Document:

FORM OF FIXED RATE SENIOR NOTE

REGISTERED                                               REGISTERED
No. FXR-1                                                U.S. $
                                                         CUSIP:

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

<PAGE>

                                 MORGAN STANLEY
                    SENIOR GLOBAL MEDIUM-TERM NOTES, SERIES F

                PERFORMANCE LEVERAGED UPSIDE SECURITIES ("PLUS")

                            PLUS DUE OCTOBER 30, 2006
                            MANDATORILY EXCHANGEABLE
                      FOR AN AMOUNT PAYABLE IN U.S. DOLLARS
            BASED ON THE VALUE OF THE PHLX OIL SERVICE SECTOR(SM) INDEX
--------------------------------------------------------------------------------
ORIGINAL ISSUE DATE: INITIAL REDEMPTION  INTEREST RATE: None  MATURITY DATE: See
                       DATE: N/A                               "Maturity Date"
                                                                below.
--------------------------------------------------------------------------------
INTEREST ACCRUAL     INITIAL REDEMPTION  INTEREST PAYMENT    OPTIONAL REPAYMENT
  DATE: N/A            PERCENTAGE: N/A     DATES: N/A          DATE(S):  N/A
--------------------------------------------------------------------------------
SPECIFIED CURRENCY:  ANNUAL REDEMPTION   INTEREST PAYMENT    APPLICABILITY OF
  U.S. dollars         PERCENTAGE          PERIOD: N/A         MODIFIED
                       REDUCTION: N/A                          PAYMENT UPON
                                                               ACCELERATION:
                                                               See "Alternate
                                                               Exchange
                                                               Calculation in
                                                               Case of an Event
                                                               of Default"
                                                               below.
--------------------------------------------------------------------------------
IF SPECIFIED         REDEMPTION NOTICE   APPLICABILITY OF    If yes, state
  CURRENCY OTHER       PERIOD: N/A         ANNUAL INTEREST     Issue Price: N/A
  THAN U.S.                                PAYMENTS: N/A
  DOLLARS, OPTION
  TO ELECT PAYMENT
  IN U.S. DOLLARS:
  N/A
--------------------------------------------------------------------------------
EXCHANGE RATE        TAX REDEMPTION AND                      ORIGINAL YIELD TO
  AGENT: N/A           PAYMENT OF                              MATURITY: N/A
                       ADDITIONAL
                       AMOUNTS: N/A
--------------------------------------------------------------------------------
OTHER PROVISIONS:    If yes, state
  See below            Initial Offering
                       Date: N/A
--------------------------------------------------------------------------------

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

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

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<PAGE>

                                  In the event that the Maturity Date of the
                                  PLUS is postponed due to postponement of the
                                  Index Valuation Date as described in the
                                  immediately preceding paragraph, the Issuer
                                  shall give notice of such postponement and,
                                  once it has been determined, of the date to
                                  which the Maturity Date has been rescheduled
                                  (i) to the holder of this PLUS by mailing
                                  notice of such postponement by first class
                                  mail, postage prepaid, to the holder's last
                                  address as it shall appear upon the registry
                                  books, (ii) to the Trustee by telephone or
                                  facsimile confirmed by mailing such notice to
                                  the Trustee by first class mail, postage
                                  prepaid, at its New York office and (iii) to
                                  The Depository Trust Company (the
                                  "Depositary") by telephone or facsimile
                                  confirmed by mailing such notice to the
                                  Depositary by first class mail, postage
                                  prepaid. Any notice that is mailed in the
                                  manner herein provided shall be conclusively
                                  presumed to have been duly given, whether or
                                  not the holder of this PLUS receives the
                                  notice. The Issuer shall give such notice as
                                  promptly as possible, and in no case later
                                  than (i) with respect to notice of
                                  postponement of the Maturity Date, the
                                  Business Day immediately following October 26,
                                  2006, and (ii) with respect to notice of the
                                  date to which the Maturity Date has been
                                  rescheduled, the Business Day immediately
                                  following the actual Index Valuation Date for
                                  determining the Final Index Value (as defined
                                  below).

Denominations...................  $5 and integral multiples thereof

Payment at Maturity.............  At maturity, upon delivery of this PLUS to the
                                  Trustee, the Issuer shall pay with respect to
                                  each $5 principal amount of this PLUS an
                                  amount in cash equal to (i) if the Final Index
                                  Value is greater than the Initial Index Value
                                  (as defined below), the lesser of (a) $5 plus
                                  the Leveraged Upside Payment (as defined
                                  below) and (b) the Maximum Payment at Maturity
                                  (as defined below) or (ii) if the Final Index
                                  Value is less than or equal to the Initial
                                  Index Value, $5 times the Index Performance
                                  Factor (as defined below).

