                   official closing price published by The
                                   Nasdaq Stock Market, Inc. on such day, or

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

                                   If Wyeth Stock (or any such other security)
                                   is listed or admitted to trading on any
                                   national securities exchange or is a security
                                   of the Nasdaq National Market but the last
                                   reported sale price or Nasdaq official
                                   closing price, as applicable, is not
                                   available pursuant to the preceding sentence,
                                   then the Closing Price for one share of Wyeth
                                   Stock (or one unit of any such other
                                   security) on any Trading Day will mean the
                                   last reported sale price of the principal
                                   trading session on the over-the-counter
                                   market as reported on the Nasdaq National
                                   Market or the OTC Bulletin Board on such day.
                                   If, because of a Market Disruption Event (as
                                   defined below) or otherwise, the last
                                   reported sale price or Nasdaq official
                                   closing price, as applicable, for Wyeth Stock
                                   (or any such other security) is not available
                                   pursuant to either of the two preceding
                                   sentences, then the Closing Price for any
                                   Trading Day will be the mean, as determined
                                   by the Calculation Agent, of the bid prices
                                   for Wyeth Stock (or any such other security)
                                   obtained from as many recognized dealers in
                                   such security, but not exceeding three, as
                                   will make such bid prices available to the
                                   Calculation Agent. Bids of MS & Co. or any of
                                   its affiliates may be included in the
                                   calculation of such mean, but only to the
                                   extent that any such bid is the highest of
                                   the bids obtained. The term "security of the
                                   Nasdaq National Market" will include a
                                   security included in any successor to such
                                   system, and the term OTC Bulletin Board
                                   Service will include any successor service
                                   thereto.

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

                                      A-10
<PAGE>

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

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

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

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

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

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

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

                                      A-11
<PAGE>

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

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

                                      A-12
<PAGE>

                                   such excess portion of the dividend or
                                   distribution is more than 5% of the Closing
                                   Price of Wyeth Stock on the Trading Day
                                   preceding the "ex-dividend date" (that is,
                                   the day on and after which transactions in
                                   Wyeth Stock on an organized securities
                                   exchange or trading system no longer carry
                                   the right to receive that cash dividend or
                                   other cash distribution) for the payment of
                                   such cash dividend or other cash distribution
                                   (such Closing Price, the "Base Closing
                                   Price") and (c) the full cash value of any
                                   non-cash dividend or distribution per share
                                   of Wyeth Stock (excluding Marketable
                                   Securities, as defined in paragraph 5 below).
                                   Subject to the following sentence, if any
                                   cash dividend or distribution of such other
                                   property with respect to Wyeth Stock includes
                                   an Extraordinary Dividend, the Exchange Ratio
                                   with respect to Wyeth Stock shall be adjusted
                                   on the ex-dividend date so that the new
                                   Exchange Ratio shall equal the product of (i)
                                   the prior Exchange Ratio and (ii) a fraction,
                                   the numerator of which is the Base Closing
                                   Price, and the denominator of which is the
                                   amount by which the Base Closing Price
                                   exceeds the Extraordinary Dividend. If any
                                   Extraordinary Dividend is at least 35% of the
                                   Base Closing Price, then, instead of
                                   adjusting the Exchange Ratio, the amount
                                   payable upon exchange at maturity shall be
                                   determined as described in paragraph 5 below,
                                   and the Extraordinary Dividend shall be
                                   allocated to Reference Basket Stocks in
                                   accordance with the procedures for a
                                   Reference Basket Event as described in clause
                                   3(b) of paragraph 5 below. The value of the
                                   non-cash component of an Extraordinary
                                   Dividend shall be determined on the
                                   ex-dividend date for such distribution by the
                                   Calculation Agent, whose determination shall
                                   be conclusive in the absence of manifest
                                   error. A distribution on Wyeth Stock
                                   described in clause (i), (iv) or (v) of the
                                   first sentence of paragraph 5 below shall
                                   cause an adjustment to the Exchange Ratio
                                   pursuant only to clause (i), (iv) or (v) of
                                   the first sentence of paragraph 5, as
                                   applicable.

