Document:

REGISTERED                                                     REGISTERED
No. R-1                                                        BIOTECH BOXES:
                                                               CUSIP:  61744Y413

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

<PAGE>

                        MORGAN STANLEY DEAN WITTER & CO.
                    SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES C

                               BASKET OPPORTUNITY
                        EXCHANGEABLE SECURITIES ("BOXES")

                        BIOTECH BOXES DUE JANUARY 30, 2032
                      EXCHANGEABLE FOR A CASH AMOUNT BASED
                 ON THE CLOSING PRICES OF THE UNDERLYING STOCKS
                         OF THE AMEX BIOTECHNOLOGY INDEX

<TABLE>
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<S>                              <C>                          <C>                          <C>
ORIGINAL ISSUE DATE:             INITIAL REDEMPTION DATE:     INTEREST RATE:  See          MATURITY DATE:  January 30,
  March 22, 2002                    See "Issuer Redemption      "Interest Rate" below.        2032
                                    Right" below.
-----------------------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL DATE:           INITIAL REDEMPTION           INTEREST PAYMENT DATES:      OPTIONAL REPAYMENT DATE(S):
  March 22, 2002                    PERCENTAGE:  See            See "Interest Payment         N/A
                                    "Issuer Redemption          Dates" below.
                                    Right" below.
-----------------------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY:              ANNUAL REDEMPTION            INTEREST PAYMENT PERIOD:     APPLICABILITY OF MODIFIED
  U.S. Dollars                      REDUCTION:  N/A             See "Interest Rate"           PAYMENT UPON ACCELERATION:
                                                                below.                        See "Alternate Exchange
                                                                                              Calculation in Case of an
                                                                                              Event of Default" below.
-----------------------------------------------------------------------------------------------------------------------
IF SPECIFIED CURRENCY OTHER      REDEMPTION NOTICE PERIOD:    APPLICABILITY OF ANNUAL      If, yes state Issue Price:
  THAN U.S. DOLLARS, OPTION         At least 30 days, but       INTEREST PAYMENTS: N/A        N/A
  TO ELECT PAYMENT IN U.S.          not more than 60 days.
  DOLLARS: N/A                      See "Issuer Redemption
                                    Right" below.
-----------------------------------------------------------------------------------------------------------------------
EXCHANGE RATE AGENT: N/A         TAX REDEMPTION AND PAYMENT                                ORIGINAL YIELD TO MATURITY:
                                    OF ADDITIONAL AMOUNTS:                                    N/A
                                    N/A
-----------------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS:  See below.    If yes, state Initial
                                 Offering Date:  N/A
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

Issue Price.............................. $o per Biotech BOXES.

Business Day............................. Any day except Saturday, Sunday and
                                          any day that is in The City of New
                                          York ("New York City") a legal holiday
                                          or a day on which banking institutions
                                          or securities exchanges are authorized
                                          or required by law or other
                                          governmental action to close.

Trading Day.............................. A day on which securities are traded
                                          on each of the principal U.S.
                                          securities exchanges or trading
                                          systems on which the stocks underlying
                                          the BTK Index are then listed or
                                          quoted.

Underlying Stocks........................ The securities included in the BTK
                                          Index or a Successor Index established
                                          pursuant to the terms hereof, as
                                          adjusted from time to time.

BTK Index................................ The AMEX Biotechnology Index as
                                          published by The American Stock
                                          Exchange LLC (the "American Stock
                                          Exchange" or "AMEX").

Exchange Notice Date..................... Beginning April 22, 2002, any Trading
                                          Day on which a Holder delivers a valid
                                          and duly completed Official Notice of
                                          Exchange, as described under "Exchange
                                          Right," before 12:00 p.m. (New York
                                          City time) to the Issuer (which must
                                          be acknowledged by the Issuer), except
                                          that no Exchange Notice Date may occur
                                          on or after the sixth Trading Day
                                          prior to the Maturity Date or any
                                          Early Redemption Date.

Exchange Date............................ The date on which the exercise of a
                                          Holder's Exchange Right is settled.
                                          The Exchange Date shall be the regular
                                          way settlement date for securities
                                          transactions occurring on the Exchange
                                          Notice Date, but it may be later than
                                          such date if: (i) the Holder fails
                                          timely to deliver its Biotech BOXES to
                                          the Trustee or to fulfill the
                                          conditions of its exchange in
                                          accordance with "Exchange Right"
                                          below; or (ii) in certain
                                          circumstances, a Market Disruption
                                          Event has occurred. See "Determination
                                          Date," "Exchange Right" and "Market
                                          Disruption Event" below.

Cash Settlement Value Payable at
Maturity or upon Exchange or Issuer
Redemption............................... Each Biotech BOXES is exchangeable on
                                          the Maturity Date, an Early Redemption
                                          Date or any Exchange Date, as
                                          applicable, for an amount of cash
                                          equal to the sum of the Exchange
                                          Values of each of the Underlying
                                          Stocks, determined by the Calculation
                                          Agent on the appropriate Determination
                                          Date.

Exchange Value........................... The Exchange Value for each Underlying
                                          Stock shall be calculated by the
                                          Calculation Agent by multiplying (a)
                                          the Underlying Stock's Exchange Ratio
                                          by (b) the Underlying Stock's Market
                                          Price on the applicable Determination
                                          Date.

Determination Date....................... The date on which the Exchange Value
                                          is calculated in accordance with the
                                          following five paragraphs.

                                          For purposes of calculating the Cash
                                          Settlement Value payable on the
                                          Maturity Date, the Exchange Value for
                                          an Underlying Stock shall be
                                          calculated on the sixth Trading Day
                                          immediately prior to the Maturity
                                          Date, unless there is a Market
                                          Disruption Event with respect to such
                                          Underlying Stock on such date.

                                          For purposes of calculating the Cash
                                          Settlement Value payable on any Early
                                          Redemption Date, the Exchange Value
                                          for an Underlying Stock shall be
                                          calculated on the sixth Trading Day
                                          immediately prior to the Early
                                          Redemption Date, unless there is a
                                          Market Disruption Event with respect
                                          to such Underlying Stock on such date.

                                          For purposes of calculating the Cash
                                          Settlement Value payable on any
                                          Exchange Date, the Exchange Value for
                                          an Underlying Stock shall be
                                          calculated on the Exchange Notice
                                          Date, unless there is a Market
                                          Disruption Event with respect to such
                                          Underlying Stock on such date.

                                          If a Market Disruption Event occurs
                                          with respect to an Underlying Stock on
                                          the day its Exchange Value is
                                          scheduled to be calculated for
                                          purposes of determining the Cash
                                          Settlement Value payable, the
                                          Determination Date shall be the
                                          immediately succeeding Trading Day on
                                          which no Market Disruption Event has
                                          occurred with respect to such
                                          Underlying Stock. The Determination
                                          Date for any Underlying Stock,
                                          however, shall be no later than (i)
                                          the second Trading Day preceding the
                                          Maturity Date; (ii) the second Trading
                                          Day preceding the Early Redemption
                                          Date; or (iii) the third Trading Day
                                          following an Exchange Notice Date, as
                                          the case may be. If a Market
                                          Disruption Event occurs on the date
                                          specified in clause (i), (ii) or (iii)
                                          of the preceding sentence with respect
                                          to any Underlying Stock for which the
                                          Exchange Value has not previously been
                                          determined, then the Exchange Value of
                                          such Underlying Stock shall be
                                          calculated on such date using the
                                          Market Price determined by the
                                          Calculation Agent as described below
                                          under "Market Price."

                                          No adjustment to any Exchange Ratio or
                                          the Cash Settlement Value payable by
                                          the Issuer for each Biotech BOXES on
                                          the Maturity Date, Early Redemption
                                          Date, Exchange Date, or the
                                          appropriate settlement date in the
                                          case of a Market Disruption Event, as
                                          applicable, shall be made as a result
                                          of any corporate event occurring after
                                          the close of business on the
                                          applicable Determination Date.

Minimum Denominations.................... 100 Biotech BOXES and integral
                                          multiples thereof.

Interest Payment Dates................... The 30th day of each March, June,
                                          September and December, commencing on
                                          June 30, 2002 in respect of base
                                          coupons and December 30, 2002 in
                                          respect of supplemental coupons,
                                          including the Maturity Date, or if any
                                          such day is not a Business Day in New
                                          York City, the immediately following
                                          Business Day. Interest Payment Dates
                                          are subject to adjustment in certain
                                          circumstances relating to the early
                                          redemption of the Biotech BOXES. See
                                          "Issuer Redemption Right" below.

Record Dates............................. Either the 15th day of the month
                                          following the applicable Quarterly
                                          Calculation Period or on an Early
                                          Redemption Date, in the case of base
                                          coupon amounts; the 15th day of
                                          November following the relevant Annual
                                          Calculation Period, in the case of
                                          supplemental coupon amounts; or the
                                          Maturity Date in the case of base and
                                          supplemental coupon amounts payable at
                                          maturity, whether or not any such day
                                          is a Business Day.

Interest Rate............................ The Issuer shall pay interest on each
                                          Biotech BOXES as follows:

                                            (i) The Issuer shall pay, for each
                                            Biotech BOXES, a base coupon
                                            quarterly on each Interest Payment
                                            Date, commencing on the Interest
                                            Payment Date occurring in June 2002.
                                            The quarterly base coupon per
                                            Biotech BOXES shall equal the sum of
                                            (a) each cash dividend or cash
                                            distribution other than dividends or
                                            distributions described in clause
                                            (b) below, if any, on any Underlying
                                            Stock at its respective Exchange
                                            Ratio and for which the ex-dividend
                                            date has occurred during the related
                                            Quarterly Calculation Period; and
                                            (b) each Extraordinary Dividend, if
                                            any, paid on any Underlying Stock,
                                            at its respective Exchange Ratio,
                                            during such Quarterly Calculation
                                            Period; provided that the base
                                            coupon shall not include any
                                            dividends or distributions referred
                                            to in clause (a) or (b) above whose
                                            value the American Stock Exchange or
                                            any successor publisher of the BTK
                                            Index or a Successor Index
                                            incorporates into the BTK Index or a
                                            Successor Index. Except as otherwise
                                            provided in the last paragraph of
                                            this subsection, cash dividends or
                                            other cash distributions on an
                                            Underlying Stock shall be considered
                                            to have accrued for purposes of
                                            calculating base coupon amounts as
                                            of the ex-dividend date (in the case
                                            of cash dividends and distributions
                                            referred to in clause (a) above) or
                                            the date the dividend or
                                            distribution is paid (in the case of
                                            dividends and distributions referred
                                            to in clause (b) above). The
                                            "ex-dividend" date for an Underlying
                                            Stock is the date on and after which
                                            transactions in such Underlying
                                            Stock on an organized securities
                                            exchange or trading system no longer
                                            carry the right to receive a
                                            dividend or distribution.

                                            Accrued but unpaid base coupon
                                            amounts are also payable by the
                                            Issuer upon the Holder's exercise of
                                            its exchange right, upon any Issuer
                                            redemption of the Biotech BOXES and
                                            at maturity of the Biotech BOXES.
                                            The base coupon amounts the Holder
                                            shall receive upon exchange shall be
                                            calculated up to, and including, the
                                            Exchange Notice Date or up to, but
                                            excluding, the sixth Trading Day
                                            prior to the Early Redemption Date
                                            or the fifteenth day prior to the
                                            Maturity Date, as the case may be.