                                  The Issuer shall, or shall cause the
                                  Calculation Agent to, (i) provide written
                                  notice to the Trustee and to the Depositary of
                                  the amount of cash to be delivered with
                                  respect to each $5 principal amount of this
                                  PLUS, on or prior to 10:30 a.m. on the Trading
                                  Day preceding the Maturity Date (but if such
                                  Trading Day is not a

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<PAGE>

                                  Business Day, prior to the close of business
                                  on the Business Day preceding the Maturity
                                  Date), and (ii) deliver the aggregate cash
                                  amount due with respect to this PLUS to the
                                  Trustee for delivery to the holder of this
                                  PLUS on the Maturity Date.

Leveraged Upside Payment .......  The product of (i) $5 and (ii)    % and (iii)
                                  the Index Percent Increase (as defined below).

Maximum Payment at Maturity.....  $

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

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

Final Index Value...............  The Index Closing Value of the PHLX Oil
                                  Service Sector Index on the Index Valuation
                                  Date.

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

                                  If there is a Market Disruption Event on the
                                  scheduled Index Valuation Date or if the
                                  scheduled Index Valuation Date is not
                                  otherwise a Trading Day, the Index Valuation
                                  Date shall be the immediately succeeding
                                  Trading Day during which no Market Disruption
                                  Event shall have occurred.

Initial Index Value.............

Index Closing Value.............  The Index Closing Value on any Trading Day
                                  shall equal the closing value of the PHLX Oil
                                  Service Sector Index or any Successor Index
                                  (as defined under "Discontinuance of the PHLX
                                  Oil Service Sector Index; Alteration of Method
                                  of Calculation" below) published at the
                                  regular weekday close of trading on that
                                  Trading Day. In certain circumstances, the
                                  Index Closing Value shall be based on the
                                  alternate calculation of the PHLX Oil Service
                                  Sector Index described under "Discontinuance
                                  of the PHLX Oil Service Sector Index;
                                  Alteration of Method of Calculation."

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<PAGE>

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

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

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

                                  All calculations with respect to the Payment
                                  at Maturity shall be rounded to the nearest
                                  one hundred-thousandth, with five
                                  one-millionths rounded upward (e.g., .876545
                                  would be rounded to .87655); all dollar
                                  amounts related to determination of the amount
                                  of cash payable for each $5 principal amount
                                  of this PLUS shall be rounded to the nearest
                                  ten-thousandth, with five one
                                  hundred-thousandths rounded upward (e.g.,
                                  .76545 would be rounded up to .7655); and all
                                  dollar amounts paid on the aggregate number of
                                  PLUS shall be rounded to the nearest cent,
                                  with one-half cent rounded upward.

Market Disruption Event.........  Market Disruption Event means, with respect to
                                  the PHLX Oil Service Sector Index:

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

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<PAGE>

                                  the last one-half hour preceding the close of
                                  the principal trading session on such Relevant
                                  Exchange are materially inaccurate; or the
                                  suspension, material limitation or absence of
                                  trading on any major U.S. securities market
                                  for trading in futures or options contracts or
                                  exchange traded funds related to the PHLX Oil
                                  Service Sector Index (or the Successor Index)
                                  for more than two hours of trading or during
                                  the one-half hour period preceding the close
                                  of the principal trading session on such
                                  market, in each case as determined by the
                                  Calculation Agent in its sole discretion; and

                                  (ii) a determination by the Calculation Agent
                                  in its sole discretion that any event
                                  described in clause (i) above materially
                                  interfered with the ability of the Issuer or
                                  any of its affiliates to unwind or adjust all
                                  or a material portion of the hedge position
                                  with respect to the PLUS due October 30, 2006,
                                  Mandatorily Exchangeable for an Amount Payable
                                  in U.S. Dollars Based on the Value of the PHLX
                                  Oil Service Sector(SM) Index.

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

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

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<PAGE>

                                  regulatory organization or any government
                                  agency of scope similar to NYSE Rule 80A as
                                  determined by the Calculation Agent) on
                                  trading during significant market fluctuations
                                  shall constitute a suspension, absence or
                                  material limitation of trading, (4) a
                                  suspension of trading in futures or options
                                  contracts on the PHLX Oil Service Sector Index
                                  by the primary securities market trading in
                                  such contracts by reason of (a) a price change
                                  exceeding limits set by such securities
                                  exchange or market, (b) an imbalance of orders
                                  relating to such contracts or (c) a disparity
                                  in bid and ask quotes relating to such
                                  contracts shall constitute a suspension,
                                  absence or material limitation of trading in
                                  futures or options contracts related to the
                                  PHLX Oil Service Sector Index and (5) a
                                  "suspension, absence or material limitation of
                                  trading" on any Relevant Exchange or on the
                                  primary market on which futures or options
                                  contracts related to the PHLX Oil Service
                                  Sector Index are traded shall not include any
                                  time when such securities market is itself
                                  closed for trading under ordinary
                                  circumstances.

