Document:

EXHIBIT 4-aa

                           [FORM OF FACE OF SECURITY]

               EURO SENIOR REGISTERED FLOATING RATE RENEWABLE NOTE

REGISTERED                                             REGISTERED
No. EFLRR                                              ISIN: [      ]
                                                       Common Code: [       ]

                                                       [Principal Amount],
                                                       as modified by Schedule I

         THIS NOTE HAS NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE
SECURITIES AND EXCHANGE LAW OF JAPAN. THIS NOTE MAY NOT BE OFFERED OR SOLD,
DIRECTLY OR INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF
JAPAN (WHICH TERM AS USED HEREIN MEANS ANY PERSON RESIDENT IN JAPAN INCLUDING
ANY CORPORATION OR OTHER ENTITY ORGANIZED UNDER THE LAWS OF JAPAN) OR TO OTHERS
FOR THE RE-OFFERING OR RE-SALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO A
RESIDENT OF JAPAN EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF, AND OTHERWISE IN COMPLIANCE WITH, THE SECURITIES AND EXCHANGE
LAW OF JAPAN AND OTHER RELEVANT LAWS AND REGULATIONS OF JAPAN.(1)

--------------------
     (1) If this Note is offered in Japan or denominated in Japanese Yen,
appropriate legends need to be added.

<PAGE>

                     GLOBAL MEDIUM-TERM NOTE, SERIES [G/H]
                 EURO SENIOR REGISTERED FLOATING RATE RENEWABLE
                 EXtendible Liquidity Securities(SM) (EXLs(SM))

-------------------------------------------------------------------------------
BASE RATE:                 ORIGINAL ISSUE DATE:      INITIAL MATURITY DATE:
-------------------------------------------------------------------------------
INDEX MATURITY:            INTEREST ACCRUAL DATE:    FINAL MATURITY DATE:
-------------------------------------------------------------------------------
REPORTING SERVICE:         INITIAL INTEREST RATE:    MATURITY EXTENSION
                                                         DATE:
-------------------------------------------------------------------------------
INTEREST PAYMENT PERIOD:   INITIAL INTEREST RESET    INTEREST PAYMENT
                               DATE:                     DATE(S):
-------------------------------------------------------------------------------
EXTENDED MATURITY DATE:    ELECTION PERIODS:         INTEREST RESET PERIOD:
-------------------------------------------------------------------------------
SPREAD (PLUS OR MINUS):    MAXIMUM INTEREST RATE:    INTEREST RESET DATE(S):
-------------------------------------------------------------------------------
SPREAD MULTIPLIER:         MINIMUM INTEREST RATE:    PRINCIPAL PAYING AGENT
                                                         AND CALCULATION
                                                         AGENT:
-------------------------------------------------------------------------------

INDEX CURRENCY:            INITIAL REDEMPTION DATE:
-------------------------------------------------------------------------------

EXCHANGE RATE AGENT:       INITIAL REDEMPTION        DENOMINATIONS:
                               PERCENTAGE:
-------------------------------------------------------------------------------
INCREMENTAL SPREAD         ANNUAL REDEMPTION         SPECIFIED CURRENCY:
    COMMENCEMENT DATE:         PERCENTAGE
                               REDUCTION:
-------------------------------------------------------------------------------

INCREMENTAL SPREAD (PLUS   OPTIONAL REPAYMENT        IF SPECIFIED CURRENCY
    OR MINUS):                 DATE(S):                  OTHER THAN U.S.
                                                         DOLLARS, OPTION TO
                                                         SELECT PAYMENT IN
                                                         U.S. DOLLARS:
-------------------------------------------------------------------------------
REDEMPTION DATES:          REDEMPTION NOTICE         DESIGNATED CMT TELERATE
                               PERIOD:(2)                PAGE:
-------------------------------------------------------------------------------
REDEMPTION PERCENTAGE:     INITIAL OFFERING DATE:    DESIGNATED CMT MATURITY
                                                         INDEX:
-------------------------------------------------------------------------------
                                                     OTHER PROVISIONS: See
                                                         below.
===============================================================================

--------------------
     (2) Applicable if other than 30-60 calendar days. Consult with Euroclear or
Clearstream if a shorter redemption is requested. A minimum of 10 calendar days
may be possible.

                                       2
<PAGE>

IRREVOCABLE NOTICE:      [Upon delivery of a notice electing to extend the
                         maturity of this Note or any portion thereof to
                         JPMorgan Chase Bank (London Branch), such election
                         shall be irrevocable. The holder of a Short-Term Note
                         (as defined below) received as a consequence of the
                         failure to make such election may not elect to exchange
                         such Short-Term Note for an interest in this Note.]

MATURITY
     EXTENSION PERIOD:   [18 calendar months, or if the last day of such period
                         is not a Business Day, the Maturity Extension Period
                         shall end on the first Business Day immediately
                         preceding such day.]

MATURITY EXTENSION:      [This Note shall mature on the Initial Maturity Date,
                         unless the maturity of all or any portion of the
                         principal amount hereof is extended in accordance with
                         the procedures described herein under "Option to Extend
                         Maturity."]

OPTION TO
     EXTEND MATURITY:    [During any Election Period, if the option to extend
                         the maturity of this Note is exercised, the maturity of
                         this Note, or of any portion of this Note having a
                         principal amount of Euro            or any integral
                         multiple of Euro          in excess thereof for which
                         such option has been exercised, shall be extended to
                         the Maturity Extension Date occurring in the month
                         eighteen months after the earliest to occur of the next
                                   ,           ,      or           immediately
                         succeeding such Election Period. In order to exercise
                         the option to extend the maturity of all, or any
                         portion, of the principal amount of this Note, the
                         holder of this Note must deliver to JPMorgan Chase Bank
                         (London Branch) during the relevant Election Period
                         (and on or prior to 5:00 p.m. (London time) on the last
                         Business Day in such Election Period) (i) the form
                         entitled "Option to Extend Maturity" included below
                         duly completed and, in the event of an election to
                         extend the maturity of only a portion of the principal
                         amount of this Note, this Note or (ii) a telegram,
                         telex, facsimile transmission or a letter from a member
                         of a national securities exchange or the National
                         Association of Securities Dealers, Inc. or a commercial
                         bank or a trust company in the United States setting
                         forth the name of the holder of this Note, the
                         principal amount

                                       3
<PAGE>

                         hereof, the certificate number of this Note or a
                         description of this Note's tenor or terms, a statement
                         that the option to elect extension of maturity is being
                         exercised thereby, the principal amount hereof with
                         respect to which such option is being exercised and a
                         guarantee that the form entitled "Option to Extend
                         Maturity" included below duly completed and, in the
                         event of an election to extend the maturity of only a
                         portion of the principal amount of this Note, this Note
                         will be received by JPMorgan Chase Bank (London Branch)
                         no later than five Business Days after the date of such
                         telegram, telex, facsimile transmission or letter;
                         provided that such telegram, telex, facsimile
                         transmission or letter shall not be effective unless
                         this Note (if required to be surrendered as aforesaid)
                         and such form duly completed are received by JPMorgan
                         Chase Bank (London Branch) by such fifth Business Day.
                         Such option may be exercised by the holder for less
                         than the entire principal amount hereof provided that
                         the principal amount for which such option is not
                         exercised is at least Euro       or any larger amount
                         that is an integral multiple of Euro         .]

                         [If the option to extend the maturity of any portion
                         hereof is not duly exercised within any Election
                         Period, a new Note or Notes in the form attached hereto
                         as Exhibit A (each, a "Short-Term Note") for all or
                         that portion of the principal amount hereof as to which
                         such option to extend has not been made and having as
                         its or their "Maturity Date" (as such term is used in
                         each such Short-Term Note) the Extended Maturity Date
                         or, if the option to extend the maturity of this Note
                         has not previously been duly exercised as to such
                         portion of the principal amount hereof, the Initial
                         Maturity Date shall be issued on the Interest Payment
                         Date immediately succeeding such Election Period in the
                         name of the holder hereof, subject to delivery of this
                         Note to JPMorgan Chase Bank (London Branch), and
                         Schedule I hereto shall be annotated as of the Interest
                         Payment Date immediately succeeding such Election
                         Period to reflect the corresponding decrease in the
                         principal amount hereof. The failure to elect to extend
                         the maturity of all or any portion of this Note will be
                         irrevocable and will be binding upon any subsequent
                         holder of this Note.]

                                       4
<PAGE>

                         [The Issuer and the Trustee shall deem this Note
                         cancelled as to any portion of the principal amount
                         hereof for which a duly completed form entitled "Option
                         to Extend Maturity" and, if applicable, this Note are
                         not delivered to JPMorgan Chase Bank (London Branch)
                         within the applicable Election Period in accordance
                         with the terms of this Note.]

                         [The maturity of this Note will not be extended beyond
                         the Final Maturity Date stated above.]

     Morgan Stanley, a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to , or
registered assignees, the principal amount specified in Schedule I hereto on the
Initial Maturity Date specified above (except to the extent previously redeemed
or repaid) or, to the extent the maturity date of any portion of the principal
amount of this Note is extended in accordance with the procedures set forth
herein to an Extended Maturity Date, as defined above, on such Extended Maturity
Date (except to the extent such portion is redeemed or repaid prior to such
Extended Maturity Date) and to pay interest on the principal amount hereof
outstanding from time to time, from the Interest Accrual Date specified above at
a rate per annum equal to the Initial Interest Rate specified above until the
Initial Interest Reset Date specified above, and thereafter at a rate per annum
determined in accordance with the provisions specified on the reverse hereof
until but excluding the date on which (a) the principal hereof is paid or duly
made available for payment or (b) this Note has been canceled in accordance with
the provisions set forth below.

         The Issuer will pay interest in arrears weekly, monthly, quarterly,
semiannually or annually as specified above as the Interest Payment Period on
each Interest Payment Date (as specified above), commencing with the first
Interest Payment Date next succeeding the Interest Accrual Date specified above,
and on the Initial Maturity Date or the Extended Maturity Date, as the case may
be (each, a "Maturity Date"), or any redemption or repayment date; provided,
however, that if the Interest Accrual Date occurs between a Record Date, as
defined below, and the next succeeding Interest Payment Date, interest payments
will commence on the second Interest Payment Date succeeding the Interest
Accrual Date to the registered holder of this Note on the Record Date with
respect to such second Interest Payment Date; provided, further, that if an
Interest Payment Date or the Maturity Date or a redemption or repayment date
would fall on a day that is not a Business Day, as defined on the reverse
hereof, such Interest Payment Date, Maturity Date, redemption date or repayment
date shall be the following day that is a Business Day, except that if the Base
Rate specified above is LIBOR or EURIBOR and such next Business Day falls in the
next calendar

                                       5
<PAGE>

month, the Interest Payment Date, Maturity Date, redemption date or repayment
date shall be the immediately preceding day that is a Business Day.

     Interest on this Note will accrue from and including the most recent date
to which interest has been paid or duly provided for, or, if no interest has
been paid or duly provided for, from and including the Interest Accrual Date,
until but excluding the date (i) the principal hereof has been paid or duly made
available for payment or (ii) this Note has been canceled in accordance with the
provisions set forth below. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the date 15
calendar days prior to such Interest Payment Date (whether or not a Business
Day) (each such date, a "Record Date"); provided, however, that interest payable
at maturity (or on any redemption or repayment date) shall be payable to the
person to whom the principal hereof shall be payable.

     Payment of the principal of this Note, any premium and the interest due at
maturity (or on any redemption or repayment date), unless this Note is
denominated in a Specified Currency other than U.S. dollars and is to be paid in
whole or in part in such Specified Currency, will be made in immediately
available funds upon surrender of this Note at the office or agency of the
Principal Paying Agent, as defined on the reverse hereof, or at the office or
agency of such other paying agent as the Issuer may determine (each, a "Paying
Agent," which term shall include the Principal Paying Agent). U.S. dollar
payments of interest, other than interest due at maturity or on any date of
redemption or repayment, will be made by United States dollar check mailed to
the address of the person entitled thereto as such address shall appear in the
Note register. A holder of U.S. $10,000,000 (or the equivalent in a Specified
Currency) or more in aggregate principal amount of Notes having the same
Interest Payment Date, the interest on which is payable in U.S. dollars, shall
be entitled to receive payments of interest, other than interest due at maturity
or on any date of redemption or repayment, by wire transfer of immediately
available funds if appropriate wire transfer instructions have been received by
the Principal Paying Agent in writing not less than 15 calendar days prior to
the applicable Interest Payment Date.

     If this Note is denominated in a Specified Currency other than U.S.
dollars, and the holder does not elect (in whole or in part) to receive payment
in U.S. dollars pursuant to the next succeeding paragraph, payments of interest,
principal or any premium with regard to this Note will be made by wire transfer
of immediately available funds to an account maintained by the holder hereof
with a bank located outside the United States if appropriate wire transfer
instructions have been received by the Principal 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

                                       6
<PAGE>

premium, at least ten Business Days prior to the Maturity Date or any redemption
or repayment date, as the case may be; provided that if payment of interest,
principal or any premium with regard to this Note is payable in euro, the
account must be a euro account in a country for which the euro is the lawful
currency, provided, further, that if such wire transfer instructions are not
received, such payments will be made by check payable in such Specified Currency
mailed to the address of the person entitled thereto as such address shall
appear in the Note register, and provided, further, that payment of the
principal of this Note, any premium and the interest due at maturity (or on any
redemption or repayment date) will be made upon surrender of this Note at the
office or agency referred to in the preceding paragraph.

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

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

     If this Note ceases to be held by a common depositary for Euroclear Bank
S.A./N.V., as operator of the Euroclear system, and Clearstream Banking, societe
anonyme, this Note will be exchanged for one or more Notes of authorized
denominations having an aggregate principal amount equal to the principal

                                       7
<PAGE>

amount of this Note as then shown on Schedule I hereto, which new Notes shall
otherwise have the same terms as this Note, except that the provisions of such
new Notes regarding the extension of the maturity thereof shall be modified to
the extent appropriate for notes not required to be held in a securities
depositary; provided that the respective rights and obligations of the Issuer
and the holders of such new Notes shall be the same in all material respects as
the respective rights and obligations of the Issuer and the holder of this Note.
Such new Notes shall have stated principal amounts and shall be registered in
the names of the persons then having a beneficial interest in this Note or in
the names of their nominees.

