Document:

Exhibit 4.1 

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.

MORGAN STANLEY

SENIOR GLOBAL MEDIUM-TERM NOTE, SERIES F

PERFORMANCE LEVERAGED UPSIDE SECURITIES (“PLUS”)

     PLUS
DUE JUNE 20, 2007

MANDATORILY EXCHANGEABLE

     FOR
AN AMOUNT PAYABLE IN U.S. DOLLARS

BASED ON THE VALUE OF THE NIKKEI 225® INDEX

	 ORIGINAL
    ISSUE DATE:	 INITIAL
    REDEMPTION DATE:

        N/A	 INTEREST
    RATE: None	 MATURITY
        DATE: See “Maturity

            Date”      below.
	 INTEREST
    ACCRUAL     DATE:

        N/A	 INITIAL
    REDEMPTION

        PERCENTAGE: N/A	 INTEREST
    PAYMENT DATE(S):

        N/A	 OPTIONAL
        REPAYMENT

     DATE(S):         N/A
	SPECIFIED CURRENCY:

          U.S.
    dollars	 ANNUAL REDEMPTION

          PERCENTAGE  REDUCTION:

    
N/A	 INTEREST PAYMENT
    PERIOD:

        N/A	 APPLICABILITY
        OF MODIFIED

          PAYMENT UPON

    ACCELERATION OR

    REDEMPTION: See “Alternate

    Exchange Calculation
in Case of

    an Event of Default” below.
	 IF SPECIFIED CURRENCY

          OTHER
        THAN U.S. DOLLARS,

          OPTION TO ELECT PAYMENT

     IN U.S. DOLLARS: N/A	REDEMPTION NOTICE

          PERIOD:
        N/A	 APPLICABILITY
        OF ANNUAL

          INTEREST PAYMENTS:
    N/A	 If yes, state
    Issue Price: N/A
	 EXCHANGE
    RATE AGENT: N/A	TAX
        REDEMPTION AND

          PAYMENT       OF ADDITIONAL

   
AMOUNTS: NO	 PRICE
        APPLICABLE UPON

          OPTIONAL  REPAYMENT:

    
N/A	 ORIGINAL
    YIELD TO

        MATURITY: N/A 
	 OTHER PROVISIONS:
    See below	IF YES, STATE INITIAL

          OFFERING         DATE:
    N/A	 	 

	 	 	 
	
Stated Principal Amount
		 
		
$10 per PLUS
	
	 	 	 
	
Underlying Index
		 
		
Nikkei 225® Index
	
	 	 	 
	
Underlying Index Publisher
		 
		
Nihon Keizai Shimbun, Inc.
	
	 	 	 
	
Initial Index Value
		 
		 

	
	 	 	 
	
Pricing Date
		 
		 

	
	 	 	 
	
Denominations
		 
		
$10 and integral multiples thereof
	
	 	 	 
	
Bull Market or Bear Market PLUS
		 
		
Bull Market PLUS
	

  2

  

 

	Maximum Payment
    at Maturity	 	$
	 	 	 
	Minimum Payment at Maturity
    if Bear Market

       PLUS 	 	 N/A
	 	 	 
	 Leverage Factor	 	      %
	 	 	 
	Index Valuation Date	 	 June 18, 2007; provided that
        if there is a Market Disruption Event on the scheduled Index Valuation
        Date or if the scheduled Index Valuation Date is not otherwise an Index
        Business Day, the Index Valuation Date shall be the immediately succeeding
        Index Business Day during which no Market Disruption Event shall have
    occurred. See “Maturity Date.”
	 	 	 
	 Maturity Date	 	June 20, 2007,
          subject to extension if the scheduled Index Valuation Date is postponed
          in accordance with the definition thereof. If the Index Valuation Date
          is postponed so that it falls less than two scheduled Index Business
          Days prior to the scheduled Maturity Date, the Maturity Date shall
          be the second scheduled Index Business Day following the Index Valuation
          Date as postponed. See “Index Valuation Date.”

      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 the scheduled Index Valuation
    Date, and (ii) with respect to notice of the date to 

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	 	 	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).
	 	 	 