Relevant Exchange...............  Relevant Exchange means the primary U.S.
                                  organized exchange or market of trading for
                                  any security (or any combination thereof) then
                                  included in the PHLX Oil Service Sector Index
                                  or any Successor Index.

Alternate Exchange
 Calculation in Case of an
 Event of Default ..............  In case an event of default with respect to
                                  the PLUS shall have occurred and be
                                  continuing, the amount declared due and
                                  payable for each $5 principal amount of this
                                  PLUS upon any acceleration of this PLUS shall
                                  be determined by the Calculation Agent and
                                  shall be an amount in cash equal to the
                                  Payment at Maturity calculated using the Index
                                  Closing Value as of the date of such
                                  acceleration as the Final Index Value.

                                  If the maturity of the PLUS is accelerated
                                  because of an event of default as described
                                  above, the Issuer shall, or shall cause the
                                  Calculation Agent to, provide written notice
                                  to the Trustee at its New York office, on
                                  which notice the Trustee may conclusively
                                  rely, and to the Depositary of the cash amount
                                  due with respect to each $5 principal amount
                                  of this PLUS as promptly as possible and in no
                                  event later than two Business Days after the
                                  date of acceleration.

                                       7

<PAGE>

Discontinuance of the PHLX
Oil Service Sector Index;
Alteration of Method of
Calculation.....................  If the Philadelphia Stock Exchange, Inc. (the
                                  "PHLX") discontinues publication of the PHLX
                                  Oil Service Sector Index and the PHLX or
                                  another entity publishes a successor or
                                  substitute index that the Calculation Agent
                                  determines, in its sole discretion, to be
                                  comparable to the discontinued PHLX Oil
                                  Service Sector Index (such index being
                                  referred to herein as a "Successor Index"),
                                  then any subsequent Index Closing Value shall
                                  be determined by reference to the published
                                  value of such Successor Index at the regular
                                  weekday close of trading on the Trading Day
                                  that any Index Closing Value is to be
                                  determined.

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

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

                                  If at any time the method of calculating the
                                  PHLX Oil Service Sector Index or a Successor
                                  Index, or the value thereof, is changed in a
                                  material respect, or if the PHLX Oil Service
                                  Sector Index or a Successor Index is in any
                                  other way modified so that such index does
                                  not,

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<PAGE>

                                  in the opinion of the Calculation Agent,
                                  fairly represent the value of the PHLX Oil
                                  Service Sector Index or such Successor Index
                                  had such changes or modifications not been
                                  made, then, from and after such time, the
                                  Calculation Agent shall, at the close of
                                  business in New York City on the date on which
                                  the Index Closing Value is to be determined,
                                  make such calculations and adjustments as, in
                                  the good faith judgment of the Calculation
                                  Agent, may be necessary in order to arrive at
                                  a value of a stock index comparable to the
                                  PHLX Oil Service Sector Index or such
                                  Successor Index, as the case may be, as if
                                  such changes or modifications had not been
                                  made, and the Calculation Agent shall
                                  calculate the Final Index Value with reference
                                  to the PHLX Oil Service Sector Index or such
                                  Successor Index, as adjusted. Accordingly, if
                                  the method of calculating the PHLX Oil Service
                                  Sector Index or a Successor Index is modified
                                  so that the value of such index is a fraction
                                  of what it would have been if it had not been
                                  modified (e.g., due to a split in the index),
                                  then the Calculation Agent shall adjust such
                                  index in order to arrive at a value of the
                                  PHLX Oil Service Sector Index or such
                                  Successor Index as if it had not been modified
                                  (e.g., as if such split had not occurred).

Treatment of PLUS for
 United States Federal
 Income Tax Purposes............  The Issuer, by its sale of this PLUS, and the
                                  holder of this PLUS (and any successor holder
                                  of, or holder of a beneficial interest in,
                                  this PLUS), by its respective purchase hereof,
                                  agree (in the absence of an administrative
                                  determination or judicial ruling to the
                                  contrary) to characterize each $5 principal
                                  amount of this PLUS for all tax purposes as a
                                  single financial contract with respect to the
                                  PHLX Oil Service Sector Index that (i)
                                  requires the holder of this PLUS to pay to the
                                  Issuer at inception an amount equal to $5 and
                                  (ii) entitles the holder to receive at
                                  maturity an amount in cash based upon the
                                  performance of the PHLX Oil Service Sector
                                  Index.

                                       9

<PAGE>

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

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

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

                                       10

<PAGE>

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

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

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

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

                                       11

<PAGE>

available, such payment will be made in the Specified Currency. All currency
exchange costs will be borne by the holder of this Note by deductions from such
payments.