                                            The commencement dates (the
                                            "Calculation Commencement Dates")
                                            for the Quarterly Calculation
                                            Periods for base coupons shall be
                                            the 30th day of January, April, July
                                            and October. Base coupon amounts
                                            shall be calculated by the
                                            Calculation Agent from and including
                                            one Calculation Commencement Date
                                            to, but excluding, the next
                                            Calculation Commencement Date, (a
                                            "Quarterly Calculation Period),
                                            provided that the initial Quarterly
                                            Calculation Period shall commence
                                            on, and include, the Original Issue
                                            Date and the final Quarterly
                                            Calculation Period shall extend to,
                                            but exclude, either the fifteenth
                                            day prior to the Maturity Date or
                                            the sixth Trading Day prior to the
                                            Early Redemption Date, as
                                            applicable. The Interest Payment
                                            Date related to each Quarterly
                                            Calculation Period shall be either
                                            the Interest Payment Date that is
                                            two months following the last day of
                                            such Quarterly Calculation Period
                                            or, with respect to the final
                                            Quarterly Calculation Period, the
                                            Maturity Date or the Early
                                            Redemption Date, as applicable. The
                                            Calculation Agent shall notify the
                                            Trustee and DTC, on which notice the
                                            Trustee and DTC may conclusively
                                            rely, of the base coupon amounts
                                            payable per each Biotech BOXES on or
                                            before the second Trading Day
                                            immediately following the last day
                                            of the applicable Quarterly
                                            Calculation Period, and base coupon
                                            amounts shall be paid to Holders of
                                            record on the applicable Record
                                            Date.

                                            "Extraordinary Dividend" shall mean
                                            (x) the full amount per share of any
                                            cash dividend or other cash
                                            distribution that is identified as
                                            an extraordinary or special dividend
                                            or distribution by the issuer of the
                                            relevant Underlying Stock,
                                            including, regardless of whether
                                            identified by the issuer as
                                            extraordinary or special, any cash
                                            dividends or cash amounts paid on an
                                            Underlying Stock as a result of a
                                            merger, reorganization or other
                                            corporate event involving an issuer
                                            of the Underlying Stock; (y) any
                                            cash dividend or other cash
                                            distribution with respect to an
                                            Underlying Stock that exceeds the
                                            immediately preceding
                                            non-extraordinary cash dividend for
                                            such Underlying Stock by an amount
                                            equal to at least 1% of the closing
                                            price of such Underlying Stock on
                                            the Trading Day preceding the
                                            ex-dividend date for the payment of
                                            such cash dividend or other cash
                                            distribution; or (z) the cash value
                                            of any non-cash dividend or
                                            distribution on an Underlying Stock.

                                            The cash value of a non-cash
                                            dividend or distribution (or any
                                            portion of a non-cash dividend or
                                            distribution) that is paid in
                                            Marketable Securities shall be an
                                            amount equal to the Market Price of
                                            those Marketable Securities on the
                                            Trading Day immediately following
                                            the day on which the non-cash
                                            distribution is paid times the
                                            number of shares or notes of those
                                            Marketable Securities paid per units
                                            of the relevant Underlying Stock.
                                            The cash value of a non-cash
                                            dividend or distribution (or any
                                            portion of a non-cash dividend or
                                            distribution) that is not paid in
                                            Marketable Securities shall be an
                                            amount equal to the market value of
                                            such non-cash dividend or
                                            distribution per share of the
                                            relevant Underlying Stock on the
                                            date on which such dividend or
                                            distribution is paid, as determined
                                            by a nationally recognized
                                            independent investment bank the
                                            Calculation Agent retains for such
                                            purpose, whose determination shall
                                            be final.

                                            "Marketable Securities" are any
                                            perpetual equity securities that are
                                            listed on a U.S. national securities
                                            exchange or reported by the Nasdaq
                                            National Market.

                                            Base coupon amounts shall accrue on
                                            the Biotech BOXES with respect to an
                                            Underlying Stock only if the
                                            Underlying Stock was included in the
                                            BTK Index on or prior to the Record
                                            Date for the related dividend or
                                            other payment on the Underlying
                                            Stock. Base coupon amounts payable
                                            in respect of each Biotech BOXES
                                            shall be calculated on the basis of
                                            the dividends paid in respect of
                                            each share of Underlying Stock
                                            represented by such Biotech BOXES,
                                            based on the applicable Exchange
                                            Ratios on the ex-dividend date for
                                            such dividend. Holders shall not
                                            receive any non-cash dividends or
                                            distributions on any Underlying
                                            Stock.

                                            (ii) On the Interest Payment Date
                                            occurring in December of each year,
                                            commencing December 2002, the Issuer
                                            shall also pay an annual
                                            supplemental coupon on each Biotech
                                            BOXES, which shall accrue at an
                                            annual rate of 0.05% of the lesser
                                            of one thirtieth of the Closing
                                            Value of the BTK Index on March 19,
                                            2002 and one thirtieth of the
                                            average closing value of the BTK
                                            Index during the preceding Annual
                                            Calculation Period. For purposes of
                                            calculating the annual supplemental
                                            coupon, the average closing value of
                                            the BTK Index during the preceding
                                            Annual Calculation Period shall
                                            equal the sum of the Closing Values
                                            of the BTK Index on each Trading Day
                                            in such Annual Calculation Period
                                            divided by the number of Trading
                                            Days in such Annual Calculation
                                            Period. The fraction used in
                                            calculating supplemental coupon
                                            amounts (the "Supplemental Coupon
                                            Fraction"), initially one thirtieth,
                                            is subject to adjustment as
                                            described below under "Adjustments
                                            to the Biotech BOXES." Each annual
                                            calculation period (an "Annual
                                            Calculation Period") shall commence
                                            on, and include, the 30th day of
                                            each October and extend to, but
                                            exclude, the 30th day of the
                                            following October (except that the
                                            first calculation period shall
                                            commence on, and include, the
                                            Original Issue Date and the final
                                            Annual Calculation Period shall
                                            extend to, but exclude, the 15th day
                                            prior to the Maturity Date or
                                            (except as provided below under
                                            "Alternate Exchange Calculation in
                                            Case of an Event of Default") the
                                            date of acceleration, as the case
                                            may be). The Calculation Agent shall
                                            notify the Trustee and DTC, on which
                                            notice the Trustee and DTC may
                                            conclusively rely, of the annual
                                            supplemental coupon amount payable
                                            per each Biotech BOXES on or before
                                            the second Trading Day immediately
                                            following the last day of the
                                            applicable Annual Calculation
                                            Period, and annual supplemental
                                            coupons shall be paid to Holders of
                                            record on the Record Date following
                                            the relevant Annual Calculation
                                            Period or, in the case of the annual
                                            supplemental coupon payable at
                                            maturity or upon acceleration,
                                            Holders of record on the Maturity
                                            Date or the date of acceleration, as
                                            the case may be.

                                            Annual supplemental coupons shall
                                            accrue on the basis of a 360-day
                                            year consisting of twelve 30-day
                                            months. Accrued but unpaid
                                            supplemental coupon amounts shall be
                                            payable by the Issuer on the
                                            Maturity Date but not upon a
                                            Holder's exercise of its Exchange
                                            Right or the Issuer's exercise of
                                            its Issuer Redemption Right. Accrued
                                            but unpaid supplemental coupon
                                            amounts paid on the Maturity Date
                                            shall accrue through the Trading Day
                                            immediately prior to the Maturity
                                            Date.

Early Redemption Notice Date............. The date, if any, on which the Issuer
                                          exercises its Issuer Redemption Right
                                          with respect to the Biotech BOXES, as
                                          described under "Issuer Redemption
                                          Right" and "Discontinuance of the BTK
                                          Index; Successor Index; Issuer
                                          Redemption Right" below.

Closing Value............................ The closing value of the BTK Index or
                                          any Successor Index as reported by the
                                          American Stock Exchange or another
                                          entity publishing a Successor Index on
                                          a specified date.

Exchange Right........................... Beginning April 22, 2002, a Holder of
                                          Biotech BOXES may, subject to the
                                          Minimum Exchange Amount, exchange each
                                          Biotech BOXES held by it for its Cash
                                          Settlement Value, plus accrued but
                                          unpaid base coupon amounts up to, and
                                          including, the applicable Exchange
                                          Notice Date, by taking the following
                                          steps through normal clearing system
                                          channels: (i) duly complete an
                                          Official Notice of Exchange, attached
                                          as Annex A hereto; (ii) deliver such
                                          Official Notice of Exchange to the
                                          Issuer (which must be acknowledged by
                                          the Issuer) before 12:00 p.m. (New
                                          York City time) on any Trading Day
                                          before the sixth Trading Day prior to
                                          the Maturity Date or an Early
                                          Redemption Date; and (iii) transfer
                                          the Biotech BOXES to be exchanged to
                                          the Trustee on the Issuer's behalf on
                                          or prior to 10:00 a.m. (New York City
                                          time) on the Exchange Date.

                                          If an Official Notice of Exchange is
                                          received by the Issuer after 12:00
                                          p.m. (New York City time) on any
                                          Trading Day or on any day that is not
                                          a Trading Day, such notice shall not
                                          be effective, and a new Official
                                          Notice of Exchange must be validly
                                          submitted in order for a Holder of
                                          Biotech BOXES to exercise its Exchange
                                          Right on any future Trading Day.

                                          Subject to the Holder's proper
                                          instruction as aforesaid, the Issuer
                                          shall, on the Exchange Date, deliver
                                          the Cash Settlement Value for each
                                          Biotech BOXES exchanged, plus accrued
                                          but unpaid base coupon amounts, to the
                                          Trustee for payment to the Holder for
                                          regular way settlement through the
                                          facilities of DTC or any successor
                                          depositary, unless there is a Market
                                          Disruption Event with respect to one
                                          or more of the Underlying Stocks on
                                          the Exchange Notice Date on which the
                                          Holder delivered a duly completed
                                          Official Notice of Exchange
                                          acknowledged by the Issuer (and, so
                                          long as the regular way settlement
                                          date is three Trading Days after such
                                          Exchange Notice Date, a Market
                                          Disruption Event occurs or is
                                          continuing with respect to such
                                          Underlying Stock(s) on the Trading Day
                                          following the Exchange Notice Date).

                                          If there is no such Market Disruption
                                          Event with respect to any of the
                                          Underlying Stocks on such Exchange
                                          Notice Date, prior to 11:00 a.m. on
                                          the first Business Day immediately
                                          succeeding such Exchange Notice Date,
                                          the Issuer shall cause the Calculation
                                          Agent to provide written notice to the
                                          Trustee and DTC at their respective
                                          New York offices, on which notice the
                                          Trustee and DTC may conclusively rely,
                                          (i) of its receipt of any such
                                          "Official Notice of Exchange;" and
                                          (ii) of the total amount of cash to be
                                          paid, equaling the product of the
                                          appropriate Cash Settlement Value plus
                                          accrued but unpaid base coupon amounts
                                          and the total number of Biotech BOXES
                                          to be exchanged.

                                          If there is such a Market Disruption
                                          Event, settlement shall occur on the
                                          later of (i) the regular way
                                          settlement date; and (ii) the second
                                          Trading Day after the last
                                          Determination Date on which the
                                          Calculation Agent determines the Cash
                                          Settlement Value of each Biotech BOXES
                                          to be exchanged and the foregoing
                                          notice to the Trustee and DTC shall be
                                          given prior to 11:00 a.m. on the first
                                          Business Day preceding such
                                          settlement. In no event shall
                                          settlement occur later than the fifth
                                          Trading Day following the Exchange
                                          Notice Date, as described under
                                          "--Determination Date" above.

                                          If a Holder of Biotech BOXES tenders
                                          its Biotech BOXES for exchange
                                          pursuant to its Exchange Right, the
                                          Issuer shall be entitled to request
                                          that Morgan Stanley & Co. Incorporated
                                          or its successor ("MS & Co.") purchase
                                          the Biotech BOXES to be exchanged in
                                          consideration of, for each Biotech
                                          BOXES exchanged, an amount of cash
                                          equal to the Cash Settlement Value
                                          that would otherwise have been payable
                                          by the Issuer on the Exchange Date,
                                          plus accrued but unpaid base coupon
                                          amounts as described under "Interest
                                          Rate" above. MS & Co.'s agreement to
                                          purchase the tendered Biotech BOXES
                                          shall be without prejudice to the
                                          Holder's right to proceed against the
                                          Issuer upon any failure by MS & Co. to
                                          settle the purchase when due. Any
                                          Biotech BOXES purchased by MS & Co.
                                          shall remain outstanding.