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

                                      A-13
<PAGE>

                                   equity securities of an issuer other than
                                   Wyeth (other than in a transaction described
                                   in clause (ii), (iii) or (iv) above) (a
                                   "spinoff stock") or (vi) Wyeth Stock is the
                                   subject of a tender or exchange offer or
                                   going private transaction on all of the
                                   outstanding shares. If any Reorganization
                                   Event occurs, in each case as a result of
                                   which the holders of Wyeth Stock receive any
                                   equity security listed on a national
                                   securities exchange or traded on The Nasdaq
                                   National Market (a "Marketable Security"),
                                   other securities or other property, assets or
                                   cash (collectively "Exchange Property"), the
                                   amount payable upon exchange at maturity with
                                   respect to each $         principal amount of
                                   this SPARQS following the effective date for
                                   such Reorganization Event (or, if
                                   applicable, in the case of spinoff stock,
                                   the ex-dividend date for the distribution of
                                   such spinoff stock) shall be determined in
                                   accordance with the following:

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

                                   (2) for each Marketable Security received in
                                   such Reorganization Event (each a "New
                                   Stock"), including the issuance of any
                                   tracking stock or spinoff stock or the
                                   receipt of any stock received in exchange for
                                   Wyeth Stock where Wyeth is not the surviving
                                   entity, the number of shares of the New Stock
                                   received with respect to one share of Wyeth
                                   Stock multiplied by the Exchange Ratio for
                                   Wyeth Stock on the Trading Day immediately
                                   prior to the effective date of the
                                   Reorganization Event (the "New Stock Exchange
                                   Ratio"), as adjusted to the third Trading Day
                                   prior to the scheduled Maturity Date (taking
                                   into account any adjustments for
                                   distributions described under clause (3)(a)
                                   below); and

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

                                      (a) if the combined value of the amount of
                                      Non-Stock Exchange Property received per
                                      share of Wyeth Stock, as determined by the
                                      Calculation Agent

                                      A-14
<PAGE>

                                      in its sole discretion on the effective
                                      date of such Reorganization Event (the
                                      "Non-Stock Exchange Property Value"), by
                                      holders of Wyeth Stock is less than 25% of
                                      the Closing Price of Wyeth Stock on the
                                      Trading Day immediately prior to the
                                      effective date of such Reorganization
                                      Event, a number of shares of Wyeth Stock,
                                      if applicable, and of any New Stock
                                      received in connection with such
                                      Reorganization Event, if applicable, in
                                      proportion to the relative Closing Prices
                                      of Wyeth Stock and any such New Stock, and
                                      with an aggregate value equal to the
                                      Non-Stock Exchange Property Value
                                      multiplied by the Exchange Ratio in effect
                                      for Wyeth Stock on the Trading Day
                                      immediately prior to the effective date of
                                      such Reorganization Event, based on such
                                      Closing Prices, in each case as determined
                                      by the Calculation Agent in its sole
                                      discretion on the effective date of such
                                      Reorganization Event; and the number of
                                      such shares of Wyeth Stock or any New
                                      Stock determined in accordance with this
                                      clause (3)(a) shall be added at the time
                                      of such adjustment to the Exchange Ratio
                                      in subparagraph (1) above and/or the New
                                      Stock Exchange Ratio in subparagraph (2)
                                      above, as applicable, or