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

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

                                       8
<PAGE>

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

DATED:                                 MORGAN STANLEY

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

TRUSTEE'S CERTIFICATE
OF AUTHENTICATION

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

JPMORGAN CHASE BANK,
as Trustee

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

                                       9
<PAGE>

                          [FORM OF REVERSE OF SECURITY]

         This Note is one of a duly authorized issue of Senior Global
Medium-Term Notes, Series [G/H], having maturities more than nine months from
the date of issue (the "Notes") of the Issuer. The Notes are issuable under a
Senior Indenture, dated as of November 1, 2004, between the Issuer and JPMorgan
Chase Bank, as Trustee (the "Trustee," which term includes any successor trustee
under the Senior Indenture) (as may be amended or supplemented from time to
time, the "Senior Indenture"), to which Senior Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities of the Issuer, the Trustee
and holders of the Notes and the terms upon which the Notes are, and are to be,
authenticated and delivered. The Issuer has appointed JPMorgan Chase Bank acting
through its principal corporate trust office in the Borough of Manhattan, The
City of New York, as a paying agent for the Notes in the United States and
JPMorgan Chase Bank, London Branch, at its corporate trust office in London, as
its principal paying agent for the Notes outside the United States (the
"Principal Paying Agent," which term includes any additional or successor
Principal Paying Agent appointed by the Issuer). The terms of individual Notes
may vary with respect to interest rates, interest rate formulas, issue dates,
maturity dates, or otherwise, all as provided in the Senior Indenture. To the
extent not inconsistent herewith, the terms of the Senior Indenture are hereby
incorporated by reference herein.

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

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

                                       10
<PAGE>

of this Note in part only, a new Note or Notes for the amount of the unredeemed
portion hereof shall be issued in the name of the holder hereof upon the
cancellation hereof.

         If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in the
authorized denominations specified on the face hereof (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 (except as provided below). For this Note to be
repaid at the option of the holder hereof, the Principal Paying Agent must
receive at its office in London, at least 15 but not more than 30 calendar days
prior to the date of repayment, (i) this Note with the form entitled "Option to
Elect Repayment" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a trust
company in the United States, Western Europe or Japan setting forth the name of
the holder of this Note, the principal amount hereof, the certificate number of
this Note or a description of this Note's tenor and terms, the principal amount
hereof to be repaid, a statement that the option to elect repayment is being
exercised thereby and a guarantee that this Note, together with the form
entitled "Option to Elect Repayment" duly completed, will be received by the
Principal Paying Agent not later than the fifth Business Day after the date of
such telegram, telex, facsimile transmission or letter; provided, that such
telegram, telex, facsimile transmission or letter shall only be effective if
this Note and form duly completed are received by the Principal Paying Agent by
such fifth Business Day. Unless otherwise indicated on the face of this Note,
exercise of such repayment option by the holder hereof shall be irrevocable. In
the event of repayment of this Note in part only, a new Note or Notes for the
amount of the unpaid portion hereof shall be issued in the name of the holder
hereof upon the cancellation hereof.

         This Note will bear interest at the rate determined in accordance with
the applicable provisions below by reference to the Base Rate specified on the
face hereof based on the Index Maturity, if any, specified on the face hereof
(i) (A) plus or minus the Spread, if any, specified on the face hereof and (B)
for any period on or after the Incremental Spread Commencement Date, if any,
specified on the face hereof, plus or minus the Incremental Spread, if any,
specified on the face hereof or (ii) multiplied by the Spread Multiplier, if
any, specified on the face hereof. Commencing with the Initial Interest Reset
Date specified on the face hereof, the rate at which interest on this Note is
payable shall be reset as of each Interest Reset Date specified on the face
hereof (as used herein, the term "Interest Reset Date" shall include the Initial
Interest Reset Date). The determination of

                                       11
<PAGE>

the rate of interest at which this Note will be reset on any Interest Reset Date
shall be made on the Interest Determination Date (as defined below) pertaining
to such Interest Reset Date. The Interest Reset Dates will be the Interest Reset
Dates specified on the face hereof; provided, however, that (a) the interest
rate in effect for the period from the Interest Accrual Date to the Initial
Interest Reset Date specified on the face hereof will be the Initial Interest
Rate and (b) unless otherwise specified on the face hereof, the interest rate in
effect for the ten calendar days immediately prior to maturity, redemption or
repayment will be that in effect on the tenth calendar day preceding such
maturity, redemption or repayment. If any Interest Reset Date would otherwise be
a day that is not a Business Day, such Interest Reset Date shall be postponed to
the next succeeding day that is a Business Day, except that if the Base Rate
specified on the face hereof is LIBOR or EURIBOR and such Business Day is in the
next succeeding calendar month, such Interest Reset Date shall be the
immediately preceding Business Day. As used herein, "Business Day" means any
day, other than a Saturday or Sunday, (a) that is neither a legal holiday nor a
day on which banking institutions are authorized or required by law or
regulation to close (x) in The City of New York or in London or (y) if this Note
is denominated in a Specified Currency other than U.S. dollars, euro or
Australian dollars, in the principal financial center of the country of the
Specified Currency, or (z) if this Note is denominated in Australian dollars, in
Sydney and (b) if this Note is denominated in euro, that is also a day on which
the Trans-European Automated Real-time Gross Settlement Express Transfer System
("TARGET") is operating (a "TARGET Settlement Day").

         The Interest Determination Date pertaining to an Interest Reset Date
for Notes bearing interest calculated by reference to the Federal Funds Rate and
Prime Rate shall be on the Business Day prior to the Interest Reset Date. The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to the CD Rate, Commercial Paper Rate
and CMT Rate will be the second Business Day prior to such Interest Reset Date.
The Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to EURIBOR (or to LIBOR when the Index
Currency is euros) shall be the second TARGET Settlement Day prior to such
Interest Reset Date. The Interest Determination Date pertaining to an Interest
Reset Date for Notes bearing interest calculated by reference to LIBOR, other
than for LIBOR Notes for which the Index Currency is euros, shall be the second
London Banking Day prior to such Interest Reset Date, except that the Interest
Determination Date pertaining to an Interest Reset Date for a LIBOR Note for
which the Index Currency is pounds sterling will be such Interest Reset Date. As
used herein, "London Banking Day" means any day on which dealings in deposits in
the Index Currency (as defined herein) are transacted in the London interbank
market. The Interest Determination Date pertaining to an Interest Reset Date for
Notes bearing interest calculated by reference to the Treasury Rate shall

                                       12
<PAGE>

be the day of the week in which such Interest Reset Date falls on which Treasury
bills normally would be auctioned. Treasury Bills are normally sold at auction
on Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except that the auction may
be held on the preceding Friday; provided, however, that if an auction is held
on the Friday of the week preceding such Interest Reset Date, the Interest
Determination Date shall be such preceding Friday; and provided, further, that
if an auction shall fall on any Interest Reset Date, then the Interest Reset
Date shall instead be the first Business Day following the date of such auction.
The Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to two or more base rates will be the
latest Business Day that is at least two Business Days before the Interest Reset
Date for the applicable Note on which each base rate is determinable.

         Unless otherwise specified on the face hereof, the "Calculation Date"
pertaining to an Interest Determination Date will be the earlier of (i) the
tenth calendar day after such Interest Determination Date or, if such day is not
a Business Day, the next succeeding Business Day, or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or Maturity Date (or,
with respect to any principal amount to be redeemed or repaid, any redemption or
repayment date), as the case may be.

         Determination of CD Rate. If the Base Rate specified on the face hereof
is the "CD Rate," for any Interest Determination Date, the CD Rate with respect
to this Note shall be the rate on that date for negotiable U.S. dollar
certificates of deposit having the Index Maturity specified on the face hereof
as published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates," or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "CDs (Secondary Market)."

         The following procedures shall be followed if the CD Rate cannot be
determined as described above:

         (i) If the above rate is not published in H.15(519) by 3:00 p.m., New
York City time, on the Calculation Date, the CD Rate shall be the rate on that
Interest Determination Date set forth in the daily update of H.15(519),
available through the world wide website of the Board of Governors of the
Federal Reserve System at http://www.federalreserve.gov/releases/h15/update, or
any successor site or publication ("H.15 Daily Update") for the Interest
Determination Date for certificates of deposit having the Index Maturity
specified on the face hereof, under the caption "CDs (Secondary Market)."

         (ii) If the above rate is not yet published in either H.15(519) or the
H.15 Daily Update by 3:00 p.m., New York City time, on the Calculation Date,

                                       13
<PAGE>

the Calculation Agent shall determine the CD Rate to be the arithmetic mean of
the secondary market offered rates as of 10:00 a.m., New York City time, on that
Interest Determination Date of three leading nonbank dealers in negotiable U.S.
dollar certificates of deposit in The City of New York, which may include the
initial dealer and its affiliates, selected by the Calculation Agent (after
consultation with the Issuer), for negotiable U.S. dollar certificates of
deposit of major U.S. money center banks of the highest credit standing in the
market for negotiable certificates of deposit with a remaining maturity closest
to the Index Maturity specified on the face hereof in an amount that is
representative for a single transaction in that market at that time.

         "Initial dealer" with respect to this Note means Morgan Stanley & Co.
International Limited.

         (iii) If the dealers selected by the Calculation Agent are not quoting
as described in (ii) above, the CD Rate shall remain the CD Rate for the
immediately preceding Interest Reset Period, or, if there was no Interest Reset
Period, the rate of interest payable shall be the Initial Interest Rate.

         Determination of Commercial Paper Rate. If the Base Rate specified on
the face hereof is the "Commercial Paper Rate," for any Interest Determination
Date, the Commercial Paper Rate with respect to this Note shall be the Money
Market Yield (as defined herein), calculated as described below, of the rate on
that date for U.S. dollar commercial paper having the Index Maturity specified
on the face hereof, as that rate is published in H.15(519), under the heading
"Commercial Paper--Nonfinancial."

         The following procedures shall be followed if the Commercial Paper Rate
cannot be determined as described above:

         (i) If the above rate is not published by 3:00 p.m., New York City
time, on the Calculation Date, then the Commercial Paper Rate shall be the Money
Market Yield of the rate on that Interest Determination Date for commercial
paper of the Index Maturity specified on the face hereof as published in the
H.15 Daily Update, or other recognized electronic source used for the purpose of
displaying the applicable rate, under the heading "Commercial
Paper--Nonfinancial."

         (ii) If by 3:00 p.m., New York City time, on that Calculation Date the
rate is not yet published in either H.15(519) or the H.15 Daily Update, or other
recognized electronic source used for the purpose of displaying the applicable
rate, then the Calculation Agent shall determine the Commercial Paper Rate to be
the Money Market Yield of the arithmetic mean of the offered rates as of 11:00
a.m., New York City time, on that Interest Determination Date of three leading
dealers of U.S. dollar commercial paper in The City of New York, which may

                                       14
<PAGE>

include the initial dealer and its affiliates, selected by the Calculation Agent
(after consultation with the Issuer), for commercial paper of the Index Maturity
specified on the face hereof, placed for an industrial issuer whose bond rating
is "Aa," or the equivalent, from a nationally recognized statistical rating
agency.

         (iii) If the dealers selected by the Calculation Agent are not quoting
as mentioned above, the Commercial Paper Rate for that Interest Determination
Date shall remain the Commercial Paper Rate for the immediately preceding
Interest Reset Period, or, if there was no Interest Reset Period, the rate of
interest payable shall be the Initial Interest Rate.

         The "Money Market Yield" shall be a yield calculated in accordance with
the following formula:

                                      D x 360
              Money Market Yield = -------------  x 100
                                   360 - (D x M)

         where "D" refers to the applicable per year rate for commercial paper
quoted on a bank discount basis and expressed as a decimal and "M" refers to the
actual number of days in the interest period for which interest is being
calculated.

         Determination of EURIBOR Notes. If the Base Rate specified on the face
hereof is "EURIBOR," for any Interest Determination Date, EURIBOR with respect
to this Note shall be the rate for deposits in euros as sponsored, calculated
and published jointly by the European Banking Federation and ACI - The Financial
Market Association, or any company established by the joint sponsors for
purposes of compiling and publishing those rates, for the Index Maturity
specified on the face hereof as that rate appears on the display on Moneyline
Telerate, or any successor service, on page 248 or any other page as may replace
page 248 on that service ("Telerate Page 248") as of 11:00 a.m., Brussels time.

         The following procedures shall be followed if the rate cannot be
determined as described above:

         (i) If the above rate does not appear, the Calculation Agent shall
request the principal Euro-zone office of each of four major banks in the
Euro-zone interbank market, as selected by the Calculation Agent (after
consultation with the Issuer), to provide the Calculation Agent with its offered
rate for deposits in euros, at approximately 11:00 a.m., Brussels time, on the
Interest Determination Date, to prime banks in the Euro-zone interbank market
for the Index Maturity specified on the face hereof commencing on the applicable
Interest Reset Date, and in a principal amount not less than the equivalent of
U.S.$1 million in euro that is representative of a single transaction in euro,
in that market at that time. If at least two quotations are provided, EURIBOR
shall be the arithmetic mean of those quotations.

                                       15
<PAGE>

         (ii) If fewer than two quotations are provided, EURIBOR shall be the
arithmetic mean of the rates quoted by four major banks in the Euro-zone
interbank market, as selected by the Calculation Agent (after consultation with
the Issuer), at approximately 11:00 a.m., Brussels time, on the applicable
Interest Reset Date for loans in euro to leading European banks for a period of
time equivalent to the Index Maturity specified on the face hereof commencing on
that Interest Reset Date in a principal amount not less than the equivalent of
U.S.$1 million in euro.

         (iii) If the banks so selected by the Calculation Agent are not quoting
as described in (ii) above, the EURIBOR rate in effect for the applicable period
shall be the same as EURIBOR for the immediately preceding Interest Reset
Period, or, if there was no Interest Reset Period, the rate of interest payable
shall be the Initial Interest Rate.

         "Euro-zone" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the relevant treaty of
the European Union, as amended.

         Determination of the Federal Funds Rates. If the Base Rate specified on
the face hereof is the "Federal Funds Rate," for any Interest Determination
Date, the Federal Funds Rate with respect to this Note shall be the rate on that
date for U.S. dollar federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)" as displayed on Moneyline Telerate, or any successor
service, on page 120 or any other page as may replace page 120 on that service
("Telerate Page 120").

         The following procedures shall be followed if the Federal Funds Rate
cannot be determined as described above:

                  (i) If the above rate is not published by 3:00 p.m., New York
         City time, on the Calculation Date, the Federal Funds Rate shall be the
         rate on that Interest Determination Date as published in the H.15 Daily
         Update, or other recognized electronic source used for the purpose of
         displaying the applicable rate, under the heading "Federal Funds
         (Effective)."

                  (ii) If that rate is not yet published in either H.15(519) or
         the H.15 Daily Update, or other recognized electronic source used for
         the purpose of displaying the applicable rate, by 3:00 p.m., New York
         City time, on the Calculation Date, the Calculation Agent shall
         determine the Federal Funds Rate to be the arithmetic mean of the rates
         for the last transaction in overnight U.S. dollar federal funds prior
         to 9:00 a.m., New York City time, on that Interest Determination Date,
         by each of three leading brokers of U.S. dollar federal funds
         transactions in The City of

                                       16
<PAGE>

         New York, which may include the initial dealer and its affiliates,
         selected by the Calculation Agent (after consultation with the
         Issuer).