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

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

                                       12

<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, N.A.,
  as Trustee

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

                                       13

<PAGE>

                           FORM OF REVERSE OF SECURITY

      This Note is one of a duly authorized issue of Senior Global Medium-Term
Notes, Series F, 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, N.A.
(formerly known as 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, N.A. at its corporate trust office in The City of New York
as the paying agent (the "Paying Agent," which term includes any additional or
successor Paying Agent appointed by the Issuer) with respect to the Notes. The
terms of individual Notes may vary with respect to interest rates, interest rate
formulas, issue dates, maturity dates, or otherwise, all as provided in the
Senior Indenture. To the extent not inconsistent herewith, the terms of the
Senior Indenture are hereby incorporated by reference herein.

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

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

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

                                       14

<PAGE>

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

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

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

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

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

                                       15

<PAGE>

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

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

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

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

                                       16

<PAGE>

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

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

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

                                       17

<PAGE>

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

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

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

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

            (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

                                       18

<PAGE>

      organization or a bank receiving interest under Section 881(c)(3)(A) of
      the Internal Revenue Code of 1986, as amended;

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

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

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

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

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

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

      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

                                       19

<PAGE>

extend the time of payment of interest thereon, or reduce any amount payable on
redemption thereof, or change the currency of payment thereof, or modify or
amend the provisions for conversion of any currency into any other currency, or
modify or amend the provisions for conversion or exchange of the debt security
for securities of the Issuer or other entities or for other property or the cash
value of the property (other than as provided in the antidilution provisions or
other similar adjustment provisions of the debt securities or otherwise in
accordance with the terms thereof), or impair or affect the rights of any holder
to institute suit for the payment thereof or (b) reduce the aforesaid percentage
in principal amount of debt securities the consent of the holders of which is
required for any such supplemental indenture.

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

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

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

                                       20

<PAGE>

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

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

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

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

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

                                       21

<PAGE>

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

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

                                       22

<PAGE>

                                  ABBREVIATIONS

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

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

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

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

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

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

                                       23

<PAGE>

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

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

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

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

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

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

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

                                       24

<PAGE>

                            OPTION TO ELECT REPAYMENT

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

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

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

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

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

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

                                       25FORM OF FLOATING RATE SENIOR NOTE

REGISTERED                                                      REGISTERED
No. FLR-1                                                       U.S.$
                                                                CUSIP:

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

<PAGE>

<TABLE>
                                                    MORGAN STANLEY
                                      SENIOR GLOBAL MEDIUM-TERM NOTES, SERIES F
                                                   (Floating Rate)

                                     CAPITAL PROTECTED NOTE DUE DECEMBER 30, 2009
                                    BASED ON THE VALUE OF THE AMEX CHINA INDEX(SM)

--------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                                     <C>
BASE RATE: None                      ORIGINAL ISSUE DATE:                    MATURITY DATE:
                                                                                See "Maturity Date" below.
--------------------------------------------------------------------------------------------------------------------
INDEX MATURITY: N/A                  INTEREST ACCRUAL DATE: N/A              INTEREST PAYMENT DATE(S): N/A
--------------------------------------------------------------------------------------------------------------------
SPREAD (PLUS OR MINUS): N/A          INITIAL INTEREST RATE: N/A              INTEREST PAYMENT PERIOD: N/A
--------------------------------------------------------------------------------------------------------------------
REPORTING SERVICE: N/A               MAXIMUM INTEREST RATE: N/A              INTEREST RESET DATE(S): N/A
--------------------------------------------------------------------------------------------------------------------
INDEX CURRENCY: N/A                  MINIMUM INTEREST RATE: N/A              CALCULATION AGENT: See "Calculation
                                                                                Agent" below.
--------------------------------------------------------------------------------------------------------------------
EXCHANGE RATE AGENT: N/A             INITIAL REDEMPTION DATE: N/A            SPECIFIED CURRENCY:
                                                                                U.S. dollars
--------------------------------------------------------------------------------------------------------------------
APPLICABILITY OF MODIFIED PAYMENT    INITIAL REDEMPTION PERCENTAGE: N/A      IF SPECIFIED CURRENCY OTHER THAN U.S.
   UPON ACCELERATION: See                                                       DOLLARS, OPTION TO ELECT PAYMENT
   "Alternate Exchange Calculation                                              IN U.S. DOLLARS: N/A
   in Case of an Event of Default"
   below.
--------------------------------------------------------------------------------------------------------------------
                                     ANNUAL REDEMPTION PERCENTAGE            DESIGNATED CMT TELERATE PAGE: N/A
                                        REDUCTION: N/A
--------------------------------------------------------------------------------------------------------------------
                                     OPTIONAL REPAYMENT DATE(S): N/A         DESIGNATED CMT MATURITY INDEX: N/A
--------------------------------------------------------------------------------------------------------------------
                                     REDEMPTION NOTICE PERIOD: N/A
--------------------------------------------------------------------------------------------------------------------
                                     TAX REDEMPTION AND PAYMENT OF
                                        ADDITIONAL AMOUNTS: N/A
--------------------------------------------------------------------------------------------------------------------
                                     IF YES, STATE INITIAL OFFERING DATE:    OTHER PROVISIONS: See below.
                                        N/A
--------------------------------------------------------------------------------------------------------------------
</TABLE>