                                          If the Exchange Date for the exchange
                                          of a Holder's Biotech BOXES is after
                                          the conclusion of a Quarterly
                                          Calculation Period and prior to the
                                          ex-interest date for the Interest
                                          Payment Date relating to such
                                          Quarterly Calculation Period, on the
                                          Exchange Date the Holder shall be
                                          entitled to base coupon amounts that
                                          have accrued from and including the
                                          Calculation Commencement Date of such
                                          Quarterly Calculation Period to and
                                          including the applicable Exchange
                                          Notice Date. The "ex-interest" date
                                          for any Interest Payment Date is the
                                          date on which purchase transactions in
                                          the Biotech BOXES no longer carry the
                                          right to receive the interest payable
                                          on such Interest Payment Date.

                                          If the Exchange Date for the exchange
                                          of a Holder's Biotech BOXES is on or
                                          after the ex-interest date for an
                                          Interest Payment Date and prior to
                                          such Interest Payment Date, on such
                                          Exchange Date a Holder shall only be
                                          entitled to its Cash Settlement Value
                                          plus any base coupon amounts that have
                                          accrued from but excluding the last
                                          day of the Quarterly Calculation
                                          Period relating to such Interest
                                          Payment Date to and including the
                                          Exchange Notice Date. For avoidance of
                                          doubt, such Holder shall be entitled
                                          to any base coupon amounts that have
                                          accrued during the Quarterly
                                          Calculation Period relating to such
                                          Interest Payment Date on such Interest
                                          Payment Date.

Minimum Exchange Amount.................. In order to exercise its Exchange
                                          Right, a Holder of Biotech BOXES must
                                          exchange at least 30,000 Biotech
                                          BOXES, or multiples of 100 in excess
                                          thereof. The Minimum Exchange Amount
                                          shall not apply so long as a Credit
                                          Exchange Event has occurred and is
                                          continuing.

Issuer Redemption Right.................. On or after March 22, 2009 (the
                                          "Initial Redemption Date"), or earlier
                                          if the BTK Index is discontinued or
                                          suspended and there is no appropriate
                                          Successor Index as described under
                                          "Discontinuance of the BTK Index;
                                          Successor Index; Issuer Redemption
                                          Right," upon at least 30 but not more
                                          than 60 days' notice to Holders of the
                                          Biotech BOXES, the Issuer may redeem
                                          the Biotech BOXES in whole but not in
                                          part for mandatory exchange. If the
                                          Biotech BOXES are so called for
                                          redemption by the Issuer, then, unless
                                          the Holder subsequently exercises its
                                          Exchange Right prior to the sixth
                                          Trading Day immediately preceding the
                                          date fixed by the Issuer and set forth
                                          in the Early Redemption Notice for
                                          settlement of the redemption (the
                                          "Early Redemption Date"), Cash
                                          Settlement Value for each Biotech
                                          BOXES so called for redemption plus
                                          accrued but unpaid base coupon amounts
                                          to but excluding the sixth Trading Day
                                          prior to the Early Redemption Date
                                          shall be paid to Holders, on the Early
                                          Redemption Date, upon delivery of such
                                          Holder's Biotech BOXES to the Trustee.
                                          The Issuer shall, or shall cause MS &
                                          Co., to deliver such Cash Settlement
                                          Value for each Biotech BOXES so called
                                          for redemption and such base coupon
                                          amounts to the Trustee on the Early
                                          Redemption Date for payment to such
                                          Holder.

                                          On the Early Redemption Notice Date,
                                          the Issuer shall give notice (the
                                          "Early Redemption Notice") of its
                                          exercise of the Issuer Redemption
                                          Right (i) to the Holders of the
                                          Biotech BOXES by mailing notice of
                                          such exercise by first class mail,
                                          postage prepaid, at least 30 days and
                                          not more than 60 days prior to the
                                          Early Redemption Date at 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 DTC in accordance
                                          with the applicable procedures set
                                          forth in the Letter of Representations
                                          related to the Biotech BOXES. Any
                                          notice which is mailed in the manner
                                          herein provided shall be conclusively
                                          presumed to have been duly given,
                                          whether or not a Holder of Biotech
                                          BOXES receives the notice. Failure to
                                          give notice by mail, or any defect in
                                          the notice to a Holder of Biotech
                                          BOXES, shall not affect the validity
                                          of the proceedings for the exercise of
                                          the Issuer Redemption Right to any
                                          other Biotech BOXES

                                          The Early Redemption Notice shall be
                                          given by the Issuer or, at the
                                          Issuer's request, by the Trustee in
                                          the name and at the expense of the
                                          Issuer and shall specify (i) the Early
                                          Redemption Date; (ii) the place or
                                          places of payment of Cash Settlement
                                          Value, and, if applicable, of any
                                          accrued but unpaid base coupon amounts
                                          as described under "Interest Rate"
                                          above, payable by the Issuer for each
                                          Biotech BOXES to be redeemed; (iii)
                                          that such delivery shall be made upon
                                          presentation and surrender of the
                                          Biotech BOXES; and (iv) that such
                                          exchange is pursuant to the Issuer
                                          Redemption Right.

                                          If any Biotech BOXES are not
                                          surrendered for exchange on the Early
                                          Redemption Date, they shall be deemed
                                          to be no longer outstanding under the
                                          Senior Indenture after the Early
                                          Redemption Date, except with respect
                                          to the Holder's right to receive the
                                          Cash Settlement Value and accrued but
                                          unpaid base coupon amounts due in
                                          connection with the Issuer Redemption
                                          Right for each Biotech BOXES called
                                          for redemption.

                                          If the Early Redemption Notice Date is
                                          after the conclusion of a Quarterly
                                          Calculation Period but prior to the
                                          ex-interest date for the Interest
                                          Payment Date relating to such
                                          Quarterly Calculation Period, such
                                          Interest Payment Date and the related
                                          Record Date shall be suspended and on
                                          the Early Redemption Date Holders of
                                          the Biotech BOXES on such Early
                                          Redemption Date shall be entitled to
                                          Cash Settlement Value for each Biotech
                                          BOXES called for redemption plus any
                                          base coupon amounts that have accrued
                                          from and including the Calculation
                                          Commencement Date of such Quarterly
                                          Calculation Period to but excluding
                                          the sixth Trading Day prior to the
                                          Early Redemption Date.

                                          If the Early Redemption Notice Date is
                                          after the conclusion of a Quarterly
                                          Calculation Period and on or after the
                                          ex-interest date for the Interest
                                          Payment Date relating to such
                                          Quarterly Calculation Period, the
                                          Issuer shall pay on the Early
                                          Redemption Date to the Holders of the
                                          Biotech BOXES on the Early Redemption
                                          Date any base coupon amounts that have
                                          accrued from but excluding the last
                                          day of the Quarterly Calculation
                                          Period relating to such Interest
                                          Payment Date to but excluding the
                                          sixth Trading Day prior to the Early
                                          Redemption Date, and the Issuer shall
                                          pay to Holders of the Biotech BOXES on
                                          the Record Date relating to such
                                          Interest Payment Date base coupon
                                          amounts accruing during the Quarterly
                                          Calculation Period relating to such
                                          Interest Payment Date either: (i) on
                                          such Interest Payment Date, if such
                                          Interest Payment Date is prior to the
                                          Early Redemption Date, or (ii) on the
                                          Early Redemption Date, if such
                                          Interest Payment Date is on or after
                                          the Early Redemption Date.

Exchange Ratios.......................... The Exchange Ratio for each Underlying
                                          Stock shall be initially calculated by
                                          multiplying (a) the number of shares
                                          of such Underlying Stock, after
                                          appropriate adjustments (including
                                          those relating to the divisor used by
                                          the American Stock Exchange in the
                                          calculation of the BTK Index (the
                                          "Divisor")), on March 19, 2002, in
                                          calculating the BTK Index by (b) one
                                          thirtieth.

                                          The Calculation Agent shall adjust the
                                          Exchange Ratios for the Underlying
                                          Stocks following each quarterly
                                          rebalancing of the BTK Index by the
                                          American Stock Exchange. The
                                          Calculation Agent shall also adjust an
                                          Exchange Ratio (x) if the American
                                          Stock Exchange adjusts the composition
                                          of the BTK Index, the Divisor or the
                                          number of shares of the Underlying
                                          Stock used in calculating the BTK
                                          Index between quarterly rebalancings;
                                          (y) in accordance with the third and
                                          seventh paragraphs under
                                          "Discontinuance of the BTK Index;
                                          Successor Index; Issuer Redemption
                                          Right"; and (z) in accordance with
                                          "Adjustments to the Biotech BOXES." No
                                          such adjustment shall be made,
                                          however, if the Calculation Agent
                                          determines that such change by the
                                          American Stock Exchange contains or is
                                          the result of a manifest error. In
                                          such case, any exchange shall be made
                                          at the Exchange Ratio then in effect
                                          without regard to such manifest error.

                                          The Calculation Agent shall provide
                                          information as to any adjustment to
                                          any Exchange Ratio upon written
                                          request by a Holder of Biotech BOXES.

Discontinuance of the BTK Index;
Successor Index; Issuer Redemption
Right.................................... If and so long as the American Stock
                                          Exchange discontinues or suspends
                                          publication of the BTK Index and the
                                          American Stock Exchange or another
                                          entity publishes a successor or
                                          substitute index that the Calculation
                                          Agent determines to be substantially
                                          identical to the discontinued or
                                          suspended BTK Index (such index being
                                          referred to herein as a "Successor
                                          Index"), then such Successor Index
                                          shall replace the BTK Index for all
                                          purposes, including for purposes of
                                          determining the Exchange Ratios to be
                                          used in computing the Cash Settlement
                                          Value payable for each Biotech BOXES
                                          based on the shares of Underlying
                                          Stocks. If the publication of a
                                          Successor Index is discontinued or
                                          suspended and the American Stock
                                          Exchange or another entity publishes a
                                          successor or substitute index that the
                                          Calculation Agent determines to be
                                          substantially identical to the
                                          discontinued or suspended BTK Index,
                                          then such other Index shall replace
                                          the discontinued or suspended BTK
                                          Index and shall be deemed to be the
                                          Successor Index for all purposes
                                          thereof.

                                          Upon any selection by the Calculation
                                          Agent of a Successor Index, the
                                          Calculation Agent shall cause written
                                          notice thereof to be furnished to the
                                          Trustee, to the Issuer and to the
                                          Holders of the Biotech BOXES within
                                          three Trading Days of such selection.

                                          If the American Stock Exchange
                                          discontinues or suspends publication
                                          of the BTK Index prior to, and such
                                          discontinuance or suspension is
                                          continuing on, a date on which the
                                          Cash Settlement Value for each Biotech
                                          BOXES is to be determined and the
                                          Calculation Agent determines that no
                                          Successor Index is available at such
                                          time, then on such date (unless the
                                          Issuer shall have redeemed the Biotech
                                          BOXES pursuant to its Issuer
                                          Redemption Right as described under
                                          "Issuer Redemption Right" above), the
                                          Calculation Agent or one of its
                                          affiliates shall determine the
                                          Exchange Ratios to be used in
                                          computing the Cash Settlement Value
                                          for each Biotech BOXES. The Cash
                                          Settlement Value for each Biotech
                                          BOXES shall be computed by the
                                          Calculation Agent or one of its
                                          affiliates in accordance with the
                                          formula for and method of calculating
                                          the BTK Index (or Successor Index, as
                                          the case may be) last in effect prior
                                          to the discontinuance or suspension of
                                          the BTK Index (or Successor Index, as
                                          the case may be), using the Market
                                          Price at such time (or, if trading in
                                          an Underlying Stock has been
                                          materially suspended or limited, its
                                          good faith estimate of the Market
                                          Price that would have prevailed but
                                          for such suspension or limitation) for
                                          each security most recently comprising
                                          the BTK Index (or Successor Index, as
                                          the case may be).