                 (iii) If the brokers selected by the Calculation Agent are not
         quoting as mentioned above, the Federal Funds Rate relating to that
         Interest Determination Date shall remain the Federal Funds Rate for the
         immediately preceding Interest Reset Period, or, if there was no
         Interest Reset Period, the rate of interest payable shall be the
         Initial Interest Rate.

         Determination of LIBOR. If the Base Rate specified on the face hereof
is "LIBOR," LIBOR with respect to this Note shall be based on London Interbank
Offered Rate. The Calculation Agent shall determine LIBOR for each Interest
Determination Date as follows:

                  (i) As of the Interest Determination Date, LIBOR shall be
         either: (a) if "LIBOR Reuters" is specified as the Reporting Service on
         the face hereof, the arithmetic mean of the offered rates for deposits
         in the Index Currency having the Index Maturity designated on the face
         hereof, commencing on the second London Banking Day immediately
         following that Interest Determination Date, that appear on the
         Designated LIBOR Page, as defined below, as of 11:00 a.m., London time,
         on that Interest Determination Date, if at least two offered rates
         appear on the Designated LIBOR Page; except that if the specified
         Designated LIBOR Page, by its terms provides only for a single rate,
         that single rate shall be used; or (b) if "LIBOR Telerate" is specified
         as the Reporting Service on the face hereof, the rate for deposits in
         the Index Currency having the Index Maturity designated on the face
         hereof, commencing on the second London Banking Day immediately
         following that Interest Determination Date or, if pounds sterling is
         the Index Currency, commencing on that Interest Determination Date,
         that appears on the Designated LIBOR Page at approximately 11:00 a.m.,
         London time, on that Interest Determination Date.

                  (ii) If (a) fewer than two offered rates appear and LIBOR
         Reuters is specified on the face hereof, or (b) no rate appears and the
         face hereof specifies either (x) LIBOR Telerate or (y) LIBOR Reuters
         and the Designated LIBOR Page by its terms provides only for a single
         rate, then the Calculation Agent shall request the principal London
         offices of each of four major reference banks in the London interbank
         market, as selected by the Calculation Agent (after consultation with
         the Issuer), to provide the Calculation Agent with its offered
         quotation for deposits in the Index Currency for the period of the
         Index Maturity specified on the face hereof commencing on the second
         London Banking Day immediately following the Interest Determination
         Date or, if pounds sterling is the Index Currency, commencing on that
         Interest Determination Date, to prime

                                       17
<PAGE>

         banks in the London interbank market at approximately 11:00 a.m.,
         London time, on that Interest Determination Date and in a principal
         amount that is representative of a single transaction in that Index
         Currency in that market at that time.

                  (iii) If at least two quotations are provided, LIBOR
         determined on that Interest Determination Date shall be the arithmetic
         mean of those quotations. If fewer than two quotations are provided,
         LIBOR shall be determined for the applicable Interest Reset Date as the
         arithmetic mean of the rates quoted at approximately 11:00 a.m., London
         time, or some other time specified on the face hereof, in the
         applicable principal financial center for the country of the Index
         Currency on that Interest Reset Date, by three major banks in that
         principal financial center selected by the Calculation Agent (after
         consultation with the Issuer) for loans in the Index Currency to
         leading European banks, having the Index Maturity specified on the face
         hereof and in a principal amount that is representative of a single
         transaction in that Index Currency in that market at that time.

                  (iv) If the banks so selected by the Calculation Agent are not
         quoting as described in (iii) above, LIBOR in effect for the applicable
         period shall be the same as LIBOR for the immediately preceding
         Interest Reset Period, or, if there was no Interest Reset Period, the
         rate of interest payable shall be the Initial Interest Rate.

         The "Index Currency" means the currency specified on the face hereof as
the currency for which LIBOR shall be calculated, or, if the euro is substituted
for that currency, the Index Currency shall be the euro. If that currency is not
specified on the face hereof, the Index Currency shall be U.S. dollars.

         "Designated LIBOR Page" means either: (a) if LIBOR Reuters is
designated as the Reporting Service on the face hereof, the display on the
Reuters Money 3000 Service for the purpose of displaying the London interbank
rates of major banks for the applicable Index Currency or its designated
successor, or (b) if LIBOR Telerate is designated as the Reporting Service on
the face hereof, the display on Moneyline Telerate, or any successor service, on
the page specified on the face hereof, or any other page as may replace that
page on that service, for the purpose of displaying the London interbank rates
of major banks for the applicable Index Currency.

         If neither LIBOR Reuters nor LIBOR Telerate is specified on the face
hereof, LIBOR for the applicable Index Currency shall be determined as if LIBOR
Telerate were specified, and, if the U.S. dollar is the Index Currency, as if
Page 3750 had been specified.

                                       18
<PAGE>

         Determination of Prime Rate. If the Base Rate specified on the face
hereof is "Prime Rate," for any Interest Determination Date, the Prime Rate with
respect to this Note shall be the rate on that date as published in H.15(519)
under the heading "Bank Prime Loan."

         The following procedures shall be followed if the Prime Rate cannot be
determined as described above:

                  (i) If the rate is not published prior to 3:00 p.m., New York
         City time, on the Calculation Date, then the Prime Rate shall be the
         rate on that Interest Determination Date as published in the H.15 Daily
         Update under the heading "Bank Prime Loan."

                  (ii) If the rate is not published prior to 3:00 p.m., New York
         City time, on the Calculation Date in either H.15(519) or the H.15
         Daily Update, then the Calculation Agent shall determine the Prime Rate
         to be the arithmetic mean of the rates of interest publicly announced
         by each bank that appears on the Reuters Screen USPRIME 1 Page, as
         defined below, as that bank's Prime Rate or base lending rate as in
         effect for that Interest Determination Date.

                  (iii) If fewer than four rates for that Interest Determination
         Date appear on the Reuters Screen USPRIME 1 Page by 3:00 p.m., New York
         City time, on the Calculation Date, the Calculation Agent shall
         determine the Prime Rate to be the arithmetic mean of the Prime Rates
         quoted on the basis of the actual number of days in the year divided by
         360 as of the close of business on that Interest Determination Date by
         at least three major banks, which may include affiliates of the initial
         dealer, in The City of New York selected by the Calculation Agent
         (after consultation with the Issuer).

                  (iv) If the banks selected are not quoting as described in
         (iii) above, the Prime Rate shall remain the Prime Rate for the
         immediately preceding Interest Reset Period, or, if there was no
         Interest Reset Period, the rate of interest payable shall be the
         Initial Interest Rate.

         "Reuters Screen USPRIME 1 Page" means the display designated as page
"USPRIME 1" on the Reuters Money 3000 Service, or any successor service, or any
other page as may replace the USPRIME 1 Page on that service for the purpose of
displaying prime rates or base lending rates of major U.S. banks.

         Determination of Treasury Rate. If the Base Rate specified on the face
hereof is "Treasury Rate," the Treasury Rate with respect to this Note shall be:

                                       19
<PAGE>

                  (i) the rate from the Auction held on the applicable Interest
         Determination Date (the "Auction") of direct obligations of the United
         States ("Treasury Bills") having the Index Maturity specified on the
         face hereof as that rate appears under the caption "INVESTMENT RATE" on
         the display on Moneyline Telerate, or any successor service, on page 56
         or any other page as may replace page 56 on that service ("Telerate
         Page 56") or page 57 or any other page as may replace page 57 on that
         service ("Telerate Page 57"); or

                  (ii) if the rate described in (i) above is not published by
         3:00 p.m., New York City time, on the Calculation Date, the Bond
         Equivalent Yield of the rate for the applicable Treasury Bills as
         published in the H.15 Daily Update, or other recognized electronic
         source used for the purpose of displaying the applicable rate, under
         the caption "U.S. Government Securities/Treasury Bills/Auction High";
         or

                  (iii) if the rate described in (ii) above is not published by
         3:00 p.m., New York City time, on the related Calculation Date, the
         Bond Equivalent Yield of the Auction rate of the applicable Treasury
         Bills, announced by the United States Department of the Treasury; or

                  (iv) in the event that the rate described in (iii) above is
         not announced by the United States Department of the Treasury, or if
         the Auction is not held, the Bond Equivalent Yield of the rate on the
         applicable Interest Determination Date of Treasury Bills having the
         Index Maturity specified on the face hereof published in H.15(519)
         under the caption "U.S. Government Securities/Treasury Bills/Secondary
         Market"; or

                  (v) if the rate described in (iv) above is not so published by
         3:00 p.m., New York City time, on the related Calculation Date, the
         rate on the applicable Interest Determination Date of the applicable
         Treasury Bills as published in the H.15 Daily Update, or other
         recognized electronic source used for the purpose of displaying the
         applicable rate, under the caption "U.S. Government Securities/Treasury
         Bills/Secondary Market"; or

                  (vi) if the rate described in (v) above is not so published by
         3:00 p.m., New York City time, on the related Calculation Date, the
         rate on the applicable Interest Determination Date calculated by the
         Calculation Agent as the Bond Equivalent Yield of the arithmetic mean
         of the secondary market bid rates, as of approximately 3:30 p.m., New
         York City time, on the applicable Interest Determination Date, of three
         primary U.S. government securities dealers, which may include the
         initial dealer and its affiliates, selected by the Calculation Agent,
         for the issue of Treasury Bills

                                       20
<PAGE>

         with a remaining maturity closest to the Index Maturity specified on
         the face hereof; or

                  (vii) if the dealers selected by the Calculation Agent are not
         quoting as described in (vi), the Treasury Rate for the immediately
         preceding Interest Reset Period, or, if there was no Interest Reset
         Period, the rate of interest payable shall be the Initial Interest
         Rate. The "Bond Equivalent Yield" means a yield calculated in
         accordance with the following formula and
         expressed as a percentage:

                                           D x N
               Bond Equivalent Yield = ------------ x 100
                                       360 - (D x M)

         where "D" refers to the applicable per annum rate for Treasury Bills
quoted on a bank discount basis, "N" refers to 365 or 366, as the case may be,
and "M" refers to the actual number of days in the interest period for which
interest is being calculated.

         Determination of CMT Rate. If the Base Rate specified on the face
hereof is the "CMT Rate," for any Interest Determination Date, the CMT Rate with
respect to this Note shall be the rate displayed on the Designated CMT Telerate
Page (as defined below) under the caption "... Treasury Constant Maturities ...
Federal Reserve Board Release H.15... Mondays Approximately 3:45 p.m.," under
the column for the Designated CMT Maturity Index, as defined below, for:

                  (1) the rate on that Interest Determination Date, if the
         Designated CMT Telerate Page is 7051; and

                  (2) the week or the month, as applicable, ended immediately
         preceding the week in which the related Interest Determination Date
         occurs, if the Designated CMT Telerate Page is 7052.

         The following procedures shall be followed if the CMT Rate cannot be
determined as described above:

                  (i) If that rate is no longer displayed on the relevant page,
         or if not displayed by 3:00 p.m., New York City time, on the related
         Calculation Date, then the CMT Rate shall be the Treasury Constant
         Maturity rate for the Designated CMT Maturity Index as published in the
         relevant H.15(519).

                  (ii) If the rate described in (i) is no longer published, or
         if not published by 3:00 p.m., New York City time, on the related
         Calculation Date, then the CMT Rate shall be the Treasury Constant
         Maturity Rate for

                                       21
<PAGE>

         the Designated CMT Maturity Index or other U.S. Treasury rate for the
         Designated CMT Maturity Index on the Interest Determination Date as
         may then be published by either the Board of Governors of the Federal
         Reserve System or the United States Department of the Treasury that
         the Calculation Agent determines to be comparable to the rate formerly
         displayed on the Designated CMT Telerate Page and published in the
         relevant H.15(519).

                  (iii) If the information described in (ii) is not provided by
         3:00 p.m., New York City time, on the related Calculation Date, then
         the Calculation Agent shall determine the CMT Rate to be a yield to
         maturity, based on the arithmetic mean of the secondary market closing
         offer side prices as of approximately 3:30 p.m., New York City time, on
         the Interest Determination Date, reported, according to their written
         records, by three leading primary U.S. government securities dealers
         ("Reference Dealers") in The City of New York, which may include the
         initial dealer or another affiliate, selected by the Calculation Agent
         as described in the following sentence. The Calculation Agent shall
         select five reference dealers (after consultation with the Issuer) and
         shall eliminate the highest quotation or, in the event of equality, one
         of the highest, and the lowest quotation or, in the event of equality,
         one of the lowest, for the most recently issued direct noncallable
         fixed rate obligations of the United States ("Treasury Notes") with an
         original maturity of approximately the Designated CMT Maturity Index, a
         remaining term to maturity of no more than 1 year shorter than that
         Designated CMT Maturity Index and in a principal amount that is
         representative for a single transaction in the securities in that
         market at that time. If two Treasury Notes with an original maturity as
         described above have remaining terms to maturity equally close to the
         Designated CMT Maturity Index, the quotes for the Treasury Note with
         the shorter remaining term to maturity shall be used.

                  (iv) If the Calculation Agent cannot obtain three Treasury
         Notes quotations as described in (iii) above, the Calculation Agent
         shall determine the CMT Rate to be a yield to maturity based on the
         arithmetic mean of the secondary market offer side prices as of
         approximately 3:30 p.m., New York City time, on the Interest
         Determination Date of three reference dealers in The City of New York,
         selected using the same method described in (iii) above, for Treasury
         Notes with an original maturity equal to the number of years closest to
         but not less than the Designated CMT Maturity Index and a remaining
         term to maturity closest to the Designated CMT Maturity Index and in a
         principal amount that is representative for a single transaction in the
         securities in that market at that time.

                                       22
<PAGE>

                  (v) If three or four, and not five, of the reference dealers
         are quoting as described in (iv) above, then the CMT Rate shall be
         based on the arithmetic mean of the offer prices obtained and neither
         the highest nor the lowest of those quotes shall be eliminated.

                  (vi) If fewer than three reference dealers selected by the
         Calculation Agent are quoting as described in (iv) above, the CMT Rate
         shall be the CMT Rate for the immediately preceding Interest Reset
         Period, or, if there was no Interest Reset Period, the rate of interest
         payable shall be the Initial Interest Rate.

         "Designated CMT Telerate Page" means the display on Moneyline Telerate,
or any successor service, on the page designated on the face hereof or any other
page as may replace that page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no page is specified
on the face hereof, the Designated CMT Telerate Page shall be 7052, for the most
recent week.

         "Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30
years, specified in an applicable pricing supplement for which the CMT Rate
shall be calculated. If no maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be two years.

         Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent shall
calculate the interest rate hereon in accordance with the foregoing on or before
each Calculation Date. The interest rate on this Note will in no event be higher
than the maximum rate permitted by New York law, as the same may be modified by
United States Federal law of general application.

         At the request of the holder hereof, the Calculation Agent will provide
to the holder hereof the interest rate hereon then in effect and, if determined,
the interest rate that will become effective as of the next Interest Reset Date.