Maturity Date................ December 30, 2009, subject to extension in
                              accordance with the following paragraph in the
                              event of a Market Disruption Event on the final
                              Determination Date for calculating the Final
                              Average Index Value.

                              If, due to a Market Disruption Event or
                              otherwise, the final Determination Date is
                              postponed so that it falls

                                      A-2
<PAGE>

                              less than two scheduled Trading Days prior to the
                              scheduled Maturity Date, the Maturity Date shall
                              be the second scheduled Trading Day following the
                              final Determination Date as postponed. See
                              "Determination Dates" below.

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

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

Issue Price.................. $10

Maturity Redemption Amount... At maturity, upon delivery of this Note to the
                              Trustee, the Issuer shall pay with respect to
                              each $10 principal amount of this Note an amount
                              in cash equal to the $10 principal amount of this
                              Note plus the Supplemental Redemption Amount, if
                              any.

                              The Issuer shall, or shall cause the Calculation
                              Agent to, (i) provide written notice to the
                              Trustee at its New York office, on which notice
                              the Trustee may conclusively rely, and to the
                              Depositary of the Maturity Redemption Amount, on
                              or prior to 10:30 a.m. on the Trading Day
                              preceding the Maturity Date (but if such Trading
                              Day is not a Business Day, prior to the close of
                              business on the Business Day preceding the
                              Maturity

                                      A-3
<PAGE>

                              Date) and (ii) deliver the aggregate cash amount
                              due with respect to this Note to the Trustee for
                              delivery to the holder of this Note on the
                              Maturity Date.

Supplemental Redemption
Amount....................... The Supplemental Redemption Amount shall be equal
                              to the product of $10 times the Index Percent
                              Change; provided that the Supplemental Redemption
                              Amount shall not be less than zero. The
                              Calculation Agent shall calculate the
                              Supplemental Redemption Amount on the final
                              Determination Date.

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

Initial Index Value..........  Final Average Index Value - Initial Index Value
                               -----------------------------------------------
                                           Initial Index Value

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

Index Closing Value.......... The Index Closing Value on any Trading Day shall
                              equal the value of the AMEX China Index or any
                              Successor Index (as defined under "Discontinuance
                              of the AMEX China Index; Alteration of Method of
                              Calculation" below) published at the regular
                              weekday close of trading on that Trading Day. In
                              certain circumstances, the Index Closing Value
                              shall be based on the alternate calculation of
                              the AMEX China Index described under
                              "Discontinuance of the AMEX China Index;
                              Alteration of Method of Calculation."

                              In this Note, references to the AMEX China Index
                              shall include any Successor Index, unless the
                              context requires otherwise.

Determination Dates.......... The Determination Dates shall be December 30,
                              2005, December 30, 2006, December 30, 2007,
                              December 30,

                                      A-4
<PAGE>

                              2008 and December 28, 2009, in each case subject
                              to adjustment for non-Trading Days or Market
                              Disruption Events as described in the following
                              two paragraphs in this section.

                              If any of the first four scheduled Determination
                              Dates is not a Trading Day or if a Market
                              Disruption Event occurs on any such date, such
                              Determination Date shall be the immediately
                              succeeding Trading Day during which no Market
                              Disruption Event shall have occurred; provided
                              that if a Market Disruption Event has occurred on
                              each of the five Trading Days immediately
                              succeeding any of the first four scheduled
                              Determination Dates, the Calculation Agent shall
                              determine the applicable Index Closing Value on
                              such fifth succeeding Trading Day in accordance
                              with the formula for calculating the value of the
                              AMEX China Index last in effect prior to the
                              commencement of the Market Disruption Event,
                              without rebalancing or substitution, using the
                              closing price (or, if trading in the relevant
                              securities has been materially suspended or
                              materially limited, its good faith estimate of
                              the closing price that would have prevailed but
                              for such suspension or limitation) on such fifth
                              succeeding Trading Day of each security most
                              recently constituting the AMEX China Index.