                                          A material suspension or limitation of
                                          trading with respect to an Underlying
                                          Stock shall be deemed to have occurred
                                          upon (i) a suspension, absence or
                                          material limitation of trading in such
                                          Underlying Stock for more than two
                                          hours of trading or during the
                                          one-half hour period preceding the
                                          close of trading in the primary
                                          exchange or market of trading for such
                                          Underlying Stock; or (ii) a breakdown
                                          or failure in the price and trading
                                          systems of the primary exchange or
                                          market of trading for such Underlying
                                          Stock, as a result of which the
                                          reported trading prices for such
                                          Underlying Stock during the last
                                          one-half hour preceding the closing of
                                          trading in such market are materially
                                          inaccurate, as determined by the
                                          Calculation Agent in its sole
                                          discretion.

                                          The Issuer shall cause the Calculation
                                          Agent to provide prompt notice to the
                                          Trustee, on which notice the Trustee
                                          may conclusively rely, of (i) the
                                          discontinuance or suspension by the
                                          American Stock Exchange or another
                                          entity of the BTK Index or a Successor
                                          Index; (ii) the Calculation Agent's
                                          selection of any Successor Index; and
                                          (iii) in the event that there is no
                                          appropriate Successor Index, of the
                                          manner in which the Calculation Agent
                                          shall thereafter determine the
                                          Exchange Ratios to be used in
                                          computing the Cash Settlement Value
                                          with respect to the Biotech BOXES.

                                          If, as a result of any discontinuance
                                          or suspension of the BTK Index or a
                                          Successor Index or any modification of
                                          the BTK Index or a Successor Index,
                                          the Calculation Agent makes any
                                          adjustment to any Exchange Ratio of
                                          any Underlying Stock and consequent
                                          adjustment to the Cash Settlement
                                          Value due to the Holder for each
                                          Biotech BOXES, the Calculation Agent
                                          shall give prompt notice of any such
                                          adjustments to the Trustee at its New
                                          York office, on which notice the
                                          Trustee may conclusively rely.

                                          Notwithstanding the foregoing, the
                                          Issuer shall have the right to redeem
                                          the Biotech BOXES at any time that the
                                          Calculation Agent determines that
                                          there is no appropriate Successor
                                          Index, even if such event occurs
                                          before the Initial Redemption Date.
                                          See "Issuer Redemption Right" above.
                                          If the Issuer exercises this right,
                                          then from and after the Early
                                          Redemption Notice Date the Calculation
                                          Agent shall cease to calculate the BTK
                                          Index and the composition of the
                                          Underlying Stocks shall become fixed
                                          as of such date, except that the
                                          Calculation Agent in its sole
                                          discretion may make adjustments
                                          thereafter solely to reflect the
                                          occurrence of a corporate or other
                                          similar event affecting an Underlying
                                          Stock. Any such subsequent adjustment
                                          shall be designed to maintain the
                                          relative investment represented by
                                          each Underlying Stock at its
                                          respective Exchange Ratio as of the
                                          Early Redemption Notice Date.

Adjustments to the Biotech
BOXES.................................... If the method of calculating the BTK
                                          Index or a Successor Index is modified
                                          so that the value of such index is a
                                          fraction or multiple of what it would
                                          have been had it not been so modified,
                                          then the Calculation Agent shall
                                          adjust the Exchange Ratios of the
                                          Underlying Stocks in order to arrive
                                          at a value of the Biotech BOXES
                                          relative to the BTK Index or any such
                                          Successor Index as if the BTK Index or
                                          any such Successor Index had not been
                                          so modified. The Calculation Agent
                                          shall also adjust the Supplemental
                                          Coupon Fraction in order to arrive at
                                          a supplemental coupon amount that
                                          would have been calculated if the BTK
                                          Index or any such Successor Index had
                                          not been so modified.

                                          The Issuer shall cause the Calculation
                                          Agent to provide prompt notice to the
                                          Trustee of any adjustment to an
                                          Exchange Ratio or the Supplemental
                                          Coupon Fraction, on which notice the
                                          Trustee may conclusively rely.

Credit Exchange Event.................... If and so long as the Issuer's senior
                                          debt rating is downgraded below A- by
                                          Standard & Poor's Rating Services
                                          ("Standard and Poor's") or below A3 by
                                          Moody's Investors Service ("Moody's")
                                          (or below the equivalent ratings of
                                          any successor to Standard & Poor's or
                                          Moody's), a Credit Exchange Event
                                          shall occur. So long as a Credit
                                          Exchange Event has occurred and is
                                          continuing, the Minimum Exchange
                                          Amount shall not apply.

                                          The Issuer shall cause the Calculation
                                          Agent to provide prompt notice to the
                                          Trustee and DTC of the occurrence of
                                          any Credit Exchange Event and the
                                          discontinuance of such Credit Exchange
                                          Event, on which notice the Trustee and
                                          DTC may conclusively rely. The Issuer
                                          shall also instruct the Trustee to
                                          provide notice to the Holders of
                                          Biotech BOXES of the occurrence of a
                                          Credit Exchange Event.

Calculation Agent........................ MS & Co.

                                          The Issuer shall cause the Calculation
                                          Agent to make all calculations
                                          hereunder, including without
                                          limitation with respect to any
                                          Exchange Ratio, Cash Settlement Value,
                                          Market Price, Interest Rate, amount of
                                          interest payable with respect to each
                                          Biotech BOXES and any adjustment to
                                          the Exchange Ratio. The Trustee shall
                                          have no responsibility to make any
                                          calculation hereunder, including the
                                          foregoing.

                                          The Calculation Agent shall be solely
                                          responsible for determining the Cash
                                          Settlement Value and base and
                                          supplemental coupon amounts. 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 Issuer, the Trustee and
                                          Holders of the Biotech BOXES.

                                          The Calculation Agent shall round all
                                          percentages resulting from any
                                          calculation with respect to the
                                          Biotech BOXES to the nearest one
                                          hundred-thousandth of a percentage
                                          point, with five one millionths of a
                                          percentage point rounded upwards. All
                                          dollar amounts used in, or resulting
                                          from, such calculation shall be
                                          rounded to the nearest cent with
                                          five-tenths of a cent being rounded
                                          upwards.

                                          The Issuer shall cause the Calculation
                                          Agent to provide notice to the Trustee
                                          and DTC no later than 11:00 a.m. New
                                          York City time on the fifth Trading
                                          Day prior to the Maturity Date or any
                                          Early Redemption Date of the aggregate
                                          amount of interest or the Cash
                                          Settlement Value payable to Holders on
                                          each such date, on which notice the
                                          Trustee and DTC may conclusively rely.

Market Disruption Event.................. A Market Disruption Event with respect
                                          to an Underlying Stock shall be deemed
                                          to have occurred upon:

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

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

                                          For purposes of determining whether a
                                          Market Disruption Event has occurred
                                          with respect to an Underlying Stock:
                                          (1) a limitation on the hours or
                                          number of days of trading shall not
                                          constitute a Market Disruption Event
                                          if it results from an announced change
                                          in the regular business hours of the
                                          relevant exchange; and (2) limitations
                                          pursuant to New York Stock Exchange
                                          ("NYSE") Rule 80A (or any applicable
                                          rule or regulation enacted or
                                          promulgated by the NYSE, any other
                                          self-regulatory organization or the
                                          Commission of similar scope as
                                          determined by the Calculation Agent)
                                          on trading during significant market
                                          fluctuations shall constitute a
                                          suspension, absence or material
                                          limitation of trading.

Market Price............................. If an Underlying Stock (or any other
                                          security for which a Market Price must
                                          be determined) is listed on a national
                                          securities exchange, is a security of
                                          The Nasdaq National Market or is
                                          included in the OTC Bulletin Board
                                          Service ("OTC Bulletin Board")
                                          operated by the National Association
                                          of Securities Dealers, Inc. (the
                                          "NASD"), the Market Price for one
                                          share of such Underlying Stock (or one
                                          unit of any such other security) means
                                          (i) the last reported sale price,
                                          regular way, of the principal trading
                                          session on such day on the principal
                                          U.S. securities exchange registered
                                          under the Securities Exchange Act of
                                          1934, as amended, on which such
                                          Underlying Stock (or any such other
                                          security) is listed or admitted to
                                          trading (which may be The Nasdaq
                                          National Market if it is then a
                                          national securities exchange) or (ii)
                                          if not listed or admitted to trading
                                          on any such securities exchange or if
                                          such last reported sale price is not
                                          obtainable (even if such Underlying
                                          Stock (or any such other security) is
                                          listed or admitted to trading on such
                                          securities exchange), the last
                                          reported sale price of the principal
                                          trading session on the
                                          over-the-counter market as reported on
                                          The Nasdaq National Market (if it is
                                          not then a national securities
                                          exchange) or OTC Bulletin Board on
                                          such day. If the last reported sale
                                          price of the principal trading session
                                          is not available pursuant to clause
                                          (i) or (ii) above, the Market Price
                                          for any Trading Day or any
                                          Determination Date that is not a
                                          Trading Day shall be the mean, as
                                          determined by the Calculation Agent,
                                          of the bid prices for such Underlying
                                          Stock (or any such other security)
                                          obtained from as many dealers in such
                                          stock (which may include MS & Co. or
                                          any of the Issuer's other subsidiaries
                                          or affiliates), but not exceeding
                                          three, as shall make such bid prices
                                          available to the Calculation Agent. A
                                          "security of The Nasdaq National
                                          Market" shall include a security
                                          included in any successor to such
                                          system and the term "OTC Bulletin
                                          Board Service" shall include any
                                          successor service thereto.

Alternate Exchange Calculation in Case
of an Event of Default................... Upon acceleration of the Biotech BOXES
                                          following the occurrence of an Event
                                          of Default, as defined in the Senior
                                          Indenture, with respect to the Biotech
                                          BOXES, Holders shall be entitled to
                                          receive an amount in cash for each
                                          Biotech BOXES equal to Cash Settlement
                                          Value, as calculated by the
                                          Calculation Agent as if the date of
                                          the acceleration were a Determination
                                          Date, plus accrued but unpaid base
                                          coupon amounts and accrued but unpaid
                                          supplemental coupon amounts up to but
                                          excluding the date of acceleration;
                                          provided that if prior to the date of
                                          acceleration (x) a Holder of the
                                          Biotech BOXES has submitted an
                                          Official Notice of Exchange to the
                                          Issuer in accordance with "Exchange
                                          Right" above; or (y) the Issuer has
                                          called the Biotech BOXES for
                                          redemption in accordance with "Issuer
                                          Redemption Right" and "Early
                                          Redemption Notice Date" above and the
                                          date of acceleration occurs on or
                                          after the sixth Trading Day prior to
                                          the Early Redemption Date, the amount
                                          declared due and payable upon any such
                                          acceleration shall be an amount in
                                          cash for each Biotech BOXES equal to
                                          the Cash Settlement Value, determined
                                          by the Calculation Agent as of the
                                          Determination Date relating to such
                                          Holder's exercise of its exchange
                                          right or such call for redemption by
                                          the Issuer, as applicable, plus
                                          accrued but unpaid base coupon amounts
                                          calculated up to and including the
                                          Exchange Notice Date or up to but
                                          excluding the sixth Trading Day prior
                                          to the early Redemption Date, as
                                          applicable. If the Issuer has called
                                          the Biotech BOXES for redemption and
                                          the acceleration date occurs before
                                          the sixth Trading Day prior to the
                                          Early Redemption Date, Holders shall
                                          be entitled to receive an amount in
                                          cash for each Biotech BOXES equal to
                                          Cash Settlement Value calculated as of
                                          the date of acceleration, plus accrued
                                          but unpaid base coupon amounts up to
                                          but excluding such date of
                                          acceleration. Whenever in the Senior
                                          Indenture, including 5.01(b) of the
                                          Senior Indenture, or this Registered
                                          Global Security there is mentioned, in
                                          any context, default in the payment of
                                          the principal or principal amount of
                                          any Security of any series, such
                                          mention shall be deemed to be, solely
                                          with respect to the Biotech BOXES,
                                          default in the payment of the Cash
                                          Settlement Value with respect to such
                                          Biotech BOXES.