                                      (b) if the Non-Stock Exchange Property
                                      Value is equal to or exceeds 25% of the
                                      Closing Price of Wyeth Stock on the
                                      Trading Day immediately prior to the
                                      effective date relating to such
                                      Reorganization Event or, if Wyeth Stock is
                                      surrendered exclusively for Non-Stock
                                      Exchange Property (in each case, a
                                      "Reference Basket Event"), an initially
                                      equal-dollar weighted basket of three
                                      Reference Basket Stocks (as defined below)
                                      with an aggregate value on the effective
                                      date of such Reorganization Event equal to
                                      the Non-Stock Exchange Property Value
                                      multiplied by the Exchange Ratio in effect
                                      for Wyeth Stock on the Trading Day
                                      immediately prior to the effective date of
                                      such Reorganization Event. The "Reference
                                      Basket Stocks" shall be the three stocks
                                      with the largest market capitalization
                                      among the stocks that then comprise the
                                      S&P 500 Index (or, if publication of such
                                      index is discontinued, any successor or
                                      substitute index selected by the
                                      Calculation Agent in its sole discretion)
                                      with the same primary Standard Industrial
                                      Classification Code ("SIC Code") as Wyeth;
                                      provided, however, that a Reference Basket

                                      A-15
<PAGE>

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

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

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

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

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

                                   In each case, the applicable Exchange Ratio
                                   (including for this purpose, any New Stock
                                   Exchange Ratio or Basket Stock Exchange
                                   Ratio) shall be determined by the

                                      A-16
<PAGE>

                                   Calculation Agent on the third Trading Day
                                   prior to the scheduled Maturity Date.

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

                                   Following the occurrence of any
                                   Reorganization Event referred to in
                                   paragraphs 4 or 5 above, (i) references to
                                   "Wyeth Stock" under "No Fractional Shares,"
                                   "Closing Price" and "Market Disruption Event"
                                   shall be deemed to also refer to any New
                                   Stock or Reference Basket Stock, and (ii) all
                                   other references in this SPARQS to "Wyeth
                                   Stock" shall be deemed to refer to the
                                   Exchange Property into which this SPARQS is
                                   thereafter exchangeable and references to a
                                   "share" or "shares" of Wyeth Stock shall be
                                   deemed to refer to the applicable unit or
                                   units of such Exchange Property, including
                                   any New Stock or Reference Basket Stock,
                                   unless the context otherwise requires. The
                                   New Stock Exchange Ratio(s) or Basket Stock
                                   Exchange Ratios resulting from any
                                   Reorganization Event described in paragraph 5
                                   above or similar adjustment under paragraph 4
                                   above shall be subject to the adjustments set
                                   forth in paragraphs 1 through 5 hereof.

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

                                      A-17
<PAGE>

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

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

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

                                   The Calculation Agent shall provide
                                   information as to any adjustments to the
                                   Exchange Ratio or to the method of
                                   calculating the amount payable upon exchange
                                   at maturity of the SPARQS made pursuant to
                                   paragraphs 1 through 5 above upon written
                                   request by any holder of this SPARQS.

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

                                      (i) a suspension, absence or material
                                      limitation of trading of Wyeth Stock on
                                      the primary market for Wyeth 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 Wyeth Stock as a
                                      result of which the reported trading
                                      prices for Wyeth Stock during the last
                                      one-half hour preceding the close of the
                                      principal trading session in such market

                                      A-18
<PAGE>

                                      are materially inaccurate; or the
                                      suspension, absence or material limitation
                                      of trading on the primary market for
                                      trading in options contracts related to
                                      Wyeth Stock, if available, during the
                                      one-half hour period preceding the close
                                      of the principal trading session in the
                                      applicable market, in each case as
                                      determined by the Calculation Agent in its
                                      sole discretion; and

                                      (ii) a determination by the Calculation
                                      Agent in its sole discretion that any
                                      event described in clause (i) above
                                      materially interfered with the ability of
                                      the Issuer or any of its affiliates to
                                      unwind or adjust all or a material portion
                                      of the hedge with respect to the SPARQS
                                      due April 1, 2005, Mandatorily
                                      Exchangeable for Shares of Common Stock of
                                      Wyeth.

