-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LPkEhvTcKADmi7PKwU8M0KAlDnTHIqlq3sstJAwSfY1bNCsJj9eWP40KN58ZRb1D cv4/ivnBlkzq9CQnLhkDWw== 0000950103-05-002227.txt : 20051025 0000950103-05-002227.hdr.sgml : 20051025 20051025172216 ACCESSION NUMBER: 0000950103-05-002227 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 21 REFERENCES 429: 333-117752 FILED AS OF DATE: 20051025 DATE AS OF CHANGE: 20051025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY CAPITAL TRUST VI CENTRAL INDEX KEY: 0001161449 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-129243-05 FILM NUMBER: 051155156 BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 MAIL ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY CAPITAL TRUST VII CENTRAL INDEX KEY: 0001161450 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-129243-04 FILM NUMBER: 051155155 BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 MAIL ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY CENTRAL INDEX KEY: 0000895421 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 363145972 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-129243 FILM NUMBER: 051155151 BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 212-761-4000 MAIL ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY DEAN WITTER & CO DATE OF NAME CHANGE: 19980326 FORMER COMPANY: FORMER CONFORMED NAME: DEAN WITTER DISCOVER & CO DATE OF NAME CHANGE: 19960315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Morgan Stanley Capital Trust X CENTRAL INDEX KEY: 0001295223 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-129243-01 FILM NUMBER: 051155152 BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 212-761-4000 MAIL ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Morgan Stanley Capital Trust IX CENTRAL INDEX KEY: 0001295225 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-129243-02 FILM NUMBER: 051155153 BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 212-761-4000 MAIL ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Morgan Stanley Capital Trust VIII CENTRAL INDEX KEY: 0001295228 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-129243-03 FILM NUMBER: 051155154 BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 212-761-4000 MAIL ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 S-3 1 s3.txt As filed with the Securities and Exchange Commission on October 25, 2005 Registration No. 333- 333- 333- 333- 333- 333- =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 -------------- MORGAN STANLEY DELAWARE 36-3145972 MORGAN STANLEY CAPITAL TRUST VI DELAWARE 13-7308501 MORGAN STANLEY CAPITAL TRUST VII DELAWARE 13-7308503 MORGAN STANLEY CAPITAL TRUST VIII DELAWARE 20-1390869 MORGAN STANLEY CAPITAL TRUST IX DELAWARE 20-1391139 MORGAN STANLEY CAPITAL TRUST X DELAWARE 20-1391361 (Exact name of each Registrant (State or other juridiction (I.R.S. Employer as specified in its charter) of incorporation or organization) Identification Number)
-------------- 1585 Broadway New York, New York 10036 (212) 761-4000 (Address, including zip code, and telephone number, including area code, of Registrants' principal executive offices) -------------- Ronald T. Carman, Esq. Vice President, Counsel and Assistant Secretary Morgan Stanley 1585 Broadway New York, New York 10036 (212) 761-4000 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------- Copies To: Joseph W. Armbrust, Esq. John M. Brandow, Esq. Sidley Austin Brown & Wood LLP Davis Polk & Wardwell 787 Seventh Avenue 450 Lexington Avenue New York, New York 10019 New York, New York 10017 -------------- Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"), other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE - -------------------------------------------------------------------------------------------------------------------- Proposed maximum Proposed maximum Title of each class of securities Amount to offering price per aggregate offering Amount of to be registered be registered security (1) price (1) registration fee - -------------------------------------------------------------------------------------------------------------------- Morgan Stanley Debt Securities (2).... Morgan Stanley Warrants (3)........... Morgan Stanley Preferred Stock (4).... Morgan Stanley Depositary Shares (5).. Morgan Stanley Common Stock (6)....... Morgan Stanley Purchase Contracts (7). Morgan Stanley Units (8).............. Morgan Stanley Capital Trust VI $30,000,000,000 Capital Securities (9)................ (10)(11) 100% $30,000,000,000 $3,531,000 Morgan Stanley Capital Trust VII Capital Securities (9)................ Morgan Stanley Capital Trust VIII Capital Securities (9)................ Morgan Stanley Capital Trust IX Capital Securities (9)................ Morgan Stanley Capital Trust X Capital Securities (9)................ Guarantees of Morgan Stanley with respect to Capital Securities (12).... - --------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for purposes of calculating the registration fee. (2) There is being registered hereby such indeterminate principal amount of Debt Securities as may be issued from time to time at indeterminate prices. (3) There is being registered hereby such indeterminate number of Warrants as may be issued at indeterminate prices. Such Warrants may be issued together with any Debt Securities, Purchase Contracts, Preferred Stock or Common Stock or any combination of such securities. Warrants may be exercised to purchase or sell (i) securities issued by Morgan Stanley or by an entity affiliated or not affiliated with Morgan Stanley, a basket of such securities, an index or indices of such securities or any combination of the above, (ii) currencies or (iii) commodities. (4) There is being registered hereby such indeterminate number of shares of Preferred Stock as may from time to time be issued at indeterminate prices. There is also being registered hereby such indeterminate number of shares of Preferred Stock as may from time to time be issued upon conversion, exercise or exchange of Debt Securities, Warrants or Purchase Contracts registered hereby. (5) There is being registered hereby such indeterminate number of Depositary Shares as may be issued in the event that Morgan Stanley elects to offer fractional or multiple interests in shares of the Preferred Stock registered hereby. (6) There is being registered hereby such indeterminate number of shares of Common Stock as may from time to time be issued at indeterminate prices. There is also being registered hereby such indeterminate number of shares of Common Stock as may from time to time be issued upon conversion, exercise or exchange of Debt Securities, Preferred Stock, Warrants or Purchase Contracts registered hereby. (7) There is being registered hereby such indeterminate number of Purchase Contracts as may be issued at indeterminate prices. Such Purchase Contracts may be issued together with any Debt Securities, Warrants, Preferred Stock or Common Stock or any combination of such securities. Purchase Contracts may require the holders thereof to purchase or sell (i) securities issued by Morgan Stanley or by an entity affiliated or not affiliated with Morgan Stanley, a basket of such securities, an index or indices of such securities or any combination of the above, (ii) currencies or (iii) commodities. (8) There is being registered hereby such indeterminate number of Units as may be issued at indeterminate prices. Units may consist of one or more Purchase Contracts, Warrants, Debt Securities, Preferred Stock or Common Stock or any combination of such securities. (9) There is being registered hereby such indeterminate number of Capital Securities of Morgan Stanley Capital Trust VI, Morgan Stanley Capital Trust VII, Morgan Stanley Capital Trust VIII, Morgan Stanley Capital Trust IX and Morgan Stanley Capital Trust X (collectively, the "Trusts") as may from time to time be issued by the Trusts at indeterminate prices and such indeterminate principal amount of Debt Securities as may be issued and sold by Morgan Stanley to any of the Trusts in connection with the issuances of the Capital Securities, in which event such Debt Securities may later be distributed for no additional consideration to the holders of the Capital Securities of such Trusts upon a dissolution of such Trusts and the distribution of the assets thereof. (10) This Registration Statement also relates to offers and sales of Debt Securities, Warrants, Preferred Stock, Depositary Shares, Common Stock, Purchase Contracts, Units and Capital Securities (collectively, "Securities") in connection with market-making transactions by and through affiliates of the Registrants (subject, with respect to Preferred Stock, Depositary Shares, Common Stock and Capital Securities, to obtaining any necessary approval of the New York Stock Exchange, Inc. in connection with market-making transactions by and through Morgan Stanley & Co. Incorporated and Morgan Stanley DW Inc.). (11) Or, if any Debt Securities are issued at an original issue discount, such greater amount as shall result in aggregate net proceeds not in excess of $30,000,000,000 to the Registrants or, if any Securities are issued with an offering price payable in a foreign currency, such amount as shall result in an aggregate initial offering price equivalent to $30,000,000,000 at the time of initial offering. (12) No additional consideration will be received for the Morgan Stanley Guarantees with respect to the Capital Securities. The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission (the "Commission"), acting pursuant to Section 8(a), may determine. Pursuant to Rule 429 of the General Rules and Regulations under the Securities Act, the prospectuses filed as part of this Registration Statement also relate to $2,460,472,613 of securities registered and remaining unissued under a Registration Statement on Form S-3, File No. 333-117752, previously filed by Morgan Stanley, Morgan Stanley Capital Trust VI, Morgan Stanley Capital Trust VII, Morgan Stanley Capital Trust VIII, Morgan Stanley Capital Trust IX and Morgan Stanley Capital Trust X on July 29, 2004 and declared effective on November 10, 2004. =============================================================================== EXPLANATORY NOTE This registration statement contains: o a prospectus to be used by Morgan Stanley in connection with offerings of its debt securities, units, warrants, purchase contracts, preferred stock and common stock; and o a prospectus to be used in connection with offerings of: o the capital securities of Morgan Stanley Capital Trust VI, Morgan Stanley Capital Trust VII, Morgan Stanley Capital Trust VIII, Morgan Stanley Capital Trust IX and Morgan Stanley Capital Trust X (the "Capital Securities"); o the junior subordinated debentures of Morgan Stanley; and o the guarantees of Morgan Stanley of the Capital Securities. The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted. PROSPECTUS (Subject to Completion, Issued October 25, 2005) Morgan Stanley DEBT SECURITIES UNITS WARRANTS PURCHASE CONTRACTS PREFERRED STOCK COMMON STOCK -------------- We, Morgan Stanley, may offer from time to time debt securities, units, warrants, purchase contracts, preferred stock and common stock. This prospectus describes the general terms of these securities and the general manner in which we will offer the securities. The specific terms of any securities we offer will be included in a supplement to this prospectus. The prospectus supplement will also describe the specific manner in which we will offer the securities. -------------- The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. -------------- MORGAN STANLEY , 2005 You should rely on the information we incorporate by reference or provide in this prospectus or the relevant prospectus supplement. We have not authorized anyone else to provide you with different or additional information. We are not making an offer of these securities in any state where the offer is not permitted. Except as we indicate under the headings "Consolidated Ratios of Earnings to Fixed Charges and Earnings to Fixed Charges and Preferred Stock Dividends," "Morgan Stanley" and "Use of Proceeds," the terms "Morgan Stanley," "we," "us" and "our" refer to Morgan Stanley excluding its consolidated subsidiaries. SUMMARY We, Morgan Stanley, may offer any of the following securities: debt securities, units, warrants, purchase contracts, preferred stock and common stock. The following summary describes these securities in general terms only. You should read the summary together with the more detailed information contained in the rest of this prospectus and the applicable prospectus supplement. We may offer up to $32,460,472,613 aggregate offering price of the securities, subject to reduction on account of the sale of capital securities under the registration statement of which this prospectus is a part. Debt Securities......... Our debt securities may be senior or subordinated in priority of payment. We will provide a prospectus supplement that describes the ranking, whether senior or subordinated, the specific designation, the aggregate principal amount, the purchase price, the maturity, the redemption terms, the interest rate or manner of calculating the interest rate, the time of payment of interest, if any, the terms for any conversion or exchange, including the terms relating to the adjustment of any conversion or exchange mechanism, the listing, if any, on a securities exchange and any other specific terms of the debt securities. The senior and subordinated debt securities will be issued under separate indentures between us and a U.S. banking institution as trustee. Neither of the indentures that govern our debt securities limits the amount of additional indebtedness that we or any of our subsidiaries may incur. We have summarized the general features of the indentures under the heading "Description of Debt Securities." We encourage you to read the indentures, which are exhibits to our registration statement. Units................... We may sell any combination of warrants, purchase contracts, shares of preferred stock, shares of common stock and debt securities issued by us, or debt obligations of an entity affiliated or not affiliated with us together as units. In a prospectus supplement, we will describe the particular combination of warrants, purchase contracts, shares of preferred stock, shares of common stock and debt securities issued by us, or debt obligations of an entity affiliated or not affiliated with us constituting any units and any other specific terms of the units. Warrants................ We may sell warrants to purchase or sell: o securities issued by us or by an entity affiliated or not affiliated with us, a basket of those securities, an index or indices of those securities or any combination of the above, o currencies, or o commodities. In a prospectus supplement, we will inform you of the exercise price and other specific terms of the warrants, 3 including whether our or your obligations, if any, under any warrants may be satisfied by delivering or purchasing the underlying securities, currencies or commodities, or their cash value. Purchase Contracts...... We may sell purchase contracts requiring the holders to purchase or sell: o securities issued by us or by an entity affiliated or not affiliated with us, a basket of those securities, an index or indices of those securities or any combination of the above, o currencies, or o commodities. In a prospectus supplement, we will describe the specific terms of the purchase contracts, including whether we will satisfy our obligations, if any, or you will satisfy your obligations, if any, under any purchase contracts by delivering the underlying securities, currencies or commodities or their cash value. Form.................... We may issue debt securities, units, warrants and purchase contracts in fully registered form or in bearer form and, in either case, in definitive form or global form. Preferred Stock......... We may sell our preferred stock, par value $0.01 per share, in one or more series. In a prospectus supplement, we will describe the specific designation, the aggregate number of shares offered, the dividend rate or manner of calculating the dividend rate, the dividend periods or manner of calculating the dividend periods, the stated value of the shares of the series, the voting rights of the shares of the series, whether or not and on what terms the shares of the series will be convertible or exchangeable, whether and on what terms we can redeem the shares of the series, whether we will offer depositary shares representing shares of the series and if so, the fraction or multiple of a share of preferred stock represented by each depositary share, whether we will list the preferred stock or depositary shares on a securities exchange and any other specific terms of the series of preferred stock. Common Stock............ We may sell our common stock, par value $0.01 per share. In a prospectus supplement, we will describe the aggregate number of shares offered and the offering price or prices of the shares. Terms Specified in Prospectus Supplements........... When we decide to sell particular securities, we will prepare a prospectus supplement describing the securities offering and the specific terms of the securities. You should carefully read this prospectus and the applicable prospectus supplement. 4 We will offer our debt securities, warrants, purchase contracts, units, preferred stock and common stock to investors on terms determined by market and other conditions. Our securities may be sold for U.S. dollars or foreign currency. Principal of, and any premium or interest on, debt securities and cash amounts payable under warrants or purchase contracts may be payable in U.S. dollars or foreign currency, as we specifically designate in the related prospectus supplement. In any prospectus supplement we prepare, we will provide the name of and compensation to each dealer, underwriter or agent, if any, involved in the sale of the securities being offered and the managing underwriters for any securities sold to or through underwriters. Any underwriters, including managing underwriters, dealers or agents in the United States will include Morgan Stanley & Co. Incorporated and/or Morgan Stanley DW Inc. and any outside the United States will include Morgan Stanley & Co. International Limited or other affiliates of ours. Structural Subordination; Our Receipt of Cash from Our Subsidiaries May Be Restricted......... The securities are unsecured senior or subordinated obligations of ours, but our assets consist primarily of equity in our subsidiaries. As a result, our ability to make payments on our debt securities and/or pay dividends on our preferred stock and common stock depends upon our receipt of dividends, loan payments and other funds from our subsidiaries. In addition, if any of our subsidiaries becomes insolvent, the direct creditors of that subsidiary will have a prior claim on its assets, and our rights and the rights of our creditors, including your rights as an owner of our debt securities, units, warrants, purchase contracts, preferred stock or common stock, will be subject to that prior claim, unless we are also a direct creditor of that subsidiary. This subordination of creditors of a parent company to prior claims of creditors of its subsidiaries is commonly referred to as structural subordination. In addition, various statutes and regulations restrict some of our subsidiaries from paying dividends or making loans or advances to us. These restrictions could prevent those subsidiaries from paying the cash to us that we need in order to pay you. These restrictions include: o the net capital requirements under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules of some exchanges and other regulatory bodies, which apply to some of our principal subsidiaries, such as Morgan Stanley & Co. Incorporated, Morgan Stanley & Co. International Limited and Morgan Stanley DW Inc., and 5 o banking regulations, which apply to Discover Bank, a Delaware chartered bank, and other bank subsidiaries of ours. Market-making by Our Affiliates............ Following the initial distribution of an offering of securities, Morgan Stanley & Co. Incorporated, Morgan Stanley & Co. International Limited, Morgan Stanley DW Inc. and other affiliates of ours may offer and sell those securities in the course of their businesses as broker dealers, subject, in the case of common stock, preferred stock and depositary shares, to obtaining any necessary approval of the New York Stock Exchange, Inc. for any of these offers and sales our United States affiliates may make. Morgan Stanley & Co. Incorporated, Morgan Stanley & Co. International Limited, Morgan Stanley DW Inc. and other affiliates of ours may act as a principal or agent in these transactions. This prospectus and the applicable prospectus supplement will also be used in connection with those transactions. Sales in any of those transactions will be made at varying prices related to prevailing market prices and other circumstances at the time of sale. 6 WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference room at Room 158, 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. In addition, the SEC maintains a website that contains reports, proxy statements and other information that we electronically file. The address of the SEC's website is http://www.sec.gov. You can find information we have filed with the SEC by reference to file number 1-11758. This prospectus is part of a registration statement we filed with the SEC. This prospectus omits some information contained in the registration statement in accordance with SEC rules and regulations. You should review the information and exhibits in the registration statement for further information on us and our consolidated subsidiaries and the securities we are offering. Statements in this prospectus concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified by reference to these filings. You should review the complete document to evaluate these statements. Our common stock, par value $0.01 per share, is listed on the New York Stock Exchange, Inc. and the Pacific Exchange, Inc. under the symbol "MWD." You may inspect reports, proxy statements and other information concerning us and our consolidated subsidiaries at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, and the Pacific Exchange, Inc., 115 Sansome Street, San Francisco, California 94104. The SEC allows us to incorporate by reference much of the information we file with them, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus is considered to be part of this prospectus. Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated and those future filings may modify or supersede some of the information included or incorporated by reference in this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously incorporated by reference have been modified or superseded. This prospectus incorporates by reference the documents listed below and any future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (other than information in the documents or filings that is deemed to have been furnished and not filed) until we complete our offering of the securities to be issued under the registration statement or, if later, the date on which any of our affiliates cease offering and selling these securities: o Annual Report on Form 10-K for the fiscal year ended November 30, 2004, as updated by Exhibit 99.1 of our Current Report on Form 8-K filed on October 12, 2005; o Quarterly Reports on Form 10-Q for the quarterly periods ended February 28, 2005 and May 31, 2005, each as updated by Exhibit Nos. 99.2 and 99.3, respectively, of our Current Report on Form 8-K filed on October 12, 2005; o Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2005; o Current Reports on Form 8-K dated December 13, 2004, December 21, 2004, January 5, 2005, January 14, 2005 (two filings), January 21, 2005, March 3, 2005, March 17, 2005, March 23, 2005, March 28, 2005 (two filings), April 1, 2005, April 2, 2005, April 4, 2005, April 6, 2005, April 13, 2005, April 30, 2005, May 4, 2005, May 13, 2005, May 16, 2005, May 18, 2005, June 13, 2005 (as amended by a Form 8-K/A filed on June 14, 2005), June 22, 2005, June 23, 2005, June 30, 2005 (three filings), July 11, 2005, August 17, 2005 (two filings) August 31, 2005, September 2, 2005, September 6, 2005, September 9, 2005, September 19, 2005, September 21, 2005 and October 12, 2005 (the Current Report dated October 12, 2005 updates the historical financial statements and Management's Discussion and Analysis of Financial 7 Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended November 30, 2004 and Quarterly Reports on Form 10-Q for the periods ended February 28, 2005 and May 31, 2005 for certain discontinued operations and the transfer of the principal components of the residential mortgage loan business from the Discover business to the Institutional Securities business); and o description of our common stock in our Registration Statement on Form 10 filed with the SEC pursuant to Section 12 of the Exchange Act, on January 15, 1993, as amended by the description contained in the Forms 8 dated February 11, February 21 and February 22, 1993. You can request a copy of these documents, excluding exhibits not specifically incorporated by reference into these documents, at no cost, by writing or telephoning us at the following address: Morgan Stanley 1585 Broadway New York, New York 10036 Attention: Investor Relations (212) 761-4000 8 CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS The following table sets forth our consolidated ratios of earnings to fixed charges and earnings to fixed charges and preferred stock dividends for the periods indicated. Nine Months Ended Fiscal Year ----------------------- ---------------------------------------- August 31, August 31, 2005 2004 2004 2003 2002 2001 2000 ---------- ---------- ---- ---- ---- ---- ---- Ratio of earnings to fixed charges.................... 1.3 1.5 1.5 1.5 1.4 1.3 1.5 Ratio of earnings to fixed charges and preferred stock dividends............ 1.3 1.5 1.5 1.5 1.4 1.3 1.5
For purposes of calculating the ratio of earnings to fixed charges and the ratio of earnings to fixed charges and preferred stock dividends, earnings are the sum of: o income before losses from unconsolidated investees, income taxes, (loss)/gain on discontinued operations, cumulative effect of accounting change and fixed charges; less: o dividends on preferred securities subject to mandatory redemption. For purposes of calculating both ratios, fixed charges are the sum of: o interest cost, including interest on deposits; o dividends on preferred securities subject to mandatory redemption; and o that portion of rent expense estimated to be representative of the interest factor. The preferred stock dividend amounts represent pre-tax earnings required to cover dividends on preferred stock. 9 MORGAN STANLEY Morgan Stanley is a global financial firm that, through its subsidiaries and affiliates, provides its products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Morgan Stanley was originally incorporated under the laws of the State of Delaware in 1981, and its predecessor companies date back to 1924. Morgan Stanley conducts its business from its headquarters in and around New York City, its regional offices and branches throughout the United States, and its principal offices in London, Tokyo, Hong Kong and other world financial centers. Morgan Stanley maintains leading market positions in each of its business segments--Institutional Securities, Retail Brokerage, Asset Management and Discover. Morgan Stanley's Institutional Securities business includes: o Investment banking, including securities underwriting and distribution and financial advisory services, including advice on mergers and acquisitions, restructurings, real estate and project finance. o Sales, trading, financing and market-making activities in equity securities and related products and fixed income securities and related products, including foreign exchange and commodities. o Other activities, such as principal investing and real estate investment management, providing benchmark indices and risk management analytics and research. Morgan Stanley's Retail Brokerage business includes: o Comprehensive brokerage, investment and financial services designed to accommodate individual investment goals and risk profiles. Morgan Stanley's Asset Management business includes: o Global asset management products and services for individual and institutional investors through three principal distribution channels: a proprietary channel consisting of Morgan Stanley's representatives; a non-proprietary channel consisting of third-party broker-dealers, banks, financial planners and other intermediaries; and Morgan Stanley's institutional channel. Morgan Stanley's Discover business includes: o Discover Financial Services, which offers Discover(R)-branded cards and other consumer finance products and services. o Discover Network, a network of merchant and cash access locations primarily in the United States and PULSE EFT Association, Inc., a U.S.-based automated teller machine/debit network. o Consumer Banking Group International, which includes Morgan Stanley-branded cards and personal loan products in the United Kingdom. Morgan Stanley's principal executive offices are at 1585 Broadway, New York, New York 10036, and its telephone number is (212) 761-4000. 10 USE OF PROCEEDS Unless otherwise set forth in the applicable prospectus supplement, we intend to use the net proceeds from the sale of the securities we offer by this prospectus for general corporate purposes, which may include, among other things: o additions to working capital; o the repurchase of outstanding common stock; and o the repayment of indebtedness. We anticipate that we will raise additional funds from time to time through equity or debt financing, including borrowings under revolving credit agreements, to finance our businesses worldwide. DESCRIPTION OF DEBT SECURITIES Debt May Be Senior or Subordinated We may issue senior or subordinated debt securities. The senior debt securities and, in the case of debt securities in bearer form, any coupons to these securities, will constitute part of our senior debt, will be issued under our Senior Debt Indenture, as defined below, and will rank on a parity with all of our other unsecured and unsubordinated debt. The subordinated debt securities and any coupons will constitute part of our subordinated debt, will be issued under our Subordinated Debt Indenture, as defined below, and will be subordinate and junior in right of payment, as set forth in the Subordinated Debt Indenture, to all of our "senior indebtedness," which is defined in our Subordinated Debt Indenture. If this prospectus is being delivered in connection with a series of subordinated debt securities, the accompanying prospectus supplement or the information we incorporate in this prospectus by reference will indicate the approximate amount of senior indebtedness outstanding as of the end of the most recent fiscal quarter. We refer to our Senior Debt Indenture and our Subordinated Debt Indenture individually as an "indenture" and collectively as the "indentures." We have summarized below the material provisions of the indentures and the debt securities, or indicated which material provisions will be described in the related prospectus supplement. These descriptions are only summaries, and each investor should refer to the applicable indenture, which describes completely the terms and definitions summarized below and contains additional information regarding the debt securities. Where appropriate, we use parentheses to refer you to the particular sections of the applicable indenture. Any reference to particular sections or defined terms of the applicable indenture in any statement under this heading qualifies the entire statement and incorporates by reference the applicable section or definition into that statement. The indentures are substantially identical, except for the provisions relating to Morgan Stanley's negative pledge, which are included in the Senior Debt Indenture only, the provisions relating to subordination and the shorter list of events of default under the Subordinated Debt Indenture. Payments We may issue debt securities from time to time in one or more series. The provisions of each indenture allow us to "reopen" a previous issue of a series of debt securities and issue additional debt securities of that issue. The debt securities may be denominated and payable in U.S. dollars or foreign currencies. We may also issue debt securities, from time to time, with the principal amount or interest payable on any relevant payment date to be determined by reference to one or more currency exchange rates, securities or baskets of securities, commodity prices or indices. Holders of these types of debt securities will receive payments of principal or interest that depend upon the value of the applicable currency, security or basket of securities, commodity or index on the relevant payment dates. Debt securities may bear interest at a fixed rate or a floating rate, which, in either case, may be zero, or at a rate that varies during the lifetime of the debt security. Debt securities bearing no interest or interest at a rate that at the time of issuance is below the prevailing market rate may be sold at a discount below their stated principal amount. 11 Terms Specified in Prospectus Supplement The prospectus supplement will contain, where applicable, the following terms of and other information relating to any offered debt securities: o classification as senior or subordinated debt securities and the specific designation; o aggregate principal amount, purchase price and denomination; o currency in which the debt securities are denominated and/or in which principal, and premium, if any, and/or interest, if any, is payable; o date of maturity; o the interest rate or rates or the method by which the calculation agent will determine the interest rate or rates, if any; o whether interest will be payable in cash or payable in kind; o the interest payment dates, if any; o the place or places for payment of the principal of and any premium and/or interest on the debt securities; o any repayment, redemption, prepayment or sinking fund provisions, including any redemption notice provisions; o whether we will issue the debt securities in registered form or bearer form or both and, if we are offering debt securities in bearer form, any restrictions applicable to the exchange of one form for another and to the offer, sale and delivery of those debt securities in bearer form; o whether we will issue the debt securities in definitive form and under what terms and conditions; o the terms on which holders of the debt securities may convert or exchange these securities into or for common or preferred stock or other securities of ours offered hereby, into or for common or preferred stock or other securities of an entity affiliated with us or debt or equity or other securities of an entity not affiliated with us, or for the cash value of our stock or any of the above securities, the terms on which conversion or exchange may occur, including whether conversion or exchange is mandatory, at the option of the holder or at our option, the period during which conversion or exchange may occur, the initial conversion or exchange price or rate and the circumstances or manner in which the amount of common or preferred stock or other securities issuable upon conversion or exchange may be adjusted; o information as to the methods for determining the amount of principal or interest payable on any date and/or the currencies, securities or baskets of securities, commodities or indices to which the amount payable on that date is linked; o any agents for the debt securities, including trustees, depositories, authenticating or paying agents, transfer agents or registrars; o any applicable United States federal income tax consequences, including: o whether and under what circumstances we will pay additional amounts on debt securities held by a person who is not a U.S. person for any tax, assessment or governmental charge withheld or deducted and, if so, whether we will have the option to redeem those debt securities rather than pay the additional amounts; o tax considerations applicable to any discounted debt securities or to debt securities issued at par that are treated as having been issued at a discount for United States federal income tax purposes; and 12 o tax considerations applicable to any debt securities denominated and payable in foreign currencies; and o any other specific terms of the debt securities, including any additions, modifications or deletions in the defaults, events of default or covenants, and any terms required by or advisable under applicable laws or regulations. Registration and Transfer of Debt Securities Holders may present debt securities for exchange, and holders of registered debt securities may present these securities for transfer, in the manner, at the places and subject to the restrictions stated in the debt securities and described in the applicable prospectus supplement. We will provide these services without charge except for any tax or other governmental charge payable in connection with these services and subject to any limitations provided in the applicable indenture. Holders may transfer debt securities in bearer form and the related coupons, if any, by delivery to the transferee. If any of the securities are held in global form, the procedures for transfer of interests in those securities will depend upon the procedures of the depositary for those global securities. See "Forms of Securities." Indentures Debt securities that will be senior debt will be issued under a Senior Indenture dated as of November 1, 2004 between Morgan Stanley and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank) as trustee. We call that indenture, as it may be supplemented from time to time, the Senior Debt Indenture. Debt securities that will be subordinated debt will be issued under a Subordinated Indenture dated as of October 1, 2004 between Morgan Stanley and J.P. Morgan Trust Company, National Association, as trustee. We call that indenture, as it may be supplemented from time to time, the Subordinated Debt Indenture. We refer to JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank) and J.P. Morgan Trust Company, National Association, individually as a "trustee" and collectively as the "trustees." Subordination Provisions Holders of subordinated debt securities should recognize that contractual provisions in the Subordinated Debt Indenture may prohibit us from making payments on these securities. Subordinated debt securities are subordinate and junior in right of payment, to the extent and in the manner stated in the Subordinated Debt Indenture, to all of our senior indebtedness. The Subordinated Debt Indenture defines senior indebtedness as (i) obligations of, or guaranteed or assumed by, Morgan Stanley for borrowed money or evidenced by bonds, debentures, notes or other similar instruments, and amendments, renewals, extensions, modifications and refundings of any of that indebtedness or of those obligations and (ii) if provided in the supplemental indenture under which a series of debt securities is issued or in the form of debt security for such series, any additional obligations that Morgan Stanley determines to include within the definition of senior indebtedness in order to assure that the debt securities of such series will be accorded the regulatory capital recognition desired by Morgan Stanley in accordance with Rule 15c3-1 under the Securities Exchange Act of 1934, as amended, or any other rule or regulation governing the definition of capital that is applicable to Morgan Stanley or its affiliates. Nonrecourse obligations, the subordinated debt securities and any other obligations specifically designated as being subordinate in right of payment to senior indebtedness are not senior indebtedness as defined under the Subordinated Debt Indenture. (Subordinated Debt Indenture, Section 1.01). The Subordinated Debt Indenture provides that, unless all principal of and any premium or interest on the senior indebtedness has been paid in full, or provision has been made to make these payments in full, no payment of principal of, or any premium or interest on, any subordinated debt securities may be made in the event: o of any insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization or other similar proceedings involving us or a substantial part of our property; o that (a) a default has occurred in the payment of principal, any premium, interest or other monetary amounts due and payable on any senior indebtedness or (b) there has occurred any other event of default concerning senior indebtedness that permits the holder or holders of the senior indebtedness to accelerate 13 the maturity of the senior indebtedness, with notice or passage of time, or both, and that event of default has continued beyond the applicable grace period, if any, and that default or event of default has not been cured or waived or has not ceased to exist; or o that the principal of and accrued interest on any subordinated debt securities have been declared due and payable upon an event of default as defined under the Subordinated Debt Indenture and that declaration has not been rescinded and annulled as provided under the Subordinated Debt Indenture. (Subordinated Debt Indenture, Section 13.01). We currently have outstanding subordinated debt securities, which were issued under an amended and restated subordinated indenture, dated May 1, 1999, between us and J.P. Morgan Trust Company, National Association (as successor in interest to Bank One Trust Company, N.A., successor to The First National Bank of Chicago) as trustee, with terms and conditions substantially similar to those of the subordinated debt securities described in this prospectus. At August 31, 2005, there was $4 billion aggregate principal amount of such subordinated debt securities outstanding. Those subordinated debt securities contain certain acceleration provisions that could be triggered prior to the acceleration provisions of the subordinated debt securities described in this prospectus. Accordingly, the outstanding amount of those subordinated debt securities could become due and payable by acceleration prior to the subordinated debt securities described in this prospectus. Covenants Restricting Pledges, Mergers and Other Significant Corporate Actions Negative Pledge. Because we are a holding company, our assets consist primarily of the securities of our subsidiaries. The negative pledge provisions of the Senior Debt Indenture limit our ability to pledge some of these securities. The Senior Debt Indenture provides that we will not, and will not permit any subsidiary to, create, assume, incur or guarantee any indebtedness for borrowed money that is secured by a pledge, lien or other encumbrance except for liens specifically permitted by the Senior Debt Indenture on: o the voting securities of Morgan Stanley & Co. Incorporated, Morgan Stanley & Co. International Limited, Morgan Stanley DW Inc., Discover Bank or any subsidiary succeeding to any substantial part of the business now conducted by any of those corporations, which we refer to collectively as the "principal subsidiaries," or o the voting securities of a subsidiary that owns, directly or indirectly, the voting securities of any of the principal subsidiaries, other than directors' qualifying shares, without making effective provisions so that the debt securities issued under the Senior Debt Indenture will be secured equally and ratably with indebtedness so secured. For these purposes, "subsidiary" means any corporation, partnership or other entity of which at the time of determination we own or control directly or indirectly more than 50% of the shares of the voting stock or equivalent interest, and "voting securities" means stock of any class or classes having general voting power under ordinary circumstances to elect a majority of the board of directors, managers or trustees of the relevant subsidiary, other than stock that carries only the conditional right to vote upon the happening of an event, whether or not that event has happened. (Senior Debt Indenture, Section 3.06). The Subordinated Debt Indenture does not include negative pledge provisions. Merger, Consolidation, Sale, Lease or Conveyance. Each indenture provides that we will not merge or consolidate with any other person and will not sell, lease or convey all or substantially all of our assets to any other person, unless: o we will be the continuing corporation; or o the successor corporation or person that acquires all or substantially all of our assets: o will be a corporation organized under the laws of the United States, a state of the United States or the District of Columbia; and 14 o will expressly assume all of our obligations under the indenture and the debt securities issued under the indenture; and o immediately after the merger, consolidation, sale, lease or conveyance, we, that person or that successor corporation will not be in default in the performance of the covenants and conditions of the indenture applicable to us. (Indentures, Section 9.01). Absence of Protections against All Potential Actions of Morgan Stanley. There are no covenants or other provisions in the indentures that would afford holders of debt securities additional protection in the event of a recapitalization transaction, a change of control of Morgan Stanley or a highly leveraged transaction. The merger covenant described above would only apply if the recapitalization transaction, change of control or highly leveraged transaction were structured to include a merger or consolidation of Morgan Stanley or a sale, lease or conveyance of all or substantially all of our assets. However, we may provide specific protections, such as a put right or increased interest, for particular debt securities, which we would describe in the applicable prospectus supplement. Events of Default The indentures provide holders of debt securities with remedies if we fail to perform specific obligations or if we become bankrupt. Holders should review these provisions and understand which of our actions trigger an event of default and which actions do not. Each indenture permits the issuance of debt securities in one or more series, and, in many cases, whether an event of default has occurred is determined on a series by series basis. An event of default is defined under the Senior Debt Indenture, with respect to any series of debt securities issued under that indenture, as being: o default in payment of any principal of the debt securities of that series, either at maturity or upon any redemption, by declaration or otherwise; o default for 30 days in payment of any interest on any debt securities of that series; o default for 60 days after written notice in the observance or performance of any covenant or agreement in the debt securities of that series or the indenture (other than a covenant or warranty with respect to the debt securities of that series the breach or nonperformance of which is otherwise included in the definition of "event of default"); o events of bankruptcy, insolvency or reorganization; or o any other event of default provided in the supplemental indenture under which that series of debt securities is issued. (Senior Debt Indenture, Section 5.01). An event of default is defined under the Subordinated Debt Indenture, with respect to any series of debt securities issued under that indenture, as being: o events of bankruptcy, insolvency or reorganization; or o any other event of default provided in the supplemental indenture under which that series of debt securities is issued. (Subordinated Debt Indenture, Section 5.01). Unless otherwise stated in the applicable prospectus supplement, the debt securities issued under either indenture will not have the benefit of any cross-default or cross-acceleration provisions with our other indebtedness. Acceleration of Debt Securities upon an Event of Default. The Senior Debt Indenture provides that: o if an event of default due to the default in payment of principal of, or any premium or interest on, any series of debt securities issued under that indenture, or due to the default in the performance or breach of any other covenant or warranty of Morgan Stanley applicable to the debt securities of that series but not 15 applicable to all outstanding debt securities issued under that indenture occurs and is 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 Morgan Stanley and to the trustee, if given by security holders, may declare the principal of all debt securities of all affected series and interest accrued thereon to be due and payable immediately; and o if an event of default due to a default in the performance of any other covenants or agreements in that indenture applicable to all outstanding debt securities issued under that indenture or due to specified events of bankruptcy, insolvency or reorganization of Morgan Stanley, occurs and is continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of all outstanding debt securities issued under that indenture, voting as one class, by notice in writing to Morgan Stanley and to the trustee, if given by security holders, may declare the principal of all those debt securities and interest accrued thereon to be due and payable immediately. (Senior Debt Indenture, Section 5.01). The Subordinated Debt Indenture provides that: o if an event of default applicable to the debt securities of that series but not applicable to all outstanding debt securities issued under that indenture occurs and is 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 Morgan Stanley and to the trustee, if given by security holders, may declare the principal of all debt securities of all affected series and interest accrued thereon to be due and payable immediately; and o if an event of default due to specified events of bankruptcy, insolvency or reorganization of Morgan Stanley, occurs and is continuing, or if an event of default applicable to all outstanding debt securities issued under that indenture is provided in the supplemental indenture under which such series of debt securities is issued or in the form of debt securities for such series and such event of default has occurred and is continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of all outstanding debt securities issued under that indenture, voting as one class, by notice in writing to Morgan Stanley and to the trustee, if given by security holders, may declare the principal of all those debt securities and interest accrued thereon to be due and payable immediately. (Subordinated Debt Indenture, Section 5.01). Annulment of Acceleration and Waiver of Defaults. The Senior Debt Indenture provides that: In some circumstances, if any and all events of default under the indenture, other than the non-payment of the principal of the securities that has become due as a result of an acceleration, have been cured, waived or otherwise remedied, then the holders of a majority in aggregate principal amount of all series of outstanding debt securities affected, voting as one class, may waive past defaults and rescind and annul past declarations of acceleration of the debt securities. (Senior Debt Indenture, Section 5.01). Prior to the acceleration of any debt securities, the holders of a majority in aggregate principal amount of all series of outstanding debt securities with respect to which an event of default has occurred and is continuing, voting as one class, may waive any past default or event of default, other than a default in the payment of principal or interest (unless such default has been cured and an amount sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the trustee) or a default in respect of a covenant or provision in the indenture that cannot be modified or amended without the consent of the holder of each debt security affected. (Senior Debt Indenture, Section 5.10). The Subordinated Debt Indenture provides that: In some circumstances, if any and all Defaults (as defined below) under the indenture, other than the non-payment of the principal of the securities that has become due as a result of an acceleration, have been cured, waived or otherwise remedied, then the holders of a majority in aggregate principal amount of all series of outstanding debt 16 securities affected, voting as one class, may waive past defaults and rescind and annul past declarations of acceleration of the debt securities. (Senior Debt Indenture, Section 5.01). Prior to the acceleration of any debt securities, the holders of a majority in aggregate principal amount of all series of outstanding debt securities with respect to which an event of default has occurred and is continuing, voting as one class, may waive any past default or event of default, other than a default in the payment of principal or interest (unless such default has been cured and an amount sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the trustee) or a default in respect of a covenant or provision in the indenture that cannot be modified or amended without the consent of the holder of each debt security affected. (Senior Debt Indenture, Section 5.10). Defaults. In the case of the Subordinated Debt Indenture, a Default is defined, with respect to any series of debt securities issued under that indenture, as being: o default in payment of any principal of the debt securities of that series, either at maturity or upon any redemption, by declaration or otherwise; o default for 30 days in payment of any interest on any debt securities of that series; o default for 60 days after written notice in the observance or performance of any covenant or agreement in the debt securities of that series or the indenture (other than a covenant or warranty with respect to the debt securities of that series the breach or nonperformance of which is otherwise included in the definition of "event of default" or "Default"); o an event of default with respect such series of debt securities; or o any other Default provided in the supplemental indenture under which that series of debt securities is issued. (Subordinated Debt Indenture, Section 5.06). There will be no event of default, and therefore no right of acceleration, in the case of a default in the performance of any covenant or obligation with respect to the debt securities issued under the Subordinated Debt Indenture, including a default in the payment of principal or interest. If a default in the payment of principal of, or any interest on, any series of debt securities issued under the Subordinated Debt Indenture occurs and is continuing and we fail to pay the full amount then due and payable with respect to all debt securities of the affected series immediately upon the demand of the trustee, the trustee is entitled to institute an action or proceeding to collect the amount due and unpaid. (Subordinated Debt Indenture, Section 5.02). If any Default occurs and is continuing, the trustee may pursue legal action to enforce the performance of any provision in the indenture to protect the rights of the trustee and the holders of the debt securities issued under the Subordinated Debt Indenture. (Subordinated Debt Indenture, Section 5.04). Indemnification of Trustee for Actions Taken on Your Behalf. Each indenture contains a provision entitling the trustee, subject to the duty of the trustee during a default to act with the required standard of care, to be indemnified by the holders of debt securities issued under that indenture before proceeding to exercise any trust or power at the request of holders. (Indentures, Section 6.02). Subject to these provisions and some other limitations, the holders of a majority in aggregate principal amount of each series of outstanding debt securities of each affected series, voting as one class, may direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee. (Indentures, Section 5.09). Limitation on Actions by You as an Individual Holder. Each indenture provides that no individual holder of debt securities may institute any action against us under that indenture, except actions for payment of overdue principal and interest, unless the following actions have occurred: o the holder must have previously given written notice to the trustee of the continuing default; o the holders of not less than 25% in aggregate principal amount of the outstanding debt securities of each affected series, treated as one class, must have (1) requested the trustee to institute that action and (2) offered the trustee reasonable indemnity; 17 o the trustee must have failed to institute that action within 60 days after receipt of the request referred to above; and o the holders of a majority in principal amount of the outstanding debt securities of each affected series, voting as one class, must not have given directions to the trustee inconsistent with those of the holders referred to above. (Indentures, Sections 5.06 and 5.09). Annual Certification. Each indenture contains a covenant that we will file annually with the trustee a certificate of no default or a certificate specifying any default that exists. (Indentures, Section 3.05). Discharge, Defeasance and Covenant Defeasance We have the ability to eliminate most or all of our obligations on any series of debt securities prior to maturity if we comply with the following provisions. (Indentures, Section 10.01). Discharge of Indenture. If at any time we have: o paid or caused to be paid the principal of and interest on all of the outstanding debt securities in accordance with their terms; o delivered to the applicable trustee for cancellation all of the outstanding debt securities; or o irrevocably deposited with the applicable trustee cash or, in the case of a series of debt securities payable only in U.S. dollars, U.S. government obligations in trust for the benefit of the holders of any series of debt securities issued under the Indenture that have either become due and payable, or are by their terms due and payable within one year or are scheduled for redemption within one year, in an amount certified to be sufficient to pay on each date that they become due and payable, the principal of and interest on, and any mandatory sinking fund payments for, those debt securities; and if, in any such case, we also pay or cause to be paid all other sums payable by us under the indenture with respect to the securities of such series, then the indenture shall cease to be of further effect with respect to the securities of such series, except as to certain rights and with respect to the transfer and exchange of securities, rights of the holders to receive payment and certain other rights and except that the deposit of cash or U.S. government obligations for the benefit of holders of a series of debt securities that are due and payable or are due and payable within one year or are scheduled for redemption within one year will discharge obligations under the relevant indenture relating only to that series of debt securities. Defeasance of a Series of Securities at Any Time. We may also discharge all of our obligations, other than as to transfers and exchanges, under any series of debt securities at any time, which we refer to as "defeasance." We may be released with respect to any outstanding series of debt securities from the obligations imposed by Sections 3.06 (in the case of the Senior Debt Indenture) and 9.01, which sections contain the covenants described above limiting liens and consolidations, mergers, asset sales and leases, and elect not to comply with those sections without creating an event of default or a Default. Discharge under those procedures is called "covenant defeasance." Defeasance or covenant defeasance may be affected only if, among other things: o We irrevocably deposit with the relevant trustee cash or, in the case of debt securities payable only in U.S. dollars, U.S. government obligations, as trust funds in an amount certified to be sufficient to pay on each date that they become due and payable or a combination of the above sufficient to pay the principal of and interest on, and any mandatory sinking fund payments for, all outstanding debt securities of the series being defeased. o We deliver to the relevant trustee an opinion of counsel to the effect that: o the holders of the series of debt securities being defeased will not recognize income, gain or loss for United States federal income tax purposes as a result of the defeasance or covenant defeasance; and 18 o the defeasance or covenant defeasance will not otherwise alter those holders' United States federal income tax treatment of principal and interest payments on the series of debt securities being defeased. In the case of a defeasance, this opinion must be based on a ruling of the Internal Revenue Service or a change in United States federal income tax law occurring after the date of this prospectus, since that result would not occur under current tax law. o In the case of the Subordinated Debt Indenture: o no event or condition will exist that, under the provisions described under "--Subordination Provisions" above, would prevent us from making payments of principal or interest on the subordinated debt securities at the date of the irrevocable deposit referred to above or at any time during the period ending on the 91st day after that deposit date; and o we deliver to the trustee for the Subordinated Debt Indenture an opinion of counsel to the effect that (i) the trust funds will not be subject to any rights of holders of senior indebtedness and (ii) after the 91st day following the deposit, the trust funds will not be subject to any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally, except that if a court were to rule under any of those laws in any case or proceeding that the trust funds remained our property, then the relevant trustee and the holders of the subordinated debt securities would be entitled to some enumerated rights as secured creditors in the trust funds. (Subordinated Debt Indenture, Section 10.01). Modification of the Indentures Modification Without Consent of Holders. We and the relevant trustee may enter into supplemental indentures without the consent of the holders of debt securities issued under a particular indenture to: o secure any debt securities; o evidence the assumption by a successor corporation of our obligations; o add covenants for the protection of the holders of debt securities; o cure any ambiguity or correct any inconsistency; o establish the forms or terms of debt securities of any series; or o evidence the acceptance of appointment by a successor trustee. (Indentures, Section 8.01). Modification with Consent of Holders. We and the applicable trustee, with the consent of the holders of not less than a majority in aggregate principal amount of each affected series of outstanding debt securities, voting as one class, may add any provisions to, or change in any manner or eliminate any of the provisions of, the applicable indenture or modify in any manner the rights of the holders of those debt securities. However, we and the trustee may not make any of the following changes to any outstanding debt security without the consent of each holder that would be affected by such change: o extend the final maturity of the principal; o reduce the principal amount; o reduce the rate or extend the time of payment of interest; o reduce any amount payable on redemption; o change the currency in which the principal, including any amount of original issue discount, premium, or interest thereon is payable; 19 o modify or amend the provisions for conversion of any currency into another currency; o reduce the amount of any original issue discount security payable upon acceleration or provable in bankruptcy; o alter the terms on which holders of the debt securities may convert or exchange debt securities for stock or other securities of Morgan Stanley or of other entities or for other property or the cash value of the property, other than in accordance with the antidilution provisions or other similar adjustment provisions included in the terms of the debt securities; o alter certain provisions of the relevant indenture relating to debt securities not denominated in U.S. dollars; o impair the right of any holder to institute suit for the enforcement of any payment on any debt security when due; or o reduce the percentage of debt securities the consent of whose holders is required for modification of the relevant indenture. (Indentures, Section 8.02). Modification of Subordination Provisions. We may not amend the Subordinated Debt Indenture to alter the subordination of any outstanding subordinated debt securities without the written consent of each potentially adversely affected holder of senior indebtedness then outstanding. (Subordinated Debt Indenture, Section 8.06). Concerning Our Relationship with the Trustees We and our subsidiaries maintain ordinary banking relationships and credit facilities with JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), which is an affiliate of J.P. Morgan Trust Company, National Association. Governing Law The debt securities and the indentures will be governed by, and construed in accordance with, the laws of the State of New York. DESCRIPTION OF UNITS Units will consist of any combination of warrants, purchase contracts, shares of preferred stock, shares of common stock and debt securities issued by us or debt obligations of an entity affiliated or not affiliated with us. The applicable prospectus supplement will also describe: o the designation and the terms of the units and of any combination of warrants, purchase contracts, shares of preferred stock, shares of common stock and debt securities issued by us or debt obligations of an entity affiliated or not affiliated with us constituting the units, including whether and under what circumstances the warrants, purchase contracts, shares of preferred stock, shares of common stock and debt securities issued by us or debt obligations of an entity affiliated or not affiliated with us may be traded separately; o any additional terms of the governing Unit Agreement; o any additional provisions for the issuance, payment, settlement, transfer or exchange of the units or of the warrants, purchase contracts, shares of preferred stock, shares of common stock and debt securities issued by us or debt obligations of an entity affiliated or not affiliated with us constituting the units; and o any applicable United States federal income tax consequences. The terms and conditions described under "Description of Debt Securities," "Description of Warrants," "Description of Purchase Contracts," "Description of Capital Stock--Offered Preferred Stock" and "Description of Capital Stock--Offered and Existing Common Stock" and those described below under "--Significant Provisions of the Unit Agreement" and "--Significant Provisions of the Unit Agreement Without Holders' Obligations" will 20 apply to each unit and to any warrants, purchase contracts, shares of preferred stock, shares of common stock or debt securities issued by us or debt obligations of an entity affiliated or not affiliated with us included in each unit, unless otherwise specified in the applicable prospectus supplement. We will issue the units under one or more Unit Agreements, each referred to as a Unit Agreement, to be entered into between us and a bank or trust company, as unit agent. We may issue units in one or more series, which will be described in the applicable prospectus supplement. Units that include purchase contracts that are all pre-paid purchase contracts, as defined below under "Description of Purchase Contracts," will be governed by one or more Unit Agreements designed for units where the holders do not have any further obligations under the purchase contracts, each referred to as a Unit Agreement Without Holders' Obligations. We have filed the forms of Unit Agreement and Unit Agreement Without Holders' Obligations as exhibits to the registration statement. Although we have described below the material provisions of the Unit Agreement, the Unit Agreement Without Holders' Obligations and the units, these descriptions are not complete, and you should review the detailed provisions of the Unit Agreement and Unit Agreement Without Holders' Obligations for a full description, including the definition of some of the terms used in this prospectus and for other information regarding the units. Significant Provisions of the Unit Agreement Obligations of Unit Holder. Under the terms of the Unit Agreement, each owner of a unit: o consents to and agrees to be bound by the terms of the Unit Agreement; o appoints the unit agent as its authorized agent to execute, deliver and perform any purchase contract included in the unit in which that owner has an interest, except in the case of pre-paid purchase contracts, which require no further performance by the owner; and o irrevocably agrees to be a party to and be bound by the terms of any purchase contract, other than a pre-paid purchase contract issued pursuant to an indenture, included in the unit in which that owner has an interest. Assumption of Obligations by Transferee. Upon the registration of transfer of a unit, the transferee will assume the obligations, if any, of the transferor under any purchase contract included in the unit and under any other security constituting that unit, and the transferor will be released from those obligations. Under the Unit Agreement, we consent to the transfer of these obligations to the transferee, to the assumption of these obligations by the transferee and to the release of the transferor, if the transfer is made in accordance with the provisions of the Unit Agreement. Remedies. Upon the acceleration of the debt securities constituting any units, our obligations and those of the owners under any purchase contracts constituting a part of the units may also be accelerated upon the request of the owners of not less than 25% of the affected purchase contracts, on behalf of all the owners. Limitation on Actions by You as an Individual Holder. No owner of any unit will have any right under the Unit Agreement to institute any action or proceeding at law or in equity or in bankruptcy or otherwise regarding the Unit Agreement, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official, unless the owner will have given written notice to the unit agent and to us of the occurrence and continuance of a default thereunder and: o in the case of an event of default under the debt securities or the relevant indenture, unless the procedures, including notice to us and the trustee, described in the indenture have been complied with; and o in the case of a failure by Morgan Stanley to observe or perform any of its obligations under the Unit Agreement relating to any purchase contracts, other than pre-paid purchase contracts, included in the unit, unless: o owners of not less than 25% of the affected purchase contracts have (a) requested the unit agent to institute that action or proceeding in its own name as unit agent under the Unit Agreement and (b) offered the unit agent reasonable indemnity; 21 o the unit agent has failed to institute that action or proceeding within 60 days of that request by the owners referred to above; and o the owners of a majority of the outstanding affected units have not given directions to the unit agent inconsistent with those of the owners referred to above. If these conditions have been satisfied, any owner of an affected unit may then, but only then, institute an action or proceeding. Notwithstanding the above, the owner of any unit or purchase contract will have the unconditional right to purchase or sell, as the case may be, purchase contract property under the purchase contract and to institute suit for the enforcement of that right. Purchase contract property is defined under "Description of Purchase Contracts" below. Negative Pledge. Because we are a holding company, our assets consist primarily of the securities of our subsidiaries. The negative pledge provisions of the Unit Agreement limit our ability to pledge some of these securities. The Unit Agreement provides that we will not, and will not permit any subsidiary to, create, assume, incur or guarantee any indebtedness for borrowed money that is secured by a pledge, lien or other encumbrance except for liens specifically permitted by the Unit Agreement on: (1) the voting securities of Morgan Stanley & Co. Incorporated, Morgan Stanley & Co. International Limited, Morgan Stanley DW Inc., Discover Bank or any subsidiary succeeding to any substantial part of the business now conducted by any of those corporations, which we refer to collectively as the "principal subsidiaries," or (2) the voting securities of a subsidiary that owns, directly or indirectly, the voting securities of any of the principal subsidiaries, other than directors' qualifying shares, without making effective provisions so that the units and the securities constituting the units under the Unit Agreement will be secured equally and ratably with indebtedness so secured. For these purposes, "subsidiary" means any corporation, partnership or other entity of which at the time of determination we own or control directly or indirectly more than 50% of the shares of the voting stock or equivalent interest, and "voting securities" means stock of any class or classes having general voting power under ordinary circumstances to elect a majority of the board of directors, managers or trustees of the relevant subsidiary, other than stock that carries only the conditional right to vote upon the happening of an event, whether or not that event has happened. Absence of Protections Against All Potential Actions of Morgan Stanley. There are no covenants or other provisions in the Unit Agreement providing for a put right or increased interest or otherwise that would afford holders of units additional protection in the event of a recapitalization transaction, a change of control of Morgan Stanley or a highly leveraged transaction. Modification Without Consent of Holders. We and the unit agent may amend or supplement the Unit Agreement and the terms of the purchase contracts and the purchase contract certificates without the consent of the holders: o to evidence the assumption by a successor of our covenants; o to evidence the acceptance of appointment by a successor agent or collateral agent; o to add covenants for the protection of the holders of the units; o to comply with the Securities Act of 1933, as amended (the "Securities Act"), the Exchange Act or the Investment Company Act of 1940, as amended; o to cure any ambiguity; o to correct or supplement any defective or inconsistent provision; or 22 o in any other manner which we may deem necessary or desirable and which will not adversely affect the interests of the affected holders in any material respect. Modification with Consent of Holders. We and the unit agent, with the consent of the holders of not less than a majority of all series of outstanding units affected may modify the rights of the holders of the units of each series so affected or the terms of any purchase contracts included in any of those series of units and the terms of the Unit Agreement relating to the purchase contracts of each series so affected. However, we and the unit agent may not make the following first three modifications without the consent of the holder of each outstanding purchase contract included in units and may not make the following last two modifications without the consent of the holder of each outstanding unit affected by the modification that: o impair the right to institute suit for the enforcement of any purchase contract; o materially adversely affect the holders' rights and obligations under any purchase contract; o reduce the percentage of purchase contracts constituting part of outstanding units the consent of whose owners is required for the modification of the provisions of the Unit Agreement relating to those purchase contracts or for the waiver of any defaults under the Unit Agreement relating to those purchase contracts; o materially adversely affect the holders' units or the terms of the Unit Agreement (other than terms related to the first three clauses above); or o reduce the percentage of outstanding units the consent of whose owners is required for the modification of the provisions of the Unit Agreement (other than terms related to the first three clauses above). Modifications of any debt securities or pre-paid purchase contracts issued pursuant to an indenture included in units may only be made in accordance with the applicable indenture, as described under "Description of Debt Securities--Modification of the Indentures." Modifications of any warrants included in units may only be made in accordance with the terms of the warrant agreement as described under "Description of Warrants--Significant Provisions of the Warrant Agreement." Merger, Consolidation, Sale, Lease or Conveyance. The Unit Agreement provides that we will not merge or consolidate with any other person and will not sell, lease or convey all or substantially all of our assets to any person unless: o we will be the continuing corporation; or o the successor corporation or person that acquires all or substantially all of our assets: o will be a corporation organized under the laws of the United States, a state of the United States or the District of Columbia; and o will expressly assume all of our obligations under the Unit Agreement; and o immediately after the merger, consolidation, sale, lease or conveyance, we, that person or that successor corporation will not be in default in the performance of the covenants and conditions of the Unit Agreement applicable to us. Replacement of Unit Certificates or Purchase Contract Certificates. We will replace any mutilated certificate evidencing a definitive unit or purchase contract at the expense of the holder upon surrender of that certificate to the unit agent. We will replace certificates that have been destroyed, lost or stolen at the expense of the holder upon delivery to us and the unit agent of evidence satisfactory to us and the unit agent of the destruction, loss or theft of the certificates. In the case of a destroyed, lost or stolen certificate, an indemnity satisfactory to the unit agent and to us may be required at the expense of the holder of the units or purchase contracts evidenced by that certificate before a replacement will be issued. 23 The Unit Agreement provides that, notwithstanding the foregoing, no replacement certificate need be delivered: o during the period beginning 15 days before the day of mailing of a notice of redemption or of any other exercise of any right held by Morgan Stanley with respect to the unit or any security constituting the unit evidenced by the mutilated, destroyed, lost or stolen certificate and ending on the day of the giving of that notice; o if the mutilated, destroyed, lost or stolen certificate evidences any security selected or called for redemption or other exercise of a right held by Morgan Stanley; or o at any time on or after the date of settlement or redemption for any purchase contract included in the unit, or at any time on or after the last exercise date for any warrant included in the unit, evidenced by the mutilated, destroyed, lost or stolen certificate, except with respect to any units that remain or will remain outstanding following the date of settlement or redemption or the last exercise date. Unit Agreement Not Qualified Under Trust Indenture Act. The Unit Agreement will not be qualified as an indenture under, and the unit agent will not be required to qualify as a trustee under, the Trust Indenture Act. Accordingly, the holders of units and purchase contracts, other than pre-paid purchase contracts issued pursuant to an indenture, will not have the benefits of the protections of the Trust Indenture Act. However, any debt securities or pre-paid purchase contracts issued under an indenture that are issued as part of a unit will be issued under an indenture qualified under the Trust Indenture Act, and the trustee under that indenture will be qualified as a trustee under the Trust Indenture Act. Title. We, the unit agent, the trustee, the warrant agent and any of their agents will treat the registered owner of any unit as its owner, notwithstanding any notice to the contrary, for all purposes. New York Law to Govern. The Unit Agreement, the units and the purchase contracts constituting part of the units will be governed by, and construed in accordance with, the laws of the State of New York. Significant Provisions of the Unit Agreement Without Holders' Obligations Remedies. The unit agent will act solely as our agent in connection with the units governed by the Unit Agreement Without Holders' Obligations and will not assume any obligation or relationship of agency or trust for or with any holders of units or interests in those units. Any holder of units or interests in those units may, without the consent of the unit agent or any other holder or beneficial owner of units, enforce by appropriate legal action, on its own behalf, its rights under the Unit Agreement Without Holders' Obligations. However, the holders of units or interests in those units may only enforce their rights under any pre-paid purchase contracts issued pursuant to an indenture and any debt securities or under any warrants issued as parts of those units in accordance with the terms of the applicable indenture and the warrant agreement. Modification. We and the unit agent may amend the Unit Agreement Without Holders' Obligations without the consent of the holders: o to cure any ambiguity; o to cure, correct or supplement any defective or inconsistent provision in the agreement; or o in any other manner which we may deem necessary or desirable and which will not adversely affect the interest of the affected holders of units in any material respect. We and the unit agent, with the consent of the holders of not less than a majority of units at the time outstanding, may modify or amend the rights of the affected holders of the affected units and the terms of the Unit Agreement Without Holders' Obligations. However, we and the unit agent may not, without the consent of each affected holder of units, make any modifications or amendments that would: o materially and adversely affect the exercise rights of the affected holders; or 24 o reduce the percentage of outstanding units the consent of whose owners is required to consent to a modification or amendment of the Unit Agreement Without Holders' Obligations. Any debt securities and pre-paid purchase contracts issued pursuant to an indenture that are issued as part of units governed by the Unit Agreement Without Holders' Obligations may be modified only in accordance with the applicable indenture, as described above under "Description of Debt Securities--Modification of the Indentures." Any warrants issued as part of units may be modified only in accordance with the terms of the warrant agreement as described in "Description of Warrants--Significant Provisions of the Warrant Agreement." Merger, Consolidation, Sale, Lease or Conveyance. The Unit Agreement Without Holders' Obligations provides that we will not merge or consolidate with any other person and will not sell, lease or convey all or substantially all of our assets to any person unless: o we will be the continuing corporation; or o the successor corporation or person that acquires all or substantially all of our assets: o will be a corporation organized under the laws of the United States, a state of the United States or the District of Columbia; and o will expressly assume all of our obligations under the Unit Agreement Without Holders' Obligations; and o immediately after the merger, consolidation, sale, lease or conveyance, we, that person or that successor corporation will not be in default in the performance of the covenants and conditions of the Unit Agreement Without Holders' Obligations applicable to us. Replacement of Unit Certificates. We will replace any mutilated certificate evidencing a definitive unit at the expense of the holder upon surrender of that certificate to the unit agent. We will replace certificates that have been destroyed, lost or stolen at the expense of the holder upon delivery to us and the unit agent of evidence satisfactory to us and the unit agent of the destruction, loss or theft of the certificates. In the case of a destroyed, lost or stolen certificate, an indemnity satisfactory to the unit agent and to us may be required at the expense of the holder of the units or prepaid purchase contracts evidenced by that certificate before a replacement will be issued. Title. We, the unit agent, the trustee, the warrant agent and any of their agents will treat the registered owner of any unit as its owner, notwithstanding any notice to the contrary, for all purposes. New York Law to Govern. The Unit Agreement Without Holders' Obligations, the units and the pre-paid purchase contracts constituting part of the units will be governed by, and construed in accordance with, the laws of the State of New York. DESCRIPTION OF WARRANTS Offered Warrants We may offer warrants separately or together with one or more additional warrants, purchase contracts, shares of preferred stock, shares of common stock and debt securities issued by us or debt obligations of an entity affiliated or not affiliated with us or any combination of those securities in the form of units, as described in the applicable prospectus supplement. If we issue warrants as part of a unit, the accompanying prospectus supplement will specify whether those warrants may be separated from the other securities in the unit prior to the warrants' expiration date. Warrants to purchase or sell securities of entities not affiliated with us issued in the United States may not be so separated prior to the 91st day after the issuance of the unit, unless otherwise specified in the applicable prospectus supplement. We may issue warrants to purchase or sell, on terms to be determined at the time of sale: o securities issued by us or by an entity affiliated or not affiliated with us, a basket of those securities, an index or indices of those securities or any combination of the above; 25 o currencies; or o commodities. We refer to the property in the above clauses as "warrant property." We may satisfy our obligations, if any, with respect to any warrants by delivering the warrant property or, in the case of warrants to purchase or sell securities or commodities, the cash value of the securities or commodities, as described in the applicable prospectus supplement. Further Information in Prospectus Supplement The applicable prospectus supplement will contain, where applicable, the following terms of, and other information relating to, the warrants: o the specific designation and aggregate number of, and the price at which we will issue, the warrants; o the currency with which the warrants may be purchased; o whether the warrants will be issued in fully registered form or bearer form, in definitive or global form or in any combination of these forms, although, in any case, the form of a warrant included in a unit will correspond to the form of the unit and of any debt security or purchase contract included in that unit; o the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants; o if applicable, the date on and after which the warrants and the related securities will be separately transferable; o whether the warrants are put warrants or call warrants, whether you or we will have the right to exercise the warrants and any conditions or restrictions on the exercise of the warrants; o the specific warrant property, and the amount or the method for determining the amount of the warrant property, purchasable or saleable upon exercise of each warrant; o the price at which and the currency with which the underlying securities, currencies or commodities may be purchased or sold upon the exercise of each warrant, or the method of determining that price; o whether the exercise price may be paid in cash, by the exchange of any other security offered with the warrants or both and the method of exercising the warrants; o whether the exercise of the warrants is to be settled in cash or by delivery of the underlying securities, commodities, or both; o any applicable United States federal income tax consequences; o the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents, registrars, determination, or other agents; o the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities exchange; o whether the warrants are to be sold separately or with other securities as part of units; and o any other terms of the warrants. 