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 NOTE, SERIES C

                PERFORMANCE LEVERAGED UPSIDE SECURITIES ("PLUS")

                            PLUS DUE JANUARY 30, 2006
                            MANDATORILY EXCHANGEABLE
                      FOR AN AMOUNT PAYABLE IN U.S. DOLLARS
                    BASED ON THE VALUE OF THE S&P 500(R)INDEX

<TABLE>
-------------------------------------------------------------------------------------------------------
<S>                        <C>                      <C>                     <C>
ORIGINAL ISSUE DATE:       INITIAL REDEMPTION       INTEREST RATE: None     MATURITY DATE:
                               DATE: N/A                                        See "Maturity Date"
                                                                                below.
-------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL           INITIAL REDEMPTION       INTEREST PAYMENT        OPTIONAL REPAYMENT
    DATE: N/A                  PERCENTAGE: N/A          DATES: N/A              DATE(S):  N/A
-------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY:        ANNUAL REDEMPTION        INTEREST PAYMENT        APPLICABILITY OF
    U.S. dollars               PERCENTAGE               PERIOD: N/A            MODIFIED PAYMENT UPON
                               REDUCTION: N/A                                   ACCELERATION: See
                                                                                "Alternate Exchange
                                                                                Calculation in Case of
                                                                                an Event of Default"
                                                                                below.
-------------------------------------------------------------------------------------------------------
IF SPECIFIED               REDEMPTION NOTICE        APPLICABILITY OF        If yes, state Issue Price:
    CURRENCY OTHER            PERIOD: N/A              ANNUAL INTEREST         N/A
    THAN U.S. DOLLARS,                                 PAYMENTS: N/A
    OPTION TO ELECT
    PAYMENT IN U.S.
    DOLLARS: N/A
-------------------------------------------------------------------------------------------------------
EXCHANGE RATE              TAX REDEMPTION                                   ORIGINAL YIELD TO
   AGENT: N/A                  AND PAYMENT OF                                  MATURITY: N/A
                               ADDITIONAL
                               AMOUNTS: N/A
-------------------------------------------------------------------------------------------------------
OTHER PROVISIONS:          If yes, state Initial
   See below               Offering Date: N/A
-------------------------------------------------------------------------------------------------------
</TABLE>

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

Maturity Date............    January 30, 2006, subject to extension in the event
                             of a Market Disruption Event on the scheduled Index
                             Valuation Date (as defined below).

                                      A-2
<PAGE>

                             If due to a Market Disruption Event or otherwise,
                             the Index Valuation 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 the
                             Index Valuation Date as postponed. See "Index
                             Valuation Date" below.

                             In the event that the Maturity Date of the PLUS is
                             postponed due to postponement of any Index
                             Valuation Date as described in the immediately
                             preceding paragraph, the Issuer shall give notice
                             of such postponement and, once it has been
                             determined, of the date to which the Maturity Date
                             has been rescheduled (i) to the holder of this PLUS
                             by mailing notice of such postponement by first
                             class mail, postage prepaid, to the holder's last
                             address as it shall appear upon the registry books,
                             (ii) to the Trustee by telephone or facsimile
                             confirmed by mailing such notice to the Trustee by
                             first class mail, postage prepaid, at its New York
                             office and (iii) to The Depository Trust Company
                             (the "Depositary") by telephone or facsimile
                             confirmed by mailing such notice to the Depositary
                             by first class mail, postage prepaid. Any notice
                             that is mailed in the manner herein provided shall
                             be conclusively presumed to have been duly given,
                             whether or not the holder of this PLUS receives the
                             notice. The Issuer shall give such notice as
                             promptly as possible, and in no case later than (i)
                             with respect to notice of postponement of the
                             Maturity Date, the Business Day immediately
                             following January 28, 2006, and (ii) with respect
                             to notice of the date to which the Maturity Date
                             has been rescheduled, the Business Day immediately
                             following the actual Index Valuation Date for
                             determining the Final Index Value (as defined
                             below).