         Unless otherwise indicated on the face hereof, interest payments on
this Note shall be the amount of interest accrued from and including the
Interest Accrual Date or from and including the last date to which interest has
been paid or duly provided for, to but excluding the Interest Payment Dates or
Maturity Date (or any earlier redemption or repayment date), as the case may be.
Accrued interest hereon for any period shall be the sum of the products obtained
by multiplying the interest factor calculated for each day in such period by the
principal amount hereof shown on Schedule I hereto for each such day; provided
that for the purpose of calculating the amount of interest payable hereon, any

                                       23
<PAGE>

decrease in the principal amount hereof attributable to the failure to duly
extend the maturity of this Note or any portion of this Note during any Election
Period shall be effective on and as of the first Interest Payment Date
immediately succeeding such Election Period.

         Unless otherwise specified on the face hereof, the interest factor for
each such day shall be computed by dividing the interest rate applicable to such
day (i) by 360 if the Base Rate is CD Rate, Commercial Paper Rate, EURIBOR,
Federal Funds Rate, Prime Rate or LIBOR (except if the Index Currency is pounds
sterling); (ii) by 365 if the Base Rate is LIBOR and the Index Currency is
pounds sterling; or (iii) by the actual number of days in the year if the Base
Rate is the Treasury Rate or the CMT Rate. All percentages resulting from any
calculation of the rate of interest on this Note will be rounded, if necessary,
to the nearest one hundred-thousandth of a percentage point (with .000005%
rounded up to .00001%), and all dollar amounts used in or resulting from such
calculation on this Note will be rounded to the nearest cent, with one-half cent
rounded upward. The interest rate in effect on any Interest Reset Date will be
the applicable rate as reset on such date. The interest rate applicable to any
other day is the interest rate from the immediately preceding Interest Reset
Date (or, if none, the Initial Interest Rate).

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

         This Note, and any Note or Notes issued upon transfer or exchange
hereof, is issuable only in fully registered form, without coupons, and is
issuable only in the minimum denominations set forth on the face hereof or any
amount in excess thereof which is an authorized denomination set forth on the
face hereof.

         The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at either the
aforesaid New York office or the London office of the Trustee by surrendering
this Note for cancellation, accompanied by a written instrument of transfer in
form satisfactory to the Issuer and the Trustee and duly executed by the
registered holder hereof in person or by the holder's attorney duly authorized
in writing, and thereupon the Trustee shall issue in the name of the transferee
or transferees, in exchange herefor, a new Note or Notes having identical terms
and provisions and having a like aggregate principal amount in authorized
denominations, subject to the terms and conditions set forth herein; provided,
however, that the Trustee will not be required (i) to register the transfer of
or exchange any Note that has been called for redemption in whole or in part,
except the unredeemed portion of Notes being

                                       24
<PAGE>

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

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

         This Note may be redeemed, as a whole, at the option of the Issuer at
any time prior to maturity, upon the giving of a notice of redemption as
described below, at a redemption price equal to 100% of the principal amount
hereof, together with accrued interest to the date fixed for redemption, if the
Issuer determines that, as a result of any change in or amendment to the laws,
or any regulations or rulings promulgated thereunder, of the United States or of
any political subdivision or taxing authority thereof or therein affecting
taxation, or any change in official position regarding the application or
interpretation of such laws, regulations or rulings, which change or amendment
becomes effective on or after the Initial Offering Date hereof, the Issuer has
or will become obligated to pay Additional Amounts, as defined below, with
respect to this Note as described below. Prior to the giving of any notice of
redemption pursuant to this paragraph, the Issuer shall deliver to the Trustee
(i) a certificate stating that the Issuer is entitled to effect such redemption
and setting forth a statement of facts showing that the conditions precedent to
the right of the Issuer to so redeem have occurred,

                                       25
<PAGE>

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

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

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

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

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

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

                                       26
<PAGE>

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

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

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

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

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

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

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

                                       27
<PAGE>

partnership or a beneficial owner who would not have been entitled to the
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the holder of this Note.

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

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

                                       28
<PAGE>

antidilution provisions or other similar adjustment provisions of the debt
securities or otherwise in accordance with the terms thereof), or impair or
affect the rights of any holder to institute suit for the payment thereof or (b)
reduce the aforesaid percentage in principal amount of debt securities of any
series the consent of the holders of which is required for any such supplemental
indenture.

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

         The "Exchange Rate Agent" shall be Morgan Stanley & Co. International
Limited, 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

                                       29
<PAGE>

discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on holders of these Notes and coupons.

         So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of, premium, if
any, and interest on this Note as herein provided in the Borough of Manhattan,
The City of New York, and an office or agency in said Borough of Manhattan for
the registration, transfer and exchange as aforesaid of the Notes. If this Note
is listed on the London Stock Exchange plc and such exchange so requires, the
Issuer shall maintain a Paying Agent in London. If any European Union Directive
on the taxation of savings comes into force, the Issuer will, to the extent
possible as a matter of law, maintain a Paying Agent in a member state of the
European Union that will not be obligated to withhold or deduct tax pursuant to
any such Directive or any law implementing or complying with, or introduced in
order to conform to, such Directive. The Issuer may designate other agencies for
the payment of said principal, premium and interest at such place or places
outside the United States (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 the payment of the principal of or interest or premium, if
any, on any Notes that remain unclaimed at the end of two years after such
principal, interest or premium shall have become due and payable (whether at
maturity or upon call for redemption or otherwise), (i) the Trustee or such
Paying Agent shall notify the holders of such Notes that such moneys shall be
repaid to the Issuer and any person claiming such moneys shall thereafter look
only to the Issuer for payment thereof and (ii) such moneys shall be so repaid
to the Issuer. Upon such repayment all liability of the Trustee or such Paying
Agent with respect to such moneys shall thereupon cease, without, however,
limiting in any way any obligation that the Issuer may have to pay the principal
of or interest or premium, if any, on this Note as the same shall become due.

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

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

                                       30
<PAGE>

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

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

         As used herein:

                  (a) the term "Market Exchange Rate" means the noon U.S. dollar
         buying rate in The City of New York for cable transfers of the
         Specified Currency indicated on the face hereof published by the
         Federal Reserve Bank of New York;

                  (b) the term "United States" means the United States of
         America (including the States and the District of Columbia), its
         territories, its possessions and other areas subject to its
         jurisdiction; and

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

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

                                       31
<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.

                               ___________________

                                       32
<PAGE>

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

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

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

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

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

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

Dated: _________________________

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

                                       33
<PAGE>

                            OPTION TO EXTEND MATURITY

         The undersigned hereby elects to extend the maturity of the Morgan
Stanley Global Medium-Term Notes, Series [G/H], Euro Senior Registered Floating
Rate Renewable Notes, EXtendible Liquidity Securities, No. EFLRR__ (ISIN
[             ]; Common Code [              ]) (or the portion thereof specified
below) with the effect provided in said Note by surrendering said Note to
JPMorgan Chase Bank (London Branch), Trinity Tower, 9 Thomas More Street, London
E19YT, England, Attention: Capital Markets Fiduciary Services, or such other
address of which the Issuer shall from time to time notify the holders of the
Notes in the event of an election to extend the maturity of only a portion of
the principal amount of said Note, together with this form of "Option to Extend
Maturity" duly completed by the holder of said Note.

         If the option to extend the maturity of less than the entire principal
amount of said Note is elected, specify the portion of said Note (which shall be
[           ] or an integral multiple of [          ] in excess thereof) as to
which the holder elects to extend the maturity [         ] ____________; and
specify the denomination or denominations (which shall be [          ] or an
integral multiple of [          ] in excess thereof) of the Notes in the form

attached to said Note as Exhibit A to be issued to the holder for the portion of
said Note as to which the option to extend the maturity is not being elected (in
the absence of any such specification one such Note in the form of said Exhibit
A will be issued for the portion as to which the option to extend maturity is
not being made) Euro ________.

Dated:______________________________    ________________________________________
                                        NOTICE: The signature on this Option to
                                        Extend Maturity must correspond with the
                                        name as written upon the face of the
                                        Note in every particular, without
                                        alteration or enlargement or any change
                                        whatever.

                                       34
<PAGE>

                            OPTION TO ELECT REPAYMENT

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

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

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

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

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

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

                                       35
<PAGE>

                                                                      SCHEDULE I

                              SCHEDULE OF EXCHANGES

         The initial principal amount of this Note is [     ]. The following
exchanges of a portion of this Note for an interest in a Short-Term Note and the
following exchanges of an interest in a Short-Term Note for an interest in this
Note have been made:

                                            Reduced Principal
                    Principal Amoun        Amount Outstanding   Notation Made by
                      Exchanged For          Following Such      or on Behalf of
Date of Exchange     Short-Term Note            Exchange             Trustee
----------------    ----------------       ------------------   ----------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       36
<PAGE>

                EXHIBIT A TO EURO SENIOR REGISTERED FLOATING RATE
                                 RENEWABLE NOTE
                                (Short-Term Note)

                           [FORM OF FACE OF SECURITY]

REGISTERED                                                REGISTERED
No. EFLRR                                                 ISIN: [      ]
                                                          Common Code: [      ]

                                                          Euro _________________

THIS NOTE HAS NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE SECURITIES AND
EXCHANGE LAW OF JAPAN. THIS NOTE MAY NOT BE OFFERED OR SOLD, DIRECTLY OR
INDIRECTLY, IN JAPAN OR TO, OR FOR THE BENEFIT OF, ANY RESIDENT OF JAPAN (WHICH
TERM AS USED HEREIN MEANS ANY PERSON RESIDENT IN JAPAN INCLUDING ANY CORPORATION
OR OTHER ENTITY ORGANIZED UNDER THE LAWS OF JAPAN) OR TO OTHERS FOR THE
RE-OFFERING OR RE-SALE, DIRECTLY OR INDIRECTLY, IN JAPAN OR TO A RESIDENT OF
JAPAN EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, AND
OTHERWISE IN COMPLIANCE WITH, THE SECURITIES AND EXCHANGE LAW OF JAPAN AND OTHER
RELEVANT LAWS AND REGULATIONS OF JAPAN.(3)

------------------------
     (3) If this Note is offered in Japan or denominated in Japanese Yen,
appropriate legends need to be added.

<PAGE>

                                 MORGAN STANLEY

                 EURO SENIOR REGISTERED FLOATING RATE RENEWABLE

                      GLOBAL MEDIUM-TERM NOTE, SERIES [G/H]

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

BASE RATE:                 ORIGINAL ISSUE DATE:      MATURITY DATE:
-------------------------------------------------------------------------------
REPORTING SERVICE:         INTEREST ACCRUAL DATE:    INTEREST PAYMENT DATES:
                             [Insert date of
                             issuance of Short-term
                             Note.]
-------------------------------------------------------------------------------
INDEX MATURITY:            INITIAL INTEREST RESET    INTEREST RESET PERIOD:
                           DATE:
-------------------------------------------------------------------------------
SPREAD (PLUS OR MINUS):    INTEREST PAYMENT PERIOD:  INTEREST RESET DATE(S):
-------------------------------------------------------------------------------
INITIAL OFFERING DATE:     INITIAL INTEREST RATE:    PRINCIPAL PAYING AGENT
                                                        AND CALCULATION
                                                        AGENT:
-------------------------------------------------------------------------------
SPECIFIED CURRENCY:        MAXIMUM INTEREST RATE:    DENOMINATIONS:
-------------------------------------------------------------------------------
INCREMENTAL SPREAD (PLUS   MINIMUM INTEREST RATE:    IF SPECIFIED CURRENCY
OR MINUS):                                              OTHER THAN U.S.
                                                        DOLLARS. OPTION TO
                                                        ELECT PAYMENT IN U.S.
                                                        DOLLARS:
-------------------------------------------------------------------------------
INCREMENTAL SPREAD         EXCHANGE RATE AGENT:      OPTIONAL REPAYMENT
COMMENCEMENT DATE:                                   DATE(S):
-------------------------------------------------------------------------------
INITIAL REDEMPTION DATE:   DESIGNATED CMT MATURITY   DESIGNATED CMT
                           INDEX:                    TELERATE PAGE:
-------------------------------------------------------------------------------
INITIAL REDEMPTION         ANNUAL REDEMPTION         REDEMPTION NOTICE PERIOD:
PERCENTAGE:                PERCENTAGE REDUCTION:
-------------------------------------------------------------------------------
REDEMPTION DATES:          REDEMPTION PERCENTAGE:
-------------------------------------------------------------------------------
OTHER PROVISIONS:
-------------------------------------------------------------------------------

                                      A-2
<PAGE>

         Morgan Stanley, a Delaware corporation (together with its successors
and assigns, the "Issuer"), for value received, hereby promises to pay to      ,
or registered assignees, the principal sum of      , on the Maturity Date
specified above (except to the extent previously redeemed or repaid) and to pay
interest on the principal amount hereof outstanding from time to time, from the
Interest Accrual Date specified above at a rate per annum equal to the Initial
Interest Rate, as defined below, until the Initial Interest Reset Date specified
above, and thereafter at a rate per annum determined in accordance with the
provisions specified on the reverse hereof until but excluding the date on which
the principal hereof is paid or duly made available for payment, together with
the unpaid amount of interest, if any, payable on the principal amount hereof
during the period that the Issuer's obligation to pay such principal amount was
evidenced by a predecessor Note (the "Renewable Note"), which amount shall be
payable on the first date succeeding the Interest Accrual Date specified above
on which interest on this Note is paid and shall be payable to the person
receiving such interest payment. The Issuer will pay interest hereon in arrears
weekly, monthly, quarterly, semiannually or annually as specified above as the
Interest Payment Period on each Interest Payment Date (as specified above),
commencing with the first Interest Payment Date next succeeding the Interest
Accrual Date specified above, and on the Maturity Date or any redemption or
repayment date; provided, however, that if the Interest Accrual Date occurs
between a Record Date, as defined below, and the next succeeding Interest
Payment Date, interest payments will commence on the second Interest Payment
Date succeeding the Interest Accrual Date to the registered holder of this Note
on the Record Date with respect to such second Interest Payment Date; provided,
further, that if an Interest Payment Date or the Maturity Date or a redemption
or repayment date would fall on a day that is not a Business Day, as defined on
the reverse hereof, such Interest Payment Date, Maturity Date, redemption date
or repayment date shall be the following day that is a Business Day, except that
if the Base Rate specified above is LIBOR or EURIBOR and such next Business Day
falls in the next calendar month, the Interest Payment Date, Maturity Date,
redemption date or repayment date shall be the immediately preceding day that is
a Business Day. As used herein, "Initial Interest Rate" means the rate of
interest determined in accordance with the provisions of the Renewable Note (i)
on the Interest Reset Date with respect to the Renewable Note occurring on the
Interest Accrual Date specified above or (ii) if no such Interest Reset Date
occurred on the Interest Accrual Date, on the Interest Reset Date with respect
to the Renewable Note occurring immediately preceding the Interest Accrual Date.