                                   For purposes of determining whether a Market
                                   Disruption Event has occurred: (i) a
                                   limitation on the hours or number of days of
                                   trading shall not constitute a Market
                                   Disruption Event if it results from an
                                   announced change in the regular business
                                   hours of the relevant exchange, (ii) a
                                   decision to permanently discontinue trading
                                   in the relevant options contract shall not
                                   constitute a Market Disruption Event, (iii)
                                   limitations pursuant to NYSE Rule 80A (or any
                                   applicable rule or regulation enacted or
                                   promulgated by the NYSE, any other
                                   self-regulatory organization or the
                                   Securities and Exchange Commission of scope
                                   similar to NYSE Rule 80A as determined by the
                                   Calculation Agent) on trading during
                                   significant market fluctuations shall
                                   constitute a suspension, absence or material
                                   limitation of trading, (iv) a suspension of
                                   trading in options contracts on Wyeth Stock
                                   by the primary securities market trading in
                                   such options, if available, by reason of (a)
                                   a price change exceeding limits set by such
                                   securities exchange or market, (b) an
                                   imbalance of orders relating to such
                                   contracts or (c) a disparity in bid and ask
                                   quotes relating to such contracts shall
                                   constitute a suspension, absence or material
                                   limitation of trading in options contracts
                                   related to Wyeth Stock and (v) a suspension,
                                   absence or material limitation of trading on
                                   the primary securities market on which
                                   options contracts related to Wyeth Stock are
                                   traded shall not include any time when such
                                   securities market is itself closed for
                                   trading under ordinary circumstances.

                                      A-19
<PAGE>

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

Treatment of SPARQS for
United States Federal
Income Tax Purposes...........     The Issuer, by its sale of this SPARQS, and
                                   the holder of this SPARQS (and any successor
                                   holder of, or holder of a beneficial interest
                                   in, this SPARQS), by its respective purchase
                                   hereof, agree (in the absence of an
                                   administrative determination or judicial
                                   ruling to the contrary) to characterize each
                                   $         principal amount of this SPARQS for
                                   all tax purposes as an investment unit
                                   consisting of (A) a terminable contract (the
                                   "Terminable Forward Contract") that (i)
                                   requires the holder of this SPARQS (subject
                                   to the Morgan Stanley Call Right) to
                                   purchase, and the Issuer to sell, for an
                                   amount equal to $         (the "Forward
                                   Price"), Wyeth Stock at maturity and (ii)
                                   allows the Issuer, upon exercise of the
                                   Morgan Stanley Call Right, to terminate the
                                   Terminable Forward Contract by returning to
                                   such holder the Deposit (as defined below)
                                   and paying to such holder an amount of cash
                                   equal to the difference between the Deposit
                                   and the Call Price and (B) a deposit with
                                   the Issuer of a fixed amount of cash, equal
                                   to the Issue Price per each $       principal
                                   amount of this SPARQS, to secure the
                                   holder's obligation to purchase Wyeth Stock
                                   pursuant to the Terminable Forward Contract
                                   (the "Deposit"), which

                                      A-20
<PAGE>

                                   Deposit bears a quarterly compounded yield of
                                       % per annum.

                                      A-21
<PAGE>

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

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

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

                                      A-22
<PAGE>

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

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

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

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

                                      A-23
<PAGE>

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

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

                                      A-24
<PAGE>

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

DATED:
                                                      MORGAN STANLEY

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

TRUSTEE'S CERTIFICATE
  OF AUTHENTICATION

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

JPMORGAN CHASE BANK,
  as Trustee

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

                                      A-25
<PAGE>

                              REVERSE OF SECURITY

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

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

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

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

                                      A-26
<PAGE>

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

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

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

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

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

                                      A-27
<PAGE>

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

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

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

                                      A-28
<PAGE>

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

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

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

                                      A-29
<PAGE>

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

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

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

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

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

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

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

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

                                      A-30
<PAGE>

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

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

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

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

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

                                      A-31
<PAGE>

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

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

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

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

                                      A-32
<PAGE>

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

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

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

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

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

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

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

                                      A-33
<PAGE>

                                  ABBREVIATIONS

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

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

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

     Under Uniform Gifts to Minors Act__________________________________________
                                                        (State)

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

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

                                      A-34
<PAGE>

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

---------------------------------------
[PLEASE INSERT SOCIAL SECURITY OR OTHER
     IDENTIFYING NUMBER OF ASSIGNEE]