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

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

                                      A-3
<PAGE>

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

Leveraged Upside
Payment..................    The product of (i) $10 and (ii) 200% and (iii) the
                             Index Percent Increase (as defined below).

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

Index Percent Increase...    A fraction, the numerator of which is the Final
                             Index Value minus the Initial Index Value and the
                             denominator of which is the Initial Index Value.

Index Performance Factor.    A fraction, the numerator of which is the Final
                             Index Value and the denominator of which is the
                             Initial Index Value.

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

Index Valuation Date.....    The Index Valuation Date will be the second
                             scheduled Trading Day prior to the Maturity Date,
                             subject to adjustment for Market Disruption Events
                             as described in the following paragraph.

                             If there is a Market Disruption Event on the
                             scheduled Index Valuation Date, the Index Valuation
                             Date will be the immediately succeeding Trading Day
                             during which no Market Disruption Event shall have
                             occurred.

Initial Index Value......

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

                                      A-4
<PAGE>

                             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."

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.

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

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

                             All calculations with respect to the Payment at
                             Maturity, if any, will 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
                             PLUS will be rounded to the nearest ten-thousandth,
                             with five one hundred-thousandths rounded upward
                             (e.g., .76545 would be rounded up to .7655); and
                             all dollar amounts paid on the aggregate number of
                             PLUS will be rounded to the nearest cent, with
                             one-half cent rounded upward.

Market Disruption Event..    "Market Disruption Event" means, with respect to
                             the S&P 500 Index:

                                  (i) the occurrence or existence of a
                                  suspension, absence or material limitation of
                                  trading of stocks then constituting 20 percent
                                  or more of the level of the S&P 500 Index (or
                                  the Successor Index) on the Relevant Exchanges
                                  for such securities for more than two hours of
                                  trading or during the one-half hour period
                                  preceding the close of the principal trading
                                  session on such Relevant Exchange; or a
                                  breakdown or failure in the price and trade
                                  reporting systems of any Relevant

                                      A-5
<PAGE>

                                  Exchange as a result of which the reported
                                  trading prices for stocks then constituting 20
                                  percent or more of the level of the S&P 500
                                  Index (or the Successor Index) during the last
                                  one-half hour preceding the close of the
                                  principal trading session on such Relevant
                                  Exchange are materially inaccurate; or the
                                  suspension, material limitation or absence of
                                  trading on any major U.S. securities market
                                  for trading in futures or options contracts or
                                  exchange traded funds related to the S&P 500
                                  Index (or the Successor Index) for more than
                                  two hours of trading or during the one-half
                                  hour period preceding the close of the
                                  principal trading session on such market, in
                                  each case as determined by the Calculation
                                  Agent in its sole discretion; and

                                  (ii) a determination by the Calculation Agent
                                  in its sole discretion that any event
                                  described in clause (i) above materially
                                  interfered with the ability of Morgan Stanley
                                  or any of its affiliates to unwind or adjust
                                  all or a material portion of the hedge
                                  position with respect to the PLUS.

                             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 level 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 the purpose of determining whether a Market
                             Disruption Event has occurred: (1) a limitation on
                             the hours or number of days of trading will not
                             constitute a Market Disruption Event if it results
                             from an announced change in the regular business
                             hours of the relevant exchange or market, (2) a
                             decision to permanently discontinue trading in the
                             relevant futures or options contract or exchange
                             traded fund will not constitute a Market Disruption
                             Event, (3) limitations pursuant to the rules of any
                             Relevant Exchange similar to NYSE Rule 80A (or any

                                      A-6
<PAGE>

                             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 will constitute a suspension,
                             absence or material limitation of trading, (4) a
                             suspension of trading in futures or options
                             contracts on the S&P 500 Index by the primary
                             securities market trading in such contracts by
                             reason of (a) a price change exceeding limits set
                             by such 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 will constitute a suspension,
                             absence or material limitation of trading in
                             futures or options contracts related to the S&P 500
                             Index and (5) a "suspension, absence or material
                             limitation of trading" on any Relevant Exchange or
                             on the primary market on which futures or options
                             contracts related to the S&P 500 Index are traded
                             will not include any time when such securities
                             market is itself closed for trading under ordinary
                             circumstances.