         Interest on this Note will accrue from and including the most recent
date to which interest has been paid or duly provided for, or, if no interest
has been paid or duly provided for, from and including the Interest Accrual
Date, until but excluding the date the principal hereof has been paid or duly
made available for payment. The interest so payable, and punctually paid or duly
provided for, on

                                      A-3
<PAGE>

any Interest Payment Date will, subject to certain exceptions described herein,
be paid to the person in whose name this Note (or one or more predecessor Notes)
is registered at the close of business on the date 15 calendar days prior to
such Interest Payment Date (whether or not a Business Day) (each such date a
"Record Date"); provided, however, that interest payable at maturity (or on any
redemption or repayment date) shall be payable to the person to whom the
principal hereof shall be payable.

         Payment of the principal of this Note, any premium and the interest due
at maturity (or on any redemption or repayment date), unless this Note is
denominated in a Specified Currency other than U.S. dollars and is to be paid in
whole or in part in such Specified Currency, will be made in immediately
available funds upon surrender of this Note at the office or agency of the
Principal Paying Agent, as defined on the reverse hereof, or at the office or
agency of such other paying agent as the Issuer may determine (each, a "Paying
Agent," which term shall include the Principal Paying Agent). U.S. dollar
payments of interest, other than interest due at maturity or on any date of
redemption or repayment, will be made by United States dollar check mailed to
the address of the person entitled thereto as such address shall appear in the
Note register. A holder of U.S. $10,000,000 (or the equivalent in a Specified
Currency) or more in aggregate principal amount of Notes having the same
Interest Payment Date, the interest on which is payable in U.S. dollars, shall
be entitled to receive payments of interest, other than interest due at maturity
or on any date of redemption or repayment, by wire transfer of immediately
available funds if appropriate wire transfer instructions have been received by
the Principal Paying Agent in writing not less than 15 calendar days prior to
the applicable Interest Payment Date.

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

                                      A-4
<PAGE>

date) will be made upon surrender of this Note at the office or agency referred
to in the preceding paragraph.

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

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

         If this Note ceases to be held by a common depositary for Euroclear
Bank S.A./N.V., as operator of the Euroclear system, and Clearstream Banking,
societe anonyme, this Note will be exchanged for one or more Notes of authorized
denominations having an aggregate principal amount equal to the principal amount
of this Note, which new Notes shall otherwise have the same terms as this Note;
provided that the respective rights and obligations of the Issuer and the
holders of such new Notes shall be the same in all material respects as the
respective rights and obligations of the Issuer and the holder of this Note.
Such new Notes shall have stated principal amounts and shall be registered in
the names of the persons then having a beneficial interest in this Note or in
the names of their nominees.

                                      A-5
<PAGE>

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

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

                                      A-6
<PAGE>

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

DATED:                                      MORGAN STANLEY

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

TRUSTEE'S CERTIFICATE
   OF AUTHENTICATION

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

JPMORGAN CHASE BANK,
   as Trustee

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

<PAGE>

                          [FORM OF REVERSE OF SECURITY]

         This Note is one of a duly authorized issue of Senior Global
Medium-Term Notes, Series [G/H], having maturities more than nine months from
the date of issue (the "Notes") of the Issuer. The Notes are issuable under a
Senior Indenture, dated as of November 1, 2004, between the Issuer and JPMorgan
Chase Bank, as Trustee (the "Trustee," which term includes any successor trustee
under the Senior Indenture) (as may be amended or supplemented from time to
time, the "Senior Indenture"), to which Senior Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities of the Issuer, the Trustee
and holders of the Notes and the terms upon which the Notes are, and are to be,
authenticated and delivered. The Issuer has appointed JPMorgan Chase Bank acting
through its principal corporate trust office in the Borough of Manhattan, The
City of New York, as a paying agent for the Notes in the United States and
JPMorgan Chase Bank, London Branch, at its corporate trust office in London, as
its principal paying agent for the Notes outside the United States (the
"Principal Paying Agent," which term includes any additional or successor
Principal Paying Agent appointed by the Issuer). The terms of individual Notes
may vary with respect to interest rates, interest rate formulas, issue dates,
maturity dates, or otherwise, all as provided in the Senior Indenture. To the
extent not inconsistent herewith, the terms of the Senior Indenture are hereby
incorporated by reference herein.

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

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

                                      A-7
<PAGE>

of this Note in part only, a new Note or Notes for the amount of the unredeemed
portion hereof shall be issued in the name of the holder hereof upon the
cancellation hereof.

         If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in the
authorized denominations specified on the face hereof (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 (except as provided below). For this Note to be
repaid at the option of the holder hereof, the Principal Paying Agent must
receive at its office in London, at least 15 but not more than 30 calendar days
prior to the date of repayment, (i) this Note with the form entitled "Option to
Elect Repayment" below duly completed or (ii) a telegram, telex, facsimile
transmission or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a trust
company in the United States, Western Europe or Japan setting forth the name of
the holder of this Note, the principal amount hereof, the certificate number of
this Note or a description of this Note's tenor and terms, the principal amount
hereof to be repaid, a statement that the option to elect repayment is being
exercised thereby and a guarantee that this Note, together with the form
entitled "Option to Elect Repayment" duly completed, will be received by the
Principal Paying Agent not later than the fifth Business Day after the date of
such telegram, telex, facsimile transmission or letter; provided, that such
telegram, telex, facsimile transmission or letter shall only be effective if
this Note and form duly completed are received by the Principal Paying Agent by
such fifth Business Day. Unless otherwise indicated on the face of this Note,
exercise of such repayment option by the holder hereof shall be irrevocable. In
the event of repayment of this Note in part only, a new Note or Notes for the
amount of the unpaid portion hereof shall be issued in the name of the holder
hereof upon the cancellation hereof.

         This Note will bear interest at the rate determined in accordance with
the applicable provisions below by reference to the Base Rate specified on the
face hereof based on the Index Maturity, if any, specified on the face hereof
(i) (A) plus or minus the Spread, if any, specified on the face hereof and (B)
for any period on or after the Incremental Spread Commencement Date, if any,
specified on the face hereof, plus or minus the Incremental Spread, if any,
specified on the face hereof or (ii) multiplied by the Spread Multiplier, if
any, specified on the face hereof. Commencing with the Initial Interest Reset
Date specified on the face hereof, the rate at which interest on this Note is
payable shall be reset as of each Interest Reset Date specified on the face
hereof (as used herein, the term "Interest Reset Date" shall include the Initial
Interest Reset Date). The

                                      A-8
<PAGE>

determination of the rate of interest at which this Note will be reset on any
Interest Reset Date shall be made on the Interest Determination Date (as defined
below) pertaining to such Interest Reset Date. The Interest Reset Dates will be
the Interest Reset Dates specified on the face hereof; provided, however, that
(i) the interest rate in effect for the period from the Interest Accrual Date to
the Initial Interest Reset Date specified on the face hereof will be the Initial
Interest Rate and (ii) unless otherwise specified on the face hereof, the
interest rate in effect for the ten calendar days immediately prior to maturity,
redemption or repayment will be that in effect on the tenth calendar day
preceding such maturity, redemption or repayment. If any Interest Reset Date
would otherwise be a day that is not a Business Day, such Interest Reset Date
shall be postponed to the next succeeding day that is a Business Day, except
that if the Base Rate specified on the face hereof is LIBOR or EURIBOR and such
Business Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Business Day. As used herein, "Business Day"
means any day, other than a Saturday or Sunday, (a) that is neither a legal
holiday nor a day on which banking institutions are authorized or required by
law or regulation to close (x) in The City of New York or in London or (y) if
this Note is denominated in a Specified Currency other than U.S. dollars, euro
or Australian dollars, in the principal financial center of the country of the
Specified Currency, or (z) if this Note is denominated in Australian dollars, in
Sydney and (b) if this Note is denominated in euro, that is also a day on which
the Trans-European Automated Real-time Gross Settlement Express Transfer System
("TARGET") is operating (a "TARGET Settlement Day").

         The Interest Determination Date pertaining to an Interest Reset Date
for Notes bearing interest calculated by reference to the Federal Funds Rate and
Prime Rate shall be on the Business Day prior to the Interest Reset Date. The
Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to the CD Rate, Commercial Paper Rate
and CMT Rate will be the second Business Day prior to such Interest Reset Date.
The Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to EURIBOR (or to LIBOR when the Index
Currency is euros) shall be the second TARGET Settlement Day prior to such
Interest Reset Date. The Interest Determination Date pertaining to an Interest
Reset Date for Notes bearing interest calculated by reference to LIBOR, other
than for LIBOR Notes for which the Index Currency is euros, shall be the second
London Banking Day prior to such Interest Reset Date, except that the Interest
Determination Date pertaining to an Interest Reset Date for a LIBOR Note for
which the Index Currency is pounds sterling will be such Interest Reset Date. As
used herein, "London Banking Day" means any day on which dealings in deposits in
the Index Currency (as defined herein) are transacted in the London interbank
market. The Interest Determination Date pertaining to an Interest Reset Date for
Notes bearing interest calculated by reference to the Treasury Rate shall

                                      A-9
<PAGE>

be the day of the week in which such Interest Reset Date falls on which Treasury
bills normally would be auctioned. Treasury Bills are normally sold at auction
on Monday of each week, unless that day is a legal holiday, in which case the
auction is normally held on the following Tuesday, except that the auction may
be held on the preceding Friday; provided, however, that if an auction is held
on the Friday of the week preceding such Interest Reset Date, the Interest
Determination Date shall be such preceding Friday; and provided, further, that
if an auction shall fall on any Interest Reset Date, then the Interest Reset
Date shall instead be the first Business Day following the date of such auction.
The Interest Determination Date pertaining to an Interest Reset Date for Notes
bearing interest calculated by reference to two or more base rates will be the
latest Business Day that is at least two Business Days before the Interest Reset
Date for the applicable Note on which each base rate is determinable.

         Unless otherwise specified on the face hereof, the "Calculation Date"
pertaining to an Interest Determination Date will be the earlier of (i) the
tenth calendar day after such Interest Determination Date or, if such day is not
a Business Day, the next succeeding Business Day, or (ii) the Business Day
immediately preceding the applicable Interest Payment Date or Maturity Date (or,
with respect to any principal amount to be redeemed or repaid, any redemption or
repayment date), as the case may be.

         Determination of CD Rate. If the Base Rate specified on the face hereof
is the "CD Rate," for any Interest Determination Date, the CD Rate with respect
to this Note shall be the rate on that date for negotiable U.S. dollar
certificates of deposit having the Index Maturity specified on the face hereof
as published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates," or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "CDs (Secondary Market)."

         The following procedures shall be followed if the CD Rate cannot be
determined as described above:

                  (i) If the above rate is not published in H.15(519) by 3:00
         p.m., New York City time, on the Calculation Date, the CD Rate shall be
         the rate on that Interest Determination Date set forth in the daily
         update of H.15(519), available through the world wide website of the
         Board of Governors of the Federal Reserve System at
         http://www.federalreserve.gov/releases/h15/update, or any successor
         site or publication ("H.15 Daily Update") for the Interest
         Determination Date for certificates of deposit having the Index
         Maturity specified on the face hereof, under the caption "CDs
         (Secondary Market)".

                                      A-10
<PAGE>

                  (ii) If the above rate is not yet published in either
         H.15(519) or the H.15 Daily Update by 3:00 p.m., New York City time, on
         the Calculation Date, the Calculation Agent shall determine the CD Rate
         to be the arithmetic mean of the secondary market offered rates as of
         10:00 a.m., New York City time, on that Interest Determination Date of
         three leading nonbank dealers in negotiable U.S. dollar certificates of
         deposit in The City of New York, which may include the initial dealer
         and its affiliates, selected by the Calculation Agent (after
         consultation with the Issuer), for negotiable U.S. dollar certificates
         of deposit of major U.S. money center banks of the highest credit
         standing in the market for negotiable certificates of deposit with a
         remaining maturity closest to the Index Maturity specified on the face
         hereof in an amount that is representative for a single transaction in
         that market at that time.

                  "Initial dealer" with respect to this Note means Morgan
         Stanley & Co. International Limited.

                  (iii) If the dealers selected by the Calculation Agent are not
         quoting as described in (ii) above, the CD Rate shall remain the CD
         Rate for the immediately preceding Interest Reset Period, or, if there
         was no Interest Reset Period, the rate of interest payable shall be the
         Initial Interest Rate.

         Determination of Commercial Paper Rate. If the Base Rate specified on
the face hereof is the "Commercial Paper Rate," for any Interest Determination
Date, the Commercial Paper Rate with respect to this Note shall be the Money
Market Yield (as defined herein), calculated as described below, of the rate on
that date for U.S. dollar commercial paper having the Index Maturity specified
on the face hereof, as that rate is published in H.15(519), under the heading
"Commercial Paper--Nonfinancial."

         The following procedures shall be followed if the Commercial Paper Rate
cannot be determined as described above:

                  (i) If the above rate is not published by 3:00 p.m., New York
         City time, on the Calculation Date, then the Commercial Paper Rate
         shall be the Money Market Yield of the rate on that Interest
         Determination Date for commercial paper of the Index Maturity specified
         on the face hereof as published in the H.15 Daily Update, or other
         recognized electronic source used for the purpose of displaying the
         applicable rate, under the heading "Commercial Paper--Nonfinancial."

                  (ii) If by 3:00 p.m., New York City time, on that Calculation
         Date the rate is not yet published in either H.15(519) or the H.15
         Daily Update, or other recognized electronic source used for the
         purpose of

                                      A-11
<PAGE>

         displaying the applicable rate, then the Calculation Agent shall
         determine the Commercial Paper Rate to be the Money Market Yield of
         the arithmetic mean of the offered rates as of 11:00 a.m., New York
         City time, on that Interest Determination Date of three leading
         dealers of U.S. dollar commercial paper in The City of New York, which
         may include the initial dealer and its affiliates, selected by the
         Calculation Agent (after consultation with the Issuer), for commercial
         paper of the Index Maturity specified on the face hereof, placed for
         an industrial issuer whose bond rating is "Aa," or the equivalent,
         from a nationally recognized statistical rating agency.

                  (iii) If the dealers selected by the Calculation Agent are not
         quoting as mentioned above, the Commercial Paper Rate for that Interest
         Determination Date shall remain the Commercial Paper Rate for the
         immediately preceding Interest Reset Period, or, if there was no
         Interest Reset Period, the rate of interest payable shall be the
         Initial Interest Rate.

         The "Money Market Yield" shall be a yield calculated in accordance with
the following formula:

                                          D x 360
                  Money Market Yield = ------------ x 100
                                       360 - (D x M)

where "D" refers to the applicable per year rate for commercial paper quoted on
a bank discount basis and expressed as a decimal and "M" refers to the actual
number of days in the interest period for which interest is being calculated.