	 Payment at Maturity	 	 At maturity,
        upon delivery of this PLUS to the Trustee, the Issuer shall pay with
        respect to each Stated Principal Amount of this PLUS an amount in cash
    equal to:
	 	 	 
	 	 	1. For
            a Bull Market PLUS,
            (i) if the Final Index Value
            is greater than the Initial Index Value, the lesser of (a) the Stated
            Principal Amount plus the Leveraged Upside Payment and (b) the Maximum
            Payment at Maturity or (ii) if the Final Index Value is less than
            or equal to the Initial Index Value, the Stated Principal Amount
            times the Index Performance Factor, subject to the Minimum Payment
            at Maturity. 

       2. For
            a Bear Market PLUS,
            (i) if the Final Index Value
            is less than the Initial Index Value, the lesser of (a) the Stated
            Principal Amount plus the Enhanced Downside Payment and (b) the Maximum
            Payment at Maturity or (ii) if the Final Index Value is greater than
            or equal to the Initial Index Value, the Stated Principal Amount
            minus the Upside Reduction Amount, subject to the Minimum Payment
            at Maturity.

       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 Stated Principal Amount of this PLUS,
          on or prior to 10:30 a.m. on the Trading Day preceding the Maturity
          Date (but if such Trading Day is not a Business Day, prior to the close
          of business on the Business Day preceding the Maturity Date), and (ii)
          deliver the aggregate cash amount due with respect to this PLUS to
          the Trustee for delivery to the holder of this PLUS on the Maturity
    Date.

	 	 	 
	 Applicable only for BULL
    MARKET PLUS	 	 
	 	 	 
	 
      Leveraged Upside Payment 

    
	 	 The product of (i) the Stated
        Principal Amount and (ii) the Leverage Factor and (iii) the Index Percent
    Increase.
	 	 	 
	
      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.

4

	
      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.
	 	 	 
	 Applicable
          only for BEAR MARKET PLUS
	 	 
	 	 	 
	 
      Enhanced Downside Payment

    
	 	The product of (i) the Stated
        Principal Amount and (ii) the Leverage Factor and (iii) the Index Percent
    Decrease.
	 	 	 
	
      Upside Reduction Amount

    
	 	 The product of (i) the Stated
    Principal Amount and (ii) the Index Percent Increase.
	 	 	 
	 
      Index Percent
        Decrease

    
	 	 A fraction, the
        numerator of which shall be the Initial Index Value minus the Final Index
    Value and the denominator of which shall be the Initial Index Value.
	 	 	 
	Applicable for all PLUS	 	 
	 	 	 
	 Final Index Value	 	 The Index Closing Value of
    the Underlying Index on the Index Valuation Date.
	 	 	 
	Index Closing Value	 	 The Index Closing Value on
        any Index Business Day shall equal the closing value of the Underlying
        Index or any Successor Index (as defined under “Discontinuance of
        the Underlying Index; Alteration of Method of Calculation” below)
        published at the regular weekday close of trading on that Index Business
        Day. In certain circumstances, the Index Closing Value shall be based
        on the alternate calculation of the Underlying Index described under “Discontinuance
    of the Underlying Index; Alteration of Method of Calculation.”
	 	 	 
	 Trading Day	 	 A day, as determined by the
        Calculation Agent, on which trading is generally conducted on the New
        York Stock Exchange, Inc. (“NYSE”), the American Stock Exchange
        LLC (“AMEX”), the Nasdaq National Market, the Chicago Mercantile
        Exchange, the Chicago Board of Options Exchange and in the over-the-counter
    market for equity securities in the United States.
	 	 	 
	 Index Business Day	 	A day, as determined by the
        Calculation Agent, on which trading is generally conducted on the Relevant
        Exchange and on any exchange on which futures or options contracts related
        to the Underlying Index (or Successor Index) are traded, other than a
        day on which trading on such exchange is scheduled to close prior to
    its regular final weekday closing price.

5

	Relevant Exchange	 	 Relevant Exchange
        means the primary exchange(s) or market(s) of trading for (i) any security
        (or any combination thereof) then included in the Underlying Index or
        any Successor Index and (ii) any futures or options contracts related
        to such Underlying Index or to any security then included in the Underlying
    Index.
	 	 	 
	 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 Stated 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 Underlying 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
          Underlying 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 Underlying 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, 

6

	 	 	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 Underlying 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 this issuance of PLUS.

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

7

  

	 	 	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 Underlying
        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 Underlying Index are traded shall not include
        any time when such securities market is itself closed for trading under
    ordinary circumstances.
	 	 	 
	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 Stated 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 plus, if applicable, any accrued
    but unpaid interest as of the date of such acceleration.