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

Alternate Exchange
Calculation in Case
of an Event of Default...    In case an event of default with respect to the
                             PLUS shall have occurred and be continuing, the
                             amount declared due and payable for each $10
                             principal amount of this PLUS upon any acceleration
                             of this PLUS shall be determined by the Calculation
                             Agent and shall be an amount in cash equal to the
                             Payment at Maturity calculated using the Index
                             Value as of the date of such acceleration as the
                             Final Index Value.

                             If the maturity of the PLUS is accelerated because
                             of an event of default as described above, the
                             Issuer shall, or shall cause the Calculation Agent
                             to, provide written notice to the Trustee at its
                             New York office, on which notice the Trustee may
                             conclusively rely, and to the Depositary of the
                             aggregate cash amount due with respect to each $10
                             principal amount of this PLUS as promptly as
                             possible and in no event later than two Business
                             Days after the date of acceleration.

                                      A-7
<PAGE>

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 will be determined by reference to
                             the value of such Successor Index at the regular
                             official weekday close of the principal trading
                             session of the NYSE, the AMEX, the Nasdaq National
                             Market or the Relevant Exchange or market for the
                             Successor Index on the date that any Index Closing
                             Value is to be determined.

                             Upon any selection by the Calculation Agent of a
                             Successor Index, the Calculation Agent will cause
                             written notice thereof to be furnished to the
                             Trustee, to Morgan Stanley and to DTC, as holder of
                             the PLUS, within three Trading Days of such
                             selection. We expect that such notice will be
                             passed on to you, as a beneficial owner of the
                             PLUS, in accordance with the standard rules and
                             procedures of DTC and its direct and indirect
                             participants.

                             If S&P discontinues publication of the S&P 500
                             Index prior to, and such discontinuance is
                             continuing on, the Index Valuation Date and MS &
                             Co., as the Calculation Agent, determines, in its
                             sole discretion, that no Successor Index is
                             available at such time, then the Calculation Agent
                             will determine the Index Closing Value for such
                             date. The Index Closing Value will be computed by
                             the Calculation Agent in accordance with the
                             formula for calculating the S&P 500 Index last in
                             effect prior to such discontinuance, using the
                             closing price (or, if trading in the relevant
                             securities has been materially suspended or
                             materially limited, its good faith estimate of the
                             closing price that would have prevailed but for
                             such suspension or limitation) at the close of the
                             principal trading session of the Relevant Exchange
                             on such date of each security most recently
                             comprising the S&P 500 Index without any
                             rebalancing or substitution of such securities
                             following such discontinuance. Notwithstanding
                             these alternative arrangements,

                                      A-8
<PAGE>

                             discontinuance of the publication of the S&P 500
                             Index may adversely affect the value of the PLUS.

                             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 will, at the close
                             of business in New York City on the date on which
                             the Index Closing Value is to be determined, make
                             such calculations and adjustments as, in the good
                             faith judgment of the Calculation Agent, may be
                             necessary in order to arrive at a 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 will calculate the Final Index
                             Value and the Initial Index Value with reference to
                             the S&P 500 Index or such Successor Index, as
                             adjusted. Accordingly, if the method of calculating
                             the S&P 500 Index or a Successor Index is modified
                             so that the value of such index is a fraction of
                             what it would have been if it had not been modified
                             (e.g., due to a split in the index), then the
                             Calculation Agent will adjust such index in order
                             to arrive at a value of the S&P 500 Index or such
                             Successor Index as if it had not been modified
                             (e.g., as if such split had not occurred).