26 Significant Provisions of the Warrant Agreement We will issue the warrants under one or more warrant agreements to be entered into between us and a bank or trust company, as warrant agent, in one or more series, which will be described in the prospectus supplement for the warrants. The form of warrant agreement is filed as an exhibit to the registration statement. The following summaries of significant provisions of the warrant agreement and the warrants are not intended to be comprehensive and holders of warrants should review the detailed provisions of the warrant agreement for a full description and for other information regarding the warrants. Modifications Without Consent of Warrantholders. We and the warrant agent may amend the terms of the warrants and the warrant certificates without the consent of the holders: o to cure any ambiguity; o to cure, correct or supplement any defective or inconsistent provision; o to establish the forms or terms of warrant certificates or warrants of any series; o to evidence the acceptance of appointment by a successor agent; or o in any other manner which we may deem necessary or desirable and which will not adversely affect the interests of the affected holders in any material respect. Modifications with Consent of Warrantholders. We and the warrant agent, with the consent of the holders of not less than a majority in number of the then outstanding unexercised warrants affected, may modify or amend the warrant agreement. However, we and the warrant agent may not make any of the following modifications or amendments without the consent of each affected warrantholder: o change the exercise price of the warrants; o reduce the amount receivable upon exercise, cancellation or expiration of the warrants other than in accordance with the antidilution provisions or other similar adjustment provisions included in the terms of the warrants; o shorten the period of time during which the warrants may be exercised; o materially and adversely affect the rights of the owners of the warrants; or o reduce the percentage of outstanding warrants the consent of whose owners is required for the modification of the applicable warrant agreement. Merger, Consolidation, Sale or Other Disposition. If at any time we merge or consolidate with, or transfer substantially all of our assets to, another entity, the successor corporation will succeed to and assume all of our obligations under each warrant agreement and the warrant certificates. We will then be relieved of any further obligation under each of those warrant agreements and the warrants issued under those warrant agreements. Enforceability of Rights of Warrantholders. The warrant agents will act solely as our agents in connection with the warrant certificates and will not assume any obligation or relationship of agency or trust for or with any holders of warrant certificates or beneficial owners of warrants. Any holder of warrant certificates and any beneficial owner of warrants may, without the consent of any other person, enforce by appropriate legal action, on its own behalf, its right to exercise the warrants evidenced by the warrant certificates in the manner provided for in that series of warrants or pursuant to the applicable warrant agreement. No holder of any warrant certificate or beneficial owner of any warrants will be entitled to any of the rights of a holder of the debt securities or any other warrant property purchasable upon exercise of the warrants, including the right to receive the payments on those debt securities or other warrant property or to enforce any of the covenants or rights in the relevant indenture or any other similar agreement. 27 Registration and Transfer of Warrants. Subject to the terms of the applicable warrant agreement, warrants in registered, definitive form may be presented for exchange and for registration of transfer, at the corporate trust office of the warrant agent for that series of warrants, or at any other office indicated in the prospectus supplement relating to that series of warrants, without service charge. However, the holder will be required to pay any taxes and other governmental charges as described in the warrant agreement. The transfer or exchange will be effected only if the warrant agent for the series of warrants is satisfied with the documents of title and identity of the person making the request. New York Law to Govern. The warrants and each warrant agreement will be governed by, and construed in accordance with, the laws of the State of New York. DESCRIPTION OF PURCHASE CONTRACTS We may issue purchase contracts, including purchase contracts issued as part of a unit with one or more warrants, shares of preferred stock, shares of common stock and debt securities issued by us or debt obligations of an entity affiliated or not affiliated with us, for the purchase or sale of: o securities issued by us or by an entity affiliated or not affiliated with us, a basket of those securities, an index or indices of those securities or any combination of the above; o currencies; or o commodities. We refer to this property in the above clauses as "purchase contract property." Each purchase contract will obligate the holder to purchase or sell, and obligate us to sell or purchase, on specified dates, the purchase contract property at a specified price or prices, all as described in the applicable prospectus supplement. The applicable prospectus supplement will also specify the methods by which the holders may purchase or sell the purchase contract property and any acceleration, cancellation or termination provisions or other provisions relating to the settlement of a purchase contract. Pre-Paid Purchase Contracts Purchase contracts may require holders to satisfy their obligations under the purchase contracts at the time they are issued. We refer to these purchase contracts as "pre-paid purchase contracts." In certain circumstances, our obligation to settle pre-paid purchase contracts on the relevant settlement date may constitute senior indebtedness or subordinated indebtedness of ours. Accordingly, pre-paid purchase contracts may be issued under the Senior Debt Indenture or the Subordinated Debt Indenture, as specified in the applicable prospectus supplement. Purchase Contracts Issued as Part of Units Purchase contracts issued as part of a unit will be governed by the terms and provisions of a Unit Agreement or, in the case of pre-paid purchase contracts issued as part of a unit that contains no other purchase contracts, a Unit Agreement Without Holders' Obligations. See "Description of Units--Significant Provisions of the Unit Agreement" and "--Significant Provisions of the Unit Agreement Without Holders' Obligations." The applicable prospectus supplement will specify the following: o whether the purchase contract obligates the holder to purchase or sell the purchase contract property; o whether and when a purchase contract issued as part of a unit may be separated from the other securities constituting part of that unit prior to the purchase contract's settlement date; o the methods by which the holders may purchase or sell the purchase contract property; o any acceleration, cancellation or termination provisions or other provisions relating to the settlement of a purchase contract; and 28 o whether the purchase contracts will be issued in fully registered or bearer form, in definitive or global form or in any combination of these forms, although, in any case, the form of a purchase contract included in a unit will correspond to the form of the unit and of any debt security or warrant included in that unit. Settlement of Purchase Contracts. Where purchase contracts issued together with debt securities or debt obligations as part of a unit require the holders to buy purchase contract property, the unit agent may apply principal payments from the debt securities or debt obligations in satisfaction of the holders' obligations under the related purchase contract as specified in the prospectus supplement. The unit agent will not so apply the principal payments if the holder has delivered cash to meet its obligations under the purchase contract. To settle the purchase contract and receive the purchase contract property, the holder must present and surrender the unit certificates at the office of the unit agent. If a holder settles its obligations under a purchase contract that is part of a unit in cash rather than by delivering the debt security or debt obligation that is part of the unit, that debt security or debt obligation will remain outstanding, if the maturity extends beyond the relevant settlement date and, as more fully described in the applicable prospectus supplement, the holder will receive that debt security or debt obligation or an interest in the relevant global debt security. Pledge by Purchase Contract Holders to Secure Performance. To secure the obligations of the purchase contract holders contained in the Unit Agreement and in the purchase contracts, the holders, acting through the unit agent, as their attorney-in-fact, will assign and pledge the items in the following sentence, which we refer to as the "pledge," to JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), in its capacity as collateral agent, for our benefit. The pledge is a security interest in, and a lien upon and right of set-off against, all of the holders' right, title and interest in and to: o any common stock, preferred stock, debt securities or debt obligations that are, or become, part of units that include the purchase contracts, or other property as may be specified in the applicable prospectus supplement, which we refer to as the "pledged items"; o all additions to and substitutions for the pledged items as may be permissible, if so specified in the applicable prospectus supplement; o all income, proceeds and collections received or to be received, or derived or to be derived, at any time from or in connection with the pledged items described in the two clauses above; and o all powers and rights owned or thereafter acquired under or with respect to the pledged items. The pledge constitutes collateral security for the performance when due by each holder of its obligations under the Unit Agreement and the applicable purchase contract. The collateral agent will forward all payments from the pledged items to us, unless the payments have been released from the pledge in accordance with the Unit Agreement. We will use the payments received from the pledged items to satisfy the obligations of the holder of the Unit under the related purchase contract. Property Held in Trust by Unit Agent. If a holder fails to settle in cash its obligations under a purchase contract that is part of a unit and fails to present and surrender its unit certificate to the unit agent when required, that holder will not receive the purchase contract property. Instead, the unit agent will hold that holder's purchase contract property, together with any distributions, as the registered owner in trust for the benefit of the holder until the holder presents and surrenders the certificate or provides satisfactory evidence that the certificate has been destroyed, lost or stolen. The unit agent or Morgan Stanley may require an indemnity from the holder for liabilities related to any destroyed, lost or stolen certificate. If the holder does not present the unit certificate, or provide the necessary evidence of destruction or loss and indemnity, on or before the second anniversary of the settlement date of the related purchase contract, the unit agent will pay to us the amounts it received in trust for that holder. Thereafter, the holder may recover those amounts only from us and not the unit agent. The unit agent will have no obligation to invest or to pay interest on any amounts it holds in trust pending distribution. 29 DESCRIPTION OF CAPITAL STOCK As of the date of this prospectus, Morgan Stanley's authorized capital stock consists of 3,500,000,000 shares of common stock, par value $0.01 per share, and 30,000,000 shares of preferred stock, par value $0.01 per share. The rights of holders of preferred stock or common stock offered by this prospectus will be subject to, and may be adversely affected by, issuances of preferred stock in the future. Under some circumstances, alone or in combination with certain provisions of our certificate of incorporation and/or with the provisions of our rights agreement, described below under "--Additional Provisions of Morgan Stanley's Certificate of Incorporation and Bylaws," respectively, our issuances of preferred stock may discourage or make more difficult an acquisition of Morgan Stanley that the Board of Directors deems undesirable. The Board of Directors of Morgan Stanley has the power, without further action by the stockholders, unless action is required by applicable laws or regulations or by the terms of outstanding preferred stock, to issue preferred stock in one or more series and to fix the voting rights, designations, preferences and other terms applicable to the preferred stock to be issued. The Board of Directors may issue preferred stock to obtain additional financing, in connection with acquisitions, as compensation to officers, directors or employees of Morgan Stanley and its subsidiaries in accordance with benefit plans or otherwise and for other proper corporate purposes. Outstanding Capital Stock Outstanding Common Stock. As of August 31, 2005, there were approximately 1,082,727,000 shares of our common stock outstanding. Outstanding Preferred Stock. As of August 31, 2005, there were no shares of our preferred stock outstanding. Cumulative Preferred Stock Issuable under the Capital Units. In addition, we and our wholly-owned subsidiary Morgan Stanley Finance plc have outstanding Capital Units. Each Capital Unit consists of a subordinated debenture issued by Morgan Stanley Finance plc, which we guaranteed on a subordinated basis, and a related purchase contract we issued that requires the holder to purchase one depositary share representing ownership of multiple shares of our preferred stock. The Capital Units outstanding on August 31, 2005 may result in the issuance at any time of up to 329,050 shares of our 8.03% Cumulative Preferred Stock, par value $0.01 per share, with a stated value of $200.00 per share, which we refer to as the Capital Units Cumulative Preferred Stock. The preceding summary and the following summary of the terms of the offered preferred stock do not purport to be complete and are qualified by our certificate of incorporation and by the Certificates of Designation of Preferences and Rights for the Capital Units Cumulative Preferred Stock. Offered and Existing Common Stock Our Board of Directors has authorized the issuance of shares of common stock and has authorized a committee of the Board of Directors to establish the price and other terms and conditions of any offering which will be described in the applicable prospectus supplement. The shares of offered common stock, when issued and sold, will be fully paid and nonassessable. Terms Specified in Prospectus Supplement. The following description sets forth some general terms and provisions of the offered common stock. The applicable prospectus supplement will contain, where applicable, the following terms of and other information relating to any offered common stock: o number of shares to be offered; o offering price or prices; o any other relevant terms of the offered common stock that the Board of Directors or the committee establishes, including any restrictions on the transfer or resale of the offered common stock; and o any additional terms of the offering. 30 Voting Rights. Each holder of our common stock has one vote per share on all matters voted on generally by the stockholders, including the election of directors. Except as otherwise required by law or as provided with respect to any series of preferred stock, the holders of our common stock will possess all voting power. The Board of Directors is currently divided into three classes of directors with the term of one class expiring at each annual meeting of stockholders. Beginning with the 2006 annual meeting of stockholders, directors elected to succeed those directors whose class's term then expires will be elected by a plurality vote of all votes cast at such meeting to hold office until the next annual meeting of stockholders, with each director to hold office until his or her successor shall have been duly elected and qualified. The classification of the Board of Directors will then cease altogether at the 2008 annual meeting of stockholders. Because our certificate of incorporation does not provide for cumulative voting rights, the holders of a plurality of the voting power of the then outstanding shares of capital stock entitled to be voted generally in the election of directors, which we refer to as the "voting stock," represented at a meeting will be able to elect all the directors standing for election at the meeting. Dividends. The holders of our common stock are entitled to share equally in dividends as may be declared by the Board of Directors out of funds legally available therefor, but only after payment of dividends required to be paid on outstanding shares of offered preferred stock and any other class or series of stock having preference over the common stock as to dividends, including, if issued, the Capital Units Cumulative Preferred Stock. Liquidation Rights. Upon voluntary or involuntary liquidation, dissolution or winding up of Morgan Stanley, the holders of the common stock will share pro rata in the assets remaining after payments to creditors and holders of any offered preferred stock and any other class or series of stock having preference over the common stock upon liquidation, dissolution or winding up that may be then outstanding, including, if issued, the Capital Units Cumulative Preferred Stock. There are no preemptive or other subscription rights, conversion rights or redemption or sinking fund provisions with respect to shares of our common stock. Because Morgan Stanley is a holding company, our rights and the rights of holders of our capital stock, including the holders of our common stock, to participate in the distribution of assets of any of our subsidiaries upon the subsidiary's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors and preferred shareholders, except to the extent Morgan Stanley may itself be a creditor with recognized claims against the subsidiary or a holder of preferred stock of the subsidiary. Agents and Registrar for Offered and Existing Common Stock. The transfer agent and registrar for the common stock is Mellon Investor Services L.L.C. Offered Preferred Stock Our Board of Directors has authorized the issuance of one or more series of additional shares of preferred stock and has authorized a committee of the Board of Directors to establish and designate series and to fix the number of shares and the relative rights, preferences and limitations of the respective series of the preferred stock offered by this prospectus and the applicable prospectus supplement. The shares of offered preferred stock, when issued and sold, will be fully paid and nonassessable. Terms Specified in Prospectus Supplement. The following description sets forth some general terms and provisions of the offered preferred stock. The number of shares and all of the relative rights, preferences and limitations of the respective series of offered preferred stock that the Board of Directors or the committee establishes will be described in the applicable prospectus supplement. The terms of particular series of offered preferred stock may differ, among other things, in: o designation; o number of shares that constitute the series; o dividend rate, or the method of calculating the dividend rate; o dividend periods, or the method of calculating the dividend periods; 31 o redemption provisions, including whether or not, on what terms and at what prices the shares will be subject to redemption at our option; o voting rights; o preferences and rights upon liquidation or winding up; o whether or not and on what terms the shares will be convertible into or exchangeable for shares of any other class, series or security of ours or any other corporation or any other property; o for preferred stock convertible into common stock, the number of shares of common stock to be reserved in connection with, and issued upon conversion of, the preferred stock; o whether depositary shares representing the offered preferred stock will be offered and, if so, the fraction or multiple of a share that each depositary share will represent; and o the other rights and privileges and any qualifications, limitations or restrictions of those rights or privileges. We have summarized below the material provisions of a certificate of designation authorizing the issuance of a series of offered preferred stock. These summaries are not complete and each investor should refer to the form of certificate of designation which has been filed as an exhibit to the registration statement and to our certificate of incorporation for a complete description of the terms and definitions. The Board of Directors or a duly authorized committee of the Board of Directors will adopt the resolutions to be included in the certificate of designation prior to the issuance of a series of offered preferred stock, and the certificate of designation will be filed with the Secretary of State of the State of Delaware as soon thereafter as reasonably practicable. Rank. Each series of offered preferred stock will rank, with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up: o junior to any series of our capital stock expressly stated to be senior to that series of offered preferred stock; o senior to our common stock and any class of our capital stock expressly stated to be junior to that series of offered preferred stock; and o on a parity with each other series of offered preferred stock and all other classes of our capital stock. The offered preferred stock will rank, as to payment of dividends and amounts payable on liquidation, on a parity with the Capital Units Cumulative Preferred Stock, if issued. Dividends. If described in the applicable prospectus supplement, we will pay cumulative cash dividends to the holders of offered preferred stock, when and as declared by the Board of Directors or the committee, out of funds legally available for payment. The prospectus supplement will detail the annual rate of dividends or the method or formula for determining or calculating them, and the payment dates and payment periods for dividends. The Board of Directors or the committee will fix a record date for the payment of dividends not more than 60 or less than 10 days preceding the dividend payment date. We will pay dividends on the offered preferred stock to the holders of record on that record date. Dividends will be cumulative from the date of original issue of the series. A series of offered preferred stock will be junior as to payment of dividends to any series of preferred stock that may be issued in the future that is expressly stated to be senior as to payment of dividends to that series of offered preferred stock. If at any time we have failed to pay accrued dividends on any of those senior shares when payable, we may not pay any dividend on that series of offered preferred stock or redeem or otherwise repurchase any shares of that series until we have paid or set aside for payment the full amount of the accumulated but unpaid dividends on the senior shares. We will not declare, pay or set aside for payment any dividends on any preferred stock ranking on a parity as to payment of dividends with the offered preferred stock unless we declare, pay or set aside for payment dividends on all the outstanding shares of offered preferred stock for all dividend payment periods ending on or before the dividend payment date for that parity stock. We must declare, pay or set aside for payment any amounts on the 32 offered preferred stock ratably in proportion to the respective amounts of dividends (1) accumulated and unpaid or payable on that parity stock, on the one hand, and (2) accumulated and unpaid or payable through the dividend payment period or periods of the offered preferred stock preceding the dividend payment date for that parity stock, on the other hand. Except as described above, unless we have paid the full cumulative dividends on the outstanding shares of offered preferred stock, we may not take any of the following actions with respect to our common stock or any other preferred stock of Morgan Stanley ranking junior or on parity with the offered preferred stock as to dividend payments: o declare, pay or set aside for payment any dividends, other than dividends payable in our common stock; o make other distributions; o redeem, purchase or otherwise acquire our common stock or junior preferred stock for any consideration; or o make any payment to or available for a sinking fund for the redemption of our common stock or junior preferred stock. Preferred stock on a parity with offered preferred stock currently would include the Capital Units Cumulative Preferred Stock, if issued. The provisions of the immediately preceding paragraph will not prevent us from applying any monies previously deposited in any sinking fund with respect to any preferred stock in compliance with the provisions of the sinking fund to the purchase or redemption of that preferred stock in accordance with the terms of the sinking fund, regardless of whether at the time of application we have paid or declared and set aside for payment full cumulative dividends upon shares of the offered preferred stock outstanding on the last dividend payment date for any series of offered preferred stock. The provisions of the immediately preceding paragraph also do not restrict the ability of a holder of any junior or parity preferred stock or common stock to convert those securities into or exchange those securities for Morgan Stanley capital stock ranking junior to the offered preferred stock as to dividend payments. We will compute the amount of dividends payable for the initial dividend period or any period shorter than a full dividend period on the basis of a 360 day year of twelve 30 day months, unless otherwise indicated in the prospectus supplement. Accrued but unpaid dividends will not bear interest. Redemption. The prospectus supplement will indicate whether, and on what terms, shares of any series of offered preferred stock will be subject to mandatory redemption or sinking fund provision. The prospectus supplement will also indicate whether, and on what terms, including the date on or after which redemption may occur, we may redeem shares of a series of the offered preferred stock. We will effect any optional redemption upon not less than 30 days' notice at a redemption price of not less than the stated value per share of the applicable series of offered preferred stock plus accrued and accumulated but unpaid dividends to but excluding the date fixed for redemption. If we have not paid full cumulative dividends on all outstanding shares of offered preferred stock, we may not redeem the offered preferred stock in part and we may not purchase or acquire any shares of offered preferred stock, otherwise than by a purchase or exchange offer made on the same terms to all holders of the offered preferred stock. If fewer than all the outstanding shares of a series of offered preferred stock are to be redeemed, we will select those to be redeemed by lot or a substantially equivalent method. Liquidation Rights. In the event of any liquidation, dissolution or winding up of Morgan Stanley, the holders of shares of offered preferred stock will be entitled to receive, out of the assets of Morgan Stanley available for distribution to stockholders, liquidating distributions in an amount equal to the stated value per share of offered preferred stock, as described in the applicable prospectus supplement, plus accrued and accumulated but unpaid dividends to the date of final distribution, before any distribution is made to holders of: 33 o any class or series of capital stock ranking junior to the offered preferred stock as to rights upon liquidation, dissolution or winding up; or o our common stock. However, holders of the shares of offered preferred stock will not be entitled to receive the liquidation price of their shares until we have paid or set aside an amount sufficient to pay in full the liquidation preference of any class or series of our capital stock ranking senior as to rights upon liquidation, dissolution or winding up. Neither a consolidation or merger of Morgan Stanley with or into another corporation nor a merger of another corporation with or into Morgan Stanley nor a sale or transfer of all or part of Morgan Stanley's assets for cash or securities will be considered a liquidation, dissolution or winding up of Morgan Stanley. If, upon any liquidation, dissolution or winding up of Morgan Stanley, assets of Morgan Stanley then distributable are insufficient to pay in full the amounts payable with respect to the offered preferred stock and any other preferred stock ranking on parity with the offered preferred stock as to rights upon liquidation, dissolution or winding up, the holders of the offered preferred stock and of that other preferred stock will share ratably in any distribution in proportion to the full respective preferential amounts to which they are entitled. After we have paid the full amount of the liquidating distribution to which they are entitled, the holders of the offered preferred stock will not be entitled to any further participation in any distribution of assets by Morgan Stanley. Voting Rights. Unless otherwise determined by our Board of Directors and indicated in the prospectus supplement, holders of the offered preferred stock will not have any voting rights except as described below or as otherwise from time to time required by law. Whenever dividends on the shares of offered preferred stock or any other stock ranking on a parity with the offered preferred stock with respect to the payment of dividends and having similar voting rights are in arrears for dividend periods, whether or not consecutive, containing in the aggregate a number of days equivalent to six calendar quarters, the holders of shares of offered preferred stock, voting separately as a class with holders of one or more other classes or series of preferred stock, including any issued Capital Units Cumulative Preferred Stock, having similar voting rights that are exercisable, will be entitled to vote for the election of two of the authorized number of directors of Morgan Stanley at the next annual meeting of stockholders and at each subsequent meeting until we have paid or set apart for payment all dividends accumulated on the offered preferred stock or the other class or series of stock having similar voting rights, as applicable. The term of office of all directors elected by the holders of preferred stock will terminate immediately upon the termination of the right of the holders of preferred stock to vote for directors. Each holder of shares of the offered preferred stock will have one vote for each share of offered preferred stock held. So long as any shares of the offered preferred stock remain outstanding, we will not, without the consent of the holders of at least two thirds of the shares of offered preferred stock outstanding at the time, voting together as one class with all other series of preferred stock having similar voting rights that have been conferred and are exercisable: o issue or increase the authorized amount of any class or series of stock ranking prior to the outstanding offered preferred stock as to dividends or upon liquidation; or o amend, alter or repeal the provisions of our certificate of incorporation or of the resolutions contained in the certificate of designation, whether by merger, consolidation or otherwise, so as to materially and adversely affect any power, preference or special right of the outstanding offered preferred stock or its holders. Holders of the offered preferred stock will vote separately as a class with all other series of preferred stock, including any issued Capital Units Cumulative Preferred Stock, having similar voting rights that have been conferred and are exercisable. For purposes of the preceding sentences, any increase in the amount of the authorized common stock or authorized preferred stock or the creation and issuance of other series of common stock or preferred stock ranking on a parity with or junior to the offered preferred stock as to dividends and upon liquidation will not be considered to materially and adversely affect those powers, preferences or special rights. Agents and Registrar for Offered Preferred Stock. The transfer agent, dividend disbursing agent and registrar for each series of offered preferred stock will be The Bank of New York. 34 Depositary Shares We may, at our option, elect to offer fractional shares or some multiple of shares of offered preferred stock, rather than individual shares of offered preferred stock. If we choose to do so, we will issue depositary receipts for depositary shares, each of which will represent a fraction or a multiple of a share of a particular series of offered preferred stock as described below. The following statements concerning depositary shares, depositary receipts, and the deposit agreement are not intended to be comprehensive and are qualified in their entirety by reference to the forms of these documents, which we have filed as exhibits to the registration statement. Each investor should refer to the detailed provisions of those documents, as we have explained under the heading "Where You Can Find More Information" in the Summary. The shares of any series of offered preferred stock represented by depositary shares will be deposited under a deposit agreement among Morgan Stanley, The Bank of New York, as depositary, which we refer to as the Preferred Stock Depositary, and the holders from time to time of depositary receipts issued under the agreement. Subject to the terms of the deposit agreement, each holder of a depositary share will be entitled, in proportion to the fraction or multiple of a share of offered preferred stock represented by that depositary share, to all the rights and preferences of the offered preferred stock represented by that depositary share, including dividend, voting and liquidation rights. The depositary shares will be evidenced by depositary receipts issued under the deposit agreement. Depositary receipts will be distributed to those persons purchasing the fractional or multiple shares of the related series of offered preferred stock. Immediately following the issuance of shares of a series of offered preferred stock, we will deposit those shares with the Preferred Stock Depositary, which will then issue and deliver the depositary receipts to the purchasers. Depositary receipts will only be issued evidencing whole depositary shares. A depositary receipt may evidence any number of whole depositary shares. Dividends and Other Distributions. The Preferred Stock Depositary will distribute all cash dividends or other cash distributions received on the related series of offered preferred stock to the record holders of depositary receipts relating to those series in proportion to the number of the depositary shares evidenced by depositary receipts those holders own. If we make a distribution other than in cash, the Preferred Stock Depositary will distribute the property it receives to the record holders of depositary receipts in proportion to the number of depositary shares evidenced by depositary receipts those holders own, unless the Preferred Stock Depositary determines that the distribution cannot be made proportionately among those holders or that it is not feasible to make the distribution. In that event, the Preferred Stock Depositary may, with our approval, sell the property and distribute the net proceeds to the holders in proportion to the number of depositary shares evidenced by depositary receipts they own. The amount distributed to holders of depositary shares will be reduced by any amounts required to be withheld by Morgan Stanley or the Preferred Stock Depositary on account of taxes or other governmental charges. Withdrawal of Stock. Upon surrender of the depositary receipts at the corporate trust office of the Preferred Stock Depositary and upon payment of the taxes, charges and fees provided for in the deposit agreement and compliance with any other requirement of the deposit agreement, the holder of the depositary shares evidenced by those depositary receipts is entitled to delivery of the number of whole shares of the related series of offered preferred stock and all money or other property, if any, represented by those shares. Holders of depositary receipts representing any number of whole shares of offered preferred stock will be entitled to receive whole shares of the related series of offered preferred stock, but those holders of whole shares of offered preferred stock will not thereafter be entitled to deposit those shares of offered preferred stock with the Preferred Stock Depositary or to receive depositary shares therefor. If the depositary receipts delivered by the holder evidence a number of depositary shares in excess of the number representing whole shares of the related series of offered preferred stock to be withdrawn, the Preferred Stock Depositary will deliver to the holder at the same time a new depositary receipt evidencing the excess number of depositary shares. Voting the Offered Preferred Stock. Upon receiving notice of any meeting at which the holders of any series of the offered preferred stock are entitled to vote, the Preferred Stock Depositary will mail the information contained in 35 the notice of the meeting to the record holders of the depositary receipts relating to that series of offered preferred stock. Each record holder of the depositary receipts on the record date, which will be the same date as the record date for the related series of offered preferred stock, may instruct the Preferred Stock Depositary how to exercise his or her voting rights. The Preferred Stock Depositary will endeavor, insofar as practicable, to vote or cause to be voted the maximum number of whole shares of the offered preferred stock represented by those depositary shares in accordance with those instructions received sufficiently in advance of the meeting, and we will agree to take all reasonable action that may be deemed necessary by the Preferred Stock Depositary in order to enable the Preferred Stock Depositary to do so. The Preferred Stock Depositary will abstain from voting shares of the offered preferred stock for which it does not receive specific instructions from the holder of the depositary shares representing them. Redemption of Depositary Shares. Depositary shares will be redeemed from any proceeds received by the Preferred Stock Depositary resulting from the redemption, in whole or in part, of the series of the offered preferred stock represented by those depositary shares. The redemption price per depositary share will equal the applicable fraction or multiple of the redemption price per share payable with respect to the series of the offered preferred stock. If we redeem shares of a series of offered preferred stock held by the Preferred Stock Depositary, the Preferred Stock Depositary will redeem as of the same redemption date the number of depositary shares representing the shares of offered preferred stock that we redeem. If less than all the depositary shares will be redeemed, the depositary shares to be redeemed will be selected by lot or substantially equivalent method determined by the Preferred Stock Depositary. After the date fixed for redemption, the depositary shares called for redemption will no longer be deemed to be outstanding, and all rights of the holders of the depositary shares will cease, except the right to receive the monies payable and any other property to which the holders were entitled upon the redemption upon surrender to the Preferred Stock Depositary of the depositary receipts evidencing the depositary shares. Any funds deposited by us with the Preferred Stock Depositary for any depositary shares that the holders fail to redeem will be returned to us after a period of two years from the date the funds are deposited. Amendment and Termination of the Deposit Agreement. We may amend the form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement at any time and from time to time by agreement with the Preferred Stock Depositary. However, any amendment that materially and adversely alters the rights of the holders of depositary receipts will not be effective unless it has been approved by the holders of at least a majority of the depositary shares then outstanding, and no amendment may impair the right of any holder of any depositary receipts, described above under "--Withdrawal of Stock," to receive shares of the related series of offered preferred stock and any money or other property represented by those depositary shares, except in order to comply with mandatory provisions of applicable law. We may terminate the deposit agreement at any time with at least 60 days' prior written notice to the Preferred Stock Depositary. Within 30 days of the date of the notice, the Preferred Stock Depositary will deliver or make available for delivery to holders of depositary receipts, upon surrender of the depositary receipts evidencing the depositary shares and upon payment of any applicable taxes or governmental charges to be paid by the holders as described below, the number of whole shares of the related series of offered preferred stock as are represented by the depositary receipts. The deposit agreement will automatically terminate after there has been a final distribution on the related series of offered preferred stock in connection with any liquidation, dissolution or winding up of Morgan Stanley and that distribution has been made to the holders of depositary shares. Charges of Preferred Stock Depositary. We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will pay all charges of the Preferred Stock Depositary in connection with the initial deposit of the related series of offered preferred stock, the initial issuance of the depositary shares, all withdrawals of shares of the related series of offered preferred stock by holders of depositary shares and the registration of transfers of title to any depositary shares. However, holders of depositary shares will pay other transfer and other taxes and governmental charges and the other charges expressly provided in the deposit agreement to be for their accounts. Limitation on Liability of Company and Preferred Stock Depositary. Neither the Preferred Stock Depositary nor Morgan Stanley will be liable if it is prevented or delayed by law, by any provision of our certificate of incorporation or of the depositary shares or by any circumstance beyond its control from performing its obligations under the deposit agreement. The obligations of Morgan Stanley and the Preferred Stock Depositary under the 36 deposit agreement will be limited to performance with best judgment and in good faith of their duties thereunder, except that they will be liable for negligence or willful misconduct in the performance of their duties thereunder, and they will not be obligated to appear in, prosecute or defend any legal proceeding related to any depositary receipts, depositary shares or related series of offered preferred stock unless satisfactory indemnity is furnished. Corporate Trust Office of Preferred Stock Depositary. The Preferred Stock Depositary's corporate trust office is currently located at 101 Barclay Street, New York, New York 10286. The Preferred Stock Depositary will act as transfer agent and registrar for depositary receipts, and, if shares of a series of offered preferred stock are redeemable, the Preferred Stock Depositary will act as redemption agent for the corresponding depositary receipts. Resignation and Removal of Preferred Stock Depositary. The Preferred Stock Depositary may resign at any time by delivering to us written notice of its election to do so, and we may at any time remove the Preferred Stock Depositary. Any resignation or removal will take effect upon the appointment of a successor Preferred Stock Depositary. A successor must be appointed by us within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company having its principal office in the United States and a combined capital and surplus of at least $50,000,000. Reports to Holders. We will deliver all required reports and communications to holders of the offered preferred stock to the Preferred Stock Depositary, and it will forward those reports and communications to the holders of depositary shares. Inspection by Holders. Upon request, the Preferred Stock Depositary will provide for inspection to the holders of depositary shares the transfer books of the depositary and the list of holders of receipts; provided that any requesting holder certifies to the Preferred Stock Depositary that such inspection is for a proper purpose reasonably related to such person's interest as an owner of depositary shares evidenced by the receipts. Capital Units Cumulative Preferred Stock Rank. The Capital Units Cumulative Preferred Stock, if issued, will rank on a parity with the offered preferred stock, and rank prior to the common stock as to payment of dividends and amounts payable on liquidation. The shares of Capital Units Cumulative Preferred Stock will not be convertible into common stock of Morgan Stanley and will have no preemptive rights. Dividends. Holders of the Capital Units Cumulative Preferred Stock, if issued, are entitled to receive, when and as declared by the Board of Directors out of legally available funds, cumulative cash dividends payable quarterly at the rate of 8.03% per year. The Capital Units Cumulative Preferred Stock, if issued, will be junior as to dividends to any preferred stock that may be issued in the future that is expressly senior as to dividends to the Capital Units Cumulative Preferred Stock. If at any time we have failed to pay accrued dividends on any of those senior shares at the time they are payable, we may not pay any dividend on any issued Capital Units Cumulative Preferred Stock or redeem or otherwise repurchase any shares of Capital Units Cumulative Preferred Stock until we have paid in full, or set aside dividends for payment, the accumulated but unpaid dividends on those senior shares. We will not declare or pay or set aside for payment dividends on any preferred stock ranking on a parity as to payment of dividends with the Capital Units Cumulative Preferred Stock unless we also declare or pay or set aside for payment dividends on any outstanding shares of Capital Units Cumulative Preferred Stock for all dividend payment periods ending on or before the dividend payment date of any parity stock. We must declare, pay or set aside for payment any amounts on any issued Capital Units Cumulative Preferred Stock ratably in proportion to the respective amounts of dividends (1) accumulated and unpaid or payable on any parity stock, on the one hand, and (2) accumulated and unpaid or payable through the dividend payment period or periods of the Capital Units Cumulative Preferred Stock next preceding the dividend payment date, on the other hand. Except as described above, unless we have paid the full cumulative dividends on any outstanding shares of Capital Units Cumulative Preferred Stock, we may not with respect to our common stock or any other preferred 37 stock of Morgan Stanley ranking junior to or on a parity with the Capital Units Cumulative Preferred Stock as to dividend payments: o declare, pay or set aside for payment any dividends, other than dividends payable in our common stock; o make other distributions; o redeem, purchase or otherwise acquire our common stock or junior preferred stock for any consideration; or o make any payment to or available for a sinking fund for redemption of our common stock or junior preferred stock. The provisions of the immediately preceding paragraph do not apply to any monies we deposit in any sinking fund with respect to any preferred stock in compliance with the provisions of that sinking fund. We may apply monies so deposited to the purchase or redemption of the preferred stock in accordance with the terms of the sinking fund, regardless of whether at the time of application we have paid or declared or set aside for payment full cumulative dividends upon any issued shares of the Capital Units Cumulative Preferred Stock. The provisions of the immediately preceding paragraph also do not restrict the ability of the holder of any junior or parity preferred stock or common stock to convert their securities into or exchange those securities for Morgan Stanley capital stock ranking junior to the Capital Units Cumulative Preferred Stock as to dividend payments. Redemption. The Capital Units Cumulative Preferred Stock, if issued, will not be subject to any mandatory redemption or sinking fund provision and will not be redeemable prior to February 28, 2007, except that under some circumstances it may be redeemed prior to that date at specified prices. On or after February 28, 2007, the Capital Units Cumulative Preferred Stock will be redeemable at our option, in whole or in part, upon not less than 30 days' notice, at specified prices during specified periods following the indicated date, plus accrued and accumulated but unpaid dividends to but excluding the date fixed for redemption. Liquidation Rights. In the event of any liquidation, dissolution or winding up of Morgan Stanley, the holders of shares of Capital Units Cumulative Preferred Stock will be entitled to receive liquidating distributions in the amount of $200.00 per share plus accrued and accumulated but unpaid dividends to the date of final distribution before any distribution is made to holders of o any class or series of capital stock ranking junior to the Capital Units Cumulative Preferred Stock, as to rights upon liquidation, dissolution or winding up; and o common stock. However, the holders of the shares of Capital Units Cumulative Preferred Stock will not be entitled to receive the liquidation price of these shares until the liquidation preference of any other shares of Morgan Stanley's capital stock ranking senior as to rights upon liquidation, dissolution or winding up will have been paid in full or a sum set aside therefor sufficient to provide for payment in full. If upon any liquidation, dissolution or winding up of Morgan Stanley, the amounts payable with respect to any issued Capital Units Cumulative Preferred Stock and any other preferred stock ranking on parity as to rights upon liquidation, dissolution or winding up are not paid in full, the holders of the Capital Units Cumulative Preferred Stock and of that other preferred stock will share ratably in any distribution in proportion to the full respective preferential amounts to which they are entitled. After payment of the full amount of the liquidating distribution to which they are entitled, the holders of Capital Units Cumulative Preferred Stock will not be entitled to any further participation in any distribution of assets by Morgan Stanley. Voting Rights. Holders of Capital Units Cumulative Preferred Stock, if issued, will not have any voting rights except as described below or as otherwise from time to time required by law. Whenever dividends on the Capital Units Cumulative Preferred Stock or any other class or series of stock ranking on a parity with the Capital Units Cumulative Preferred Stock with respect to the payment of dividends and having similar voting rights are in arrears 38 for dividend periods, whether or not consecutive, containing in the aggregate a number of days equivalent to six calendar quarters, the holders of shares of Capital Units Cumulative Preferred Stock, voting separately as a class with holders of one or more other classes or series of preferred stock having similar voting rights that are exercisable, will be entitled to vote for the election of two of the authorized number of directors of Morgan Stanley at the next annual meeting of stockholders and at each subsequent meeting until we have paid or set apart for payment all dividends accumulated on the Capital Units Cumulative Preferred Stock or the other class or series of stock having similar voting rights, as applicable. At elections of such directors, each holder of shares of Capital Units Cumulative Preferred Stock will have one vote for each share of Capital Units Cumulative Preferred Stock held. The term of office of all directors elected by the holders of preferred stock will terminate immediately upon the termination of the right of the holders of preferred stock to vote for directors. So long as any shares of Capital Units Cumulative Preferred Stock are outstanding, we will not, without the consent of the holders of at least two thirds of the shares of Capital Units Cumulative Preferred Stock outstanding at the time, voting separately as a class with all other series of preferred stock having similar voting rights that have been conferred and are exercisable: o issue or increase the authorized amount of any class or series of stock ranking prior to the Capital Units Cumulative Preferred Stock as to dividends or upon liquidation; or o amend, alter or repeal the provisions of our certificate of incorporation or of the resolutions contained in the certificate of designation relating to the Capital Units Cumulative Preferred Stock, whether by merger, consolidation or otherwise, so as to materially and adversely affect any power, preference or special right of the Capital Units Cumulative Preferred Stock or its holders. For purposes of the preceding sentence any increase in the authorized amount of common stock or preferred stock or the creation and issuance of other series of common stock or preferred stock ranking on a parity with or junior to the Capital Units Cumulative Preferred Stock as to dividends and upon liquidation will not be deemed to materially and adversely affect those powers, preferences or special rights. Transfer Agent for Capital Units Cumulative Preferred Stock. The transfer agent and registrar for the Capital Units Cumulative Preferred Stock is The Bank of New York. Additional Provisions of Morgan Stanley's Certificate of Incorporation and Bylaws Size of the Board of Directors, Removal of Directors and Filling Vacancies on the Board of Directors. Our Board of Directors currently consists of 11 directors. The Board of Directors is currently divided into three classes. At each annual meeting of stockholders ending with the annual meeting of stockholders in 2005, a class of directors is elected, for a term expiring at the third succeeding annual meeting of stockholders after its election, to succeed that class of directors whose term then expires. Beginning with the 2006 annual meeting of stockholders, directors elected to succeed those directors whose class's term then expires will be elected by a plurality vote of all votes cast at such meeting to hold office until the next annual meeting of stockholders, with each director to hold office until his or her successor shall have been duly elected and qualified. The classification of the Board of Directors will then cease altogether at the 2008 annual meeting of stockholders. Under our amended and restated bylaws, a majority vote of the Board of Directors may increase or decrease the number of directors. However, the bylaws provide that the Board shall consist of not less than three nor more than fifteen members. Our certificate of incorporation also provides that directors may be removed only for cause and with the approval of the holders of at least 80% of the voting power of the voting stock, voting together as a single class. Any vacancy on the Board of Directors or newly created directorship will be filled by a majority vote of the remaining directors then in office though less than a quorum, and those newly elected directors will serve for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been elected expires. Limitations on Actions by Stockholders; Calling Special Meetings of Stockholders. Our certificate of incorporation provides that, subject to the rights of holders of any series of preferred stock or any other series of capital stock set forth in the certificate of incorporation, any action required or permitted to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing in lieu of a meeting. Our bylaws provide that special meetings of the stockholders may be 39 called at any time only by the Secretary of Morgan Stanley at the direction of and pursuant to a resolution of the Board of Directors. Amendment of Governing Documents. Our certificate of incorporation provides that, generally, it can be amended in accordance with the provisions of the laws of the State of Delaware. Under Section 242 of the Delaware General Corporation Law, the Board of Directors may propose, and the stockholders may adopt by a majority vote of the voting stock, an amendment to our certificate of incorporation. However, our certificate of incorporation also provides that the approval of 80% of the voting power of the voting stock, voting together as a single class, is required in order to amend, repeal or adopt any provision inconsistent with the provisions in the certificate of incorporation relating to amendment of the bylaws, actions of stockholders and the Board of Directors and to change the provisions establishing this 80% vote requirement. Our certificate of incorporation provides that our bylaws may be altered, amended or repealed or new provisions may be adopted by a majority of the Board of Directors or with the approval of at least 80% of the voting power of the voting stock of Morgan Stanley, voting together as a single class. Furthermore, the bylaws provide that they may be altered, amended or repealed or new provisions may be adopted by a majority of the Board of Directors or with the approval of at least 80% of the voting power of the voting stock of Morgan Stanley. Limitation of Directors' Liability. Section 102 of the Delaware General Corporation Law allows a corporation to eliminate the personal liability of directors of a corporation to the corporation or to any of its stockholders for monetary damages for a breach of fiduciary duty as a director, except in the case where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase or redemption in violation of the Delaware General Corporation Law or obtained an improper personal benefit. Under our certificate of incorporation, a director of Morgan Stanley will not be personally liable to Morgan Stanley or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent the exemption from liability or limitation of liability is not permitted under the Delaware General Corporation Law as in effect or as that law may be amended. FORMS OF SECURITIES Each debt security, warrant, purchase contract and unit will be represented either by a certificate issued in definitive form to a particular investor or by one or more global securities representing the entire issuance of securities. Both certificated securities in definitive form and global securities may be issued either (1) in registered form, where our obligation runs to the holder of the security named on the face of the security or (2) subject to the limitations explained below under "--Limitations on Issuance of Bearer Securities," in bearer form, where our obligation runs to the bearer of the security. Definitive securities name you or your nominee as the owner of the security (other than definitive bearer securities, which name the bearer as owner), and, in order to transfer or exchange these securities or to receive payments other than interest or other interim payments, you or your nominee must physically deliver the securities to the trustee, registrar, paying agent or other agent, as applicable. Global securities name a depositary or its nominee as the owner of the debt securities, warrants, purchase contracts or units represented by these global securities (other than global bearer securities, which name the bearer as owner). The depositary maintains a computerized system that will reflect each investor's beneficial ownership of the securities through an account maintained by the investor with its broker/dealer, bank, trust company or other representative, as we explain more fully below under "--Global Securities." Our obligations, as well as the obligations of the trustee under any indenture and the obligations, if any, of any warrant agents and unit agents and any other agents of ours, any agents of the trustee or any agents of any warrant agents or unit agents, run only to the persons or entities named as holders of the securities in the relevant security register, in the case of registered securities, or the persons or entities that are the bearers of those securities, in the case of bearer securities. Neither we nor any trustee, warrant agent, unit agent, other agent of ours, agent of the trustee or agent of the warrant agents or unit agents have obligations to investors who hold beneficial interest in global securities, in street name or by any other indirect means. Upon making a payment or giving a notice to the holder or bearer as required by the terms of that security, we will have no further responsibility for that payment or notice even if that holder or bearer is required, under 40 agreements with depositary participants or customers or by law, to pass it along to the indirect owners of beneficial interests in that security but does not do so. Similarly, if we want to obtain the approval or consent of the holders or bearers of any securities for any purpose, we would seek the approval only from the holders or bearers, and not the indirect owners, of the relevant securities. Whether and how the holders or bearers contact the indirect owners would be governed by the agreements between such holders and bearers and the indirect owners. References to "you" in this prospectus refer to those who invest in the securities being offered by this prospectus, whether they are the direct holders or bearer or only indirect owners of beneficial interests in those securities. Global Securities Registered Global Securities. We may issue the registered debt securities, warrants, purchase contracts and units in the form of one or more fully registered global securities that will be deposited with a depositary or its nominee identified in the applicable prospectus supplement and registered in the name of that depositary or its nominee. In those cases, one or more registered global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal or face amount of the securities to be represented by registered global securities. Unless and until it is exchanged in whole for securities in definitive registered form, a registered global security may not be transferred except as a whole by and among the depositary for the registered global security, the nominees of the depositary or any successors of the depositary or those nominees. If not described below, any specific terms of the depositary arrangement with respect to any securities to be represented by a registered global security will be described in the prospectus supplement relating to those securities. We anticipate that the following provisions will apply to all depositary arrangements. Ownership of beneficial interests in a registered global security will be limited to persons, called participants, that have accounts with the depositary or persons that may hold interests through participants. Upon the issuance of a registered global security, the depositary will credit, on its book-entry registration and transfer system, the participants' accounts with the respective principal or face amounts of the securities beneficially owned by the participants. Any dealers, underwriters or agents participating in the distribution of the securities will designate the accounts to be credited. Ownership of beneficial interests in a registered global security will be shown on, and the transfer of ownership interests will be effected only through, records maintained by the depositary, with respect to interests of participants, and on the records of participants, with respect to interests of persons holding through participants. The laws of some states may require that some purchasers of securities take physical delivery of these securities in definitive form. These laws may impair your ability to own, transfer or pledge beneficial interests in registered global securities. So long as the depositary, or its nominee, is the registered owner of a registered global security, that depositary or its nominee, as the case may be, will be considered the sole owner or holder of the securities represented by the registered global security for all purposes under the applicable indenture, warrant agreement, purchase contract or unit agreement. Except as described below, owners of beneficial interests in a registered global security will not be entitled to have the securities represented by the registered global security registered in their names, will not receive or be entitled to receive physical delivery of the securities in definitive form and will not be considered the owners or holders of the securities under the applicable indenture, warrant agreement, purchase contract or unit agreement. Accordingly, each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary for that registered global security and, if that person is not a participant, on the procedures of the participant through which the person owns its interest, to exercise any rights of a holder under the applicable indenture, warrant agreement, purchase contract or unit agreement. We understand that under existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a registered global security desires to give or take any action that a holder is entitled to give or take under the applicable indenture, warrant agreement, purchase contract or unit agreement, the depositary for the registered global security would authorize the participants holding the relevant beneficial interests to give or take that action, and the participants would authorize beneficial owners owning through them to give or take that action or would otherwise act upon the instructions of beneficial owners holding through them. 41 Payments of principal of, and premium, if any, and interest on, debt securities, and any payments to holders with respect to warrants, purchase contracts or units, represented by a registered global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee, as the case may be, as the registered owner of the registered global security. None of Morgan Stanley, the trustees, the warrant agents, the unit agents or any other agent of Morgan Stanley, agent of the trustees or agent of the warrant agents or unit agents will have any responsibility or liability for any aspect of the records relating to payments made on account of beneficial ownership interests in the registered global security or for maintaining, supervising or reviewing any records relating to those beneficial ownership interests. We expect that the depositary for any of the securities represented by a registered global security, upon receipt of any payment of principal, premium, interest or other distribution of underlying securities or other property to holders on that registered global security, will immediately credit participants' accounts in amounts proportionate to their respective beneficial interests in that registered global security as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests in a registered global security held through participants will be governed by standing customer instructions and customary practices, as is now the case with the securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of those participants. If the depositary for any of these securities represented by a registered global security is at any time unwilling or unable to continue as depositary or ceases to be a clearing agency registered under the Exchange Act, and a successor depositary registered as a clearing agency under the Exchange Act is not appointed by us within 90 days, we will issue securities in definitive form in exchange for the registered global security that had been held by the depositary. In addition, under the terms of the indentures, we may at any time and in our sole discretion decide not to have any of the securities represented by one or more registered global securities. We understand, however, that, under current industry practices, the depositary would notify its participants of our request, but will only withdraw beneficial interests from a global security at the request of each participant. We would issue definitive certificates in exchange for any such interests withdrawn. Any securities issued in definitive form in exchange for a registered global security will be registered in the name or names that the depositary gives to the relevant trustee, warrant agent, unit agent or other relevant agent of ours or theirs. It is expected that the depositary's instructions will be based upon directions received by the depositary from participants with respect to ownership of beneficial interests in the registered global security that had been held by the depositary. Bearer Global Securities. The securities may also be issued in the form of one or more bearer global securities that will be deposited with a common depositary for Euroclear Bank S.A./N.V., as operator of the Euroclear System, and Clearstream Banking, societe anonyme, or with a nominee for the depositary identified in the prospectus supplement relating to those securities. The specific terms and procedures, including the specific terms of the depositary arrangement, with respect to any securities to be represented by a bearer global security will be described in the prospectus supplement relating to those securities. Limitations on Issuance of Bearer Securities In compliance with United States federal income tax laws and regulations, bearer securities, including bearer securities in global form, will not be offered, sold or delivered, directly or indirectly, in the United States or its possessions or to United States persons, as defined below, except as otherwise permitted by United States Treasury Regulations Section 1.163-5(c)(2)(i)(D). Any underwriters, agents or dealers participating in the offerings of bearer securities, directly or indirectly, must agree that: o they will not, in connection with the original issuance of any bearer securities or during the restricted period with respect to such securities (as defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), which we refer to as the "restricted period," offer, sell or deliver, directly or indirectly, any bearer securities in the United States or its possessions or to United States persons, other than as permitted by the applicable Treasury regulations described above; and o they will not, at any time, offer, sell or deliver, directly or indirectly, any bearer securities in the United States or its possessions or to United States persons, other than as permitted by the applicable Treasury regulations described above. 42 In addition, any underwriters, agents or dealers must have procedures reasonably designed to ensure that their employees or agents who are directly engaged in selling bearer securities are aware of the above restrictions on the offering, sale or delivery of bearer securities. Bearer securities, other than temporary global debt securities and bearer securities that satisfy the requirements of United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(3)(iii) and any coupons or talons appertaining thereto, will not be delivered in definitive form, and no interest will be paid thereon, unless Morgan Stanley has received a signed certificate in writing, or an electronic certificate described in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(3)(ii), stating that on the date of that certificate the bearer security: o is owned by a person that is not a United States person; o is owned by a United States person that (a) is a foreign branch of a United States financial institution, as defined in applicable United States Treasury regulations, which we refer to as a "financial institution," purchasing for its own account or for resale, or (b) is acquiring the bearer security through a foreign branch of a United States financial institution and who holds the bearer security through that financial institution through the certification date, and in either case (a) or (b) above, each of those United States financial institutions agrees and certifies, on its own behalf or through its agent, that Morgan Stanley may be advised that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986 and the regulations thereunder; or o is owned by a United States or foreign financial institution for the purposes of resale during the restricted period and, in addition, if the owner of the bearer security is a United States or foreign financial institution described in this clause, whether or not also described in the first or second clause above, the financial institution certifies that it has not acquired the bearer security for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. We will make payments on bearer securities only outside the United States and its possessions (as described in Treasury Regulations Section 1.163-5(c)(2)(v)) except as permitted by the above regulations. Bearer securities, other than temporary global securities, and any coupons issued with bearer securities will bear the following legend: "Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in sections 165(j) and 1287(a) of the Internal Revenue Code." The sections referred to in this legend provide that, with exceptions, a United States person will not be permitted to deduct any loss, and will not be eligible for capital gain treatment with respect to any gain realized on the sale, exchange or redemption of that bearer security or coupon. As used in the preceding three paragraphs, the term bearer securities includes bearer securities that are part of units. As used herein, "United States person" means a citizen or resident of the United States for United States federal income tax purposes, a corporation or partnership, including an entity treated as a corporation or partnership for United States federal income tax purposes, created or organized in or under the laws of the United States, or any state of the United States or the District of Columbia (other than a partnership that is not treated as a United States person under any applicable Treasury regulations), an estate the income of which is subject to United States federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust. In addition, some trusts treated as United States persons before August 20, 1996 that elect to continue to be so treated to the extent provided in the Treasury regulations shall be considered United States persons. Form of Securities Included in Units The form of the warrant or purchase contract included in a unit will correspond to the form of the unit and of any other security included in that unit. 43 PLAN OF DISTRIBUTION We may sell the securities being offered by this prospectus in three ways: (1) through agents, (2) through underwriters and (3) through dealers. The agents, underwriters or dealers in the United States will include Morgan Stanley & Co. Incorporated, which we refer to as MS & Co., and/or Morgan Stanley DW Inc., which we refer to as MSDWI, or other affiliates of ours, and the agents, underwriters, or dealers outside the United States will include Morgan Stanley & Co. International Limited, which we refer to as MSIL, or other affiliates of ours. We may sell our shares at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices. Any at-the-market offering of common stock will be through an underwriter, or underwriters, acting as principal(s) or agent(s) for us. We may designate agents from time to time to solicit offers to purchase these securities. We will name any such agent, who may be deemed to be an underwriter as that term is defined in the Securities Act, and state any commissions we are to pay to that agent in the applicable prospectus supplement. That agent will be acting on a reasonable efforts basis for the period of its appointment or, if indicated in the applicable prospectus supplement, on a firm commitment basis. If we use any underwriters to offer and sell these securities, we will enter into an underwriting agreement with those underwriters when we and they determine the offering price of the securities, and we will include the names of the underwriters and the terms of the transaction in the applicable prospectus supplement. If we use a dealer to offer and sell these securities, we will sell the securities to the dealer, as principal, and will name the dealer in the applicable prospectus supplement. The dealer may then resell the securities to the public at varying prices to be determined by that dealer at the time of resale. Our net proceeds will be the purchase price in the case of sales to a dealer, the public offering price less discount in the case of sales to an underwriter or the purchase price less commission in the case of sales through an agent--in each case, less other expenses attributable to issuance and distribution. In order to facilitate the offering of these securities, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of these securities or any other securities the prices of which may be used to determine payments on these securities. Specifically, the underwriters may sell more securities than they are obligated to purchase in connection with the offering, creating a short position for their own accounts. A short sale is covered if the short position is no greater than the number or amount of securities available for purchase by the underwriters under any overallotment option. The underwriters can close out a covered short sale by exercising the overallotment option or purchasing these securities in the open market. In determining the source of securities to close out a covered short sale, the underwriters will consider, among other things, the open market price of these securities compared to the price available under the overallotment option. The underwriters may also sell these securities or any other securities in excess of the overallotment option, creating a naked short position. The underwriters must close out any naked short position by purchasing securities in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of these securities in the open market after pricing that could adversely affect investors who purchase in the offering. As an additional means of facilitating the offering, the underwriters may bid for, and purchase, these securities or any other securities in the open market to stabilize the price of these securities or of any other securities. Finally, in any offering of the securities through a syndicate of underwriters or dealer group, the agent acting on behalf of the underwriting syndicate or for itself may also reclaim selling concessions allowed to an underwriter or a dealer for distributing these securities in the offering, if the agent repurchases previously distributed securities to cover syndicate short positions or to stabilize the price of these securities. Any of these activities may raise or maintain the market price of these securities above independent market levels or prevent or retard a decline in the market price of these securities. The underwriters are not required to engage in these activities and may end any of these activities at any time. If so indicated in the applicable prospectus supplement, one or more firms, including MS & Co., MSIL and MSDWI, which we refer to as "remarketing firms," acting as principals for their own accounts or as agents for us, may offer and sell these securities as part of a remarketing upon their purchase, in accordance with their terms. We 44 will identify any remarketing firm, the terms of its agreement, if any, with us and its compensation in the applicable prospectus supplement. Remarketing firms, agents, underwriters and dealers may be entitled under agreements with us to indemnification by us against some civil liabilities, including liabilities under the Securities Act, and may be customers of, engage in transactions with, or perform services for us in the ordinary course of business. We may enter into derivative or other hedging transactions with financial institutions. These financial institutions may in turn engage in sales of common stock to hedge their position, deliver this prospectus in connection with some or all of those sales and use the shares covered by this prospectus to close out any loan of common stock or short position created in connection with those sales. We may also sell shares of common stock short using this prospectus and deliver common stock covered by this prospectus to close out any loan of common stock or such short positions, or loan or pledge common stock to financial institutions that in turn may sell the shares of common stock using this prospectus. We may pledge or grant a security interest in some or all of the common stock covered by this prospectus to support a derivative or hedging position or other obligation and, if we default in the performance of our obligations, the pledgees or secured parties may offer and sell the common stock from time to time pursuant to this prospectus. If so indicated in the prospectus supplement, we will authorize agents, underwriters or dealers to solicit offers by some purchasers to purchase debt securities or warrants, purchase contracts or units, as the case may be, from us at the public offering price stated in the prospectus supplement under delayed delivery contracts providing for payment and delivery on a specified date in the future. These contracts will be subject to only those conditions described in the prospectus supplement, and the prospectus supplement will state the commission payable for solicitation of these offers. Any underwriter, agent or dealer utilized in the initial offering of securities will not confirm sales to accounts over which it exercises discretionary authority without the prior specific written approval of its customer. MS & Co., MSIL and MSDWI are wholly-owned subsidiaries of Morgan Stanley. Each initial offering of securities will be conducted in compliance with the requirements of Rule 2720 of the National Association of Securities Dealers, Inc., which is commonly referred to as the NASD, regarding a NASD member firm's distributing the securities of an affiliate. Following the initial distribution of any of these securities, MS & Co., MSIL, MSDWI and other affiliates of Morgan Stanley may offer and sell these securities in the course of their business as broker dealers, subject, in the case of common stock, preferred stock and depositary shares, to obtaining any necessary approval of the New York Stock Exchange, Inc. for any of the offers and sales MS & Co. and MSDWI may make. MS & Co., MSIL, MSDWI and other affiliates may act as principals or agents in these transactions and may make any sales at varying prices related to prevailing market prices at the time of sale or otherwise. MS & Co., MSIL, MSDWI and other affiliates may use this prospectus in connection with these transactions. None of MS & Co., MSIL, MSDWI or any other affiliate is obligated to make a market in any of these securities and may discontinue any market making activities at any time without notice. In the event that MS & Co., MSDWI or any other NASD member participates in a public offering of these securities: (a) post-effective amendments or prospectus supplements disclosing the actual price and selling terms will be submitted to the NASD's Corporate Financing Department (the "Department") at the same time they are filed with the SEC; (b) the Department will be advised if, subsequent to the filing of the offering, any 5% or greater shareholder of ours is or becomes an affiliate or associated person of an NASD member participating in the distribution; and (c) all NASD members participating in the offering will confirm their understanding of the requirements that have to be met in connection with SEC Rule 415 and Notice-to-Members 88-101. Underwriting discounts and commissions on securities sold in the initial distribution will not exceed 8% of the offering proceeds. LEGAL MATTERS The validity of these securities will be passed upon for Morgan Stanley by Sidley Austin Brown & Wood LLP, or other counsel who is satisfactory to MS & Co., MSIL or MSDWI, as the case may be, and who may be an officer of Morgan Stanley. Davis Polk & Wardwell will pass upon some legal matters relating to these securities for the 45 underwriters. Davis Polk & Wardwell has in the past represented Morgan Stanley and continues to represent Morgan Stanley on a regular basis and in a variety of matters, including in connection with its private equity and leveraged capital activities. EXPERTS The consolidated financial statements and financial statement schedules of Morgan Stanley and its subsidiaries at November 30, 2004 and 2003 and for each of the three fiscal years in the period ended November 30, 2004, and management's report on the effectiveness of internal control over financial reporting, which are incorporated in this prospectus by reference to Exhibit No. 99.1 of Morgan Stanley's Current Report on Form 8-K filed October 12, 2005, Schedule I of Morgan Stanley's Annual Report on Form 10-K for the fiscal year ended November 30, 2004, filed on February 11, 2005 ("2004 Form 10-K") and Item 9A of the 2004 Form 10-K, respectively, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference (which reports (1) express an unqualified opinion on the financial statements and financial statement schedule and include an explanatory paragraph referring to the adoption of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based Compensation Transition and Disclosure, an amendment of FASB Statement No. 123, in 2003, (2) express an unqualified opinion on management's assessment regarding the effectiveness of internal control over financial reporting, and (3) express an unqualified opinion on the effectiveness of internal control over financial reporting) and have been so included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing). With respect to the unaudited interim financial information for the periods ended February 28, 2005 and February 29, 2004, May 31, 2005 and May 31, 2004 and August 31, 2005 and August 31, 2004, which is incorporated herein by reference, Deloitte & Touche LLP, an independent registered public accounting firm, have applied limited procedures in accordance with the standards of the Public Company Accounting Oversight Board (United States) for a review of such information. However, as stated in their reports included in Morgan Stanley's Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2005 and in Exhibit Nos. 99.2 and 99.3 of Morgan Stanley's Current Report on Form 8-K filed October 12, 2005, and incorporated by reference herein, they did not audit and they do not express an opinion on the interim financial information. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche LLP are not subject to the liability provisions of Section 11 of the Securities Act for their reports on the unaudited interim financial information because those reports are not reports or a part of the registration statement prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Securities Act. ERISA MATTERS FOR PENSION PLANS AND INSURANCE COMPANIES Each fiduciary of a pension, profit-sharing or other employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), which we refer to as a "plan," should consider the fiduciary standards of ERISA in the context of the plan's particular circumstances before authorizing an investment in these securities. Accordingly, among other factors, the fiduciary should consider whether the investment would satisfy the prudence and diversification requirements of ERISA and would be consistent with the documents and instruments governing the plan. In addition, we and certain of our subsidiaries and affiliates, including MS & Co. and MSDWI, may be each considered "parties in interest" within the meaning of ERISA or "disqualified persons" within the meaning of the Code with respect to many plans, as well as many individual retirement accounts and Keogh plans (also "plans"). ERISA Section 406 and Code Section 4975 generally prohibit transactions between plans and parties in interest or disqualified persons. Prohibited transactions within the meaning of ERISA or the Code would likely arise, for example, if these securities are acquired by or with the assets of a plan with respect to which MS & Co., MSDWI or any of their affiliates is a service provider or other party in interest, unless the securities are acquired pursuant to an exemption from the "prohibited transaction" rules. A violation of these "prohibited transaction" rules could result in 46 an excise tax or other liabilities under ERISA and/or Section 4975 of the Code for those persons, unless exemptive relief is available under an applicable statutory or administrative exemption. The U.S. Department of Labor has issued five prohibited transaction class exemptions ("PTCEs") that may provide exemptive relief for direct or indirect prohibited transactions resulting from the purchase or holding of these securities. Those class exemptions are PTCE 96-23 (for certain transactions determined by in-house asset managers), PTCE 95-60 (for certain transactions involving insurance company general accounts), PTCE 91-38 (for certain transactions involving bank collective investment funds), PTCE 90-1 (for certain transactions involving insurance company separate accounts) and PTCE 84-14 (for certain transactions determined by independent qualified asset managers). Because we may be considered a party in interest with respect to many plans, unless otherwise specified in the applicable prospectus supplement, these securities may not be purchased, held or disposed of by any plan, any entity whose underlying assets include "plan assets" by reason of any plan's investment in the entity (a "Plan Asset Entity") or any person investing "plan assets" of any plan, unless such purchase, holding or disposition is eligible for exemptive relief, including relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or such purchase, holding or disposition is otherwise not prohibited. Unless otherwise specified in the applicable prospectus supplement, any purchaser, including any fiduciary purchasing on behalf of a plan, transferee or holder of these securities will be deemed to have represented, in its corporate and its fiduciary capacity, by its purchase and holding thereof that either (a) it is not a plan or a Plan Asset Entity, is not purchasing such securities on behalf of or with "plan assets" of any plan, or with any assets of a governmental or church plan that is subject to any federal, state or local law that is substantially similar to the provisions of Section 406 of ERISA or Section 4975 of the Code or (b) its purchase, holding and disposition are eligible for exemptive relief or such purchase, holding or disposition are not prohibited by ERISA or Section 4975 of the Code (or in the case of a governmental or church plan, any substantially similar federal, state or local law). Under ERISA, assets of a plan may include assets held in the general account of an insurance company which has issued an insurance policy to such plan or assets of an entity in which the plan has invested. Accordingly, insurance company general accounts that include assets of a plan must ensure that one of the foregoing exemptions is available. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries or other persons considering purchasing these securities on behalf of or with "plan assets" of any plan consult with their counsel regarding the availability of exemptive relief under PTCEs 96-23, 95-60, 91-38, 90-1 or 84-14. Purchasers of these securities have exclusive responsibility for ensuring that their purchase, holding and disposition of the securities do not violate the prohibited transaction rules of ERISA or the Code or similar regulations applicable to governmental or church plans, as described above. 47 The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted. PROSPECTUS (Subject to Completion, Issued October 25, 2005) Morgan Stanley Capital Trust VI Morgan Stanley Capital Trust VII Morgan Stanley Capital Trust VIII Morgan Stanley Capital Trust IX Morgan Stanley Capital Trust X CAPITAL SECURITIES guaranteed by Morgan Stanley -------------- The Morgan Stanley Capital Trusts may offer from time to time capital securities guaranteed by Morgan Stanley. This prospectus describes the general terms of these securities and the general manner in which we will offer the securities. The specific terms of any securities we offer will be included in a supplement to this prospectus. The prospectus supplement will also describe the specific manner in which we will offer the securities. This prospectus may not be used to sell securities unless accompanied by a prospectus supplement. As used in this prospectus, except as otherwise specified, the terms "Morgan Stanley," "we," "us" and "our" refer to Morgan Stanley excluding its consolidated subsidiaries. -------------- The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. -------------- The securities are not insured or protected by the Securities Investor Protection Corporation or any other governmental agency. -------------- MORGAN STANLEY , 2005 WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. In addition, the SEC maintains a website that contains reports, proxy statements and other information that we electronically file. The address of the SEC's website is http://www.sec.gov. This prospectus is part of a registration statement we filed with the SEC. This prospectus omits some information contained in the registration statement in accordance with SEC rules and regulations. You should review the information and exhibits in the registration statement for further information on us and our consolidated subsidiaries and the securities we are offering. Statements in this prospectus concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified by reference to these filings. You should review the complete document to evaluate these statements. Our common stock, par value $0.01 per share, is listed on the New York Stock Exchange, Inc. and the Pacific Exchange, Inc. under the symbol "MWD." You may inspect reports, proxy statements and other information concerning us and our consolidated subsidiaries at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005, and the Pacific Exchange, Inc., 115 Sansome Street, San Francisco, California 94104. The SEC allows us to incorporate by reference much of the information we file with them, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference in this prospectus is considered to be part of this prospectus. Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated and those future filings may modify or supersede some of the information included or incorporated by reference in this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously incorporated by reference have been modified or superseded. This prospectus incorporates by reference the documents listed below and any future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, other than information in the documents or filings that is deemed to have been furnished and not filed, until we complete our offering of the securities to be issued under the registration statement or, if later, the date on which any of our affiliates cease offering and selling these securities: o Annual Report on Form 10-K for the fiscal year ended November 30, 2004, as updated by Exhibit 99.1 of our Current Report on Form 8-K filed on October 12, 2005; o Quarterly Reports on Form 10-Q for the quarterly periods ended February 28, 2005 and May 31, 2005, each as updated by Exhibit Nos. 99.2 and 99.3, respectively, of our Current Report on Form 8-K filed on October 12, 2005; o Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2005; and o Current Reports on Form 8-K dated December 13, 2004, December 21, 2004, January 5, 2005, January 14, 2005 (both reports), January 21, 2005, March 3, 2005, March 17, 2005, March 23, 2005, March 28, 2005 (both reports), April 1, 2005, April 2, 2005, April 4, 2005, April 6, 2005, April 13, 2005, April 30, 2005, May 4, 2005, May 13, 2005, May 16, 2005, May 18, 2005, June 13, 2005 (as amended by a Form 8-K/A filed on June 14, 2005), June 22, 2005, June 23, 2005, June 30, 2005 (three reports), July 11, 2005, August 17, 2005 (both reports), August 31, 2005, September 2, 2005, September 6, 2005, September 9, 2005, September 19, 2005, September 21, 2005 and October 12, 2005 (the Current Report dated October 12, 2005 updates the historical financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report 2 on Form 10-K for the fiscal year ended November 30, 2004 and Quarterly Reports on Form 10-Q for the periods ended February 28, 2005 and May 31, 2005 for certain discontinued operations and the transfer of the principal components of the residential mortgage loan business form the Discover business segment to the Institutional Securities business segment). You can request a copy of these documents, excluding exhibits not specifically incorporated by reference into these documents, at no cost, by writing or telephoning us at the following address: Morgan Stanley 1585 Broadway New York, New York 10036 Attention: Investor Relations (212) 761-4000 3 There are no separate financial statements of the Morgan Stanley Capital Trusts in this prospectus. We do not believe these financial statements would be material to holders of the capital securities because: o the Morgan Stanley Capital Trusts are special purpose entities that will not have any independent operations other than issuing capital securities and common securities, which are together referred to as "trust securities," holding junior subordinated debentures of Morgan Stanley as trust assets and other necessary or incidental activities as described in this prospectus; and o Morgan Stanley guarantees the payments on the capital securities of the Morgan Stanley Capital Trusts. We do not expect any of the Morgan Stanley Capital Trusts will be subject to the reporting requirements of the Securities Exchange Act of 1934. 4 MORGAN STANLEY Morgan Stanley is a global financial firm that, through its subsidiaries and affiliates, provides its products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Morgan Stanley was originally incorporated under the laws of the State of Delaware in 1981, and its predecessor companies date back to 1924. Morgan Stanley conducts its business from its headquarters in and around New York City, its regional offices and branches throughout the United States and its principal offices in London, Tokyo, Hong Kong and other world financial centers. Morgan Stanley maintains leading market positions in each of its business segments -- Institutional Securities, Retail Brokerage, Asset Management and Discover. Morgan Stanley's Institutional Securities business includes: o Investment banking, including securities underwriting and distribution and financial advisory services, including advice on mergers and acquisitions, restructurings, real estate and project finance. o Sales, trading, financing and market-making activities in equity securities and related products and fixed income securities and related products, including foreign exchange and commodities. o Other activities, such as principal investing and real estate investment management; providing benchmark indices and risk management analytics; and research. Morgan Stanley's Retail Brokerage business includes: o Comprehensive brokerage, investment and financial services designed to accommodate individual investment goals and risk profiles. Morgan Stanley's Asset Management business includes: o Global asset management products and services for individual and institutional investors, through three principal distribution channels: a proprietary channel consisting of Morgan Stanley's representatives; a non-proprietary channel consisting of third-party broker-dealers, banks, financial planners and other intermediaries; and Morgan Stanley's institutional channel. Morgan Stanley's Discover business includes: o Discover Financial Services, which offers Discover(R)-branded cards and other consumer finance products and services. o Discover Network, a network of merchant and cash access locations primarily in the United States and PULSE EFT Association, Inc., a U.S.-based automated teller machine/debit network. o Consumer Banking Group International, which includes Morgan Stanley-branded cards and personal loan products in the United Kingdom. Morgan Stanley's principal executive offices are at 1585 Broadway, New York, New York 10036, and its telephone number is (212) 761-4000. Under this heading, "Use of Proceeds" and "Consolidated 5 Ratios of Earnings to Fixed Charges and Earnings to Fixed Charges and Preferred Stock Dividends," the terms "Morgan Stanley," "we," "us" and "our" include Morgan Stanley and its consolidated subsidiaries. THE MORGAN STANLEY CAPITAL TRUSTS We created the Morgan Stanley Capital Trusts, each of which is a Delaware statutory trust, pursuant to trust agreements and the filing of certificates of trust with the Delaware Secretary of State. We will execute amended and restated trust agreements for the Morgan Stanley Capital Trusts, referred to in this prospectus as the "trust agreements," which will state the terms and conditions for the Morgan Stanley Capital Trusts to issue and sell their trust securities. We have filed a form of trust agreement as an exhibit to the registration statement of which this prospectus forms a part. We, as holder of the common securities, intend to select two of our employees, officers or affiliates to serve as administrators of the Morgan Stanley Capital Trusts. Each Morgan Stanley Capital Trust exists solely to o issue and sell its trust securities; o use the proceeds from the sale of its trust securities to purchase Morgan Stanley's junior subordinated debentures; and o engage in other activities that are necessary, convenient or incidental to the above purposes (such as registering the transfer of trust securities). Accordingly, our junior subordinated debentures will be the sole assets of each Morgan Stanley Capital Trust, and payments under the junior subordinated debentures owned by each Morgan Stanley Capital Trust will be its sole source of revenues. We will hold directly or indirectly all of the common securities of each of the Morgan Stanley Capital Trusts. Unless otherwise specified in the applicable prospectus supplement, the common securities will represent an aggregate liquidation amount equal to at least 3% of each Morgan Stanley Capital Trust's total capitalization. The capital securities will represent the remaining percentage of each Morgan Stanley Capital Trust's total capitalization. The common securities will have terms substantially identical to, and will rank equal in priority of payment with, the capital securities. However, if Morgan Stanley defaults in payments due under the junior subordinated debentures owned by a Morgan Stanley Capital Trust, then distributions, redemption payments and liquidation payments must be paid to the holders of the capital securities of that trust before any payments are paid to the holders of the common securities of that trust. Unless otherwise specified in the applicable prospectus supplement, each Morgan Stanley Capital Trust will have a term of approximately 50 years from the initial issue date of its capital securities, but may dissolve earlier as provided in the applicable trust agreement and described in the applicable prospectus supplement. Unless otherwise specified in the applicable prospectus supplement, the name and address of the Delaware trustee for each Morgan Stanley Capital Trust will be The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711, and the name and address of the property trustee, the guarantee trustee and the indenture trustee for each Morgan Stanley Capital Trust will be The Bank of New York, 101 Barclay Street, Floor 8 West, New York, New York 10286. The capital securities will be guaranteed by us as described in this prospectus and the applicable prospectus supplement. Only we, as direct or indirect owner of the common securities, can remove or replace the administrators. In addition, we can increase or decrease the number of administrators. Also, we, as direct or indirect holder of the common securities, will generally have the sole right to remove or replace the property trustee and Delaware trustee. However, if a default with respect to the junior subordinated 6 debentures occurs, then, so long as that default is continuing, the holders of a majority in liquidation amount of the outstanding capital securities of that trust may remove and replace the property trustee and Delaware trustee for that trust at any time. We will pay all fees and expenses related to the organization of the Morgan Stanley Capital Trusts and the offering of the capital securities. We will also pay all ongoing costs and expenses of the Morgan Stanley Capital Trusts, except each trust's obligations under the trust securities. USE OF PROCEEDS The Morgan Stanley Capital Trusts will use all proceeds from the sale of trust securities to purchase junior subordinated debentures from us. Unless otherwise set forth in the applicable prospectus supplement, we intend to use the net proceeds from the sale of our junior subordinated debentures for general corporate purposes, which may include, among other things: o additions to working capital; o the redemption of outstanding preferred stock; o the repurchase of outstanding common stock; and o the repayment of indebtedness. We anticipate that we will raise additional funds from time to time through equity or debt financing, including borrowings under revolving credit agreements, to finance our businesses worldwide. CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS The following table sets forth Morgan Stanley's consolidated ratios of earnings to fixed charges and earnings to fixed charges and preferred stock dividends for the periods indicated. Nine Months Ended Fiscal Year ----------------------------------------------------------------------- August August 31, 2005 31, 2004 2004 2003 2002 2001 2000 --------- -------- ------ ------ ------ ------ ------ Ratio of earnings to fixed charges.......... 1.3 1.5 1.5 1.5 1.4 1.3 1.5 Ratio of earnings to fixed charges and preferred stock dividends.............. 1.3 1.5 1.5 1.5 1.4 1.3 1.5
For purposes of calculating the ratio of earnings to fixed charges and the ratio of earnings to fixed charges and preferred stock dividends, earnings are the sum of: o income before losses from unconsolidated investees, income taxes, (loss)/gain on discontinued operations, cumulative effect of accounting change and fixed charges; less: o dividends on preferred securities subject to mandatory redemption. For purposes of calculating both ratios, fixed charges are the sum of: 7 o interest cost, including interest on deposits; o dividends on preferred securities subject to mandatory redemption; and o that portion of rent expense estimated to be representative of the interest factor. The preferred stock dividend amounts represent pre-tax earnings required to cover dividends on preferred stock. DESCRIPTION OF CAPITAL SECURITIES Each Morgan Stanley Capital Trust will issue only one series of capital securities and one series of common securities. The trust agreement for each Morgan Stanley Capital Trust will be qualified as an indenture under the Trust Indenture Act of 1939. The capital securities will have terms and will be subject to conditions as set forth in the trust agreement or made a part of the trust agreement by the Trust Indenture Act. This summary of certain provisions of the capital securities and each trust agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions of each trust agreement, including the definitions of certain terms, and those provisions made part of each trust agreement by the Trust Indenture Act. A form of the trust agreement to be used in connection with the issuance of the capital securities and a form of the capital securities are filed as exhibits to the registration statement that includes this prospectus. Wherever particular defined terms of a trust agreement are referred to in this prospectus, those defined terms are incorporated in this prospectus by reference. A copy of the form of the trust agreement is available upon request from the property trustee of the relevant trust. General The capital securities will represent preferred undivided beneficial interests in the assets of the applicable Morgan Stanley Capital Trust. The only assets of a Morgan Stanley Capital Trust, and its only source of revenues, will be the junior subordinated debentures purchased by the Morgan Stanley Capital Trust with the proceeds from the sale of its trust securities. Accordingly, distribution and other payment dates for the trust securities will correspond with the interest and other payment dates for the junior subordinated debentures. If we do not make payments on the junior subordinated debentures in accordance with their terms, the Morgan Stanley Capital Trust will not have funds available to pay distributions or other amounts payable on the trust securities issued by that Morgan Stanley Capital Trust in accordance with their terms. The capital securities issued by a Morgan Stanley Capital Trust will rank equally, and payments will be made proportionately, with the common securities issued by that Morgan Stanley Capital Trust except as described below under "--Subordination of Common Securities" and in the applicable prospectus supplement. Payments on the capital securities will be fully and unconditionally guaranteed by us to the extent described under "Description of Guarantees" and in the applicable prospectus supplement. The Morgan Stanley Capital Trusts may offer up to $32,460,472,613 aggregate offering price of capital securities, subject to reduction on account of the sale of other securities under the registration statement of which this prospectus is a part. Each Morgan Stanley Capital Trust will describe the specific terms of the capital securities it is offering in the applicable prospectus supplement, including: o the specific designation, liquidation amount, number to be issued by the Morgan Stanley Capital Trust and purchase price; o the currency or units based on or relating to currencies in which distributions and other payments will or may be payable; 8 o the distribution rates (or the method by which the rates will be determined), if any; o the dates on which any distributions will be payable; o any provisions relating to deferral of distribution payments; o the places where distributions and other amounts payable on the capital securities will be payable; o any repayment, redemption, prepayment or sinking fund provisions; o any conversion or exchange provisions; o the voting rights, if any, of holders of the capital securities; o the terms and conditions, if any, upon which the assets of the Morgan Stanley Capital Trust may be distributed to holders of the capital securities; o any applicable United States federal income tax consequences; and o any other specific terms of the capital securities. If indicated in the applicable prospectus supplement, the terms of the trust agreement for, and capital securities offered by, a Morgan Stanley Capital Trust may differ from the terms summarized in this prospectus. Distributions Distributions on the capital securities will be cumulative. Distributions will accumulate from and including the date of original issuance and will be payable on the dates specified in the applicable prospectus supplement. The amount of distributions payable for any period less than a full distribution period will be computed on the basis of a 360-day year of twelve 30-day months and the actual days elapsed in a partial month in that period, unless otherwise specified in the applicable prospectus supplement. Distributions payable for each full distribution period will be computed by dividing the annual rate by four, unless otherwise specified in the applicable prospectus supplement. Subordination of Common Securities Payment of distributions on, and other amounts payable under, the capital securities and the common securities issued by a Morgan Stanley Capital Trust will be made proportionately based on the liquidation amount of the capital securities and the common securities. However, unless otherwise provided in the applicable prospectus supplement, if on any distribution date or other payment date, a default with respect to the junior subordinated debentures, which we refer to as a "debenture default," owned by the Morgan Stanley Capital Trust has occurred and is continuing as a result of any failure by us to pay any amounts in respect of the junior subordinated debentures when due, no payment of any distribution on, or other amounts payable under, the common securities will be made unless cash payment in full of all accumulated amounts then due and payable with respect to all of the Morgan Stanley Capital Trust's outstanding capital securities has been made or provided for, and all funds immediately available to the property trustee will first be applied to the cash payment in full of all distributions on, and all other amounts with respect to, capital securities then due and payable. In the case of any event of default under the applicable trust agreement occurring as a result of a debenture default, the holders of the applicable Morgan Stanley Capital Trust's common securities will 9 have no right to act with respect to the event of default under the applicable trust agreement until the effects with respect to the capital securities of all events of default resulting from a debenture default have been cured, waived or otherwise eliminated. Until all of the events of default resulting from a debenture default have been cured, waived or otherwise eliminated, the property trustee will act solely on behalf of the holders of the capital securities and not on behalf of the holders of the common securities, and only the holders of the capital securities will have the right to direct the property trustee to act on their behalf. Liquidation Distribution upon Dissolution The amount payable on capital securities in the event of any liquidation of a Morgan Stanley Capital Trust will be the stated liquidation amount per capital security or other amount as specified in the applicable prospectus supplement plus accumulated and unpaid distributions, which, if specified in the applicable prospectus supplement, may be in the form of a distribution of the junior subordinated debentures owned by the Morgan Stanley Capital Trust. The holders of all the outstanding common securities of a Morgan Stanley Capital Trust will have the right at any time to dissolve the Morgan Stanley Capital Trust and, after satisfaction of liabilities to creditors of the Morgan Stanley Capital Trust as provided by applicable law, cause the junior subordinated debentures owned by the Morgan Stanley Capital Trust to be distributed to the holders of the capital securities and common securities in liquidation of the Morgan Stanley Capital Trust as described in the applicable prospectus supplement. Other terms for the dissolution of a Morgan Stanley Capital Trust and the distribution or liquidation of its assets to holders of trust securities will be set forth in the applicable prospectus supplement. Capital Securities Events of Default; Notice Any one of the following events constitutes an event of default under a trust agreement, which we refer to as a "capital securities event of default," regardless of the reason for the capital securities event of default and whether it is voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body: o the occurrence of a default with respect to the junior subordinated debentures in which the proceeds from the sale of the trust securities have been invested; o default by the applicable Morgan Stanley Capital Trust or the property trustee in the payment of any distribution on the capital securities when it becomes due and payable, and continuation of the default for a period of 30 days; o default by the applicable Morgan Stanley Capital Trust or the property trustee in the payment of any redemption price of any trust security issued pursuant to its trust agreement when it becomes due and payable; o default in the performance, or breach, in any material respect, of any covenant or warranty of the applicable property trustee and Delaware trustee (other than a covenant or warranty described above dealing with default in the payment of any distribution or redemption price) and continuation of such default or breach for a period of 60 days after written notice has been given, by registered or certified mail, to the applicable property trustee and Delaware trustee and us by the holders of at least 25% in aggregate liquidation amount of the capital securities outstanding, which notice must specify the default or breach, demand it be remedied and state that it is a "Notice of Default" under the applicable trust agreement; or 10 o the occurrence of certain events of bankruptcy or insolvency with respect to the property trustee or all or substantially all of its property if a successor property trustee has not been appointed within 90 days of the event. Within ten business days after the occurrence of any capital securities event of default actually known to the property trustee, the property trustee will transmit notice of the event of default to the holders of the applicable trust securities and the administrators, unless the capital securities event of default has been cured or waived. In addition, the property trustee will notify each holder of the capital securities of any notice of default received by it with respect to the junior subordinated debentures. We, as depositor, and the administrators are required to file annually with the property trustee a certificate as to whether or not the applicable Morgan Stanley Capital Trust is in compliance with all the conditions and covenants under its trust agreement. If a debenture default has occurred and is continuing as a result of any failure by us to pay any amounts in respect of the junior subordinated debentures owned by a Morgan Stanley Capital Trust when due, the capital securities issued by that Morgan Stanley Capital Trust will have a preference over the common securities issued by the Morgan Stanley Capital Trust with respect to payments of any amounts in respect of the capital securities as described above under "--Subordination of Common Securities." Removal of Morgan Stanley Capital Trustees; Appointment of Successors The holders of at least a majority in aggregate liquidation amount of the outstanding capital securities may remove the property trustee or the Delaware trustee for cause or, if a debenture default has occurred and is continuing, with or without cause. If a property trustee or Delaware trustee is removed by the holders of the outstanding capital securities, the successor may be appointed by the holders of at least 25% in liquidation amount of the outstanding capital securities. If a property trustee or Delaware trustee resigns, the resigning property trustee or Delaware trustee will appoint its successor. If a resigning property trustee or Delaware trustee fails to appoint a successor, the holders of at least 25% in liquidation amount of the outstanding capital securities may appoint a successor. If a successor has not been appointed by the holders, any holder of capital securities or common securities or the property trustee or the Delaware trustee may petition a court of competent jurisdiction to appoint a successor. Any Delaware trustee must meet the applicable requirements of Delaware law. Any property trustee must be a national- or state-chartered bank and at the time of appointment have capital and surplus of at least $50,000,000. No resignation or removal of a property trustee or Delaware trustee and no appointment of a successor trustee shall be effective until the acceptance of appointment by the successor trustee in accordance with the provisions of the applicable trust agreement. Merger or Consolidation of Morgan Stanley Capital Trustees Any entity into which a property trustee or Delaware trustee is merged or converted or with which it is consolidated, or any entity resulting from any merger, conversion or consolidation to which the property trustee or the Delaware trustee is a party, or any entity succeeding to all or substantially all the corporate trust business of the property trustee or the Delaware trustee, will be the successor of that property trustee or Delaware trustee under each trust agreement, provided it is otherwise qualified and eligible. Mergers, Consolidations, Amalgamations or Replacements of the Morgan Stanley Capital Trusts A Morgan Stanley Capital Trust may not merge with or into, consolidate or amalgamate with, be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, any entity, except as described below or as otherwise set forth in the applicable trust agreement. A Morgan Stanley Capital Trust may, at the request of the holders of its common securities and with the consent of the holders of at least a majority in aggregate liquidation amount of its outstanding capital securities, merge with or 11 into, consolidate or amalgamate with, be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, a trust organized as such under the laws of any state of the United States, so long as o the successor entity either: o expressly assumes all the obligations of the Morgan Stanley Capital Trust with respect to the capital securities of that Morgan Stanley Capital Trust, or o substitutes for the capital securities of that Morgan Stanley Capital Trust other securities having substantially the same terms as those capital securities so long as the successor securities have the same priority as the capital securities with respect to distributions and payments upon liquidation, redemption and otherwise; o the successor entity has a trustee possessing the same powers and duties as the property trustee appointed to hold the junior subordinated debentures; o the merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the capital securities of that Morgan Stanley Capital Trust (including any successor securities) to be downgraded by any nationally recognized statistical rating organization; o the merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the capital securities (including any successor securities) in any material respect; o the successor entity has a purpose substantially identical to that of the Morgan Stanley Capital Trust; o prior to the merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the property trustee and Delaware trustee have received an opinion from independent counsel experienced in these matters to the effect that: o the merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the capital securities (including any successor securities) of that Morgan Stanley Capital Trust in any material respect, and o following the merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Morgan Stanley Capital Trust nor the successor entity will be required to register as an "investment company" under the Investment Company Act of 1940; and o Morgan Stanley or any permitted transferee to whom Morgan Stanley has transferred the common securities owns, directly or indirectly, all of the common securities of the successor entity and guarantees the obligations of the successor entity with respect to the successor securities at least to the extent provided by the related guarantee with respect to the capital securities. Notwithstanding the foregoing, a Morgan Stanley Capital Trust may not, except with the consent of holders of 100% in aggregate liquidation amount of the capital securities of that Morgan Stanley Capital Trust, merge with or into, consolidate or amalgamate with, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, any other entity or permit any other entity to merge 12 with or into, consolidate or amalgamate with, or replace it if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Morgan Stanley Capital Trust or the successor entity to be taxable as a corporation for United States federal income tax purposes. Voting Rights; Amendment of Trust Agreements Except as provided below and under "--Removal of Morgan Stanley Capital Trustees; Appointment of Successors" and "Description of Guarantees--Amendments and Assignment" and as otherwise required by law and the applicable trust agreement, the holders of the capital securities will have no voting rights. Each trust agreement may be amended from time to time by the holders of at least a majority in aggregate liquidation amount of the common securities and the property trustee, without the consent of the holders of the capital securities, to: o cure any ambiguity, correct or supplement any provisions in the trust agreement that may be inconsistent with any other provision, or to make any other provisions with respect to matters or questions arising under the trust agreement, provided that the amendment will not adversely affect in any material respect the interests of any holder of trust securities; or o modify, eliminate or add to any provisions of the trust agreement to the extent necessary to ensure that the Morgan Stanley Capital Trust will not be taxable as a corporation for United States federal income tax purposes at any time that any trust securities are outstanding or to ensure that the Morgan Stanley Capital Trust will not be required to register as an "investment company" under the Investment Company Act of 1940. Any amendment of the trust agreement without the consent of the holders of the capital securities will become effective when notice of the amendment is given to the holders of trust securities. Each trust agreement may be amended by the holders of at least a majority in aggregate liquidation amount of the common securities and the property trustee with: o the consent of holders representing at least a majority in aggregate liquidation amount of the outstanding capital securities; and o receipt by the Delaware trustee and the property trustee of an opinion of counsel to the effect that the amendment or the exercise of any power granted to the Delaware trustee and the property trustee in accordance with the amendment will not cause the Morgan Stanley Capital Trust to be taxable as a corporation for United States federal income tax purposes or affect the Morgan Stanley Capital Trust's exemption from status as an "investment company" under the Investment Company Act of 1940; except that, without the consent of each holder of trust securities affected, a trust agreement may not be amended to: o change the amount or timing of any distribution on the trust securities or otherwise adversely affect the amount of any distribution required to be made in respect of the trust securities as of a specified date, or o restrict the right of a holder of trust securities to institute suit for the enforcement of payment of any distribution on the trust securities on or after such date. 13 So long as any junior subordinated debentures are held by a Morgan Stanley Capital Trust, the property trustee will not: o direct the time, method and place of conducting any proceeding for any remedy available to the indenture trustee, or execute any trust or power conferred on the property trustee with respect to the junior subordinated debentures, o waive any past default that may be waived under the indenture, o exercise any right to rescind or annul a declaration of acceleration of the maturity of the principal amount of the junior subordinated debentures, or o consent to any amendment, modification or termination of the indenture or junior subordinated debentures, where the consent is required, without, in each case, obtaining the prior approval of the holders of at least a majority in aggregate liquidation amount of the outstanding capital securities, except that, if a consent under the indenture would require the consent of each holder of the junior subordinated debentures affected, no consent will be given by the property trustee without the prior consent of each holder of the capital securities. In addition to obtaining the foregoing approvals of the holders of the capital securities, before taking any of the foregoing actions, the property trustee will obtain an opinion of counsel experienced in these matters to the effect that the Morgan Stanley Capital Trust will not be taxable as a corporation for United States federal income tax purposes on account of the action. The property trustee may not revoke any action previously authorized or approved by a vote of the holders of the capital securities issued by the Morgan Stanley Capital Trust except by subsequent vote of the holders of the capital securities. Any required approval of holders of capital securities may be given at a meeting of holders of capital securities convened for that purpose or pursuant to written consent. The property trustee will cause a notice of any meeting at which holders of capital securities are entitled to vote, or of any matter upon which action by written consent of the holders is to be taken, to be given to each registered holder of capital securities in the manner set forth in each trust agreement. No vote or consent of the holders of capital securities will be required to redeem and cancel the capital securities in accordance with the applicable trust agreement. Any capital securities that are owned by us, the Delaware trustee, the property trustee, the administrators or any of our affiliates or affiliates of any Delaware trustee or property trustee, will, for purposes of a vote or consent under any of the circumstances described above, be treated as if they were not outstanding. Expenses and Taxes In the junior subordinated debentures owned by a Morgan Stanley Capital Trust, we, as borrower, will agree to pay all debts and other obligations (other than with respect to the capital securities issued by the Morgan Stanley Capital Trust) and all costs and expenses of the Morgan Stanley Capital Trust (including costs and expenses relating to the organization of the Morgan Stanley Capital Trust, the fees and expenses of the Delaware trustee and property trustee on behalf of the Morgan Stanley Capital Trust and the costs and expenses relating to the operation of the Morgan Stanley Capital Trust) and to pay any and all taxes and all costs and expenses with respect to those taxes (other than United States withholding taxes) to which the Morgan Stanley Capital Trust might become subject. The foregoing obligations under the junior subordinated debentures owned by a Morgan Stanley Capital Trust are for the benefit of, and shall be enforceable by, any person to whom any of those debts, obligations, costs, expenses and taxes payable by 14 the Morgan Stanley Capital Trust are owed, whether or not that person has received notice of the debts, obligations, costs, expenses or taxes. Any such person may enforce these obligations directly against us, and we will irrevocably waive any right or remedy to require that person to take any action against a Morgan Stanley Capital Trust or any other person before proceeding against us. We will also agree in the junior subordinated debentures owned by a Morgan Stanley Capital Trust to execute additional agreements necessary or desirable to give full effect to the foregoing. Payment and Paying Agency The applicable prospectus supplement will specify the manner in which payments in respect of the capital securities will be made. The paying agent for capital securities will initially be the property trustee and any co-paying agent chosen by the property trustee and acceptable to the administrators. The paying agent will be permitted to resign as paying agent upon 30 days' written notice to the property trustee and the administrators. If the property trustee is no longer the paying agent, the property trustee will appoint a successor (which must be a bank or trust company) reasonably acceptable to the administrators to act as paying agent. Registrar and Transfer Agent Unless otherwise specified in the applicable prospectus supplement, the property trustee will act as registrar and transfer agent for the capital securities. Registration of transfers and exchanges of capital securities will be effected without charge by or on behalf of each Morgan Stanley Capital Trust, but the property trustee may require payment to cover any tax or other governmental charges that may be imposed in connection with any transfer or exchange. The Morgan Stanley Capital Trusts will not be required to register or cause to be registered the transfer of, or exchange or to cause to be exchanged, any capital securities that have been called for redemption. Information Concerning the Property Trustee The property trustee, other than during the occurrence and continuance of a capital securities event of default, undertakes to perform only those duties specifically set forth in each trust agreement or provided by the Trust Indenture Act and, after a capital securities event of default has occurred that has not been cured or waived, must exercise the rights and powers vested in it by the applicable trust agreement for the benefit of the holders of trust securities using the same degree of care and skill as a prudent person would exercise in the conduct of his or her own affairs. Subject to this provision, the property trustee is under no obligation to exercise any of the rights or powers vested in it by the applicable trust agreement, other than those vested in it upon the occurrence of a capital securities event of default, at the request of any holder of trust securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that might be incurred in complying with the request or direction. For information concerning the relationships between The Bank of New York, which will initially be the property trustee, and us, see "Description of Junior Subordinated Debentures--Information Concerning the Indenture Trustee." Miscellaneous The administrators and the property trustee of each Morgan Stanley Capital Trust are authorized and directed to conduct the affairs of, and to operate, the applicable Morgan Stanley Capital Trust in such a way that the Morgan Stanley Capital Trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act or taxed as a corporation for United States federal income tax purposes and so that the junior subordinated debentures owned by the Morgan Stanley Capital Trust will be treated as indebtedness of Morgan Stanley for United States federal income tax purposes. In this 15 regard, the property trustee and the holders of common securities are authorized to take any action, not inconsistent with applicable law or the certificate of trust or the trust agreement of the applicable Morgan Stanley Capital Trust, that the property trustee and the holders of common securities determine in their discretion to be necessary or desirable for those purposes, as long as the action does not materially adversely affect the interests of the holders of the capital securities of the applicable Morgan Stanley Capital Trust. Holders of the trust securities have no preemptive or similar rights. The Morgan Stanley Capital Trusts may not borrow money, issue debt or mortgage or pledge any of their assets. Governing Law Each trust agreement will be governed by, and construed in accordance with, the laws of the State of Delaware. DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES The junior subordinated debentures will constitute junior subordinated debt of Morgan Stanley and will be issued under a junior subordinated indenture, dated October 1, 2004, entered into between us and The Bank of New York, as indenture trustee. The indenture contains, and the junior subordinated debentures, when issued, will contain, additional important terms and provisions. The indenture and the form of the junior subordinated debentures are filed as exhibits to the registration statement that includes this prospectus. The following summaries of certain provisions of the indenture and the junior subordinated debentures do not purport to be complete and are subject to the detailed provisions of the indenture and junior subordinated debentures. Where appropriate, we use parentheses to refer you to the particular sections of the indenture. Any reference to particular sections or defined terms of the indenture in any statement under this heading qualifies the entire statement and incorporates by reference the applicable section or definition into that statement. This summary of the indenture and the junior subordinated debentures relates to terms and conditions applicable to the junior subordinated debentures generally. The particular terms of any series of junior subordinated debentures will be summarized in the applicable prospectus supplement. If indicated in the prospectus supplement, the terms of any series may differ from the terms summarized below. General Each series of junior subordinated debentures issued under the indenture will rank equally with all other series of junior subordinated debentures issued under the indenture and will be unsecured and subordinate and junior in right of payment to the extent and in the manner set forth in the indenture to all senior indebtedness of Morgan Stanley. See "--Subordination." Most of our assets are owned by our subsidiaries. Therefore, our rights and the rights of our creditors, including holders of junior subordinated debentures, to participate in the assets of any subsidiary upon the subsidiary's liquidation or recapitalization will be subject to the prior claims of the subsidiary's creditors, except to the extent that we ourselves may be a creditor with recognized claims against the subsidiary. In addition, dividends, loans and advances to us from certain subsidiaries are restricted by legal requirements, including (in the case of Morgan Stanley & Co. Incorporated and Morgan Stanley DW Inc.) net capital requirements under the Securities Exchange Act of 1934 and under rules of certain exchanges and other regulatory bodies, and (in the case of Discover Bank, a Delaware-chartered bank and our wholly-owned indirect subsidiary, and other bank subsidiaries) by banking regulations. Except as otherwise provided in the applicable prospectus supplement, the indenture does not limit the incurrence or issuance of other secured or unsecured debt of Morgan Stanley, including senior indebtedness, whether under the indenture, any other existing indenture or any other 16 indenture that Morgan Stanley may enter into in the future, or otherwise afford holders of junior subordinated debentures protection in the event of a highly leveraged or similar transaction that may adversely affect the holders of the junior subordinated debentures. See "--Subordination" and the applicable prospectus supplement relating to any offering of capital securities or junior subordinated debentures. We may issue junior subordinated debentures from time to time in one or more series pursuant to a supplemental indenture or a resolution of our board of directors or a committee of our board of directors. The applicable prospectus supplement will contain, where applicable, the following terms of and other information relating to any offered junior subordinated debentures: o the title of the junior subordinated debentures; o any limit upon the aggregate principal amount of the junior subordinated debentures; o the date or dates on which the principal of the junior subordinated debentures is payable or the method of determination thereof, including the right, if any, of Morgan Stanley to shorten or extend the stated maturity date in certain circumstances; o the rate or rates, if any, at which the junior subordinated debentures will bear interest, the dates on which that interest will be payable, the right, if any, of Morgan Stanley to defer or extend an interest payment date and the record dates for any interest payable on any interest payment date or the method by which any of the foregoing will be determined; o the place or places where the principal of and premium, if any, and interest on the junior subordinated debentures will be payable and where, subject to the terms of the indenture as described below under "--Registration and Transfer of Junior Subordinated Debentures," the junior subordinated debentures may be presented for registration of transfer or exchange and the place or places where notices and demands to or upon Morgan Stanley in respect of the junior subordinated debentures and the indenture may be made; o any period or periods within which, or date or dates on which, the price or prices at which and the terms and conditions upon which junior subordinated debentures may be redeemed, in whole or in part, at the option of Morgan Stanley or a holder of junior subordinated debentures; o the obligation, if any, of Morgan Stanley to redeem, purchase or repay the junior subordinated debentures and the period or periods within which, the price or prices at which, and the other terms and conditions upon which the junior subordinated debentures will be redeemed, repaid or purchased, in whole or in part, pursuant to that obligation; o the denominations in which any junior subordinated debentures will be issuable if other than denominations of $25 and any integral multiple of $25; o if other than in U.S. dollars, the currency or currencies (including currency unit or units) in which the principal of (and premium, if any) and interest, if any, on the junior subordinated debentures will be payable, or in which the junior subordinated debentures will be denominated; o if other than the principal amount, the portion of the principal amount of junior subordinated debentures that will be payable upon declaration of acceleration of maturity; 17 o any index or indices used to determine the amount of payments of principal of and premium, if any, and interest on the junior subordinated debentures and the manner in which those amounts will be determined; o whether the junior subordinated debentures will be issuable in registered form or bearer form or both and, if bearer securities are issuable, any restrictions applicable to the exchange of one form for another and to the offer, sale and delivery of the bearer securities; o any additions or changes to the indenture with respect to a series of junior subordinated debentures as will be necessary to permit or facilitate the issuance of that series in bearer form, registrable or not registrable as to principal, and with or without interest coupons; o the appointment of any trustees, depositaries, authenticating or paying agents, transfer agents or registrars or other agents; o whether the junior subordinated debentures will be convertible or exchangeable for other securities or property and, if so, the terms of any conversion or exchange and the terms of the other securities; and o any other terms of the junior subordinated debentures, including any additions, modifications or deletions in the events of default or defaults under the indenture or covenants of Morgan Stanley specified in the indenture with respect to the junior subordinated debentures, and any terms required by or advisable under applicable laws or regulations. Registration and Transfer of Junior Subordinated Debentures Holders may present junior subordinated debentures for exchange, and holders of registered junior subordinated debentures may present these securities for transfer, in the manner, at the places and subject to the restrictions stated in the junior subordinated debentures and described in the applicable prospectus supplement. We will provide these services without charge except for any tax or other governmental charge payable in connection with these services and subject to any limitations provided in the indenture. Holders may transfer junior subordinated debentures in bearer form and the related coupons, if any, by delivery to the transferee. If any of the securities are held in global form, the procedures for transfer of interests in those securities will depend upon the procedures of the depositary for those global securities. Subordination Holders of the junior subordinated debentures should recognize that contractual provisions in the indenture may prohibit us from making payments on these securities. The junior subordinated debentures are subordinate and junior in right of payment, to the extent and in the manner stated in the indenture, to all of our senior indebtedness. The indenture defines senior indebtedness as obligations of, or guaranteed or assumed by, Morgan Stanley for borrowed money or evidenced by bonds, debentures, notes or other similar instruments, including obligations with respect to securities issued under the senior indenture or the senior subordinated indentures of Morgan Stanley, and amendments, renewals, extensions, modifications and refundings of any of that indebtedness or of those obligations. Additional obligations may be included in the definition of senior indebtedness pursuant to the supplemental indenture under which a series of junior subordinated debentures is issued or in the form of junior subordinated debenture for such series if we determine that inclusion of such obligations is necessary in order to ensure that the junior subordinated debentures receive the regulatory capital treatment desired by us. Nonrecourse obligations, the junior subordinated debentures and any other obligations specifically designated as being subordinate in right of payment to senior indebtedness are not senior indebtedness as defined under the indenture. (Section 1.01) 18 The indenture does not restrict our ability to issue senior indebtedness. The indenture provides that, unless all principal of and any premium or interest on the senior indebtedness has been paid in full, or provision has been made to make these payments in full, no payment of principal of, or any premium or interest on, any junior subordinated debentures may be made in the event: o of any insolvency or bankruptcy proceedings, or any receivership, liquidation, reorganization or other similar proceedings involving us or a substantial part of our property; o that (a) a default has occurred in the payment of principal, any premium, interest or other monetary amounts due and payable on any senior indebtedness or (b) there has occurred any other event of default concerning senior indebtedness, that permits the holder or holders of the senior indebtedness to accelerate the maturity of the senior indebtedness, with notice or passage of time, or both, and that event of default has continued beyond the applicable grace period, if any, and that default or event of default has not been cured or waived or has not ceased to exist; or o that the principal of and accrued interest on any junior subordinated debentures have been declared due and payable upon an event of default as defined under the indenture and that declaration has not been rescinded and annulled as provided under the indenture. (Section 13.01) We currently have outstanding four series of junior subordinated debentures, which were issued under a junior subordinated indenture, dated March 1, 1998, between us and The Bank of New York and purchased, respectively, by Morgan Stanley Capital Trust II, Morgan Stanley Capital Trust III, Morgan Stanley Capital Trust IV and Morgan Stanley Capital Trust V, with terms and conditions substantially similar to those of the junior subordinated debentures described in this prospectus. At August 31, 2005, there was $[2,881] million aggregate principal amount of such junior subordinated debentures outstanding. Those junior subordinated debentures contain certain acceleration provisions that could be triggered prior to the acceleration provisions of the junior subordinated debentures described in this prospectus. Accordingly, the outstanding amount of those four series of junior subordinated debentures could become due and payable prior to the junior subordinated debentures described in this prospectus. Merger, Consolidation, Sale, Lease or Conveyance The indenture provides that we will not merge or consolidate with any other person and will not sell, lease or convey all or substantially all of our assets to any other person, unless: o we will be the continuing corporation; or o the successor corporation or person that acquires all or substantially all of our assets: o will be a corporation organized under the laws of the United States, a state of the United States or the District of Columbia; and o will expressly assume all of our obligations under the indenture and the junior subordinated debentures issued under the indenture; and o immediately after the merger, consolidation, sale, lease or conveyance, we, that person or that successor corporation will not be in default in the performance of the covenants and conditions of the indenture applicable to us. (Section 9.01) 19 There are no covenants or other provisions in the indenture that would afford holders of junior subordinated debentures additional protection in the event of a recapitalization transaction, a change of control of Morgan Stanley or a highly leveraged transaction. The merger covenant described above would only apply if the recapitalization transaction, change of control or highly leveraged transaction were structured to include a merger or consolidation of Morgan Stanley or a sale, lease or conveyance of all or substantially all of our assets. However, we may provide specific protections, such as a put right or increased interest, for particular junior subordinated debentures, which we would describe in the applicable prospectus supplement. Events of Default and Defaults The indenture provides holders of junior subordinated debentures with remedies if we fail to perform specific obligations, such as making payments on the junior subordinated debentures, or if we become bankrupt. Holders should review these provisions and understand which of our actions trigger an event of default or a default and which actions do not. The indenture permits the issuance of junior subordinated debentures in one or more series, and, in many cases, whether an event of default or a default has occurred is determined on a series by series basis. Events of Default An event of default is defined under the indenture, with respect to any series of junior subordinated debentures issued under the indenture, as being: o failure to pay in full the interest accrued on any junior subordinated debentures of that series upon the conclusion of an extension of the interest payment period of 20 consecutive quarters and continuance of that failure for a period of 30 days; o events of bankruptcy, insolvency or reorganization; or o any other event of default provided in a supplemental indenture under which the series of junior subordinated debentures is issued. (Section 5.01) Defaults A default is defined under the indenture, with respect to any series of junior subordinated debentures issued under the indenture, as being: o an event of default with respect to such series; o default in payment of any principal of the junior subordinated debentures of that series, either at maturity or upon any redemption, by declaration or otherwise; o default for 30 days in payment of any interest on any junior subordinated debentures of that series, provided, however, that a valid extension of an interest payment period by Morgan Stanley in accordance with the terms of the junior subordinated debentures of any series will not constitute a default in the payment of interest for this purpose; o default for 60 days after written notice in the observance or performance of any other covenant or agreement in the junior subordinated debentures of that series or the indenture (other than a covenant or warranty with respect to the junior subordinated debentures of that series the breach or nonperformance of which is otherwise included in the definition of "event of default" or "default"); or 20 o any other default provided in a supplemental indenture under which the series of junior subordinated debentures is issued. (Section 5.06) Acceleration of Junior Subordinated Debentures upon an Event of Default and Other Remedies The indenture provides that: o if an event of default due to the default in the payment of accrued interest on any series of junior subordinated debentures issued under the indenture occurs and is continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding junior subordinated debentures of each affected series, voting as one class, by notice in writing to Morgan Stanley, may declare the principal of all junior subordinated debentures of each affected series and interest accrued thereon to be due and payable immediately; and o if an event of default due to specified events of bankruptcy, insolvency or reorganization of Morgan Stanley occurs and is continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of all outstanding junior subordinated debentures issued under that indenture, voting as one class, by notice in writing to Morgan Stanley may declare the principal of all those junior subordinated debentures and interest accrued thereon to be due and payable immediately. (Section 5.01) There is no right of acceleration with respect to defaults, except for those defaults that are also events of default. If a default in the payment of principal of, or any interest on, any series of junior subordinated debentures issued under the indenture occurs and is continuing and we fail to pay the full amount then due and payable with respect to all junior subordinated debentures of the affected series immediately upon the demand of the indenture trustee, the indenture trustee is entitled to institute an action or proceeding to collect the amount due and unpaid. (Section 5.02) If any default occurs and is continuing, the indenture trustee may pursue legal action to enforce the performance of any provision in the indenture to protect the rights of the indenture trustee and the holders of the junior subordinated debentures. (Section 5.04) Annulment of Acceleration and Waiver of Defaults In some circumstances, if any and all defaults under the indenture, other than the non-payment of the principal of the securities that has become due as a result of an acceleration, have been cured, waived or otherwise remedied, then the holders of a majority in aggregate principal amount of all series of outstanding junior subordinated debentures affected, voting as one class, may waive past defaults of and annul past declarations of acceleration of the junior subordinated debentures. (Section 5.01) Prior to the acceleration of any junior subordinated debentures, the holders of a majority in aggregate principal amount of all series of outstanding junior subordinated debentures with respect to which a default has occurred and is continuing, voting as one class, may waive any past default, other than a default in the payment of principal or interest (unless such default has been cured and an amount sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the trustee) or a default in respect of a covenant or provision in the indenture that cannot be modified or amended without the consent of the holder of each junior subordinated debenture affected. (Section 5.10) Indemnification of Trustee for Actions Taken on Your Behalf The indenture contains a provision entitling the indenture trustee, subject to the duty of the indenture trustee during a default to act with the required standard of care, to be indemnified by the holders of junior subordinated debentures issued under that indenture before proceeding to exercise any right or 21 power at the request of holders. (Section 6.02) Subject to these provisions and some other limitations, the holders of a majority in aggregate principal amount of each series of outstanding junior subordinated debentures of each affected series, voting as one class, may direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the indenture trustee. (Section 5.09) Limitation on Actions by You as an Individual Holder The indenture provides that no individual holder of junior subordinated debentures may institute any action against us under that indenture, except actions for payment of overdue principal and interest, unless the following actions have occurred: o the holder must have previously given written notice to the trustee of the continuing default; o the holders of not less than 25% in aggregate principal amount of the outstanding junior subordinated debentures of each affected series, treated as one class, must have (1) requested the trustee to institute that action and (2) offered the indenture trustee reasonable indemnity; o the indenture trustee must have failed to institute that action within 60 days after receipt of the request referred to above; and o the holders of a majority in principal amount of the outstanding junior subordinated debentures of each affected series, voting as one class, must not have given directions to the indenture trustee inconsistent with those of the holders referred to above. (Sections 5.06 and 5.09) Annual Certification The indenture contains a covenant that we will file annually with the indenture trustee a certificate of no default or a certificate specifying any default that exists. (Section 3.05) Discharge, Defeasance and Covenant Defeasance We have the ability to eliminate most or all of our obligations on any series of junior subordinated debentures prior to maturity if we comply with the following provisions. (Section 10.01) Discharge of Indenture If at any time we have: o paid or caused to be paid the principal of and interest on all of the outstanding junior subordinated debentures of the series in accordance with their terms; o delivered to the indenture trustee for cancellation all of the outstanding junior subordinated debentures of the series; or o irrevocably deposited with the indenture trustee cash or, in the case of a series of junior subordinated debentures payable only in U.S. dollars, U.S. government obligations in trust for the benefit of the holders of any series of junior subordinated debentures issued under the indenture that have either become due and payable, or are by their terms due and payable within one year or are scheduled for redemption within one year in an amount certified to be sufficient to pay on each date that they become due and payable, the principal of and interest on, and any mandatory sinking fund payments for, those junior subordinated debentures; 22 and if, in any such case, we also pay or cause to be paid all other sums payable by us under the indenture with respect to the series of junior subordinated debentures, then the indenture shall cease to be of further effect with respect to the junior subordinated debentures of such series, except as to certain rights with respect to the transfer and exchange of securities, rights of the holders to receive payment and certain other rights. Defeasance of a Series of Securities at Any Time We may also discharge all of our obligations, other than as to transfers and exchanges, under any series of junior subordinated debentures at any time, which we refer to as "defeasance." We may be released with respect to any outstanding series of junior subordinated debentures from the covenants described above limiting consolidations, mergers, asset sales and leases, and elect not to comply with that section without creating an event of default or a default. Discharge under these procedures is called "covenant defeasance." Defeasance or covenant defeasance may be effected only if, among other things: o we irrevocably deposit with the indenture trustee cash or, in the case of junior subordinated debentures payable only in U.S. dollars, U.S. government obligations, as trust funds in an amount certified to be sufficient to pay on each date that they become due and payable, the principal of and interest on, and any mandatory sinking fund payments for, all outstanding junior subordinated debentures of the series being defeased; o we deliver to the indenture trustee an opinion of counsel to the effect that: o the holders of the series of junior subordinated debentures being defeased will not recognize income, gain or loss for United States federal income tax purposes as a result of the defeasance or covenant defeasance; and o the defeasance or covenant defeasance will not otherwise alter those holders' United States federal income tax treatment of principal and interest payments on the series of junior subordinated debentures being defeased; in the case of a defeasance, this opinion must be based on a ruling of the Internal Revenue Service or a change in United States federal income tax law occurring after the date of this prospectus, since that result would not occur under current tax law; o no event or condition will exist that, under the provisions described under "--Subordination" above, would prevent us from making payments of principal or interest on the junior subordinated debentures at the date of the irrevocable deposit referred to above or at any time during the period ending on the 91st day after that deposit date; and o we deliver to the indenture trustee an opinion of counsel to the effect that: o the trust funds will not be subject to any rights of holders of senior indebtedness; and o after the 91st day following the deposit, the trust funds will not be subject to any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally, except that if a court were to rule under any of those laws in any case or proceeding that the trust funds remained our property, then the indenture trustee and the holders of the junior subordinated debentures 23 would be entitled to some enumerated rights as secured creditors in the trust funds. (Section 10.01) Modification of Indenture Modification Without Consent of Holders We and the indenture trustee may enter into supplemental indentures without the consent of the holders of junior subordinated debentures to: o secure any junior subordinated debentures; o evidence the assumption of our obligations by a successor corporation; o add covenants for the protection of the holders of junior subordinated debentures; o cure any ambiguity or correct any inconsistency in the indenture; o establish the forms or terms of junior subordinated debentures of any series; and o evidence the acceptance of appointment by a successor indenture trustee. (Section 8.01) Modification with Consent of Holders We and the trustee, with the consent of the holders of not less than a majority in aggregate principal amount of each affected series of outstanding junior subordinated debentures, voting as one class, may add any provisions to, or change in any manner or eliminate any of the provisions of, the indenture or modify in any manner the rights of the holders of those junior subordinated debentures. However, except as specified in the applicable prospectus supplement, we and the trustee may not make any of the following changes to any outstanding junior subordinated debenture without the consent of each holder that would be affected by such change: o extend the final maturity of the principal; o reduce the principal amount; o reduce the rate or extend the time of payment of interest; o reduce any amount payable on redemption; o change the currency in which the principal, including any amount of original issue discount, premium, or interest thereon is payable; o reduce the amount of any original issue discount security payable upon acceleration or provable in bankruptcy; o alter certain provisions of the indenture relating to the junior subordinated debentures not denominated in U.S. dollars; o impair the right of any holder to institute suit for the enforcement of any payment on any junior subordinated debenture when due; or 24 o reduce the percentage of junior subordinated debentures the consent of whose holders is required for modification of the indenture. If the junior subordinated debentures are owned by a Morgan Stanley Capital Trust, none of the modifications described above may be made without the prior written consent of all the holders of capital securities of the Morgan Stanley Capital Trust. (Section 8.02) Modification of Subordination Provisions We may not amend the indenture to alter the subordination of any outstanding junior subordinated debentures without the written consent of each potentially adversely affected holder of senior indebtedness then outstanding. (Section 8.06) Information Concerning the Indenture Trustee We and our subsidiaries maintain credit facilities and other ordinary banking relationships with The Bank of New York. Governing Law The junior subordinated debentures and the indenture will be governed by, and construed in accordance with, the laws of the State of New York. DESCRIPTION OF GLOBAL SECURITIES We may issue the registered junior subordinated debentures and capital securities in the form of one or more fully registered global securities that will be deposited with a depositary or its nominee identified in the applicable prospectus supplement and registered in the name of that depositary or its nominee. In those cases, one or more registered global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal or face amount of the securities to be represented by registered global securities. Unless and until it is exchanged in whole for securities in definitive registered form, a registered global security may not be transferred except as a whole by and among the depositary for the registered global security, the nominees of the depositary or any successors of the depositary or those nominees. The specific terms of the depositary arrangement with respect to any portion of a series of securities to be represented by a registered global security will be described in the prospectus supplement relating to that series. We anticipate that the following provisions will apply to all depositary arrangements. Ownership of beneficial interests in a registered global security will be limited to persons, called participants, that have accounts with the depositary or persons that may hold interests through participants. Upon the issuance of a registered global security, the depositary will credit, on its book-entry registration and transfer system, the participants' accounts with the respective principal or face amounts of the securities beneficially owned by the participants. Any dealers, underwriters or agents participating in the distribution of the securities will designate the accounts to be credited. Ownership of beneficial interests in a registered global security will be shown on, and the transfer of ownership interests will be effected only through, records maintained by the depositary, with respect to interests of participants, and on the records of participants, with respect to interests of persons holding through participants. The laws of some states may require that some purchasers of securities take physical delivery of these securities in definitive form. These laws may impair your ability to own, transfer or pledge beneficial interests in registered global securities. 