     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 Stated Principal Amount of this PLUS as promptly as possible
    and in no event later than two Business Days after the date of acceleration.

	 	 	 
	 Discontinuance of the Underlying
    Index;

	 	 
	   Alteration
    of Method of Calculation	 	 If the Underlying
        Index Publisher discontinues publication of the Underlying Index and
        the Underlying Index Publisher or another entity (including MS & Co.)
        publishes a successor or substitute index that the Calculation Agent
        determines, in its sole discretion, to be comparable to the discontinued
    Underlying Index (such index being

8

 

	 	 	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 Index Business 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 Underlying
          Index Publisher discontinues publication of the Underlying 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 and method of calculating
          the Underlying 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 Underlying Index without any rebalancing or substitution of such
          securities following such discontinuance.

       If at any time
          the method of calculating the Underlying Index or a Successor Index,
          or the value thereof, is changed in a material respect, or if the Underlying
          Index or a Successor Index is in any other way modified so that such
          index does not, in the opinion of the Calculation Agent, fairly represent
          the value of the Underlying 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

9

	 	 	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 Underlying 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 Underlying Index or such Successor
        Index, as adjusted. Accordingly, if the method of calculating the Underlying
        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 Underlying Index
        or such Successor Index as if it had not been modified (e.g., as if such
    split had not occurred).

10

     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.

11

$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

12

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.

13

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

	 	 	 MORGAN STANLEY 
	 	 	 	 	 
	 DATED: 	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 

14

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. If the face hereof indicates that this Note is subject to “Modified Payment upon Acceleration or Redemption”, the amount of principal payable upon redemption will 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 accrued from the Interest Accrual Date to the
date of redemption (expressed as a percentage of the aggregate principal amount), with the amount of original issue discount accrued being calculated using a constant yield method (as described below).  Notice of redemption shall be mailed to the
registered holders of the Notes designated for redemption at their addresses as the same shall appear on the Note register not less than 30 nor more than 60 calendar days prior to the date fixed for redemption or within the Redemption Notice Period
specified on the face hereof, subject to all the conditions and provisions of the Senior Indenture. In the event of redemption 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.

15

     If so indicated on the face of this Note, this Note will be subject to repayment at the option of the holder on the Optional Repayment Date or Dates specified on the face hereof on
the terms set forth herein. On any Optional Repayment Date, this Note will be repayable in whole or in part in increments of $1,000 or, if this Note is denominated in a Specified Currency other than U.S. dollars, in increments of 1,000 units of
such Specified Currency (provided that any remaining principal amount hereof shall not be less than the minimum authorized denomination hereof) at the option of the holder hereof at a price equal to 100% of the principal amount to be repaid,
together with interest accrued and unpaid hereon to the date of repayment, provided that if the face hereof indicates that this Note is subject to
“Modified Payment upon Acceleration or Redemption”, the amount of principal payable upon repayment will 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 accrued from the Interest Accrual Date to the date of repayment (expressed as a percentage of the aggregate principal amount), with the amount of original issue
discount accrued being calculated using a constant yield method (as described below). 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.

16

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

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

     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.

17

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

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

18

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.

     The constant yield shall be calculated using a 30-day month, 360-day year convention, a computing period that, except for the initial period (as defined below), corresponds to the
shortest period between Interest Payment Dates (with ratable accruals within a compounding period), and an assumption that the maturity will not be accelerated. If the period from the Original Issue Date to the first Interest Payment Date (the
“initial period”) is shorter than the compounding period for this Note, a proportionate amount of the yield for an entire compounding period will be accrued. If the initial period is longer than the compounding period, then the period will
be divided into a regular compounding period and a short period with the short period being treated as provided in the preceding sentence.

     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,” the amount of principal so payable will 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 accrued from the Interest Accrual Date to the date of redemption (expressed as a percentage of the aggregate principal amount), with the amount of
original issue discount accrued being calculated using a constant yield method (as described above)), if the Issuer determines that, as a result of any change in or amendment to the laws (including a holding, judgment or as ordered by a court of
competent jurisdiction), 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 occurs, becomes effective or, in the case of a change in official position, is announced 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.

19

     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 U.S. 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 U.S. 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 U.S. 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 controlled foreign corporation or passive foreign
investment  company with respect to the United States or as a corporation which
accumulates earnings to avoid U.S. 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;

20

     (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 U.S. Alien who is a fiduciary or
partnership or other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of the United States (or any political subdivision thereof) to be included in the income, for tax purposes, of a beneficiary
or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the holder of this
Note.