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

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

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

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

Dated:________________________

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

                                      A-35
<PAGE>

                            OPTION TO ELECT REPAYMENT

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

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

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

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

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

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

                                      A-36FIXED RATE SENIOR NOTE

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

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

                                      A-1
<PAGE>

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

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

                       % PROPELS(SM) DUE DECEMBER 30, 2011
                           BASED ON THE VALUE OF THE
                                S&P 500(R) INDEX

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

Maturity Date..............  December 30, 2011, subject to extension in
                             accordance with the following paragraph in the
                             event of a Market Disruption Event on the final
                             Determination Date for calculating the Average
                             Protected Index Value.

                                      A-2
<PAGE>

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

                             In the event that the final Determination Date is
                             postponed due to a Market Disruption Event or
                             otherwise, the Issuer shall give notice of such
                             postponement as promptly as possible, and in no
                             case later than one Business Day following the
                             scheduled final Determination Date, (i) to the
                             holder of this PROPELS by mailing notice of such
                             postponement by first class mail, postage prepaid,
                             to the holder's last address as it shall appear
                             upon the registry books, (ii) to the Trustee by
                             telephone or facsimile confirmed by mailing such
                             notice to the Trustee by first class mail, postage
                             prepaid, at its New York office and (iii) to The
                             Depository Trust Company (the "Depositary") by
                             telephone or facsimile confirmed by mailing such
                             notice to the Depositary by first class mail,
                             postage prepaid. Any notice that is mailed in the
                             manner herein provided shall be conclusively
                             presumed to have been duly given, whether or not
                             the holder of this PROPELS receives the notice.

Interest Payment Dates.....  Each December 30, beginning December 30, 2004, and
                             the Maturity Date.

                             If the scheduled Maturity Date is postponed due to
                             a Market Disruption Event or otherwise, the Issuer
                             shall pay interest on the Maturity Date as
                             postponed rather than on December 30, 2011, but no
                             interest will accrue on this PROPELS or on such
                             payment during the period from or after the
                             scheduled Maturity Date.

Minimum Denominations......  $

Maturity Redemption Amount.  At maturity, upon delivery of this PROPELS to the
                             Trustee, the Issuer shall pay with respect to each
                             $10 principal amount of this PROPELS an amount in
                             cash equal to $10 plus the Supplemental Redemption
                             Amount, if any, as determined by the Calculation
                             Agent. See "Discontinuance of the S&P 500 Index;
                             Alteration of Method of Calculation" below.

                                      A-3
<PAGE>

                             The Issuer shall, or shall cause the Calculation
                             Agent to, (i) provide written notice to the
                             Trustee and to the Depositary, of the amount of
                             cash to be delivered with respect to each $10
                             principal amount of this PROPELS, on or prior to
                             10:30 a.m. on the Trading Day preceding the
                             Maturity Date (but if such Trading Day is not a
                             Business Day, prior to the close of business on
                             the Business Day preceding the Maturity Date), and
                             (ii) deliver the aggregate cash amount due with
                             respect to this PROPELS to the Trustee for
                             delivery to the Depositary, as holder of this
                             PROPELS, on the Maturity Date.

Supplemental Redemption
Amount.....................  The amount by which (i) the product of (x) $10 and
                             (y) the Index Percent Change exceeds (ii) $       ,
                             which is the total amount of interest payable over
                             the term of the PROPELS, including on the Maturity
                             Date. The Calculation Agent shall calculate the
                             Supplemental Redemption Amount on the final
                             Determination Date.

Index......................  The S&P 500(R) Index (the "S&P 500 Index"),
                             published by Standard and Poor's Corporation
                             ("S&P").

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

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

Initial Index Value........

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

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

                                      A-4
<PAGE>

                             on December 30, 2004 will equal the Index Closing
                             Value on such date.

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

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

Determination Dates........  The Determination Dates shall be the 30th of each
                             December, beginning with December 30, 2004 to and
                             including December 30, 2010, and December 27,
                             2011, in each such case subject to adjustment for
                             Market Disruption Events as described in the two
                             following paragraphs.