25 So long as the depositary, or its nominee, is the registered owner of a registered global security, that depositary or its nominee, as the case may be, will be considered the sole owner or holder of the securities represented by the registered global security for all purposes under the indenture. Except as described below, owners of beneficial interests in a registered global security will not be entitled to have the securities represented by the registered global security registered in their names, will not receive or be entitled to receive physical delivery of the securities in definitive form and will not be considered the owners or holders of the securities under the indenture. Accordingly, each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary for that registered global security and, if that person is not a participant, on the procedures of the participant through which the person owns its interest, to exercise any rights of a holder under the indenture. We understand that under existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a registered global security desires to give or take any action that a holder is entitled to give or take under the indenture, the depositary for the registered global security would authorize the participants holding the relevant beneficial interests to give or take that action, and the participants would authorize beneficial owners owning through them to give or take that action or would otherwise act upon the instructions of beneficial owners holding through them. Payments of principal of, and premium, if any, and interest on, junior subordinated debentures, and any payments to holders with respect to capital securities, represented by a registered global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee, as the case may be, as the registered owner of the registered global security. None of Morgan Stanley, the indenture trustee, the Delaware trustee, the property trustee or any other agent of Morgan Stanley, agent of the applicable Morgan Stanley Capital Trust or agent of any of the aforementioned trustees, as the case may be, will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the registered global security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. We and the Morgan Stanley Capital Trusts expect that the depositary for any securities represented by a registered global security, upon receipt of any payment of principal, premium, interest or other distribution with respect to underlying securities to holders in respect of the registered global security, will immediately credit participants' accounts in amounts proportionate to their respective beneficial interests in the registered global security as shown on the records of the depositary. We and the Morgan Stanley Capital Trusts also expect that payments by participants to owners of beneficial interests in the registered global security held through participants will be governed by standing customer instructions and customary practices, as is now the case with the securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of those participants. If the depositary for any securities represented by a registered global security is at any time unwilling or unable to continue as depositary or ceases to be a clearing agency registered under the Securities Exchange Act of 1934, and a successor depositary registered as a clearing agency under the Securities Exchange Act of 1934 is not appointed by us or the applicable Morgan Stanley Capital Trust, as the case may be, within 90 days, we or the applicable Morgan Stanley Capital Trust, as the case may be, will issue the securities in definitive form in exchange for the registered global security. In addition, we or the applicable Morgan Stanley Capital Trust, as the case may be, may at any time and in our sole discretion determine not to have any of the securities of a series represented by one or more registered global securities. We understand, however, that, under current industry practices, the depositary would notify its participants of our request, but will only withdraw beneficial interests from a global security at the request of each participant. We would issue definitive certificates in exchange for any such interests withdrawn. Any securities issued in definitive form in exchange for a registered global security will be registered in the name or names as the depositary instructs the relevant trustee or other relevant agent of Morgan Stanley, the applicable Morgan Stanley Capital Trust or that trustee. It is expected that those instructions will be based upon directions received by the depositary from participants with respect to ownership of beneficial interests in the registered global security. 26 The securities may also be issued in the form of one or more bearer global securities that will be deposited with a common depositary for Euroclear Bank S.A./N.V., as operator of the Euroclear System, and Clearstream Banking, societe anonyme, or with a nominee for the depositary identified in the prospectus supplement relating to those securities. The specific terms and procedures, including the specific terms of the depositary arrangement, with respect to any securities to be represented by a bearer global security will be described in the prospectus supplement relating to those securities. DESCRIPTION OF GUARANTEES Morgan Stanley will execute and deliver a guarantee concurrently with the issuance by each Morgan Stanley Capital Trust of its capital securities for the benefit of the holders from time to time of those capital securities. The guarantee trustee will hold the guarantee for the benefit of the holders of the related Morgan Stanley Capital Trust's capital securities. Morgan Stanley will qualify each of the guarantees as an indenture under the Trust Indenture Act. The guarantees will be subject to, and governed by, the Trust Indenture Act. This summary of certain provisions of the guarantees does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions of each guarantee, including the definitions of terms, and those provisions made part of each guarantee by the Trust Indenture Act. A form of guarantee is filed as an exhibit to the registration statement that includes this prospectus. A copy of the form of the guarantee is available upon request from the guarantee trustee. If indicated in the applicable prospectus supplement, the terms of a particular guarantee may differ from the terms discussed below. General Morgan Stanley will irrevocably and unconditionally agree to pay in full, to the extent set forth in the guarantee, the guarantee payments to the holders of the capital securities covered by the guarantee, as and when due, regardless of any defense, right of set-off or counterclaim that the Morgan Stanley Capital Trust that issued the capital securities may have or assert other than the defense of payment. The following payments constitute guarantee payments with respect to capital securities that, to the extent not paid by or on behalf of the Morgan Stanley Capital Trust, will be subject to the applicable guarantee: o any accumulated and unpaid distributions required to be paid on the applicable capital securities, to the extent that the applicable Morgan Stanley Capital Trust has funds on hand available for that purpose at that time; o the applicable redemption price with respect to any capital securities called for redemption, which will include all accumulated and unpaid distributions to but excluding the date of redemption, to the extent that the applicable Morgan Stanley Capital Trust has funds on hand available for that purpose at that time; and o upon a voluntary or involuntary dissolution, winding-up or liquidation of the applicable Morgan Stanley Capital Trust (unless the junior subordinated debentures owned by the Morgan Stanley Capital Trust are distributed to holders of the capital securities in accordance with the terms of the applicable trust agreement), the lesser of: o the aggregate of the liquidation amount and all accumulated and unpaid distributions to the date of payment, and o the amount of assets of the applicable Morgan Stanley Capital Trust remaining available for distribution to holders of capital securities on liquidation of the Morgan Stanley Capital Trust. 27 Our obligation to make a guarantee payment may be satisfied by direct payment of the required amounts by us to the holders of the capital securities or by causing the applicable Morgan Stanley Capital Trust to pay those amounts to the holders. Each guarantee will be an irrevocable guarantee of the related Morgan Stanley Capital Trust's payment obligations described above under the capital securities covered by the guarantee, but will apply only to the extent that the Morgan Stanley Capital Trust has funds sufficient to make such payments, and is not a guarantee of collection. If we do not make payments on the junior subordinated debentures owned by a Morgan Stanley Capital Trust, the Morgan Stanley Capital Trust will not be able to pay any amounts payable in respect of its capital securities and will not have funds legally available for that purpose. In that event, holders of the capital securities would not be able to rely upon the guarantee for payment of those amounts. Each guarantee will have the same ranking as the junior subordinated debentures owned by the Morgan Stanley Capital Trust that issues the capital securities covered by the guarantee. See "--Status of the Guarantees." No guarantee will limit the incurrence or issuance of other secured or unsecured debt of Morgan Stanley. Status of the Guarantees Each guarantee will constitute an unsecured obligation of Morgan Stanley and will rank equal to the junior subordinated debentures owned by the Morgan Stanley Capital Trust that issues the capital securities covered by the guarantee. Each guarantee will constitute a guarantee of payment and not of collection. Any holder of capital securities covered by the guarantee may institute a legal proceeding directly against us to enforce its rights under the guarantee without first instituting a legal proceeding against any other person or entity. Each guarantee will be held by the guarantee trustee for the benefit of the holders of the related capital securities. Each guarantee will not be discharged except by payment of the guarantee payments in full to the extent not paid by or on behalf of the Morgan Stanley Capital Trust or, if applicable, distribution to the holders of the capital securities of the junior subordinated debentures owned by the Morgan Stanley Capital Trust. Amendments and Assignment Except with respect to any changes that do not materially adversely affect the rights of holders of the capital securities issued by the Morgan Stanley Capital Trust, in which case no approval will be required, the guarantee that covers the capital securities may not be amended without the prior approval of the holders of at least a majority of the aggregate liquidation amount of the outstanding capital securities covered by the guarantee. The manner of obtaining any such approval will be as set forth under "Description of Capital Securities--Voting Rights; Amendment of Trust Agreements" and in the applicable prospectus supplement. All guarantees and agreements contained in each guarantee will bind the successors, assigns, receivers, trustees and representatives of Morgan Stanley and will inure to the benefit of the holders of the then outstanding capital securities covered by the guarantee. Events of Default An event of default under a guarantee will occur upon the failure of Morgan Stanley to perform any of its payment obligations under that guarantee, or to perform any non-payment obligation if the non-payment default remains unremedied for 30 days. If an event of default under a guarantee occurred and is continuing, the guarantee trustee will enforce the guarantee for the benefit of the holders of capital securities covered by the guarantee. The holders of a majority in aggregate liquidation amount of the outstanding capital securities covered by the guarantee have the right to direct the time, method and place of conducting any proceeding for any remedy available to the guarantee trustee in respect of the guarantee or to direct the exercise of any right or power conferred upon the guarantee trustee under the guarantee. 28 Any holder of capital securities covered by the guarantee may institute a legal proceeding directly against Morgan Stanley to enforce its rights under the guarantee without first instituting a legal proceeding against the applicable Morgan Stanley Capital Trust, the guarantee trustee or any other person or entity. We, as guarantor, are required to file annually with the guarantee trustee a certificate as to whether or not we are in compliance with all the conditions and covenants under the guarantee. Information Concerning the Guarantee Trustee The guarantee trustee, other than during the occurrence and continuance of an event of default under the guarantee, undertakes to perform only those duties as are specifically set forth in the guarantee and, after the occurrence of an event of default with respect to the guarantee that has not been cured or waived, must exercise the rights and powers vested in it by the guarantee using the same degree of care and skill as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the guarantee trustee is under no obligation to exercise any of the rights or powers vested in it by the guarantee at the request of any holder of the capital securities covered by the guarantee unless it is offered reasonable indemnity, including reasonable advances requested by it, against the costs, expenses and liabilities that might be incurred in complying with the request or direction. For information concerning the relationship between The Bank of New York, which will initially be the guarantee trustee, and Morgan Stanley, see "Description of Junior Subordinated Debentures--Information Concerning the Indenture Trustee." Termination of the Guarantee Each guarantee will terminate upon full payment of the redemption price of all of the capital securities covered by the guarantee, upon full payment of the amounts payable with respect to the capital securities upon liquidation of the related Morgan Stanley Capital Trust or upon distribution of the junior subordinated debentures owned by the Morgan Stanley Capital Trust to the holders of all the capital securities covered by the guarantee. Each guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of the capital securities covered by the guarantee must repay any sums with respect to the capital securities or the guarantee. Governing Law Each guarantee will be governed by, and construed in accordance with, the laws of the State of New York. PLAN OF DISTRIBUTION We may sell junior subordinated debentures and a Morgan Stanley Capital Trust may sell capital securities in three ways: (1) through agents, (2) through underwriters and (3) through dealers. The agents, underwriters or dealers in the United States will include Morgan Stanley & Co. Incorporated, which we refer to as MS & Co., and/or Morgan Stanley DW Inc., which we refer to as MSDWI, or other affiliates of ours, and the agents, underwriters or dealers outside the United States will include Morgan Stanley & Co. International Limited, which we refer to as MSIL, or other affiliates of ours. We and/or the applicable Morgan Stanley Capital Trust may designate agents from time to time to solicit offers to purchase these securities. We will name any such agent, who may be deemed to be an underwriter as that term is defined in the Securities Act of 1933, and state any commissions we are to pay to that agent in the applicable prospectus supplement. That agent will be acting on a reasonable efforts basis for the period of its appointment or, if indicated in the applicable prospectus supplement, on a firm commitment basis. 29 If any underwriters are utilized in the sale of these securities, we and/or the applicable Morgan Stanley Capital Trust, as the case may be, will enter into an underwriting agreement with the underwriters at the time of sale to them and the names of the underwriters and the terms of the transaction will be set forth in the applicable prospectus supplement, which will be used by the underwriters to make resales of the securities in respect of which this prospectus is delivered to the public. If a dealer is utilized in the sale of these securities, we and/or the applicable Morgan Stanley Capital Trust, as the case may be, will sell the securities to the dealer, as principal, and will name the dealer in the applicable prospectus supplement. The dealer may then resell the securities to the public at varying prices to be determined by such dealer at the time of resale. In order to facilitate the offering of these securities, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of these securities or any other securities the prices of which may be used to determine payments on these securities. Specifically, the underwriters may sell more securities than they are obligated to purchase in connection with the offering, creating a short position for their own accounts. A short sale is covered if the short position is no greater than the number or amount of securities available for purchase by the underwriters under any overallotment option. The underwriters can close out a covered short sale by exercising the overallotment option or purchasing these securities in the open market. In determining the source of securities to close out a covered short sale, the underwriters will consider, among other things, the open market price of these securities compared to the price available under the overallotment option. The underwriters may also sell these securities or any other securities in excess of the overallotment option, creating a naked short position. The underwriters must close out any naked short position by purchasing securities in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of these securities in the open market after pricing that could adversely affect investors who purchase in the offering. As an additional means of facilitating the offering, the underwriters may bid for, and purchase, these securities or any other securities in the open market to stabilize the price of these securities or of any other securities. Finally, in any offering of the securities through a syndicate of underwriters or dealer group, the agent acting on behalf of the underwriting syndicate or for itself may also reclaim selling concessions allowed to an underwriter or a dealer for distributing these securities in the offering, if the agent repurchases previously distributed securities to cover syndicate short positions or to stabilize the price of these securities. Any of these activities may raise or maintain the market price of these securities above independent market levels or prevent or retard a decline in the market price of these securities. The underwriters are not required to engage in these activities and may end any of these activities at any time. If so indicated in the applicable prospectus supplement, one or more firms, including MS & Co., MSDWI and MSIL, which we refer to as "remarketing firms," acting as principals for their own accounts or as agents for us and/or a Morgan Stanley Capital Trust, as the case may be, may offer and sell these securities as part of a remarketing upon their purchase, in accordance with their terms. We will identify any remarketing firm, the terms of its agreement, if any, with us and/or a Morgan Stanley Capital Trust, as the case may be, and its compensation in the applicable prospectus supplement. Remarketing firms, agents, underwriters and dealers may be entitled under agreements with us and/or a Morgan Stanley Capital Trust to indemnification by us and/or a Morgan Stanley Capital Trust, against some civil liabilities, including liabilities under the Securities Act of 1933, and may be customers of, engage in transactions with, or perform services for, us and/or a Morgan Stanley Capital Trust in the ordinary course of business. If so indicated in the applicable prospectus supplement, we and/or a Morgan Stanley Capital Trust will authorize agents, underwriters or dealers to solicit offers by some purchasers to purchase these securities from us at the public offering price stated in the prospectus supplement under delayed delivery contracts providing for payment and delivery on a specified date in the future. These contracts will be subject to only those conditions described in the applicable prospectus supplement, and the prospectus supplement will state the commission payable for solicitation of these offers. 30 Any underwriter, agent or dealer utilized in the initial offering of securities will not confirm sales to accounts over which it exercises discretionary authority without the prior specific written approval of its customer. MS & Co., MSDWI and MSIL are wholly-owned subsidiaries of Morgan Stanley. Each initial offering of securities will be conducted in compliance with the requirements of Rule 2720 of the Conduct Rules of the National Association of Securities Dealers, Inc., which is commonly referred to as the NASD, regarding a NASD member firm's distributing the securities of an affiliate. Following the initial distribution of any of these securities, MS & Co., MSDWI, MSIL and other affiliates of Morgan Stanley may offer and sell these securities in the course of their business as broker-dealers, subject to obtaining any necessary approval of the New York Stock Exchange, Inc. for any of the offers and sales. MS & Co., MSDWI, MSIL and other affiliates may act as principals or agents in these transactions and may make any sales at varying prices related to prevailing market prices at the time of sale or otherwise. MS & Co., MSDWI, MSIL and other affiliates may use this prospectus in connection with these transactions. None of MS & Co., MSDWI, MSIL or any other affiliate is obligated to make a market in any of these securities and may discontinue any market-making activities at any time without notice. In the event that MS & Co., MSDWI or any other NASD member participates in a public offering of these securities: (a) post-effective amendments or prospectus supplements disclosing the actual price and selling terms will be submitted to the NASD's Corporate Financing Department (the "Department") at the same time they are filed with the SEC; (b) the Department will be advised if, subsequent to the filing of the offering, any 5% or greater shareholder of ours is or becomes an affiliate or associated person of an NASD member participating in the distribution; and (c) all NASD members participating in the offering will confirm their understanding of the requirements that have to be met in connection with SEC Rule 415 and Notice-to-Members 88-101. Underwriting discounts and commissions on securities sold in the initial distribution will not exceed 8% of the offering proceeds. LEGAL MATTERS The validity of the capital securities will be passed upon for the Morgan Stanley Capital Trusts by Richards, Layton & Finger, P.A., or other counsel who is satisfactory to MS & Co. and/or MSDWI, as the case may be, and who may be an officer of Morgan Stanley. The validity of the junior subordinated debentures and the guarantees will be passed upon for Morgan Stanley by Sidley Austin Brown & Wood LLP, or other counsel who is satisfactory to MS & Co. and/or MSDWI, as the case may be, and who may be an officer of Morgan Stanley. Certain legal matters relating to the securities will be passed upon for the underwriters by Davis Polk & Wardwell. Davis Polk & Wardwell has in the past represented Morgan Stanley and continues to represent Morgan Stanley and its affiliates on a regular basis and in a variety of matters, including in connection with its private equity and leveraged capital activities. EXPERTS The consolidated financial statements and financial statement schedules of Morgan Stanley and its subsidiaries, at November 30, 2004 and 2003 and for each of the three fiscal years in the period ended November 30, 2004, and management's report on the effectiveness of internal control over financial reporting, which are incorporated in this prospectus by reference to Exhibit 99.1 to Morgan Stanley's Current Report on Form 8-K filed October 12, 2005, Schedule I of Morgan Stanley's Annual Report on Form 10-K for the fiscal year ended November 30, 2004, filed on February 11, 2005 ("2004 Form 10-K") and Item 9A of the 2004 Form 10-K, respectively, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference (which reports (1) express an unqualified opinion on the financial statements and financial statement schedule and include an explanatory paragraph referring to the adoption of Statement of Financial Accounting Standards ("SFAS") No. 123 "Accounting for Stock-Based Compensation," as amended by SFAS No. 148 "Accounting for Stock-Based Compensation?Transition and Disclosure, an amendment of FASB Statement No. 123," in 2003, (2) express an unqualified opinion on management's 31 assessment regarding the effectiveness of internal control over financial reporting, and (3) express an unqualified opinion on the effectiveness of internal control over financial reporting), and have been so included in reliance upon the respective reports of such firm given upon their authority as experts in accounting and auditing. With respect to the unaudited interim financial information for the periods ended February 28, 2005 and February 29, 2004, May 31, 2005 and May 31, 2004 and August 31, 2005 and August 31, 2004, which is incorporated herein by reference, Deloitte & Touche LLP, an independent registered public accounting firm, have applied limited procedures in accordance with standards of the Public Company Accounting Oversight Board (United States) for a review of such information. However, as stated in their reports included Morgan Stanley's Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2005 and in Exhibits 99.2 and 99.3 to the Current Report on Form 8-K filed October 12, 2005, and incorporated by reference herein, they did not audit and they do not express an opinion on such interim financial information. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche LLP are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their reports on the unaudited interim financial information because those reports are not "reports" or a "part" of the registration statement prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Securities Act of 1933. 32 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution The following are the expenses of the issuance and distribution of the securities being registered, all of which will be paid by the Registrants. Other than the registration fee and the NASD filing fee, all of these expenses are estimated. Registration fee.................................... $ 3,531,000 NASD filing fee..................................... 75,500 Rating agency fees.................................. 750,000 Printing and engraving expenses..................... 1,320,000 Legal fees and expenses............................. 1,800,000 Accounting fees and expenses........................ 225,000 Unit Agents', Warrant Agents', Trustees' and Preferred Stock Depositary's fees and expenses (including counsel fees)............ 600,000 Listing............................................. 300,000 ----------------- Total....................................... $ 8,601,500 Item 15. Indemnification of Directors and Officers Section 145 of the General Corporation Law of the State of Delaware, as amended, provides that under certain circumstances a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at its request in such capacity in another corporation or business association, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. Article VIII of the Amended and Restated Certificate of Incorporation of Morgan Stanley ("Certificate of Incorporation") and Section 6.07 of the Amended and Restated Bylaws of Morgan Stanley ("Bylaws"), each as amended to date, provide for the indemnification of Morgan Stanley's directors and officers. The Certificate of Incorporation provides that any person who is a director or officer of Morgan Stanley shall be indemnified by Morgan Stanley to the fullest extent permitted from time to time by applicable law. In addition, the Bylaws provide that each person who was or is made a party or is threatened to be made a party to or is involved in any manner in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or officer of Morgan Stanley or a director or elected officer of a corporation a majority of the capital stock (other than directors' qualifying shares) of which is owned directly or indirectly by Morgan Stanley (a "Subsidiary") shall be indemnified and held harmless by Morgan Stanley to the fullest extent permitted by applicable law. The right to indemnification under the Bylaws includes the right to be paid the expenses incurred in defending a proceeding in advance of its final disposition upon receipt (unless Morgan Stanley upon authorization of the Board of Directors waives said requirement to the extent permitted by applicable law) of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by Morgan Stanley. Morgan Stanley's Bylaws also provide that Morgan Stanley may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification, and rights to be paid by Morgan Stanley the expenses II-1 incurred in defending any proceeding in advance of its final disposition, to any person who is or was an employee or agent (other than a director or officer) of Morgan Stanley or a Subsidiary and to any person who is or was serving at the request of Morgan Stanley or a Subsidiary as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to employee benefit plans maintained or sponsored by Morgan Stanley or a Subsidiary, to the fullest extent as the Bylaws provide with respect to indemnification of, and advancement of expenses for, directors and officers of Morgan Stanley. Under the By-laws, Morgan Stanley has the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, partner, member, employee or agent of Morgan Stanley or a Subsidiary, or of another corporation, partnership, limited liability company, joint venture, trust or other enterprise, against any expense, liability or loss whether or not Morgan Stanley would have the power to indemnify that person against that expense, liability or loss under the provisions of applicable law. Morgan Stanley has in effect insurance policies in the amount of $215 million for general officers' and directors' liability insurance. The forms of Underwriting Agreements and Distribution Agreements filed as Exhibits 1-a, 1-b, 1-c, 1-d, 1-e and 1-f hereto, and incorporated herein by reference, contain some provisions relating to the indemnification of Morgan Stanley's directors, officers and controlling persons. Item 16. Exhibits Morgan Stanley's Exchange Act file number is 1-11758. Exhibit Number Description - ------- ----------- 1-a Form of Underwriting Agreement for Debt Securities, Warrants, Purchase Contracts and Units (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-106789, and incorporated herein by reference). 1-b Form of Underwriting Agreement for Preferred Stock, Depositary Shares and Common Stock (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-106789, and incorporated herein by reference). 1-c Form of Underwriting Agreement for Capital Securities (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-106789, and incorporated herein by reference). 1-d Form of U.S. Distribution Agreement. 1-e Form of Euro Distribution Agreement. 1-f Form of DirectSecurities Distribution Agreement. 3-a Amended and Restated Certificate of Incorporation of Morgan Stanley (previously filed as an exhibit to Morgan Stanley's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2005, and incorporated herein by reference). 3-b Amended and Restated By-Laws of Morgan Stanley (previously filed as an exhibit to Morgan Stanley's Form 8-K dated September 20, 2005, and incorporated herein by reference). 4-a Form of Certificate of Designation of Offered Preferred Stock (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-27919, and incorporated herein by reference). II-2 Exhibit Number Description - ------- ----------- 4-b Form of Certificate of Offered Preferred Stock (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-27919, and incorporated herein by reference). 4-c Form of Deposit Agreement (including Form of Depositary Receipt) (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-27919, and incorporated herein by reference). 4-d Senior Indenture dated as of November 1, 2004 between Morgan Stanley and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), Trustee (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-e Subordinated Indenture dated as of October 1, 2004 between Morgan Stanley and J.P. Morgan Trust Company, National Association, Trustee (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-f Form of Floating Rate Senior Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-g Form of Fixed Rate Senior Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-h Form of Senior Variable Rate Renewable Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-i Form of Floating Rate Subordinated Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-j Form of Fixed Rate Subordinated Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-k Form of Subordinated Variable Rate Renewable Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-l Form of Fixed Rate Amortizing Senior Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-m Form of Floating/Fixed Rate Senior Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-n Form of Temporary Global Floating Rate Senior Bearer Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-o Form of Permanent Global Floating Rate Senior Bearer Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-p Form of Definitive Floating Rate Senior Bearer Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-q Form of Temporary Global Fixed Rate Senior Bearer Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). II-3 Exhibit Number Description - ------- ----------- 4-r Form of Permanent Global Fixed Rate Senior Bearer Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-s Form of Definitive Fixed Rate Senior Bearer Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-t Form of Euro Fixed Rate Senior Registered Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-u Form of Euro Fixed Rate Subordinated Registered Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-v Form of Euro Senior Registered Floating Rate Renewable Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-w Form of DirectSecurities Fixed Rate Note (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-x Form of Warrant Agreement (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-y Form of Unit Agreement (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-z Form of Put Warrant (included in Exhibit 4-z, previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-aa Form of Call Warrant (included in Exhibit 4-z, previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-bb Form of Purchase Contract (Issuer Sale) (included in Exhibit 4-aa, previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-cc Form of Purchase Contract (Issuer Purchase) (included in Exhibit 4-aa, previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-dd Form of Unit Certificate (included in Exhibit 4-aa, previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-ee Form of Cash-Settled Pre-Paid Purchase Contract (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-ff Form of Unit Agreement Without Holders' Obligations. (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-75289, and incorporated herein by reference). 4-gg Certificate of Trust of Morgan Stanley Capital Trust VI (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-83616, and incorporated herein by reference). II-4 4-hh Certificate of Trust of Morgan Stanley Capital Trust VII (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-83616, and incorporated herein by reference). 4-ii Certificate of Trust of Morgan Stanley Capital Trust VIII (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-jj Certificate of Trust of Morgan Stanley Capital Trust IX (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-kk Certificate of Trust of Morgan Stanley Capital Trust X (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-ll Trust Agreement of Morgan Stanley Capital Trust VI (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-83616, and incorporated herein by reference). 4-mm Trust Agreement of Morgan Stanley Capital Trust VII (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-83616, and incorporated herein by reference). 4-nn Trust Agreement of Morgan Stanley Capital Trust VIII (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-oo Trust Agreement of Morgan Stanley Capital Trust IX (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-pp Trust Agreement of Morgan Stanley Capital Trust X (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-qq Form of Amended and Restated Trust Agreement to be used in connection with the issuance of the Capital Securities (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-rr Junior Subordinated Indenture dated as of October 1, 2004 between Morgan Stanley and The Bank of New York, Trustee, to be used in connection with the issuance of the Junior Subordinated Debentures and the Capital Securities (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-ss Form of Capital Security (included in Exhibit 4-ss, previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-tt Form of Junior Subordinated Deferrable Interest Debenture (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-uu Form of Capital Securities Guarantee (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). 4-vv Form of Certificate representing Morgan Stanley Common Stock (previously filed as an exhibit to Morgan Stanley's Registrations Statement on Form S-3, Registration No. 333-106789, and incorporated herein by reference). 4-ww Form of Physically-Settled Pre-Paid Purchase Contract (previously filed as an exhibit to Morgan Stanley's Registration Statement on Form S-3, Registration No. 333-117752, and incorporated herein by reference). II-5 Exhibit Number Description - ------- ----------- 5-a* Opinion of Sidley Austin Brown & Wood LLP. 5-b* Opinion of Richards, Layton & Finger, P.A., with respect to Morgan Stanley Capital Trust VI. 5-c* Opinion of Richards, Layton & Finger, P.A., with respect to Morgan Stanley Capital Trust VII. 5-d* Opinion of Richards, Layton & Finger, P.A., with respect to Morgan Stanley Capital Trust VIII. 5-e* Opinion of Richards, Layton & Finger, P.A., with respect to Morgan Stanley Capital Trust IX. 5-f* Opinion of Richards, Layton & Finger, P.A., with respect to Morgan Stanley Capital Trust X. 12-a Computation of Consolidated Ratio of Earnings to Fixed Charges (previously filed as an exhibit to Morgan Stanley's Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2005, and incorporated herein by reference). 12-b Computation of Consolidated Ratio of Earnings to Fixed Charges and Preferred Stock Dividends (previously filed as an exhibit to Morgan Stanley's Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2005, and incorporated herein by reference). 15 Letter of Awareness from Deloitte & Touche LLP. 23-a Consent of Deloitte & Touche LLP. 23-b* Consent of Sidley Austin Brown & Wood LLP (included in Exhibit 5-a). 23-c* Consents of Richards, Layton & Finger, P.A. (included in Exhibits 5-b through 5-f). 23-d Consent of BK Associates, Inc. 23-e Consent of Morten Beyer & Agnew, Inc. 23-f* Consent of Airclaims Limited. 24 Powers of Attorney for Morgan Stanley (included on the signature pages) 25-a Statement of Eligibility of JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), Trustee under the Senior Indenture. 25-b Statement of Eligibility of J.P. Morgan Trust Company, National Association, Trustee under the Subordinated Indenture. 25-c Statement of Eligibility of The Bank of New York, Trustee under the Junior Subordinated Indenture. 25-d Statement of Eligibility of The Bank of New York, Trustee under the Amended and Restated Trust Agreement of Morgan Stanley Capital Trust VI. 25-e Statement of Eligibility of The Bank of New York, Trustee under the Amended and Restated Trust Agreement of Morgan Stanley Capital Trust VII. II-6 Exhibit Number Description - ------- ----------- 25-f Statement of Eligibility of The Bank of New York, Trustee under the Amended and Restated Trust Agreement of Morgan Stanley Capital Trust VIII. 25-g Statement of Eligibility of The Bank of New York, Trustee under the Amended and Restated Trust Agreement of Morgan Stanley Capital Trust IX. 25-h Statement of Eligibility of The Bank of New York, Trustee under the Amended and Restated Trust Agreement of Morgan Stanley Capital Trust X. 25-i Statement of Eligibility of The Bank of New York, Trustee under the Capital Securities Guarantee of Morgan Stanley with respect to the Capital Securities of Morgan Stanley Capital Trust VI. 25-j Statement of Eligibility of The Bank of New York, Trustee under the Capital Securities Guarantee of Morgan Stanley with respect to the Capital Securities of Morgan Stanley Capital Trust VII. 25-k Statement of Eligibility of The Bank of New York, Trustee under the Capital Securities Guarantee of Morgan Stanley with respect to the Capital Securities of Morgan Stanley Capital Trust VIII. 25-l Statement of Eligibility of The Bank of New York, Trustee under the Capital Securities Guarantee of Morgan Stanley with respect to the Capital Securities of Morgan Stanley Capital Trust IX. 25-m Statement of Eligibility of The Bank of New York, Trustee under the Capital Securities Guarantee of Morgan Stanley with respect to the Capital Securities of Morgan Stanley Capital Trust X. - --------- * To be filed by amendment Item 17. Undertakings (1) The undersigned Registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of Morgan Stanley's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (2) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrants pursuant to the foregoing provisions, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (3) The undersigned Registrants hereby undertake: (a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: II-7 (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that paragraphs (3)(a)(i) and (3)(a)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrants pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) The undersigned Registrants (other than Morgan Stanley) hereby undertake to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. (5) The undersigned Registrants hereby undertake that: (a) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the forms of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective. (b) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-8 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, Morgan Stanley certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of New York, State of New York, as of this 25th day of October, 2005. MORGAN STANLEY (Registrant) By: /s/ John J. Mack --------------------------------------- Name: John J. Mack Title: Chairman of the Board, Director and Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature appears below hereby constitutes and appoints David H. Sidwell, Paul C. Wirth, Alan Scheuer, Jai Sooklal, Ronald T. Carman and Martin M. Cohen, and each of them singly, his or her true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this Registration Statement (any of which amendments may make such changes and additions to this Registration Statement as such attorneys-in-fact may deem necessary or appropriate) and to file the same, with all exhibits thereto, and any other documents that may be required in connection therewith, granting unto said attorneys-in-fact and agents full power and authority to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirement of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons on behalf of Morgan Stanley and in the capacities indicated as of this 25th day of October, 2005. Signature Title --------- ----- /s/ John J. Mack Chairman of the Board, Director - ------------------------------------------ and Chief Executive Officer John J. Mack /s/ David H. Sidwell Executive Vice President and - ------------------------------------------ Chief Financial Officer David H. Sidwell (Principal Financial Officer) /s/ Paul C. Wirth Controller - ------------------------------------------ Paul C. Wirth /s/ David S. Moser Principal Accounting Officer - ------------------------------------------ David S. Moser II-9 /s/ Roy J. Bostock Director - ------------------------------------------ Roy J. Bostock /s/ Edward A. Brennan Director - ------------------------------------------ Edward A. Brennan /s/ Howard J. Davies Director - ------------------------------------------ Howard J. Davies /s/ C. Robert Kidder Director - ------------------------------------------ C. Robert Kidder /s/ John W. Madigan Director - ------------------------------------------ John W. Madigan /s/ Miles L. Marsh Director - ------------------------------------------ Miles L. Marsh /s/ Charles H. Noski Director - ------------------------------------------ Charles H. Noski /s/ O. Griffith Sexton Director - ------------------------------------------ O. Griffith Sexton /s/ Laura D'Andrea Tyson Director - ------------------------------------------ Laura D'Andrea Tyson /s/ Klaus Zumwinkel Director - ------------------------------------------ Klaus Zumwinkel II-10 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, Morgan Stanley Capital Trust VI, Morgan Stanley Capital Trust VII, Morgan Stanley Capital Trust VIII, Morgan Stanley Capital Trust IX and Morgan Stanley Capital Trust X each certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of New York, State of New York, as of this 25th day of October, 2005. MORGAN STANLEY CAPITAL TRUST VI By: Morgan Stanley By: /s/ Jai Sooklal --------------------------------- Name: Jai Sooklal Title: Assistant Treasurer MORGAN STANLEY CAPITAL TRUST VII By: Morgan Stanley By: /s/ Jai Sooklal --------------------------------- Name: Jai Sooklal Title: Assistant Treasurer MORGAN STANLEY CAPITAL TRUST VIII By: Morgan Stanley By: /s/ Jai Sooklal --------------------------------- Name: Jai Sooklal Title: Assistant Treasurer MORGAN STANLEY CAPITAL TRUST IX By: Morgan Stanley By: /s/ Jai Sooklal --------------------------------- Name: Jai Sooklal Title: Assistant Treasurer II-11 MORGAN STANLEY CAPITAL TRUST X By: Morgan Stanley By: /s/ Jai Sooklal --------------------------------- Name: Jai Sooklal Title: Assistant Treasurer II-12 EXHIBIT INDEX Exhibit Number Description - ------- ----------- 1-d Form of U.S. Distribution Agreement. 1-e Form of Euro Distribution Agreement. 1-f Form of DirectSecurities Distribution Agreement. 5-a* Opinion of Sidley Austin Brown & Wood LLP. 5-b* Opinion of Richards, Layton & Finger, P.A., with respect to Morgan Stanley Capital Trust VI. 5-c* Opinion of Richards, Layton & Finger, P.A., with respect to Morgan Stanley Capital Trust VII. 5-d* Opinion of Richards, Layton & Finger, P.A., with respect to Morgan Stanley Capital Trust VIII. 5-e* Opinion of Richards, Layton & Finger, P.A., with respect to Morgan Stanley Capital Trust IX. 5-f* Opinion of Richards, Layton & Finger, P.A., with respect to Morgan Stanley Capital Trust X. 15 Letter of Awareness from Deloitte & Touche LLP. 23-a Consent of Deloitte & Touche LLP. 23-b* Consent of Sidley Austin Brown & Wood LLP (included in Exhibit 5-a). 23-c* Consents of Richards, Layton & Finger, P.A. (included in Exhibits 5-b through 5-f). 23-d Consent of BK Associates, Inc. 23-e Consent of Morten Beyer & Agnew, Inc. 23-f* Consent of Airclaims Limited. 24 Powers of Attorney for Morgan Stanley (included on the signature pages) 25-a Statement of Eligibility of JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), Trustee under the Senior Indenture. 25-b Statement of Eligibility of J.P. Morgan Trust Company, National Association, Trustee under the Subordinated Indenture. 25-c Statement of Eligibility of The Bank of New York, Trustee under the Junior Subordinated Indenture. 25-d Statement of Eligibility of The Bank of New York, Trustee under the Amended and Restated Trust Agreement of Morgan Stanley Capital Trust VI. 25-e Statement of Eligibility of The Bank of New York, Trustee under the Amended and Restated Trust Agreement of Morgan Stanley Capital Trust VII. E-1 Exhibit Number Description - ------- ----------- 25-f Statement of Eligibility of The Bank of New York, Trustee under the Amended and Restated Trust Agreement of Morgan Stanley Capital Trust VIII. 25-g Statement of Eligibility of The Bank of New York, Trustee under the Amended and Restated Trust Agreement of Morgan Stanley Capital Trust IX. 25-h Statement of Eligibility of The Bank of New York, Trustee under the Amended and Restated Trust Agreement of Morgan Stanley Capital Trust X. 25-i Statement of Eligibility of The Bank of New York, Trustee under the Capital Securities Guarantee of Morgan Stanley with respect to the Capital Securities of Morgan Stanley Capital Trust VI. 25-j Statement of Eligibility of The Bank of New York, Trustee under the Capital Securities Guarantee of Morgan Stanley with respect to the Capital Securities of Morgan Stanley Capital Trust VII. 25-k Statement of Eligibility of The Bank of New York, Trustee under the Capital Securities Guarantee of Morgan Stanley with respect to the Capital Securities of Morgan Stanley Capital Trust VIII. 25-l Statement of Eligibility of The Bank of New York, Trustee under the Capital Securities Guarantee of Morgan Stanley with respect to the Capital Securities of Morgan Stanley Capital Trust IX. 25-m Statement of Eligibility of The Bank of New York, Trustee under the Capital Securities Guarantee of Morgan Stanley with respect to the Capital Securities of Morgan Stanley Capital Trust X. - --------- * To be filed by amendment EX-1.D 2 ex-1d.txt EXHIBIT 1-d MORGAN STANLEY Global Medium-Term Notes, Series F Global Units, Series F U.S. DISTRIBUTION AGREEMENT [ ], 2005 Morgan Stanley 1585 Broadway New York, New York 10036 Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Dear Sirs: Morgan Stanley, a Delaware corporation (the "Company"), confirms its agreement with you with respect to the issue and sale from time to time by the Company of up to $[ ] (or the equivalent thereof in one or more currencies other than U.S. dollars) aggregate initial public offering price of its Global Medium-Term Notes, Series F, due more than nine months from the date of issue (the "Notes"), and its Global Units, Series F (the "Units" and, together with the Notes, the "Program Securities"), in each case subject to reduction as a result of the sale of the Company's (i) Global Medium-Term Notes, Series G and Series H, to be sold primarily outside of the United States, (ii) Global Units, Series G and Series H, to be sold primarily outside of the United States, and (iii) the sale of certain of the Company's other debt securities, warrants, common stock, preferred stock, purchase contracts and units and of capital securities of certain Morgan Stanley Capital Trusts. The Notes may be issued as senior indebtedness (the "Series F Senior Notes") or as subordinated indebtedness (the "Series F Subordinated Notes") of the Company. The Series F Senior Notes will be issued, either alone or as part of a Unit, pursuant to the provisions of a senior indenture dated as of November 1, 2004, between the Company and JPMorgan Chase Bank, N.A., (formerly known as JPMorgan Chase Bank), as trustee (the "Senior Debt Trustee") (as may be supplemented or amended from time to time, the "Senior Debt Indenture"). The Series F Subordinated Notes will be issued pursuant to the provisions of a subordinated indenture dated as of October 1, 2004, between the Company and J.P. Morgan Trust Company, National Association, as trustee (the "Subordinated Debt Trustee") (as may be supplemented or amended from time to time, the "Subordinated Debt Indenture"). The Senior Debt Indenture and the Subordinated Debt Indenture are sometimes hereinafter referred to individually as an "Indenture" and collectively as the "Indentures," and the Senior Debt Trustee and the Subordinated Debt Trustee are sometimes hereinafter referred to individually as a "Trustee" and collectively as the "Trustees." Purchase contracts ("Purchase Contracts") that require holders to satisfy their obligations thereunder when such Purchase Contracts are issued are referred to as "Pre-paid Purchase Contracts." Pre-paid Purchase Contracts that settle in cash ("Cash-settled Pre-paid Purchase Contracts") generally will be issued under an Indenture. Pre-paid Purchase Contracts that do not settle in cash ("Physically-settled Pre-paid Purchase Contracts") generally will be issued under the Unit Agreement or the Unit Agreement Without Holders' Obligations (each as defined below). The Units will be issued either pursuant to the Unit Agreement dated as of November 1, 2004, among the Company, JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Unit Agent, as Collateral Agent, as Trustee and Paying Agent under the Indenture referred to therein, and as Warrant Agent under the Warrant Agreement referred to therein, and the holders from time to time of the Units described therein (as may be amended from time to time, the "Unit Agreement") or, if the Units do not include Purchase Contracts (or include only Pre-paid Purchase Contracts), pursuant to a Unit Agreement among the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Unit Agent, as Trustee and Paying Agent under the Indenture referred to therein, and as Warrant Agent under the Warrant Agreement referred to therein, in the form of such agreement filed as an exhibit to the Registration Statement referred to below (each such agreement, a "Unit Agreement Without Holders's Obligations").(1) Units may include one or more (i) Series F Senior Notes, (ii) warrants ("Warrants") entitling the holders thereof to purchase or sell (a) securities issued by the Company or by an entity affiliated or not affiliated with the Company, a basket of such securities, an index or indices of such securities or any combination of the above, (b) currencies or (c) commodities, (iii) Purchase Contracts, including Pre-paid Purchase Contracts, requiring the holders thereof to purchase or sell (a) securities issued by the Company or by an entity affiliated or not affiliated with the Company, a basket of such securities, an index or indices of such securities or any combination of the above, (b) currencies or (c) commodities or (iv) any combination thereof. The applicable prospectus supplement will specify whether Notes, Warrants and Purchase Contracts comprised by a Unit - --------- (1) The Unit Agreement Without Holders' Oligations shall include additional provisions to allow for the issuance of Pre-Paid Purchase Contracts that are not issued under the Indenture. 2 may or may not be separated from any series of Units. Warrants issued as part of a Unit will be issued pursuant to the Warrant Agreement dated as of November 1, 2004 (as may be amended from time to time, the "Warrant Agreement") between the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Warrant Agent. Purchase Contracts, other than Pre-paid Purchase Contracts ("Non-Pre-paid Purchase Contracts"), entered into by the Company and the holders thereof will be governed by the Unit Agreement. The Notes, whether issued alone or as part of a Unit, will have the maturities, interest rates, redemption provisions, if any, and other terms as set forth in supplements to the Basic Prospectus referred to below. The Warrants will have the exercise prices, exercise dates, expiration dates and other terms as set forth in supplements to the Basic Prospectus. The Purchase Contracts will have the closing dates, purchase or sale prices and other terms as set forth in supplements to the Basic Prospectus. The Company hereby appoints you as its exclusive agents for the purpose of soliciting and receiving offers to purchase Program Securities from the Company by others and, on the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, you agree to use reasonable efforts to solicit and receive offers to purchase Program Securities upon terms acceptable to the Company at such times and in such amounts as the Company shall from time to time specify. In addition, you may also purchase Program Securities as principal pursuant to the terms of a terms agreement relating to such sale (in the case of Notes, a "Notes Terms Agreement" and, in the case of Units, a "Units Terms Agreement") in accordance with the provisions of Section 2(b) hereof. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement, including a prospectus, relating to the Program Securities. Such registration statement, including the exhibits thereto, as amended at the Commencement Date (as hereinafter defined), is hereinafter referred to as the "Registration Statement." The Company proposes to file with the Commission from time to time, pursuant to Rule 424 under the Securities Act of 1933, as amended (the "Securities Act"), supplements to the prospectus relating to the Program Securities included in the Registration Statement that will describe certain terms of the Program Securities. The prospectus relating to the Program Securities in the form in which it appears in the Registration Statement is hereinafter referred to as the "Basic Prospectus." The term "Prospectus" means the Basic Prospectus together with the prospectus supplement or supplements (each, a "Prospectus Supplement") specifically relating to the Program Securities, as filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act. As used herein, the terms "Basic Prospectus" and "Prospectus" shall include in each case the documents, if any, incorporated by reference therein. The terms "supplement," "amendment" and "amend" as used herein shall include all documents deemed to be incorporated by reference in the Prospectus that are filed subsequent to the date of the Basic Prospectus by the 3 Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). If the Company has filed an abbreviated registration statement to register additional Program Securities pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall be deemed to include such Rule 462 Registration Statement. 1. Representations and Warranties. The Company represents and warrants to and agrees with you as of the Commencement Date, as of each date on which you solicit offers to purchase Program Securities, as of each date on which the Company accepts an offer to purchase Program Securities (including any purchase by you as principal pursuant to a Notes Terms Agreement or a Units Terms Agreement), as of each date the Company issues and delivers Program Securities and as of each date the Registration Statement or the Basic Prospectus is amended or supplemented, as follows (it being understood that such representations, warranties and agreements shall be deemed to relate to the Registration Statement, the Basic Prospectus and the Prospectus, each as amended or supplemented to each such date): (a) The Registration Statement has become effective, no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (b) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (ii) each part of the Registration Statement, when such part became effective, did not contain and each such part, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (iv) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that (1) the representations and warranties set forth in this Section 1(b) do not apply (A) to statements or omissions in the Registration Statement or the Prospectus based upon information relating to you furnished to the Company in writing by you expressly for use therein or (B) to those parts of the Registration Statement that constitute the Statements of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the 4 Trustees and (2) the representations and warranties set forth in clauses (iii) and (iv) above, when made as of the Commencement Date or as of any date on which you solicit offers to purchase Program Securities or on which the Company accepts an offer to purchase Program Securities, shall be deemed not to cover information concerning an offering of particular Program Securities to the extent such information will be set forth in a supplement to the Basic Prospectus. (c) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of Delaware, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole. (d) Each subsidiary of the Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole. (e) Each of this Agreement and any applicable Written Notes Terms Agreement or Written Units Terms Agreement (each as hereinafter defined) has been duly authorized, executed and delivered by the Company. (f) Each Indenture has been duly qualified under the Trust Indenture Act and each of the Senior Indenture, the Subordinated Indenture, the Unit Agreement and the Warrant Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. (g) The form of Unit Agreement Without Holders' Obligations has been duly authorized by the Company and, when a Unit Agreement 5 Without Holders' Obligations has been duly executed and delivered by the Company, the Unit Agreement Without Holders' Obligations will be a valid and binding agreement of the Company, enforceable in accordance with its terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. (h) The forms of Notes (including the form of Cash-settled Pre-paid Purchase Contracts), whether issued alone or as part of a Unit, have been duly authorized and established in conformity with the provisions of the relevant Indenture and, when the Notes (and the Cash-settled Pre-paid Purchase Contracts) have been executed and authenticated in accordance with the provisions of the relevant Indenture and delivered to and duly paid for by the purchasers thereof, the Notes (and the Cash-settled Pre-paid Purchase Contracts) will be entitled to the benefits of such Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. (i) The forms of Units under the Unit Agreement, including the forms of Warrants, Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase Contracts, have been duly authorized and established in conformity with the provisions of (i) in the case of such Units, Physically-settled Pre-paid Purchase Contracts, Non-Pre-paid Purchase Contracts, the Unit Agreement and (ii) in the case of Warrants, the Warrant Agreement. When such Units have been delivered to and duly paid for by the purchasers thereof and (A) any Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase Contracts included in such Units have been executed by the Company and countersigned by the Unit Agent and (B) any Warrants included in such Units have been executed by the Company and countersigned by the Warrant Agent, such Units (including any such Physically-settled Pre-paid Purchase Contracts, Non-Pre-paid Purchase Contracts or Warrants contained therein) will be entitled to the benefits of the Unit Agreement and, in the case of the Warrants, the Warrant Agreement and will be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. 6 (j) When a Unit Agreement Without Holders' Obligations has been executed and delivered by the Company, the Units to be issued thereunder will have been duly authorized and when such Units have been established in conformity with the provisions of the Unit Agreement Without Holders' Obligations and delivered to and duly paid for by the purchasers thereof, and any Warrants included in such Units have been executed by the Company and countersigned by the Warrant Agent, such Units (including any such Warrants contained therein) will be entitled to the benefits of the Unit Agreement Without Holders' Obligations and will be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. (k) The execution and delivery by the Company of this Agreement, the Notes and Pre-paid Purchase Contracts (whether issued alone or as part of a Unit), the Units (including any Purchase Contracts and Warrants included therein), the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Written Notes Terms Agreement or Written Units Terms Agreement and the performance by the Company of its obligations under this Agreement, the Notes, the Pre-paid Purchase Contracts, the Units (including any Purchase Contracts or Warrants included therein), the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Notes Terms Agreement or Units Terms Agreement will not contravene any provision of applicable law or the certificate of incorporation or by-laws of the Company or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its consolidated subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any consolidated subsidiary, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Notes, the Pre-paid Purchase Contracts, the Units (including any Purchase Contracts or Warrants included therein), the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Notes Terms Agreement or Units Terms Agreement, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Program Securities; provided, however, that no representation is made or warranty given as to whether the purchase of the Program Securities constitutes a "prohibited transaction" under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as 7 amended. (l) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus. (m) There are no legal or governmental proceedings pending or threatened to which the Company or any of its consolidated subsidiaries is a party or to which any of the properties of the Company or any of its consolidated subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus and are not so described or any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed or incorporated by reference as exhibits to the Registration Statement that are not described, filed or incorporated as required. (n) Each of the Company and its consolidated subsidiaries has all necessary consents, authorizations, approvals, orders, certificates and permits of and from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, to own, lease, license and use its properties and assets and to conduct its business in the manner described in the Prospectus, except to the extent that the failure to obtain or file would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole. (o) Morgan Stanley is registered as a broker-dealer and investment adviser with the Commission, is registered with the Commodity Futures Trading Commission as a futures commission merchant and is a member of the New York Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. (p) Morgan Stanley & Co. Incorporated is registered as a broker-dealer and investment adviser with the Commission, is registered with the Commodity Futures Trading Commission as a futures commission merchant and is a member of the New York Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. (q) The Company is not, and after giving effect to the offering and sale of the Program Securities and the application of the proceeds thereof as described in the Prospectus, will not be required to register as, an "investment company" as such term is defined in the Investment Company Act of 1940, as amended. Notwithstanding the foregoing, it is understood and agreed that the 8 representations and warranties set forth in Section 1(b)(iii) and 1(b)(iv), 1(h) (except as to due authorization of the Notes and Cash-settled Pre-paid Purchase Contracts), 1(i) (except as to due authorization of the Units, Warrants, Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase Contracts), 1(j) (except as to due authorization of the Units and Warrants) and 1(k), when made as of the Commencement Date, or as of any date on which you solicit offers to purchase Program Securities, with respect to any Program Securities the payments of principal or interest on which, or any other payments with respect to which, will be determined by reference to one or more currency exchange rates, commodity prices, securities of entities affiliated or unaffiliated with the Company, baskets of such securities, equity indices or other factors, shall be deemed not to address the application of the Commodity Exchange Act, as amended, or the rules, regulations or interpretations of the Commodity Futures Trading Commission. 2. Solicitations as Agents; Purchases as Principals. (a) Solicitations as Agents. In connection with your actions as agents hereunder, you agree to use reasonable efforts to solicit offers to purchase Program Securities upon the terms and conditions set forth in the Prospectus as then amended or supplemented. The Company reserves the right, in its sole discretion, to instruct you to suspend at any time, for any period of time or permanently, the solicitation of offers to purchase Program Securities. Upon receipt of at least one business day's prior notice from the Company, you will forthwith suspend solicitations of offers to purchase Program Securities from the Company until such time as the Company has advised you that such solicitation may be resumed. While such solicitation is suspended, the Company shall not be required to deliver any certificates, opinions or letters in accordance with Sections 5(a), 5(b) and 5(c); provided, however, that if the Registration Statement or Prospectus is amended or supplemented during the period of suspension (other than by an amendment or supplement providing solely for (i) in the case of Notes issued alone or as part of a Unit, a change in the interest rates, redemption provisions, amortization schedules or maturities offered on the Notes, (ii) in the case of Units, a change in the exercise price, exercise date or period or expiration of an underlying Warrant or a change in the settlement date or purchase or sale price of an underlying Purchase Contract or (iii) for a change you deem to be immaterial), you shall not be required to resume soliciting offers to purchase Program Securities until the Company has delivered such certificates, opinions and letters as you may request. The Company agrees to pay to you, as consideration for the sale of each Program Security resulting from a solicitation made or an offer to purchase received by you, a commission in the form of a discount from the purchase price of such Program Security equal to between .125% 9 and .750% (depending upon such Note's maturity or, in the case of Units, any underlying Note's maturity or the terms of the Units and of the securities comprised by such Units) of the principal amount of such Note or, in the case of Units, the face amount of such Unit (provided that the commission for Notes having, or Units including Notes or other securities having, a maturity of 30 years or greater will be negotiated) or such other discount as may be specified in the Prospectus Supplement relating to such Note or Unit. You shall communicate to the Company, orally or in writing, each offer to purchase Program Securities received by you as agent that in your judgment should be considered by the Company. The Company shall have the sole right to accept offers to purchase Program Securities and may reject any offer in whole or in part. You shall have the right to reject any offer to purchase Program Securities that you consider to be unacceptable, and any such rejection shall not be deemed a breach of your agreements contained herein. The procedural details relating to the issue and delivery of Program Securities sold by you as agent and the payment therefor shall be as set forth in the Administrative Procedures (as hereinafter defined). (b) Purchases as Principals. Each sale of Program Securities to you as principals shall be made in accordance with the terms of this Agreement. In connection with each such sale, the Company will enter into a Notes Terms Agreement or Units Terms Agreement that will provide for the sale of such Program Securities to and the purchase thereof by you. Each Notes Terms Agreement or Units Terms Agreement will take the form of either (i) a written agreement between you and the Company, which may be substantially in the form of Exhibit A or Exhibit A-1 (as applicable) hereto (in the case of Notes, a "Written Notes Terms Agreement," and in the case of Units, a "Written Units Terms Agreement"), or (ii) an oral agreement between you and the Company confirmed in writing by you to the Company. Your commitment to purchase Program Securities as principal pursuant to a Notes Terms Agreement or Units Terms Agreement shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each (i) Notes Terms Agreement shall specify the principal amount of Notes to be purchased by you pursuant thereto, the maturity date of such Notes, the price to be paid to the Company for such Notes, the interest rate and interest rate formula, if any, applicable to such Notes and any other terms of such Notes and (ii) Units Terms Agreement shall specify (a) the information set forth in (i) above with respect to any Notes issued as part of a Unit, (b) with respect to any Warrants issued as part of a Unit, the exercise price, the exercise date or period, the expiration date and any other terms of such Warrants 10 and (c) with respect to any Purchase Contracts issued as part of a Unit, the settlement date, the purchase or sale price or any other terms of such Purchase Contracts. Each such Notes Terms Agreement or Units Terms Agreement may also specify any requirements for officers' certificates, opinions of counsel and letters from the independent auditors of the Company pursuant to Section 4 hereof. A Notes Terms Agreement and a Unit Terms Agreement may also specify certain provisions relating to the reoffering of such Notes or Units, as the case may be, by you. Each Notes Terms Agreement and each Units Terms Agreement shall specify the time and place of delivery of and payment for such Notes or Units, as the case may be. Unless otherwise specified in a Notes Terms Agreement or a Units Terms Agreement, the procedural details relating to the issue and delivery of Notes or Units, as the case may be, purchased by you as principal and the payment therefor shall be as set forth in the Administrative Procedures. Each date of delivery of and payment for Program Securities to be purchased by you as principal pursuant to a Notes Terms Agreement or a Units Terms Agreement, as the case may be, is referred to herein as a "Settlement Date." Unless otherwise specified in a Notes Terms Agreement or a Units Terms Agreement, if you are purchasing Program Securities as principal you may resell such Program Securities to other dealers. Any such sales may be at a discount, which shall not exceed the amount set forth in the Prospectus Supplement relating to such Notes or Units. (c) Administrative Procedures. You and the Company agree to perform the respective duties and obligations specifically provided to be performed in the Global Medium-Term Notes, Series F, and Global Units, Series F, Administrative Procedures (attached hereto as Exhibit B) (the "Administrative Procedures"), as amended from time to time. The Administrative Procedures may be amended only by written agreement of the Company and you. (d) Delivery. The documents required to be delivered by Section 4 of this Agreement as a condition precedent to your obligation to begin soliciting offers to purchase Program Securities as agents of the Company shall be delivered at the office of Davis Polk & Wardwell, your counsel, not later than 4:00 p.m., New York City time, on the date hereof, or at such other time and/or place as you and the Company may agree upon in writing, but in no event later than the day prior to the earlier of (i) the date on which you begin soliciting offers to purchase Program Securities and (ii) the first date on which the Company accepts any offer by you to purchase Program Securities as principal. The date of delivery of such documents is referred to herein as the "Commencement Date." 3. Agreements. The Company agrees with you that: 11 (a) Prior to the termination of the offering of the Program Securities pursuant to this Agreement or pursuant to any Notes Terms Agreement or Units Terms Agreement, the Company will not file any Prospectus Supplement relating to the Program Securities or any amendment to the Registration Statement relating to the Program Securities unless the Company has previously furnished to you a copy thereof for your review and will not file any such proposed supplement or amendment to which you reasonably object; provided, however, that the foregoing requirement shall not apply to any of the Company's periodic filings with the Commission required to be filed pursuant to Section 13(a), 13(c), 13(f), 14 or 15(d) of the Exchange Act, copies of which filings the Company will cause to be delivered to you promptly after being transmitted for filing with the Commission. Subject to the foregoing sentence, the Company will promptly cause each Prospectus Supplement to be filed with or transmitted for filing to the Commission in accordance with Rule 424(b) under the Securities Act. The Company will promptly advise you (i) of the filing of any amendment or supplement to the Basic Prospectus, (ii) of the filing and effectiveness of any amendment to the Registration Statement, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Basic Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Program Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order or notice of suspension of qualification and, if issued, to obtain as soon as possible the withdrawal thereof. If the Basic Prospectus is amended or supplemented as a result of the filing under the Exchange Act of any document incorporated by reference in the Prospectus, you shall not be obligated to solicit offers to purchase Program Securities so long as you are not reasonably satisfied with such document. (b) If, at any time when a prospectus relating to the Program Securities is required to be delivered under the Securities Act, any event occurs or condition exists as a result of which the Prospectus, as then amended or supplemented, would include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in the light of the circumstances when the Prospectus, as then amended or supplemented, is delivered to a purchaser, not misleading, or if, in your opinion or in the opinion of the Company, it is necessary at any time to amend or supplement the Prospectus, as then amended or supplemented, to comply with applicable law, the Company will immediately notify you by telephone (with confirmation in writing) to suspend solicitation of offers to purchase Program Securities and, if so 12 notified by the Company, you shall forthwith suspend such solicitation and cease using the Prospectus, as then amended or supplemented. If the Company shall decide to amend or supplement the Registration Statement or Prospectus, as then amended or supplemented, it shall so advise you promptly by telephone (with confirmation in writing) and, at its expense, shall prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or Prospectus, as then amended or supplemented, satisfactory in all respects to you, that will correct such statement or omission or effect such compliance and will supply such amended or supplemented Prospectus to you in such quantities as you may reasonably request. If any documents, certificates, opinions and letters furnished to you pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c) in connection with the preparation and filing of such amendment or supplement are satisfactory in all respects to you, upon the filing with the Commission of such amendment or supplement to the Prospectus or upon the effectiveness of an amendment to the Registration Statement, you will resume the solicitation of offers to purchase Program Securities hereunder. Notwithstanding any other provision of this Section 3(b), until the distribution of any Program Securities you may own as principal has been completed, if any event described above in this paragraph (b) occurs, the Company will, at its own expense, forthwith prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or Prospectus, as then amended or supplemented, satisfactory in all respects to you, will supply such amended or supplemented Prospectus to you in such quantities as you may reasonably request and shall furnish to you pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c) such documents, certificates, opinions and letters as you may request in connection with the preparation and filing of such amendment or supplement. (c) The Company will make generally available to its security holders and to you as soon as practicable earning statements that satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder covering twelve month periods beginning, in each case, not later than the first day of the Company's fiscal quarter next following the "effective date" (as defined in Rule 158 under the Securities Act) of the Registration Statement with respect to each sale of Program Securities. If such fiscal quarter is the first fiscal quarter of the Company's fiscal year, such earning statement shall be made available not later than 90 days after the close of the period covered thereby and in all other cases shall be made available not later than 45 days after the close of the period covered thereby. (d) The Company will furnish in New York City, without charge, (i) to each Agent, a signed copy of the Registration Statement, including exhibits and all amendments thereto, and as many copies of the 13 Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto as you may reasonably request and (ii) to each Agent that purchases Program Securities pursuant to a Notes Terms Agreement or Units Terms Agreement or solicits an offer to purchase Program Securities that is accepted by the Company, prior to 10:00 a.m. New York City time on the business day next succeeding the date of such Notes Terms Agreement or Units Terms Agreement or the acceptance of such offer, as many copies of the Prospectus, as then amended or supplemented (including the Prospectus Supplement relating to the Program Securities to be purchased pursuant to such Notes Terms Agreement or Units Terms Agreement or accepted offer), as such Agent may reasonably request. (e) The Company will endeavor to qualify the Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request and to maintain such qualifications for as long as you shall reasonably request. (f) During the term of this Agreement, the Company shall furnish to you such relevant documents and certificates of officers of the Company relating to the business, operations and affairs of the Company, the Registration Statement, the Basic Prospectus, any amendments or supplements thereto, the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement, the Notes, the Units, the Warrants, the Purchase Contracts, this Agreement, the Administrative Procedures, any Notes Terms Agreement or Units Terms Agreement and the performance by the Company of its obligations hereunder or thereunder as you may from time to time reasonably request. (g) The Company shall notify you promptly in writing of any downgrading, or of its receipt of any notice of any intended or potential downgrading or of any review for possible change that does not indicate the direction of the possible change, in the rating accorded the Company or any of the Company's securities by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act. (h) The Company will, whether or not any sale of Program Securities is consummated, pay all expenses incident to the performance of its obligations under this Agreement and any Notes Terms Agreement or Units Terms Agreement, including: (i) the preparation and filing of the Registration Statement and the Prospectus and all amendments and supplements thereto, (ii) the preparation, issuance and delivery of the Program Securities, (iii) the fees and disbursements of the Company's counsel and accountants, of the Trustees and their counsel, of the Unit Agent and its counsel, and of the Warrant Agent and its counsel, (iv) the qualification of the Notes and Units (and of any securities comprised 14 thereby) under securities or Blue Sky laws in accordance with the provisions of Section 3(e), including filing fees and the fees and disbursements of your counsel in connection therewith and in connection with the preparation of any Blue Sky or Legal Investment Memoranda, (v) the printing and delivery to you in quantities as hereinabove stated of copies of the Registration Statement and all amendments thereto and of the Prospectus and any amendments or supplements thereto, (vi) the printing and delivery to you of copies of the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any Blue Sky or Legal Investment Memoranda, (vii) any fees charged by rating agencies for the rating of the Program Securities, (viii) the fees and expenses, if any, incurred with respect to any filing with the National Association of Securities Dealers, Inc., (ix) the fees and disbursements of your counsel incurred in connection with the offering and sale of the Program Securities, including any opinions to be rendered by such counsel hereunder, and (x) any out-of-pocket expenses incurred by you; provided that any advertising expenses incurred by you shall have been approved by the Company. (i) During the period beginning on the date of any Notes Terms Agreement or Units Terms Agreement relating to either Notes or Units, as the case may be, and continuing to and including the Settlement Date with respect to such Notes Terms Agreement or Units Terms Agreement, the Company will not, without your prior consent, offer, sell, contract to sell or otherwise dispose of (i) in the case of Notes, any debt securities of the Company substantially similar to the Notes set forth in such Notes Terms Agreement (other than (A) the Notes that are to be sold pursuant to such Notes Terms Agreement, (B) Notes previously agreed to be sold by the Company and (C) commercial paper issued in the ordinary course of business) or (ii) in the case of Units, any securities substantially similar to such Units (other than (A) the Units that are sold pursuant to such Units Terms Agreement or (B) Units previously agreed to be sold by the Company), in each case, except as may otherwise be provided in the applicable Notes Terms Agreement or Units Terms Agreement. 