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

     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

21

has been substituted for such Specified Currency, the Issuer may at its option (or shall, if so required by applicable law) without the consent of the holder of this Note effect the payment of principal of,
premium, if any, or interest on any Note denominated in such Specified Currency in euro in lieu of such Specified Currency in conformity with legally applicable measures taken pursuant to, or by virtue of, the Treaty establishing the European
Community, as amended. Any payment made under such circumstances in U.S. dollars or euro where the required payment is in an unavailable Specified Currency will not constitute an Event of Default.  If such Market Exchange Rate is not then available
to the Issuer or is not published for a particular Specified Currency, the Market Exchange Rate will be based on the highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately 11:00 a.m., New York City time,
on the second Business Day preceding the date of such payment from three recognized foreign exchange dealers (the “Exchange Dealers”) for the
purchase by the quoting Exchange Dealer of the Specified Currency for U.S. dollars for settlement on the payment date, in the aggregate amount of the Specified Currency payable to those holders or beneficial owners of Notes and at which the
applicable Exchange Dealer commits to execute a contract. One of the Exchange Dealers providing quotations may be the Exchange Rate Agent unless the Exchange Rate Agent is an affiliate of the Issuer. If those bid quotations are not available, the
Exchange Rate Agent shall determine the market exchange rate at its sole discretion.

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

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

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

     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

22

of the Trustee or such Paying Agent with respect to such moneys shall thereupon cease, without, however, limiting in any way any obligation that the Issuer may have to pay the principal of or interest or premium,
if any, on this Note as the same shall become due.

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

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

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

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

     As used herein, the term “U.S. Alien” means any person who is, for U.S. 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 U.S. 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.

23

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.

	 	 	 	 
	 	 	 
	 
		 		

24

  

     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.

25

  

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.

26<PAGE>

                                                                    EXHIBIT 10.1

                     DARWIN PROFESSIONAL UNDERWRITERS, INC.
                               STOCK AND UNIT PLAN
                            FOR NONEMPL0YEE DIRECTORS

1.    Introduction

            This Darwin Professional Underwriters, Inc. Stock and Unit Plan for
Nonemployee Directors (the "Plan") is intended to advance the interests of the
Company and its shareholders by paying part or all of the compensation of the
Company's nonemployee directors in the form of an economic equivalent of an
equity interest in the Company. The Plan provides for the conversion of at least
50 percent and up to 100 percent of the Director Fees otherwise payable each
year to a director into units of measurement relating to the value of the
Company's Common Stock, and for payment to the director of the value of such
units after five calendar years (or upon termination from service on the Board,
if earlier), so that a director will normally receive payment under the Plan
each successive year in respect of the fees originally converted into units in
the year preceding the fifth calendar year prior to the year of payment. The
Plan also provides for a one-time grant of Restricted Stock to each nonemployee
director serving on the Board at the time the Plan is adopted. The Plan shall
become effective with respect to Director Fees earned in 2006.

2.    Definitions

        (a) "Annual Meeting" means the Company's annual meeting of shareholders.

        (b) "Board" means the Board of Directors of the Company.

        (c) "Change in Control" means (i) the acquisition by any person
(including an entity) or group (as defined in Rule 13d-5 under the Securities
Exchange Act of 1934, as amended), other than the Company or any Affiliate of
the Company (an "Acquiring Person or Group"), of more than 50% of the
outstanding voting securities (weighted by voting power) of the Company or (ii)
the acquisition by an Acquiring Person or Group, over the 12-month period ending
on the date of the most recent acquisition, of assets of the Company having a
total gross fair market value of more than 50% of the total gross fair market
value of all of the assets of the Company. An "Affiliate" of the Company means
any person or entity that directly or indirectly, through one or more
intermediaries, controls or is controlled by or is under common control with the
Company. The term "control" (including the terms "controlled by" and "under
common control") means the ability, directly or indirectly, to direct or cause
the direction of the management and policies of the affected person or entity.

        (d) "Common Stock" means the shares of common stock of the Company, par
value $0.01.

        (e) "Company" means Darwin Professional Underwriters, Inc., a Delaware
corporation.

        (f) "Conversion Date" means the first business day following the
conclusion of an Annual Meeting; provided that the initial Conversion Date under
the Plan shall be the first business day following the date the Plan is adopted.