                                          If the acceleration date is after the
                                          conclusion of a Quarterly Calculation
                                          Period but prior to the ex-interest
                                          date for the Interest Payment Date
                                          relating to such Quarterly Calculation
                                          Period, such Interest Payment Date and
                                          the related Record Date shall be
                                          suspended and on the acceleration date
                                          Holders of the Biotech BOXES on such
                                          acceleration date shall be entitled to
                                          Cash Settlement Value for each of
                                          their Biotech BOXES plus any base
                                          coupon amounts that have accrued from
                                          and including the Calculation
                                          Commencement Date of such Quarterly
                                          Calculation Period to but excluding
                                          the acceleration date. Furthermore, if
                                          the acceleration date is after the
                                          conclusion of an Annual Calculation
                                          Period (other than the final Annual
                                          Calculation Period) but prior to the
                                          ex-interest date for the Interest
                                          Payment Date relating to such Annual
                                          Calculation Period, on the
                                          acceleration date Holders of the
                                          Biotech BOXES on such acceleration
                                          date also shall be entitled to any
                                          supplemental coupon amounts that have
                                          accrued from and including the
                                          commencement date of such Annual
                                          Calculation Period to but excluding
                                          the acceleration date. For the
                                          purposes of determining supplemental
                                          coupon amounts that have accrued from
                                          and including the commencement date of
                                          such Annual Calculation Period to but
                                          excluding the acceleration date,
                                          supplemental coupon amounts shall
                                          accrue at an annual rate of 0.05% of
                                          the lesser of one thirtieth of the
                                          Closing Value of the BTK Index on
                                          March 19, 2002 and one thirtieth of
                                          the average closing value of the BTK
                                          Index during such Annual Calculation
                                          Period.

                                          If the acceleration date is after the
                                          conclusion of a Quarterly Calculation
                                          Period and on or after the ex-interest
                                          date for the Interest Payment Date
                                          relating to such Quarterly Calculation
                                          Period, the Issuer shall pay on the
                                          acceleration date to the Holders of
                                          Biotech BOXES on the acceleration date
                                          any base coupon amounts that have
                                          accrued from but excluding the last
                                          day of the Quarterly Calculation
                                          Period relating to such Interest
                                          Payment Date to but excluding the
                                          acceleration date, and the Issuer
                                          shall pay to Holders of the Biotech
                                          BOXES on the Record Date relating to
                                          such Interest Payment Date base coupon
                                          amounts accruing during the Quarterly
                                          Calculation Period relating to such
                                          Interest Payment Date either: (i) on
                                          such Interest Payment Date, if such
                                          Interest Payment Date is prior to the
                                          acceleration date, or (ii) on the
                                          acceleration date, if such Interest
                                          Payment Date is on or after the
                                          acceleration date. Furthermore, if the
                                          acceleration date is after the
                                          conclusion of an Annual Calculation
                                          Period (other than the final Annual
                                          Calculation Period) and on or after
                                          the ex-interest date for the Interest
                                          Payment Date relating to such Annual
                                          Calculation Period, the Issuer shall
                                          pay on the acceleration date to the
                                          Holders of Biotech BOXES on the
                                          acceleration date any supplemental
                                          coupon amounts that have accrued from
                                          but excluding the last day of the
                                          Annual Calculation Period relating to
                                          such Interest Payment Date to but
                                          excluding the acceleration date
                                          (determined as described in the last
                                          sentence of this paragraph), and the
                                          Issuer shall pay to Holders of the
                                          Biotech BOXES on the Record Date
                                          relating to such Interest Payment Date
                                          supplemental coupon amounts accruing
                                          during the Annual Calculation Period
                                          relating to such Interest Payment Date
                                          either: (i) on such Interest Payment
                                          Date, if such Interest Payment Date is
                                          prior to the acceleration date, or
                                          (ii) on the acceleration date, if such
                                          Interest Payment Date is on or after
                                          the acceleration date. For the
                                          purposes of determining supplemental
                                          coupon amounts that have accrued from
                                          but excluding the last day of the
                                          Annual Calculation Period relating to
                                          such Interest Payment Date to but
                                          excluding the acceleration date,
                                          supplemental coupon amounts shall
                                          accrue at an annual rate of 0.05% of
                                          the lesser of one thirtieth of the
                                          Closing Value of the BTK Index on
                                          March 19, 2002 and one thirtieth of
                                          the average closing value of the BTK
                                          Index during such Annual Calculation
                                          Period.

                                          The Calculation Agent shall determine
                                          the amount of cash due with respect to
                                          each Biotech BOXES on an acceleration
                                          date and shall give the Trustee
                                          immediate notice of such amount, on
                                          which notice the Trustee may
                                          conclusively rely.

Notices to Trustee....................... Except as otherwise specifically
                                          provided herein, all notices given
                                          hereunder to the Trustee shall be in
                                          writing and shall be delivered either
                                          by hand to its Corporate Trust Office
                                          in the Borough of Manhattan, The City
                                          of New York, or by facsimile
                                          transmission to said office promptly
                                          confirmed by mailing such notice to
                                          the Trustee by first class mail,
                                          postage prepaid, at said office and
                                          all references herein to the New York
                                          office of the Trustee shall mean said
                                          Corporate Trust Office, which office
                                          on the Original Issue Date is located
                                          at 450 West 33rd Street, New York, New
                                          York 10001, Attention: Institutional
                                          Trust Services.

Treatment of Biotech BOXES for United
States Federal Income Tax Purposes....... The Issuer, by its sale of the Biotech
                                          BOXES, and each Holder of Biotech
                                          BOXES (and any successor Holder of
                                          Biotech BOXES), by its respective
                                          purchase thereof, agree to
                                          characterize the Biotech BOXES for all
                                          tax purposes as a prepaid cash
                                          settlement forward contract with
                                          respect to a portfolio of stocks
                                          consisting of the Underlying Stocks
                                          under which: (i) at the time of
                                          issuance of the Biotech BOXES the
                                          Holder pays the Issuer a fixed amount
                                          of cash equal to the issue price of
                                          the Biotech BOXES in consideration for
                                          the Issuer's obligation to deliver to
                                          the Holder the Cash Settlement Value
                                          on the Maturity Date or any Early
                                          Redemption Date or Exchange Date or
                                          appropriate settlement date in the
                                          case of a Market Disruption Event, as
                                          described under "Cash Settlement Value
                                          Payable at Maturity or upon Exchange
                                          or Issuer Redemption" above; (ii)
                                          until such Maturity Date or Early
                                          Redemption Date or Exchange Date or
                                          appropriate settlement date in the
                                          case of a Market Disruption Event, the
                                          Issuer shall be obligated to pay
                                          amounts equal to the base coupons and
                                          supplemental coupons as a return on
                                          the Biotech BOXES that constitutes
                                          income to the Holder; (iii) on such
                                          Maturity Date or Early Redemption Date
                                          or Exchange Date or appropriate
                                          settlement date in the case of a
                                          Market Disruption Event, the Issuer
                                          shall deliver to the Holder a cash
                                          amount equal to the sum of the Cash
                                          Settlement Value and certain accrued
                                          but unpaid coupon amounts in full
                                          satisfaction of the Issuer's
                                          obligation under the prepaid cash
                                          settlement forward contract; and (iv)
                                          it shall not take any action
                                          (including filing any tax return or
                                          form or taking any position in any tax
                                          proceeding) that is inconsistent with
                                          the obligations contained in the
                                          foregoing clauses (i) through (iii),
                                          unless such action or position is
                                          required by an applicable taxing
                                          authority, by a change in statutory
                                          law or regulation, or by a judicial or
                                          other authoritative interpretation of
                                          the law enacted, promulgated or
                                          published after the date hereof.

         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, an amount of cash equal to the
Cash Settlement Value, as determined in accordance with the provisions set forth
under "Cash Settlement Value Payable at Maturity or upon Exchange or Issuer
Redemption" above, due with respect to each Biotech BOXES evidenced hereby on
the Maturity Date specified above (except to the extent redeemed or exchanged
prior to the Maturity Date) and to pay interest thereon as specified under
"Interest Rate" above, from and including the relevant Calculation Commencement
Date until such Cash Settlement Value is paid or duly made available for
payment, quarterly in arrears on each Interest Payment Date, commencing on the
Interest Payment Date following the Original Issue Date, and on any Early
Redemption Date or Exchange Date. The interest so payable on any Interest
Payment Date shall be paid to the person in whose name this Registered Global
Security (or one or more predecessor Registered Global Securities) is registered
at the close of business on the Record Date immediately preceding such Interest
Payment Date.

         Payment of the Cash Settlement Value of each of the Biotech BOXES
represented by this Registered Global Security and the interest due at maturity
(or on any Early Redemption Date or Exchange Date) shall be made in immediately
available funds upon surrender of this Registered Global Security 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. Payments of interest,
other than interest due at maturity (or on any Early Redemption Date or Exchange
Date), shall be made by U.S. dollar check mailed to the address of the person
entitled thereto as such address shall appear in the Registered Global Security
register. A Holder of     Biotech BOXES or more shall be entitled to receive
payments of interest, other than interest due at maturity (or on any Early
Redemption Date or Exchange Date), 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 Registered Global Security 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
Registered Global Security 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 Registered Global Security 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 Registered Global Security register; and provided, further, that payment of
the principal of this Registered Global Security, any premium and the interest
due at maturity (or on any redemption or repayment date) shall be made upon
surrender of this Registered Global Security at the office or agency referred to
in the preceding paragraph.

         If so indicated on the face hereof, the holder of this Registered
Global Security, if denominated in a Specified Currency other than U.S. dollars,
may elect to receive all or portion of payments on this Registered Global
Security 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 Registered Global Security at least five Business Days prior to such
Record Date, for payments of interest, or at least ten days prior to the
Maturity Date or any redemption or repayment date, for payments of principal, as
the case may be.

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

         Reference is hereby made to the further provisions of this Registered
Global Security 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
Registered Global Security shall not be entitled to any benefit under the Senior
Indenture or be valid or obligatory for any purpose.

<PAGE>

         IN WITNESS WHEREOF, the Issuer has caused this Registered Global
Security to be duly executed.

DATED:  March 22, 2002                     MORGAN STANLEY DEAN WITTER & CO.

                                           By:
                                               ---------------------------------
                                               Name:  Alexander C. Frank
                                               Title: Treasurer

TRUSTEE'S CERTIFICATE OF
   AUTHENTICATION

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

JPMORGAN CHASE BANK,
  as Trustee

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

<PAGE>

                              REVERSE OF SECURITY

         This Registered Global Security is one of the duly authorized issues
of Senior Global Medium-Term Notes, Series C, having maturities more than nine
months from the date of issue (the "Securities"), of the Issuer designated as
the Biotech Basket Opportunity Exchangeable Securities due January 30, 2032 of
the Issuer (the "Biotech BOXES"). The Securities are issuable under an Amended
and Restated Senior Indenture, dated as of May 1, 1999, each 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 it 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 their respective rights, limitations
of rights, duties and immunities of the Issuer, the Trustee and holders of the
Securities and the terms upon which the Securities are, and are to be,
authenticated and delivered. The Issuer has appointed JPMorgan Chase Bank at its
corporate trust office in New York City as the paying agent (the "Paying Agent,"
which term includes any additional or successor Paying Agent appointed by the
Issuer) with respect to the Securities. The terms of the individual Securities
may vary with respect to the 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. The aggregate number of Biotech BOXES
which may be authenticated and delivered under the Senior Indenture is initially
limited to         except for Biotech BOXES authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Biotech
BOXES pursuant to Sections 2.08, 2.09, 2.11 or 8.05 of the Senior Indenture,
provided, however, that the Issuer may "reopen" the series of Biotech BOXES and
issue additional securities of that series. References to "each Biotech BOXES"
or any similar phrase denoting a singular Biotech BOXES shall be deemed to refer
to a single Biotech BOXES representing the right to receive the Cash Settlement
Value (as defined herein) on the Maturity Date or on any Exchange Date or Early
Redemption Date.