4. Conditions of the Obligations of the Agents. Your obligation to solicit offers to purchase Program Securities as agents of the Company, your obligation to purchase Program Securities as principals pursuant to any Notes Terms Agreement or Units Terms Agreement and the obligation of any other purchaser to purchase Program Securities will be subject to the accuracy of the representations and warranties on the part of the Company herein, to the accuracy of the statements of the Company's officers made in each certificate furnished pursuant to the provisions hereof and to the performance and observance by the Company of all covenants and agreements herein contained on its part to be performed and observed (in the case of your obligation to solicit offers to purchase Program Securities, at the time of such solicitation, and, in the case of your or any other purchaser's obligation to purchase Program Securities, at the 15 time the Company accepts the offer to purchase such Program Securities and at the time of issuance and delivery) and (in each case) to the following additional conditions precedent when and as specified: (a) Prior to such solicitation or purchase, as the case may be: (i) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus, as amended or supplemented at the time of such solicitation or at the time such offer to purchase was made, that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Program Securities on the terms and in the manner contemplated by the Prospectus, as so amended or supplemented; (ii) there shall not have occurred any (A) suspension or material limitation of trading generally on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (B) suspension of trading of any securities of the Company on any exchange or in any over-the-counter market, (C) material disruption in securities settlement, payment or clearance services in the United States or, in the event of a global offering, in any relevant foreign jurisdiction, (D) declaration of any moratorium on commercial banking activities by Federal or New York State authorities or (E) any outbreak or escalation of hostilities or any change in financial markets (or, if the relevant Program Securities are denominated in a currency other than U.S. dollars, any change in currency exchange rates or controls) or any calamity or crisis that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (E), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Program Securities on the terms and in the manner contemplated by the Prospectus, as amended or supplemented, at the time of such solicitation or at the time such offer to purchase was made; and (iii) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded the Company or any of the Company's securities by any "nationally recognized statistical rating organization," as such 16 term is defined for purposes of Rule 436(g)(2) under the Securities Act; (A) except, in each case described in paragraph (i), (ii) or (iii) above, as disclosed to you in writing by the Company prior to such solicitation or, in the case of a purchase of Program Securities, before the offer to purchase such Program Securities was made or (B) unless in each case described in (ii) above, the relevant event shall have occurred and been known to you prior to such solicitation or, in the case of a purchase of Program Securities, before the offer to purchase such Program Securities was made. (b) On the Commencement Date and, if called for by any Notes Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date, you shall have received: (i) The opinion, dated as of such date, of Sidley Austin Brown & Wood LLP, counsel to the Company, or of other counsel satisfactory to you and who may be an officer of the Company, to the following effect that: (A) the Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of Delaware, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus, as amended or supplemented, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole; (B) each of Morgan Stanley, Discover Bank, Morgan Stanley & Co. Incorporated and Morgan Stanley International Holdings Inc. (each a "Material Subsidiary") has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus, as amended or supplemented, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company 17 and its consolidated subsidiaries, taken as a whole; (C) each of the Company and its Material Subsidiaries has all necessary consents, authorizations, approvals, orders, certificates and permits of and from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, to own, lease, license and use its properties and assets and to conduct its business in the manner described in the Prospectus, as amended or supplemented, except to the extent that the failure to obtain or file would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole; (D) each of this Agreement and any applicable Written Notes Terms Agreement or Written Units Terms Agreement has been duly authorized, executed and delivered by the Company; (E) each Indenture has been duly qualified under the Trust Indenture Act and each of the Senior Indenture, the Subordinated Indenture, the Unit Agreement and the Warrant Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; (F) the Unit Agreement Without Holders' Obligations, if any, has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; (G) the forms of Notes (including the form 18 of Cash-settled Pre-paid Purchase Contracts), whether issued alone or as part of a Unit, have been duly authorized and established in conformity with the provisions of the relevant Indenture and, if the Notes and the Cash-settled Pre-paid Purchase Contracts, had been executed by the Company and authenticated by the relevant Trustee or its duly appointed agent in accordance with the provisions of the relevant Indenture and delivered to and duly paid for by the purchasers thereof on the date of such opinion, such Notes and the Cash-settled Pre-paid Purchase Contracts would be entitled to the benefits of such Indenture and would be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; (H) the forms of Units under the Unit Agreement, including the forms of Warrants, Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase Contracts, have been duly authorized and established in conformity with the provisions of (i) in the case of Units under the Unit Agreement, Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase Contracts, the Unit Agreement and (ii) in the case of the Warrants, the Warrant Agreement. If such Units (including the Warrants, the Physically-settled Pre-paid Purchase Contracts and the Non-Pre-paid Purchase Contracts) had been delivered to and duly paid for by the purchasers thereof (and any Purchase Contracts included therein had been executed by the Company and countersigned by the Unit Agent and any Warrants included therein had been executed by the Company and countersigned by the Warrant Agent) on the date of such opinion, such Units (including the Physically-settled Pre-paid Purchase Contracts, the Non-Pre-paid Purchase Contracts and the Warrants contained therein) would be entitled to the benefits of the Unit Agreement and, in the case of the Warrants, the Warrant Agreement, and would be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, 19 moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; (I) the Units under the Unit Agreement Without Holders' Obligations have been duly authorized (and the forms of any Warrants included therein have been duly authorized and established in conformity with the provisions of the Warrant Agreement), and if such Units (including any such Warrants included therein) had been delivered to and duly paid for by the purchasers thereof (and any Warrants included therein had been executed by the Company and countersigned by the Warrant Agent) on the date of such opinion, such Units (including the Warrants contained therein) would be entitled to the benefits of the Unit Agreement Without Holders' Obligations and in the case of the Warrants, the Warrant Agreement, and would be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; (J) the execution and delivery by the Company of the Notes and Cash-settled Pre-paid Purchase Contracts (whether issued alone or as part of a Unit), the Units (including any Purchase Contract or Warrant included therein), the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Written Notes Terms Agreement or Written Units Terms Agreement and the performance by the Company of its obligations under this Agreement, the Notes, the Units, the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Notes Terms Agreement or Units Terms Agreement will not contravene any provision of applicable law or the certificate of incorporation or by-laws of the Company or, to the best of such counsel's knowledge, any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its consolidated subsidiaries, 20 taken as a whole, or, to the best of such counsel's knowledge, any judgment, order or decree of any U.S. governmental body, agency or court having jurisdiction over the Company or any of its consolidated subsidiaries, and no consent, approval, authorization or order of or qualification with any U.S. governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Notes, the Cash-settled Pre-paid Purchase Contracts, the Units (including any Purchase Contracts or Warrants included therein), the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Notes Terms Agreement or Units Terms Agreement, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Program Securities; provided, however, that no opinion is expressed on whether the purchase of the Program Securities constitutes a "prohibited transaction" under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended; (K) the statements (1) in the Prospectus, as then amended or supplemented, under the captions "Description of Notes" (in the Prospectus Supplement), "Description of Debt Securities" (in the Basic Prospectus), "Description of Units" (in the Prospectus Supplement and in the Basic Prospectus), "Plan of Distribution" (in the Prospectus Supplement and in the Basic Prospectus), "Description of Purchase Contracts" (in the Basic Prospectus) and "Description of Warrants" (in the Basic Prospectus), (2) in the Registration Statement, as then amended or supplemented, under Item 15, (3) in "Item 3. Legal Proceedings" of the most recent annual report on Form 10-K incorporated by reference in the Prospectus and (4) in "Item 1. Legal Proceedings" of Part II of the quarterly reports on Form 10-Q, if any, filed since such annual report and incorporated by reference in the Prospectus, in each case insofar as such statements constitute summaries of the legal matters, documents or proceedings referred to therein, fairly present the information called for with respect to such legal matters, documents and proceedings and fairly summarize the matters referred to therein; (L) after due inquiry, such counsel does not 21 know of any legal or governmental proceedings pending or threatened to which the Company or any of its consolidated subsidiaries is a party or to which any of the properties of the Company or any of its consolidated subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus, as then amended or supplemented, and are not so described or of any U.S. federal or state statutes, regulations, contracts or other documents governed by U.S. federal or state law that are required to be described in the Registration Statement or the Prospectus, as then amended or supplemented, or to be filed or incorporated by reference as exhibits to such Registration Statement that are not described, filed or incorporated by reference as required; (M) the Company is not, and after giving effect to the offering and sale of the Program Securities and the application of the proceeds thereof as described in the Prospectus, will not be required to register as, an "investment company" as such term is defined in the Investment Company Act of 1940, as amended; and (N) such counsel (1) believes that each document, if any, filed pursuant to the Exchange Act and incorporated by reference in the Prospectus as then amended or supplemented (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief) complied when so filed as to form in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (2) has no reason to believe that any part of the Registration Statement (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief, and except for that part of the Registration Statement that constitutes the Forms T-1 heretofore referred to), as then amended, if applicable, when such part became effective contained, and the Registration Statement (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief, and except for the part of the Registration Statement that constitutes the Forms T-1) as of the date such opinion is delivered contains, any untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to 22 make the statements therein not misleading, (3) believes that the Registration Statement and Prospectus, as then amended or supplemented, if applicable (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief), complied as to form in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (4) has no reason to believe that the Prospectus, as then amended or supplemented, if applicable (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief), as of the date such opinion is delivered contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that in the case of an opinion delivered on the Commencement Date or pursuant to Section 5(b), the opinion and belief set forth in clauses (3) and (4) above shall be deemed not to cover information concerning an offering of particular Notes or Units to the extent such information will be set forth in a supplement to the Basic Prospectus. (ii) The opinion, dated as of such date, of Davis Polk & Wardwell, your special counsel, covering the matters in subparagraphs (D), (E), (F), (G), (H), (I) and (K) (with respect to statements in the Prospectus, as then amended or supplemented, under the captions "Description of Notes" (in the Prospectus Supplement), "Description of Debt Securities" (in the Basic Prospectus), "Description of Units" (in the Prospectus Supplement and the Basic Prospectus), "Plan of Distribution" (in the Prospectus Supplement and in the Basic Prospectus), "Description of Purchase Contracts" (in the Basic Prospectus) and "Description of Warrants" (in the Basic Prospectus)) and clauses (2), (3) and (4) of subparagraph (N) in paragraph (b)(i) above. The opinions described in subparagraphs (F) and (I) need only be contained in an opinion delivered on a Settlement Date related to an offering of Units under a Unit Agreement Without Holders' Obligations to be executed on or prior to such Settlement Date. Notwithstanding the foregoing, the opinions described in subparagraphs (G) (except as to due authorization of the Notes and Cash-settled Pre-paid Purchase Contracts), (H) (except as to due authorization of the Units, Warrants, Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase 23 Contracts), (I) (except as to due authorization of the Units and Warrants), (J), (K)(1) and (N)(3) and (4) of paragraph (b)(i) above, when contained in an opinion delivered on the Commencement Date or pursuant to Section 5(b), shall be deemed not to address the application of the Commodity Exchange Act, as amended, or the rules, regulations or interpretations of the Commodity Futures Trading Commission to Program Securities the payments of principal or interest on which, or any other payments with respect to which, will be determined by reference to one or more currency exchange rates, commodity prices, securities of entities affiliated or unaffiliated with the Company, baskets of such securities, equity indices or other factors. With respect to subparagraph (N) of paragraph (b)(i) above, if such opinion is given by counsel who is also an officer of the Company, such counsel may state that his or her opinion and belief are based upon his or her participation, or the participation of someone under his or her supervision, in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto and documents incorporated therein by reference and review and discussion of the contents thereof, but are without independent check or verification, except as specified. With respect to subparagraph (N) of paragraph (b)(i) above, Davis Polk & Wardwell and, if Sidley Austin Brown & Wood LLP is giving such opinion, Sidley Austin Brown & Wood LLP may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto (but not including documents incorporated therein by reference) and review and discussion of the contents thereof (including documents incorporated therein by reference), but are without independent check or verification, except as specified. (iii) The opinion, dated as of such date, of Sidley Austin Brown & Wood LLP, special counsel to the Company, to the effect that the statements set forth under the caption "United States Federal Taxation" in the Prospectus Supplement and under the caption "Forms of Securities--Limitations on Issuance of Bearer Securities" in the Basic Prospectus, insofar as such statements relate to statements of law or legal conclusions under the laws of the United States or matters of United States law, fairly present the information called for and fairly summarize the matters referred to therein. The opinion of Sidley Austin Brown & Wood LLP described in paragraph (b)(iii) above and in paragraph (b)(i) above, if such opinion is given by Sidley Austin Brown & Wood LLP, shall be rendered to you at the request of the Company and shall so state therein. (c) On the Commencement Date and, if called for by any Notes Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date, you shall have received a certificate, dated the 24 Commencement Date or such Settlement Date, as the case may be, and signed by an executive officer of the Company to the effect set forth in subparagraph (a)(iii) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of such date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied on or before such date. The officer signing and delivering such certificate may rely upon the best of his knowledge as to proceedings threatened. (d) On the Commencement Date and, if called for by any Notes Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date, the Company's independent auditors shall have furnished to you a letter or letters, dated as of the Commencement Date or such Settlement Date, as the case may be, in form and substance satisfactory to you containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus, as then amended or supplemented; provided that each letter so furnished shall use a "cut-off date" no more than three business days prior to the date of such letter. (e) On the Commencement Date and on each Settlement Date, the Company shall have furnished to you such appropriate further information, certificates and documents as you may reasonably request. 5. Additional Agreements of the Company. (a) Each time the Registration Statement or Prospectus is amended or supplemented (other than by an amendment or supplement providing solely for (i) in the case of Notes, a change in the interest rates, redemption provisions, amortization schedules or maturities offered on the Notes issued alone or as part of a Unit, (ii) in the case of Units, (x) a change in the exercise price, exercise date or period or expiration of an underlying Warrant or (y) a change in the settlement date or purchase or sale price of an underlying Purchase Contract or (iii) a change you deem to be immaterial), the Company will deliver or cause to be delivered forthwith to you a certificate signed by an executive officer of the Company, dated the date of such amendment or supplement, as the case may be, in form reasonably satisfactory to you, of the same tenor as the certificate referred to in Section 4(c) relating to the Registration Statement or the Prospectus as amended or supplemented to the time of delivery of such certificate. (b) Each time the Company furnishes a certificate pursuant to Section 5(a) (other than any amendment or supplement to the Registration Statement or Prospectus caused by the filing of a Current Report on Form 8-K unless you shall reasonably request based on disclosure included or omitted from such Report), the Company will furnish or cause to be 25 furnished forthwith to you a written opinion of counsel for the Company. Any such opinion shall be dated the date of such amendment or supplement, as the case may be, shall be in a form satisfactory to you and shall be of the same tenor as the opinions referred to in Section 4(b), but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion. In lieu of such opinion, counsel last furnishing such an opinion to you may furnish to you a letter to the effect that you may rely on such last opinion to the same extent as though it were dated the date of such letter (except that statements in such last opinion will be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented to the time of delivery of such letter.) (c) Each time the Registration Statement or the Prospectus is amended or supplemented to set forth amended or supplemental financial information or such amended or supplemental information is incorporated by reference in the Prospectus, the Company shall cause its independent auditors forthwith to furnish you with a letter, dated the date of such amendment or supplement, as the case may be, in form satisfactory to you, of the same tenor as the letter referred to in Section 4(d), with regard to the amended or supplemental financial information included or incorporated by reference in the Registration Statement or the Prospectus as amended or supplemented to the date of such letter; provided that each letter so furnished shall use a "cut-off date" no more than three business days prior to the date of such letter. 6. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless you and each person, if any, who controls you within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to you furnished to the Company in writing by you expressly for use therein. (b) You agree to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to you, but 26 only with reference to information relating to you furnished to the Company in writing by you expressly for use in the Registration Statement or the Prospectus or any amendments or supplements thereto. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either paragraph (a) or (b) above, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by you, in the case of parties indemnified pursuant to paragraph (a) above, and by the Company, in the case of parties indemnified pursuant to paragraph (b) above. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there were to be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which 27 any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) To the extent the indemnification provided for in paragraph (a) or (b) of this Section 6 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein in connection with any offering of Program Securities, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and you on the other hand from the offering of such Program Securities or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and you on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and you on the other hand in connection with the offering of such Program Securities shall be deemed to be in the same respective proportions as the total net proceeds from the offering of such Program Securities (before deducting expenses) received by the Company bear to the total discounts and commissions received by you in respect thereof. The relative fault of the Company on the one hand and of you on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by you and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (e) The Company and you agree that it would not be just or equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6, you shall not be required to contribute any amount in excess of the amount by which the total price at which the Program Securities referred to in paragraph (d) above that were offered and sold to the public through you exceeds the amount of any 28 damages that you have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 6 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. (f) The indemnity and contribution provisions contained in this Section 6 and the representations, warranties and other statements of the Company, its officers and you set forth in or made pursuant to this Agreement or any Notes Terms Agreement or Units Terms Agreement will remain operative and in full force and effect regardless of (i) any termination of this Agreement or any such Notes Terms Agreement or Units Terms Agreement, (ii) any investigation made by or on behalf of you or any person controlling you or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Program Securities. 7. Position of the Agent. In acting under this Agreement and in connection with the sale of any Program Securities by the Company (other than Program Securities sold to you pursuant to a Notes Terms Agreement or Units Terms Agreement, as the case may be), you are acting solely as agent of the Company and do not assume any obligation towards or relationship of agency or trust with any purchaser of Program Securities. You shall make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Program Securities has been solicited by you and accepted by the Company, but you shall not have any liability to the Company in the event any such purchase is not consummated for any reason. If the Company shall default in its obligations to deliver Program Securities to a purchaser whose offer it has accepted, the Company shall hold you harmless against any loss, claim, damage or liability arising from or as a result of such default and shall, in particular, pay to you the commission you would have received had such sale been consummated. 8. Offering Restrictions. If any Program Securities are to be offered outside the United States, you will not offer or sell any such Program Securities in any jurisdiction if such offer or sale would not be in compliance with any applicable law or regulation or if any consent, approval or permission is needed for such offer or sale by you or for or on behalf of the Company unless such consent, approval or permission has been previously obtained. Subject to the obligations of the Company set forth in Section 3 of this Agreement, the Company shall have no responsibility for, and you will obtain, any consent, approval or permission required by you for the subscription, offer, sale or delivery by you of Program Securities, or the distribution of any offering materials, under the laws and regulations in force in any jurisdiction to which you are subject or in or from which you make any subscription, offer, sale or delivery. 29 9. Termination. This Agreement may be terminated at any time either by the Company or by you upon the giving of written notice of such termination to the other parties hereto, but without prejudice to any rights, obligations or liabilities of the other parties hereto accrued or incurred prior to such termination. The termination of this Agreement shall not require termination of any Notes Terms Agreement or Units Terms Agreement, and the termination of any such Notes Terms Agreement or Units Terms Agreement shall not require termination of this Agreement. If this Agreement is terminated, the provisions of the third paragraph of Section 2(a), the last sentence of Section 3(b) and Sections 3(c), 3(h), 6, 7, 10, 11 and 13 shall survive; provided that if at the time of termination an offer to purchase Program Securities has been accepted by the Company but the time of delivery to the purchaser or its agent of such Program Securities has not occurred, the provisions of Sections 1, 2(b), 2(c), 3(a), 3(d), 3(e), 3(f), 3(g), 3(i), 4 and 5 shall also survive until such delivery has been made. 10. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to you, will be mailed, delivered or telefaxed and confirmed to you at 1585 Broadway, New York, New York 10036, Attention: Manager, Continuously Offered Products (telefax number: 212-761-0781), with a copy to 1585 Broadway, 34th Floor, New York, New York 10036, Attention: Peter Cooper, Investment Banking Information Center (telefax number: 212-761-0260) or, if sent to the Company, will be mailed, delivered or telefaxed and confirmed to the Company at 1221 Avenue of the Americas, New York, New York 10020, Attention: Treasurer; Facsimile No.: 212-762-7337. 11. Successors. This Agreement and any Notes Terms Agreement or Units Terms Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors and controlling persons referred to in Section 6 and the purchasers of Notes and Units (to the extent expressly provided in Section 4), and no other person will have any right or obligation hereunder. 12. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 13. Applicable Law. This Agreement will be governed by and construed in accordance with the internal laws of the State of New York. 14. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. 30 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement between the Company and you. Very truly yours, MORGAN STANLEY By: ---------------------------------- Name: Jai Sooklal Title: Assistant Treasurer The foregoing Agreement is hereby confirmed and accepted as of the date first above written. MORGAN STANLEY By: ---------------------------------------- Name: Title: MORGAN STANLEY & CO. INCORPORATED By: ---------------------------------------- Name: Title: EXHIBIT A MORGAN STANLEY GLOBAL MEDIUM-TERM NOTES, SERIES F NOTES TERMS AGREEMENT __________________, 200_ Morgan Stanley 1585 Broadway New York, New York 10036 Attention: Re: U.S. Distribution Agreement dated [ ], 2005 (the "U.S. Distribution Agreement") --------------------------------------------------------------- The undersigned agrees to purchase your Global Medium-Term Notes, Series F, [specified designation] having the following terms: All Notes Fixed Rate Notes Floating Rate Notes - ----------------------------------------------------------------------------------------------------- Principal Amount: Interest Rate: Base Rate: Purchase Price: Applicability of Modified Payment Index Maturity: upon Acceleration: Price to Public: If yes, state issue price: Index Currency: Settlement Date and Time: Amortization Schedule: Spread (Plus or Minus): Place of Delivery: Applicability of Annual Interest Spread Multiplier: Payments: Specified Currency: Denominated Currency (if any): Alternate Rate Event Spread: Original Issue Date: Indexed Currency or Currencies Initial Interest Rate: (if any): Interest Accrual Date: Payment Currency (if any): Initial Interest Reset Date: Interest Payment Dates: Exchange Rate Agent (if any): Interest Reset Dates:
A-1 All Notes Fixed Rate Notes Floating Rate Notes - ----------------------------------------------------------------------------------------------------- Interest Payment Period: Reference Dealers: Interest Reset Period: Maturity Date: Face Amount (if any): Maximum Interest Rate: Optional Repayment Date(s): Fixed Amount of each Indexed Minimum Interest Rate: Currency (if any): Optional Redemption Date(s): Aggregate Fixed Amount of each Calculation Agent: Indexed Currency (if any): Initial Redemption Date: Applicability of Issuer's Option Reporting Service: to Extend Original Maturity Date: Initial Redemption Percentage: If yes, state Final Maturity Date: Variable Rate Renewable Notes: Annual Redemption Percentage Redemption Dates: Reduction: Ranking: Redemption Percentage: Minimum Denominations: Initial Maturity Date: Other Provisions: Final Maturity Date: Applicability of Issuer's Option to Reset Spread or Spread Multiplier:
The provisions of Sections 1, 2(b) and 2(c), 3 through 6, 8 and 10 through 14 of the U.S. Distribution Agreement and the related definitions are incorporated by reference herein and shall be deemed to have the same force and effect as if set forth in full herein. This Agreement is also subject to termination on the terms incorporated by reference herein. If this Agreement is terminated, the provisions of Sections 3(h), 6, 10, 11 and 13 of the U.S. Distribution Agreement shall survive for the purposes of this Agreement. The following information, opinions, certificates, letters and documents referred to in Section 4 of the U.S. Distribution Agreement will be required: ___________. A-2 MORGAN STANLEY By: -------------------------------------- Name: Title: MORGAN STANLEY & CO. INCORPORATED By: -------------------------------------- Name: Title: Accepted: MORGAN STANLEY By: ----------------------------------- Name: Title: A-3 EXHIBIT A-1 MORGAN STANLEY GLOBAL UNITS, SERIES F UNITS TERMS AGREEMENT ___________________, 200_ Morgan Stanley 1585 Broadway New York, New York 10036 Attention: Re: U.S. Distribution Agreement dated [ ], 2005 (the "U.S. Distribution Agreement") -------------------------------------------------------------------- The undersigned agrees to purchase your Global Units, Series F, [specified designation] having the following terms: All Units: Warrants Issued as Part of a Unit: Purchase Contracts Issued as Part of a Unit: - ----------------------------------------------------------------------------------------------------------- Settlement Date and Time: Designation of the Series of Designation of the Series of Warrants: [Call] [Put] Warrants Purchase Contracts: [Purchase][Sale] Purchase Contracts Number (Face Amount): Warrant Property: Aggregate Number of Purchase Contracts: Purchase Price: Aggregate Number of Warrants: Purchase Contract Property: Specified Currency: Date(s) upon which Warrants may Quantity per Purchase Contract: be exercised: Severability: Currency in which exercise [Purchase] [Sale] Price: payments shall be made: Other Terms: Exchange Rate (or method of Settlement Date: calculation:
A-1-1 All Units: Warrants Issued as Part of a Unit: Purchase Contracts Issued as Part of a Unit: - ----------------------------------------------------------------------------------------------------------- Expiration Date: Payment Location: Form of Settlement: Method of Settlement: [Call Price:](1) [Formula for determining Cash Currency of Settlement Payment: Settlement Value:](2) [Amount of Warrant Property Contract Fees, if any: Salable per Warrant:](3) [Put Price for such specified Corporation Acceleration: amount of Warrant Property per Warrant:](2) [Method of delivery of any Holders' Acceleration: Warrant Property to be delivered for sale upon exercise of Warrants:](3) Other Terms: Redemption Provisions: Other Terms: All Notes Issued as Part of a Unit: Fixed Rate Notes Issued as Part Floating Rate Notes Issued as of a Unit: Part of a Unit: - ----------------------------------------------------------------------------------------------------------- Principal Amount: Interest Rate: Base Rate: Purchase Price: Applicability of Modified Payment Index Maturity: upon Acceleration: Price to Public: If yes, state issue price: Index Currency: Settlement Date and Time: Amortization Schedule: Spread (Plus or Minus): Place of Delivery: Applicability of Annual Interest Spread Multiplier: Payments: Specified Currency: Denominated Currency (if any): Alternate Rate Event Spread:
- ----------------------------- (1) Applicable to Call Warrants (2) Applicable to Put Warrants (3) Applicable to Put Warrants only if such Put Warrants contemplate that the holder deliver Warrant Property to settle Put Warrants A-1-2 All Notes Issued as Part of Fixed Rate Notes Issued as Floating Rate Notes Issued a Units: Part of a Unit: as Part of a Unit: - -------------------------------------------------------------------------------------------------------- Original Issue Date: Indexed Currency or Currencies Initial Interest Rate: (if any): Interest Accrual Date: Payment Currency (if any): Initial Interest Reset Date: Maturity Date: Exchange Rate Agent (if any): Interest Reset Dates: Interest Payment Date(s): Reference Dealers: Interest Reset Period: Interest Payment Period: Face Amount (if any): Maximum Interest Rate: Optional Repayment Date(s): Fixed Amount of each Indexed Minimum Interest Rate: Currency (if any): Optional Redemption Date(s): Aggregate Fixed Amount of each Calculation Agent: Indexed Currency (if any): Initial Redemption Date: Applicability of Issuer's Option Reporting Service: to Extend Original Maturity Date: Initial Redemption Percentage: If yes, state Final Maturity Date: Variable Rate Renewable Notes: Annual Redemption Percentage Redemption Dates: Reduction: Ranking: Redemption Percentage: Series: Initial Maturity Date: Minimum Denominations: Final Maturity Date: Other Terms: Applicability of Issuer's Option to Reset Spread or Spread Multiplier:
A-1-3 The provisions of Sections 1, 2(b) and 2(c), 3 through 6, 8 and 10 through 14 of the U.S. Distribution Agreement and the related definitions are incorporated by reference herein and shall be deemed to have the same force and effect as if set forth in full herein.(4) This Agreement is also subject to termination on the terms incorporated by reference herein. If this Agreement is terminated, the provisions of Sections 3(h), 6, 10, 11 and 13 of the U.S. Distribution Agreement shall survive for the purposes of this Agreement. The following information, opinions, certificates, letters and documents referred to in Section 4 of the U.S. Distribution Agreement will be required: ___________. MORGAN STANLEY By: ------------------------------------ Name: Title: MORGAN STANLEY & CO. INCORPORATED By: ------------------------------------ Name: Title: Accepted: MORGAN STANLEY By: ------------------------------------ Name: Title: - ---------------------- In the case of Physically-settled Pre-paid Purchase Contracts issued under a Unit Agreement Without Holders' Obligations, additional representations and warranties will be added with respect to such Physically-settled Pre-paid Purchase Contracts and the opinions of counsel delivered pursuant to Sections 4(b)(i) and 4(b)(ii) will cover such additional representations and warranties, as appropriate. EXHIBIT B MORGAN STANLEY GLOBAL MEDIUM-TERM NOTES, SERIES F GLOBAL UNITS, SERIES F ADMINISTRATIVE PROCEDURES ---------------------- Explained below are the administrative procedures and specific terms of the offering of Global Medium-Term Notes, Series F (the "Notes") and Global Units, Series F (the "Units"), on a continuous basis by Morgan Stanley (the "Company") pursuant to the U.S. Distribution Agreement dated [ ], 2005 (as may be amended from time to time, the "Distribution Agreement") among the Company, Morgan Stanley and Morgan Stanley & Co. Incorporated (collectively or individually the "Agent" as the context requires). The Notes may be issued as senior indebtedness (the "Senior Notes") or subordinated indebtedness (the "Subordinated Notes") of the Company, and as used herein the term "Notes" includes the Senior Notes and the Subordinated Notes. The Senior Notes will be issued, either alone or as part of a Unit, pursuant to the provisions of a senior indenture dated as of November 1, 2004 (as may be supplemented or amended from time to time, the "Senior Debt Indenture"), between the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), ("JPMorgan Chase"), as trustee. The Subordinated Notes will be issued pursuant to the provisions of a subordinated indenture, dated as of October 1, 2004 (as may be supplemented or amended from time to time, the "Subordinated Debt Indenture"), between the Company and J.P. Morgan Trust Company, National Association ("JPMorgan Trust"), as trustee. The Senior Debt Indenture and the Subordinated Debt Indenture are sometimes hereinafter referred to individually as an "Indenture" and collectively as the "Indentures." Purchase contracts ("Purchase Contracts") that require holders to satisfy their obligations thereunder when such Purchase Contracts are issued are referred to as "Pre-paid Purchase Contracts." Pre-paid Purchase Contracts that settle in cash ("Cash-settled Pre-paid Purchase Contracts") generally will be issued under the Indentures. Pre-paid Purchase Contracts that do not settle in cash ("Physically-settled Pre-paid Purchase Contracts") generally will be issued under the Unit Agreement or the Unit Agreement Without Holders' Obligations (each as defined below). Unless otherwise specified in the applicable Pricing Supplement, the Units will be issued (i) pursuant to the Unit Agreement dated as of November 1, 2004, among the Company, JPMorgan Chase Bank, N.A. (formerly known as JPMorgan B-1 Chase Bank), as Unit Agent, as Collateral Agent, as Trustee and Paying Agent under the Indenture referred to therein, and as Warrant Agent under the Warrant Agreement referred to therein, and the holders from time to time of the Units described therein (as may be amended from time to time, the "Unit Agreement"), or (ii) if Units do not include Purchase Contracts (or include only Pre-paid Purchase Contracts), pursuant to a unit agreement among the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Unit Agent, as Trustee and Paying Agent under the Indenture referred to therein, and as Warrant Agent under the Warrant Agreement referred to therein, in the form of such agreement filed as an exhibit to the Registration Statement (each such agreement, a "Unit Agreement Without Holders' Obligations").(1) Units may include one or more (i) Series F Senior Notes, (ii) warrants ("Warrants") entitling the holders thereof to purchase or sell (a) securities issued by the Company or by an entity affiliated or not affiliated with the Company, a basket of such securities, an index or indices of such securities or any combination of the above, (b) currencies or (c) commodities, (iii) Purchase Contracts, including Pre-paid Purchase Contracts, requiring the holders thereof to purchase or sell (a) securities issued by the Company or by an entity affiliated or not affiliated with the Company, a basket of such securities, an index or indices of such securities or any combination of the above, (b) currencies or (c) commodities or (iv) any combination thereof. The applicable Pricing Supplement will specify whether or not any Notes, Warrants and Purchase Contracts comprised by a Unit may or may not be separated from the Unit. Warrants issued as part of a Unit will be issued pursuant to the Warrant Agreement dated as of November 1, 2004, between the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Warrant Agent (as may be amended from time to time, the "Warrant Agreement"). Purchase Contracts, other than Pre-paid Purchase Contracts, entered into by the Company and the holders thereof will be governed by the Unit Agreement. In the Distribution Agreement, the Agent has agreed to use reasonable efforts to solicit purchases of the Notes and the Units, and the administrative procedures explained below will govern the issuance and settlement of any Notes or Units sold through the Agent, as agent of the Company. The Agent, as principal, may also purchase Notes and Units for its own account, and the Company and the Agent will enter into a terms agreement (in the case of Notes, a "Notes Terms Agreement," and in the case of Units, a "Units Terms Agreement"), as contemplated by the Distribution Agreement. The administrative procedures explained below will govern the issuance and settlement of any Notes or Units purchased by the Agent, as principal, unless otherwise specified in the applicable Notes Terms Agreement or Units Terms Agreement. - -------------------- (1) The Unit Agreement Without Holders' Obligations shall include provisions to allow for the issuance of Pre-Paid Purchase Contracts that are not issued under the Indentures. B-2 JPMorgan Chase will be the Registrar, Calculation Agent, Authenticating Agent and Paying Agent for the Senior Notes (and any Cash-settled Pre-paid Purchase Contracts), the Unit Agent for the Units and Purchase Contracts (other than Cash-settled Pre-paid Purchase Contracts) and Warrant Agent for the Warrants, and in each case, will perform the duties specified herein. JPMorgan Trust will be the Registrar, Calculation Agent, Authenticating Agent and Paying Agent for the Subordinated Notes (and any Cash-settled Pre-paid Purchase Contracts) and in each case, will perform the duties specified herein. References herein to "JPMorgan" are to JPMorgan Chase (in the case of duties relating to the Senior Notes) or to JPMorgan Trust (in the case of duties relating to the Subordinated Notes). Each Note and each Unit will be represented by either (i) in the case of the Notes, a Global Note and, in the case of the Units, a Global Unit (each as defined below) delivered to JPMorgan, as agent for The Depository Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC (in the case of a Note, a "Book-Entry Note" and, in the case of a Unit, a "Book-Entry Unit") or (ii) a certificate delivered to the holder thereof or a person designated by such holder (in the case of a Note, a "Certificated Note" and, in the case of a Unit, a "Certificated Unit"). Each Note, Warrant or Purchase Contract which may be included in any Unit will be issued in the corresponding global or certificated form. Except as set forth in the Indentures, in the case of Notes or Cash-settled Pre-paid Purchase Contracts, the Unit Agreement or a Unit Agreement Without Holders' Obligations, as applicable, in the case of Units and all other Purchase Contracts, or the Warrant Agreement, in the case of the Warrants, an owner of a Book-Entry Note or Book-Entry Unit (or of any Note, Warrant or Purchase Contract included in such Book-Entry Unit), as the case may be, will not be entitled to receive a Certificated Note (including with respect to a Book-Entry Note included in a Book-Entry Unit) or a Certificated Unit (or certificated Warrants or Purchase Contracts, as applicable). Book-Entry Notes and Book-Entry Units, which may be payable in either U.S. dollars or other specified currencies, will be issued in accordance with the administrative procedures set forth in Part I hereof as they may subsequently be amended as the result of changes in DTC's operating procedures. Certificated Notes and Certificated Units will be issued in accordance with the administrative procedures set forth in Part II hereof. Unless otherwise defined herein, terms defined in the Indentures, the Unit Agreement, the Unit Agreement Without Holders' Obligations, the Warrant Agreement, the Notes, the Units, the Warrants, the Purchase Contracts or any Prospectus Supplement relating to the Notes and Units shall be used herein as therein defined. The Company will advise the Agent in writing of the employees B-3 of the Company with whom the Agent is to communicate regarding offers to purchase Notes and Units and the related settlement details. The Company will advise the Agent in writing of the employees of the Company with whom the Agent is to communicate regarding offers to purchase Notes and Units and the related settlement details. B-4 PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES AND BOOK-ENTRY UNITS In connection with the qualification of the Book-Entry Notes and Book-Entry Units for eligibility in the book-entry system maintained by DTC, JPMorgan will perform the custodial, document control and administrative functions described below, in accordance with its respective obligations under DTC's Operational Arrangements dated February 20, 2002, as amended from time to time, including by the Blanket Issuer Letter of Representations from the Company to DTC, dated as of August 25, 2003, its obligations under a Medium-Term Note Certificate Agreement between JPMorgan Chase and DTC dated as of November 13, 2001, and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). Issuance: On any date of settlement (as defined under "Settlement" below) for one or more Book-Entry Notes, or one or more Book-Entry Units, the Company will issue, in the case of the Notes, a single global Note in fully registered form without coupons (a "Global Note") representing up to U.S. $500,000,000 principal amount of all such Notes that have the same Original Issue Date, Maturity Date and other terms and, in the case of a Unit, a single global unit in fully registered form (a "Global Unit"), representing up to U.S. $500,000,000 face amount of all such Units that have the same Original Issue Date and that otherwise comprise the same securities and have the same terms. Each Global Note, whether issued alone or as part of a Unit, will be dated and issued as of the date of its authentication by JPMorgan and each Global Unit will be dated and issued as of the date of the issuances of the other securities comprised by such Unit. Each Global Note, whether alone or as part of a Unit, will bear an "Interest Accrual Date," which will be (i) with respect to an original Global Note (or any portion thereof), its original issuance date and (ii) with respect to any Global Note (or any portion thereof) issued subsequently upon exchange of a Global Note, or in lieu of a destroyed, lost or stolen Global Note, the most recent Interest Payment Date to which interest has been paid or duly provided for on the predecessor Global Note or Notes (or if no such payment or provision has been made, the original issuance date of the predecessor Global Note), B-5 regardless of the date of authentication of such subsequently issued Global Note. Book-Entry Notes and Book-Entry Units may be payable in either U.S. dollars or other specified currencies. No Global Note or Global Unit will represent, any Certificated Note or Certificated Unit, as the case may be. Denominations: Book-Entry Notes and Book-Entry Units will be issued in (i) in the case of Book-Entry Notes, principal amounts of U.S. $1,000 or any amount in excess thereof that is an integral multiple of U.S. $1,000 or, if such Book-Entry Notes are issued in a currency other than U.S. dollars, principal amounts of such currency in denominations of the equivalent of U.S. $1,000 (rounded to an integral multiple of 1,000 units of such currency), unless otherwise indicated in the applicable Pricing Supplement and (ii) in the case of Book-Entry Units, denominations of a single unit and any integral multiple thereof with face amounts of U.S. $1,000 or any amount in excess thereof that is an integral multiple of U.S. $1,000 or, if such Book-Entry Units are issued in a currency other than U.S. dollars, face amounts of such currency in denominations of the equivalent of U.S. $1,000 (rounded to an integral multiple of 1,000 units of such currency), unless otherwise indicated in the applicable Pricing Supplement. Global Notes and Global Units will be denominated in, in the case of Global Notes, principal amounts not in excess of U.S.$500,000,000 and, in the case of Global Units, face amounts not in excess of U.S. $500,000,000. If one or more Book-Entry Notes having an aggregate principal amount in excess of U.S. $500,000,000, or one or more Book-Entry Units having an aggregate face amount, in excess of $500,000,000 would, but for the preceding sentence, be represented by a single Global Note or Global Unit, as the case may be, then one Global Note will be issued to represent each U.S. $500,000,000 principal amount of such Book-Entry Note or Notes and one Global Unit will be issued to represent each U.S.$500,000,000 face amount of such Book-Entry Unit or Units and an additional Global Note or Global Unit, will be issued to represent any remaining principal amount of such Book-Entry Note or Notes or face amount of such B-6 Book-Entry Unit or Units. In such a case, each of the Global Notes or Global Units representing such Book-Entry Note or Notes or such Book-Entry Unit or Units, as the case may be, shall be assigned the same CUSIP number. Preparation of Pricing If any order to purchase a Book-Entry Note or Supplement: Book-Entry Unit is accepted by or on behalf of the Company, the Company will prepare a pricing supplement (a "Pricing Supplement") reflecting the terms of such Note or Unit. The Company (i) will arrange to file an electronic format document, in the manner prescribed by the EDGAR Filer Manual, of such Pricing Supplement with the Commission in accordance with the applicable paragraph of Rule 424(b) under the Securities Act, (ii) will, as soon as possible and in any event not later than the date on which such Pricing Supplement is filed with the Commission, deliver the number of copies of such Pricing Supplement to the Agent as the Agent shall request and (iii) will, on the Agent's behalf, promptly file five copies of such Pricing Supplement with the National Association of Securities Dealers, Inc. (the "NASD"). The Agent will cause such Pricing Supplement to be delivered to the purchaser of the Note or Unit. In each instance that a Pricing Supplement is prepared, the Agent will affix the Pricing Supplement to Prospectuses prior to their use. Outdated Pricing Supplements, and the Prospectuses to which they are attached (other than those retained for files), will be destroyed. Settlement: The receipt by the Company of immediately available funds in payment for a Book-Entry Note or a Book-Entry Unit and, in the case of the Note, the authentication and issuance of the Global Note representing such Note or, in the case of the Unit, the completion and issuance of the Global Unit representing such Unit (and of each security comprised by such Unit) shall constitute "settlement" with respect to such Note or Unit, as the case may be. All orders accepted by the Company will be settled on the fifth Business Day B-7 pursuant to the timetable for settlement set forth below unless the Company and the purchaser agree to settlement on another day, which shall be no earlier than the next Business Day. Settlement Procedures: Settlement Procedures with regard to each Book-Entry Note and each Book-Entry Unit sold by the Company to or through the Agent (unless otherwise specified pursuant to a Notes Terms Agreement or a Units Terms Agreement), shall be as follows: A. In the case of a Book-Entry Note (whether issued alone or as part of a Unit), the Agent will advise the Company by telephone that such Note is a Book-Entry Note and of the following settlement information: 1. Principal amount. 2. Maturity Date. 3. In the case of a Fixed Rate Book-Entry Note, the Interest Rate, whether such Note will pay interest annually or semiannually and whether such Note is an Amortizing Note, and, if so, the amortization schedule, or, in the case of a Floating Rate Book-Entry Note, the Initial Interest Rate (if known at such time), Interest Payment Date(s), Interest Payment Period, Calculation Agent, Base Rate, Index Maturity, Index Currency, Interest Reset Period, Initial Interest Reset Date, Interest Reset Dates, Spread or Spread Multiplier (if any), Minimum Interest Rate (if any), Maximum Interest Rate (if any) and the Alternate Rate Event Spread (if any). 4. Redemption or repayment provisions, if any. 5. Ranking. 6. Settlement date and time (Original Issue Date). B-8 7. Interest Accrual Date. 8. Price. 9. Agent's commission, if any, determined as provided in the Distribution Agreement. 10. Specified Currency. 11. Whether the Note is an Original Issue Discount Note (an "OID Note"), and if it is an OID Note, the applicability of Modified Payment upon Acceleration (and, if so, the Issue Price). 12. Whether the Note is a Renewable Note, and if it is a Renewable Note, the Initial Maturity Date, the Final Maturity Date, the Election Dates and the Maturity Extension Dates. 13. Whether the Company has the option to reset the Spread or Spread Multiplier of the Note. 14. Whether the Note is an Optionally Exchangeable Note, a Mandatorily Exchangeable Note, or any form of exchangeable Note. 15. Any other applicable provisions. B. In the case of a Book-Entry Unit, the Agent will advise the Company by telephone that such Unit is a Book-Entry Unit, of the information set forth in Settlement Procedures "A" above with respect to any Book-Entry Notes that constitute a part of such Book-Entry Unit and of the following information: 1. Settlement date and time. 2. Face Amount. 3. Agent's commission, if any, determined as provided in the Distribution Agreement. 4. Designation of the Securities comprised by such Units: B-9 a. Notes (See Settlement Procedures "A"); b. Warrants, if any; and c. Purchase Contracts, if any. 5. Whether, and the terms under which, the Securities comprised by such Unit will be separately tradeable. 6. Any other provisions applicable to the Unit (other than those provisions applicable to the securities comprised by such Unit). 7. If the Book-Entry Unit comprises Book-Entry Warrants: a. Designation of the Series of Warrants: [Call][Put] Warrants; b. Warrant Property; c. Aggregate Number of Warrants; d. Price to Public; e. Warrant Exercise Price; f. Dates upon which Warrants may be exercised; g. Expiration Date; h. Form; i. Currency in which exercise payments shall be made; j. Minimum number of Warrants exercisable by any holder on any day; k. Maximum number of Warrants exercisable on any day: [In the aggregate] [By any beneficial owner]; l. Formula for determining Cash Settlement Value; B-10 m. Exchange Rate (or method of calculation); n. Whether the Company or the holder is the writer of the Warrant; and o. Any other applicable provisions. 8. If the Book-Entry Unit comprises Book-Entry Purchase Contracts: a. Designation of the Series of Purchase Contracts: [Purchase][Sale] Purchase Contracts; b. Purchase Contract Property; c. Aggregate Number of Purchase Contracts; d. Price to Public; e. Settlement Date; f. [Purchase/Sale] Price of Purchase Contract Property; g. Form; and h. Any other applicable provisions. C. The Company will advise JPMorgan by telephone or electronic transmission (confirmed in writing at any time on the same date) of the information set forth in "Settlement Procedures" "A" and "B" above, as applicable, such advice to contain a representation as to the aggregate principal amount of Program Securities permitted to be issued hereunder after such issuance. JPMorgan will then assign a CUSIP number to the Global Note representing a Note, whether issued alone or as part of a Unit, and will notify the Company and the Agent of such CUSIP number(s) by telephone as soon as practicable, except that for Optionally B-11 Exchangeable and Mandatorily Exchangeable Notes the Agent will obtain a CUSIP number for the Global Note representing such Note and will notify the Company and JPMorgan of such CUSIP number(s) by telephone as soon as practicable. The Agent will obtain a CUSIP number for (i) the Global Unit representing a Unit, (ii) the Warrant, if any, issued as part of a Unit and (iii) the Purchase Contract, if any, issued as part of a Unit and, in each case will notify the Company and JPMorgan of such CUSIP number(s) by telephone as soon as practicable. D. JPMorgan will enter a pending deposit message through DTC's Participant Terminal System, providing the following settlement information to DTC, the Agent and Standard & Poor's Corporation: 1. The information set forth in "Settlement Procedure" "A" and "B" above, as applicable. 2. The Initial Interest Payment Date for the Notes, whether issued alone or as part of a Unit, the number of days by which such date succeeds the related DTC Record Date and, if known, amount of interest payable on such Initial Interest Payment Date. 3. The CUSIP number of the Global Note (whether issued alone or as part of a Unit), Global Unit, Warrant issued as part of a Unit and Purchase Contract issued as part of a Unit, as applicable. 4. Whether the Global Note or Global Unit will represent any other Book-Entry Note or Book-Entry Unit, as the case may be (to the extent known at such time). 5. Whether any Note, issued alone or as part of a Unit, is an Amortizing Note (by an appropriate notation in the B-12 comments field of DTC's Participant Terminal System). 6. The number of Participant accounts to be maintained by DTC on behalf of the Agent and JPMorgan. E. JPMorgan will, as applicable, authenticate, complete and deliver the Global Note representing the Note and will complete the Global Unit representing the Unit (including, as applicable, by authenticating, completing and delivering any Global Note or Cash-settled Pre-paid Purchase Contracts, by countersigning and delivering any Warrants and by countersigning, executing and delivering any Purchase Contracts (other than Cash-settled Pre-paid Purchase Contracts) includable in such Unit). F. DTC will credit such Note or Unit to JPMorgan's participant account at DTC. G. JPMorgan will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC to (i) debit the Note or Unit, as the case may be, to JPMorgan's participant account and credit such Note or Unit to the Agent's participant account and (ii) debit the Agent's settlement account and credit JPMorgan's settlement account for an amount equal to the price of such Note or Unit, as the case may be, less the Agent's commission, if any. The entry of such a deliver order shall constitute a representation and warranty by JPMorgan to DTC that (a) the Global Note representing a Book-Entry Note has been issued and authenticated or a Global Unit representing a Book-Entry Unit has been completed and issued and (b) JPMorgan is holding such Global Note or Global Unit pursuant to the Medium-Term Note Certificate Agreement between JPMorgan and DTC. H. Unless the Agent is the end purchaser of a Note or Unit, the Agent will enter an SDFS B-13 deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note or Unit to the Agent's participant account and credit such Note or Unit to the participant accounts of the Participants with respect to such Note or Unit and (ii) to debit the settlement accounts of such Participants and credit the settlement account of the Agent for an amount equal to the price of such Note or Unit. I. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures "G" and "H" will be settled in accordance with SDFS operating procedures in effect on the settlement date. J. JPMorgan will credit to the account of the Company maintained at JPMorgan Chase, New York, New York, in funds available for immediate use in the amount transferred to JPMorgan in accordance with "Settlement Procedure" "G". K. Unless the Agent is the end purchaser of the Note or Unit, the Agent will confirm the purchase of such Note or Unit to the purchaser either by transmitting to the Participants with respect to such Note or Unit a confirmation order or orders through DTC's institutional delivery system or by mailing a written confirmation to such purchaser. L. Monthly, JPMorgan will send to the Company a statement setting forth the principal amount of Notes outstanding as of that date under the Indentures or, in the case of Units, the aggregate face amount of Units outstanding as of that date, under the Unit Agreement, and setting forth a brief description of any sales of which the Company has advised JPMorgan that have not yet been settled. Settlement Procedures For sales by the Company of Book-Entry Notes or Timetable: Book-Entry Units to or through the Agent (unless otherwise specified pursuant to a Notes Terms B-14 Agreement or a Units Terms Agreement) for settlement on the first Business Day after the sale date, Settlement Procedures "A" through "K" set forth above shall be completed as soon as possible but not later than the respective times in New York City set forth below: Settlement Procedure Time ---------- ----- A 11:00 A.M. on the sale date B 11:00 A.M. on the sale date C 12:00 Noon on the sale date D 2:00 P.M. on the sale date E 9:00 A.M. on the settlement date F 10:00 A.M. on the settlement date G-H 2:00 P.M. on the settlement date I 4:45 P.M. on the settlement date J-K 5:00 P.M. on the settlement date If a sale is to be settled more than one Business Day after the sale date, Settlement Procedures "A", "B", "C" and "D" shall be completed as soon as practicable but no later than 11:00 A.M., 11:00 A.M., 12 Noon and 2:00 P.M., respectively, on the first Business Day after the sale date. If the Initial Interest Rate for a Floating Rate Book-Entry Note, whether issued alone or as part of a Unit, has not been determined at the time that "Settlement Procedure" "A" is completed, "Settlement Procedure" "C" and "D" shall be completed as soon as such rate has been determined but no later than 12 Noon and 2:00 P.M., respectively, on the first Business Day before the settlement date. "Settlement Procedure" "I" is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the settlement date. B-16 If settlement of a Book-Entry Note or a Book-Entry Unit is rescheduled or canceled, JPMorgan, after receiving notice from the Company or the Agent, will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 2:00 P.M. on the Business Day immediately preceding the scheduled settlement date. Failure to Settle: If JPMorgan fails to enter an SDFS deliver order with respect to a Book-Entry Note or a Book-Entry Unit pursuant to "Settlement Procedure" "G", JPMorgan may deliver to DTC, through DTC's Participant Terminal System, as soon as practicable a withdrawal message instructing DTC to debit such Note or Unit to JPMorgan's participant account, provided that JPMorgan's participant account contains a principal amount of the Global Note representing such Note or a face amount of the Global Unit representing such Unit that is at least equal to the principal amount or face amount to be debited. If a withdrawal message is processed with respect to all the Book-Entry Notes represented by a Global Note or all of the Book-Entry Units represented by a Global Unit, JPMorgan will mark such Global Note or Global Unit "canceled," make appropriate entries in JPMorgan's records and send such canceled Global Note or Global Unit to the Company. The CUSIP number assigned to such Global Note, Global Unit, Warrant included in such Unit, or Purchase Contract included in such Unit, shall, in accordance with the procedures of the CUSIP Service Bureau of Standard & Poor's Corporation, be canceled and not immediately reassigned. If a withdrawal message is processed with respect to one or more, but not all, of the Book-Entry Notes represented by a Global Note or with respect to one or more, but not all, of the Book-Entry Units represented by a Global Unit, JPMorgan will exchange such Global Note or Global Unit, as the case may be, for two Global Notes or for two Global Units, as the case may be, one of which shall represent such Book-Entry Note or Notes or such B-16 Book-Entry Unit or Units and shall be canceled immediately after issuance and the other of which shall represent the remaining Book-Entry Notes or Book-Entry Units previously represented by the surrendered Global Note or Global Unit and shall bear the CUSIP number of the surrendered Global Note, Global Unit, Warrant included in such Unit, or Purchase Contract included in such Unit. If the purchase price for any Book-Entry Note or Book-Entry Unit is not timely paid to the Participants with respect to such Note or Unit by the beneficial purchaser thereof (or a person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participants and, in turn, the Agent may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures "G" and "H", respectively. Thereafter, JPMorgan will deliver the withdrawal message and take the related actions described in the preceding paragraph. Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note or Book-Entry Unit, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to one or more, but not all, of the Book-Entry Notes or Book-Entry Units to have been represented by a Global Note or a Global Unit, as the case may be, JPMorgan will provide, in accordance with Settlement Procedures "E" and "G", for the authentication and issuance of a Global Note representing the Book-Entry Notes to be represented by such Global Note and for the issuance of a Global Unit representing the Book-Entry Units to be represented by such Global Unit and, in each case, will make appropriate entries in its records. PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES AND CERTIFICATED UNITS B-17 JPMorgan will serve as registrar in connection with the Certificated Notes and the Certificated Units. Issuance: Each Certificated Note will be dated and issued as of the date of its authentication by JPMorgan and each Certificated Unit will be deemed to be dated as of the date of the underlying Certificated Note or, if there is not such underlying Certificated Note on the date of the other securities comprised thereby. Each Certificated Note will bear an Original Issue Date, which will be (i) with respect to an original Certificated Note (or any portion thereof), its original issuance date (which will be the settlement date) and (ii) with respect to any Certificated Note (or portion thereof) issued subsequently upon transfer or exchange of a Certificated Note or in lieu of a destroyed, lost or stolen Certificated Note, the original issuance date of the predecessor Certificated Note, regardless of the date of authentication of such subsequently issued Certificated Note. Preparation of Pricing If any order to purchase a Certificated Note or Supplement: a Certificated Unit is accepted by or on behalf of the Company, the Company will prepare a pricing supplement (a "Pricing Supplement") reflecting the terms of such Note or Unit. The Company (i) will arrange to file an electronic format document, in the manner prescribed by the EDGAR Filer Manual, of such Pricing Supplement with the Commission in accordance with the applicable paragraph of Rule 424(b) under the Securities Act, (ii) will, as soon as possible and in any event not later than the date on which such Pricing Supplement is filed with the Commission, deliver the number of copies of such Pricing Supplement to the Agent as the Agent shall request and (iii) will, on the Agent's behalf, promptly file five copies of such Pricing Supplement with the NASD. The Agent will cause such Pricing Supplement to be delivered to the purchaser of the Note or the Unit, as the case may be. B-18 In each instance that a Pricing Supplement is prepared, the Agent will affix the Pricing Supplement to Prospectuses prior to their use. Outdated Pricing Supplements, and the Prospectuses to which they are attached (other than those retained for files), will be destroyed. Settlement: The receipt by the Company of immediately available funds in exchange for an authenticated Certificated Note or a Certificated Unit delivered to the Agent and the Agent's delivery of such Note or Unit against receipt of immediately available funds shall constitute "settlement" with respect to such Note or Unit. All offers accepted by the Company will be settled on or before the fifth Business Day next succeeding the date of acceptance pursuant to the timetable for settlement set forth below, unless the Company and the purchaser agree to settlement on another date. Settlement Procedures: Settlement Procedures with regard to each Certificated Note and each Certificated Unit sold by the Company to or through the Agent (unless otherwise specified pursuant to a Notes Terms Agreement or a Units Terms Agreement) shall be as follows: A. In the case of Certificated Notes (whether issued alone or as part of a Unit), the Agent will advise the Company by telephone that such Note is a Certificated Note and of the following settlement information: 1. Name in which such Note is to be registered ("Registered Note Owner"). 2. Address of the Registered Note Owner and address for payment of principal and interest. 3. Taxpayer identification number of the Registered Note Owner (if available). B-19 4. Principal amount. 5. Maturity Date. 6. In the case of a Fixed Rate Certificated Note, the Interest Rate, whether such Note will pay interest annually or semiannually and whether such Note is an Amortizing Note and, if so, the amortization schedule, or, in the case of a Floating Rate Certificated Note, the Initial Interest Rate (if known at such time), Interest Payment Date(s), Interest Payment Period, Calculation Agent, Base Rate, Index Maturity, Index Currency, Interest Reset Period, Initial Interest Reset Date, Interest Reset Dates, Spread or Spread Multiplier (if any), Minimum Interest Rate (if any), Maximum Interest Rate (if any) and the Alternate Rate Event Spread (if any). 7. Redemption or repayment provisions, if any. 8. Ranking. 9. Settlement date and time (Original Issue Date). 10. Interest Accrual Date. 11. Price. 12. Agent's commission, if any, determined as provided in the Distribution Agreement. 13. Denominations. 14. Specified Currency. 15. Whether the Note is an OID Note, and if it is an OID Note, the applicability of Modified Payment upon Acceleration (and if so, the Issue Price). B-20 16. Whether the Note is a Renewable Note, and if it is a Renewable Note, the Initial Maturity Date, the Final Maturity Date, the Election Dates and the Maturity Extension Dates. 17. Whether the Company has the option to reset the Spread or Spread Multiplier of the Note. 18. Whether the Note is an Optionally Exchangeable Note, a Mandatorily Exchangeable Note, or any form of exchangeable Note. 19. Any other applicable provisions. B. In the case of a Certificated Unit, the Agent will advise the Company by telephone that such Unit is a Certificated Unit, of the information set forth in Settlement Procedure "A" above with respect to Certificated Notes that constitute a part of such Certificated Unit and of the following information: 1. Name in which such Unit is to be registered ("Registered Unit Owner"). 2. Address of the Registered Unit Owner. 3. Taxpayer identification number of the Registered Unit Owner (if available). 4. Denominations. 5. Settlement date and time. 6. Face Amount. 7. Agent's commission, if any, determined as provided in the Distribution Agreement. 8. Designation of the Securities comprised by such Units: a. Notes, if any (See Settlement Procedures "A"); b. Warrants, if any; and c. Purchase Contracts, if any. B-21 9. Whether, and the terms under which, the Securities comprised by such Unit will be separately tradeable. 10. Any other provisions applicable to the Unit (other than those provisions applicable to the securities comprised by such Unit). 11. If the Certificated Unit comprises Certificated Warrants: a. Designation of the Series of Warrants: [Call][Put] Warrants; b. Warrant Property; c. Aggregate Number of Warrants; d. Price to Public; e. Warrant Exercise Price; f. Dates upon which Warrants may be exercised; g. Expiration Date; h. Form; i. Currency in which exercise payments shall be made; j. Minimum number of Warrants exercisable by any holder on any day; k. Maximum number of Warrants exercisable on any day: [In the aggregate] [By any beneficial owner]; l. Formula for determining Cash Settlement Value; m. Exchange Rate (or method of calculation); n. Whether the Company or the holder is the writer of the warrant; and B-22 o. Any other applicable provisions. 12. If the Certificated Unit comprises Certificated Purchase Contracts: a. Designation of the Series of Purchase Contracts: [Purchase][Sale] Purchase Contracts; b. Purchase Contract Property; c. Aggregate Number of Purchase Contracts; d. Price to Public; e. Settlement Date; f. [Purchase/Sale] Price of Purchase Contract Property; g. Form; and h. Any other applicable provisions. C. The Company will advise JPMorgan by telephone or electronic transmission (confirmed in writing at any time on the sale date) of the information set forth in Settlement Procedure "A" and "B" above, as applicable, such advice to contain a representation as to the aggregate principal amount of Program Securities permitted to be issued hereunder after such issuance. D. The Company will have delivered to JPMorgan a pre-printed four-ply packet for each Note and Unit, which packet will contain the following documents in forms that have been approved by the Company, the Agent, the Trustee and the Unit Agent, as applicable: 1. Note or Unit, as the case may be, with customer confirmation. 2. Stub One - For JPMorgan. 3. Stub Two - For the Agent. B-23 4. Stub Three - For the Company. E. JPMorgan will (i) with respect to a Note or Cash-settled Pre-paid Purchase Contract, authenticate such Note or Cash-settled Pre-paid Purchase Contract and deliver it (with the confirmation) and Stubs One and Two to the Agent or (ii) with respect to a Unit, complete and deliver the Unit (including countersigning and delivering the Warrant, if any, and countersigning, executing and delivering the Purchase Contract (other than a Cash-settled Pre-paid Purchase Contract, if any) with the confirmation Stubs One and Two to the Agent. The Agent will acknowledge receipt of the Note or the Unit, as the case may be, by stamping or otherwise marking Stub One and returning it to JPMorgan. Such delivery will be made only against such acknowledgment of receipt and evidence that instructions have been given by the Agent for payment to the account of the Company at JPMorgan Chase, New York, New York, or to such other account as the Company shall have specified to the Agent and JPMorgan in funds available for immediate use, of an amount equal to the price of such Note or Unit less the Agent's commission, if any. In the event that the instructions given by the Agent for payment to the account of the Company are revoked, the Company will as promptly as possible wire transfer to the account of the Agent an amount of immediately available funds equal to the amount of such payment made. F. Unless the Agent is the end purchaser of such Note or Unit, the Agent will deliver such Note or Unit (with confirmation) to the customer against payment in immediately payable funds. The Agent will obtain the acknowledgment of receipt of such Note or Unit by retaining Stub Two. G. JPMorgan will send Stub Three to the Company by first-class mail. Periodically, B-24 JPMorgan will also send to the Company a statement setting forth, in the case of the Notes, the principal amount of the Notes outstanding as of that date under each Indenture and, in the case of the Units, the aggregate face amount of the Units outstanding under the Unit Agreement and, in each case, setting forth a brief description of any sales of which the Company has advised JPMorgan that have not yet been settled. Settlement Procedures For sales by the Company of Certificated Notes Timetable: or of Certificated Units to or through the Agent (unless otherwise specified pursuant to a Notes Terms Agreement or a Units Terms Agreement), Settlement Procedures "A" through "G" set forth above shall be completed on or before the respective times in New York City set forth below: Settlement Time Procedure ---- --------- A 2:00 P.M. on day before settlement date B 2:00 P.M. on day before settlement date C 3:00 P.M. on day before settlement date D-E 2:15 P.M. on settlement date F 3:00 P.M. on settlement date G 5:00 P.M. on settlement date Failure to Settle: If a purchaser fails to accept delivery of and make payment for any Certificated Note or any Certificated Unit, the Agent will notify the Company and JPMorgan by telephone and return such Note or Unit to JPMorgan. Upon receipt of such notice, the Company will immediately wire transfer to the account of the Agent an amount equal to the amount previously credited thereto in respect to such Note or Unit. Such wire transfer will be made on the settlement date, if possible, and in any event not later than the Business Day following the settlement date. b-25 If the failure shall have occurred for any reason other than a default by the Agent in the performance of its obligations hereunder and under the Distribution Agreement, then the Company will reimburse the Agent or JPMorgan, as appropriate, on an equitable basis for its loss of the use of the funds during the period when they were credited to the account of the Company. Immediately upon receipt of the Certificated Note or the Certificated Unit in respect of which such failure occurred, JPMorgan will mark such note or Unit "canceled," make appropriate entries in JPMorgan's records and send such Note or Unit, as the case may be, to the Company. B-26 EX-1.E 3 ex-1e.txt EXHIBIT 1-e MORGAN STANLEY Global Medium-Term Notes, Series G and Series H Global Units, Series G and Series H EURO DISTRIBUTION AGREEMENT [ ], 2005 Morgan Stanley & Co. International Limited c/o Morgan Stanley & Co. International Limited 25 Cabot Square Canary Wharf London E14 4QA United Kingdom Dear Sirs: Morgan Stanley, a Delaware corporation (the "Company"), confirms its agreement with you with respect to the issue and sale from time to time by the Company primarily outside the United States of up to $[ ] (or the equivalent thereof in one or more currencies other than U.S. dollars) aggregate initial public offering price of its Global Medium-Term Notes, Series G and Series H, each due more than nine months from the date of issue (the "Notes") and its Global Units, Series G and Series H (the "Units" and together with the Notes, the "Program Securities"), in each case subject to reduction as a result of the sale of the Company's (i) Global Medium-Term Notes, Series F, to be sold primarily inside the United States, (ii) Global Units, Series F, to be sold primarily inside the United States, and (iii) the sale of certain of the Company's other debt securities, warrants, common stock, preferred stock, purchase contracts and units and of capital securities of certain Morgan Stanley Capital Trusts. The Series G Notes are intended to be admitted to listing on the Official List of the Financial Services Authority (the "UK Listing Authority") in its capacity as competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 (the "FSMA"), and to trading on the London Stock Exchange plc (the "London Stock Exchange") or admitted to listing, trading and/or quotation by any other listing authority, stock exchange and/or quotation system, if so required by Section 3(j) hereof. Application may, in certain circumstances described in the Prospectus Supplement (as defined below), be made to admit the Series G Units to the Official List of the UK Listing Authority and to trading on the London Stock Exchange. The Series H Notes and the Series H Units will not be listed on any stock exchange. The Notes may be issued as senior indebtedness (the "Senior Notes") or as subordinated indebtedness (the "Subordinated Notes") of the Company. The Senior Notes will be issued, either alone or as part of a Unit, pursuant to the provisions of an amended and restated senior indenture dated as of November 1, 2004, between the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as trustee (the "Senior Debt Trustee") (as may be supplemented or amended from time to time, the "Senior Debt Indenture"). The Subordinated Notes will be issued pursuant to the provisions of a subordinated indenture dated as of October 1, 2004, between the Company and J.P. Morgan Trust Company, National Association, as trustee (the "Subordinated Debt Trustee") (as may be supplemented or amended from time to time, the "Subordinated Debt Indenture"). The Senior Debt Indenture and the Subordinated Debt Indenture are sometimes hereinafter referred to individually as an "Indenture" and collectively as the "Indentures," and the Senior Debt Trustee and the Subordinated Debt Trustee are sometimes hereinafter referred to individually as a "Trustee" and collectively as the "Trustees." Purchase contracts ("Purchase Contracts") that require holders to satisfy their obligations thereunder when such Purchase Contracts are issued are referred to as "Pre-paid Purchase Contracts." Pre-paid Purchase Contracts that settle in cash ("Cash-settled Pre-paid Purchase Contracts") generally will be issued under an Indenture. Pre-paid Purchase Contracts that do not settle in cash ("Physically-settled Pre-paid Purchase Contracts") generally will be issued under the Unit Agreement or the Unit Agreement Without Holders' Obligations (each as defined below). The Units will be issued either pursuant to the Unit Agreement dated as of November 1, 2004, among the Company, JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Unit Agent, as Collateral Agent, as Trustee and Paying Agent under the Indenture referred to therein, and as Warrant Agent under the Warrant Agreement referred to therein, and the holders from time to time of the Units described therein (as may be amended from time to time, the "Unit Agreement") or, if the Units do not include Purchase Contracts (or include only Pre-paid Purchase Contracts), pursuant to a Unit Agreement among the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Unit Agent, as Trustee and Paying Agent under the Indenture referred to therein, and as Warrant Agent under the Warrant Agreement referred to therein, in the form of such agreement filed as an exhibit to the Registration Statement referred to below (each such agreement, a "Unit Agreement Without Holders' Obligations").