        (g) "Director Fees" means the annual retainer fee or fees earned by the
Participant for his service on the Board.

        (h) "Fair Market Value" of Common Stock as of a given date means the
mean of the high and low sales prices of the Common Stock on the relevant date
as reported on the stock exchange or market on which the Common Stock are
primarily traded, or, if no sale is made on such date, then Fair Market Value is
the weighted average of the mean of the high and low sales prices of the Common
Stock on the next preceding day and the next succeeding day on which such sales
were made as reported on the stock exchange or market on which the Common Stock
are primarily traded; provided, however, that the Fair Market Value for the
award of Restricted Stock or the conversion into Share Units following the
adoption of the Plan shall be based upon the offering price for Common Stock in
the Company's initial public offering.

        (i) "Mandatory Conversion" means the required conversion of 50 percent
of a Participant's Director Fees into a Share Unit Award pursuant to Section 6
hereof.

        (j) "Participant" means a member of the Board who is not an employee of
the Company, any of its affiliates or Alleghany Corporation.

        (k) "Realization Date" means, with respect to each Share Unit allocated
to a Participant's Share Unit Account, the first business day following the
earlier of (i) the first business day of the sixth calendar year after such
Share Unit is awarded to the Participant, or (ii) either upon the date the
Participant ceases to be a member of the Board or upon a Change in Control.

        (l) "Restricted Stock" means Common Stock which are subject to potential
forfeiture and restrictions on transfer as provided in Section 5 hereof.

        (m) "Share Unit" means a non-voting unit of measurement based on the
value of a whole or a fraction of a share of Common Stock, which entitles a
participant to receive payment in accordance with the terms of the Plan.

        (n) "Share Unit Account" means a book account maintained by the Company
reflecting the Share Units allocated to a Participant pursuant to Section 6
hereof as a result of the Participant's Mandatory Conversions and Voluntary
Conversions and such additional Share Units as shall be credited thereto in
respect of dividends paid on Common Stock.

        (o) "Share Unit Award" means an award under Section 6 hereof of Share
Units.

        (p) "Voluntary Conversion" means the conversion based on the election of
the Participant of all or part of a Participant's Director Fees otherwise
payable to the Participant in cash into a Share Unit Award pursuant to Section 6
hereof.
<PAGE>

3.    Common Stock Subject to the Plan

            (a) Number of Shares

            Subject to the following provisions of this Section 3, the aggregate
number of Common Stock that may be issued under the Plan is 130,000 shares of
Common Stock. The Common Stock to be delivered under the Plan will be made
available from authorized but unissued Common Stock or from reacquired shares.
To the extent that any Share Unit Award or award of Restricted Stock is
forfeited or terminated for any reason or is not paid in Common

                                      -2-
<PAGE>

Stock, the number of Common Stock covered thereby shall not be charged against
the foregoing maximum share limitation.

(b)   Adjustments

            If there shall occur any recapitalization, reclassification, share
dividend, share split, reverse share split, or other distribution with respect
to the Common Stock, or other change in corporate structure affecting the Common
Stock, the Board may, in the manner and to the extent that it deems appropriate
and equitable and consistent with the terms of this Plan, cause an adjustment to
be made in (i) the maximum number and kind of shares available for issuance
pursuant to Section 3(a) hereof and (ii) the Share Units allocated to
Participants' Share Unit Accounts in accordance with Section 6(e) hereof.

4.    Administration

            The Plan shall be administered by the Board. The Board shall have
full and final authority to administer the Plan, including the discretionary
authority to interpret and construe all provisions of the Plan, to resolve all
questions of fact arising under the Plan, and to adopt and amend such rules and
regulations for administering the Plan as it may deem necessary or appropriate.
Decisions of the Board shall be final and binding on all parties. The Board may
delegate administrative responsibilities under the Plan to appropriate officers
or employees of the Company. All expenses of the Plan shall be borne by the
Company.

5.    Restricted Share Awards

            Each Participant on the date the Plan is adopted (the "Grant Date"),
shall receive an award of Restricted Stock equal to that number of whole shares
of Common Stock (rounded up to the next whole share) as could be acquired with
$40,000, based upon the Fair Market Value of Common Stock. Awards of Restricted
Stock shall be subject to the terms of the Plan and otherwise evidenced by an
award agreement.