                                      A-9
<PAGE>

Treatment of PLUS for
United States Federal
Income Tax Purposes......    The Issuer, by its sale of this PLUS, and the
                             holder of this PLUS (and any successor holder of,
                             or holder of a beneficial interest in, this PLUS),
                             by its respective purchase hereof, agree (in the
                             absence of an administrative determination or
                             judicial ruling to the contrary) to characterize
                             each $10 principal amount of this PLUS for all tax
                             purposes as a single financial contract with
                             respect to the S&P 500 Index that (i) requires the
                             holder of this PLUS to pay to the Issuer at
                             inception an amount equal to $10 and (ii) entitles
                             the holder to receive at maturity an amount in cash
                             based upon the performance of the S&P 500 Index.

                                      A-10
<PAGE>

     Morgan Stanley (formerly known as Morgan Stanley Dean Witter & Co.), a
Delaware corporation (together with its successors and assigns, the "Issuer"),
for value received, hereby promises to pay to CEDE & Co., or registered
assignees, the 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 on the Maturity Date (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 shall 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 shall 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 shall, 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) shall 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, shall 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, shall 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-11
<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 shall 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
shall 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) shall 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) shall convert such payments into U.S. dollars. In
the event of such an election, payment in respect of this Note shall be based
upon the exchange rate as determined by the Exchange Rate Agent based on the
highest bid quotation in The City of New York received by such Exchange Rate
Agent at approximately 11:00 a.m., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign exchange
dealers (one of which may be the Exchange Rate Agent unless such Exchange Rate
Agent is an affiliate of the Issuer) for the purchase by the quoting dealer of
U.S. dollars for the Specified Currency of 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 shall
be made in the Specified Currency. All currency exchange costs shall be borne by
the holder of this Note by deductions from such payments.

                                      A-12
<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-13
<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-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 shall 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, shall 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 shall 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 shall 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 shall be repayable in whole or in part in increments
of $1,000 or, if this Note is denominated in a Specified Currency other than
U.S. dollars, in increments of 1,000 units of such Specified Currency (provided
that any remaining principal amount hereof shall not be less than the minimum
authorized denomination hereof) at the option of the holder hereof at a price
equal to 100% of the principal amount to be repaid, together with interest
accrued and unpaid hereon to the date of repayment, provided that if this Note
is issued with original

                                      A-15
<PAGE>

issue discount, this Note shall 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, shall 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 shall 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 shall be computed and paid on
the basis of a 360 day year of twelve 30 day months.

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

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

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

                                      A-16
<PAGE>

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

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

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

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

                                      A-17
<PAGE>

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

     If the face hereof indicates that this Note is subject to "Modified Payment
upon Acceleration and 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 shall become obligated to pay Additional Amounts, as defined
below, with respect to this Note as described below. Prior to the giving of any
notice of redemption pursuant to this paragraph, the Issuer shall deliver to the
Trustee (i) a certificate stating that the Issuer is entitled to effect such

                                      A-18
<PAGE>

redemption and setting forth a statement of facts showing that the conditions
precedent to the right of the Issuer to so redeem have occurred, and (ii) an
opinion of independent legal counsel satisfactory to the Trustee to such effect
based on such statement of facts; provided that no such notice of redemption
shall be given earlier than 60 calendar days prior to the earliest date on which
the Issuer would be obligated to pay such Additional Amounts if a payment in
respect of this Note were then due.