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

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

                                      A-5
<PAGE>

Market Disruption Event...... Market Disruption Event means, with respect to
                              the AMEX China Index:

                                   (i) the occurrence or existence of a
                                   suspension, absence or material limitation
                                   of trading of securities then constituting
                                   20 percent or more of the level of the AMEX
                                   China Index (or the Successor Index) on the
                                   Relevant Exchanges for such securities for
                                   more than two hours of trading or during the
                                   one-half hour period preceding the close of
                                   the principal trading session on such
                                   Relevant Exchange; or a breakdown or failure
                                   in the price and trade reporting systems of
                                   any Relevant Exchange as a result of which
                                   the reported trading prices for securities
                                   then constituting 20 percent or more of the
                                   level of the AMEX China Index (or the
                                   Successor Index) during the last one-half
                                   hour preceding the close of the principal
                                   trading session on such Relevant Exchange
                                   are materially inaccurate; or the
                                   suspension, material limitation or absence
                                   of trading on any major securities market
                                   for trading in futures or options contracts
                                   or exchange traded funds related to the AMEX
                                   China Index (or the Successor Index) for
                                   more than two hours of trading or during the
                                   one-half hour period preceding the close of
                                   the principal trading session on such
                                   market, in each case as determined by the
                                   Calculation Agent in its sole discretion;
                                   and

                                   (ii) a determination by the Calculation
                                   Agent in its sole discretion that any event
                                   described in clause (i) above materially
                                   interfered with the ability of the Issuer or
                                   any of its affiliates to unwind or adjust
                                   all or a material portion of the hedge with
                                   respect to the Capital Protected Notes due
                                   December 30, 2009, Based on the Value of the
                                   AMEX China Index.

                              For the purpose of determining whether a Market
                              Disruption Event exists at any time, if trading
                              in a security included in the AMEX China Index is
                              materially suspended or materially limited at
                              that time, then the relevant percentage
                              contribution of that security to the value of the
                              AMEX China Index shall be based on a comparison
                              of (x) the portion of the value of the AMEX China
                              Index attributable to that security relative to
                              (y) the overall value of the AMEX China

                                      A-6
<PAGE>

                              Index, in each case immediately before that
                              suspension or limitation.

                              For purposes of determining whether a Market
                              Disruption Event has occurred: (1) a limitation
                              on the hours or number of days of trading shall
                              not constitute a Market Disruption Event if it
                              results from an announced change in the regular
                              business hours of the relevant exchange or
                              market, (2) a decision to permanently discontinue
                              trading in the relevant futures or options
                              contract or exchange traded fund shall not
                              constitute a Market Disruption Event, (3)
                              limitations pursuant to the rules of any Relevant
                              Exchange similar to NYSE Rule 80A (or any
                              applicable rule or regulation enacted or
                              promulgated by any other self-regulatory
                              organization or any government agency of scope
                              similar to NYSE Rule 80A as determined by the
                              Calculation Agent) on trading during significant
                              market fluctuations shall constitute a
                              suspension, absence or material limitation of
                              trading, (4) a suspension of trading in futures
                              or options contracts on the AMEX China Index by
                              the primary securities market trading in such
                              contracts by reason of (a) a price change
                              exceeding limits set by such exchange or market,
                              (b) an imbalance of orders relating to such
                              contracts or (c) a disparity in bid and ask
                              quotes relating to such contracts shall
                              constitute a suspension, absence or material
                              limitation of trading in futures or options
                              contracts related to the AMEX China Index and (5)
                              a "suspension, absence or material limitation of
                              trading" on any Relevant Exchange or on the
                              primary market on which futures or options
                              contracts related to the AMEX China Index are
                              traded shall not include any time when such
                              market is itself closed for trading under
                              ordinary circumstances.

Relevant Exchange............ Relevant Exchange means the primary exchange or
                              market of trading for any security then included
                              in the AMEX China Index or any Successor Index.

Alternate Exchange
Calculation in Case of
an Event of Default.......... In case an event of default with respect to this
                              Note shall have occurred and be continuing, the
                              amount declared due and payable for each $10
                              principal amount of this Note upon any
                              acceleration of this Note (the "Acceleration
                              Amount") shall be equal to such $10 principal
                              amount plus the Supplemental Redemption

                                      A-7
<PAGE>

                              Amount, if any, determined as though the Index
                              Closing Value for any Determination Date
                              scheduled to occur on or after such date of
                              acceleration were the Index Closing Value on the
                              date of acceleration.

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

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

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

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

Discontinuance of the
AMEX China Index;
Alteration of Method of
Calculation.................. If AMEX discontinues publication of the AMEX
                              China Index and AMEX or another entity publishes
                              a successor or substitute index that MS & Co., as
                              the Calculation Agent, determines, in its sole
                              discretion, to be comparable to the discontinued
                              AMEX China Index (such index being referred to
                              herein as a "Successor

                                      A-8
<PAGE>

                              Index"), then any subsequent Index Closing Value
                              shall be determined by reference to the value of
                              such Successor Index at the regular weekday close
                              of trading on the Trading Day that any Index
                              Closing Value is to be determined, as determined
                              by the Calculation Agent.