                             If any of the first seven scheduled Determination
                             Dates is not a Trading Day or if a Market
                             Disruption Event occurs on any such date, such
                             Determination Date shall be the immediately
                             succeeding Trading Day during which no Market
                             Disruption Event shall have occurred; provided
                             that if a Market Disruption Event has occurred on
                             each of the five Trading Days immediately
                             succeeding any of the first seven Determination
                             Dates, then (i) 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, and (ii) with
                             respect to any such fifth Trading Day on which a
                             Market Disruption Event occurs, the Calculation
                             Agent shall determine the value of the S&P 500
                             Index on such fifth Trading Day in accordance with
                             the formula for calculating the value of the S&P
                             500 Index last in effect prior to the commencement
                             of the Market Disruption Event,

                                      A-5
<PAGE>

                             without rebalancing or substitution, using the
                             closing price (or, if trading in the relevant
                             securities has been materially suspended or
                             materially limited, its good faith estimate of the
                             closing price that would have prevailed but for
                             such suspension or limitation) on such Trading Day
                             of each security most recently comprising the S&P
                             500 Index.

                             If December 27, 2011 (the final scheduled
                             Determination Date) is not a Trading Day or if
                             there is a Market Disruption Event on such day,
                             the final Determination Date shall be the
                             immediately succeeding Trading Day during which no
                             Market Disruption Event shall have occurred.

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

Market Disruption Event....  "Market Disruption Event" means, with respect to
                             the S&P 500 Index, a suspension, absence or
                             material limitation of trading of stocks then
                             constituting 20 percent or more of the value of
                             the S&P 500 Index on the Relevant Exchanges for
                             such securities for more than two hours of trading
                             or during the one-half hour period preceding the
                             close of the principal trading session on such
                             Relevant Exchange; or a breakdown or failure in
                             the price and trade reporting systems of any
                             Relevant Exchange as a result of which the
                             reported trading prices for stocks then
                             constituting 20 percent or more of the value of
                             the S&P 500 Index during the last one-half hour
                             preceding the close of the principal trading
                             session on such Relevant Exchange are materially
                             inaccurate; or the suspension, absence or material
                             limitation of trading on the primary securities
                             market for trading in futures or options contracts
                             related to the S&P 500 Index for more than two
                             hours of trading or during the one-half hour
                             period preceding the close of the principal
                             trading session on such market, in

                                      A-6
<PAGE>

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

                             For the purpose of determining whether a Market
                             Disruption Event exists at any time, if trading in
                             a security included in the S&P 500 Index is
                             materially suspended or materially limited at that
                             time, then the relevant percentage contribution of
                             that security to the value of the S&P 500 Index
                             shall be based on a comparison of (x) the portion
                             of the value of the S&P 500 Index attributable to
                             that security relative to (y) the overall value of
                             the S&P 500 Index, in each case immediately before
                             that suspension or limitation.

                             For purposes of determining whether a Market
                             Disruption Event has occurred: (i) a limitation on
                             the hours or number of days of trading shall not
                             constitute a Market Disruption Event if it results
                             from an announced change in the regular business
                             hours of the relevant exchange or market, (ii) a
                             decision to permanently discontinue trading in the
                             relevant futures or options contract shall not
                             constitute a Market Disruption Event, (iii)
                             limitations pursuant to the rules of any Relevant
                             Exchange similar to NYSE Rule 80A (or any
                             applicable rule or regulation enacted or
                             promulgated by any other self-regulatory
                             organization or any government agency of scope
                             similar to NYSE Rule 80A as determined by the
                             Calculation Agent) on trading during significant
                             market fluctuations shall constitute a suspension,
                             absence or material limitation of trading, (iv) a
                             suspension of trading in futures or options
                             contracts on the S&P 500 Index by the primary
                             securities market trading in such contracts by
                             reason of (a) a price change exceeding limits set
                             by such exchange or market, (b) an imbalance of
                             orders relating to such contracts or (c) a
                             disparity in bid and ask quotes relating to such
                             contracts shall constitute a suspension, absence
                             or material limitation of trading in futures or
                             options contracts related to the S&P 500 Index and
                             (v) a "suspension, absence or material limitation
                             of trading" on any Relevant Exchange or on the
                             primary market on which futures or options
                             contracts related to the S&P 500 Index are traded
                             shall not include any time

                                      A-7
<PAGE>

                             when such market is itself closed for trading
                             under ordinary circumstances.