     Notice of redemption shall 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 shall 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 shall, 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, shall not be less than the amount provided for in this Note to be then
due and payable. The Issuer shall not, however, be required to 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 the holder of this Note for payment on a date more than 15
     calendar days after the date on which such payment became due and payable
     or the date on which payment thereof is duly provided for, whichever occurs
     later;

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

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

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

                                      A-19
<PAGE>

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

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

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

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

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

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

                                      A-20
<PAGE>

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

     Except as set forth below, if the principal of, premium, if any, or
interest on this Note is payable in a Specified Currency other than U.S. dollars
and such Specified Currency is not available to the Issuer for making payments
hereon due to the imposition of exchange controls or other circumstances beyond
the control of the Issuer or is no longer used by the government of the country
issuing such currency or for the settlement of transactions by public
institutions within the international banking community, then the Issuer shall
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 shall 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 shall 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 shall 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 shall not be obligated to withhold or deduct tax

                                      A-21
<PAGE>

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

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

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

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

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

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

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

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

                                      A-22
<PAGE>

                                  ABBREVIATIONS

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

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

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

     Under Uniform Gifts to Minors Act
                                       ---------------------------
                                                 (State)

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

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

                                      A-23
<PAGE>

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

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

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

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

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

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

Dated:
       -------------------

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

                                      A-24
<PAGE>

                            OPTION TO ELECT REPAYMENT

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

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

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

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

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

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

                                      A-25<PAGE>

                                                                   EXHIBIT 10.26

                                    AMENDMENT

            AMENDMENT (this "Amendment"), dated as of August 5, 2003, to that
certain Financing Agreement, dated as of August 7, 2002 (as amended from time to
time, the "Financing Agreement"), by and among TransTechnology Corporation
("TransTechnology"), NORCO, Inc. (n/k/a TT Connecticut Corporation) ("TTC"), TCR
Corporation (n/k/a TT Minnesota Corporation)("TTM") and The CIT Group/Business
Credit, Inc. ("CIT").

                                   WITNESSETH:

            WHEREAS, TransTechnology has requested that CIT amend certain
covenant levels and amend other provisions of the Financing Agreement as set
forth below, and CIT is willing to do so on the terms and conditions hereafter
set forth.

            NOW, THEREFORE, the parties hereto hereby agree as follows:

            1.    Defined Terms.

            All capitalized terms not otherwise defined herein shall have the
meanings given to them in the Financing Agreement.

            2.    Amendments to the Financing Agreement.

            From and after the date this Amendment becomes effective in
accordance with Section 4 below:

            (a)   (i) Notwithstanding the first paragraph of the Financing
Agreement, as used in the Financing Agreement each of "Company" and "Companies"
shall mean TransTechnology and TTC only, and (ii) TTM (x) shall have no further
obligations to CIT under the Financing Agreement and each of the other Loan
Documents, and (y) shall be authorized to file termination statements with
respect to any and all financing statements previously filed by CIT naming TTM
as debtor in connection with the Financing Agreement.

            (b)   The definition of "Applicable Margin" set forth in Paragraph
1.01 of the Financing Agreement is amended and restated in its entirety to read
as follows:

            "APPLICABLE MARGIN shall mean, with respect to Revolving Loans, one
            percent (1%) during such time as such loan is a Chase Bank Rate Loan
            and three and one-quarter percent (3.25%) during such time as such
            loan is a LIBOR Loan."

            (c)   The definition of "Early Termination Date" set forth in
Paragraph 1.01 of the Financing Agreement is amended and restated in its
entirety as follows:

            "EARLY TERMINATION DATE shall mean the date on which this Financing
            Agreement is terminated pursuant to Section 11."

<PAGE>

            (d)   The definition of "Early Termination Fee" set forth in
Paragraph 1.01 of the Financing Agreement is amended and restated in its
entirety as follows:

            "EARLY TERMINATION FEE shall: (a) mean the fee CIT is entitled to
            charge the Companies or any one of them upon the termination of the
            Revolving Line of Credit or this Financing Agreement; and (b) be
            determined by multiplying the Revolving Line of Credit by two
            percent (2%)."