                              Upon any selection by the Calculation Agent of a
                              Successor Index, the Calculation Agent shall
                              cause written notice thereof to be furnished to
                              the Trustee, to the Issuer and to the Depositary,
                              as holder of this Note, within three business
                              days of such selection.

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

                              If at any time the method of calculating the AMEX
                              China Index or a Successor Index, or the value
                              thereof, is changed in a material respect, or if
                              the AMEX China Index or a Successor Index is in
                              any other way modified so that such index does
                              not, in the opinion of MS & Co., as the
                              Calculation Agent, fairly represent the value of
                              the AMEX China Index or such Successor Index had
                              such changes or modifications not been made,
                              then, from and after such time, the Calculation
                              Agent shall, at the close of business in New York
                              City on each date on which the Index Closing
                              Value is to be determined, make such calculations
                              and adjustments as, in the good faith judgment of
                              the Calculation

                                      A-9
<PAGE>

                              Agent, may be necessary in order to arrive at a
                              value of a stock index comparable to the AMEX
                              China Index or such Successor Index, as the case
                              may be, as if such changes or modifications had
                              not been made, and the Calculation Agent shall
                              calculate the Final Average Index Value with
                              reference to the AMEX China Index or such
                              Successor Index, as adjusted. Accordingly, if the
                              method of calculating the AMEX China Index or a
                              Successor Index is modified so that the value of
                              such index is a fraction of what it would have
                              been if it had not been modified (e.g., due to a
                              split in the index), then the Calculation Agent
                              shall adjust such index in order to arrive at a
                              value of the AMEX China Index or such Successor
                              Index as if it had not been modified (e.g., as if
                              such split had not occurred).

                                      A-10
<PAGE>

     Morgan Stanley, a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to CEDE &
CO., or registered assignees, the amount of cash, as determined in accordance
with the provisions set forth under "Maturity Redemption Amount" above, due
with respect to the principal sum of U.S.$         (UNITED STATES DOLLARS
                               ) on the Maturity Date specified above (except
to the extent redeemed or repaid prior to the maturity) and to pay interest
thereon from and including 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 the principal hereof is paid or duly made available for payment. 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
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; and provided, further, that if an Interest Payment Date
(other than the Maturity Date or 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 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, such Interest Payment Date shall be the
immediately preceding day that is a Business Day; and provided, further, that
if the Maturity Date or redemption or repayment date would fall on a day that
is not a Business Day, such payment shall be made on the following day that is
a Business Day and no interest shall accrue for the period from and after such
Maturity Date or redemption or repayment 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) (each such date, a "Record Date"); provided, however, that interest
payable at maturity (or any redemption or repayment date) will be payable to
the person to whom the principal hereof shall be payable.

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

                                     A-11
<PAGE>

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

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

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

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

                                     A-12
<PAGE>

the amount of the Specified Currency payable in the absence of such an election
to such holder and at which the applicable dealer commits to execute a
contract. If such bid quotations are not available, such payment will be made
in the Specified Currency. All currency exchange costs will be borne by the
holder of this Note by deductions from such payments.

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

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

                                     A-13
<PAGE>

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

DATED:                                   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, N.A.,
    as Trustee

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

                                     A-14
<PAGE>

                              REVERSE OF SECURITY

     This Note is one of a duly authorized issue of Senior Global Medium-Term
Notes, Series F, 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, N.A.
(formerly known as 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, N.A. at its corporate trust office in
The City of New York as the paying agent (the "Paying Agent," which term
includes any additional or successor Paying Agent appointed by the Issuer) with
respect to the Notes. The terms of individual Notes may vary with respect to
interest rates, interest rate formulas, issue dates, maturity dates, or
otherwise, all as provided in the Senior Indenture. To the extent not
inconsistent herewith, the terms of the Senior Indenture are hereby
incorporated by reference herein.

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

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

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

                                     A-15
<PAGE>

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

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

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

     If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," the Issuer will, subject to certain
exceptions and limitations set forth below, pay such additional amounts (the
"Additional Amounts") to the holder of this Note who is a United States Alien
as may be necessary in order that every net payment of the principal of and
interest on this Note and any other amounts payable on this Note, after
withholding or

                                     A-16
<PAGE>

deduction for or on account of any present or future tax, assessment or
governmental charge imposed upon or as a result of such payment by the United
States, or any political subdivision or taxing authority thereof or therein,
will not be less than the amount provided for in this Note to be then due and
payable. The Issuer will not, however, make any payment of Additional Amounts
to any such holder who is a United States Alien for or on account of:

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

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

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

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

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

          (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;

                                     A-17
<PAGE>

          (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.