         Determination of EURIBOR Notes. If the Base Rate specified on the face
hereof is "EURIBOR," for any Interest Determination Date, EURIBOR with respect
to this Note shall be the rate for deposits in euros as sponsored, calculated
and published jointly by the European Banking Federation and ACI - The Financial
Market Association, or any company established by the joint sponsors for
purposes of compiling and publishing those rates, for the Index Maturity
specified on the face hereof as that rate appears on the display on Moneyline
Telerate, or any successor service, on page 248 or any other page as may replace
page 248 on that service ("Telerate Page 248") as of 11:00 a.m., Brussels time.

         The following procedures shall be followed if the rate cannot be
determined as described above:

                  (i) If the above rate does not appear, the Calculation Agent
         shall request the principal Euro-zone office of each of four major
         banks in the Euro-zone interbank market, as selected by the Calculation
         Agent (after consultation with the Issuer), to provide the Calculation
         Agent with its offered rate for deposits in euros, at approximately
         11:00 a.m., Brussels

                                      A-12
<PAGE>

         time, on the Interest Determination Date, to prime banks in the
         Euro-zone interbank market for the Index Maturity specified on the
         face hereof commencing on the applicable Interest Reset Date, and in a
         principal amount not less than the equivalent of U.S.$1 million in
         euro that is representative of a single transaction in euro, in that
         market at that time. If at least two quotations are provided, EURIBOR
         shall be the arithmetic mean of those quotations.

                  (ii) If fewer than two quotations are provided, EURIBOR shall
         be the arithmetic mean of the rates quoted by four major banks in the
         Euro-zone interbank market, as selected by the Calculation Agent (after
         consultation with the Issuer), at approximately 11:00 a.m., Brussels
         time, on the applicable Interest Reset Date for loans in euro to
         leading European banks for a period of time equivalent to the Index
         Maturity specified on the face hereof commencing on that Interest Reset
         Date in a principal amount not less than the equivalent of U.S.$1
         million in euro.

                  (iii) If the banks so selected by the Calculation Agent are
         not quoting as described in (ii) above, the EURIBOR rate in effect for
         the applicable period shall be the same as EURIBOR for the immediately
         preceding Interest Reset Period, or, if there was no Interest Reset
         Period, the rate of interest payable shall be the Initial Interest
         Rate.

         "Euro-zone" means the region comprised of member states of the European
Union that adopt the single currency in accordance with the relevant treaty of
the European Union, as amended.

         Determination of the Federal Funds Rates. If the Base Rate specified on
the face hereof is the "Federal Funds Rate," for any Interest Determination
Date, the Federal Funds Rate with respect to this Note shall be the rate on that
date for U.S. dollar federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)" as displayed on Moneyline Telerate, or any successor
service, on page 120 or any other page as may replace page 120 on that service
("Telerate Page 120").

         The following procedures shall be followed if the Federal Funds Rate
cannot be determined as described above:

                  (i) If the above rate is not published by 3:00 p.m., New York
         City time, on the Calculation Date, the Federal Funds Rate shall be the
         rate on that Interest Determination Date as published in the H.15 Daily
         Update, or other recognized electronic source used for the purpose of
         displaying the applicable rate, under the heading "Federal Funds
         (Effective)."

                                      A-13
<PAGE>

                  (ii) If that rate is not yet published in either H.15(519) or
         the H.15 Daily Update, or other recognized electronic source used for
         the purpose of displaying the applicable rate, by 3:00 p.m., New York
         City time, on the Calculation Date, the Calculation Agent shall
         determine the Federal Funds Rate to be the arithmetic mean of the rates
         for the last transaction in overnight U.S. dollar federal funds prior
         to 9:00 a.m., New York City time, on that Interest Determination Date,
         by each of three leading brokers of U.S. dollar federal funds
         transactions in The City of New York, which may include the initial
         dealer and its affiliates, selected by the Calculation Agent (after
         consultation with the Issuer).

                  (iii) If the brokers selected by the Calculation Agent are not
         quoting as mentioned above, the Federal Funds Rate relating to that
         Interest Determination Date shall remain the Federal Funds Rate for the
         immediately preceding Interest Reset Period, or, if there was no
         Interest Reset Period, the rate of interest payable shall be the
         Initial Interest Rate.

         Determination of LIBOR. If the Base Rate specified on the face hereof
is "LIBOR," LIBOR with respect to this Note shall be based on London Interbank
Offered Rate. The Calculation Agent shall determine LIBOR for each Interest
Determination Date as follows:

                  (i) As of the Interest Determination Date, LIBOR shall be
         either: (a) if "LIBOR Reuters" is specified as the Reporting Service on
         the face hereof, the arithmetic mean of the offered rates for deposits
         in the Index Currency having the Index Maturity designated on the face
         hereof, commencing on the second London Banking Day immediately
         following that Interest Determination Date, that appear on the
         Designated LIBOR Page, as defined below, as of 11:00 a.m., London time,
         on that Interest Determination Date, if at least two offered rates
         appear on the Designated LIBOR Page; except that if the specified
         Designated LIBOR Page, by its terms provides only for a single rate,
         that single rate shall be used; or (b) if "LIBOR Telerate" is specified
         as the Reporting Service on the face hereof, the rate for deposits in
         the Index Currency having the Index Maturity designated on the face
         hereof, commencing on the second London Banking Day immediately
         following that Interest Determination Date or, if pounds sterling is
         the Index Currency, commencing on that Interest Determination Date,
         that appears on the Designated LIBOR Page at approximately 11:00 a.m.,
         London time, on that Interest Determination Date.

                  (ii) If (a) fewer than two offered rates appear and LIBOR
         Reuters is specified on the face hereof, or (b) no rate appears and the
         face hereof specifies either (x) LIBOR Telerate or (y) LIBOR Reuters
         and the Designated LIBOR Page by its terms provides only for a single
         rate, then

                                      A-14
<PAGE>

         the Calculation Agent shall request the principal London offices of
         each of four major reference banks in the London interbank market, as
         selected by the Calculation Agent (after consultation with the
         Issuer), to provide the Calculation Agent with its offered quotation
         for deposits in the Index Currency for the period of the Index
         Maturity specified on the face hereof commencing on the second London
         Banking Day immediately following the Interest Determination Date or,
         if pounds sterling is the Index Currency, commencing on that Interest
         Determination Date, to prime banks in the London interbank market at
         approximately 11:00 a.m., London time, on that Interest Determination
         Date and in a principal amount that is representative of a single
         transaction in that Index Currency in that market at that time.

                  (iii) If at least two quotations are provided, LIBOR
         determined on that Interest Determination Date shall be the arithmetic
         mean of those quotations. If fewer than two quotations are provided,
         LIBOR shall be determined for the applicable Interest Reset Date as the
         arithmetic mean of the rates quoted at approximately 11:00 a.m., London
         time, or some other time specified on the face hereof, in the
         applicable principal financial center for the country of the Index
         Currency on that Interest Reset Date, by three major banks in that
         principal financial center selected by the Calculation Agent (after
         consultation with the Issuer) for loans in the Index Currency to
         leading European banks, having the Index Maturity specified on the face
         hereof and in a principal amount that is representative of a single
         transaction in that Index Currency in that market at that time.

                  (iv) If the banks so selected by the Calculation Agent are not
         quoting as described in (iii) above, LIBOR in effect for the applicable
         period shall be the same as LIBOR for the immediately preceding
         Interest Reset Period, or, if there was no Interest Reset Period, the
         rate of interest payable shall be the Initial Interest Rate.

         The "Index Currency" means the currency specified on the face hereof as
the currency for which LIBOR shall be calculated, or, if the euro is substituted
for that currency, the Index Currency shall be the euro. If that currency is not
specified on the face hereof, the Index Currency shall be U.S. dollars.

         "Designated LIBOR Page" means either: (a) if LIBOR Reuters is
designated as the Reporting Service on the face hereof, the display on the
Reuters Money 3000 Service for the purpose of displaying the London interbank
rates of major banks for the applicable Index Currency or its designated
successor, or (b) if LIBOR Telerate is designated as the Reporting Service on
the face hereof, the display on Moneyline Telerate, or any successor service, on
the page specified on the face hereof, or any other page as may replace that
page on that service, for the

                                      A-15
<PAGE>

purpose of displaying the London interbank rates of major banks for the
applicable Index Currency.

         If neither LIBOR Reuters nor LIBOR Telerate is specified on the face
hereof, LIBOR for the applicable Index Currency shall be determined as if LIBOR
Telerate were specified, and, if the U.S. dollar is the Index Currency, as if
Page 3750 had been specified.

         Determination of Prime Rate. If the Base Rate specified on the face
hereof is "Prime Rate," for any Interest Determination Date, the Prime Rate with
respect to this Note shall be the rate on that date as published in H.15(519)
under the heading "Bank Prime Loan."

         The following procedures shall be followed if the Prime Rate cannot be
determined as described above:

                  (i) If the rate is not published prior to 3:00 p.m., New York
         City time, on the Calculation Date, then the Prime Rate shall be the
         rate on that Interest Determination Date as published in the H.15 Daily
         Update under the heading "Bank Prime Loan."

                  (ii) If the rate is not published prior to 3:00 p.m., New York
         City time, on the Calculation Date in either H.15(519) or the H.15
         Daily Update, then the Calculation Agent shall determine the Prime Rate
         to be the arithmetic mean of the rates of interest publicly announced
         by each bank that appears on the Reuters Screen USPRIME 1 Page, as
         defined below, as that bank's Prime Rate or base lending rate as in
         effect for that Interest Determination Date.

                  (iii) If fewer than four rates for that Interest Determination
         Date appear on the Reuters Screen USPRIME 1 Page by 3:00 p.m., New York
         City time, on the Calculation Date, the Calculation Agent shall
         determine the Prime Rate to be the arithmetic mean of the Prime Rates
         quoted on the basis of the actual number of days in the year divided by
         360 as of the close of business on that Interest Determination Date by
         at least three major banks, which may include affiliates of the initial
         dealer, in The City of New York selected by the Calculation Agent
         (after consultation with the Issuer).

                  (iv) If the banks selected are not quoting as described in
         (iii) above, the Prime Rate shall remain the Prime Rate for the
         immediately preceding Interest Reset Period, or, if there was no
         Interest Reset Period, the rate of interest payable shall be the
         Initial Interest Rate.

                                      A-16
<PAGE>

         "Reuters Screen USPRIME 1 Page" means the display designated as page
"USPRIME 1" on the Reuters Money 3000 Service, or any successor service, or any
other page as may replace the USPRIME 1 Page on that service for the purpose of
displaying prime rates or base lending rates of major U.S. banks.

         Determination of Treasury Rate. If the Base Rate specified on the face
hereof is "Treasury Rate," the Treasury Rate with respect to this Note shall be:

                  (i) the rate from the Auction held on the applicable Interest
         Determination Date (the "Auction") of direct obligations of the United
         States ("Treasury Bills") having the Index Maturity specified on the
         face hereof as that rate appears under the caption "INVESTMENT RATE" on
         the display on Moneyline Telerate, or any successor service, on page 56
         or any other page as may replace page 56 on that service ("Telerate
         Page 56") or page 57 or any other page as may replace page 57 on that
         service ("Telerate Page 57"); or

                  (ii) if the rate described in (i) above is not published by
         3:00 p.m., New York City time, on the Calculation Date, the Bond
         Equivalent Yield of the rate for the applicable Treasury Bills as
         published in the H.15 Daily Update, or other recognized electronic
         source used for the purpose of displaying the applicable rate, under
         the caption "U.S. Government Securities/Treasury Bills/Auction High";
         or

                  (iii) if the rate described in (ii) above is not published by
         3:00 p.m., New York City time, on the related Calculation Date, the
         Bond Equivalent Yield of the Auction rate of the applicable Treasury
         Bills, announced by the United States Department of the Treasury; or

                  (iv) in the event that the rate described in (iii) above is
         not announced by the United States Department of the Treasury, or if
         the Auction is not held, the Bond Equivalent Yield of the rate on the
         applicable Interest Determination Date of Treasury Bills having the
         Index Maturity specified on the face hereof published in H.15(519)
         under the caption "U.S. Government Securities/Treasury Bills/Secondary
         Market"; or

                  (v) if the rate described in (iv) above is not so published by
         3:00 p.m., New York City time, on the related Calculation Date, the
         rate on the applicable Interest Determination Date of the applicable
         Treasury Bills as published in the H.15 Daily Update, or other
         recognized electronic source used for the purpose of displaying the
         applicable rate, under the caption "U.S. Government Securities/Treasury
         Bills/Secondary Market"; or

                                      A-17
<PAGE>

                  (vi) if the rate described in (v) above is not so published by
         3:00 p.m., New York City time, on the related Calculation Date, the
         rate on the applicable Interest Determination Date calculated by the
         Calculation Agent as the Bond Equivalent Yield of the arithmetic mean
         of the secondary market bid rates, as of approximately 3:30 p.m., New
         York City time, on the applicable Interest Determination Date, of three
         primary U.S. government securities dealers, which may include the
         initial dealer and its affiliates, selected by the Calculation Agent,
         for the issue of Treasury Bills with a remaining maturity closest to
         the Index Maturity specified on the face hereof; or

                  (vii) if the dealers selected by the Calculation Agent are not
         quoting as described in (vi), the Treasury Rate for the immediately
         preceding Interest Reset Period, or, if there was no Interest Reset
         Period, the rate of interest payable shall be the Initial Interest
         Rate.

         The "Bond Equivalent Yield" means a yield calculated in accordance with
the following formula and expressed as a percentage:

                                              D x N
                  Bond Equivalent Yield = ------------- x 100
                                          360 - (D x M)

where "D" refers to the applicable per annum rate for Treasury Bills quoted on a
bank discount basis, "N" refers to 365 or 366, as the case may be, and "M"
refers to the actual number of days in the interest period for which interest is
being calculated.

         Determination of CMT Rate. If the Base Rate specified on the face
hereof is the "CMT Rate," for any Interest Determination Date, the CMT Rate with
respect to this Note shall be the rate displayed on the Designated CMT Telerate
Page (as defined below) under the caption "... Treasury Constant Maturities ...
Federal Reserve Board Release H.15... Mondays Approximately 3:45 p.m.," under
the column for the Designated CMT Maturity Index, as defined below, for:

                  (1) the rate on that Interest Determination Date, if the
         Designated CMT Telerate Page is 7051; and

                  (2) the week or the month, as applicable, ended immediately
         preceding the week in which the related Interest Determination Date
         occurs, if the Designated CMT Telerate Page is 7052.

         The following procedures shall be followed if the CMT Rate cannot be
determined as described above:

                                      A-18
<PAGE>

                  (i) If that rate is no longer displayed on the relevant page,
         or if not displayed by 3:00 p.m., New York City time, on the related
         Calculation Date, then the CMT Rate shall be the Treasury Constant
         Maturity rate for the Designated CMT Maturity Index as published in the
         relevant H.15(519).