            (e)   The definition of "Revolving Line of Credit" set forth in
Paragraph 1.01 of the Financing Agreement is amended and restated in its
entirety as follows:

            "REVOLVING LINE OF CREDIT shall mean the aggregate commitment of CIT
            to make loans and advances pursuant to Section 3 of this Financing
            Agreement and issue Letters of Credit Guaranties pursuant to Section
            5 hereof to Parent, in the aggregate amount of $8,000,000."

            (f)   Paragraph 3.1 of the Financing Agreement is amended and
restated in its entirety to read as follows:

            "3.1 CIT agrees, subject to the terms and conditions of this
            Financing Agreement, from time to time, and within (x) Availability,
            (y) Aggregate Availability and (z) the Revolving Line of Credit (but
            subject to CIT's right in its sole discretion to make Overadvances),
            to make loans and advances to Parent on a revolving basis (i.e.,
            subject to the limitations set forth herein, Parent may borrow,
            repay and re-borrow Revolving Loans). Such loans and advances shall
            be in amounts not to exceed Parent's Borrowing Base, and shall not
            in the aggregate exceed the Aggregate Borrowing Base. All requests
            for loans and advances must be received by an officer of CIT no
            later than (i) 1:00 p.m., New York time, of the Business Day on
            which any such Chase Bank Rate Loans and advances are required or
            (ii) three Business Days prior to any requested LIBOR Loan;
            provided, however, that in the event that after giving effect to the
            making of a requested loan and advance, the principal amount of
            outstanding Revolving Loans would exceed ten percent (10%) of the
            Aggregate Borrowing Base, (i) such request must be received at least
            three Business Days prior to the requested Revolving Loan, and (ii)
            CIT shall be entitled to perform a field audit of the Collateral at
            Parent's expense in accordance with Paragraph 8.8. Should CIT for
            any reason honor requests for Overadvances, any such Overadvances
            shall be made in CIT's sole discretion and subject to any additional
            terms CIT deems necessary."

            (g)   Paragraph 7.20 of the Financing Agreement is amended and
restated in its entirety to read as follows:

                                        2
<PAGE>

            "7.20 Until termination of the Financing Agreement and payment and
            satisfaction in full of all Obligations hereunder, Parent, on a
            consolidated basis, shall:

            (a)   Not permit EBITDA for the applicable period ending on each
            date set forth below, to be less than the applicable amount set
            forth below for the applicable period:

<TABLE>
<CAPTION>
               PERIOD                                         EBITDA
-----------------------------------------------------------------------
<S>                                                         <C>
Three Months Ending June 30, 2003                           $ 3,966,000
-----------------------------------------------------------------------
Four Months Ending July 31, 2003                            $ 4,493,000
-----------------------------------------------------------------------
Five Months Ending August 31, 2003                          $ 5,293,000
-----------------------------------------------------------------------
Six Months Ending September 30, 2003                        $ 6,833,000
-----------------------------------------------------------------------
Seven Months Ending October 31, 2003                        $ 7,712,000
-----------------------------------------------------------------------
Eight Months Ending November 30, 2003                       $ 8,838,000
-----------------------------------------------------------------------
Nine Months Ending December 31, 2003                        $ 9,602,000
-----------------------------------------------------------------------
Ten Months Ending January 31, 2004                          $10,213,000
</TABLE>

            (b)   Not permit the Fixed Charges Coverage Ratio for the applicable
            period ending on each date set forth below, to be less than the
            ratio set forth below for the applicable period:

<TABLE>
<CAPTION>
               PERIOD                                          RATIO
-----------------------------------------------------------------------
<S>                                                           <C>
Three Months Ending June 30, 2003                             2.02:1.00
-----------------------------------------------------------------------
Four Months Ending July 31, 2003                              1.71:1.00
-----------------------------------------------------------------------
Five Months Ending August 31, 2003                            1.56:1.00
-----------------------------------------------------------------------
Six Months Ending September 30, 2003                          1.71:1.00
-----------------------------------------------------------------------
Seven Months Ending October 31, 2003                          1.56:1.00
-----------------------------------------------------------------------
Eight Months Ending November 30, 2003                         1.59:1.00
-----------------------------------------------------------------------
Nine Months Ending December 31, 2003                          1.51:1.00
-----------------------------------------------------------------------
Ten Months Ending January 31, 2004                            1.46:1.00
</TABLE>