Relevant Exchange..........  "Relevant Exchange" means the primary exchange or
                             market of trading for any security then included
                             in the S&P 500 Index or any Successor Index.

Alternate Exchange
Calculation in Case of
an Event of Default........  In case an event of default with respect to this
                             PROPELS shall have occurred and be continuing, the
                             amount declared due and payable for each $10
                             principal amount of this PROPELS upon any
                             acceleration of this PROPELS (the "Acceleration
                             Amount") shall be determined by the Calculation
                             Agent and shall be equal to (i) accrued but unpaid
                             interest to but excluding the date of acceleration
                             plus (ii) the Maturity Redemption Amount
                             determined (A) as though the Index Closing Value
                             for any Determination Date scheduled to occur on
                             or after such date of acceleration were the Index
                             Closing Value on the date of acceleration and (B)
                             by subtracting       , the total amount of interest
                             that would have been payable over the term of this
                             PROPELS notwithstanding the acceleration of this
                             PROPELS, from the product of (x) $10 and (y) the
                             Index Percent Change to determine the Supplemental
                             Redemption Amount.

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

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

                             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

                                      A-8
<PAGE>

                             all purposes and binding on the holder of this
                             PROPELS, the Trustee and the Issuer.

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

Discontinuance of the
S&P 500 Index; Alteration
of Method of Calculation     If S&P discontinues publication of the S&P 500
                             Index and S&P or another entity publishes a
                             successor or substitute index that MS & Co., as
                             the Calculation Agent, determines, in its sole
                             discretion, to be comparable to the discontinued
                             S&P 500 Index (such index being referred to herein
                             as a "Successor Index"), then any subsequent Index
                             Closing Value shall be determined by reference to
                             the value of such Successor Index at the regular
                             official weekday close of the principal trading
                             session of the relevant exchange or market for the
                             Successor Index on the date that any Index Closing
                             Value is to be determined.

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

                             If S&P discontinues publication of the S&P 500
                             Index prior to, and such discontinuance is
                             continuing on, the date that any Index Closing
                             Value is to be determined and MS & Co., as the
                             Calculation Agent, determines that no Successor
                             Index is available at such time, then, on such
                             date, the Calculation Agent shall determine the
                             S&P 500 Index Closing Value in accordance with the

                                      A-9
<PAGE>

                             formula for calculating the S&P 500 Index last in
                             effect prior to such discontinuance, without
                             rebalancing or substitution, using the closing
                             price (or, if trading in the relevant securities
                             has been materially suspended or materially
                             limited, its good faith estimate of the closing
                             price that would have prevailed but for such
                             suspension or limitation) at the close of the
                             principal trading session on such date of each
                             security most recently comprising the S&P 500
                             Index on the Relevant Exchange.

                             If at any time the method of calculating the S&P
                             500 Index or a Successor Index, or the value
                             thereof, is changed in a material respect, or if
                             the S&P 500 Index or a Successor Index is in any
                             other way modified so that such index does not, in
                             the opinion of MS & Co., as the Calculation Agent,
                             fairly represent the value of the S&P 500 Index or
                             such Successor Index had such changes or
                             modifications not been made, then, from and after
                             such time, the Calculation Agent shall, at the
                             close of business in New York City on each date on
                             which the Index Closing Value is to be determined,
                             make such calculations and adjustments as, in the
                             good faith judgment of the Calculation Agent,
                             shall be necessary in order to arrive at a value
                             of a stock index comparable to the S&P 500 Index
                             or such Successor Index, as the case may be, as if
                             such changes or modifications had not been made,
                             and the Calculation Agent shall determine the
                             Average Protected Index Value with reference to
                             the S&P 500 Index or such Successor Index, as
                             adjusted. Accordingly, if the method of
                             calculating the S&P 500 Index or a Successor Index
                             is modified so that the value of such index is a
                             fraction of what it would have been if it had not
                             been modified (e.g., due to a split in the index),
                             then the Calculation Agent shall adjust such index
                             in order to arrive at a value of the S&P 500 Index
                             or such Successor Index as if it had not been
                             modified (i.e., as if such split had not
                             occurred).