                  (ii) If the rate described in (i) is no longer published, or
         if not published by 3:00 p.m., New York City time, on the related
         Calculation Date, then the CMT Rate shall be the Treasury Constant
         Maturity Rate for the Designated CMT Maturity Index or other U.S.
         Treasury rate for the Designated CMT Maturity Index on the Interest
         Determination Date as may then be published by either the Board of
         Governors of the Federal Reserve System or the United States Department
         of the Treasury that the Calculation Agent determines to be comparable
         to the rate formerly displayed on the Designated CMT Telerate Page and
         published in the relevant H.15(519).

                  (iii) If the information described in (ii) is not provided by
         3:00 p.m., New York City time, on the related Calculation Date, then
         the Calculation Agent shall determine the CMT Rate to be a yield to
         maturity, based on the arithmetic mean of the secondary market closing
         offer side prices as of approximately 3:30 p.m., New York City time, on
         the Interest Determination Date, reported, according to their written
         records, by three leading primary U.S. government securities dealers
         ("Reference Dealers") in The City of New York, which may include the
         initial dealer or its affiliates, selected by the Calculation Agent as
         described in the following sentence. The Calculation Agent shall select
         five reference dealers (after consultation with the Issuer) and shall
         eliminate the highest quotation or, in the event of equality, one of
         the highest, and the lowest quotation or, in the event of equality, one
         of the lowest, for the most recently issued direct noncallable fixed
         rate obligations of the United States ("Treasury Notes") with an
         original maturity of approximately the Designated CMT Maturity Index, a
         remaining term to maturity of no more than 1 year shorter than that
         Designated CMT Maturity Index and in a principal amount that is
         representative for a single transaction in the securities in that
         market at that time. If two Treasury Notes with an original maturity as
         described above have remaining terms to maturity equally close to the
         Designated CMT Maturity Index, the quotes for the Treasury Note with
         the shorter remaining term to maturity shall be used.

                  (iv) If the Calculation Agent cannot obtain three Treasury
         Notes quotations as described in (iii) above, the Calculation Agent
         shall determine the CMT Rate to be a yield to maturity based on the
         arithmetic mean of the secondary market offer side prices as of
         approximately 3:30 p.m., New York City time, on the Interest
         Determination Date of three

                                      A-19
<PAGE>

         reference dealers in The City of New York, selected using the same
         method described in (iii) above, for Treasury Notes with an original
         maturity equal to the number of years closest to but not less than the
         Designated CMT Maturity Index and a remaining term to maturity closest
         to the Designated CMT Maturity Index and in a principal amount that is
         representative for a single transaction in the securities in that
         market at that time.

                  (v) If three or four, and not five, of the reference dealers
         are quoting as described in (iv) above, then the CMT Rate shall be
         based on the arithmetic mean of the offer prices obtained and neither
         the highest nor the lowest of those quotes shall be eliminated.

                  (vi) If fewer than three reference dealers selected by the
         Calculation Agent are quoting as described in (iv) above, the CMT Rate
         shall be the CMT Rate for the immediately preceding Interest Reset
         Period, or, if there was no Interest Reset Period, the rate of interest
         payable shall be the Initial Interest Rate.

         "Designated CMT Telerate Page" means the display on Moneyline Telerate,
or any successor service, on the page designated on the face hereof or any other
page as may replace that page on that service for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no page is specified
on the face hereof, the Designated CMT Telerate Page shall be 7052, for the most
recent week.

         "Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities, which is either 1, 2, 3, 5, 7, 10, 20 or 30
years, specified in an applicable pricing supplement for which the CMT Rate
shall be calculated. If no maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be two years.

         Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, specified on the face hereof. The Calculation Agent shall
calculate the interest rate hereon in accordance with the foregoing on or before
each Calculation Date. The interest rate on this Note will in no event be higher
than the maximum rate permitted by New York law, as the same may be modified by
United States Federal law of general application.

         At the request of the holder hereof, the Calculation Agent will provide
to the holder hereof the interest rate hereon then in effect and, if determined,
the interest rate that will become effective as of the next Interest Reset Date.

                                      A-20
<PAGE>

         Unless otherwise indicated on the face hereof, interest payments on
this Note shall be the amount of interest accrued from and including the
Interest Accrual Date or from and including the last date to which interest has
been paid or duly provided for, to but excluding the Interest Payment Dates or
Maturity Date (or any earlier redemption or repayment date), as the case may be.
Accrued interest hereon for any period shall be the sum of the products obtained
by multiplying the interest factor calculated for each day in such period by the
principal amount hereof.

         Unless otherwise specified on the face hereof, the interest factor for
each such day shall be computed by dividing the interest rate applicable to such
day (i) by 360 if the Base Rate is CD Rate, Commercial Paper Rate, EURIBOR,
Federal Funds Rate, Prime Rate or LIBOR (except if the Index Currency is pounds
sterling); (ii) by 365 if the Base Rate is LIBOR and the Index Currency is
pounds sterling; or (iii) by the actual number of days in the year if the Base
Rate is the Treasury Rate or the CMT Rate. All percentages resulting from any
calculation of the rate of interest on this Note will be rounded, if necessary,
to the nearest one hundred-thousandth of a percentage point (with .000005%
rounded up to .00001%), and all dollar amounts used in or resulting from such
calculation on this Note will be rounded to the nearest cent, with one-half cent
rounded upward. The interest rate in effect on any Interest Reset Date will be
the applicable rate as reset on such date. The interest rate applicable to any
other day is the interest rate from the immediately preceding Interest Reset
Date (or, if none, the Initial Interest Rate).

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

         This Note, and any Note or Notes issued upon transfer or exchange
hereof, is issuable only in fully registered form, without coupons, and is
issuable only in the minimum denominations set forth on the face hereof or any
amount in excess thereof which is an authorized denomination set forth on the
face hereof.

         The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at either the
aforesaid New York office or the London office of the Trustee by surrendering
this Note for cancellation, accompanied by a written instrument of transfer in
form satisfactory to the Issuer and the Trustee and duly executed by the
registered holder hereof in person or by the holder's attorney duly authorized
in writing, and thereupon the Trustee shall issue in the name of the transferee
or transferees, in exchange herefor, a new Note or Notes having identical terms
and provisions and having a

                                      A-21
<PAGE>

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

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

         This Note may be redeemed, as a whole, at the option of the Issuer at
any time prior to maturity, upon the giving of a notice of redemption as
described below, at a redemption price equal to 100% of the principal amount
hereof, together with accrued interest to the date fixed for redemption, if the
Issuer determines that, as a result of any change in or amendment to the laws,
or any regulations or rulings promulgated thereunder, of the United States or of
any political subdivision or taxing authority thereof or therein affecting
taxation, or any change in official position regarding the application or
interpretation of such laws, regulations or rulings, which change or amendment
becomes effective on or after the Initial Offering Date hereof, the Issuer has
or will become obligated to pay Additional Amounts, as defined below, with
respect to this Note as described

                                      A-22
<PAGE>

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

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

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

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

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

                                      A-23
<PAGE>

                  (c) any tax, assessment or other governmental charge imposed
         by reason of such holder's past or present status as a personal holding
         company or foreign personal holding company or controlled foreign
         corporation or passive foreign investment company with respect to the
         United States or as a corporation which accumulates earnings to avoid
         United States federal income tax or as a private foundation or other
         tax-exempt organization;

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

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

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

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

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

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

                                      A-24
<PAGE>

subdivision thereof) to be included in the income, for tax purposes, of a
beneficiary or settlor with respect to such fiduciary or a member of such
partnership or a beneficial owner who would not have been entitled to the
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the holder of this Note.

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

         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, (i) extend the final maturity of any such debt security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any amount payable on redemption thereof,
or change the currency of payment thereof, or modify or amend the provisions for
conversion of any currency into any other currency, or modify or amend the
provisions for conversion or

                                      A-25
<PAGE>

exchange of the debt security for securities of the Issuer or other entities or
for other property or the cash value of the property (other than as provided in
the antidilution provisions or other similar adjustment provisions of the debt
securities or otherwise in accordance with the terms thereof), or impair or
affect the rights of any holder to institute suit for the payment thereof or
(ii) reduce the aforesaid percentage in principal amount of debt securities the
consent of the holders of which is required for any such supplemental indenture.

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

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

                                      A-26
<PAGE>

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

         So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the Notes.
If this Note is listed on the London Stock Exchange plc and such exchange so
requires, the Issuer shall maintain a Paying Agent in London. If any European
Union Directive on the taxation of savings comes into force, the Issuer will, to
the extent possible as a matter of law, maintain a Paying Agent in a member
state of the European Union that will not be obligated to withhold or deduct tax
pursuant to any such Directive or any law implementing or complying with, or
introduced in order to conform to, such Directive. The Issuer may designate
other agencies for the payment of said principal, premium and interest at such
place or places outside the United States (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 the payment of the principal of or interest or premium, if
any, on any Notes that remain unclaimed at the end of two years after such
principal, interest or premium shall have become due and payable (whether at
maturity or upon call for redemption or otherwise), (i) the Trustee or such
Paying Agent shall notify the holders of such Notes that such moneys shall be
repaid to the Issuer and any person claiming such moneys shall thereafter look
only to the Issuer for payment thereof and (ii) such moneys shall be so repaid
to the Issuer. Upon such repayment all liability of the Trustee or such Paying
Agent with respect to such moneys shall thereupon cease, without, however,
limiting in any way any obligation that the Issuer may have to pay the principal
of or interest or premium, if any, on this Note as the same shall become due.

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

         Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes,

                                      A-27
<PAGE>

whether or not this Note be overdue, and none of the Issuer, the Trustee or any
such agent shall be affected by notice to the contrary.

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

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

         As used herein:

                  (a) the term "Market Exchange Rate" means the noon U.S. dollar
         buying rate in The City of New York for cable transfers of the
         Specified Currency indicated on the face hereof published by the
         Federal Reserve Bank of New York;

                  (b) the term "United States" means the United States of
         America (including the States and the District of Columbia), its
         territories, its possessions and other areas subject to its
         jurisdiction; and

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

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

                                      A-28
<PAGE>

                                  ABBREVIATIONS

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

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

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

        Under Uniform Gifts to Minors Act __________________________________
                                                         (State)

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

                               ___________________

                                      A-29
<PAGE>

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

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

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

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

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

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

Dated: _________________________

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

                                      A-30
<PAGE>

                            OPTION TO ELECT REPAYMENT

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

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

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

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

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

Dated:______________________________    ________________________________________
                                        NOTICE: The signature on this Option to
                                        Extend Maturity must correspond with the
                                        name as written upon the face of the
                                        Note in every particular, without
                                        alteration or enlargement or any change
                                        whatever.

                                      A-31EXHIBIT 4-bb

                           [FORM OF FACE OF SECURITY]
                       MORGAN STANLEY DIRECTSECURITIES(SM)

REGISTERED                                                    REGISTERED
No. FXR                                                       [PRINCIPAL AMOUNT]
                                                              CUSIP:

     Unless this certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein. (1)

(1)  Applies only if this Note is a Registered Global Security.

<PAGE>

                                 MORGAN STANLEY
                      MORGAN STANLEY DIRECTSECURITIES(SM)

<TABLE>
===============================================================================================================
ORIGINAL ISSUE DATE:          INITIAL REDEMPTION DATE:     INTEREST RATE:              MATURITY DATE:
---------------------------------------------------------------------------------------------------------------
<S>                           <C>                          <C>                         <C>
INTEREST ACCRUAL DATE:        INITIAL REDEMPTION           INTEREST PAYMENT            APPLICABILITY OF
                                 PERCENTAGE:                  DATE(S):  The 15th          SURVIVOR'S OPTION:
                                                              day of each [        ]      YES(2)
                                                              beginning [          ]
---------------------------------------------------------------------------------------------------------------
                              ANNUAL REDEMPTION            INTEREST PAYMENT            OPTIONAL REPAYMENT
                                 PERCENTAGE REDUCTION:        PERIOD:                     DATE(S):
---------------------------------------------------------------------------------------------------------------
                              REDEMPTION NOTICE                                        APPLICABILITY OF
                                 PERIOD:(3 )                                              MODIFIED PAYMENT UPON
                                                                                          ACCELERATION:
---------------------------------------------------------------------------------------------------------------
                              TAX REDEMPTION AND                                       If yes, state Issue
                                 PAYMENT OF ADDITIONAL                                    Price:
                                 AMOUNTS: NO(4)
---------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS:             IF YES, STATE INITIAL                                    ORIGINAL YIELD TO
                                 OFFERING DATE: N/A                                       MATURITY:
===============================================================================================================
</TABLE>

     Morgan Stanley, a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to         ,
or registered assignees, the principal sum of US$[      ], on the Maturity Date
specified above (except to the extent redeemed or repaid prior to maturity) and
to pay interest thereon at the Interest Rate per annum specified above, from
and including the Interest Accrual Date specified above until the principal
hereof is paid or duly made available for payment monthly, quarterly,
semiannually or annually in arrears as specified above as the Interest Payment
Period on each Interest Payment Date (as defined below), commencing on the
Interest Payment Date next succeeding the Interest Accrual Date specified
above, and at maturity (or on any redemption or repayment date or upon
repayment pursuant to the exercise of the Survivor's Option); provided,
however, that if the Interest Accrual Date occurs between a Record Date, as
defined below, and the next succeeding Interest Payment Date, interest payments
will commence on the second Interest Payment Date

---------
     (2) Default provision is YES.

     (3) Applicable if other than 30-60 calendar days. Minimum notice period is
[10] calendar days [current DTC limitation].

     (4) Default provision is NO. Indicate YES only for certain notes issued on
a global basis if specified in pricing supplement.

                                       2
<PAGE>

succeeding the Interest Accrual Date to the registered holder of this Note on
the Record Date with respect to such second Interest Payment Date.

     Interest on this Note will accrue from and including the most recent date
to which interest has been paid or duly provided for, or, if no interest has
been paid or duly provided for, from and including the Interest Accrual Date,
until but excluding the date the principal hereof has been paid or duly made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the date 15
calendar days prior to such Interest Payment Date (whether or not a Business
Day (as defined below)) (each such date, a "Record Date"); provided, however,
that interest payable at maturity (or any redemption or repayment date or upon
repayment pursuant to the exercise of the Survivor's Option) will be payable to
the person to whom the principal hereof shall be payable. As used herein,
"Business Day" means any day, other than a Saturday or Sunday, that is neither
a legal holiday nor a day on which banking institutions are authorized or
required by law or regulation to close in The City of New York.

     Unless otherwise specified above, "Interest Payment Dates" will be as
follows:

          (a) For monthly Interest Payment Periods, the Interest Payment Dates
     will be the fifteenth day of each calendar month, beginning in the first
     calendar month following the month this Note is issued;

          (b) For quarterly Interest Payment Periods, the Interest Payment
     Dates will be the fifteenth day of every third month, beginning in the
     third calendar month following the month this Note is issued;

          (c) For semiannual Interest Payment Periods, the Interest Payment
     Dates will be the fifteenth day of every sixth month, beginning in the
     sixth calendar month following the month this Note is issued; and

          (d) For annual Interest Payment Periods, the Interest Payment Dates
     will be the fifteenth day of every twelfth month, beginning in the twelfth
     calendar month following the month this Note is issued.