     This Note will bear interest at the rate determined in accordance with the
applicable provisions below by reference to the Base Rate shown on the face
hereof based on the Index Maturity, if any, shown on the face hereof (i) plus
or minus the Spread, if any, and/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 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 Dates. 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 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
date. 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 (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

                                     A-18
<PAGE>

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 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 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 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)."

                                     A-19
<PAGE>

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,
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 either Morgan Stanley &
Co. Incorporated or Morgan Stanley DW Inc., as applicable.

     (iii) If the dealers selected by the Calculation Agent are not quoting as
set forth above, the CD Rate for that Interest Determination Date 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."

                                     A-20
<PAGE>

     (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 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
set forth in (ii) 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.

                                     A-21
<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
set forth above, the EURIBOR rate for that Interest Determination Date shall
remain the 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 the above 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
set forth in (ii) above, the Federal Funds Rate for 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.

                                     A-22
<PAGE>

     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 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
set forth above, the LIBOR rate for that Interest Determination Date shall
remain the 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.

                                     A-23
<PAGE>

     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.

     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 above 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 above rate is not 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, 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 in The City of New York, which
may include affiliates of the initial dealer, selected by the Calculation Agent
(after consultation with the Issuer).

     (iv) If the banks selected by the Calculation Agent are not quoting as set
forth above, the Prime Rate for that Interest Determination Date 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-24
<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) if 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 with a remaining maturity closest to the
Index Maturity specified on the face hereof; or

                                     A-25
<PAGE>

     (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 the above 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 above rate 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 set forth above 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

                                     A-26
<PAGE>

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 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 for that Interest Determination
Date 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 for that Interest
Determination Date shall remain 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, as specified in the 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.

                                     A-27
<PAGE>

     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 the
Maturity Date (or any earlier redemption or repayment date), as the case may
be. Accrued interest hereon shall be an amount calculated by multiplying the
face amount hereof by an accrued interest factor. Such accrued interest factor
shall be computed by adding the interest factor calculated for each day in the
period for which interest is being paid. The interest factor for each such date
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%
being rounded up to .00001%) and all U.S. 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. All Japanese Yen amounts used in or resulting
from such calculations will be rounded downwards to the next lower whole
Japanese Yen amount. All amounts denominated in any other currency used in or
resulting from such calculations will be rounded to the nearest two decimal
places in such currency, with .005 being rounded up to .01. 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, if denominated
in U.S. dollars, unless otherwise stated above, is issuable only in
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. If this Note is denominated in a Specified Currency other than U.S.
dollars, then, unless a higher minimum denomination is required by applicable
law, it is issuable only in denominations of the equivalent of U.S. $1,000
(rounded to an integral multiple of 1,000 units of such Specified Currency), or
any amount in excess thereof which is an

                                     A-28
<PAGE>

integral multiple of 1,000 units of such Specified Currency, as determined by
reference to the noon dollar buying rate in The City of New York for cable
transfers of such Specified Currency published by the Federal Reserve Bank of
New York (the "Market Exchange Rate") on the Business Day immediately preceding
the date of issuance.

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

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

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

                                     A-29
<PAGE>

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, (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 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 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

                                     A-30
<PAGE>

principal of or premium, if any, or interest on any Note denominated in such
Specified Currency in euro in lieu of such Specified Currency in conformity
with legally applicable measures taken pursuant to, or by virtue of, the Treaty
establishing the European Community, as amended. Any payment made under such
circumstances in U.S. dollars or euro where the required payment is in an
unavailable Specified Currency will not constitute an Event of Default. If such
Market Exchange Rate is not then available to the Issuer or is not published
for a particular Specified Currency, the Market Exchange Rate will be based on
the highest bid quotation in The City of New York received by the Exchange Rate
Agent at approximately 11:00 a.m., New York City time, on the second Business
Day preceding the date of such payment from three recognized foreign exchange
dealers (the "Exchange Dealers") for the purchase by the quoting Exchange
Dealer of the Specified Currency for U.S. dollars for settlement on the payment
date, in the aggregate amount of the Specified Currency payable to those
holders or beneficial owners of Notes and at which the applicable Exchange
Dealer commits to execute a contract. One of the Exchange Dealers providing
quotations may be the Exchange Rate Agent unless the Exchange Rate Agent is an
affiliate of the Issuer. If those bid quotations are not available, the
Exchange Rate Agent shall determine the market exchange rate at its sole
discretion.

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

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

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

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

                                     A-31
<PAGE>

     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 and 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 or premium,
if any, or the interest on this Note, for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Senior Indenture or any
indenture supplemental thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.

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

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

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

                                     A-32
<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-33
<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-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.

                                     A-35

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