                                      A-10
<PAGE>

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

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

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

                                      A-11
<PAGE>

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

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

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

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

                                      A-12
<PAGE>

Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the
quoting dealer of the Specified Currency for U.S. dollars for settlement on
such payment date in the amount of the Specified Currency payable in the
absence of such an election to such holder and at which the applicable dealer
commits to execute a contract. If such bid quotations are not available, such
payment will be made in the Specified Currency. All currency exchange costs
will be borne by the holder of this Note by deductions from such payments.

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

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

                                      A-13
<PAGE>

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

DATED: March   , 2004
                                            MORGAN STANLEY

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

TRUSTEE'S CERTIFICATE
   OF AUTHENTICATION

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

JPMORGAN CHASE BANK,
    as Trustee

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

                                      A-14
<PAGE>

                              REVERSE OF SECURITY

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

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

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

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

                                      A-15
<PAGE>

the holder hereof at a price equal to 100% of the principal amount to be
repaid, together with interest accrued and unpaid hereon to the date of
repayment, provided that if this Note is issued with original issue discount,
this Note will be repayable on the applicable Optional Repayment Date or Dates
at the price(s) specified on the face hereof. For this Note to be repaid at the
option of the holder hereof, the Paying Agent must receive at its corporate
trust office in the Borough of Manhattan, The City of New York, at least 15 but
not more than 30 calendar days prior to the date of repayment, (i) this Note
with the form entitled "Option to Elect Repayment" below duly completed or (ii)
a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc. or a commercial bank or a trust company in the United States setting forth
the name of the holder of this Note, the principal amount hereof, the
certificate number of this Note or a description of this Note's tenor and
terms, the principal amount hereof to be repaid, a statement that the option to
elect repayment is being exercised thereby and a guarantee that this Note,
together with the form entitled "Option to Elect Repayment" duly completed,
will be received by the Paying Agent not later than the fifth Business Day
after the date of such telegram, telex, facsimile transmission or letter;
provided, that such telegram, telex, facsimile transmission or letter shall
only be effective if this Note and form duly completed are received by the
Paying Agent by such fifth Business Day. Exercise of such repayment option by
the holder hereof shall be irrevocable. In the event of repayment of this Note
in part only, a new Note or Notes for the amount of the unpaid portion hereof
shall be issued in the name of the holder hereof upon the cancellation hereof.

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

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

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

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

                                      A-16
<PAGE>

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

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

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

     The Senior Indenture provides that (a) if an Event of Default (as defined
in the Senior Indenture) due to the default in payment of principal of,
premium, if any, or interest on, any series

                                      A-17
<PAGE>

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

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

     If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption (except that if this Note is subject to "Modified Payment upon
Acceleration or Redemption," such redemption price would be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual

                                      A-18
<PAGE>

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

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

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

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

                                      A-19
<PAGE>

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

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

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

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

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

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

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

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

                                      A-20
<PAGE>

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

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

                                      A-21
<PAGE>

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

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

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

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

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

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

     No recourse shall be had for the payment of the principal of, premium, if
any, or the interest on this Note, for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Senior Indenture or any
indenture supplemental thereto, against any incorporator, shareholder,

                                      A-22
<PAGE>

officer or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.

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

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

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

                                      A-23
<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-24
<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-25
<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-26

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00063-of-00352.parquet"}]]