     Payment of the principal of this Note, any premium and the interest due at
maturity (or any redemption or repayment date or upon repayment pursuant to the
exercise of the Survivor's Option) will be made in immediately available funds
upon surrender of this Note (and in connection with a repayment date or the
exercise of the Survivor's Option, upon providing the information and/or
documents required herein on the applicable date for repayment) 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 date of redemption or
repayment or upon repayment pursuant to the exercise of the Survivor's Option,
will be made by U.S. dollar check mailed to the address of the person entitled
thereto as such address shall appear in the Note register. A holder of
$10,000,000 or more in aggregate principal amount of Notes having the same
Interest Payment Date shall be entitled to receive payments of interest in U.S.
dollars, other than interest due at maturity or on any date of

                                       3
<PAGE>

redemption or repayment or upon repayment pursuant to the exercise of the
Survivor's Option, 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.

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

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

                                       4
<PAGE>

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

DATED:
                                             MORGAN STANLEY

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

TRUSTEE'S CERTIFICATE
  OF AUTHENTICATION

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

JPMORGAN CHASE BANK,
  as Trustee

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

                                       5
<PAGE>

                         [FORM OF REVERSE OF SECURITY]

     This Note is one of a duly authorized issue of Morgan Stanley
DirectSecurities(SM) having a maturity more than nine months from the date of
issue (the "Notes") of the Issuer. The Notes are issuable under a Senior
Indenture, dated as of November 1, 2004, between the Issuer and JPMorgan Chase
Bank, as Trustee (the "Trustee," which term includes any successor trustee
under the Senior Indenture) (as may be amended or supplemented from time to
time, the "Senior Indenture"), to which Senior Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities of the Issuer, the Trustee
and holders of the Notes and the terms upon which the Notes are, and are to be,
authenticated and delivered. The Issuer has appointed JPMorgan Chase Bank at
its corporate trust office in The City of New York as the paying agent (the
"Paying Agent," which term includes any additional or successor Paying Agent
appointed by the Issuer) with respect to the Notes. The terms of individual
Notes may vary with respect to interest rates, issue dates, maturity dates, or
otherwise, all as provided in the Senior Indenture. To the extent not
inconsistent herewith, the terms of the Senior Indenture are hereby
incorporated by reference herein.

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

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

     If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments
of $1,000 (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 Note to be repaid at the option of the holder hereof, the Paying Agent
must receive at its corporate trust office in the Borough of Manhattan, The
City of New

                                       6
<PAGE>

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

     If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder of this Note upon the request of the
estate of a deceased owner of a beneficial ownership interest in this Note (a
"Survivor's Option") on the terms set forth herein. If a Survivor's Option is
applicable, subject to the Annual Put Limitation and the Individual Put
Limitation (each as defined below), this Note shall be repayable in whole or in
part in increments of $1,000 (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 Note to be repaid at the option of the holder
hereof, the deceased beneficial owner's Authorized Representative (as defined
below) must provide the following items to the participant (the "Participant")
of The Depository Trust Company (the "Depositary") through which the related
beneficial interest in this Note is owned:

          (a) a written instruction to such Participant, to notify the
     Depositary of the Authorized Representative's desire to obtain repayment
     pursuant to exercise of the Survivor's Option;

          (b) appropriate evidence that (i) the deceased was the owner of a
     beneficial interest in this Note at the time of death and for at least six
     months prior to his or her death, (ii) the death of the owner has occurred
     and (iii) the Authorized Representative has authority to act on behalf of
     the deceased owner;

          (c) if the beneficial interest in this Note is held by a nominee of
     the deceased owner, a certificate or letter from the nominee attesting to
     the deceased owner's ownership of a beneficial interest in this Note;

          (d) a written request for repayment signed by the Authorized
     Representative of the deceased beneficial owner (which includes a detailed
     description of the Note, including CUSIP number and Maturity Date, the
     deceased's social security number and the date of death of the deceased),
     with signature guaranteed by a member firm of a registered national

                                       7
<PAGE>

     securities exchange or of the National Association of Securities Dealers,
     Inc. or a commercial bank or trust company having an office or
     correspondent in the United States;

          (e) if applicable, a properly executed assignment or endorsement;

          (f) tax waivers and any other instruments or documents reasonably
     required in order to establish the validity of the ownership of the
     beneficial interest in this Note and the claimant's entitlement to
     payment; and

          (g) any additional information reasonably required to document the
     ownership or authority to exercise the Survivor's Option and to cause the
     repayment of this Note.

Following receipt of the items listed in (a) through (g) above, the applicable
Participant will deliver each of the items to the Trustee, together with
evidence satisfactory to the Trustee from the Participant stating that it
represents the deceased owner of the beneficial interest in this Note.

         The Issuer may limit the aggregate principal amount of Notes subject
to a Survivor's Option that may be exercised in any calendar year (the "Annual
Put Limitation") to an amount equal to the greater of (i) $5,000,000 or (ii) 5%
of the principal amount of Notes outstanding under the Issuer's
DirectSecurities program as of the end of the most recent calendar year and
subject to the Survivor's Option. The Issuer may also limit the aggregate
principal amount of Notes subject to a Survivor's Option that may be exercised
in any calendar year on behalf of any individual deceased owner of a beneficial
interest in this Note to $500,000 (the "Individual Put Limitation").

         A valid election to exercise the Survivor's Option may not be
withdrawn, unless the election is not accepted during one calendar year as a
result of either the Annual Put Limitation or the Individual Put Limitation.
After such exercise, the Notes with respect to which the Survivor's Option has
been exercised may not be transferred prior to repayment by the Issuer. Each
election to exercise the Survivor's Option will be accepted in the order
received by the Trustee, except for an election the acceptance of which would
contravene the Annual Put Limitation or the Individual Put Limitation. If this
Note is accepted for repayment pursuant to exercise of the Survivor's Option,
the principal amount and accrued interest to be repaid will be repaid no later
than the first Interest Payment Date that occurs 20 or more calendar days after
the date of acceptance. The Issuer shall (i) provide written notice to the
Trustee at its New York office, on which notice the Trustee may conclusively
rely, and to the Depositary of the principal amount of and accrued interest on
this Note to be repaid, on or prior to 10:30 a.m. on the Business Day preceding
the day on which such principal amount will be repaid and (ii) deliver the
aggregate cash amount due with respect to the principal amount of and accrued
interest on this Note to be repaid to the Trustee for delivery to the holder of
this Note. The applicable Participant will be responsible for disbursing
payments received from the Trustee to the Authorized Representative. Each
election to exercise the Survivor's Option that is not accepted in any calendar
year due to the application of the Annual Put Limitation or the Individual Put
Limitation will be deemed to be resubmitted on the first day of the following
calendar year in the order in which all such elections were originally
received, unless the election to exercise the Survivor's Option is withdrawn
after such non-acceptance. If a Note submitted for repayment pursuant to a
valid election to exercise the Survivor's Option is not accepted, the Issuer
shall or shall cause the

                                       8
<PAGE>

Trustee to deliver a written notice by first-class mail to the Authorized
Representative of the deceased beneficial owner that states the reason the
election to exercise the Survivor's Option was not accepted.

     For purposes of making a valid election to exercise the Survivor's Option:

          (a) The Survivor's Option must be exercised by or on behalf of the
     person who has authority to act on behalf of the deceased owner of a
     beneficial interest in this Note (which may be the personal representative
     of or executor of the estate of the deceased beneficial owner or the
     surviving joint owner with the deceased beneficial owner) under the laws
     of the applicable jurisdiction (the "Authorized Representative");

          (b) An owner of a beneficial interest in this Note is a person who
     has the right, immediately prior to such person's death, to receive a pro
     rata share of the proceeds from the disposition of this Note, as well as
     the right to receive payment of a pro rata share of the principal of this
     Note;

          (c) The death of a person owning a beneficial interest in this Note
     in joint tenancy or tenancy by the entirety with another or others will be
     deemed the death of the owner of that beneficial interest in this Note,
     and the entire principal amount of this Note represented by such
     beneficial interest will be subject to repayment as described above;

          (d) The death of a person owning a beneficial interest in this Note
     by tenancy in common will be deemed the death of an owner of that
     beneficial interest in this Note only with respect to the deceased owner's
     beneficial interest in this Note. However, if a beneficial interest in
     this Note is held by husband and wife as tenants in common, the death of
     either spouse will be deemed the death of the owner of that beneficial
     interest in this Note, and the entire principal amount of this Note
     represented by such beneficial interest will be subject to repayment as
     described above;

          (e) A beneficial interest in this Note owned by a trust will be
     regarded as beneficially owned by each beneficiary of the trust to the
     extent of that beneficiary's interest in the trust. The death of a
     beneficiary of a trust will be deemed the death of the beneficial owner of
     this Note beneficially owned by the trust to the extent of the
     beneficiary's interest in the trust. The death of an individual who was a
     tenant in common in a tenancy which is the beneficiary of a trust will be
     deemed the death of the beneficiary of the trust only with respect to the
     deceased individual's beneficial interest in this Note, unless a husband
     and wife are the tenants in common, in which case the death of either
     spouse will be deemed the death of the beneficiary of the trust.

          (f) The death of a person who, during his or her lifetime, was
     entitled to substantially all of the beneficial interests of ownership in
     this Note will be deemed the death of the owner of that beneficial
     interest in this Note if the beneficial ownership interest in this Note
     can be established to the satisfaction of the Trustee. A beneficial
     interest in this Note will be deemed to exist in typical cases of nominee
     ownership, ownership under the Uniform Transfers to Minors Act, community
     property or other joint ownership arrangements between a husband and wife
     and custodial and trust arrangements where one

                                       9
<PAGE>

     person has substantially all of the beneficial ownership interests in this
     Note during his or her lifetime.

     Apart from the Issuer's discretionary right to limit the aggregate
principal amount of this Note subject to a Survivor's Option pursuant to the
Annual Put Limitation and the Individual Put Limitation, all other questions
regarding the eligibility or validity of any exercise of the Survivor's Option
shall (subject to the following sentence) be determined by the Trustee, in its
sole discretion, which determination shall be final and binding on all parties.
In making any determinations hereunder, the Trustee may elect, in the exercise
of its own discretion, to consult with personnel of the Issuer and seek advice
of the Issuer, but it is in no way obligated to do so. The Trustee may
conclusively rely on the advice provided to it by the Issuer in connection
herewith, which advice the Issuer has agreed to provide upon such request and
which shall be final and binding on all parties. The Trustee shall not be
liable to any person for any loss arising from any election on its part to seek
advice of the Issuer (whether such loss arises from any resulting delay or
otherwise).

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

     In the case where the Interest Payment Date or the Maturity Date (or any
redemption or repayment date or the date of repayment pursuant to the exercise
of the Survivor's Option) 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 or the date of repayment pursuant to
the exercise of the Survivor's Option), 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 or the date of repayment pursuant to
the exercise of the Survivor's Option) to such next succeeding Business Day.

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

     This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and, 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.

     The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the Trustee and duly executed by the registered holder hereof in
person or by the holder's attorney duly authorized in writing, and thereupon
the Trustee shall issue in the name of the

                                      10
<PAGE>

transferee or transferees, in exchange herefor, a new Note or Notes having
identical terms and provisions and having a like aggregate principal amount in
authorized denominations, subject to the terms and conditions set forth herein;
provided, however, that the Trustee will not be required (i) to register the
transfer of or exchange any Note that has been called for redemption in whole
or in part, except the unredeemed portion of Notes being redeemed in part, (ii)
to register the transfer of or exchange any Note if the holder thereof has
exercised his right, if any, to require the Issuer to repurchase such Note in
whole or in part, pursuant to the Survivor's Option, if any, or otherwise,
except the portion of such Note not required to be repurchased, or (iii) to
register the transfer of or exchange Notes to be redeemed for a period of
fifteen calendar days preceding the mailing of the relevant notice of
redemption. Notes are exchangeable at said office for other Notes of other
authorized denominations of equal aggregate principal amount having identical
terms and provisions. All such exchanges and transfers of Notes will be free of
charge, but the Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge in connection therewith. All Notes surrendered for
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee and executed by the registered
holder in person or by the holder's attorney duly authorized in writing. The
date of registration of any Note delivered upon any exchange or transfer of
Notes shall be such that no gain or loss of interest results from such exchange
or transfer.

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

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

                                      11
<PAGE>

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, premium, if any, or interest on
such debt securities) by the holders of a majority in aggregate principal
amount of the debt securities of all affected series then outstanding.

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

     If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption (except that if this Note is subject to "Modified Payment upon
Acceleration or Redemption," such redemption price would be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of redemption, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of redemption) (the "Amortized
Amount")), if the Issuer determines that, as a result of any change in or
amendment to the laws, or any regulations or rulings promulgated thereunder, of
the United States or of any political subdivision or taxing authority thereof
or therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which
change or amendment becomes effective on or after the Initial Offering Date
hereof, the Issuer has or will become obligated to pay Additional Amounts, as
defined below, with respect to this Note as described below. Prior to the
giving of any notice of redemption pursuant to this paragraph, the Issuer shall
deliver to the Trustee (i) a certificate stating that the Issuer is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Issuer to so redeem have occurred, and
(ii) an opinion of independent legal counsel satisfactory to the Trustee to
such effect based on such statement of facts; provided that no such notice of
redemption shall be given earlier than 60 calendar days prior to the earliest
date on which the Issuer would be obligated to pay such Additional Amounts if a
payment in respect of this Note were then due.

                                      12
<PAGE>

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

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

          (a) any present or future tax, assessment or other governmental
     charge that would not have been so imposed but for (i) the existence of
     any present or former connection between such holder, or between a
     fiduciary, settlor, beneficiary, member or shareholder of such holder, if
     such holder is an estate, a trust, a partnership or a corporation for
     United States federal income tax purposes, and the United States 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 or on behalf of the
     holder of this Note for payment on a date more than 15 calendar days after
     the date on which such payment became due and payable or the date on which
     payment thereof is duly provided for, whichever occurs later;

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

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

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

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

                                      13
<PAGE>

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

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

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

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

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

     So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as

                                      14
<PAGE>

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

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

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

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

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

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

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

                                      15
<PAGE>

the members of which is, for United States federal income tax purposes, a
nonresident alien individual, a foreign corporation or a nonresident alien
fiduciary of a foreign estate or trust.

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

                                      16
<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.

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

                                      17
<PAGE>

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

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

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

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

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

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

Dated: _______________________

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

                                      18
<PAGE>

                           OPTION TO ELECT REPAYMENT

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

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

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

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

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

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

                                      19

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