            (c)   Contract for, purchase, make expenditures for, lease pursuant
            to a Capital Lease or otherwise incur obligations with respect to
            Capital Expenditures

                                        3
<PAGE>

            (whether subject to a security interest or otherwise) for the period
            beginning June 1, 2003 and ending January 31, 2004, in excess of
            $1,300,000."

            (h)   Paragraph 8.7 of the Financing Agreement is amended and
restated in its entirety as follows:

            "8.7 On the Closing Date and each anniversary of the Closing Date
            thereafter, Parent shall pay to CIT the Administrative Management
            Fee in the amount of $50,000.00, which shall be deemed fully earned
            when paid. In addition, on June 1, 2003 and on the first day of each
            month thereafter, Parent shall pay CIT an additional administrative
            fee in the amount of $2,000, which shall be deemed fully earned when
            paid."

            (i)   Paragraph 8.8 of the Financing Agreement is amended by
deleting "$750" in the first sentence thereof and replacing it with "$850".

            (j)   Section 11 of the Financing Agreement is amended and restated
in its entirety to read as follows:

            "SECTION 11. TERMINATION

            This Financing Agreement shall terminate on January 31, 2004.
            Notwithstanding the foregoing, CIT may terminate this Financing
            Agreement immediately upon the occurrence of an Event of Default,
            provided, however, that if the Event of Default is an event listed
            in Paragraph 10.1(c) of Section 10 of this Financing Agreement, this
            Financing Agreement shall terminate in accordance with Paragraph
            10.2 of Section 10, and provided further that this Financing
            Agreement shall automatically terminate on the day that is six
            months prior to the maturity date of the Subordinated Notes. Parent
            may terminate this Financing Agreement at any time upon five (5)
            days' prior written notice to CIT. Upon the termination of this
            Financing Agreement, whether by CIT, Parent or on January 31, 2004
            pursuant to the terms hereof, Parent shall pay to CIT immediately as
            of such termination the Early Termination Fee. All Obligations shall
            become due and payable as of any termination hereunder or under
            Section 10 hereof and, pending a final accounting, CIT may withhold
            any balances in Parent's accounts (unless supplied with an indemnity
            satisfactory to CIT) to cover all of the Obligations, whether
            absolute or contingent, including, but not limited to, cash reserves
            for any contingent Obligations, including an amount of 110% of the
            face amount of any outstanding Letters of Credit with an expiry date
            on, or within thirty (30) days of the effective date of termination
            of this Financing Agreement. All of CIT's rights, Liens and security
            interests shall continue after any termination until all Obligations
            have been paid and satisfied in full."

                                        4
<PAGE>

            3.    Amended and Restated Note.

            TransTechnology shall deliver to CIT an Amended and Restated
Revolving Loan Promissory Note (the "Amended Note"), in the form attached hereto
as Exhibit A, duly executed by TransTechnology, which Amended Note will amend
(to the extent set forth therein) and restate the Revolving Loan Promissory Note
(dated August 7, 2002), and will be issued in substitution of and exchange for,
but not in payment of, such Revolving Loan Promissory Note. Following CIT's
receipt of the Amended Note, CIT will return to TransTechnology for cancellation
the original Revolving Loan Promissory Note and the previously satisfied Term
Loan Promissory Note, provided, however, that if such promissory notes are
unavailable, CIT will instead deliver to TransTechnology an affidavit of loss
with respect to such promissory notes. From and after the date this Amendment
becomes effective in accordance with Section 4 hereof, the Amended Note will be
deemed to be the "Revolving Loan Promissory Note" referred to in the Financing
Agreement for all purposes therein.