(1) Units may include one or more (i) Senior Notes, (ii) warrants 2 - ----------------------- (1) The Unit Agreement Without Holders' Obligations shall include additional provisions to allow for the issuance of Pre-paid Purchase Contracts that are not issued under the Indentures. ("Warrants") entitling the holders thereof to purchase or sell (a) securities issued by the Company or by an entity not affiliated with the Company (or securities issued by an entity affiliated with the Company in the case of Series H Units), a basket of such securities, an index or indices of such securities or any combination of the above, (b) currencies or (c) commodities, (iii) Purchase Contracts, including Pre-paid Purchase Contracts, requiring the holders thereof to purchase or sell (a) securities issued by the Company or by an entity not affiliated with the Company (or securities issued by an entity affiliated with the Company in the case of Series H Units), a basket of such securities, an index or indices of such securities or any combination of the above, (b) currencies or (c) commodities or (iv) any combination thereof. The applicable prospectus supplement will specify whether Notes, Warrants and Purchase Contracts comprised by a Unit may or may not be separated from any series of Units. Warrants issued as part of a Unit will be issued pursuant to the Warrant Agreement dated as of November 1, 2004 (as may be amended from time to time, the "Warrant Agreement") between the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Warrant Agent. Purchase Contracts, other than Pre-paid Purchase Contracts ("Non-Pre-paid Purchase Contracts"), entered into by the Company and the holders thereof will be governed by the Unit Agreement. The Notes, whether issued alone or as part of a Unit, will have the maturities, interest rates, redemption provisions, if any, and other terms as set forth in supplements to the Basic Prospectus referred to below. The Warrants will have the exercise prices, exercise dates, expiration dates and other terms as set forth in supplements to the Basic Prospectus. The Purchase Contracts will have the closing dates, purchase or sale prices and other terms as set forth in supplements to the Basic Prospectus. The Company has initially appointed (i) JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), London Branch, at its principal office in London, as principal paying agent for the Senior Notes (in such capacity, the "Senior Principal Paying Agent") and (ii) the Subordinated Debt Trustee (acting through JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), London Branch, at its principal office in London, as its sub-agent) as principal paying agent for the Subordinated Notes (in such capacity, the "Subordinated Principal Paying Agent"). References herein to the "Principal Paying Agent" are to the Senior Principal Paying Agent (in the case of duties relating to the Senior Notes) or to the Subordinated Principal Paying Agent (in the case of duties relating to the Subordinated Notes). The Notes will be issued in bearer form or in definitive registered form without coupons (the "Registered Notes"), the Units will be issued in bearer form or in definitive registered form (the "Registered Units") and the securities included in a Unit will be in the form of such Unit. The Program Securities issued in bearer form will be represented initially by, in the case of the Notes, a temporary global Note and, in the case of the Units, a temporary global Unit, each 3 of which will be delivered to a common depositary located outside the United States for Euroclear Bank S.A./N.V., as operator of the Euroclear System (the "Euroclear Operator"), Clearstream Banking, societe anonyme ("Clearstream"), or any other relevant clearing system. Beneficial interests in a temporary global Note or a temporary global Unit will be exchangeable for beneficial interests in, in the case of a temporary global Note, a permanent global Note and, in the case of a temporary global Unit, a permanent global Unit. Beneficial interests in a permanent global Note will be exchangeable in whole, but not in part, for definitive Notes in bearer form, with interest coupons attached, upon receipt of the Principal Paying Agent of an initial request to so exchange by any holder of a beneficial interest in such permanent global Note (such temporary global Note, permanent global Note and definitive Notes in bearer form are collectively referred to as the "Bearer Notes"), and Bearer Notes, if the applicable Pricing Supplement so specifies, will be exchangeable in whole or in part for Registered Notes. Beneficial interests in a permanent global Unit (including an interest in the securities included in such Unit) will be exchangeable in whole, but not in part, for definitive Units in bearer form upon receipt of the Unit Agent of an initial request to so exchange by any holder of a beneficial interest in such permanent global Unit (such temporary global Unit, permanent global Unit and definitive Units in bearer form are collectively referred to as the "Bearer Units") and Bearer Units, if the applicable Pricing Supplement so specifies, will be exchangeable in whole or in part for Registered Units. As used in this Agreement, the term "Note" includes any temporary global Note or permanent global Note issued pursuant to the Indentures and the term "Unit" includes any temporary global Unit or permanent global Unit issued pursuant to the Unit Agreement. The Company hereby appoints you as its exclusive agents for the purpose of soliciting and receiving offers to purchase Program Securities from the Company by others and, on the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, you agree to use reasonable efforts to solicit and receive offers to purchase Program Securities upon terms acceptable to the Company at such times and in such amounts as the Company shall from time to time specify. In addition, you may also purchase Program Securities as principal pursuant to the terms of a terms agreement relating to such sale (in the case of Notes, a "Notes Terms Agreement" and, in the case of Units, a "Units Terms Agreement") in accordance with the provisions of Section 2(b) hereof. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement, including a prospectus, relating to the Program Securities. Such registration statement, including the exhibits thereto, as amended at the Commencement Date (as hereinafter defined), is hereinafter referred to as the "Registration Statement." The Company proposes to file with the Commission from time to time, pursuant to Rule 424 under the Securities Act of 1933, as amended (the "Securities Act"), supplements to the prospectus 4 relating to the Program Securities included in the Registration Statement that will describe certain terms of the Program Securities. The prospectus relating to the Program Securities in the form in which it appears in the Registration Statement is hereinafter referred to as the "Basic Prospectus." The term "Prospectus" means the Basic Prospectus together with the prospectus supplement or supplements (each, a "Prospectus Supplement") specifically relating to the Program Securities, as filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act. As used herein, the terms "Basic Prospectus" and "Prospectus" shall include in each case the documents, if any, incorporated by reference therein. The terms "supplement," "amendment" and "amend" as used herein shall include all documents deemed to be incorporated by reference in the Prospectus that are filed subsequent to the date of the Basic Prospectus by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). If the Company has filed an abbreviated registration statement to register additional Program Securities pursuant to Rule 462(b) under the Securities Act (a "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall be deemed to include such Rule 462 Registration Statement. 1. Representations and Warranties. The Company represents and warrants to and agrees with you as of the Commencement Date, as of each date on which you solicit offers to purchase Program Securities, as of each date on which the Company accepts an offer to purchase Program Securities (including any purchase by you as principal pursuant to a Notes Terms Agreement or a Units Terms Agreement), as of each date the Company issues and delivers Program Securities and as of each date the Registration Statement or the Basic Prospectus is amended or supplemented, as follows (it being understood that such representations, warranties and agreements shall be deemed to relate to the Registration Statement, the Basic Prospectus and the Prospectus, each as amended or supplemented to each such date): (a) The Registration Statement has become effective, no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (b) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (ii) each part of the Registration Statement, when such part became effective, did not contain and each such part, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the 5 Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that (1) the representations and warranties set forth in this Section 1(b) do not apply (A) to statements or omissions in the Registration Statement or the Prospectus based upon information relating to you furnished to the Company in writing by you expressly for use therein or (B) to those parts of the Registration Statement that constitute the Statements of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the Trustees and (2) the representations and warranties set forth in clauses (iii) and (iv) above, when made as of the Commencement Date or as of any date on which you solicit offers to purchase Program Securities or on which the Company accepts an offer to purchase Program Securities, shall be deemed not to cover information concerning an offering of particular Program Securities to the extent such information will be set forth in a supplement to the Basic Prospectus. (c) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of Delaware, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole. (d) Each subsidiary of the Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole. 6 (e) Each of this Agreement and any applicable Written Notes Terms Agreement or Written Units Terms Agreement (each as hereinafter defined) has been duly authorized, executed and delivered by the Company. (f) Each Indenture has been duly qualified under the Trust Indenture Act and each of the Senior Indenture, the Subordinated Indenture, the Unit Agreement and the Warrant Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. (g) The form of Unit Agreement Without Holders' Obligations has been duly authorized by the Company and, when a Unit Agreement Without Holders' Obligations has been duly executed and delivered by the Company, the Unit Agreement Without Holders' Obligations will be a valid and binding agreement of the Company, enforceable in accordance with its terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. (h) The forms of Notes (including the form of Cash-settled Pre-paid Purchase Contracts), whether issued alone or as part of a Unit, have been duly authorized and established in conformity with the provisions of the relevant Indenture and, when the Notes (and the Cash-settled Pre-paid Purchase Contracts) have been executed and authenticated in accordance with the provisions of the relevant Indenture and delivered to and duly paid for by the purchasers thereof, the Notes (and the Cash-settled Pre-paid Purchase Contracts) will be entitled to the benefits of such Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. (i) The forms of Units under the Unit Agreement, including the forms of Warrants, Physically-settled Pre-paid Purchase Contracts and 7 Non-Pre-paid Purchase Contracts, have been duly authorized and established in conformity with the provisions of (i) in the case of such Units, Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase Contracts, the Unit Agreement and (ii) in the case of Warrants, the Warrant Agreement. When such Units have been delivered to and duly paid for by the purchasers thereof and (A) any Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase Contracts included in such Units have been executed by the Company and countersigned by the Unit Agent and (B) any Warrants included in such Units have been executed by the Company and countersigned by the Warrant Agent, such Units (including any such Physically-settled Pre-paid Purchase Contracts, Non-Pre-paid Purchase Contracts or Warrants contained therein) will be entitled to the benefits of the Unit Agreement and, in the case of the Warrants, the Warrant Agreement and will be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. (j) When a Unit Agreement Without Holders' Obligations has been executed and delivered by the Company, the Units to be issued thereunder will have been duly authorized and when such Units have been established in conformity with the provisions of the Unit Agreement Without Holders' Obligations and delivered to and duly paid for by the purchasers thereof, and any Warrants included in such Units have been executed by the Company and countersigned by the Warrant Agent, such Units (including any such Warrants contained therein) will be entitled to the benefits of the Unit Agreement Without Holders' Obligations and will be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. (k) The execution and delivery by the Company of this Agreement, the Notes and Pre-paid Purchase Contracts (whether issued alone or as part of a Unit), the Units (including any Purchase Contracts and Warrants included therein), the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Written Notes Terms Agreement or Written Units Terms Agreement and the performance by the Company of its obligations under this Agreement, the Notes, the Pre-paid Purchase Contracts, the 8 Units (including any Purchase Contracts or Warrants included therein), the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Notes Terms Agreement or Units Terms Agreement will not contravene any provision of applicable law or the certificate of incorporation or by-laws of the Company or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its consolidated subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any of its consolidated subsidiaries, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Notes, the Pre-paid Purchase Contracts, the Units (including any Purchase Contracts or Warrants included therein), the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Notes Terms Agreement or Units Terms Agreement, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Program Securities; provided, however, that no representation is made or warranty given as to whether the purchase of the Program Securities constitutes a "prohibited transaction" under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended. (l) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus. (m) There are no legal or governmental proceedings pending or threatened to which the Company or any of its consolidated subsidiaries is a party or to which any of the properties of the Company or any of its consolidated subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus and are not so described or any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed or incorporated by reference as exhibits to the Registration Statement that are not described, filed or incorporated as required. (n) Each of the Company and its consolidated subsidiaries has all necessary consents, authorizations, approvals, orders, certificates and permits of and from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory 9 organizations and all courts and other tribunals, to own, lease, license and use its properties and assets and to conduct its business in the manner described in the Prospectus, except to the extent that the failure to obtain or file would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole. (o) Morgan Stanley DW Inc. is registered as a broker-dealer and investment adviser with the Commission, is registered with the Commodity Futures Trading Commission as a futures commission merchant and is a member of the New York Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. (p) Morgan Stanley & Co. Incorporated is registered as a broker-dealer and investment adviser with the Commission, is registered with the Commodity Futures Trading Commission as a futures commission merchant and is a member of the New York Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. (q) The Company is not, and after giving effect to the offering and sale of the Program Securities and the application of the proceeds thereof as described in the Prospectus, will not be required to register as, an "investment company" as such term is defined in the Investment Company Act of 1940, as amended. Notwithstanding the foregoing, it is understood and agreed that the representations and warranties set forth in Section 1(b)(iii) and 1(b)(iv), 1(h) (except as to due authorization of the Notes and Cash-settled Pre-paid Purchase Contracts), 1(i) (except as to due authorization of the Units, Warrants, Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase Contracts), 1(j) (except as to due authorization of the Units and Warrants) and 1(k), when made as of the Commencement Date, or as of any date on which you solicit offers to purchase Program Securities, with respect to any Program Securities the payments of principal or interest on which, or any other payments with respect to which, will be determined by reference to one or more currency exchange rates, commodity prices, securities of entities affiliated or unaffiliated with the Company, baskets of such securities, equity indices or other factors, shall be deemed not to address the application of the Commodity Exchange Act, as amended, or the rules, regulations or interpretations of the Commodity Futures Trading Commission. 2. Solicitations as Agents; Purchases as Principals. (a) Solicitations as Agents. In connection with your actions as agents hereunder, you agree to use reasonable efforts to solicit offers to purchase Program Securities upon the terms and conditions set forth in the Prospectus as then amended or supplemented. 10 The Company reserves the right, in its sole discretion, to instruct you to suspend at any time, for any period of time or permanently, the solicitation of offers to purchase Program Securities. Upon receipt of at least one business day's prior notice from the Company, you will forthwith suspend solicitations of offers to purchase Program Securities from the Company until such time as the Company has advised you that such solicitation may be resumed. While such solicitation is suspended, the Company shall not be required to deliver any certificates, opinions or letters in accordance with Sections 5(a), 5(b) and 5(c); provided, however, that if the Registration Statement or Prospectus is amended or supplemented during the period of suspension (other than by an amendment or supplement providing solely for (i) in the case of Notes issued alone or as part of a Unit, a change in the interest rates, redemption provisions, amortization schedules or maturities offered on the Notes, (ii) in the case of Units, a change in the exercise price, exercise date or period or expiration of an underlying Warrant or a change in the settlement date or purchase or sale price of an underlying Purchase Contract or (iii) for a change you deem to be immaterial), you shall not be required to resume soliciting offers to purchase Program Securities until the Company has delivered such certificates, opinions and letters as you may request. The Company agrees to pay to you, as consideration for the sale of each Program Security resulting from a solicitation made or an offer to purchase received by you, a commission in the form of a discount from the purchase price of such Program Security equal to between .125% and .750% (depending upon such Note's maturity or, in the case of Units, any underlying Note's maturity or the terms of the Units and of the securities comprised by such Units) of the principal amount of such Note or, in the case of Units, the face amount of such Unit (provided that the commission for Notes having, or Units including Notes or other securities having, a maturity of 30 years or greater will be negotiated) or such other discount as may be specified in the Prospectus Supplement relating to such Note or Unit. You shall communicate to the Company, orally or in writing, each offer to purchase Program Securities received by you as agent that in your judgment should be considered by the Company. The Company shall have the sole right to accept offers to purchase Program Securities and may reject any offer in whole or in part. You shall have the right to reject any offer to purchase Program Securities that you consider to be unacceptable, and any such rejection shall not be deemed a breach of your agreements contained herein. The procedural details relating to the issue and delivery of Program Securities sold by you as agent and the payment therefor shall be as set forth in the Administrative Procedures (as hereinafter defined). (b) Purchases as Principals. Each sale of Program Securities to you as principals shall be made in accordance with the terms of this Agreement. In connection with each such sale, the Company will enter into a Notes Terms 11 Agreement or Units Terms Agreement that will provide for the sale of such Program Securities to and the purchase thereof by you. Each Notes Terms Agreement or Units Terms Agreement will take the form of either (i) a written agreement between you and the Company, which may be substantially in the form of Exhibit A or Exhibit A-1 (as applicable) hereto (in the case of Notes, a "Written Notes Terms Agreement," and in the case of Units, a "Written Units Terms Agreement"), or (ii) an oral agreement between you and the Company confirmed in writing by you to the Company. Your commitment to purchase Program Securities as principal pursuant to a Notes Terms Agreement or Units Terms Agreement shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each (i) Notes Terms Agreement shall specify the principal amount of Notes to be purchased by you pursuant thereto, the maturity date of such Notes, the price to be paid to the Company for such Notes, the interest rate and interest rate formula, if any, applicable to such Notes and any other terms of such Notes and (ii) Units Terms Agreement shall specify (a) the information set forth in (i) above with respect to any Notes issued as part of a Unit, (b) with respect to any Warrants issued as part of a Unit, the exercise price, the exercise date or period, the expiration date and any other terms of such Warrants and (c) with respect to any Purchase Contracts issued as part of a Unit, the settlement date, the purchase or sale price or any other terms of such Purchase Contracts. Each such Notes Terms Agreement or Units Terms Agreement may also specify any requirements for officers' certificates, opinions of counsel and letters from the independent auditors of the Company pursuant to Section 4 hereof. A Notes Terms Agreement and a Unit Terms Agreement may also specify certain provisions relating to the reoffering of such Notes or Units, as the case may be, by you. Each Notes Terms Agreement and each Units Terms Agreement shall specify the time and place of delivery of and payment for such Notes or Units, as the case may be. Unless otherwise specified in a Notes Terms Agreement or a Units Terms Agreement, the procedural details relating to the issue and delivery of Notes or Units, as the case may be, purchased by you as principal and the payment therefor shall be as set forth in the Administrative Procedures. Each date of delivery of and payment for Program Securities to be purchased by you as principal pursuant to a Notes Terms Agreement or a Units Terms Agreement, as the case may be, is referred to herein as a "Settlement Date." Unless otherwise specified in a Notes Terms Agreement or a Units Terms Agreement, if you are purchasing Program Securities as principal you may resell such Program Securities to other dealers. Any such sales may be at a discount, which shall not exceed the amount set forth in the Prospectus Supplement relating to such Notes or Units. 12 (c) Administrative Procedures. You and the Company agree to perform the respective duties and obligations specifically provided to be performed in the Global Medium-Term Notes, Series G and Series H and Global Units, Series G and Series H, Administrative Procedures (attached hereto as Exhibit B) (the "Administrative Procedures"), as amended from time to time. The Administrative Procedures may be amended only by written agreement of the Company and you. (d) Delivery. The documents required to be delivered by Section 4 of this Agreement as a condition precedent to your obligation to begin soliciting offers to purchase Program Securities as agents of the Company shall be delivered at the office of Davis Polk & Wardwell, your counsel, not later than 4:00 p.m., New York City time, on the date hereof, or at such other time and/or place as you and the Company may agree upon in writing, but in no event later than the day prior to the earlier of (i) the date on which you begin soliciting offers to purchase Program Securities and (ii) the first date on which the Company accepts any offer by you to purchase Program Securities as principal. The date of delivery of such documents is referred to herein as the "Commencement Date." 3. Agreements. The Company agrees with you that: (a) Prior to the termination of the offering of the Program Securities pursuant to this Agreement or pursuant to any Notes Terms Agreement or Units Terms Agreement, the Company will not file any Prospectus Supplement relating to the Program Securities or any amendment to the Registration Statement relating to the Program Securities unless the Company has previously furnished to you a copy thereof for your review and will not file any such proposed supplement or amendment to which you reasonably object; provided, however, that the foregoing requirement shall not apply to any of the Company's periodic filings with the Commission required to be filed pursuant to Section 13(a), 13(c), 13(f), 14 or 15(d) of the Exchange Act, copies of which filings the Company will cause to be delivered to you promptly after being transmitted for filing with the Commission. Subject to the foregoing sentence, the Company will promptly cause each Prospectus Supplement to be filed with or transmitted for filing to the Commission in accordance with Rule 424(b) under the Securities Act. The Company will promptly advise you of the filing of any amendment or supplement to the Basic Prospectus, of the filing and effectiveness of any amendment to the Registration Statement, of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Basic Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose, (v) of the receipt by the Company of 13 any notification with respect to the suspension of the qualification of the Program Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (vi) of the issuance by any non-United States regulatory authority of any request for information relating to the Program Securities or suspension of the listing, trading and/or quotation of any Program Securities then admitted to listing, trading and/or quotation by any listing authority, stock exchange and/or quotation system. The Company will use its best efforts to prevent the issuance of any such stop order or notice of suspension of qualification or listing and, if issued, to obtain as soon as possible the withdrawal thereof. If the Basic Prospectus is amended or supplemented as a result of the filing under the Exchange Act of any document incorporated by reference in the Prospectus, you shall not be obligated to solicit offers to purchase Program Securities so long as you are not reasonably satisfied with such document. (b) If, at any time when a prospectus relating to the Program Securities is required to be delivered under the Securities Act or made available to purchasers of the Program Securities, any event occurs or condition exists as a result of which the Prospectus, as then amended or supplemented, would include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in the light of the circumstances when the Prospectus, as then amended or supplemented, is delivered to a purchaser, not misleading, or if, in your opinion or in the opinion of the Company, it is necessary at any time to amend or supplement the Prospectus, as then amended or supplemented, to comply with applicable law, the Company will immediately notify you by telephone (with confirmation in writing) to suspend solicitation of offers to purchase Program Securities and, if so notified by the Company, you shall forthwith suspend such solicitation and cease using the Prospectus, as then amended or supplemented. If the Company shall decide to amend or supplement the Registration Statement or Prospectus, as then amended or supplemented, it shall so advise you promptly by telephone (with confirmation in writing) and, at its expense, shall prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or Prospectus, as then amended or supplemented, satisfactory in all respects to you, that will correct such statement or omission or effect such compliance and will supply such amended or supplemented Prospectus to you in such quantities as you may reasonably request. If any documents, certificates, opinions and letters furnished to you pursuant to paragraph (e) below and Sections 5(a), 5(b) and 5(c) in connection with the preparation and filing of such amendment or supplement are satisfactory in all respects to you, upon the filing with the Commission of such amendment or supplement to the Prospectus or upon the effectiveness of an amendment to the Registration Statement, you will 14 resume the solicitation of offers to purchase Program Securities hereunder. Notwithstanding any other provision of this Section 3(b), until the distribution of any Program Securities you may own as principal has been completed, if any event described above in this paragraph (b) occurs, the Company will, at its own expense, forthwith prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or Prospectus, as then amended or supplemented, satisfactory in all respects to you, will supply such amended or supplemented Prospectus to you in such quantities as you may reasonably request and shall furnish to you pursuant to paragraph (e) below and Sections 5(a), 5(b) and 5(c) such documents, certificates, opinions and letters as you may request in connection with the preparation and filing of such amendment or supplement. (c) The Company will make generally available to its security holders and to you as soon as practicable earning statements that satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder covering twelve month periods beginning, in each case, not later than the first day of the Company's fiscal quarter next following the "effective date" (as defined in Rule 158 under the Securities Act) of the Registration Statement with respect to each sale of Program Securities. If such fiscal quarter is the first fiscal quarter of the Company's fiscal year, such earning statement shall be made available not later than 90 days after the close of the period covered thereby and in all other cases shall be made available not later than 45 days after the close of the period covered thereby. (d) The Company will furnish in New York City, without charge, (i) to each Agent, a signed copy of the Registration Statement, including exhibits and all amendments thereto, and as many copies of the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto as you may reasonably request and (ii) to each Agent that purchases Program Securities pursuant to a Notes Terms Agreement or Units Terms Agreement or solicits an offer to purchase Program Securities that is accepted by the Company, prior to 10:00 a.m. New York City time on the business day next succeeding the date of such Notes Terms Agreement or Units Terms Agreement or the acceptance of such offer, as many copies of the Prospectus, as then amended or supplemented (including the Prospectus Supplement relating to the Program Securities to be purchased pursuant to such Notes Terms Agreement or Units Terms Agreement or accepted offer), as such Agent may reasonably request. 15 (e) During the term of this Agreement, the Company shall furnish to you such relevant documents and certificates of officers of the Company relating to the business, operations and affairs of the Company, the Registration Statement, the Basic Prospectus, any amendments or supplements thereto, the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement, the Notes, the Units, the Warrants, the Purchase Contracts, this Agreement, the Administrative Procedures, any Notes Terms Agreement or Units Terms Agreement and the performance by the Company of its obligations hereunder or thereunder as you may from time to time reasonably request. (f) The Company shall notify you promptly in writing of any downgrading, or of its receipt of any notice of any intended or potential downgrading or of any review for possible change that does not indicate the direction of the possible change, in the rating accorded the Company or any of the Company's securities by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act. (g) The Company will, whether or not any sale of Program Securities is consummated, pay all expenses incident to the performance of its obligations under this Agreement and any Notes Terms Agreement or Units Terms Agreement, including: (i) the preparation and filing of the Registration Statement and the Prospectus and all amendments and supplements thereto, (ii) the preparation, issuance and delivery of the Program Securities, (iii) the fees and disbursements of the Company's counsel and accountants, of the Trustees and their counsel, of the Unit Agent and its counsel, of the Warrant Agent and its counsel and of the Principal Paying Agent and its counsel and any paying agents for the Program Securities appointed by the Company, (iv) the fees and expenses incurred with respect to the admission of the Series G Notes (and the Series G Units, if application for such admission is made) to the Official List of the UK Listing Authority and to trading on the London Stock Exchange or to listing, trading and/or quotation by any other listing authority, stock exchange and/or quotation system if so required by Section 3(j), (v) the printing and delivery to you in quantities as hereinabove stated of copies of the Registration Statement and all amendments thereto and of the Prospectus and any amendments or supplements thereto, (vi) the printing and delivery to you of copies of the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations and the Warrant Agreement, (vii) any fees charged by rating agencies for the rating of the Program Securities, (viii) the fees and expenses, if any, incurred with respect to any filing with the National Association of Securities Dealers, Inc., the fees and disbursements of your counsel incurred in connection with the offering and sale of the 16 Program Securities, including any opinions to be rendered by such counsel hereunder, and (x) any out-of-pocket expenses incurred by you; provided that any advertising expenses incurred by you shall have been approved by the Company. (h) During the period beginning on the date of any Notes Terms Agreement or Units Terms Agreement relating to either Notes or Units, as the case may be, and continuing to and including the Settlement Date with respect to such Notes Terms Agreement or Units Terms Agreement, the Company will not, without your prior consent, offer, sell, contract to sell or otherwise dispose of (i) in the case of Notes, any debt securities of the Company substantially similar to the Notes set forth in such Notes Terms Agreement (other than (A) the Notes that are to be sold pursuant to such Notes Terms Agreement, (B) Notes previously agreed to be sold by the Company and (C) commercial paper issued in the ordinary course of business) or (ii) in the case of Units, any securities substantially similar to such Units (other than (A) the Units that are sold pursuant to such Units Terms Agreement or (B) Units previously agreed to be sold by the Company), in each case, except as may otherwise be provided in the applicable Notes Terms Agreement or Units Terms Agreement. (i) The Company will indemnify and hold you harmless against any documentary, stamp or similar transfer or issue tax, including any interest and penalties, on the issue of the Program Securities in accordance with the terms of this Agreement, on the execution and delivery of this Agreement, any Written Notes Terms Agreement or Written Units Terms Agreement and on the exchange of any temporary global Notes for definitive Notes or permanent global Notes, of any temporary global Units for definitive Units or permanent global Units, of any permanent global bearer Notes for definitive bearer Notes or of any permanent global bearer Units for definitive bearer Units, that are or may be required to be paid under the laws of the United Kingdom, the United States or any political subdivision or taxing authority thereof or therein. (j) In connection with any application to admit the Series G Notes or Series G Units to the Official List of the UK Listing Authority and to trading on the London Stock Exchange, the Company will furnish from time to time any and all documents, instruments, information and undertakings and publish all advertisements or other material that may be necessary in order to effect such listing and trading and will maintain such listing and trading until, (i) in the case of the Notes, none of the Series G Notes is outstanding, either as part of a Unit or otherwise, or until such time as payment of principal, premium, if any, and interest in respect of all the Series G Notes, whether issued alone or as part of a Unit, has been duly provided for, whichever is earlier and (ii) in the case of the Units, 17 none of the Series G Units is outstanding; provided, however, that if the Company can no longer reasonably maintain such listing and trading, including, but not limited to, in circumstances where obtaining or the maintenance of such listing would require preparation of financial statements in accordance with accounting standards other than U.S. GAAP or where the proposed European Union Transparency Obligations Directive (the "Directive") is implemented in a manner that, in the Company's opinion, is burdensome, it will consider obtaining and maintaining the quotation for, or listing and trading of, the Series G Notes and Series G Units by such other listing authority, stock exchange and/or quotation system (in the case of a delisting in response to the Directive, outside the European Union) as you shall reasonably request. However, if such an alternative listing is not available to the Company or is, in the Company's opinion, burdensome, an alternative listing for the Series G Notes and Series G Units need not be considered by the Company. In addition, for so long as the Series G Notes and Series G Units are admitted to listing, trading and/or quotation by a listing authority, stock exchange and/or quotation system, and such listing authority, stock exchange and/or quotation system so requires, the Company will maintain in London, or in such other place as the Series G Notes and Series G Units are listed (if the Series G Notes and Series G Units are no longer listed on the London Stock Exchange), a paying agent in respect of the Series G Notes or Series G Units, as required. (k) In respect of any Notes which have a maturity of less than one year where either (a) the issue proceeds of such Notes are received by the Company in the United Kingdom or (b) the activity of issuing such Notes is carried on from an establishment maintained by the Company in the United Kingdom, the Company will issue such Notes only if the following conditions apply (or the Notes can otherwise be issued without contravention of Section 19 of the FSMA): (i) you represent, warrant and agree in the terms relating to the Notes set out in Section 7(b)(v); and (ii) the redemption value of each such Note is not less than (pound)100,000 (or an amount of equivalent value denominated wholly or partly in a currency other than sterling), and no part of any Note may be transferred unless the redemption value of that part is not less than (pound)100,000 (or such an equivalent amount). 4. Conditions of the Obligations of the Agents. Your obligation to solicit offers to purchase Program Securities as agents of the Company, your obligation to purchase Program Securities as principals pursuant to any Notes Terms Agreement or Units Terms Agreement and the obligation of any other purchaser to purchase Program Securities will be subject to the accuracy of the representations and warranties on the part of the Company herein, to the accuracy of the statements of the Company's officers made in each certificate furnished 18 pursuant to the provisions hereof and to the performance and observance by the Company of all covenants and agreements herein contained on its part to be performed and observed (in the case of your obligation to solicit offers to purchase Program Securities, at the time of such solicitation, and, in the case of your or any other purchaser's obligation to purchase Program Securities, at the time the Company accepts the offer to purchase such Program Securities and at the time of issuance and delivery) and (in each case) to the following additional conditions precedent when and as specified: (a) Prior to such solicitation or purchase, as the case may be: (i) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus, as amended or supplemented at the time of such solicitation or at the time such offer to purchase was made, that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Program Securities on the terms and in the manner contemplated by the Prospectus, as so amended or supplemented; (ii) there shall not have occurred such a change in national or international financial, political or economic conditions or currency exchange rates or exchange controls as would in your view be likely to prejudice materially the success of the offering and distribution of the Program Securities or dealings in the Program Securities in the secondary market; and (iii) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded the Company or any of the Company's securities by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; (A) except, in each case described in paragraph (i), (ii) or (iii) above, as disclosed to you in writing by the Company prior to such solicitation or, in the case of a purchase of Program Securities, before the offer to purchase such Program Securities was made or (B) unless in each case described in (ii) above, the relevant event shall have occurred and been known to you prior to such solicitation or, in the case of a purchase of Program Securities, before the offer to purchase such Program Securities was made. 19 (b) On the Commencement Date and, if called for by any Notes Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date, you shall have received: (i) The opinion, dated as of such date, of Sidley Austin Brown & Wood LLP, counsel to the Company, or of other counsel satisfactory to you and who may be an officer of the Company, to the following effect that: (A) the Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of Delaware, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus, as amended or supplemented, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole; (B) each of Morgan Stanley DW Inc., Discover Bank, Morgan Stanley & Co. Incorporated and Morgan Stanley International Holdings Inc. (each a "Material Subsidiary") has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus, as amended or supplemented, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole; (C) each of the Company and its Material Subsidiaries has all necessary consents, authorizations, approvals, orders, certificates and permits of and from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other 20 tribunals, to own, lease, license and use its properties and assets and to conduct its business in the manner described in the Prospectus, as amended or supplemented, except to the extent that the failure to obtain or file would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole; (D) each of this Agreement and any applicable Written Notes Terms Agreement or Written Units Terms Agreement has been duly authorized, executed and delivered by the Company; (E) each Indenture has been duly qualified under the Trust Indenture Act and each of the Senior Indenture, the Subordinated Indenture, the Unit Agreement and the Warrant Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; (F) the Unit Agreement Without Holders' Obligations, if any, has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; (G) the forms of Notes (including the form of Cash-settled Pre-paid Purchase Contracts), whether issued alone or as part of a Unit, have been duly authorized and established in conformity with the provisions of the relevant Indenture and, if the Notes and the Cash-settled Pre-paid Purchase Contracts had been executed by the Company and authenticated by the 21 relevant Trustee or its duly appointed agent in accordance with the provisions of the relevant Indenture and delivered to and duly paid for by the purchasers thereof on the date of such opinion, such Notes and the Cash-settled Pre-paid Purchase Contracts would be entitled to the benefits of such Indenture and would be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; (H) the forms of Units under the Unit Agreement, including the forms of Warrants, Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase Contracts, have been duly authorized and established in conformity with the provisions of (i) in the case of Units under the Unit Agreement, Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase Contracts, the Unit Agreement and (ii) in the case of the Warrants, the Warrant Agreement. If such Units (including the Warrants, the Physically-settled Pre-paid Purchase Contracts and the Non-Pre-paid Purchase Contracts) had been delivered to and duly paid for by the purchasers thereof (and any Purchase Contracts included therein had been executed by the Company and countersigned by the Unit Agent and any Warrants included therein had been executed by the Company and countersigned by the Warrant Agent) on the date of such opinion, such Units (including the Physically-settled Pre-paid Purchase Contracts, the Non-pre-paid Purchase Contracts and the Warrants contained therein) would be entitled to the benefits of the Unit Agreement and, in the case of the Warrants, the Warrant Agreement, and would be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; 22 (I) the Units under the Unit Agreement Without Holders' Obligations have been duly authorized (and the forms of any Warrants included therein have been duly authorized and established in conformity with the provisions of the Warrant Agreement), and if such Units (including any such Warrants included therein) had been delivered to and duly paid for by the purchasers thereof (and any Warrants included therein had been executed by the Company and countersigned by the Warrant Agent) on the date of such opinion, such Units (including the Warrants contained therein) would be entitled to the benefits of the Unit Agreement Without Holders' Obligations and in the case of the Warrants, the Warrant Agreement, and would be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; (J) the execution and delivery by the Company of the Notes and Cash-settled Pre-paid Purchase Contracts (whether issued alone or as part of a Unit), the Units (including any Purchase Contract or Warrant included therein), the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Written Notes Terms Agreement or Written Units Terms Agreement and the performance by the Company of its obligations under this Agreement, the Notes, the Units, the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Notes Terms Agreement or Units Terms Agreement will not contravene any provision of applicable law or the certificate of incorporation or by-laws of the Company or, to the best of such counsel's knowledge, any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its consolidated subsidiaries, taken as a whole, or, to the best of such counsel's knowledge, any judgment, order or decree of any U.S. governmental body, agency or court having jurisdiction 23 over the Company or any of its consolidated subsidiaries, and no consent, approval, authorization or order of or qualification with any U.S. governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Notes, the Cash-settled Pre-paid Purchase Contracts, the Units (including any Purchase Contracts or Warrants included therein), the Indentures, the Unit Agreement, any Unit Agreement Without Holders' Obligations, the Warrant Agreement and any applicable Notes Terms Agreement or Units Terms Agreement; provided, however, that no opinion is expressed on whether the purchase of the Program Securities constitutes a "prohibited transaction" under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended; (K) the statements (1) in the Prospectus, as then amended or supplemented, under the captions "Description of Notes" (in the Prospectus Supplement), "Description of Debt Securities" (in the Basic Prospectus), "Description of Units" (in the Prospectus Supplement and in the Basic Prospectus), "Plan of Distribution" (in the Prospectus Supplement and in the Basic Prospectus), "Description of Purchase Contracts" (in the Basic Prospectus) and "Description of Warrants" (in the Basic Prospectus), (2) in the Registration Statement, as then amended or supplemented, under Item 15, (3) in "Item 3. Legal Proceedings" of the most recent annual report on Form 10-K incorporated by reference in the Prospectus and (4) in "Item 1. Legal Proceedings" of Part II of the quarterly reports on Form 10-Q, if any, filed since such annual report and incorporated by reference in the Prospectus, in each case insofar as such statements constitute summaries of the legal matters, documents or proceedings referred to therein, fairly present the information called for with respect to such legal matters, documents and proceedings and fairly summarize the matters referred to therein; (L) after due inquiry, such counsel does not know of any legal or governmental proceedings pending or threatened to which the Company or any of its consolidated subsidiaries is a party or to which any of the properties of the Company or any of its consolidated 24 subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus, as then amended or supplemented, and are not so described or of any U.S. federal or state statutes, regulations, contracts or other documents governed by U.S. federal or state law that are required to be described in the Registration Statement or the Prospectus, as then amended or supplemented, or to be filed or incorporated by reference as exhibits to such Registration Statement that are not described, filed or incorporated by reference as required; (M) the Company is not, and after giving effect to the offering and sale of the Program Securities and the application of the proceeds thereof as described in the Prospectus, will not be required to register as, an "investment company" as such term is defined in the Investment Company Act of 1940, as amended; and (N) such counsel (1) believes that each document, if any, filed pursuant to the Exchange Act and incorporated by reference in the Prospectus as then amended or supplemented (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief) complied when so filed as to form in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (2) has no reason to believe that any part of the Registration Statement (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief, and except for that part of the Registration Statement that constitutes the Forms T-1 heretofore referred to), as then amended, if applicable, when such part became effective contained, and the Registration Statement (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief, and except for the part of the Registration Statement that constitutes the Forms T-1) as of the date such opinion is delivered contains, any untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (3) believes that the Registration Statement and Prospectus, as then 25 amended or supplemented, if applicable (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief), complied as to form in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (4) has no reason to believe that the Prospectus, as then amended or supplemented, if applicable (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief), as of the date such opinion is delivered contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that in the case of an opinion delivered on the Commencement Date or pursuant to Section 5(b), the opinion and belief set forth in clauses (3) and (4) above shall be deemed not to cover information concerning an offering of particular Notes or Units to the extent such information will be set forth in a supplement to the Basic Prospectus. (ii) The opinion, dated as of such date, of Davis Polk & Wardwell, your special counsel, covering the matters in subparagraphs (D), (E), (F), (G), (H), (I) and (K) (with respect to statements in the Prospectus, as then amended or supplemented, under the captions "Description of Notes" (in the Prospectus Supplement), "Description of Debt Securities" (in the Basic Prospectus), "Description of Units" (in the Prospectus Supplement and the Basic Prospectus), "Plan of Distribution" (in the Prospectus Supplement and in the Basic Prospectus), "Description of Purchase Contracts" (in the Basic Prospectus) and "Description of Warrants" (in the Basic Prospectus)) and clauses (2), (3) and (4) of subparagraph (N) in paragraph (b)(i) above. The opinions described in subparagraphs (F) and (I) need only be contained in an opinion delivered on a Settlement Date related to an offering of Units under a Unit Agreement Without Holders' Obligations to be executed on or prior to such Settlement Date. Notwithstanding the foregoing, the opinions described in subparagraphs (G) (except as to due authorization of the Notes and Cash-settled Pre-paid Purchase Contracts), (H) (except as to due authorization of the Units, Warrants, Physically-settled Pre-paid Purchase Contracts and Non-Pre-paid Purchase 26 Contracts), (I) (except as to due authorization of the Units and Warrants), (J), (K)(1) and (N)(3) and (4) of paragraph (b)(i) above, when contained in an opinion delivered on the Commencement Date or pursuant to Section 5(b), shall be deemed not to address the application of the Commodity Exchange Act, as amended, or the rules, regulations or interpretations of the Commodity Futures Trading Commission to Program Securities the payments of principal or interest on which, or any other payments with respect to which, will be determined by reference to one or more currency exchange rates, commodity prices, securities of entities affiliated or unaffiliated with the Company, baskets of such securities, equity indices or other factors. With respect to subparagraph (N) of paragraph (b)(i) above, if such opinion is given by counsel who is also an officer of the Company, such counsel may state that his or her opinion and belief are based upon his or her participation, or the participation of someone under his or her supervision, in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto and documents incorporated therein by reference and review and discussion of the contents thereof, but are without independent check or verification, except as specified. With respect to subparagraph (N) of paragraph (b)(i) above, Davis Polk & Wardwell and, if Sidley Austin Brown & Wood LLP is giving such opinion, Sidley Austin Brown & Wood LLP may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto (but not including documents incorporated therein by reference) and review and discussion of the contents thereof (including documents incorporated therein by reference), but are without independent check or verification, except as specified. (iii) The opinion, dated as of such date, of Sidley Austin Brown & Wood LLP, special counsel to the Company, to the effect that the statements set forth under the caption "United States Federal Taxation" in the Prospectus Supplement and under the caption "Forms of Securities-Limitations on Issuance of Bearer Securities" in the Basic Prospectus, insofar as such statements relate to statements of law or legal conclusions under the laws of the United States or matters of United States law, fairly present the information called for and fairly summarize the matters referred to therein. The opinion of Sidley Austin Brown & Wood LLP described in paragraph (b)(iii) above and in paragraph (b)(i) above, if such opinion is given by Sidley Austin Brown & Wood LLP, shall be rendered to you at the request of the Company and shall so state therein. 27 (c) On the Commencement Date and, if called for by any Notes Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date, you shall have received a certificate, dated the Commencement Date or such Settlement Date, as the case may be, and signed by an executive officer of the Company to the effect set forth in subparagraph (a)(iii) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of such date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied on or before such date. The officer signing and delivering such certificate may rely upon the best of his knowledge as to proceedings threatened. (d) On the Commencement Date and, if called for by any Notes Terms Agreement or Units Terms Agreement, on the corresponding Settlement Date, the Company's independent auditors shall have furnished to you a letter or letters, dated as of the Commencement Date or such Settlement Date, as the case may be, in form and substance satisfactory to you containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus, as then amended or supplemented; provided that each letter so furnished shall use a "cut-off date" no more than three business days prior to the date of such letter. (e) On the Commencement Date and on each Settlement Date, the Company shall have furnished to you such appropriate further information, certificates and documents as you may reasonably request. (f) On the Commencement Date, application to admit the Series G Notes issued by the Company during the twelve months following the date of the approval of such application to listing on the Official List of the UK Listing Authority and to trading on the London Stock Exchange shall have been made and, prior to the issuance of the first Series G Note offered pursuant to this Agreement, such admission to listing and to trading shall have been granted, subject to official notice of issuance. 5. Additional Agreements of the Company. Each time the Registration Statement or Prospectus is amended or supplemented (other than by an amendment or supplement providing solely for (i) in the case of Notes, a change in the interest rates, redemption provisions, amortization schedules or maturities offered on the Notes issued alone or as part of a Unit, (ii) in the case of Units, (x) a change in the exercise price, exercise date or period or expiration of an underlying Warrant or (y) a change in the settlement date or purchase or sale 28 price of an underlying Purchase Contract or (iii) a change you deem to be immaterial), the Company will deliver or cause to be delivered forthwith to you a certificate signed by an executive officer of the Company, dated the date of such amendment or supplement, as the case may be, in form reasonably satisfactory to you, of the same tenor as the certificate referred to in Section 4(c) relating to the Registration Statement or the Prospectus as amended or supplemented to the time of delivery of such certificate. (b) Each time the Company furnishes a certificate pursuant to Section 5(a) (other than any amendment or supplement to the Registration Statement or Prospectus caused by the filing of a Current Report on Form 8-K unless you shall reasonably request based on disclosure included or omitted from such Report), the Company will furnish or cause to be furnished forthwith to you a written opinion of counsel for the Company. Any such opinion shall be dated the date of such amendment or supplement, as the case may be, shall be in a form satisfactory to you and shall be of the same tenor as the opinions referred to in Section 4(b), but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion. In lieu of such opinion, counsel last furnishing such an opinion to you may furnish to you a letter to the effect that you may rely on such last opinion to the same extent as though it were dated the date of such letter (except that statements in such last opinion will be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented to the time of delivery of such letter.) (c) Each time the Registration Statement or the Prospectus is amended or supplemented to set forth amended or supplemental financial information or such amended or supplemental information is incorporated by reference in the Prospectus, the Company shall cause its independent auditors forthwith to furnish you with a letter, dated the date of such amendment or supplement, as the case may be, in form satisfactory to you, of the same tenor as the letter referred to in Section , with regard to the amended or supplemental financial information included or incorporated by reference in the Registration Statement or the Prospectus as amended or supplemented to the date of such letter; provided that each letter so furnished shall use a "cut-off date" no more than three business days prior to the date of such letter. 6. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless you and each person, if any, who controls you within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments 29 or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to you furnished to the Company in writing by you expressly for use therein. (b) You agree to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to you, but only with reference to information relating to you furnished to the Company in writing by you expressly for use in the Registration Statement or the Prospectus or any amendments or supplements thereto. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either paragraph (a) or (b) above, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by you, in the case of parties indemnified pursuant to paragraph (a) above, and by the Company, in the case of parties indemnified pursuant to paragraph (b) above. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there were to be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any 30 time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) To the extent the indemnification provided for in paragraph (a) or (b) of this Section 6 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein in connection with any offering of Program Securities, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and you on the other hand from the offering of such Program Securities or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and you on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and you on the other hand in connection with the offering of such Program Securities shall be deemed to be in the same respective proportions as the total net proceeds from the offering of such Program Securities (before deducting expenses) received by the Company bear to the total discounts and commissions received by you in respect thereof. The relative fault of the Company on the one hand and of you on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by you and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (e) The Company and you agree that it would not be just or equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable 31 considerations referred to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6, you shall not be required to contribute any amount in excess of the amount by which the total price at which the Program Securities referred to in paragraph (d) above that were offered and sold to the public through you exceeds the amount of any damages that you have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 6 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. (f) The indemnity and contribution provisions contained in this Section 6 and the representations, warranties and other statements of the Company, its officers and you set forth in or made pursuant to this Agreement or any Notes Terms Agreement or Units Terms Agreement will remain operative and in full force and effect regardless of (i) any termination of this Agreement or any such Notes Terms Agreement or Units Terms Agreement, (ii) any investigation made by or on behalf of you or any person controlling you or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Program Securities. 7. Offering Restrictions. You hereby represent to the Company and agree with respect to the Program Securities that: (a) you have not (A) offered or sold and will not offer or sell during the Restricted Period (as defined below) Bearer Notes (whether offered alone or as part of a Unit) (including any Note that is exchangeable for Bearer Notes) directly or indirectly in the United States (as defined below) or to or for the account of any United States person (as defined below), other than to a Qualifying Foreign Branch (as defined below) or to certain other persons as provided under United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(1)(iii)(B) and (C); and (B) delivered and will not deliver within the United States definitive Bearer Notes that are sold during the Restricted Period; (ii) you have, and throughout the Restricted Period will have, in effect procedures reasonably designed to ensure that your employees or agents who are directly engaged in selling Bearer Notes (whether offered alone or as part of a Unit) are 32 aware that such Bearer Notes may not be offered or sold during the Restricted Period to a person who is within the United States or to a United States person, except as permitted by Section 7(a)(i)(A) above; (iii) if you are a United States person, you are acquiring the Bearer Notes (whether offered alone or as part of a Unit) for purposes of resale in connection with their original issuance and if you retain Bearer Notes for your own account, you will only do so in accordance with the requirements of United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(6); (iv) if you transfer to any affiliate Bearer Notes (whether offered alone or as part of a Unit) for the purpose of offering or selling such Bearer Notes during the Restricted Period, you will either (A) obtain from such affiliate for the benefit of the Company the representations and agreements contained in clauses , (ii) and (iii) above or (B) repeat and confirm the representations and agreements contained in clauses (i), (ii) and (iii) above on such affiliate's behalf and obtain from such affiliate the authority to so obligate it; and (v) you will obtain for the benefit of the Company the representations and agreements contained in clauses (i), (ii), (iii) and (iv) above from any person other than your affiliate with whom you enter into a written contract, within the meaning of United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(4), for the offer or sale during the Restricted Period of Bearer Notes (whether offered alone or as part of a Unit). For purposes of this Section 7(a), an offer or sale will be considered to be made in the United States if the offeror or seller of such Notes (whether offered alone or as part of a Unit) has an address within the United States for the offeree or purchaser of such Notes with respect to the offer or sale. As used in this Section 7(a), "United States person" means a citizen or resident of the United States, a corporation or partnership (including an entity treated as a corporation or partnership for United States federal income tax purposes) created or organized in or under the laws of the United States, any State thereof or the District of Columbia, an estate the income of which is subject to United States federal income taxation regardless of its source or a trust if both (x) a court within the United States is able to exercise primary supervision over the administration of the trust and (y) one or more United States persons have the authority to control all substantial decisions of the trust; "United States" means the United States (including the States and the District of Columbia), its territories, its possessions and any other areas subject to its jurisdiction; "Qualifying Foreign Branch" 33 means a branch of a United States financial institution, as defined in the applicable United States Treasury Regulations, located outside the United States that is purchasing for its own account or for resale and that has agreed, as a condition to purchase, to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder; and "Restricted Period" with respect to each issuance means the period which begins on the earlier of the date on which the Company receives the proceeds of the sale of Notes with respect to such issuance or the first date on which the Notes are offered to persons other than you, and which ends 40 days after the date on which the Company receives the proceeds of the sale of such Notes; provided that with respect to a Note held as part of an unsold allotment or subscription, any offer or sale of such Note by the Company or you shall be deemed to be during the Restricted Period. (b) (i) In relation to Notes which have a maturity of one year or more and which are to be admitted to the Official List of the UK Listing Authority, you have not offered or sold and will not offer or sell any such Notes to persons in the United Kingdom prior to the admission of such Notes to listing in accordance with Part VI of the FSMA, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995 or the FSMA, as amended; (ii) in relation to Notes which have a maturity of one year or more and which are not to be admitted to the Official List of the UK Listing Authority, you have not offered or sold and, prior to the expiry of the period of six months from the date of issue of such Notes, will not offer or sell any such Notes to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (iii) you have complied with and will comply with all applicable provisions of the FSMA with respect to anything done by you in relation to the Notes in, from or otherwise involving the United Kingdom; 34 (iv) you have only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by you in connection with the issue or sale of Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Company; and (v) with respect to any Notes which have a maturity of less than one year, (A) you are a person whose ordinary activities involve you in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of your business, and (B) you have not offered or sold and will not offer or sell any such Notes other than to persons (1) whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or (2) who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses, where the issue of the Notes would otherwise constitute a contravention of Section 19 of the FSMA by the Company. (c) (i) You have complied and will comply with all applicable provisions of the FSMA in respect to anything done in relation to any Warrants in, from or otherwise involving the United Kingdom. Any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by any person in connection with the issue or sale of any Warrants has only communicated or caused to be communicated and will only communicate or cause to be communicated in circumstances in which Section 21(l) of the FSMA does not apply to the Company. (ii) If the Warrants give entitlements to securities within the meaning of the Public Offers of Securities Regulations 1995, you have not offered or sold and will not offer or sell any such Warrants to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of those Regulations. (d) You will not purchase, deliver, offer or sell any Program Securities or possess or distribute offering material in relation to such 35 Program Securities in any jurisdiction if such purchase, delivery, offer or sale or the possession or distribution of such offering material would not be in compliance with any applicable law or regulation or if any consent, approval or permission is needed for such purchase, delivery, offer or sale or the possession or distribution by you or for or on behalf of the Company unless such consent, approval or permission has been previously obtained. Without prejudice to the provisions of this Section 7 above and subject to the obligations of the Company set forth in Section 3 of this Agreement, the Company shall have no responsibility for, and you will obtain, any consent, approval or permission required by you for the subscription, offer, sale or delivery by you of Program Securities, or the possession or distribution of any offering materials, under the laws and regulations in force in any jurisdiction to which you are subject or in or from which you make any subscription, offer, sale or delivery. (e) You will not offer or sell any Program Securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan including any corporation or other entity organized under the laws of Japan) or to others for the re-offering or re-sale, directly or indirectly, in Japan or to a resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law of Japan and other relevant laws and regulations of Japan. (f) Each of the Agents and the Company represents and agrees that Program Securities will be issued outside the Republic of France, that it will not offer or sell any Program Securities in the Republic of France and will not distribute or cause to be distributed in the Republic of France the Prospectus or any other offering material relating to Program Securities, except to (i) qualified investors (investisseurs qualifies) and/or (ii) within a restricted circle of investors (cercle restreint d'investisseurs), all as defined in and in accordance with Article L.411-2 of the Code Monetaire et Financier and Decree no 98-880 dated 1st October, 1998. 8. Position of the Agent. In acting under this Agreement and in connection with the sale of any Program Securities by the Company (other than Program Securities sold to you pursuant to a Notes Terms Agreement or Units Terms Agreement, as the case may be), you are acting solely as agent of the Company and do not assume any obligation towards or relationship of agency or trust with any purchaser of Program Securities. You shall make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Program Securities has been solicited by you and accepted by the Company, but you shall not have any liability to the Company in the event any such purchase is not consummated for any reason. If the Company shall default in its obligations to deliver Program Securities to a purchaser whose offer it has 36 accepted, the Company shall hold you harmless against any loss, claim, damage or liability arising from or as a result of such default and shall, in particular, pay to you the commission you would have received had such sale been consummated. 9. Termination. This Agreement may be terminated at any time either by the Company or by you upon the giving of written notice of such termination to the other parties hereto, but without prejudice to any rights, obligations or liabilities of the other parties hereto accrued or incurred prior to such termination. The termination of this Agreement shall not require termination of any Notes Terms Agreement or Units Terms Agreement, and the termination of any such Notes Terms Agreement or Units Terms Agreement shall not require termination of this Agreement. If this Agreement is terminated, the provisions of the third paragraph of Section 2(a), the last sentence of Section 3(b) and Sections 3(c), 3(g), 3(i), 3(j), 6, 7, 8, 10, 11 and 13 shall survive; provided that if at the time of termination an offer to purchase Program Securities has been accepted by the Company but the time of delivery to the purchaser or its agent of such Program Securities has not occurred, the provisions of Sections 1, 2(b), 2(c), 3(a), 3(d), 3(e), 3(f), 3(h), 4 and 5 shall also survive until such delivery has been made. 10. Notices. All communications hereunder will be in writing and effective only on receipt, and (a) if sent to Morgan Stanley & Co. International Limited, will be mailed, delivered or telefaxed and confirmed to Morgan Stanley & Co. International Limited, 25 Cabot Square, Canary Wharf, London E14 4QA, United Kingdom, to the attention of Global Capital Markets - Head of Transaction Management Group (Telephone No.: +44-20-7677-7799; Telecopy No.: +44-20-7677-7999) and (b) if sent to the Company, will be mailed, delivered or telefaxed and confirmed to Morgan Stanley, 1221 Avenue of the Americas, New York, New York 10020, Attention: Treasurer (Telecopy No.: 212-762-7337) (or to such other address as the Company may designate). 11. Successors. This Agreement and any Notes Terms Agreement or Units Terms Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors and controlling persons referred to in Section 6 and the purchasers of Notes and Units (to the extent expressly provided in Section 4), and no other person will have any right or obligation hereunder. 12. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 13. Applicable Law. This Agreement will be governed by and construed in accordance with the internal laws of the State of New York. 37 14. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. 38 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement between the Company and you. Very truly yours, MORGAN STANLEY By: ------------------------------------------- Name: Jai Sooklal Title: Assistant Treasurer The foregoing Agreement is hereby confirmed and accepted as of the date first above written. MORGAN STANLEY & CO. INTERNATIONAL LIMITED By: -------------------------------------------- Name: Title: EXHIBIT A MORGAN STANLEY GLOBAL MEDIUM-TERM NOTES, SERIES G AND SERIES H NOTES TERMS AGREEMENT _______________, 200_ Morgan Stanley 1585 Broadway New York, New York 10036 Attention: Re: Euro Distribution Agreement dated [ ], 2005 (the "Euro Distribution Agreement") ---------------------------------------------------------------- The undersigned agrees to purchase your Global Medium-Term Notes, Series G/H, [specific designation] having the following terms: All Notes Fixed Rate Notes Floating Rate Notes - ------------------------------------------------------------------------------------------- Principal Amount: Interest Rate: Base Rate: Purchase Price: Applicability of Modified Payment Index Maturity: upon Acceleration: Price to Public: If yes, state issue price: Spread (Plus or Minus): Settlement Date and Time: Amortization Schedule: Spread Multiplier: Place of Delivery: Applicability of Annual Interest Alternate Rate Event Spread: Payments: Specified Currency: Denominated Currency (if any): Initial Interest Rate: Original Issue Date: Indexed Currency or Currencies Initial Interest Reset Date: (if any): Interest Accrual Date: Payment Currency (if any): Interest Reset Dates:
A-1 All Notes Fixed Rate Notes Floating Rate Notes - ------------------------------------------------------------------------------------------- Interest Payment Date(s): Exchange Rate Agent (if any): Interest Reset Period: Interest Payment Period: Reference Dealers: Maximum Interest Rate: Maturity Date: Face Amount (if any): Minimum Interest Rate: Optional Repayment Fixed Amount of each Indexed Calculation Agent: Date(s): Currency (if any): Optional Redemption Date(s): Aggregate Fixed Amount of each Reporting Service: Indexed Currency (if any): Initial Redemption Date: Index Currency: Initial Redemption Percentage: Designated CMT Telerate Page: Annual Redemption Percentage Designated CMT Maturity Index: Reduction: Ranking: Series: Minimum Denominations: Other Terms:
The provisions of Sections 1, 2(b) and 2(c) and 3 through 7 and 10 through 14 of the Euro Distribution Agreement and the related definitions are incorporated by reference herein and shall be deemed to have the same force and effect as if set forth in full herein. This Agreement is also subject to termination on the terms incorporated by reference herein. If this Agreement is so terminated, the provisions of Sections 3(g), 6, 10, 11 and 13 of the Euro Distribution Agreement shall survive for the purposes of this Agreement. A-2 The following information, opinions, certificates, letters and documents referred to in Section 4 of the Euro Distribution Agreement will be required: ________________. MORGAN STANLEY & CO. INTERNATIONAL LIMITED By: ------------------------------------------- Name: Title: Accepted: MORGAN STANLEY By: ------------------------------------------ Name: Title: A-3 EXHIBIT A-1 MORGAN STANLEY GLOBAL UNITS, SERIES G AND SERIES H UNITS TERMS AGREEMENT _______________, 200_ Morgan Stanley 1585 Broadway New York, New York 10036 Attention: Re: Euro Distribution Agreement dated [ ], 2005 (the "Euro Distribution Agreement") -------------------------------------------------------------- The undersigned agrees to purchase your Global Units, Series G/H, [specified designation] having the following terms: Warrants Issued as Part of a Purchase Contracts Issued as All Units: Unit: Part of a Unit: - ----------------------------------- -------------------------------- ---------------------------- Settlement Date and Time: Price: Price: Number (Face Amount): Designation of the Series of Designation of the Series of Warrants: [Call] [Put] Purchase Contracts: Warrants [Purchase][Sale] Purchase Contracts Purchase Price: Warrant Property: Aggregate Number of Purchase Contracts: Specified Currency: Aggregate Number of Warrants: Purchase Contract Property: Severability: Date(s) upon which Warrants may Quantity per Purchase Contract: be exercised: Other Terms: Currency in which exercise [Purchase] [Sale] Price: payments shall be made:
A-1-1 Warrants Issued as Part of a Purchase Contracts Issued as All Units: Unit: Part of a Unit: - ----------------------------------- ---------------------------- ---------------------------- Exchange Rate (or method of Settlement Date: calculation: Expiration Date: Payment Location: Form of Settlement: Method of Settlement: [Call Price:](1) [Formula for determining Cash Currency of Settlement Payment: Settlement Value:](2) [Amount of Warrant Property Contract Fees, if any: Salable per Warrant:](3) [Put Price for such specified Corporation Acceleration: amount of Warrant Property per Warrant:](2) [Method of delivery of any Holders' Acceleration: Warrant Property to be delivered for sale upon exercise of Warrants:](3) Other Terms: Redemption Provisions: Other Terms:
- -------------------------------- (1) Applicable to Call Warrants (2) Applicable to Put Warrants (3) Applicable to Put Warrants only if such Put Warrants contemplate that the holder deliver Warrant Property to settle Put Warrants A-1-2 All Notes Issued as Part of Fixed Rate Notes Issued as Part Floating Rate Notes Issued as a Unit: of a Unit: Part of a Unit: - ---------------------------------- --------------------------------- ----------------------------- Principal Amount: Interest Rate: Base Rate: Purchase Price: Applicability of Modified Payment Index Maturity: upon Acceleration: Price to Public: If yes, state issue price: Spread (Plus or Minus): Settlement Date and Time: Amortization Schedule: Spread Multiplier: Place of Delivery: Applicability of Annual Interest Alternate Rate Event Spread: Payments: Specified Currency: Denominated Currency (if any): Initial Interest Rate: Original Issue Date: Indexed Currency or Currencies Initial Interest Reset Date: (if any): Interest Accrual Date: Payment Currency (if any): Interest Reset Dates: Interest Payment Date(s): Exchange Rate Agent (if any): Interest Reset Period: Interest Payment Period: Reference Dealers: Maximum Interest Rate: Maturity Date: Face Amount (if any): Minimum Interest Rate: Optional Repayment Date(s): Fixed Amount of each Indexed Calculation Agent: Currency (if any): Optional Redemption Date(s): Aggregate Fixed Amount of each Reporting Service: Indexed Currency (if any): Initial Redemption Date: Index Currency: Initial Redemption Percentage: Designated CMT Telerate Page: Annual Redemption Percentage Designated CMT Maturity Index: Reduction: Ranking:
A-1-3 All Notes Issued as Part of Fixed Rate Notes Issued as Part Floating Rate Notes Issued as a Unit: of a Unit: Part of a Unit: - ---------------------------------- --------------------------------- ----------------------------- Series: Minimum Denominations: Other Terms:
The provisions of Sections 1, 2(b) and 2(c) and 3 through 7 and 10 through 14 of the Euro Distribution Agreement and the related definitions are incorporated by reference herein and shall be deemed to have the same force and effect as if set forth in full herein.(4) This Agreement is also subject to termination on the terms incorporated by reference herein. If this Agreement is terminated, the provisions of Sections 3(g), 6, 10, 11 and 13 of the Euro Distribution Agreement shall survive for the purposes of this Agreement. The following information, opinions, certificates, letters and documents referred to in Section 4 of the Euro Distribution Agreement will be required: ___________. MORGAN STANLEY & CO. INTERNATIONAL LIMITED By: ------------------------------------------- Name: Title: - ------------------------ (4) In the case of Physically-settled Pre-paid Purchase Contracts issued under a Unit Agreement Without Holders' Obligations, additional representations and warranties will be added with respect to such Physically-settled Pre-paid Purchase Contracts and the opinions of counsel delivered pursuant to Sections 4(b)(i) and 4(b)(ii) will cover such additional representations and warranties, as appropriate. A-1-4 Accepted: MORGAN STANLEY By: -------------------------------------------- Name: Title: A-1-5 EXHIBIT B MORGAN STANLEY GLOBAL MEDIUM-TERM NOTES, SERIES G AND SERIES H GLOBAL UNITS, SERIES G AND SERIES H ADMINISTRATIVE PROCEDURES --------------------------------- Explained below are the administrative procedures and specific terms of the offering of (i) Global Medium-Term Notes, Series G (the "Series G Notes"), (ii) Global Medium-Term Notes, Series H (the "Series H Notes" and together with the Series G Notes, the "Notes"), (iii) Global Units, Series G (the "Series G Units") and (iv) Global Units, Series H (the "Series H Units" and together with the Series G Units, the "Units", and the Units together with the Notes, the "Program Securities"), on a continuous basis by Morgan Stanley (the "Company") pursuant to the Euro Distribution Agreement dated [ ], 2005 (as may be amended from time to time, the "Distribution Agreement") between the Company and Morgan Stanley & Co. International Limited (the "Agent"). The Notes may be issued, either alone or as part of a Unit, in registered form without coupons ("Registered Notes"), in bearer form with or without coupons ("Bearer Notes") or in any combination of Registered Notes and Bearer Notes. The Units may be issued in registered form ("Registered Units"), in bearer form ("Bearer Units") or in any combination of Registered Units and Bearer Units. The securities comprised by a Unit will be issued in the same form as such Unit. Bearer Notes and Bearer Units initially will be represented by, in the case of Bearer Notes, a Temporary Global Note and, in the case of Bearer Units, a Temporary Global Unit. Such Temporary Global Note and Temporary Global Unit will subsequently be represented by, in the case of the Temporary Global Note, a Permanent Global Note and, in the case of the Temporary Global Unit, a Permanent Global Unit. Interests in a Permanent Global Note may be exchanged, in whole, for individual definitive Bearer Notes with or without coupons attached. Definitive Bearer Notes may be exchanged, if the applicable Pricing Supplement so specifies, in whole or in part, for Registered Notes. Interests in a Permanent Global Unit may be exchanged, in whole, for individual definitive Bearer Units. Definitive Bearer Units may be exchanged, if the applicable Pricing Supplement so specifies, in whole or in part, for Registered Units. The Notes may be issued as senior indebtedness (the "Senior Notes") or subordinated indebtedness (the "Subordinated Notes") of the Company, and as used herein the term "Notes" includes the Senior Notes and the Subordinated Notes. The Senior Notes will be issued, either alone or as part of a Unit, pursuant B-1 to the provisions of an amended and restated senior indenture dated November 1, 2004 (as may be supplemented or amended from time to time, the "Senior Debt Indenture"), between the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as trustee (the "Senior Debt Trustee"). The Subordinated Notes will be issued pursuant to the provisions of a subordinated indenture, dated as of October 1, 2004 (as may be supplemented or amended from time to time, the "Subordinated Debt Indenture"), between the Company and J.P. Morgan Trust Company, National Association, as trustee. The Senior Debt Indenture and the Subordinated Debt Indenture are sometimes hereinafter referred to individually as an "Indenture" and collectively as the "Indentures." Purchase contracts ("Purchase Contracts") that require holders to satisfy their obligations thereunder when such Purchase Contracts are issued are referred to as "Pre-paid Purchase Contracts." Pre-paid Purchase Contracts that settle in cash ("Cash-settled Pre-paid Purchase Contracts") generally will be issued under the Indentures. Pre-paid Purchase Contracts that do not settle in cash ("Physically-settled Pre-paid Purchase Contracts") generally will be issued under the Unit Agreement or the Unit Agreement Without Holders' Obligations (each as defined below). Unless otherwise specified in the applicable Pricing Supplement, the Units will be issued (1) pursuant to the Unit Agreement dated as of November 1, 2004, among the Company, JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Unit Agent, as Collateral Agent, as Trustee and Paying Agent under the Indenture referred to therein, and as Warrant Agent under the Warrant Agreement referred to therein, and the holders from time to time of the Units described therein (as may be amended from time to time, the "Unit Agreement") or (ii) if Units do not include Purchase Contracts (or include only Pre-paid Purchase Contracts), pursuant to a unit agreement among the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Unit Agent, as Trustee and Paying Agent under the Indenture referred to therein, and as Warrant Agent under the Warrant Agreement referred to therein, in the form of such agreement filed as an exhibit to the Registration Statement (each such agreement, a "Unit Agreement Without Holders' Obligations").(1) Units may include one or more (i) Series G & H Senior Notes, (ii) warrants ("Warrants") entitling the holders thereof to purchase or sell (a) securities issued by the Company or by an entity not affiliated with the Company (or securities issued by an entity affiliated with the Company in the case of Series H Units), a basket of such securities, an index or indices of such securities or any combination of the above, (b) currencies or (c) commodities, (iii) purchase contracts ("Purchase Contracts"), including Pre-paid Purchase Contracts, requiring the holders thereof to purchase or sell (a) securities issued by the Company or by an entity not - ----------------------------- (1) The Unit Agreement Without Holders' Obligations shall include provisions to allow for the issuance of Pre-paid Purchase Contracts that are not issued under the Indentures. B-2 affiliated with the Company (or securities issued by an entity affiliated with the Company in the case of Series H Units), a basket of such securities, an index or indices of such securities or any combination of the above, (b) currencies or (c) commodities or (iv) any combination thereof. The applicable Pricing Supplement will specify whether or not any Notes, Warrants and Purchase Contracts comprised by a Unit may or may not be separated from the Unit. Warrants issued as part of a Unit will be issued pursuant to the Warrant Agreement dated as of November 1, 2004, between the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Warrant Agent (as may be amended from time to time, the "Warrant Agreement"). Purchase Contracts, other than Pre-paid Purchase Contracts, entered into by the Company and the holders thereof will be governed by the Unit Agreement. In the Distribution Agreement, the Agent has agreed to use reasonable efforts to solicit purchases of the Notes and the Units, and the administrative procedures explained below will govern the issuance and settlement of any Notes or Units sold through the Agent, as agent of the Company. The Agent, as principal, may also purchase Notes or Units for its own account, and the Company and the Agent will enter into a terms agreement (in the case of Notes, a "Notes Terms Agreement" and, in the case of Units, a "Units Terms Agreement"), as contemplated by the Distribution Agreement. The administrative procedures explained below will govern the issuance and settlement of any Notes or Units purchased by the Agent, as principal, unless otherwise specified in the applicable Notes Terms Agreement or Units Terms Agreement. JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), ("JPMorgan Chase") has initially been appointed the (i) Calculation Agent and Principal Paying Agent for the Senior Notes (and any Cash-settled Pre-Paid Purchase Contracts), (ii) the Unit Agent for the Units and Purchase Contracts (other than Cash-settled Pre-Paid Purchase Contracts), (iii) the Warrant Agent for the Warrants and (iv) the Registrar for the Senior Registered Notes, and will perform the duties specified herein. J.P. Morgan Trust Company, National Association (acting through JPMorgan Chase at its corporate trust office in London as its sub-agent) has initially been appointed the (x) Calculation Agent and Principal Paying Agent for the Subordinated Notes and (y) the Registrar for the Subordinated Registered Notes, and will perform the duties specified herein. As used herein, the term "Principal Paying Agent" shall mean (i) JPMorgan Chase acting B-3 through its London office in connection with the authentication and delivery of the Senior Notes and (ii) J.P. Morgan Trust Company, National Association (acting through JPMorgan Chase at its corporate trust office in London as its sub-agent) in connection with the authentication and delivery of the Subordinated Notes, in each case whether issued alone or as part of a Unit, (and any Cash-settled Pre-Paid Purchase Contracts) pursuant to the terms of the Indentures, and the term "Unit Agent" shall mean JPMorgan Chase acting through its London office in connection with the completion and delivery of the Units (including, as applicable, countersigning and delivering any Warrants, as Warrant Agent, and countersigning, executing and delivering any Purchase Contracts (other than Cash-settled Pre-Paid Purchase Contracts), as Unit Agent, includable in such Unit), pursuant to the terms of the Unit Agreements. "Warrant Agent" shall mean JPMorgan Chase acting through its London office. The Series G Notes are intended to be, and the Series G Units, in certain circumstances described in the Prospectus Supplement (as such term is defined in the Distribution Agreement), may be, admitted to the Official List of the Financial Services Authority (the "UK Listing Authority") in its capacity as competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000 (the "FSMA"), and to trading on the London Stock Exchange plc (the "London Stock Exchange"). Series H Notes and the Series H Units will not be listed on any stock exchange. The Company has appointed Morgan Stanley & Co. International Limited as the authorized adviser for purposes of applications to admit the Series G Notes and the Series G Units, if it is determined that Series G Units are to be so admitted, to the Official List of the UK Listing Authority and to trading on the London Stock Exchange. Each Bearer Note and each Bearer Unit (including each security comprised by such Bearer Unit) initially will be represented by, in the case of a Bearer Note, a Temporary Global Note and, in the case of a Bearer Unit, a Temporary Global Unit, each of which will be delivered to a common depositary located outside the United States (the "Depositary") for Euroclear Bank S.A./N.V., as operator of the Euroclear System (the "Euroclear Operator"), Clearstream Banking, societe anonyme ("Clearstream"), and/or any other relevant clearing system (including Euroclear France). Such Temporary Global Note and Temporary Global Unit will subsequently be represented by, in the case of the Temporary Global Note, a Permanent Global Note and, in the case of the Temporary Global Unit, a Permanent Global Unit. Upon the first request by any beneficial owner to exchange any interest in a Permanent Global Note to a definitive Bearer Note, or if any Note represented by such Permanent Global Note is accelerated following an event of default with respect to such Note or if either the Euroclear Operator, Clearstream or any other relevant clearing system is closed for business for a continuous period of fourteen days (other than by reason of public holidays) or announces an intention to cease business permanently or in fact does so, then all (and not less than all) interests in such Permanent Global Note shall be exchanged for definitive Bearer Notes; provided that, if the applicable Pricing Supplement so specifies, nothing herein shall prevent the further exchange of definitive Bearer Notes for Registered Notes. Upon the first request by any beneficial owner to exchange any interest in a Permanent Global Unit to a definitive Bearer Unit, or if any Note comprised by such Permanent Global Note is accelerated following an event of default with respect to such Note or if either the Euroclear Operator, Clearstream or any other relevant clearing system is closed for business for a continuous period of fourteen days (other than B-4 by reason of public holidays) or announces an intention to cease business permanently or in fact does so, then all (and not less than all) interests in such Permanent Global Unit shall be exchanged for definitive Bearer Units; provided that, if the applicable Pricing Supplement so specifies, nothing herein shall prevent the further exchange of definitive Bearer Units for Registered Units. Unless otherwise defined herein, terms defined in the Indentures, the Unit Agreement, the Unit Agreement Without Holders' Obligations, the Warrant Agreement, the Notes, the Units, the Warrants, the Purchase Contracts or any Prospectus Supplement relating to the Notes and Units shall be used herein as therein defined. The Company will advise the Agent in writing of the employees of the Company with whom the Agent is to communicate regarding offers to purchase Notes and Units and the related settlement details. B-5 ADMINISTRATIVE PROCEDURES FOR BEARER NOTES, REGISTERED NOTES, BEARER UNITS AND REGISTERED UNITS Issuance: Bearer Notes. Each Bearer Note, whether issued alone or as part of a Unit, will be dated as of its Original Issue Date. Each Bearer Note will bear an Original Issue Date, which will be (i) with respect to a Temporary Global Note (or any portion thereof), the date of its original issue as specified in such Temporary Global Note or (ii) with respect to any Permanent Global Note or any definitive Bearer Note (or any portion thereof) issued subsequently upon transfer or exchange of a Bearer Note or in lieu of a destroyed, lost or stolen Bearer Note (a "Replacement Bearer Note"), the Original Issue Date of the predecessor Bearer Note, regardless of the date of authentication of such subsequently issued Bearer Note. Registered Notes. Each Registered Note, whether issued alone or as part of a Unit, will be dated as of the date of its authentication by JPMorgan Chase. Each Registered Note will also bear an Original Issue Date, which will be (i) with respect to an original Registered Note (an "Original Registered Note") (or any portion thereof), its original issuance date (which will be the settlement date) and (ii) with respect to any Registered Note (or portion thereof) issued subsequently upon transfer or exchange of a Registered Note or in lieu of a destroyed, lost or stolen Registered Note or upon exchange of a Bearer Note (a "Replacement Registered Note"), the original issuance date of the predecessor Registered Note or Bearer Note, as the case may be, regardless of the date of authentication of such subsequently issued Registered Note. B-6 Bearer Units. Each Bearer Unit (whether in temporary, permanent or definitive form) will be deemed to be dated as of the Original Issue Date of the Bearer Note comprised by such Unit or, if there is no such underlying Bearer Note, the date of the other securities comprised thereby in accordance with the procedures described above. Registered Units. Each Registered Unit will be deemed to be dated as of the Original Issue Date of the Registered Note comprised by such Unit or, if there is no such underlying Registered Note, as of the date of the other securities comprised thereby in accordance with the procedures described above. Denominations: Bearer Notes. Unless otherwise specified in the applicable Pricing Supplement, Bearer Notes, whether issued alone or as part of a Unit, will be issued only in denominations of $1,000 (or, in the case of Bearer Notes not denominated in U.S. dollars, the equivalent thereof in the Specified Currency, rounded to the nearest 1,000 units of the Specified Currency) or any amount in excess thereof which is an integral multiple of $1,000 (or, in the case of Bearer Notes not denominated in U.S. dollars, 1,000 units of the Specified Currency). Registered Notes. Unless otherwise specified in the applicable Pricing Supplement, Registered Notes will be issued, either alone or as part of a Unit, only in denominations of $1,000 (or, in the case of Registered Notes not denominated in U.S. dollars, the equivalent thereof in the Specified Currency, rounded to the nearest 1,000 units of the Specified Currency) or any amount in excess thereof which is an integral multiple of $1,000 (or, in the case B-7 of Registered Notes not denominated in U.S. dollars, 1,000 units of the Specified Currency). Bearer Units. Unless otherwise specified in the applicable Pricing Supplement, Bearer Units will be issued only in denominations of a single Unit and any integral multiple thereof, with face amounts in denominations as indicated in the applicable Pricing Supplement, generally corresponding to the denominations of any Notes or other securities comprised by such Units. Registered Units. Unless otherwise specified in the applicable Pricing Supplement, Registered Units will be issued only in denominations of a single Unit and any integral multiple thereof, with face amounts in denominations as indicated in the applicable Pricing Supplement, generally corresponding to the denominations of any Notes or other securities comprised by such Units. Global Notes and Definitive Bearer and Registered Notes: Until Final Certification (as defined below) with respect to an issuance of Bearer Notes has occurred, such Notes, together with all other Bearer Notes that have the same terms (other than their respective principal amounts) (all such Notes herein referred to collectively as a "Note Tranche"), will be represented by a single Temporary Global Note in bearer form without interest coupons. The Company shall execute, and upon Company instructions the Principal Paying Agent shall complete and authenticate, such Temporary Global Note upon the same conditions and in substantially the same manner, and with the same effect, as an individual definitive Bearer Note. On or prior to the settlement B-8 date (which will normally be the Original Issue Date) with respect to such Notes, the Principal Paying Agent shall deposit the Temporary Global Note with the Depositary in the manner specified below under "Settlement Procedures; Bearer Notes and Bearer Units". The interest of each beneficial owner of Notes represented by such Temporary Global Note will be credited to the appropriate account with the Euroclear Operator, Clearstream or any other relevant clearing system. On or after the date (the "Exchange Date") that is the 40th day following the date on which the Company receives the proceeds of the sale of a Temporary Global Note (the "Closing Date"), or if such Note is held by the Agent as part of an unsold allotment or subscription more than 40 days after the Closing Date for such Note, on or after the day after the date such Note is sold by the Agent, all as notified by the Agent in writing to JPMorgan Chase, the interest of the beneficial owners of the Notes represented by the Temporary Global Note shall be canceled and such interests shall thereafter be represented by a Permanent Global Note in bearer form without interest coupons held in London by the Depositary; provided that Final Certification (as described below) has occurred. The interest of each beneficial owner of Notes represented by such Permanent Global Note will be credited to the appropriate account with the Euroclear Operator, Clearstream or any other relevant clearing system. If the beneficial owner of an interest in a Permanent Global Note requests, at any time, upon 30 days' written notice to the Principal Paying Agent given by such beneficial owner through either the Euroclear Operator, Clearstream or any B-9 other relevant clearing system, as the case may be, or if any Note represented by such Permanent Global Note is accelerated following an event of default with respect to such Note or if either the Euroclear Operator, Clearstream or any other relevant clearing system is closed for business for a continuous period of fourteen days (other than by reason of public holidays) or announces an intention to cease business permanently or in fact does so, such Permanent Global Note shall be exchanged for one or more definitive Bearer Notes with coupons attached, if appropriate, or, if the applicable Pricing Supplement so specifies, one or more Registered Notes in authorized denominations equal in aggregate principal amount to such beneficial interest; provided that any such exchange of an interest in a Permanent Global Note for a definitive Bearer Note shall result in the exchange of all (and not less than all) interests in such Permanent Global Note for definitive Bearer Notes; provided further, that, if the applicable Pricing Supplement so specifies, nothing herein shall prevent the further exchange of definitive Bearer Notes for Registered Notes. To effect such exchange, the interest of such beneficial owner in such Permanent Global Note shall be canceled and one or more definitive Bearer Notes or Registered Notes, as the case may be, shall be issued to such beneficial owner, through the Euroclear Operator, Clearstream or any other relevant clearing system, as the case may be. In all events, Bearer Notes and coupons will be delivered by the Principal Paying Agent only outside the United States. B-10 Global Units and Definitive Bearer Until Final Certification (as defined below) and Registered Units: has occurred with respect to an issuance of Bearer Notes included in an issuance of Bearer Units, such Units, together with all other Bearer Units that include securities that have the same terms (other than their respective number and face amounts) (all such Units herein referred to collectively as a "Unit Tranche"), will be represented by a single Temporary Global Unit in bearer form (which form shall include the corresponding temporary global forms of each security comprised by such Unit). The Company shall execute, and upon Company instructions, JPMorgan Chase, as Unit Agent, shall complete, such Temporary Global Unit (including, as applicable, authenticating any Temporary Global Note or Cash-settled Pre-paid Purchase Contracts, as Principal Paying Agent, countersigning and delivering any Warrants, as Warrant Agent, and countersigning, executing and delivering any Purchase Contracts (other than Cash-settled Pre-paid Purchase Contracts), as Unit Agent, includable in such Unit) upon the same conditions and in substantially the same manner, and with the same effect, as an individual definitive Bearer Unit. On or prior to the settlement date (which will normally be the Original Issue Date of the Note comprised by a Unit or, if there is no such underlying Note, the date of the other securities comprised thereby) with respect to such Units, the Unit Agent shall deposit the Temporary Global Unit (with the corresponding temporary global forms of each security comprised by such Unit) with the Depositary in the manner specified below under "Settlement Procedures; Bearer Notes and Bearer Units." The interest of each beneficial owner of Units represented by such Temporary Global Unit will be credited to the appropriate account with the Euroclear Operator, Clearstream or any other relevant clearing system. B-11 On or after the Exchange Date of any Temporary Global Note comprised by a Temporary Global Unit, the interest of the beneficial owners of the Units represented by the Temporary Global Unit shall be canceled and such interests shall thereafter be represented by a Permanent Global Unit in bearer form (with the corresponding permanent global forms of each security comprised by such Unit) held in London by the Depositary; provided that Final Certification (as described below) of any Notes comprised by such Unit has occurred. The interest of each beneficial owner of Units represented by such Permanent Global Unit will be credited to the appropriate account with the Euroclear Operator, Clearstream or any other relevant clearing system. If the beneficial owner of an interest in a Permanent Global Unit requests, at any time, upon 30 days' written notice to the Unit Agent given by such beneficial owner through either the Euroclear Operator, Clearstream or any other relevant clearing system, as the case may be, or if any Note comprised by such Permanent Global Note is accelerated following an event of default with respect to such Note or if either the Euroclear Operator, Clearstream or any other relevant clearing system is closed for business for a continuous period of fourteen days (other than by reason of public holidays) or announces an intention to cease business permanently or in fact does so, such Permanent Global Unit shall be exchanged for one or more definitive Bearer Units or, if the applicable Pricing Supplement so specifies, one or more Registered Units in authorized denominations equal in aggregate number and aggregate face amount to such B-12 beneficial interest; provided that any such exchange in any interest in a Permanent Global Unit for a definitive Bearer Unit shall result in the exchange of all (and not less than all) interests in such Permanent Global Unit for definitive Bearer Units; provided further, that, if the applicable Pricing Supplement so specifies, nothing herein shall prevent the further exchange of definitive Bearer Units for Registered Units. To effect such exchange, the interest of such beneficial owner in such Permanent Global Unit shall be canceled and one or more definitive Bearer Units or Registered Units, as the case may be, shall be issued to such beneficial owner, through the Euroclear Operator, Clearstream or any other relevant clearing system, as the case may be. In all events, Bearer Units will be delivered by the Unit Agent only outside the United States. Notes or Units Purchased by U.S. Persons: All Notes (whether issued alone or as part of a Unit) purchased in connection with their original issuance by or on behalf of a United States person (as defined in the Distribution Agreement) (other than a branch of a United States financial institution (as defined in the applicable United States Treasury Regulation) located outside the United States purchasing for its own account or for resale (a "Qualifying Foreign Branch") or other permitted U.S. purchasers as provided in the Prospectus Supplement that satisfies the conditions for receiving Bearer Notes as described under "Final Certification" below) will be issued only as Registered Notes and any Units comprising such Notes will be issued only as Registered Units. B-13 Final Certification: Final Certification with respect to a Temporary Global Note (whether issued alone or as part of a Unit) shall mean the delivery by the Euroclear Operator, Clearstream or any other relevant clearing system, as the case may be, to the Principal Paying Agent of a signed certificate (each a "Clearance System Certificate") in the form set forth in Appendix 1 hereto with respect to the Notes being exchanged, dated no earlier than the Exchange Date for such Notes, to the effect that the Euroclear Operator, Clearstream or any other relevant clearing system, as the case may be, has received certificates in writing, by tested telex or by electronic transmission from the account holders appearing on its records as entitled to such Notes ("Ownership Certificates") in the form set forth in Appendix 2 hereto with respect to each of such Notes, which Ownership Certificates shall be dated no earlier than ten days before the Exchange Date. Preparation of Pricing Supplement: If any offer to purchase a Program Security is accepted by or on behalf of the Company, the Company will prepare a pricing supplement (a "Pricing Supplement") reflecting the terms of such Program Security, will arrange to file an electronic format document, in the manner prescribed by the EDGAR Filer Manual, of such Pricing Supplement with the Commission in accordance with the applicable paragraph of Rule 424(b) under the Securities Act and will, as soon as possible and in any event not later than the date on which such Pricing Supplement is filed with the Commission, deliver the number of copies of such Pricing Supplement to the Agent as the Agent shall request. The Agent will cause such Pricing Supplement to be delivered to the purchaser of the Program Security. B-14 In each instance that a Pricing Supplement is prepared, the Agent will affix the Pricing Supplement to Prospectuses prior to their use. Outdated Pricing Supplements, and the Prospectuses to which they are attached (other than those retained for files), will be destroyed. Settlement: The receipt by the Company of immediately available funds in exchange for (i) the delivery of an authenticated Temporary Global Note or a Temporary Global Unit (including each security comprised by such Unit) to the Depositary in the manner described in "Settlement Procedures; Bearer Notes and Bearer Units" below or (ii) the delivery of an authenticated Registered Note or a Registered Unit (including each security comprised by such Unit) to the Agent shall constitute "settlement" with respect to such Note or Unit. All offers accepted by the Company will be settled on the fifth Business Day next succeeding the date of acceptance pursuant to the timetable for settlement set forth below, unless the Company and the purchaser agree to settlement on another day, which shall be no earlier than the next Business Day. Settlement Procedures; Bearer Notes and Bearer Units: Procedures with regard to each Bearer Note or Bearer Unit sold by the Company to or through the Agent (unless otherwise specified pursuant to a Notes Terms Agreement or a Units Terms Agreement) shall be as follows: A. In the case of a Bearer Note (whether issued alone or as part of a Unit), the Agent will advise the Company by telephone that such Note is initially a Bearer Note and of the following settlement information: B-15 1. Principal amount. 2. Maturity Date. 3. Interest Payment Date(s). 4. In the case of a Fixed Rate Bearer Note, the Interest Rate and whether such Note is an Amortizing Note, and, if so, the amortization schedule, or, in the case of a Floating Rate Bearer Note, the Initial Interest Rate (if known at such time), Interest Payment Period, Calculation Agent, Base Rate, Index Maturity, Index Currency, Interest Reset Period, Initial Interest Reset Date, Interest Reset Dates, Spread or Spread Multiplier (if any), Minimum Interest Rate (if any), Maximum Interest Rate (if any) and the Alternate Rate Event Spread (if any). 5. Redemption or repayment provisions, if any. 6. Ranking. 7. Settlement date and time (Original Issue Date). 8. Interest Accrual Date. 9. Price. 10. Agent's commission, if any, determined as provided in the Distribution Agreement. 11. Specified Currency. B-16 12. Whether the Note is an Original Issue Discount Note (an "OID Note"), and if it is an OID Note, the applicability of Modified Payment upon Acceleration (and, if so, the Issue Price). 13. Agent's account number at the Euroclear Operator, Clearstream or any other relevant clearing system. 14. Whether such Note is a Series G Note or a Series H Note. 15. Any other applicable provisions. B. In the case of a Bearer Unit, the Agent will advise the Company by telephone that such Unit is initially a Bearer Unit, of the information set forth in Settlement Procedures; Bearer Notes and Bearer Units "A" above with respect to Bearer Notes that constitute a part of such Bearer Unit and of the following information: 1. Settlement date and time. 2. Face Amount. 3. Agent's commission, if any, determined as provided in the Distribution Agreement. 4. Designation of the Securities comprised by such Units: a. Notes (See "Settlement Procedures; Bearer Notes and Bearer Units" "A"); B-17 b. Warrants, if any; and c. Purchase Contracts, if any. 5. Whether, and the terms under which, the Securities comprised by such Unit will be separately tradeable. 6. Any other provisions applicable to the Unit (other than those provisions applicable to the securities comprised by such Unit). 7. If the Bearer Unit comprises Bearer Warrants: a. Designation of the Series of Warrants: [Call] [Put] Warrants; b. Warrant Property; c. Aggregate Number of Warrants; d. Price to Public; e. Warrant Exercise Price; f. Dates upon which Warrants may be exercised; g. Expiration Date; h. Form; i. Currency in which exercise payments shall be made; B-18 j. Minimum number of Warrants exercisable by any holder on any day; k. Maximum number of Warrants exercisable on any day: [In the aggregate] [By any beneficial owner]; l. Formula for determining Cash Settlement Value; m. Exchange Rate (or method of calculation); n. Whether the Company or the holder is the writer of the Warrant; and o. Any other applicable provisions. 8. If the Bearer Unit comprises Bearer Purchase Contracts: a. Purchase Contract Property; b. Price to Public; c. Settlement Date; d. Payment Location; e. Method of Settlement; f. Method of Computing Settlement Amount; g. Currency of Settlement Payment; h. Authorized Number of Purchase Contracts; B-19 i. [Purchase] [Sale] Price of Purchase Contract Property; j. Contract Fees; k. Corporation Acceleration; h. Holders' Acceleration; i. Redemption Provisions; and j. Any other applicable provisions. C. The Company will advise JPMorgan Chase as the Principal Paying Agent for the Notes or as the Unit Agent for the Units by telephone or electronic transmission (confirmed in writing at any time on the same date) of the information set forth in "Settlement Procedures; Bearer Notes and Bearer Units" "A" or "B", above, as applicable, and shall give the Principal Paying Agent or the Unit Agent, as the case may be, written instructions (substantially in the form set out in Appendix 3 and Appendix 4, as applicable) to prepare a Temporary Global Note for each Note Tranche or a Temporary Global Unit (with the corresponding temporary global forms of each security comprised by such Unit) for each Unit Tranche, as the case may be, which the Company has agreed to sell. The Company will send a copy of such instructions to the Agent and the relevant Trustee, such instructions to contain a representation as to the aggregate B-20 principal amount of Program Securities permitted to be issued hereunder after such issuance. The Principal Paying Agent or the Unit Agent shall telephone each of the Euroclear Operator, Clearstream or any other relevant clearing system with a request for a security code for each Note Tranche or Unit Tranche (and, if applicable, a security code for each security comprised by the Units of such Unit Tranche) agreed to be issued and shall notify the Company and the Agent of such security code or codes as soon as practicable. D. In accordance with instructions received from the Company, (i) the Principal Paying Agent shall authenticate and deliver a Temporary Global Note or Cash-settled Pre-paid Purchase Contract for each Note Tranche or Unit Tranche, as applicable, which the Company has agreed to sell and (ii) the Unit Agent shall prepare a Temporary Global Unit for each Unit Tranche which the Company has agreed to sell (including, as applicable, by countersigning and delivering any Warrants includable in such Unit, by countersigning, executing and delivering any Purchase Contracts (other than Cash-settled Pre-Paid Purchase Contracts) includable in such Unit and by obtaining from the Principal Paying Agent any Notes or Cash-settled Pre-paid Purchase Contracts to be included in such Units, authenticated in accordance with clause (i) above). The settlement of each of the Note Tranche and the Unit Tranche is to B-21 occur on the relevant settlement date. All such Temporary Global Notes and all such Temporary Global Units (including all of the securities included in such Units) will then be delivered to the Depositary. The Principal Paying Agent or the Unit Agent, as the case may be, will also give instructions to the Euroclear Operator, Clearstream or any other relevant clearing system to credit the Notes or Units represented by such Temporary Global Note or Temporary Global Unit delivered to such Depositary to, in the case of the Notes, the Principal Paying Agent's distribution account and, in the case of the Units, the Unit Agent's distribution account, at the Euroclear Operator, Clearstream or any other relevant clearing system. At settlement of any Note Tranche, the Principal Paying Agent will instruct the Euroclear Operator, Clearstream or any other relevant clearing system to debit, on the settlement date, from the distribution account of the Principal Paying Agent the principal amount of Notes of each Note Tranche, with respect to which the Agent has solicited an offer to purchase and to credit, on the settlement date, such principal amount to the account of the Agent with the Euroclear Operator, Clearstream or any other relevant clearing system against payment of the purchase payment price of such Notes. At settlement of any Unit Tranche, the Unit Agent will instruct the Euroclear Operator, Clearstream or any other relevant clearing system to debit, on the settlement date, from the distribution account of the Unit Agent the number and face amount B-22 of Units of each Unit Tranche, with respect to which the Agent has solicited an offer to purchase and to credit, on the settlement date, such number and face amount to the account of the Agent with the Euroclear Operator, Clearstream or any other relevant clearing system against payment of the purchase payment price of such Units. In the case of the Notes and the Units, the Agent shall give corresponding instructions to the Euroclear Operator, Clearstream or any other relevant clearing system. E. The Euroclear Operator, Clearstream and any other relevant clearing system shall debit and credit accounts in accordance with instructions received from the Principal Paying Agent and the Agent, in the case of Notes and the Unit Agent and the Agent, in the case of Units. Each of the Principal Paying Agent and the Unit Agent shall pay the Company the aggregate net proceeds received by it in immediately available funds via a transfer of funds to the U.S. dollar account of the Company with a bank in New York City (or, with respect to Notes and Units payable in a Specified Currency other than U.S. dollars, to an account maintained at a bank selected by the Company, which bank shall be located outside the United Kingdom in the case of Notes and Units payable in a Specified Currency other than pounds sterling that mature not later than five years from and including the date of issue thereof) designed by the Company in writing. B-23 Settlement Procedures For sales by the Company of Bearer Notes or of Timetable; Bearer Notes Bearer Units to or through the Agent, and Bearer Units: "Settlement Procedures; Bearer Notes and Bearer Units" "A" through "E" above shall be completed on or before the respective times set forth below: Settlement Procedure; Bearer Notes and Bearer Units Time ------------------------ ---------------------- A 12:00 P.M. (NYC time) three days before settlement date B 12:00 P.M. (NYC time) three days before settlement date C 9:00 A.M. (London time) two days before settlement date D 3:45 P.M. (London time) one day before settlement date E 5:00 P.M. (NYC time) on settlement date Settlement Procedures; Registered Notes and Settlement Procedures with regard to each Registered Units: Registered Note and Registered Unit sold by the Company to or through the Agent (unless otherwise specified pursuant to a Notes Terms Agreement or a Units Terms Agreement) shall be as follows: AA. In the case of a Registered Note (whether issued alone or as part of a Unit), the Agent will advise the Company by telephone that such Note is a Registered Note and of the following settlement information: 1. Name in which such Note is to be registered ("Registered Note Owner"). B-24 2. Address of the Registered Note Owner and address for payment of principal and interest. 3. Taxpayer identification number of the Registered Note Owner (if available). 4. Principal amount. 5. Maturity Date. 6. Interest Payment Date(s) 7. In the case of a Fixed Rate Registered Note, the Interest Rate, whether such Note is an Amortizing Note and, if so, the amortization schedule, or, in the case of a Floating Rate Registered Note, the Initial Interest Rate (if known at such time), Interest Payment Dates, Interest Payment Period, Calculation Agent, Base Rate, Index Maturity, Index Currency, Interest Reset Period, Initial Interest Reset Date, Interest Reset Dates, Spread or Spread Multiplier (if any), Minimum Interest Rate (if any), Maximum Interest Rate (if any) and the Alternate Rate Event Spread (if any). 8. Redemption or repayment provisions (if any). B-25 9. Ranking. 10. Settlement date and time (Original Issue Date). 11. Interest Accrual Date. 12. Price. 13. Agent's commission (if any) determined as provided in the Distribution Agreement. 14. Denominations. 15. Specified Currency. 16. Whether the Note is an OID Note, and if it is an OID Note, and the applicability of Modified Payment upon Acceleration (and if so, the Issue Price). 17. Whether such Note is a Series G Note or a Series H Note. 18. Any other applicable provisions. BB. In the case of a Registered Unit, the Agent will advise the Company by telephone that such Unit is a Registered Unit, of the information set forth in "Settlement Procedures; Registered Notes and Registered Units" "A" above with respect to any Registered Notes that constitute a part of such Registered Unit and of the following information: 1. Name in which such Unit is to be registered ("Registered Unit Owner"). B-26 2. Address of the Registered Unit Owner. 3. Taxpayer identification number of the Registered Unit Owner (if available). 4. Denominations. 5. Settlement date and time. 6. Number of Units (and Face Amount). 7. Agent's commission, if any, determined as provided in the Distribution Agreement. 8. Designation of the Securities comprised by such Units: a. Notes, if any (See "Settlement Procedures; Registered Notes and Registered Units" "A"); b. Warrants, if any; and c. Purchase Contracts, if any. 9. Whether, and the terms under which, the Securities comprised by such Unit will be separately tradeable. 10. Any other provisions applicable to the Unit (other than those provisions applicable to the securities comprised by such Unit). B-27 11. If the Registered Unit comprises Registered Warrants: a. Designation of Series of Warrants: the Series of Warrants: [Call][Put] Warrants; b. Warrant Property; c. Aggregate Number of Warrants; d. Price to Public; e. Warrant Exercise Price; f. Dates upon which Warrants may be exercised; g. Expiration Date; h. Currency in which exercise payments shall be made; i. Minimum number of Warrants exercisable by any holder on any day; j. Maximum number of Warrants exercisable on any day: [In the aggregate] [By any beneficial owner]; k. Formula for determining Cash Settlement Value; l. Exchange Rate (or method of calculation); B-28 m. Whether the Company or the holder is the writer of the warrant; and n. Any other applicable provisions. 12. If the Registered Unit comprises Registered Purchase Contracts: a. Purchase Contract Property; b. Price to Public; c. Settlement Date; d. Payment Location; e. Method of Settlement; f. Method of Computing Settlement Amount; g. Currency of Settlement Payment; h. Authorized Number of Purchase Contracts; i. [Purchase] [Sale] Price of Purchase Contract Property; j. Contract Fees; k. Corporation Acceleration; h. Holders' Acceleration; i. Redemption Provisions; and B-29 j. Any other applicable provisions. CC. The Company will advise JPMorgan Chase as Principal Paying Agent for the Notes or as Unit Agent for the Units, by telephone or electronic transmission (confirmed in writing at any time on the same date) of the information set forth in "Settlement Procedures; Registered Notes and Registered Units" "AA" and "BB" above, as applicable, such advice to contain a representation as to the aggregate principal amount of Program Securities permitted to be issued hereunder after such issuance. DD. The Company will have delivered to JPMorgan Chase as Principal Paying Agent for the Notes, or as Unit Agent for the Units, a pre-printed four-ply packet for such Note or such Unit, as the case may be, which packet will contain the following documents in forms that have been approved by the Company, the Agent and JPMorgan Chase, as Principal Paying Agent for the Notes, or as Unit Agent for the Units: 1. Note or Unit, as the case may be, with customer confirmation. 2. Stub One - For JPMorgan Chase. 3. Stub Two - For the Agent. B-30 4. Stub Three - For the Company. EE. JPMorgan Chase will (i) authenticate and deliver any Note (whether issued alone or as part of a Unit) or Cash-settled Pre-Paid Purchase Contract through the Principal Paying Agent, if necessary, with the confirmation and Stubs One and Two to the Agent, and (ii) complete and deliver any Unit (including by countersigning and delivering any Warrant includable in such Unit, by countersigning, executing and delivering any Purchase Contract (other than Cash-settled Pre-paid Purchase Contracts) includable in such Unit and by obtaining from the Principal Paying Agent any Notes or Cash-settled Pre-paid Purchase Contracts to be included in such Units, authenticated in accordance with clause (i) above) with the confirmation and Stubs One and Two to the Agent. The Agent will acknowledge receipt of the Note or the Unit, as the case may be, by stamping or otherwise marking Stub One and returning it to JPMorgan Chase, through the Principal Paying Agent, in the case of the Notes, if necessary. Such delivery will be made only against such acknowledgment of receipt and evidence that instructions have been given by the Agent, with respect to Program Securities denominated in U.S. dollars, for payment to the account of the Company at JPMorgan Chase, New York, New York (or, with respect to Program Securities payable in a Specified Currency other than U.S. B-31 dollars, to an account maintained at a bank selected by the Company, which bank shall be located outside the United Kingdom in the case of Program Securities payable in a Specified Currency other than pounds sterling that mature not later than five years from and including the date of issue thereof), in immediately available funds, of an amount equal to the purchase price of such Program Securities less the Agent's commission (if any). In the event that the instructions given by the Agent for payment to the account of the Company are revoked, the Company will as promptly as possible wire transfer to the account of the Agent an amount of immediately available funds equal to the amount of such payment made. The Principal Paying Agent and the Unit Agent shall pay the Company the aggregate net proceeds received by it in immediately available funds via a transfer of funds to the U.S. dollar account of the Company with JPMorgan Chase in New York City (or, with respect to Program Securities payable in a Specified Currency other than U.S. dollars, to an account maintained at a bank selected by the Company which bank shall be located outside the United Kingdom in the case of Program Securities payable in a Specified Currency other than pounds sterling that mature not later than five years including the date of issue thereof) designated by the Company in writing. FF. Unless the Agent purchased such Program Securities as principal, the B-32 Agent will deliver (with confirmation) such Program Securities to the customer against payment in immediately available funds. The Agent will obtain the acknowledgment of receipt of such Program Securities by retaining Stub Two. GG. In the case of all Program Securities, JPMorgan Chase will send Stub Three to the Company by first-class mail. Periodically, JPMorgan Chase will also send to the Company a statement setting forth, in the case of the Notes, the principal amount of the Notes outstanding as of that date under each Indenture and, in the case of the Units, the aggregate face amount of the Units outstanding under the Unit Agreement and, in each case, setting forth a brief description of any sales of which the Company has advised JPMorgan Chase that have not yet been settled. Settlement Procedures For sales by the Company of Registered Notes or Timetable; Registered Notes and Registered Units: Registered Units to or and Registered Units: through the Agent, "Settlement Procedures; Registered Notes and Registered Units" "AA" through "GG" set forth above shall be completed on or before the respective times (London time) set forth below: Settlement Procedure; Registered Notes and Registered Units Time ------------------------- ---------------------- AA 2:00 P.M. on second day before settlement date B-33 BB 2:00 P.M. on second day before settlement date CC 3:00 P.M. on second day before settlement date DD-EE 2:15 P.M. on settlement date FF 3:00 P.M. on settlement date GG 5:00 P.M. on settlement date B-34 Failure to Settle: Bearer Notes and Bearer Units. If the Agent shall have advanced its own funds for payment against subsequent receipt of funds from the purchaser and if a purchaser shall fail to make payment for a Note or a Unit, the Agent will promptly notify, in the case of a Note, the Company, the Principal Paying Agent, the Depositary and the Euroclear Operator, Clearstream and any other relevant clearing system, and, in the case of the Unit, the Company, the Unit Agent, the Depositary, and the Euroclear Operator, Clearstream and any other relevant clearing system, in each case by telephone, promptly confirmed in writing (but no later than the next Business Day). In such event, the Company shall promptly instruct the Principal Paying Agent, in the case of the Note, and the Unit Agent, in the case of the Unit, to cancel the purchaser's interest in the appropriate Temporary Global Note representing such Note or the appropriate Temporary Global Unit representing such Unit. Upon (i) confirmation from the Principal Paying Agent or the Unit Agent in writing (which may be given by telex or telecopy) that the Principal Paying Agent or the Unit Agent has canceled such purchaser's interest in such Temporary Global Note or Temporary Global Unit, as the case may be, and (ii) confirmation from the Agent in writing (which may be given by telex or telecopy) that the Agent has not received payment from the purchaser for the Note or the Unit, the Company will promptly pay to the Agent an amount in immediately available funds equal to the amount previously paid by the Agent in respect of such Bearer Note or Bearer Unit. Such payment will be made on the settlement date, if possible, and in any event not later than 12 noon (New York City time) on the Business Day following the settlement date. The Principal Paying Agent or the Unit Agent, B-35 as the case may be, and the Depositary will make or cause to be made such revisions to such Temporary Global Note or Temporary Global Unit as are necessary to reflect the cancellation of such portion of such Temporary Global Note or Temporary Global Unit. If a purchaser shall fail to make payment for the Note or Unit for any reason other than a default by the Agent in the performance of its obligations hereunder and under the Distribution Agreement, then the Company will reimburse the Agent on an equitable basis for the Agent's loss of the use of funds during the period when they were credited to the account of the Company, the Principal Paying Agent or the Unit Agent, as applicable. Immediately upon such cancellation, the Principal Paying Agent or the Unit Agent, as the case may be, will make appropriate entries in its records to reflect the fact that a settlement did not occur with respect to such Note or Unit. Registered Notes and Registered Units. If a purchaser fails to accept delivery of and make payment for any Registered Note or Registered Unit, the Agent will notify the Company and JPMorgan Chase, as Registrar of the Registered Notes or as Unit Agent, by telephone and return such Note or Unit to JPMorgan Chase through the Principal Paying Agent, in the case of the Notes or the Unit Agent, in the case of the Units, if necessary. Upon receipt of such notice, the Company will immediately wire transfer to the account of the Agent an amount equal to the amount previously credited to the Company's account in respect of such Note or Unit. Such wire B-36 transfer will be made on the settlement date, if possible, and in any event not later than the Business Day following the settlement date. If the failure shall have occurred for any reason other than a default by the Agent in the performance of its obligations hereunder and under the Distribution Agreement, then the Company will reimburse the Agent on an equitable basis for its loss of the use of the funds during the period when they were credited to the account of the Company or JPMorgan Chase. Immediately upon receipt of the Registered Note or Registered Unit in respect of which such failure occurred, JPMorgan Chase will mark such Note or Unit "canceled," make appropriate entries in JPMorgan Chase's records and send such Note or Unit to the Company. Cancellation of Issuance: If any Program Securities of a particular series in respect of which information has been supplied under "Settlement Procedures" above is not to be issued on a given issue date, the Issuer shall promptly notify the Principal Paying Agent and the Trustee and shall promptly confirm such notification in writing. Upon receipt of such notice, neither the Principal Paying Agent nor the Trustee shall thereafter issue or release the relevant Program Securities but shall, if applicable, cancel and, unless otherwise instructed by the Issuer in writing, dispose of them in accordance with their customary procedures. Notice of Issuance to the The Sponsoring Member Firm will provide UK Listing Authority and the information with respect to the issuance of each London Stock Exchange: Series G Note and Series G Unit to the UK Listing Authority and the London Stock Exchange or any other stock exchange or quotation system, as appropriate, and will advise the Company in writing as to the effectiveness of the B-37 listing of such Series G Note and Series G Unit by the close of business on the related settlement date. Listing: The Sponsoring Member Firm will, on a regular basis, provide the UK Listing Authority and the London Stock Exchange or any other stock exchange or listing authority or quotation system, as appropriate, with such information regarding Series G Notes and Series G Units issued and outstanding as such exchange or listing authority may require. B-38 APPENDIX 1 [FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR, CLEARSTREAM AND/OR ANY OTHER RELEVANT CLEARING SYSTEM] CERTIFICATE --------------- Morgan Stanley Notes, Series G/H Represented by Temporary Global [Fixed/Floating] Rate Senior Bearer Note No. __ This is to certify that, based solely on certifications we have received in writing, by tested telex or by electronic transmission from member organizations appearing in our records as persons being entitled to a portion of the principal amount set forth below (our "Member Organizations") substantially to the effect set forth in Appendix 2 to Exhibit B to the Euro Distribution Agreement relating to such Notes, as of the date hereof, __________ principal amount of the above-captioned Securities (i) is owned by persons that are not citizens or residents of the United States, domestic partnerships, domestic corporations or other entity created or organized in or under the laws of the United States or any political subdivision thereof, an estate the income of which is subject to United States federal income taxation regardless of its source or a trust if both (a) a court within the United States is able to exercise primary supervision over the administration of the trust and (b) one or more United States persons have the authority to control all substantial decisions of the trust ("United States persons"), (ii) is owned by United States persons that are (a) foreign branches of United States financial institutions (as defined in the applicable U.S. Treasury Regulations) ("financial institutions") purchasing for their own account or for resale, or (b) United States persons who acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution has agreed, on its own behalf or through its agent, that we may advise the Issuer or the Issuer's agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the U.S. Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in the applicable U.S. Treasury Regulations), and such United States or foreign financial institutions described in clause (iii) above (whether or not also described in clause (i) or (ii)) have certified that they have not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. Any such certification by electronic transmission satisfies the requirements set forth in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(3)(ii). We will retain all certifications from our Member Organizations for the period specified in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(3)(i). As used herein, "United States" means the United States of America (including the States and the District of Columbia); and its "possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands. We further certify (i) that we are not making available herewith for exchange (or, if relevant, seeking to collect principal or interest with respect to) any portion of the temporary global Security representing the above-captioned Securities excepted in the above-referenced certificates of Member Organizations and (ii) that as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith (or, if relevant, with respect to which principal or interest is being requested) are no longer true and cannot be relied upon as of the date hereof. We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings. Dated: ___________, 20__ [To be dated no earlier than [insert date of Interest Payment Date prior to Exchange Date] [insert date of Redemption Date prior to Exchange Date] [insert Exchange Date]] 2 [EUROCLEAR BANK S.A./N.V., as Operator of the Euroclear System] [CLEARSTREAM BANKING, SOCIETE ANONYME] [OTHER] By: ------------------------------------------- Name: Title: 3 APPENDIX 2 [FORM OF CERTIFICATE TO BE GIVEN BY AN ACCOUNT HOLDER OF EUROCLEAR, CLEARSTREAM AND/OR ANY OTHER RELEVANT CLEARING SYSTEM] CERTIFICATE -------------- Morgan Stanley Notes, Series G/H Represented by Temporary Global [Fixed/Floating] Rate Senior Bearer Note No. __ This is to certify that as of the date hereof, and except as set forth below, the above-captioned Securities held by you for our account (i) are owned by person(s) that are not citizens or residents of the United States, domestic partnerships, domestic corporations or other entity created or organized in or under the laws of the United States or any political subdivision thereof, an estate the income of which is subject to United States Federal income taxation regardless of its source, or a trust if both (a) a court within the United States is able to exercise primary supervision over the administration of the trust and (b) one or more United States persons have the authority to control all substantial decisions of the trust ("United States persons"), (ii) is owned by United States persons that are (a) foreign branches of United States financial institutions (as defined in the applicable U.S. Treasury Regulations) ("financial institutions") purchasing for their own account or for resale, or (b) United States persons who acquired the Securities through foreign branches of United States financial institutions and who hold the Securities through such United States financial institutions on the date hereof (and in either case (a) or (b), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise the Issuer or the Issuer's agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the U.S. Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are owned by United States or foreign financial institution(s) for purposes of resale during the restricted period (as defined in the applicable U.S. Treasury Regulations), and in addition if the owner of the Securities is a United States or foreign financial institution described in clause (iii) above (whether or not also described in clause (i) or (ii)) such financial institution has not acquired the Securities for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. As used herein, "United States" means the United States of America (including the States and the District of Columbia); and its "possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands. We undertake to advise you promptly by tested telex on or prior to the date on which you intend to submit your certification relating to the Securities held by you for our account in accordance with your Operating Procedures if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date. This certification excepts and does not relate to [U.S.$] _________ of such interest in the above-captioned Securities in respect of which we are not able to certify and as to which we understand exchange for and delivery of definitive Securities (or, if relevant, exercise of any rights or collection of any principal or interest) cannot be made until we do so certify. We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings. 2 Dated: ___________, 20__ [To be dated no earlier than the 10th day before [insert date of Interest Payment Date prior to Exchange Date] [insert date of Redemption Date prior to Exchange Date] [insert Exchange Date]] [NAME OF ACCOUNT HOLDER] By: -------------------------------------------- (Authorized Signatory) Name: Title: 3 APPENDIX 3 FORM OF COMPANY'S NOTICE TO PRINCIPAL PAYING AGENT -------------------------------------------------- To: JPMorgan Chase Bank, N.A. London Office Attention: ________________________ ________________________ and with a copy to: [JPMorgan Chase Bank, N.A., as Senior Debt Trustee] [J.P. Morgan Trust Company, National Association, as Subordinated Debt Trustee] Re: Euro Distribution Agreement dated [_____ __], 2005 Terms defined in the Administrative Procedures relating to the above Euro Distribution Agreement have the same meanings herein. We hereby confirm our telephone instruction to prepare, complete, authenticate and issue a Temporary Global Note in accordance with the terms of the [Notes Terms Agreement dated _______,] Administrative Procedures and Euro Distribution Agreement and to give instructions to the Euroclear Operator, Clearstream and/or any other relevant clearing system in order for you to:(1) Credit account of [Name of Agent] with [Euroclear/Clearstream/Other](2) with the following Bearer Notes: - ---------------------- (1) Separate instructions are to be sent in respect of each offer accepted by the Company. Repeat this information (numbering consecutively) if Bearer Notes of more than one Note Tranche are to be issued to an Agent. (2) Delete as appropriate. All Notes: Fixed Rate Notes: Floating Rate Notes: - ------------------------------------ ----------------------------------- --------------------------------- Principal Amount: Interest Rate: Base Rate: - ------------------------------------- ----------------------------------- --------------------------------- Purchase Price: Applicability of Modified Payment Index Maturity: upon Acceleration: - ------------------------------------- ----------------------------------- --------------------------------- Price to Public: If yes, state issue price: Spread (Plus or Minus): - ------------------------------------- ----------------------------------- --------------------------------- Settlement Date and Time: Amortization Schedule: Spread Multiplier: - ------------------------------------- ----------------------------------- --------------------------------- Place of Delivery: Applicability of Annual Interest Alternate Rate Event Spread: Payments: - ------------------------------------- ----------------------------------- --------------------------------- Specified Currency: Denominated Currency (if any): Initial Interest Rate: - ------------------------------------- ----------------------------------- --------------------------------- Original Issue Date: Indexed Currency or Currencies Initial Interest Reset Date: (if any): - ------------------------------------- ----------------------------------- --------------------------------- Interest Accrual Date: Payment Currency (if any): Interest Reset Dates: - ------------------------------------- ----------------------------------- --------------------------------- Interest Payment Date(s): Exchange Rate Agent (if any): Interest Reset Period: - ------------------------------------- ----------------------------------- --------------------------------- Maturity Date: Reference Dealers: Maximum Interest Rate: - ------------------------------------- ----------------------------------- --------------------------------- Optional Redemption Date(s): Face Amount: Minimum Interest Rate: - ------------------------------------- ----------------------------------- --------------------------------- Initial Redemption Date: Fixed Amount of each Indexed Interest Payment Period: Currency (if any): - ------------------------------------- ----------------------------------- --------------------------------- Initial Redemption Percentage: Aggregate Fixed Amount of each Calculation Agent: Indexed Currency (if any): - ------------------------------------- ----------------------------------- --------------------------------- Annual Redemption Percentage Indexed Currency (if any): Reporting Service: Reduction: - ------------------------------------- ----------------------------------- --------------------------------- Ranking: Index Currency: - ------------------------------------- ----------------------------------- --------------------------------- Series: Designated CMT Telerate Page: - ------------------------------------- ----------------------------------- --------------------------------- Minimum Denominations: Designated CMT Maturity Index: - ------------------------------------- ----------------------------------- --------------------------------- Other Provisions:
2 against payment of [__________________]. Date: MORGAN STANLEY By: ------------------------------------- APPENDIX 4 FORM OF COMPANY'S NOTICE TO UNIT AGENT -------------------------------------- To: JPMorgan Chase Bank, N.A. Attention: __________________ __________________ Re: Euro Distribution Agreement dated [__________], 2005 ___________________________ Terms defined in the Administrative Procedures relating to the above Euro Distribution Agreement have the same meanings herein. We hereby confirm our telephone instruction to prepare, complete and issue a Temporary Global Unit in accordance with the terms of the [Units Terms Agreement dated _______________] Administrative Procedures and Euro Distribution Agreement and to give instructions to the Euroclear Operator, Clearstream and/or any other relevant clearing system in order for you to: (1) Credit account of [Name of Agent] with [Euroclear/Clearstream/Other](2) with the following Bearer Units: - ----------------------- (1) Separate instructions are to be sent in respect of each offer accepted by the Company. Repeat this information (numbering consecutively) if Bearer Units of more than one Unit Tranche are to be issued to an Agent. (2) Delete as appropriate. Warrants Purchase Contracts All Units: Issued as Part of a Unit: Issued as Part of a Unit: - ---------- ------------------------- ------------------------- Principal Amount: Price: Price: - ----------------------------------- ----------------------------------- ----------------------------------- Purchase Price: Specified Currency or Composite Settlement Date and Time: Currency: - ----------------------------------- ----------------------------------- ----------------------------------- Price to Public: Exercise Date: Buy or Sell: - ----------------------------------- ----------------------------------- ----------------------------------- Place of Delivery: Warrant Property: Purchase Contract Property: - ----------------------------------- ----------------------------------- ----------------------------------- Specified Currency: Permitted Payment: Purchase or Sale Price: - ----------------------------------- ----------------------------------- ----------------------------------- Original Issue Date: Exercise Price: - ----------------------------------- ----------------------------------- ----------------------------------- Expiration Date: Specified Currency or Composite Currency: - ----------------------------------- ----------------------------------- ----------------------------------- Put or Call: Permitted Payment: - ----------------------------------- ----------------------------------- ----------------------------------- - ----------------------------------- ----------------------------------- ----------------------------------- - ----------------------------------- ----------------------------------- ----------------------------------- - ----------------------------------- ----------------------------------- ----------------------------------- =================================== =================================== ===================================
2 Fixed Rate Notes Issued as Part Floating Rate Notes Issued as All Notes Issued as Part of a Unit: of a Unit: Part of a Unit: - -------------------------------------- ---------------------------------- --------------------------------- Principal Amount: Interest Rate: Base Rate: - -------------------------------------- ---------------------------------- --------------------------------- Purchase Price: Applicability of Modified Index Maturity: Payment upon Acceleration: - -------------------------------------- ---------------------------------- --------------------------------- Price to Public: If yes, state issue price: Spread (Plus or Minus): - -------------------------------------- ---------------------------------- --------------------------------- Settlement Date and Time: Amortization Schedule: Spread Multiplier: - -------------------------------------- ---------------------------------- --------------------------------- Place of Delivery: Applicability of Annual Interest Alternate Rate Event Spread: Payments: - -------------------------------------- ---------------------------------- --------------------------------- Specified Currency: Denominated Currency (if any): Initial Interest Rate: - -------------------------------------- ---------------------------------- --------------------------------- Original Issue Date: Indexed Currency or Currencies Initial Interest Reset Date: (if any): - -------------------------------------- ---------------------------------- --------------------------------- Interest Accrual Date: Payment Currency (if any): Interest Reset Dates: - -------------------------------------- ---------------------------------- --------------------------------- Interest Payment Date(s): Exchange Rate Agent (if any): Interest Reset Period: - -------------------------------------- ---------------------------------- --------------------------------- Maturity Date: Reference Dealers: Maximum Interest Rate: - -------------------------------------- ---------------------------------- --------------------------------- Optional Repayment Date(s): Face Amount: Minimum Interest Rate: - -------------------------------------- ---------------------------------- --------------------------------- Optional Redemption Date(s): Fixed Amount of each Indexed Interest Payment Period: Currency (if any): - -------------------------------------- ---------------------------------- --------------------------------- Initial Redemption Date: Aggregate Fixed Amount of each Calculation Agent: Indexed Currency (if any): - -------------------------------------- ---------------------------------- --------------------------------- Initial Redemption Percentage: Indexed Currency (if any): Reporting Service: - -------------------------------------- ---------------------------------- --------------------------------- Annual Redemption Percentage Index Currency: Reduction:
3 Fixed Rate Notes Issued as Part Floating Rate Notes Issued as All Notes Issued as Part of a Unit: of a Unit: Part of a Unit: - -------------------------------------- ---------------------------------- --------------------------------- Ranking: Designated CMT Telerate Page: - -------------------------------------- ---------------------------------- --------------------------------- Series: Designated CMT Maturity Index: - -------------------------------------- ---------------------------------- --------------------------------- Minimum Denominations: - -------------------------------------- ---------------------------------- --------------------------------- Other Provisions: ====================================== ================================== =================================