            (a) Each grant of Restricted Stock shall be issued for no
consideration but shall be forfeited to the Company (without the payment of any
consideration) if the Participant resigns from the Board (other than in
connection with a change in control, as such term is defined in the applicable
award agreement) prior to the first Annual Meeting next following the Grant
Date. In addition, Restricted Stock shall not be sold, assigned, pledged or
transferred to any person until the third anniversary of the Grant Date;
provided that the Restricted Stock shall automatically cease to be subject to
the foregoing restrictions on sale, assignment, pledge or transfer upon the
Participant's death or a change in control (as such term is defined in the
applicable award agreement) prior to such first Annual Meeting or, subsequent to
such first Annual Meeting, either upon the date the Participant ceases to be a
director for any reason or upon a change in control.

            (b) The Participant to whom Restricted Stock are issued will have
the customary rights of a shareholder with respect to such Restricted Stock,
including the right to vote the Restricted Stock and to receive cash dividends
paid thereon. Prior to the date the

                                      -3-
<PAGE>

Restricted Stock ceases to be subject to the restrictions on sale, assignment,
pledge or transfer in Section 5(a), dividends paid on such Common Stock in the
form of additional Common Stock or as securities or other non-cash property
shall be subject to the same risk of forfeiture and other restrictions as the
underlying Common Stock with respect to which the dividend was paid.

            (c) Any Restricted Stock issued under the Plan may be evidenced in
such manner as the Board in its sole discretion shall deem appropriate,
including, without limitation, book-entry registration or by the issuance of a
stock certificate or certificates. In the event any stock certificate is issued
in respect of Restricted Stock, such certificate shall be registered in the name
of the Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock.

6.    Crediting of Share Units

            (a) Mandatory Conversions

            Effective as of each Conversion Date occurring while the Plan is in
effect, 50 percent of the aggregate dollar amount of a Participant's Director
Fees otherwise payable on such Conversion Date shall be converted into a Share
Unit Award pursuant to Section 6(c) hereof.

            (b) Voluntary Conversions

            Effective as of each Conversion Date occurring while the Plan is in
effect, a Participant may elect to convert all or any portion of his Director
Fees otherwise payable on such Conversion Date (in addition to those required to
be converted under Section 6(a) hereof) into a Share Unit Award pursuant to
Section 6(c) hereof. Each Voluntary Conversion shall be made on the basis of a
Participant's written election stating the amount of such Director Fees in
excess of those required to be converted under Section 6(a) hereof which shall
be converted to a Share Unit Award. Each such election shall be made in the form
required by the Board, shall be delivered to the Company no later than the
December 31 of the calendar year immediately preceding the calendar year in
which such Directors Fees would otherwise be payable; provided, however, that in
the year the Plan is adopted, such election shall be delivered to the Company no
later than the close of business on the date the Plan is adopted and in the case
of a member of the Board who first becomes a Participant during a year, the
election for such year must be made no later than the close of business on the
date on which the Participant is elected to the Board.

            (c) Share Unit Awards

            On each Conversion Date, a Participant shall receive a Share Unit
Award in respect of his Mandatory Conversion and any Voluntary Conversion
applicable to the Directors Fees which would otherwise be payable to the
Participant on such Conversion Date. Such Share Unit Award shall equal the
number of the Share Units determined by dividing (A) the aggregate dollar amount
of the Participant's Director Fees that are to be converted into a Share Unit

                                      -4-
<PAGE>

Award, including the Mandatory Conversion and any Voluntary Conversion, by (B)
the Fair Market Value of the Common Stock on the applicable Conversion Date.

            (d) Dividend Equivalents

            As of any date that cash dividends are paid with respect to the
Common Stock from time to time, each Participant's Share Unit Account shall be
credited with an additional number of Share Units determined by dividing (A) the
aggregate dollar amount of the cash dividends that would have been paid on the
Share Units credited to the Participant's Share Unit Account as of the record
date for such dividend had such Share Units been actual Common Stock by (B) the
Fair Market Value of the Common Stock on the dividend payment date.

7.    Distributions of Share Unit Awards

            (a) Valuation and Payment of Units

            Subject to Section 8 hereof, a Participant shall be entitled to a
benefit under the Plan with respect to each Share Unit Award upon the
Realization Date for such Share Unit Award. Such benefit shall be equal to the
amount determined by multiplying (A) the number of Share Units credited to the
Participant's Share Unit Account in respect of the Share Unit Award for which
the Realization Date has occurred by (B) the Fair Market Value of the Common
Stock on the Realization Date. Each such amount shall be paid within 30 days
after the applicable Realization Date, at the discretion of the Board, in cash
or in Common Stock, or in some combination thereof.