            4.    Conditions to Effectiveness.

            (a)   This Amendment shall become effective as of the date when (i)
TransTechnology, TTC and TTM shall have executed and delivered to CIT this
Amendment, (ii) CIT shall have executed the same, (iii) TransTechnology shall
have executed and delivered to CIT the Amended Note, and (iv) TransTechnology
shall have paid CIT the fee required under Section 4(b) below.

            (b)   TransTechnology shall pay to CIT a non-refundable amendment
fee equal to $50,000, payable to CIT on the date hereof, in accordance with the
provisions of Section 8.9 of the Financing Agreement.

            5.    General.

            (a)   Representations and Warranties. To induce CIT to enter into
this Amendment, TransTechnology, TTC and TTM, jointly and severally, hereby
represent and warrant to CIT that as of the date hereof:

                  (i)   Each of TransTechnology, TTC and TTM has the requisite
      corporate power and authority, and the legal right, to make, deliver and
      perform this Amendment and to perform the Loan Documents, as amended by
      this Amendment, to which it is a party, and has taken all necessary
      corporate action to authorize the execution, delivery and performance of
      this Amendment and the performance of the Loan Documents, as so amended,
      to which it is a party.

                  (ii)  No consent or authorization of, approval by, notice to,
      filing with or other act by or in respect of, any Governmental Authority
      or any other Person is required with respect to TransTechnology, TTC or
      TTM in connection with the execution and delivery of this Amendment or
      with the performance, validity or enforceability of the Loan Documents, as
      amended by this Amendment.

                                        5
<PAGE>

                  (iii) This Amendment and each Loan Document, as amended by
      this Amendment, constitutes the legal, valid and binding obligation of
      each of TransTechnology, TTC and TTM, enforceable against each such Person
      in accordance with its terms, subject to the effects of bankruptcy,
      insolvency, fraudulent conveyance, reorganization, moratorium and other
      similar laws relating to or affecting the enforcement of creditors' rights
      generally.

                  (iv)  Each of the representations and warranties made by each
      of TransTechnology, TTC or TTM in or pursuant to the Loan Documents is
      true and correct in all material respects on and as of the date hereof as
      if made on and as of the date hereof (or, if such representation or
      warranty is expressly stated to have been made as of a specific date, as
      of such specific date).

            (b)   Payment of Expenses. TransTechnology agrees to pay or
reimburse CIT for all out-of-pocket costs and expenses incurred in connection
with this Amendment, any other documents prepared in connection herewith and the
transactions contemplated hereby, including, without limitation, the reasonable
fees and disbursements of counsel to CIT.

            (c)   No Other Amendments; Confirmation. Except as expressly
amended, modified and supplemented hereby, the provisions of the Financing
Agreement and the other Loan Documents are and shall remain in full force and
effect.

            (d)   Governing Law; Counterparts. This Amendment and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the internal laws of the State of New York. This
Amendment may be executed by one or more of the parties hereto on any number of
separate counterparts (including by facsimile transmission), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

                                        6
<PAGE>

      IN WITNESS WHEREOF, the parties hereto caused this Amendment to be duly
executed and delivered by their respective proper and duly authorized officers
as of the day and year first above written.

                                     THE CIT GROUP/BUSINESS CREDIT,
                                     INC.

                                     By: /s/Vincent Belcastro
                                         ---------------------------------------
                                     Title: Vice President

                                     TRANSTECHNOLOGY CORPORATION

                                     By: /s/ Joseph F. Spanier
                                         ---------------------------------------
                                     Title: VP, CFO & Treasurer

                                     TT CONNECTICUT CORPORATION

                                     By: /s/ Gerald C. Harvey
                                         ---------------------------------------
                                     Title: VP & Secretary

                                     TT MINNESOTA CORPORATION

                                     By: /s/ Gerald C. Harvey
                                         ---------------------------------------
                                     Title: VP & Secretary

                                        7

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