                  Unless otherwise indicated on the face hereof, this Registered
Global Security 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 Registered Global
Security 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. If this Registered Global Security 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 Registered Global Security 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 Biotech BOXES designated for redemption at their
addresses as the same shall appear on the Registered Global Security register
not less than 30 nor more than 60 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 Registered Global Security in part only, a new Registered
Global Security or Registered Global Securities 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 Registered Global
Security, this Registered Global Security 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
Registered Global Security shall be repayable in whole or in part in increments
of $1,000 or, if this Registered Global Security 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. For this
Registered Global Security 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 days prior to
the date of repayment, (i) this Registered Global Security 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 Registered Global Security, the principal amount hereof, the
certificate number of this Registered Global Security or a description of this
Registered Global Security'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 Registered Global Security, 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
Registered Global Security 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 Registered
Global Security in part only, a new Registered Global Security or Registered
Global Securities for the amount of the unpaid portion hereof shall be issued in
the name of the holder hereof upon the cancellation hereof.

                  Unless otherwise provided on the face hereof, interest
payments for this Registered Global Security will be computed and paid on the
basis of a 360-day year of twelve-30 day months.

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

                  This Registered Global Security 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 Registered Global Security, and any Registered Global
Security or Registered Global Securities 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 Registered Global Security is denominated in a Specified
Currency other than U.S. dollars, then, unless a higher minimum denomination is
required by applicable law, it is issuable only in denominations of the
equivalent of U.S. $1,000 (rounded to an integral multiple of 1,000 units of
such Specified Currency), or any amount in excess thereof which is an integral
multiple of 1,000 units of such Specified Currency, as determined by reference
to the noon dollar buying rate in The City of New York for cable transfers of
such Specified Currency published by the Federal Reserve Bank of New York (the
"Market Exchange Rate") on the Business Day immediately preceding the date of
issuance.

                  The Trustee has been appointed registrar for the Biotech
BOXES, and the Trustee shall maintain at its office in the Borough of Manhattan,
The City of New York, a register for the registration and transfer of Biotech
BOXES. Subject to the limitations, terms and conditions set forth herein and in
the Senior Indenture, this Registered Global Security may be transferred at the
aforesaid office of the Trustee by surrendering this Registered Global Security
for cancellation, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and duly executed by the registered holder hereof in
person or by the holder's attorney duly authorized in writing, and thereupon the
Issuer shall execute and the Trustee shall authenticate and deliver in the name
of the transferee or transferees, in exchange herefor, a new Registered Global
Security or Registered Global Securities 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
Biotech BOXES that have been called for redemption, (ii) to register the
transfer of or exchange any Biotech BOXES if the holder thereof has exercised
its right, if any, to require the Issuer to repurchase such Biotech BOXES in
whole or in part, except the portion of such Biotech BOXES not required to be
repurchased, or (iii) to register the transfer of or exchange Biotech BOXES to
the extent and during the period so provided in the Senior Indenture with
respect to the redemption of Biotech BOXES. Biotech BOXES are exchangeable at
said office for other Biotech BOXES of other authorized denominations of equal
aggregate principal amount having identical terms and provisions. All such
exchanges and transfers of Biotech BOXES 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 Biotech BOXES surrendered for exchange shall
be accompanied by a written instrument of transfer in form satisfactory to the
Trustee and executed by the registered holder in person or by the holder's
attorney duly authorized in writing. The date of registration of any Biotech
BOXES delivered upon any exchange or transfer of Biotech BOXES shall be such
that no gain or loss of interest results from such exchange or transfer.

                  In case this Registered Global Security shall at any time
become mutilated, defaced or be destroyed, lost or stolen and this Registered
Global Security 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 Registered Global Security of like tenor in
exchange for this Registered Global Security, but, if this Registered Global
Security is destroyed, lost or stolen, only upon receipt of evidence
satisfactory to the Trustee and the Issuer that this Registered Global Security
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 Registered Global Security shall be borne by the owner of the
Registered Global Security 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 Registered Global Security forms a part, or due to the default in the
performance or breach of any other covenant or warranty of the Issuer applicable
to the debt securities of such series but not applicable to all outstanding debt
securities issued under the Senior Indenture shall have occurred and be
continuing, either the Trustee or the holders of not less than 25% in principal
amount of the debt securities of each affected series (voting as a single class)
may then declare the principal of all debt securities of all such series and
interest accrued thereon to be due and payable immediately, and (b) if an Event
of Default due to a default in the performance of any other of the covenants or
agreements in the Senior Indenture applicable to all outstanding debt securities
issued thereunder, including this Registered Global Security, or due to certain
events of bankruptcy or insolvency of the Issuer, shall have occurred and be
continuing, either the Trustee or the holders of not less than 25% in principal
amount of all debt securities issued under the Senior Indenture then outstanding
(treated as one class) may declare the principal of all such debt securities and
interest accrued thereon to be due and payable immediately, but upon certain
conditions such declarations may be annulled and past defaults may be waived
(except a continuing default in payment of principal (or premium, if any) or
interest on such debt securities) by the holders of a majority in principal
amount of the debt securities of all affected series then outstanding.

                  If the face hereof indicates that this Registered Global
Security is subject to "Modified Payment upon Acceleration," then (i) for the
purpose of any vote of securityholders taken pursuant to the Senior Indenture
prior to the acceleration of payment of this Registered Global Security, the
principal amount hereof shall equal the amount that would be due and payable
hereon if this Registered Global Security were declared to be due and payable on
the date of any such vote and (ii) for the purpose of any vote of
securityholders taken pursuant to the Senior Indenture following the
acceleration of payment of this Registered Global Security, the principal amount
hereof shall equal the amount of principal due and payable with respect to this
Registered Global Security.

                  If the face hereof indicates that this Registered Global
Security is subject to "Tax Redemption and Payment of Additional Amounts," this
Registered Global Security 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 Registered Global Security is subject to "Modified Payment upon
Acceleration or Redemption," such redemption price would be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of redemption, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of redemption) (the "Amortized
Amount")), if the Issuer determines that, as a result of any change in or
amendment to the laws (or any regulations or rulings promulgated thereunder) of
the United States or of any political subdivision or taxing authority thereof or
therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which change
or amendment becomes effective on or after the Initial Offering Date hereof, the
Issuer has or will become obligated to pay Additional Amounts (as defined below)
with respect to this Registered Global Security as described below. Prior to the
giving of any Notice of redemption pursuant to this paragraph, the Issuer shall
deliver to the Trustee (i) a certificate stating that the Issuer is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Issuer to so redeem have occurred, and
(ii) an opinion of independent counsel satisfactory to the Trustee to such
effect based on such statement of facts; provided that no such notice of
redemption shall be given earlier than 60 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 Registered Global Security were then due.

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

                  If the face hereof indicates that this Registered Global
Security 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
Registered Global Security who is a United States Alien as may be necessary in
order that every net payment of principal of and interest on this Registered
Global Security and any other amounts payable on the Biotech BOXES, after
withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein),
shall not be less than the amount provided for in this Registered Global
Security to be then due and payable. The Issuer shall not, however, be required
to make any payment of Additional Amounts to any such holder for or on account
of:

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

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

                  (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;

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

                  (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 Registered Global Security, 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 Registered Global Security, 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);

nor shall Additional Amounts be paid with respect to any payment on this
Registered Global Security 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 Registered Global Security.

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

                  Except as set forth below, if the principal of, premium, if
any, or interest on, this Registered Global Security 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 Registered Global Security 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 Registered Global
Security effect the payment of principal of, premium, if any, or interest on,
any Registered Global Security 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 (the "EC"), as amended by the treaty on European Union (as so amended,
the "Treaty"). 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 the
Securities 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 the Securities.

                  So long as this Registered Global Security 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 Registered
Global Security 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 Biotech BOXES. 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.

                  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 Biotech BOXES 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 Biotech BOXES 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 Registered
Global Security as the same shall become due.

                  No provision of this Registered Global Security 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 Registered Global Security 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 Registered Global Security. For
purposes of the Biotech BOXES, references to payment of principal in the
immediately preceding sentence shall mean payment of Cash Settlement Value.

                  Except as otherwise specifically provided in this Registered
Global Security, whenever in the Senior Indenture or this Registered Global
Security there is mentioned, in any context, the principal of or principal
amount of any Security of any series, such mention shall be deemed to be, solely
with respect to this Registered Global Security, $ o per Biotech BOXES;
provided, however, that whenever in the Senior Indenture or this Registered
Global Security there is mentioned declaration or payment of such principal or
principal amount, such mention shall be deemed to be, solely with respect to the
Biotech BOXES, declaration or payment of the Cash Settlement Value with respect
to such Biotech BOXES.

                  Prior to due presentment of this Registered Global Security
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 Registered Global
Security is registered as the owner hereof for all purposes, whether or not this
Registered Global Security 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 Registered Global Security, 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 Registered Global Security shall for all purposes be
governed by, and construed in accordance with, the laws of the State of New
York.

                  As used herein, the term "United States Alien" means any
person who, for United States federal income tax purposes, is a foreign
corporation, a non-resident alien individual, a non-resident alien fiduciary of
a foreign estate or trust, or a foreign partnership one or more of the members
of which is a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.

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

<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.

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

<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 Registered Global Security and all rights thereunder, hereby
irrevocably constituting and appointing such person attorney to transfer such
Registered Global Security 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 Registered Global Security in
         every particular without alteration or enlargement or any change
         whatsoever.

<PAGE>
                                                                         ANNEX A
                           OFFICIAL NOTICE OF EXCHANGE

                                               Dated: On or after April 22, 2002

Morgan Stanley Dean Witter & Co.
1585 Broadway
New York, New York 10036

Morgan Stanley & Co. Incorporated, as Calculation Agent
1585 Broadway
New York, New York 10036
Fax No.: (212) 761-0674
(Attn: William Threadgill)

Dear Sirs:

         The undersigned holder of the Basket Opportunity eXchangeablE
SecuritiesSM due January 30, 2032, exchangeable for an amount of cash based on
the value of the stocks underlying the American Stock Exchange's BTK Index of
Morgan Stanley Dean Witter & Co. (CUSIP No. 61744Y413) (the "Biotech BOXES")
hereby irrevocably elects to exercise with respect to the number of Biotech
BOXES indicated below, as of the date hereof, the Exchange Right as described in
the pricing supplement dated March 19, 2002 (the "Pricing Supplement") to the
Prospectus Supplement and Prospectus, dated January 24, 2001 related to
Registration Statement No. 333-47576. Terms not defined herein have the meanings
given to such terms in the Pricing Supplement. Please date and acknowledge
receipt of this notice in the place provided below on the date of receipt, and
fax a copy to the fax number indicated.

         The undersigned certifies to you that (i) it is, or is duly authorized
to act for, the beneficial owner of the principal amount of the Biotech BOXES
indicated below its signature (and attaches evidence of such ownership as
provided by the undersigned's position services department or the position
services department of the entity through which the undersigned holds its
Biotech BOXES); and (ii) it will cause the Biotech BOXES to be exchanged to be
transferred to the Trustee on the Exchange Date.