            (b) Payment of Additional Dividends

            Subject to Section 8 hereof, if, pursuant to Section 6(d) hereof,
additional Share Units are required to be credited to a Participant's Share Unit
Account in respect of Share Units that were held in the Participant's Share Unit
Account as of the record date for cash dividends paid on the Common Stock that
are paid after the payment to the Participant of a benefit in respect of such
Share Units, the Company shall pay to the Participant a cash amount in respect
of such dividends equal to the dollar amount of such dividends. Such amount
shall be paid to the Participant within 30 days after the dividend payment date.

8.    Forfeiture of Share Unit Awards

            Each Participant's Share Unit Account hereunder shall be
nonforfeitable, except that a Participant shall forfeit all rights to all
benefits hereunder in respect of Mandatory Conversions, Voluntary Conversions
and Share Units credited to the Participant's Share Unit Account if the
Participant's status as a director of the Company is terminated for "Cause," as
determined by the Board in its sole discretion.

                                      -5-
<PAGE>

9.    Certain Adjustments

            If there shall occur any recapitalization, reclassification, share
dividend, share split, reverse share split, or other distribution with respect
to the Common Stock, or other change in corporate structure affecting the Common
Stock, the Board may, in the manner and to the extent that it deems appropriate
and equitable to the Participants and consistent with the terms of this Plan,
cause an adjustment to be made to the number and kind of shares that may be
issued under the Plan and to the Participants' Restricted Stock and Share Unit
Accounts. It is intended that in making such adjustments to Share Unit Accounts,
the Board will seek to treat each Participant as if he were a shareholder of the
Common Stock of the number of Share Units credited to his Share Unit Account
(but without duplication of any benefits that may be provided under Section 6(d)
hereof). Except as is expressly provided in this Section, Participants shall
have no rights as a result of any such change in the Common Stock or other
event.

10.   Beneficiaries

            Any payment required to be made to a Participant hereunder that
cannot be made to the Participant because of his death shall be made to the
Participant's beneficiary or beneficiaries, subject to applicable law. Each
Participant shall have the right to designate in writing from time to time a
beneficiary or beneficiaries by filing a written notice of such designation with
the Board. In the event a beneficiary designated by the Participant does not
survive the Participant and no successor beneficiary is selected, or in the
event no valid designation has been made, such Participant's beneficiary shall
be such Participant's estate.

11.   Unfunded Status

            The Plan shall be unfunded, and Mandatory Conversions, Voluntary
Conversions, Share Units credited to each Participant's Share Unit Account and
all benefits payable to Participants under the Plan represent merely unfunded,
unsecured promises of the Company to pay a sum of money to the Participant in
the future.

12.   Transfers Prohibited

            No transfer (other than pursuant to Section 10 hereof) by a
Participant of any right to any payment hereunder, whether voluntary or
involuntary, by operation of law or otherwise, and whether by means of
alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge,
attachment, charge, or encumbrance of any kind, shall vest the transferee with
any interest or right, and any attempt to so alienate, sell, transfer, assign,
pledge, attach, charge, or otherwise encumber any such amount, whether presently
or thereafter payable, shall be void and of no force or effect.

13.   Limitation of Rights

            Except as provided in Section 5 hereof, nothing contained in the
Plan shall confer upon any Participant any right as a shareholder of the
Company. In addition, nothing contained

                                      -6-
<PAGE>

herein shall be deemed to create any obligation on the part of the Board to
nominate any director for re-election by the Company's shareholders or to limit
the rights of the shareholders to remove any director.

14.   Termination and Amendment

            The Plan may be terminated at any time by the Board. The Plan may be
amended by the Board from time to time in any respect; provided, however, that
no such
termination or amendment may reduce the number or the value of Share Units
theretofore credited or creditable to a Participant's Share Unit Account or
materially and adversely affect any rights or obligations with respect to any
Restricted Stock award made pursuant to Section 5 hereof without the affected
Participant's prior written consent.

15.   Choice of Law

            The Plan and all rights hereunder shall be subject to and
interpreted in accordance with the laws of the State of Delaware without giving
effect to principles of conflict of laws.

                                      -7-

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