                                                Very truly yours,

                                                --------------------------------
                                                [Name of Holder]

                                                By:
                                                   -----------------------------
                                                   [Title]

                                                   -----------------------------
                                                   [Tel. No.]

                                                   -----------------------------
                                                   [Fax No.]

Number of Biotech BOXES surrendered for exchange(1):
                                                    ----------------------------

Receipt of the above Official Notice of Exchange is hereby acknowledged

MORGAN STANLEY DEAN WITTER & CO., as Issuer
MORGAN STANLEY & CO. INCORPORATED, as Calculation Agent

By: MORGAN STANLEY & CO. INCORPORATED, as Calculation Agent

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

Date and time of acknowledgment:
                                 -------------------------------

--------
(1) Minimum 30,000 Biotech BOXES unless a Credit Exchange Event (as defined in
the Pricing Supplement) has occurred and is continuing.EXHIBIT 10.1

<PAGE>

                                    FORM OF
                                 RADVISION LTD.
                           YEAR 2000 STOCK OPTION PLAN

     RADVision Ltd., a corporation  formed under the laws of the State of Israel
(the "Company"),  hereby  establishes and adopts the following Stock Option Plan
(the "Plan"),  effective ________,  2000 (the AEffective Date@),  subject to the
approval of the Plan within 12 months of the  Effective  Date by the majority of
the shares entitled to vote at a duly constituted meeting of the shareholders of
the Company.

     1.  Purpose.  The purpose of the Plan is to attract and retain  outstanding
employees  and  consultants  of  the  Company  and  its  Subsidiaries  who  will
contribute to the Company's  success and to achieve  long-term  objectives which
will  inure to the  benefit  of all  stockholders  of the  Company  through  the
additional  incentive inherent in the ownership of the Company's ordinary shares
("Shares").  For  purposes  of  the  Plan,  the  term  "Subsidiary"  shall  mean
"subsidiary  corporation," as such term is defined in Section 424(f) of the U.S.
Internal  Revenue  Code of 1986,  as amended (the  "Code").  For purposes of the
Plan,  the term AAward@  shall mean a grant of an option to purchase  Shares (an
AOption@) pursuant to the Plan.

     2. Shares Subject to Awards.

     (a) Awards under the Plan may be granted in the following forms:

          (i) incentive stock options (AIncentive Stock Options@) as provided in
     Section  422 of the Code;  provided,  however,  that no Award of  Incentive
     Stock  Options  shall be made  hereunder  after  the date that is the tenth
     anniversary of the Effective Date;

          (ii) non-qualified stock options  (ANon-qualified  Options@) (the term
     AOptions@ includes incentive stock options and non-qualified options); and

          (iii)  options  granted  pursuant  to Section  102 of the  Israeli Tax
     Ordinance ("102 Options").

          (iv)  options  granted  pursuant  to Section  3.9 of the  Israeli  Tax
     Ordinance ("3.9 Options").

     (b)  Subject  to the  adjustment  provisions  of  Section  12  hereof,  the
aggregate number of Shares which may be issued under all Awards shall not exceed
_____________Shares.  Shares  delivered  under  the Plan may be  authorized  and
unissued  Shares or Shares  reacquired by the Company,  or both. The Shares that
are  forfeited  under the terms of the Plan and Shares  that are the  subject of
Options that expire unexercised or which are otherwise surrendered by the holder
of such Option (the AOptionee@)  without  receiving any payment or other benefit
with respect thereto may again be subject to new Awards under the Plan.

<PAGE>

     3. Administration of the Plan. The Plan shall be administered by members of
the  compensation  committee  of the  Board of  Directors  of the  Company  (the
ABoard@),  consisting  of not  fewer  than  two  directors  of the  Company,  as
designated by the Board (the ACommittee@).

     The  Committee is  authorized,  subject to the  provisions  of the Plan, to
establish such rules and regulations as it may deem  appropriate for the conduct
of meetings and proper  administration of the Plan. All actions of the Committee
shall be taken by majority vote of its members,  except that the members thereof
may  authorize  any one or more of their number or any officer of the Company to
execute  and  deliver  documents  on behalf  of the  Committee.  Subject  to the
provisions  of the  Plan,  the  Committee  shall  have  authority,  in its  sole
discretion,  to grant Awards under the Plan, to interpret the  provisions of the
Plan and, subject to the requirements of applicable law, including Rule 16b-3 of
the  Exchange  Act,  to  prescribe,  amend,  and rescind  rules and  regulations
relating  to the  Plan or any  Award  thereunder  as it may  deem  necessary  or
advisable. All decisions made by the Committee pursuant to the provisions of the
Plan shall be final,  conclusive  and binding on all  persons.  No member of the
Committee  shall be liable for anything  done or omitted to be done by him or by
any other member of the  Committee in connection  with the Plan,  except for his
own willful misconduct or as expressly provided by statute.

     It may be intended that Options issued to Israeli  employees of the Company
or any of its  Subsidiaries  shall  contain  such terms as will qualify them for
special tax treatment  under section 102 of the Israeli Tax Ordinance  ("Section
102").  Accordingly,  all 102 Options  and/or Shares issued upon the exercise of
102 Options shall be issued to a trustee nominated by the Committee and approved
in accordance with the provisions of Section 102 (the  "Trustee"),  and shall be
held in trust for the benefit of such  Optionees  for the period  prescribed  in
Section 102. Notwithstanding any provision of the Plan or the trust described in
the preceding  sentence,  the Trustee shall not release any 102 Option which has
not been  exercised into Shares by an Optionee or release any Shares issued upon
the  exercise of a 102 Option prior to the full  payment of the  Optionee's  tax
liabilities  arising  from such 102 Option.  Upon  receipt of the grant of a 102
Option,  the Optionee may be required to execute a release relieving the Trustee
from any  liability in respect of any action or decision duly taken and executed
in respect of such 102 Option or Shares issued pursuant thereto.

     4.  Eligibility.  Awards shall be made to such  employees or consultants of
the Company or any of its  Subsidiaries  as the Committee shall select from time
to time; provided, however, that Incentive Stock Options shall not be granted to
any person who is not an employee of the Company or its  Subsidiaries  or to any
owner of 10% or more of the total combined  voting power of all classes of stock
of the Company and its  Subsidiaries,  as determined under Section  422(b)(6) of
the  Code  (a  A10%  owner@),   except  as  specifically  provided  herein.  The
Committee's  designation  of an  Optionee  in any year  shall  not  require  the
Committee  to  designate  such  person to receive  Awards or grants in any other
year.

                                       2

<PAGE>

     5. Stock Option Agreements.  All Options granted pursuant to the Plan shall
be evidenced in writing by stock option agreements  ("Stock Option  Agreements")
in such form and  containing  such terms and  conditions as the Committee  shall
determine which are not inconsistent with the provisions of the Plan,  including
the following:

     (a) Type of Option; Number of Shares. Each Option shall be designated as an
Incentive Stock Option, a Non-qualified Option, 102 Option or a 3.9 Option. Each
Stock  Option  Agreement  shall  state  the  total  number of Shares to which it
pertains;  provided,  however,  that the aggregate Fair Market Value (as defined
below) of Shares subject to an Incentive Stock Option granted to any employee in
any  calendar  year under this Plan and all other  plans of the  Company and its
Subsidiaries shall not exceed $100,000, as determined in accordance with Section
422 of the Code.

     (b) Option  Price.  The Option price per Share shall be  determined  by the
Committee  at the time any  Option is  granted  and  stated in the Stock  Option
Agreement,  but shall not be less  than  100% of the Fair  Market  Value of such
Share on the date of the Award; provided,  however, that in the case of an Award
of Incentive Stock Option made to a 10% owner,  the Option price per Share shall
be not less than 110% of the Fair Market  Value of such Share on the date of the
Award.  For all purposes  under the Plan,  Fair Market Value shall mean,  if the
Shares are listed or admitted to trading on a securities exchange, the per Share
closing  price of the Shares for the day  immediately  preceding  the date as of
which Fair Market Value is being determined (or if there was no reported closing
price on such date,  on the last  preceding  date on which the closing price was
reported) reported on the principal  securities exchange on which the Shares are
listed or admitted to trading and reflected in the  consolidated  trading tables
of The Wall Street Journal.

     (c) Option  Period.  The  period  for which the Option is granted  shall be
determined by the Committee,  and the Stock Option  Agreement shall provide that
the Option shall expire at the end of such period:  provided,  however,  that no
Option shall be  exercisable  after the expiration of ten years from the date of
its Award; and, provided further that an Option shall not be exercisable  unless
counsel  for the Company  shall be  satisfied  that the  issuance of Shares upon
exercise will be in compliance with the Exchange Act and other  applicable laws.
No Option may be exercised after the expiration of its term. Notwithstanding the
foregoing,  in the case of an Award of  Incentive  Stock  Options  made to a 10%
owner,  such Option shall not be exercisable  after the expiration of five years
from its date of Award.

                                       3
<PAGE>

     (d) Exercise  Period.  The Exercise  Period for which the Option is granted
shall be determined by the Committee.

     Except as  otherwise  provided  upon a Change of Control of the  Company in
Section 11 hereof,  Options that are subject to vesting shall cease to vest upon
the Optionee's  termination  and/or  resignation of employment as an employee or
consultant for any reason; provided,  however, that in the year that an Optionee
terminates and/or resigns  employment as an employee or consultant on account of
his or her death or  disability,  the Optionee  shall  receive a fraction of the
incremental percentage increase in vesting that the Optionee would have received
had he or she  remained  employed  until  the  next  vesting  date  equal to the
proportional  time of service to the Company or any Subsidiary in such year. For
the purpose of this section, the Optionee's  termination and/or resignation date
shall be his last date of employment.

     (e) Time and Manner of Payment.  Each Stock Option  Agreement shall provide
that  Options  granted  under the Plan shall be exercised by the Optionee (or by
his executors,  administrators,  guardian or legal  representative) as to all or
part of the Shares covered thereby,  by the giving of written notice of exercise
to the Company, specifying the number of Shares to be purchased. Full payment of
such  purchase  price shall be made  within five  business  days  following  the
receipt of such notice by the Company and shall be made in cash or by  certified
check  or bank  check;  provided,  however,  that the  Optionee  may  order  the
deduction  of full  payment out of the  proceeds of the  immediate  sales of the
Shares.  Such notice of exercise  and full  payment,  shall be  delivered to the
Company at its principal  business  office or such other office as the Committee
may from time to time direct, and shall be in such form, containing such further
provisions consistent with the provisions of the Plan, as the Committee may from
time to  time  prescribe.  In no  event  may any  Option  granted  hereunder  be
exercised  for a fraction of a Share.  The Company  shall effect the transfer of
Shares  purchased  pursuant to an Option as soon as  practicable,  and, within a
reasonable time thereafter, such transfer shall be evidenced on the books of the
Company. No person exercising an Option shall have any of the rights of a holder
of Shares  subject to an Option  until  certificates  for such Shares shall have
been issued  following the exercise of such Option.  No adjustment shall be made
for cash  dividends  or other  rights for which the record  date is prior to the
date of such issuance.

     (f) Other Provisions.  A Stock Option Agreement may contain any other terms
and conditions that the Committee,  in its sole discretion,  deems  appropriate;
provided, however, that no such term or condition shall be inconsistent with the
terms of the Plan or, in the case of an Incentive  Stock Option,  Section 422 of
the Code.  Each Stock Option  Agreement may condition the exercise of any Option
upon the  attainment  of  specified  productivity  goals by a  Company  group or
division or an individual Optionee.

     6.  Non-Transferability  of  Options.  No  Option  shall be  assignable  or
transferable  by the  Optionee,  other than by will or the laws of  descent  and
distribution,  and may be exercised  during the lifetime of the Optionee only by
the Optionee or his guardian or legal representative; provided,

                                       4

<PAGE>

however, that during the Optionee's lifetime, the Optionee may, with the consent
of the  Committee,  transfer  without  consideration  all or any  portion of his
Options to (i) one or more members of the Optionee's  immediate  family,  (ii) a
trust  established  for the  exclusive  benefit  of one or more  members  of the
Optionee's  immediate  family, or (iii) a limited liability company in which all
members are members of the  Optionee's  immediate  family.  For purposes of this
Section  6,   Aimmediate   family@  means  the  Optionee's   spouse,   children,
stepchildren,   grandchildren,  parents,  stepparents,   grandparents,  siblings
(including half-brothers and half-sisters),  in-laws, and all such relationships
arising because of legal adoption;  provided,  however,  that any such immediate
family,  and any such trust,  partnership and limited liability  company,  shall
agree to be and shall be bound by the terms and  provisions  of the Plan and any
applicable Stock Option  Agreement or other  agreements  covering the Options of
the Shares.

     7. Termination of Employment or Services as a Consultant.

     (a)  Except  as  otherwise  provided  by the  Committee  in a Stock  Option
Agreement, in the event of the termination of and/or resignation from employment
or consulting  services of an Optionee with the Company and its Subsidiaries for
any reason (other than termination for cause,  retirement,  death, disability or
Change of Control of the Company as provided below), Options granted to him that
have  not  previously  expired  or  been  exercised  shall  be,  to  the  extent
exercisable on the date of such termination and/or resignation (the "Termination
Date"),  exercisable by the Optionee within 30 days after such Termination Date,
unless  such  Option is earlier  terminated  pursuant  to its  terms;  provided,
however,  that if a Termination Date falls within a restricted period (such as a
"Quiet  Period," as may be determined by the  Committee,  or within a restricted
period due to tax regulations), then the Termination Date shall be determined to
be the first following date after the end of such restricted period. All Options
that are not exercisable as of the  Termination  Date or which are not exercised
within 30 days  thereafter,  shall be deemed  canceled and terminated as of such
date. For the purpose of this section, the Optionee's  Termination Date shall be
the date of the Optionee's  "Letter of  Termination"  or "Letter of Resignation"
(as the case may be); provided, however, that the CEO and COO of the Company are
hereby authorized to determine the Termination Date as any other date .

     (b) In the event  that an  Optionee's  employment  or  consulting  services
agreement is terminated by the Company or any of its  Subsidiaries  for Acause,@
all Options exercisable as of the date of such termination shall be canceled and
terminated as of such date. For these  purposes,  termination  for "cause" shall
mean the following:  the Optionee's violation of copyright/trademark  protection
maintained by the Company, a Subsidiary or Affiliate; the Optionee's engaging or
assisting in any business in  competition  with the Company,  a Subsidiary as an
employee, owner, partner, director,  officer,  stockholder,  consultant or agent
(ownership of minority  interests in  publicly-traded  corporations  or of 5% or
less of the equity of  privately-held  corporations,  partnerships  or companies
shall not be considered  competition for purposes of this Plan);  the Optionee's
dishonesty,  or acting in any manner inconsistent with the utmost good faith and
loyalty in the performance of the Optionee's duties;  failure of the Optionee to
perform  his  duties  to  the  reasonable  satisfaction  of the  Company  or its
Subsidiaries.

                                       5
<PAGE>

     8.  Retirement.  Except as otherwise  provided by the  Committee in a Stock
Option Agreement, in the event that an Optionee retires from employment with the
Company and its  Subsidiaries,  Options  granted to him that have not previously
expired  or been  exercised  shall,  to the  extent  exercisable  on the date of
retirement,  continue to be exercisable  by the Optionee in accordance  with the
Stock Option Agreement under which such Options were granted.  Whether or not an
Optionee  has  Aretired@  shall  be  determined  by the  Committee  in its  sole
discretion.

     9. Death.  In the event an  Optionee  dies while  employed by or  providing
consulting  services  to the  Company  or any of its  Subsidiaries,  any  Option
granted to him that has not previously  expired or been exercised  shall, to the
extent  exercisable  on the date of death,  be exercisable by the estate of such
Optionee or by any person who acquired such Option by bequest or inheritance, at
any time  within one year after the date of death of the  Optionee,  unless such
Option is earlier  terminated  pursuant to its terms.  All Options  that are not
exercisable  as of the date of the  Optionee's  death or which are not exercised
within one years  thereafter  shall be deemed canceled and terminated as of such
applicable date.

     10.  Disability.  In the event of the  termination  and/or  resignation  of
employment or consulting  services of an Optionee due to total  disability,  the
Optionee  or his  guardian  or legal  representative,  shall  have the  right to
exercise any Option which has not been previously exercised or expired and which
the Optionee was eligible to exercise as of the first date of total  disability,
at any time  within  one year  after  such  termination  and/or  resignation  or
separation,  unless such Option is earlier terminated pursuant to its terms. All
Options that are not  exercisable as of the date of the  Optionee's  termination
and/or  resignation or which are not exercised  within one year thereafter shall
be deemed  canceled and terminated as of such  applicable  date. The term "total
disability"  shall,  for purposes of this Plan, be defined in the same manner as
such term is defined in Section  22(e)(3) of the Code and shall be determined by
the Committee in its sole discretion.

     11. Change of Control.  Except as otherwise  provided by the Committee in a
Stock Option Agreement, upon a Change of Control of the Company, Options granted
to any Optionee that have not previously  expired or been exercised shall become
null and void. A Change of Control shall be deemed to have occurred when:

     (a) any person (as such term is used in Section 13 of the  Exchange Act and
the rules and regulations  thereunder and any person acting in concert with such
person)  directly or indirectly  acquires or otherwise  becomes entitled to vote
more than 80% of the voting power entitled to be cast at elections for directors
of the Company; or

                                       6
<PAGE>

     (b) there occurs any merger or consolidation  of the Company,  or any sale,
lease or exchange of all or any substantial part of the  consolidated  assets of
the Company and its  Subsidiaries to any other person,  and (i) in the case of a
merger  or  consolidation,  the  holders  of  outstanding  stock of the  Company
entitled to vote in elections of  directors  of the Company  immediately  before
such  merger or  consolidation  (excluding  for this  purpose  any  person  that
directly  or  indirectly  owns or is  entitled to vote 20% or more of the voting
power of the Company)  hold less than 80% of the voting power of the survivor of
such  merger or  consolidation  or its  parent,  or (ii) in the case of any such
sale,  lease or  exchange,  the Company  does not own at least 80% of the voting
power of the other person, or

     (c) one or more new  directors  of the Company are elected and at such time
five or more directors  (or, if less, a majority of the directors)  then holding
office were not nominated as candidates by a majority of the directors in office
immediately before such election.

     12.  Adjustments.  In the event that the Committee shall determine that any
dividend  or other  distribution  (whether  in the form of cash,  Shares,  other
securities,  or other property),  recapitalization,  stock split,  reverse stock
split, reorganization,  merger, consolidation,  split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities,  the issuance of warrants
or other  rights  to  purchase  Shares  or other  securities,  or other  similar
corporate  transaction or event affects the Shares with respect to which Options
have been or may be issued under the Plan, such that an adjustment is determined
by the Committee to be appropriate  in order to prevent  dilution or enlargement
of the benefits or potential  benefits  intended to be made available  under the
Plan,  then the  Committee  shall,  in such  manner  as the  Committee  may deem
equitable,  adjust  any or all of  (i)  the  number  and  type  of  Shares  that
thereafter  may be made the  subject  of  Options,  (ii) the  number and type of
Shares  subject to  outstanding  Options,  and (iii) the grant or exercise price
with respect to any Option, or, if deemed appropriate, make provision for a cash
payment to the holder of any outstanding  Option;  provided,  however,  that the
number of Shares  subject to any Option  denominated in Shares shall always be a
whole number.

     13. Tax Withholding. The Optionee shall be fully and solely responsible for
any Local,  State,  Federal and/or any other tax resulting from the grant of the
Options  and/or from exercise of such options.  The Company shall have the right
to withhold from such Optionee such withholding taxes as may be required by law,
or to  otherwise  require the  Optionee to pay such  withholding  taxes.  If the
Optionee  shall fail to make such tax payments as are  required,  the Company or
its Subsidiaries shall, to the extent permitted by law, have the right to deduct
any such taxes  from any  payment  of any kind,  including  a payment of Shares,
otherwise  due to such Optionee or to take such other action as may be necessary
to satisfy such withholding obligations.

     14.  Right of Discharge  Reserved.  Nothing in the Plan nor the grant of an
Award hereunder shall confer upon any employee or other  individual the right to
continue  in the  employment  of or to  continue  under  a  consulting  services
agreement with the Company or any of its  Subsidiaries  or affect any right that
the Company or any  Subsidiary or Affiliate may have to terminate the employment
of

                                       7
<PAGE>

(or to  demote  or to  exclude  from  future  Options  under  the Plan) any such
employee  or  consultant  at any time for any  reason.  Except  as  specifically
provided  by the  Committee,  the  Company  shall not be liable  for the loss of
existing or potential  profit from an Award granted in the event of  termination
of employment or any consulting services agreement even if the termination is in
violation of an  obligation  of the Company or any  Subsidiary of the Company to
the employee.

     15.  Severability.  If any  provision of the Plan shall be held unlawful or
otherwise  invalid  or  unenforceable  in whole or in part,  such  unlawfulness,
invalidity or unenforceability  shall not affect any other provision of the Plan
or part thereof, each of which remain in full force and effect. If the making of
any payment or the provision of any other benefit  required under the Plan shall
be held  unlawful or  otherwise  invalid or  unenforceable,  such  unlawfulness,
invalidity  or  unenforceability  shall not prevent any other payment or benefit
from being made or provided  under the Plan,  to the extent that it would not be
unlawful,  invalid or  unenforceable,  and the maximum  payment or benefit  that
would not be unlawful,  invalid or unenforceable shall be made or provided under
the Plan.

     16.  Amendment  and  Termination  of the Plan.  The Board may, from time to
time, alter,  amend,  suspend or terminate the Plan with respect to Options that
have not been  granted,  subject to any  requirement  for  stockholder  approval
imposed by applicable law or any rule of any stock exchange or quotation  system
on which Shares are listed or quoted; provided,  however, that the Board may not
amend  the Plan in any  manner  that  would  result  in  noncompliance  with any
applicable law.  Neither the Board nor the Committee may, without the consent of
the Optionee,  alter or in any way impair the rights of such Optionee  under any
Award  previously  granted.  Neither the  termination of the Plan nor, except as
provided in Section 11, the Change of Control of the  Company  shall  affect any
Option previously granted.

     Without  amending the Plan,  the  Committee  may grant  Options to eligible
individuals  who are foreign  nationals on such terms and  conditions  different
from those  specified  in this Plan as may in the  judgment of the  Committee be
necessary or desirable to foster and promote  achievement of the purposes of the
Plan,  and,  in  furtherance  of such  purposes,  the  Committee  may make  such
modifications,  amendment,  procedures  and  the  like  to  the  Plan  as may be
necessary or advisable to comply with the provisions of laws in other  countries
in which the Company operates or has employees.

     If the  approval  of the Plan by the  stockholders  of the  Company  is not
obtained within 12 months of the Effective Date, the Plan shall be null and void
and each Award of an Option hereunder shall be null and void.

     17. Gender and Number. Any masculine terminology used in this Plan document
shall also include the  feminine,  and the  definition of any term herein in the
singular  shall also include the plural except when  otherwise  indicated by the
context.

                                       8
<PAGE>

     18. Governing Law. The Plan and all  determinations  made and actions taken
thereunder,  to the extent not otherwise governed by the Code or the laws of the
United  States,  shall be  governed  by the  laws of the  State  of  Israel  and
construed accordingly.

                                       9

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