against payment of [___________________]. Date: MORGAN STANLEY By: ------------------------------------- 4 EX-1.F 4 ex-1f.txt EXHIBIT 1-f MORGAN STANLEY Morgan Stanley DirectSecurities(SM) DISTRIBUTION AGREEMENT [ ], 2005 Morgan Stanley 1585 Broadway New York, New York 10036 Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Dear Sirs: Morgan Stanley, a Delaware corporation (the "Company"), confirms its agreement with you with respect to the issue and sale from time to time by the Company of up to U.S.$[ ] aggregate initial public offering price of its Morgan Stanley DirectSecurities(SM) due more than nine months from the date of issue (the "Notes") or such larger aggregate initial public offering price as the Company may determine to offer (the "Program Capacity"), subject to reduction as a result of the sale of the Company's (i) Global Medium-Term Notes, Series F (issued other than as part of a Unit), (ii) Global Units, Series F, (iii) Global Medium-Term Notes, Series G and Series H (issued other than as part of a Unit), to be sold primarily outside of the United States, and (iv) Global Units, Series G and Series H, to be sold primarily outside of the United States, and the sale of certain of the Company's other debt securities, warrants, preferred stock, common stock, purchase contracts and units and of capital securities of certain Morgan Stanley Capital Trusts (together with the Notes, the "Program Securities") in excess of an aggregate initial public offering price equal to U.S. $[ ] minus the Program Capacity. The Notes will be issued as senior indebtedness pursuant to the provisions of a senior indenture dated as of November 1, 2004, between the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as trustee (the "Trustee") (as may be supplemented or amended from time to time, the "Indenture"). The Notes will have the maturities, interest rates, redemption provisions, if any, and other terms as set forth in supplements to the Basic Prospectus referred to below. The Company hereby appoints you as its exclusive agents for the purpose of soliciting and receiving offers to purchase Notes from the Company by others and, on the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, you agree to use reasonable efforts to solicit and receive offers to purchase Notes upon terms acceptable to the Company at such times and in such amounts as the Company shall from time to time specify. In addition, you may also purchase Notes as principal pursuant to the terms of a terms agreement relating to such sale (a "Notes Terms Agreement") in accordance with the provisions of Section 2(b) hereof. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement, including a prospectus, relating to the Notes. Such registration statement, including the exhibits thereto, as amended at the Commencement Date (as hereinafter defined), is hereinafter referred to as the "Registration Statement." The Company proposes to file with the Commission from time to time, pursuant to Rule 424 under the Securities Act of 1933, as amended (the "Securities Act"), supplements to the prospectus relating to the Notes included in the Registration Statement that will describe certain terms of the Notes. The prospectus relating to the Notes in the form in which it appears in the Registration Statement is hereinafter referred to as the "Basic Prospectus." The term "Prospectus" means the Basic Prospectus together with the prospectus supplement or supplements (each, a "Prospectus Supplement") specifically relating to the Notes, as filed with, or transmitted for filing to, the Commission pursuant to Rule 424 under the Securities Act. As used herein, the terms "Basic Prospectus" and "Prospectus" shall include in each case the documents, if any, incorporated by reference therein. The terms "supplement," "amendment" and "amend" as used herein shall include all documents deemed to be incorporated by reference in the Prospectus that are filed subsequent to the date of the Basic Prospectus by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). If the Company has filed an abbreviated registration statement to register additional Program Securities pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall be deemed to include such Rule 462 Registration Statement. 2 1. Representations and Warranties. The Company represents and warrants to and agrees with you as of the Commencement Date, as of each date on which you solicit offers to purchase Notes, as of each date on which the Company accepts an offer to purchase Notes (including any purchase by you as principal pursuant to a Notes Terms Agreement), as of each date the Company issues and delivers Notes and as of each date the Registration Statement or the Basic Prospectus is amended or supplemented, as follows (it being understood that such representations, warranties and agreements shall be deemed to relate to the Registration Statement, the Basic Prospectus and the Prospectus, each as amended or supplemented to each such date): (a) The Registration Statement has become effective, no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (b) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (ii) each part of the Registration Statement, when such part became effective, did not contain and each such part, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (iv) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that (1) the representations and warranties set forth in this Section 1(b) do not apply (A) to statements or omissions in the Registration Statement or the Prospectus based upon information relating to you furnished to the Company in writing by you expressly for use therein or (B) to those parts of the Registration Statement that constitute the Statements of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the Trustees and (2) the representations and warranties set forth in clauses (iii) and (iv) above, when made as of the Commencement Date or as of any date on which you solicit offers to purchase Notes or on which the Company accepts an offer to purchase Notes, shall be deemed not to cover information concerning an offering of particular Notes to the extent such information will be set forth in a supplement to the Basic Prospectus. 3 (c) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of Delaware, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole. (d) Each subsidiary of the Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole. (e) Each of this Agreement and any applicable Written Notes Terms Agreement (as hereinafter defined) has been duly authorized, executed and delivered by the Company. (f) The Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. (g) The form of the Notes has been duly authorized and established in conformity with the provisions of the Indenture and, when the Notes have been executed and authenticated in accordance with the provisions of the Indenture and delivered to and duly paid for by the purchasers thereof, the Notes will be entitled to the benefits of such Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law. 4 (h) The execution and delivery by the Company of this Agreement, the Notes, the Indenture and any applicable Written Notes Terms Agreement and the performance by the Company of its obligations under this Agreement, the Notes, the Indenture and any applicable Notes Terms Agreement will not contravene any provision of applicable law or the certificate of incorporation or by-laws of the Company or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its consolidated subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any consolidated subsidiary, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Notes, the Indenture and any applicable Notes Terms Agreement, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes; provided, however, that no representation is made or warranty given as to whether the purchase of the Notes constitutes a "prohibited transaction" under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended. (i) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus. (j) There are no legal or governmental proceedings pending or threatened to which the Company or any of its consolidated subsidiaries is a party or to which any of the properties of the Company or any of its consolidated subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus and are not so described or any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed or incorporated by reference as exhibits to the Registration Statement that are not described, filed or incorporated as required. (k) Each of the Company and its consolidated subsidiaries has all necessary consents, authorizations, approvals, orders, certificates and permits of and from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, to own, lease, license and use its properties and assets and to conduct its business in the manner described in the Prospectus, except to the extent that the failure to obtain or file would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole. 5 (l) Morgan Stanley is registered as a broker-dealer and investment adviser with the Commission, is registered with the Commodity Futures Trading Commission as a futures commission merchant and is a member of the New York Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. (m) Morgan Stanley & Co. Incorporated is registered as a broker-dealer and investment adviser with the Commission, is registered with the Commodity Futures Trading Commission as a futures commission merchant and is a member of the New York Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. (n) The Company is not, and after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as described in the Prospectus, will not be required to register as, an "investment company" as such term is defined in the Investment Company Act of 1940, as amended. 2. Solicitations as Agents; Purchases as Principals. (a) Solicitations as Agents. In connection with your actions as agents hereunder, you agree to use reasonable efforts to solicit offers to purchase Notes upon the terms and conditions set forth in the Prospectus as then amended or supplemented. The Company reserves the right, in its sole discretion, to instruct you to suspend at any time, for any period of time or permanently, the solicitation of offers to purchase Notes. Upon receipt of at least one business day's prior notice from the Company, you will forthwith suspend solicitations of offers to purchase Notes from the Company until such time as the Company has advised you that such solicitation may be resumed. While such solicitation is suspended, the Company shall not be required to deliver any certificates, opinions or letters in accordance with Sections 5(a), 5(b) and 5(c); provided, however, that if the Registration Statement or Prospectus is amended or supplemented during the period of suspension (other than by an amendment or supplement providing solely for (i) a change in the interest rates, repayment provisions, redemption provisions or maturities offered on the Notes or (ii) for a change you deem to be immaterial), you shall not be required to resume soliciting offers to purchase Notes until the Company has delivered such certificates, opinions and letters as you may request. The Company agrees to pay to you, as consideration for the sale of each Note resulting from a solicitation made or an offer to purchase received by you, a commission in the form of a discount from the purchase price of such Note equal to between 0.2% and 3.0% (depending upon such Note's maturity) of the principal amount of such Note or such other discount as may be specified in the Prospectus Supplement relating to such Note. 6 You shall communicate to the Company, orally or in writing, each offer to purchase Notes received by you as agent that in your judgment should be considered by the Company. The Company shall have the sole right to accept offers to purchase Notes and may reject any offer in whole or in part. You shall have the right to reject any offer to purchase Notes that you consider to be unacceptable, and any such rejection shall not be deemed a breach of your agreements contained herein. The procedural details relating to the issue and delivery of Notes sold by you as agent and the payment therefor shall be as set forth in the Administrative Procedures (as hereinafter defined). (b) Purchases as Principals. Each sale of Notes to you as principals shall be made in accordance with the terms of this Agreement. In connection with each such sale, the Company will enter into a Notes Terms Agreement that will provide for the sale of such Notes to and the purchase thereof by you. Each Notes Terms Agreement will take the form of either (i) a written agreement between you and the Company, which may be substantially in the form of Exhibit A hereto (a "Written Notes Terms Agreement"), or (ii) an oral agreement between you and the Company confirmed in writing by you to the Company. Your commitment to purchase Notes as principal pursuant to a Notes Terms Agreement shall be deemed to have been made on the basis of the representations and warranties of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Notes Terms Agreement shall specify the principal amount of Notes to be purchased by you pursuant thereto, the maturity date of such Notes, the price to be paid to the Company for such Notes, the interest rate and interest rate formula, if any, applicable to such Notes and any other terms of such Notes. Each such Notes Terms Agreement may also specify any requirements for officers' certificates, opinions of counsel and letters from the independent auditors of the Company pursuant to Section 4 hereof. A Notes Terms Agreement may also specify certain provisions relating to the reoffering of such Notes by you. Each Notes Terms Agreement shall specify the time and place of delivery of and payment for such Notes. Unless otherwise specified in a Notes Terms Agreement, the procedural details relating to the issue and delivery of Notes purchased by you as principal and the payment therefor shall be as set forth in the Administrative Procedures. Each date of delivery of and payment for Notes to be purchased by you as principal pursuant to a Notes Terms Agreement is referred to herein as a "Settlement Date." Unless otherwise specified in a Notes Terms Agreement, if you are purchasing Notes as principal you may resell such Notes to other dealers. Any such sales may be at a discount, which shall not exceed the amount set forth in the Prospectus Supplement relating to such Notes. 7 (c) Administrative Procedures. You and the Company agree to perform the respective duties and obligations specifically provided to be performed in the DirectSecurities, Administrative Procedures (attached hereto as Exhibit B) (the "Administrative Procedures"), as amended from time to time. The Administrative Procedures may be amended only by written agreement of the Company and you. (d) Delivery. The documents required to be delivered by Section 4 of this Agreement as a condition precedent to your obligation to begin soliciting offers to purchase Notes as agents of the Company shall be delivered at the office of Davis Polk & Wardwell, your counsel, not later than 4:00 p.m., New York City time, on the date hereof, or at such other time and/or place as you and the Company may agree upon in writing, but in no event later than the day prior to the earlier of (i) the date on which you begin soliciting offers to purchase Notes and (ii) the first date on which the Company accepts any offer by you to purchase Notes as principal. The date of delivery of such documents is referred to herein as the "Commencement Date." 3. Agreements. The Company agrees with you that: (a) Prior to the termination of the offering of the Notes pursuant to this Agreement or pursuant to any Notes Terms Agreement, the Company will not file any Prospectus Supplement relating to the Notes or any amendment to the Registration Statement relating to the Notes unless the Company has previously furnished to you a copy thereof for your review and will not file any such proposed supplement or amendment to which you reasonably object; provided, however, that the foregoing requirement shall not apply to any of the Company's periodic filings with the Commission required to be filed pursuant to Section 13(a), 13(c), 13(f), 14 or 15(d) of the Exchange Act, copies of which filings the Company will cause to be delivered to you promptly after being transmitted for filing with the Commission. Subject to the foregoing sentence, the Company will promptly cause each Prospectus Supplement to be filed with or transmitted for filing to the Commission in accordance with Rule 424(b) under the Securities Act. The Company will promptly advise you (i) of the filing of any amendment or supplement to the Basic Prospectus, (ii) of the filing and effectiveness of any amendment to the Registration Statement, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Basic Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order or notice of suspension of qualification and, if issued, to obtain as soon as possible the 8 withdrawal thereof. If the Basic Prospectus is amended or supplemented as a result of the filing under the Exchange Act of any document incorporated by reference in the Prospectus, you shall not be obligated to solicit offers to purchase Notes so long as you are not reasonably satisfied with such document. (b) If, at any time when a prospectus relating to the Notes is required to be delivered under the Securities Act, any event occurs or condition exists as a result of which the Prospectus, as then amended or supplemented, would include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in the light of the circumstances when the Prospectus, as then amended or supplemented, is delivered to a purchaser, not misleading, or if, in your opinion or in the opinion of the Company, it is necessary at any time to amend or supplement the Prospectus, as then amended or supplemented, to comply with applicable law, the Company will immediately notify you by telephone (with confirmation in writing) to suspend solicitation of offers to purchase Notes and, if so notified by the Company, you shall forthwith suspend such solicitation and cease using the Prospectus, as then amended or supplemented. If the Company shall decide to amend or supplement the Registration Statement or Prospectus, as then amended or supplemented, it shall so advise you promptly by telephone (with confirmation in writing) and, at its expense, shall prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or Prospectus, as then amended or supplemented, satisfactory in all respects to you, that will correct such statement or omission or effect such compliance and will supply such amended or supplemented Prospectus to you in such quantities as you may reasonably request. If any documents, certificates, opinions and letters furnished to you pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c) in connection with the preparation and filing of such amendment or supplement are satisfactory in all respects to you, upon the filing with the Commission of such amendment or supplement to the Prospectus or upon the effectiveness of an amendment to the Registration Statement, you will resume the solicitation of offers to purchase Notes hereunder. Notwithstanding any other provision of this Section 3(b), until the distribution of any Notes you may own as principal has been completed, if any event described above in this paragraph (b) occurs, the Company will, at its own expense, forthwith prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or Prospectus, as then amended or supplemented, satisfactory in all respects to you, will supply such amended or supplemented Prospectus to you in such quantities as you may reasonably request and shall furnish to you pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c) such documents, certificates, opinions and letters as you may request in connection with the preparation and filing of such amendment or supplement. 9 (c) The Company will make generally available to its security holders and to you as soon as practicable earning statements that satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder covering twelve month periods beginning, in each case, not later than the first day of the Company's fiscal quarter next following the "effective date" (as defined in Rule 158 under the Securities Act) of the Registration Statement with respect to each sale of Notes. If such fiscal quarter is the first fiscal quarter of the Company's fiscal year, such earning statement shall be made available not later than 90 days after the close of the period covered thereby and in all other cases shall be made available not later than 45 days after the close of the period covered thereby. (d) The Company will furnish in New York City, without charge, (i) to each Agent, a signed copy of the Registration Statement, including exhibits and all amendments thereto, and as many copies of the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto as you may reasonably request and (ii) to each Agent that purchases Notes pursuant to a Notes Terms Agreement or solicits an offer to purchase Notes that is accepted by the Company, prior to 10:00 a.m. New York City time on the business day next succeeding the date of such Notes Terms Agreement or the acceptance of such offer, as many copies of the Prospectus, as then amended or supplemented (including the Prospectus Supplement relating to the Notes to be purchased pursuant to such Notes Terms Agreement or accepted offer), as such Agent may reasonably request. (e) The Company will endeavor to qualify the Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request and to maintain such qualifications for as long as you shall reasonably request. (f) During the term of this Agreement, the Company shall furnish to you such relevant documents and certificates of officers of the Company relating to the business, operations and affairs of the Company, the Registration Statement, the Basic Prospectus, any amendments or supplements thereto, the Indenture, the Notes, this Agreement, the Administrative Procedures, any Notes Terms Agreement and the performance by the Company of its obligations hereunder or thereunder as you may from time to time reasonably request. (g) The Company shall notify you promptly in writing of any downgrading, or of its receipt of any notice of any intended or potential downgrading or of any review for possible change that does not indicate the direction of the possible change, in the rating accorded the Company or any of the Company's securities by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act. 10 (h) The Company will, whether or not any sale of Notes is consummated, pay all expenses incident to the performance of its obligations under this Agreement and any Notes Terms Agreement, including: (i) the preparation and filing of the Registration Statement and the Prospectus and all amendments and supplements thereto, (ii) the preparation, issuance and delivery of the Notes, (iii) the fees and disbursements of the Company's counsel and accountants and of the Trustees and their counsel, (iv) the qualification of the Notes under securities or Blue Sky laws in accordance with the provisions of Section 3(e), including filing fees and the fees and disbursements of your counsel in connection therewith and in connection with the preparation of any Blue Sky or Legal Investment Memoranda, (v) the printing and delivery to you in quantities as hereinabove stated of copies of the Registration Statement and all amendments thereto and of the Prospectus and any amendments or supplements thereto, (vi) the printing and delivery to you of copies of the Indenture and any Blue Sky or Legal Investment Memoranda, (vii) any fees charged by rating agencies for the rating of the Notes, (viii) the fees and expenses, if any, incurred with respect to any filing with the National Association of Securities Dealers, Inc., (ix) the fees and disbursements of your counsel incurred in connection with the offering and sale of the Notes, including any opinions to be rendered by such counsel hereunder, and (x) any out-of-pocket expenses incurred by you; provided that any advertising expenses incurred by you shall have been approved by the Company. (i) During the period beginning on the date of any Notes Terms Agreement and continuing to and including the Settlement Date with respect to such Notes Terms Agreement, the Company will not, without your prior consent, offer, sell, contract to sell or otherwise dispose of any debt securities of the Company substantially similar to the Notes set forth in such Notes Terms Agreement (other than (A) the Notes that are to be sold pursuant to such Notes Terms Agreement, (B) Notes previously agreed to be sold by the Company and (C) commercial paper issued in the ordinary course of business), except as may otherwise be provided in the applicable Notes Terms Agreement. 4. Conditions of the Obligations of the Agents. Your obligation to solicit offers to purchase Notes as agents of the Company, your obligation to purchase Notes as principals pursuant to any Notes Terms Agreement and the obligation of any other purchaser to purchase Notes will be subject to the accuracy of the representations and warranties on the part of the Company herein, to the accuracy of the statements of the Company's officers made in each certificate furnished pursuant to the provisions hereof and to the performance and observance by the Company of all covenants and agreements herein contained on its part to be performed and observed (in the case of your obligation to solicit offers to purchase Notes, at the time of such solicitation, and, in the case of your or any other purchaser's obligation to purchase Notes, at the time the Company accepts the offer to purchase such Notes and at the time of issuance and delivery) 11 and (in each case) to the following additional conditions precedent when and as specified: (a) Prior to such solicitation or purchase, as the case may be: (i) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus, as amended or supplemented at the time of such solicitation or at the time such offer to purchase was made, that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Notes on the terms and in the manner contemplated by the Prospectus, as so amended or supplemented; (ii) there shall not have occurred any (A) suspension or material limitation of trading generally on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (B) suspension of trading of any securities of the Company on any exchange or in any over-the-counter market, (C) material disruption in securities settlement, payment or clearance services in the United States or, in the event of a global offering, in any relevant foreign jurisdiction, (D) declaration of any moratorium on commercial banking activities by Federal or New York State authorities or (E) any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (E), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Notes on the terms and in the manner contemplated by the Prospectus, as amended or supplemented, at the time of such solicitation or at the time such offer to purchase was made; and (iii) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded the Company or any of the Company's securities by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; (A) except, in each case described in paragraph (i), (ii) or (iii) above, as disclosed to you in writing by the Company prior to such solicitation or, in the case of a purchase of Notes, before the offer to purchase such Notes was made or (B) 12 unless in each case described in (ii) above, the relevant event shall have occurred and been known to you prior to such solicitation or, in the case of a purchase of Notes, before the offer to purchase such Notes was made. (b) On the Commencement Date and, if called for by any Notes Terms Agreement, on the corresponding Settlement Date, you shall have received: (i) The opinion, dated as of such date, of Sidley Austin Brown & Wood LLP, counsel to the Company, or of other counsel satisfactory to you and who may be an officer of the Company, to the following effect that: (A) the Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of Delaware, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus, as amended or supplemented, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole; (B) each of Morgan Stanley, Discover Bank, Morgan Stanley & Co. Incorporated and Morgan Stanley International Holdings Inc. (each a "Material Subsidiary") has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus, as amended or supplemented, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole; (C) each of the Company and its Material Subsidiaries has all necessary consents, authorizations, approvals, orders, certificates and permits of and from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals, to own, lease, 13 license and use its properties and assets and to conduct its business in the manner described in the Prospectus, as amended or supplemented, except to the extent that the failure to obtain or file would not have a material adverse effect on the Company and its consolidated subsidiaries, taken as a whole; (D) each of this Agreement and any applicable Written Notes Terms Agreement has been duly authorized, executed and delivered by the Company; (E) the Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; (F) the form of the Notes has been duly authorized and established in conformity with the provisions of the Indenture and, if the Notes had been executed by the Company and authenticated by the Trustee or its duly appointed agent in accordance with the provisions of the Indenture and delivered to and duly paid for by the purchasers thereof on the date of such opinion, such Notes would be entitled to the benefits of such Indenture and would be valid and binding obligations of the Company, enforceable in accordance with their respective terms except as the enforceability thereof (i) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors' rights generally and (ii) is subject to general principles of equity, regardless of whether such enforceability is considered at a proceeding in equity or at law; (G) the execution and delivery by the Company of the Notes, the Indenture and any applicable Written Notes Terms Agreement and the performance by the Company of its obligations under this Agreement, the Notes, the Indenture and any applicable Notes Terms Agreement will not contravene any provision of applicable law or the certificate of incorporation or by-laws of the Company or, to the best of such counsel's knowledge, any agreement or other instrument binding upon 14 the Company or any of its subsidiaries that is material to the Company and its consolidated subsidiaries, taken as a whole, or, to the best of such counsel's knowledge, any judgment, order or decree of any U.S. governmental body, agency or court having jurisdiction over the Company or any of its consolidated subsidiaries, and no consent, approval, authorization or order of or qualification with any U.S. governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Notes, the Indenture and any applicable Notes Terms Agreement, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes; provided, however, that no opinion is expressed on whether the purchase of the Notes constitutes a "prohibited transaction" under Section 406 of the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended; (H) the statements (1) in the Prospectus, as then amended or supplemented, under the captions "Description of Notes" (in the Prospectus Supplement), "Description of Debt Securities" (in the Basic Prospectus) and "Plan of Distribution" (in the Prospectus Supplement and in the Basic Prospectus), (2) in the Registration Statement, as then amended or supplemented, under Item 15, (3) in "Item 3. Legal Proceedings" of the most recent annual report on Form 10-K incorporated by reference in the Prospectus and (4) in "Item 1. Legal Proceedings" of Part II of the quarterly reports on Form 10-Q, if any, filed since such annual report and incorporated by reference in the Prospectus, in each case insofar as such statements constitute summaries of the legal matters, documents or proceedings referred to therein, fairly present the information called for with respect to such legal matters, documents and proceedings and fairly summarize the matters referred to therein; (I) after due inquiry, such counsel does not know of any legal or governmental proceedings pending or threatened to which the Company or any of its consolidated subsidiaries is a party or to which any of the properties of the Company or any of its consolidated subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus, as then amended or supplemented, and are not so described or of any U.S. federal or state statutes, regulations, contracts or other documents governed by U.S. federal or state law that are 15 required to be described in the Registration Statement or the Prospectus, as then amended or supplemented, or to be filed or incorporated by reference as exhibits to such Registration Statement that are not described, filed or incorporated by reference as required; (J) the Company is not, and after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as described in the Prospectus, will not be required to register as, an "investment company" as such term is defined in the Investment Company Act of 1940, as amended; and (K) such counsel (1) believes that each document, if any, filed pursuant to the Exchange Act and incorporated by reference in the Prospectus as then amended or supplemented (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief) complied when so filed as to form in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (2) has no reason to believe that the Registration Statement (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief, and except for the part of the Registration Statement that constitutes the Forms T-1) as of the date such opinion is delivered contains, any untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (3) believes that the Registration Statement and Prospectus, as then amended or supplemented, if applicable (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief), complied as to form in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (4) has no reason to believe that the Prospectus, as then amended or supplemented, if applicable (except as to financial statements and schedules and other financial and statistical data included therein, as to which such counsel need not express any belief), as of the date such opinion is delivered contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that in the case of an opinion 16 delivered on the Commencement Date or pursuant to Section 5(b), the opinion and belief set forth in clauses (3) and (4) above shall be deemed not to cover information concerning an offering of particular Notes to the extent such information will be set forth in a supplement to the Basic Prospectus. (ii) The opinion, dated as of such date, of Davis Polk & Wardwell, your special counsel, covering the matters in subparagraphs (D), (E), (F) and (H) (with respect to statements in the Prospectus, as then amended or supplemented, under the captions "Description of Notes" (in the Prospectus Supplement), "Description of Debt Securities" (in the Basic Prospectus), "Plan of Distribution" (in the Prospectus Supplement and in the Basic Prospectus) and clauses (2), (3) and (4) of subparagraph (K) in paragraph (b)(i) above. With respect to subparagraph (K) of paragraph (b)(i) above, if such opinion is given by counsel who is also an officer of the Company, such counsel may state that his or her opinion and belief are based upon his or her participation, or the participation of someone under his or her supervision, in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto and documents incorporated therein by reference and review and discussion of the contents thereof, but are without independent check or verification, except as specified. With respect to subparagraph (K) of paragraph (b)(i) above, Davis Polk & Wardwell and, if Sidley Austin Brown & Wood LLP is giving such opinion, Sidley Austin Brown & Wood LLP may state that their opinion and belief are based upon their participation in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto (but not including documents incorporated therein by reference) and review and discussion of the contents thereof (including documents incorporated therein by reference), but are without independent check or verification, except as specified. (iii) The opinion, dated as of such date, of Sidley Austin Brown & Wood LLP, special counsel to the Company, to the effect that the statements set forth under the caption "United States Federal Income Taxation" in the Prospectus Supplement and under the caption "Forms of Securities -- Limitations on Issuance of Bearer Securities and Bearer Debt Warrants" in the Basic Prospectus, insofar as such statements relate to statements of law or legal conclusions under the laws of the United States or matters of United States law, fairly present the information called for and fairly summarize the matters referred to therein. 17 The opinion of Sidley Austin Brown & Wood LLP described in paragraph (b)(iii) above and in paragraph (b)(i) above, if such opinion is given by Sidley Austin Brown & Wood LLP, shall be rendered to you at the request of the Company and shall so state therein. (c) On the Commencement Date and, if called for by any Notes Terms Agreement, on the corresponding Settlement Date, you shall have received a certificate, dated the Commencement Date or such Settlement Date, as the case may be, and signed by an executive officer of the Company to the effect set forth in subparagraph (a)(iii) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of such date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied on or before such date. The officer signing and delivering such certificate may rely upon the best of his knowledge as to proceedings threatened. (d) On the Commencement Date and, if called for by any Notes Terms Agreement, on the corresponding Settlement Date, the Company's independent auditors shall have furnished to you a letter or letters, dated as of the Commencement Date or such Settlement Date, as the case may be, in form and substance satisfactory to you containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus, as then amended or supplemented; provided that each letter so furnished shall use a "cut-off date" no more than three business days prior to the date of such letter. (e) On the Commencement Date and on each Settlement Date, the Company shall have furnished to you such appropriate further information, certificates and documents as you may reasonably request 5. Additional Agreements of the Company. (a) Each time the Registration Statement or Prospectus is amended or supplemented (other than by an amendment or supplement providing solely for (i) a change in the interest rates, repayment provisions, redemption provisions or maturities offered on the Notes or (ii) a change you deem to be immaterial), the Company will deliver or cause to be delivered forthwith to you a certificate signed by an executive officer of the Company, dated the date of such amendment or supplement, as the case may be, in form reasonably satisfactory to you, of the same tenor as the certificate referred to in Section 4(c) relating to the Registration Statement or the Prospectus as amended or supplemented to the time of delivery of such certificate. 18 (b) Each time the Company furnishes a certificate pursuant to Section 5(a) (other than any amendment or supplement to the Registration Statement or Prospectus caused by the filing of a Current Report on Form 8-K unless you shall reasonably request based on disclosure included or omitted from such Report), the Company will furnish or cause to be furnished forthwith to you a written opinion of counsel for the Company. Any such opinion shall be dated the date of such amendment or supplement, as the case may be, shall be in a form satisfactory to you and shall be of the same tenor as the opinions referred to in Section 4(b), but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion. In lieu of such opinion, counsel last furnishing such an opinion to you may furnish to you a letter to the effect that you may rely on such last opinion to the same extent as though it were dated the date of such letter (except that statements in such last opinion will be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented to the time of delivery of such letter.) (c) Each time the Registration Statement or the Prospectus is amended or supplemented to set forth amended or supplemental financial information or such amended or supplemental information is incorporated by reference in the Prospectus, the Company shall cause its independent auditors forthwith to furnish you with a letter, dated the date of such amendment or supplement, as the case may be, in form satisfactory to you, of the same tenor as the letter referred to in Section 4(d), with regard to the amended or supplemental financial information included or incorporated by reference in the Registration Statement or the Prospectus as amended or supplemented to the date of such letter; provided that each letter so furnished shall use a "cut-off date" no more than three business days prior to the date of such letter. 6. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless you and each person, if any, who controls you within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to you furnished to the Company in writing by you expressly for use therein. 19 (b) You agree to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to you, but only with reference to information relating to you furnished to the Company in writing by you expressly for use in the Registration Statement or the Prospectus or any amendments or supplements thereto. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either paragraph (a) or (b) above, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by you, in the case of parties indemnified pursuant to paragraph (a) above, and by the Company, in the case of parties indemnified pursuant to paragraph (b) above. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there were to be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance 20 with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) To the extent the indemnification provided for in paragraph (a) or (b) of this Section 6 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein in connection with any offering of Notes, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and you on the other hand from the offering of such Notes or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and you on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and you on the other hand in connection with the offering of such Notes shall be deemed to be in the same respective proportions as the total net proceeds from the offering of such Notes (before deducting expenses) received by the Company bear to the total discounts and commissions received by you in respect thereof. The relative fault of the Company on the one hand and of you on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by you and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (e) The Company and you agree that it would not be just or equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6, you shall not be required to contribute any amount in excess of the amount by which the total price at which the Notes referred to in paragraph (d) above that were offered and sold to 21 the public through you exceeds the amount of any damages that you have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 6 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. (f) The indemnity and contribution provisions contained in this Section 6 and the representations, warranties and other statements of the Company, its officers and you set forth in or made pursuant to this Agreement or any Notes Terms Agreement will remain operative and in full force and effect regardless of (i) any termination of this Agreement or any such Notes Terms Agreement, (ii) any investigation made by or on behalf of you or any person controlling you or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Notes. 7. Position of the Agent. In acting under this Agreement and in connection with the sale of any Notes by the Company (other than Notes sold to you pursuant to a Notes Terms Agreement), you are acting solely as agent of the Company and do not assume any obligation towards or relationship of agency or trust with any purchaser of Notes. You shall make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes has been solicited by you and accepted by the Company, but you shall not have any liability to the Company in the event any such purchase is not consummated for any reason. If the Company shall default in its obligations to deliver Notes to a purchaser whose offer it has accepted, the Company shall hold you harmless against any loss, claim, damage or liability arising from or as a result of such default and shall, in particular, pay to you the commission you would have received had such sale been consummated. 8. Offering Restrictions. If any Notes are to be offered outside the United States, you will not offer or sell any such Notes in any jurisdiction if such offer or sale would not be in compliance with any applicable law or regulation or if any consent, approval or permission is needed for such offer or sale by you or for or on behalf of the Company unless such consent, approval or permission has been previously obtained. Subject to the obligations of the Company set forth in Section 3 of this Agreement, the Company shall have no responsibility for, and you will obtain, any consent, approval or permission required by you for the subscription, offer, sale or delivery by you of Notes, or the distribution of any offering materials, under the laws and regulations in force in any jurisdiction to which you are subject or in or from which you make any subscription, offer, sale or delivery. 22 9. Termination. This Agreement may be terminated at any time either by the Company or by you upon the giving of written notice of such termination to the other parties hereto, but without prejudice to any rights, obligations or liabilities of the other parties hereto accrued or incurred prior to such termination. The termination of this Agreement shall not require termination of any Notes Terms Agreement, and the termination of any such Notes Terms Agreement shall not require termination of this Agreement. If this Agreement is terminated, the provisions of the third paragraph of Section 2(a), the last sentence of Section 3(b) and Sections 3(c), 3(h), 6, 7, 10, 11 and 13 shall survive; provided that if at the time of termination an offer to purchase Notes has been accepted by the Company but the time of delivery to the purchaser or its agent of such Notes has not occurred, the provisions of Sections 1, 2(b), 2(c), 3(a), 3(d), 3(e), 3(f), 3(g), 3(i), 4 and 5 shall also survive until such delivery has been made. 10. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to you, will be mailed, delivered or telefaxed and confirmed to you at 1585 Broadway, New York, New York 10036, Attention: Manager, Continuously Offered Products (telefax number: 212-761-0781) or, if sent to the Company, will be mailed, delivered or telefaxed and confirmed to the Company at 1221 Avenue of the Americas, New York, New York 10020, Attention: Treasurer; Facsimile No.: 212-762-7337. 11. Successors. This Agreement and any Notes Terms Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors and controlling persons referred to in Section 6 and the purchasers of Notes (to the extent expressly provided in Section 4), and no other person will have any right or obligation hereunder. 12. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 13. Applicable Law. This Agreement will be governed by and construed in accordance with the internal laws of the State of New York. 14. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. 23 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement between the Company and you. Very truly yours, MORGAN STANLEY By: ---------------------------------- Name: Jai Sooklal Title: Assistant Treasurer The foregoing Agreement is hereby confirmed and accepted as of the date first above written. MORGAN STANLEY By: ------------------------------- Name: Title: MORGAN STANLEY & CO. INCORPORATED By: ------------------------------- Name: Title: EXHIBIT A MORGAN STANLEY DIRECTSECURITIES(SM) NOTES TERMS AGREEMENT _______________, 200_ Morgan Stanley 1585 Broadway New York, New York 10036 Attention: Re: DirectSecurities Distribution Agreement dated [ ], 2005 (the "DirectSecurities Distribution Agreement") -------------------------------------------------------------- The undersigned agrees to purchase your Morgan Stanley DirectSecurities(SM) having the following terms: Principal Amount: Interest Rate: Purchase Price: Applicability of Modified Payment upon Acceleration: Price to Public: If yes, state issue price: Settlement Date and Time: Applicability of Survivor's Option: Place of Delivery: Optional Repayment Date(s): Original Issue Date: Optional Redemption Date(s): Interest Accrual Date: Initial Redemption Date: Interest Payment Dates: Initial Redemption Percentage: Interest Payment Period: Annual Redemption Percentage Reduction: Maturity Date: Face Amount (if any): Minimum Denominations: Other Provisions: A-1 The provisions of Sections 1, 2(b) and 2(c), 3 through 6, 8 and 10 through 14 of the DirectSecurities Distribution Agreement and the related definitions are incorporated by reference herein and shall be deemed to have the same force and effect as if set forth in full herein. This Agreement is also subject to termination on the terms incorporated by reference herein. If this Agreement is terminated, the provisions of Sections 3(h), 6, 10, 11, and 13 of the DirectSecurities Distribution Agreement shall survive for the purposes of this Agreement. The following information, opinions, certificates, letters and documents referred to in Section 4 of the DirectSecurities Distribution Agreement will be required: ________________. A-2 MORGAN STANLEY By: ---------------------------------- Name: Title: MORGAN STANLEY & CO. INCORPORATED By: ---------------------------------- Name: Title: Accepted: MORGAN STANLEY By: ------------------------------- Name: Title: A-3 EXHIBIT B MORGAN STANLEY MORGAN STANLEY DIRECTSECURITIES(SM) ADMINISTRATIVE PROCEDURES ________________________ Explained below are the administrative procedures and specific terms of the offering of Morgan Stanley DirectSecurities(SM) (the "Notes") on a continuous basis by Morgan Stanley (the "Company") pursuant to the Morgan Stanley DirectSecurities Distribution Agreement dated [ ], 2005 (as may be amended from time to time, the "DirectSecurities Distribution Agreement") among the Company, Morgan Stanley and Morgan Stanley & Co. Incorporated (collectively or individually the "Agent" as the context requires). The Notes will be issued as senior indebtedness of the Company pursuant to the provisions of a senior indenture dated as of November 1, 2004 (as may be supplemented or amended from time to time, the "Indenture"), between the Company and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), ("JPMorgan Chase"), as trustee. In the DirectSecurities Distribution Agreement, the Agent has agreed to use reasonable efforts to solicit purchases of the Notes, and the administrative procedures explained below will govern the issuance and settlement of any Notes sold through the Agent, as agent of the Company. The Agent, as principal, may also purchase Notes for its own account, and the Company and the Agent will enter into a terms agreement (a "Notes Terms Agreement"), as contemplated by the DirectSecurities Distribution Agreement. The administrative procedures explained below will govern the issuance and settlement of any Notes purchased by the Agent, as principal, unless otherwise specified in the applicable Notes Terms Agreement. JPMorgan Chase will be the Registrar, Authenticating Agent and Paying Agent for the Notes and will perform the duties specified herein. Each Note will be represented by a Global Note (as defined below) delivered to JPMorgan Chase, as agent for The Depository Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC (a "Book-Entry Note"). Each Note will be issued in global form. Except as set forth in the Indenture, an owner of a Book-Entry Note will not be entitled to receive a certificated note. Book-Entry Notes will be payable in U.S. dollars and will be issued in accordance with the administrative procedures set forth in Part I hereof as they B-1 may subsequently be amended as the result of changes in DTC's operating procedures. Unless otherwise defined herein, terms defined in the Indenture, the Notes or any Prospectus Supplement relating to the Notes shall be used herein as therein defined. The Company will advise the Agent in writing of the employees of the Company with whom the Agent is to communicate regarding offers to purchase Notes and the related settlement details. B-2 PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES In connection with the qualification of the Book-Entry Notes for eligibility in the book-entry system maintained by DTC, JPMorgan Chase will perform the custodial, document control and administrative functions described below, in accordance with its respective obligations under (i) DTC's Operational Arrangements dated February 20, 2002, as amended from time to time, including by the Blanket Issuer Letter of Representations from the Company to DTC, dated as of August 25, 2003 and (ii) its obligations under a Medium-Term Note Certificate Agreement between JPMorgan Chase and DTC dated as of November 13, 2001, and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). Issuance: On any date of settlement (as defined under "Settlement" below) for one or more Book-Entry Notes, the Company will issue a single global Note in fully registered form without coupons (a "Global Note") representing up to U.S.$500,000,000 principal amount of all such Notes that have the same Original Issue Date, Maturity Date and other terms and that otherwise comprise the same securities and have the same terms. Each Global Note will be dated and issued as of the date of its authentication by JPMorgan Chase. Each Global Note will bear an "Interest Accrual Date," which will be (i) with respect to an original Global Note (or any portion thereof), its original issuance date and (ii) with respect to any Global Note (or any portion thereof) issued subsequently upon exchange of a Global Note, or in lieu of a destroyed, lost or stolen Global Note, the most recent Interest Payment Date to which interest has been paid or duly provided for on the predecessor Global Note or Notes (or if no such payment or provision has been made, the original issuance date of the predecessor Global Note), regardless of the date of authentication of such subsequently issued Global Note. Book-Entry Notes will be payable in U.S. dollars. Denominations: Book-Entry Notes will be issued in principal amounts of U.S.$1,000 or any amount in excess thereof that is an integral multiple of U.S.$1,000, unless otherwise indicated in the applicable Pricing Supplement. Global Notes will be denominated in principal amounts not in excess of U.S.$500,000,000. If one or more Book-Entry Notes having an aggregate principal amount in B-3 excess of U.S.$500,000,000 would, but for the preceding sentence, be represented by a single Global Note then one Global Note will be issued to represent each U.S.$500,000,000 principal amount of such Book-Entry Note or Notes and an additional Global Note will be issued to represent any remaining principal amount of such Book-Entry Note or Notes. In such a case, each of the Global Notes shall be assigned the same CUSIP number. Preparation of Pricing Supplement: If any order to purchase a Book-Entry Note is accepted by or on behalf of the Company, the Company will prepare a pricing supplement (a "Pricing Supplement") reflecting the terms of such Note. The Company (i) will arrange to file an electronic format document, in the manner prescribed by the EDGAR Filer Manual, of such Pricing Supplement with the Commission in accordance with the applicable paragraph of Rule 424(b) under the Securities Act, (ii) will, as soon as possible and in any event not later than the date on which such Pricing Supplement is filed with the Commission, deliver the number of copies of such Pricing Supplement to the Agent as the Agent shall request and (iii) will, on the Agent's behalf, promptly file five copies of such Pricing Supplement with the National Association of Securities Dealers, Inc. (the "NASD"), if required under the rules of the NASD. The Agent will cause such Pricing Supplement to be delivered to the purchaser of the Note. In each instance that a Pricing Supplement is prepared, the Agent will affix the Pricing Supplement to Prospectuses prior to their use. Outdated Pricing Supplements, and the Prospectuses to which they are attached (other than those retained for files), will be destroyed. Settlement: The receipt by the Company of immediately available funds in payment for a Book-Entry Note and the authentication and issuance of the Global Note representing such Note shall constitute "settlement" with respect to such Note. All orders accepted by the Company will be settled on the fifth Business Day B-4 pursuant to the timetable for settlement set forth below unless the Company and the purchaser agree to settlement on another day, which shall be no earlier than the next Business Day. Settlement Procedures: Settlement Procedures with regard to each Book-Entry Note sold by the Company to or through the Agent (unless otherwise specified pursuant to a Notes Terms Agreement), shall be as follows: A. The Agent will advise the Company by telephone that such Note is a Book-Entry Note and of the following settlement information: 1. Principal amount. 2. Maturity Date. 3. Whether such Note will pay interest monthly, quarterly, semiannually or annually. 4. Whether a Survivor's Option is applicable. 5. Redemption or repayment provisions, if any. 6. Settlement date and time (Original Issue Date). 7. Interest Accrual Date. 8. Price. 9. Agent's commission, if any, determined as provided in the DirectSecurities Distribution Agreement. 10. Whether the Note is an Original Issue Discount Note (an "OID Note"), and if it is an OID Note, the applicability of Modified Payment upon Acceleration (and, if so, the Issue Price). 11. Any other applicable provisions. B. The Company will advise JPMorgan Chase by telephone or electronic transmission (confirmed in writing at any time on the same date) of the information set forth in "Settlement Procedures" "A" above, such B-5 advice to contain a representation as to the aggregate principal amount of Notes permitted to be issued hereunder after such issuance. JPMorgan Chase will then assign a CUSIP number to the Global Note representing a Note and will notify the Company and the Agent of such CUSIP number(s) by telephone as soon as practicable. C. JPMorgan Chase will enter a pending deposit message through DTC's Participant Terminal System, providing the following settlement information to DTC, the Agent and Standard & Poor's Corporation: 1. The information set forth in "Settlement Procedure" "A" above. 2. The Initial Interest Payment Date for the Notes, the number of days by which such date succeeds the related DTC Record Date and, if known, amount of interest payable on such Initial Interest Payment Date. 3. The CUSIP number of the Global Note. 4. Whether the Global Note will represent any other Book-Entry Note (to the extent known at such time). 5. The number of Participant accounts to be maintained by DTC on behalf of the Agent and JPMorgan Chase. D. JPMorgan Chase will authenticate, complete and deliver the Global Note representing the Note. E. DTC will credit such Note to JPMorgan Chase's participant account at DTC. F. JPMorgan Chase will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC to (i) debit the Note to JPMorgan Chase's participant account and credit such Note to the Agent's participant account and (ii) debit the Agent's settlement account and credit JPMorgan Chase's settlement account for an amount equal to the price of such Note less the Agent's commission, if any. The entry of such B-6 a deliver order shall constitute a representation and warranty by JPMorgan Chase to DTC that (a) the Global Note representing a Book-Entry Note has been issued and authenticated and (b) JPMorgan Chase is holding such Global Note pursuant to the Medium-Term Note Certificate Agreement between JPMorgan Chase and DTC. G. Unless the Agent is the end purchaser of a Note, the Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to the Agent's participant account and credit such Note to the participant accounts of the Participants with respect to such Note and (ii) to debit the settlement accounts of such Participants and credit the settlement account of the Agent for an amount equal to the price of such Note. H. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures "F" and "G" will be settled in accordance with SDFS operating procedures in effect on the settlement date. I. JPMorgan Chase will credit to the account of the Company maintained at JPMorgan Chase, New York, New York, in funds available for immediate use in the amount transferred to JPMorgan Chase in accordance with "Settlement Procedure" "F". J. Unless the Agent is the end purchaser of the Note, the Agent will confirm the purchase of such Note to the purchaser either by transmitting to the Participants with respect to such Note a confirmation order or orders through DTC's institutional delivery system or by mailing a written confirmation to such purchaser. K. Monthly, JPMorgan Chase will send to the Company a statement setting forth the principal amount of Notes outstanding as of that date under the Indenture and setting forth a brief description of any sales of which the Company has advised JPMorgan Chase that have not yet been settled. B-7 Settlement Procedures Timetable: For sales by the Company of Book-Entry Notes to or through the Agent (unless otherwise specified pursuant to a Notes Terms Agreement) for settlement on the first Business Day after the sale date, Settlement Procedures "A" through "J" set forth above shall be completed as soon as possible but not later than the respective times in New York City set forth below: Settlement Procedure Time --------- ---- A 11:00 A.M. on the sale date B 12:00 Noon on the sale date C 2:00 P.M. on the sale date D 9:00 A.M. on the settlement date E 10:00 A.M. on the settlement date F-G 2:00 P.M. on the settlement date H 4:45 P.M. on the settlement date I-J 5:00 P.M. on the settlement date If a sale is to be settled more than one Business Day after the sale date, Settlement Procedures "A", "B" and "C" shall be completed as soon as practicable but no later than 11:00 A.M., 12 Noon and 2:00 P.M., respectively, on the first Business Day after the sale date. "Settlement Procedure" "H" is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the settlement date. If settlement of a Book-Entry Note is rescheduled or canceled, JPMorgan Chase, after receiving notice from the Company or the Agent, will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 2:00 P.M. on the Business Day immediately preceding the scheduled settlement date. Failure to Settle: If JPMorgan Chase fails to enter an SDFS deliver order with respect to a Book-Entry Note pursuant to "Settlement Procedure" "F", JPMorgan Chase may deliver to DTC, through DTC's Participant Terminal B-1 System, as soon as practicable a withdrawal message instructing DTC to debit such Note to JPMorgan Chase's participant account, provided that JPMorgan Chase's participant account contains a principal amount of the Global Note representing such Note that is at least equal to the principal amount to be debited. If a withdrawal message is processed with respect to all the Book-Entry Notes represented by a Global Note, JPMorgan Chase will mark such Global Note "canceled," make appropriate entries in JPMorgan Chase's records and send such canceled Global Note to the Company. The CUSIP number assigned to such Global Note shall, in accordance with the procedures of the CUSIP Service Bureau of Standard & Poor's Corporation, be canceled and not immediately reassigned. If a withdrawal message is processed with respect to one or more, but not all, of the Book-Entry Notes represented by a Global Note, JPMorgan Chase will exchange such Global Note for two Global Notes one of which shall represent such Book-Entry Note or Notes and shall be canceled immediately after issuance and the other of which shall represent the remaining Book-Entry Notes previously represented by the surrendered Global Note and shall bear the CUSIP number of the surrendered Global Note. If the purchase price for any Book-Entry Note is not timely paid to the Participants with respect to such Note by the beneficial purchaser thereof (or a person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participants and, in turn, the Agent may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures "F" and "G", respectively. Thereafter, JPMorgan Chase will deliver the withdrawal message and take the related actions described in the preceding paragraph. Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to one or more, but not all, of the Book-Entry Notes to have been B-2 represented by a Global Note, JPMorgan Chase will provide, in accordance with Settlement Procedures "D" and "F", for the authentication and issuance of a Global Note representing the Book-Entry Notes to be represented by such Global Note and will make appropriate entries in its records. B-3 EX-15 5 ex-15.txt EXHIBIT 15 October 25, 2005 To the Board of Directors and Shareholders of Morgan Stanley: We have made a review, in accordance with standards of the Public Company Accounting Oversight Board (United States), of the unaudited interim financial information of Morgan Stanley and subsidiaries for the periods ended February 28, 2005 and February 29, 2004, and May 31, 2005 and 2004 as indicated in our reports dated April 4, 2005 and July 7, 2005, respectively, (October 12, 2005, as to the effects of discontinued operations and segment classification discussed in Note 22) (which reports included an explanatory paragraph regarding the adoption of Statement of Financial Accounting Standards ("SFAS") No. 123R, "Share-based Payment"); because we did not perform an audit, we expressed no opinion on that information. Additionally, we have made a review, in accordance with standards of the Public Company Accounting Oversight Board (United States), of the unaudited interim financial information of Morgan Stanley and subsidiaries for the periods ended August 31, 2005 and 2004, as indicated in our report dated October 7, 2005 (which report included an explanatory paragraph regarding the adoption of Statement of Financial Accounting Standards ("SFAS") No. 123R, "Share-based Payment"); because we did not perform an audit, we expressed no opinion on that information. We are aware that our reports referred to above, which are included in your Quarterly Report on Form 10-Q for the quarter ended August 31, 2005 and in your Current Report on Form 8-K filed October 12, 2005 for the quarters ended February 28, 2005 and May 31, 2005, are being incorporated by reference in this Registration Statement on Form S-3 dated October 25, 2005. We also are aware that the aforementioned reports, pursuant to Rule 436(c) under the Securities Act of 1933, are not considered a part of the Registration Statements prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. /s/ Deloitte & Touche LLP New York, New York EX-23.A 6 ex-23a.txt EXHIBIT 23-a CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in this Registration Statement of Morgan Stanley (the "Registrant") on Form S-3 of our report dated February 7, 2005 (October 12, 2005 as to the effects of discontinued operations and segment classifications discussed in Note 22) included in Exhibit 99.1 to the Registrant's Current Report on Form 8-K filed October 12, 2005, and our report dated February 7, 2005 for the related financial statement schedule included in Schedule I to the Company's Annual Report on Form 10-K for the year ended November 30, 2004 (which reports (1) express an unqualified opinion on the financial statements and financial statement schedule and include an explanatory paragraph relating to the adoption of Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure, an amendment of FASB Statement No. 123," in 2003, (2) express an unqualified opinion on management's assessment regarding the effectiveness of internal control over financial reporting, and (3) express an unqualified opinion on the effectiveness of internal control over financial reporting), and to the references to us under the heading "Experts" in each prospectus, which is part of this Registration Statement. /s/ Deloitte & Touche LLP New York, New York October 25, 2005 EX-23.D 7 ex-23d.txt Exhibit 23-d CONSENT OF BK ASSOCIATES, INC. We hereby consent to the incorporation by reference in this Registration Statement of Morgan Stanley on Form S-3 of the references to us appearing in: (1) Note 18 to Morgan Stanley's consolidated financial statements and notes thereto recast for discontinued operations for the fiscal years ended November 30, 2004, 2003 and 2002 included as exhibit 99.1 in the Current Report on Form 8-K of Morgan Stanley filed with the Securities and Exchange Commission on October 12, 2005 (the "Current Report"), (ii) Note 16 to Morgan Stanley's condensed consolidated financial statements and notes thereto recast for discontinued operations for the three months ended February 28, 2005 and February 29, 2004, included as exhibit 99.2 in the Current Report, and (iii) Note 16 to Morgan Stanley's condensed consolidated financial statements and notes thereto recast for discontinued operations for the three and six months ended May 31, 2005 and May 31, 2004, included as exhibit 99.3 in the Currency Report. BK ASSOCIATES, INC. By: /s/ John F. Keitz --------------------- Name: John F. Keitz Title: President October 25, 2005 EX-23.E 8 ex-23e.txt Exhibit 23-e CONSENT OF MORTEN BEYER & AGNEW, INC. We hereby consent to the incorporation by reference in this Registration Statement of Morgan Stanley on Form S-3 of the references to us appearing in: (1) Note 18 to Morgan Stanley's consolidated financial statements and notes thereto recast for discontinued operations for the fiscal years ended November 30, 2004, 2003 and 2002 included as exhibit 99.1 in the Current Report on Form 8-K of Morgan Stanley filed with the Securities and Exchange Commission on October 12, 2005 (the "Current Report"), (ii) Note 16 to Morgan Stanley's condensed consolidated financial statements and notes thereto recast for discontinued operations for the three months ended February 28, 2005 and February 29, 2004, included as exhibit 99.2 in the Current Report, and (iii) Note 16 to Morgan Stanley's condensed consolidated financial statements and notes thereto recast for discontinued operations for the three and six months ended May 31, 2005 and May 31, 2004, included as exhibit 99.3 in the Currency Report. MORTEN BEYER & AGNEW, INC. By: /s/ Robert F. Agnew ----------------------- Name: Robert F. Agnew Title: President & COO Date: October 25, 2005 EX-25.A 9 ex-25a.txt Exhibit 25-a SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------------------------------------- JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (Exact name of trustee as specified in its charter) 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 1111 Polaris Parkway Columbus, Ohio 43271 (Address of principal executive offices) (Zip Code) Pauline E. Higgins Vice President and Assistant General Counsel JPMorgan Chase Bank, National Association 707 Travis Street, 4th Floor North Houston, Texas 77002 Tel: (713) 216-1436 (Name, address and telephone number of agent for service) -------------------------------------------- Morgan Stanley (Exact name of obligor as specified in its charter) Delaware 36-3145972 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip Code) ------------------------------------------------------- Debt Securities (Title of the indenture securities) ------------------------------------------------------------------ GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Comptroller of the Currency, Washington, D.C. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor and Guarantors. If the obligor or any guarantor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of JPMorgan Chase Bank, N.A. (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-106575 which is incorporated by reference). 2. A copy of the Certificate of Authority of the Comptroller of the Currency for the trustee to commence business. (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 333-106575 which is incorporated by reference). 3. None, the authority of the trustee to exercise corporate trust powers being contained in the documents described in Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee. (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-106575 which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act. (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 333-106575 which is incorporated by reference). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, N.A., has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 25th day of October, 2005. JPMORGAN CHASE BANK, N.A. By /s/ Natalie B. Pesce ------------------------------------------- Natalie B. Pesce, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank, N.A. of 1111 Polaris Parkway, Columbus, Ohio 43271 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS in Millions Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .............................................. $ 33,595 Interest-bearing balances ...................................... 9,074 Securities: Held to maturity securities.......................................... 92 Available for sale securities........................................ 46,530 Federal funds sold and securities purchased under agreements to resell ........................................... Federal funds sold in domestic offices 27,359 Securities purchased under agreements to resell 162,222 Loans and lease financing receivables: Loans and leases held for sale.................................. 28,317 Loans and leases, net of unearned income $348,961 Less: Allowance for loan and lease losses 4,676 Loans and leases, net of unearned income and allowance ...................................................... 344,285 Trading Assets....................................................... 231,417 Premises and fixed assets (including capitalized leases)............. 8,360 Other real estate owned.............................................. 142 Investments in unconsolidated subsidiaries and associated companies............................................ 818 Customers' liability to this bank on acceptances outstanding..................................................... 549 Intangible assets Goodwill .................................................... 23,432 Other Intangible assets ..................................... 9,440 Other assets ........................................................ 47,481 TOTAL ASSETS ........................................................ $973,113 ==========
LIABILITIES Deposits In domestic offices ............................................... $383,950 Noninterest-bearing ....................................$ 141,374 Interest-bearing ....................................... 242,576 In foreign offices, Edge and Agreement subsidiaries and IBF's............................................. 145,247 Noninterest-bearing ...................... $ 7,348 Interest-bearing .................................... 137,899 Federal funds purchased and securities sold under agree- ments to repurchase: Federal funds purchased in domestic offices 8,743 Securities sold under agreements to repurchase 93,698 Trading liabilities ............................................... 117,933 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) 79,495 Bank's liability on acceptances executed and outstanding 549 Subordinated notes and debentures .................................. 17,982 Other liabilities .................................................. 40,922 TOTAL LIABILITIES .................................................. 888,519 Minority Interest in consolidated subsidiaries ..................... 1,426 EQUITY CAPITAL Perpetual preferred stock and related surplus ...................... 0 Common stock ....................................................... 1,785 Surplus (exclude all surplus related to preferred stock) .......... 58,838 Retained earnings .................................................. 22,718 Accumulated other comprehensive income ............................. (173) Other equity capital components .................................... 0 TOTAL EQUITY CAPITAL ............................................... 83,168 ________ TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL $973,113 ========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in- structions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) JAMES DIMON ) DIRECTORS MICHAEL J. CAVANAGH ) EX-25.B 10 ex-25b.txt Exhibit 25-b SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ---------------------------------------- J. P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION (Exact name of trustee as specified in its charter) 95-4655078 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 1999 Avenue of the Stars - Floor 26 Los Angeles, CA 90067 (Address of principal executive offices) (Zip Code) Thomas F. Godfrey Vice President and Assistant General Counsel J. P. Morgan Trust Company, National Association 1 Chase Manhattan Plaza, 25th Floor New York, New York 10081 Tel: (212) 552-2192 (Name, address and telephone number of agent for service) -------------------------------------------- Morgan Stanley (Exact name of obligor as specified in its charter) Delaware 36-3145972 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip Code) Debt Securities (Title of the indenture securities) Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Comptroller of the Currency, Washington, D.C. Board of Governors of the Federal Reserve System, Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with Obligor. If the Obligor is an affiliate of the trustee, describe each such affiliation. None. No responses are included for Items 3-15 of this Form T-1 because the Obligor is not in default as provided under Item 13. Item 16. List of Exhibits. List below all exhibits filed as part of this statement of eligibility. Exhibit 1. Articles of Association of the Trustee as Now in Effect (see Exhibit 1 to Form T-1 filed in connection with Form 8K of the Southern California Water Company filing, dated December 7, 2001, which is incorporated by reference). Exhibit 2. Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 333-41329, which is incorporated by reference). Exhibit 3. Authorization of the Trustee to Exercise Corporate Trust Powers (contained in Exhibit 2). Exhibit 4. Existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Form 8K of the Southern California Water Company filing, dated December 7, 2001, which is incorporated by reference). Exhibit 5. Not Applicable Exhibit 6. The consent of the Trustee required by Section 321 (b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 333-41329, which is incorporated by reference). Exhibit 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. Exhibit 8. Not Applicable Exhibit 9. Not Applicable 2 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, J. P. Morgan Trust Company, National Association, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of San Francisco, and State of California, on the 25th day of October, 2005. J. P. Morgan Trust Company, National Association By /s/ : Carol Ng. ---------------------------------------- Carol Ng, Vice President 3 Exhibit 7 to Form T-1 J. P. Morgan Trust Company, National Association Statement of Condition 30-Jun-05 ($000) Assets Cash and Due From Banks 26,954 Securities 191,553 Loans and Leases 110,708 Premises and Fixed Assets 7,790 Intangible Assets 363,423 Goodwill 202,094 Other Assets 45,476 ------------- Total Assets 947,998 ============= Liabilities Deposits 101,305 Other Liabilities 39,598 ------------- Total Liabilities 140,903 Equity Capital Common Stock 600 Surplus 701,587 Retained Earnings 104,908 ------------- Total Equity Capital 807,095 ------------- Total Liabilities and Equity Capital 947,998 ============= EX-25.C 11 ex-25c.txt ================================================================================ EXHIBIT 25-c FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) MORGAN STANLEY (Exact name of obligor as specified in its charter) Delaware 36-3145972 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip code) _____________ Junior Subordinated Debt Securities (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ------------------------------------------------------------------------------------------ Name Address - ------------------------------------------------------------------------------------------ Superintendent of Banks of the State of One State Street, New York, New York N.Y. 10004-1417, and Albany, N.Y. 12223 Federal Reserve Bank of New York 33 Liberty Street, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -2- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of October, 2005. THE BANK OF NEW YORK By: /s/ VAN K. BROWN ------------------------------ Name: VAN K. BROWN Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,753,000 Interest-bearing balances........................... 6,045,000 Securities: Held-to-maturity securities......................... 2,183,000 Available-for-sale securities....................... 21,741,000 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices.............. 5,486,000 Securities purchased under agreements to resell.............................................. 192,000 Loans and lease financing receivables: Loans and leases held for sale...................... 0 Loans and leases, net of unearned income............................................ 32,953,000 LESS: Allowance for loan and lease losses...................................... 558,000 Loans and leases, net of unearned income and allowance.............................. 32,395,000 Trading Assets......................................... 6,114,000 Premises and fixed assets (including capitalized leases)............................................. 812,000 Other real estate owned................................ 0 Investments in unconsolidated subsidiaries and associated companies................................ 278,000 Customers' liability to this bank on acceptances outstanding......................................... 68,000 Intangible assets: Goodwill............................................ 2,039,000 Other intangible assets............................. 736,000 Other assets........................................... 5,237,000 ----------- Total assets........................................... $86,079,000 =========== LIABILITIES Deposits: In domestic offices................................. $38,768,000 Noninterest-bearing................................. 18,417,000 Interest-bearing.................................... 20,351,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,246,000 Noninterest-bearing................................. 462,000 Interest-bearing.................................... 25,784,000 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices........................................... 1,224,000 Securities sold under agreements to repurchase........................................ 126,000 Trading liabilities.................................... 2,927,000 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,245,000 Not applicable Bank's liability on acceptances executed and outstanding......................................... 69,000 Subordinated notes and debentures...................... 1,440,000 Other liabilities...................................... 5,976,000 ----------- Total liabilities...................................... $78,021,000 =========== Minority interest in consolidated subsidiaries........................................ 139,000 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,000 Surplus (exclude all surplus related to preferred stock).............................................. 2,089,000 Retained earnings...................................... 4,716,000 Accumulated other comprehensive income................. -21,000 Other equity capital components........................ 0 Total equity capital................................... 7,919,000 Total liabilities, minority interest, and equity capital............................................. $86,079,000 ============= I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. __ Thomas A. Renyi | Gerald L. Hassell | Alan R. Griffith | Directors | __| EX-25.D 12 ex-25d.txt ================================================================================ EXHIBIT 25-d FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) MORGAN STANLEY CAPITAL TRUST VI (Exact name of obligor as specified in its charter) Delaware 13-7308501 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip code) _____________ Capital Securities (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ------------------------------------------------------------------------------------------ Name Address - ------------------------------------------------------------------------------------------ Superintendent of Banks of the State of One State Street, New York, New York N.Y. 10004-1417, and Albany, N.Y. 12223 Federal Reserve Bank of New York 33 Liberty Street, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of October, 2005. THE BANK OF NEW YORK By: /s/ VAN K. BROWN ------------------------------ Name: VAN K. BROWN Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,753,000 Interest-bearing balances........................... 6,045,000 Securities: Held-to-maturity securities......................... 2,183,000 Available-for-sale securities....................... 21,741,000 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices.............. 5,486,000 Securities purchased under agreements to resell.............................................. 192,000 Loans and lease financing receivables: Loans and leases held for sale...................... 0 Loans and leases, net of unearned income............................................ 32,953,000 LESS: Allowance for loan and lease losses...................................... 558,000 Loans and leases, net of unearned income and allowance.............................. 32,395,000 Trading Assets......................................... 6,114,000 Premises and fixed assets (including capitalized leases)............................................. 812,000 Other real estate owned................................ 0 Investments in unconsolidated subsidiaries and associated companies................................ 278,000 Customers' liability to this bank on acceptances outstanding......................................... 68,000 Intangible assets: Goodwill............................................ 2,039,000 Other intangible assets............................. 736,000 Other assets........................................... 5,237,000 ----------- Total assets........................................... $86,079,000 =========== LIABILITIES Deposits: In domestic offices................................. $38,768,000 Noninterest-bearing................................. 18,417,000 Interest-bearing.................................... 20,351,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,246,000 Noninterest-bearing................................. 462,000 Interest-bearing.................................... 25,784,000 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices........................................... 1,224,000 Securities sold under agreements to repurchase........................................ 126,000 Trading liabilities.................................... 2,927,000 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,245,000 Not applicable Bank's liability on acceptances executed and outstanding......................................... 69,000 Subordinated notes and debentures...................... 1,440,000 Other liabilities...................................... 5,976,000 ----------- Total liabilities...................................... $78,021,000 =========== Minority interest in consolidated subsidiaries........................................ 139,000 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,000 Surplus (exclude all surplus related to preferred stock).............................................. 2,089,000 Retained earnings...................................... 4,716,000 Accumulated other comprehensive income................. -21,000 Other equity capital components........................ 0 Total equity capital................................... 7,919,000 Total liabilities, minority interest, and equity capital............................................. $86,079,000 ============= I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. __ Thomas A. Renyi | Gerald L. Hassell | Alan R. Griffith | Directors | __| EX-25.E 13 ex-25e.txt ================================================================================ EXHIBIT 25-e FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) MORGAN STANLEY CAPITAL TRUST VII (Exact name of obligor as specified in its charter) Delaware 13-7308503 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip code) _____________ Capital Securities (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ------------------------------------------------------------------------------------------ Name Address - ------------------------------------------------------------------------------------------ Superintendent of Banks of the State of One State Street, New York, New York N.Y. 10004-1417, and Albany, N.Y. 12223 Federal Reserve Bank of New York 33 Liberty Street, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of October, 2005. THE BANK OF NEW YORK By: /s/ VAN K. BROWN ------------------------------ Name: VAN K. BROWN Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,753,000 Interest-bearing balances........................... 6,045,000 Securities: Held-to-maturity securities......................... 2,183,000 Available-for-sale securities....................... 21,741,000 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices.............. 5,486,000 Securities purchased under agreements to resell.............................................. 192,000 Loans and lease financing receivables: Loans and leases held for sale...................... 0 Loans and leases, net of unearned income............................................ 32,953,000 LESS: Allowance for loan and lease losses...................................... 558,000 Loans and leases, net of unearned income and allowance.............................. 32,395,000 Trading Assets......................................... 6,114,000 Premises and fixed assets (including capitalized leases)............................................. 812,000 Other real estate owned................................ 0 Investments in unconsolidated subsidiaries and associated companies................................ 278,000 Customers' liability to this bank on acceptances outstanding......................................... 68,000 Intangible assets: Goodwill............................................ 2,039,000 Other intangible assets............................. 736,000 Other assets........................................... 5,237,000 ----------- Total assets........................................... $86,079,000 =========== LIABILITIES Deposits: In domestic offices................................. $38,768,000 Noninterest-bearing................................. 18,417,000 Interest-bearing.................................... 20,351,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,246,000 Noninterest-bearing................................. 462,000 Interest-bearing.................................... 25,784,000 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices........................................... 1,224,000 Securities sold under agreements to repurchase........................................ 126,000 Trading liabilities.................................... 2,927,000 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,245,000 Not applicable Bank's liability on acceptances executed and outstanding......................................... 69,000 Subordinated notes and debentures...................... 1,440,000 Other liabilities...................................... 5,976,000 ----------- Total liabilities...................................... $78,021,000 =========== Minority interest in consolidated subsidiaries........................................ 139,000 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,000 Surplus (exclude all surplus related to preferred stock).............................................. 2,089,000 Retained earnings...................................... 4,716,000 Accumulated other comprehensive income................. -21,000 Other equity capital components........................ 0 Total equity capital................................... 7,919,000 Total liabilities, minority interest, and equity capital............................................. $86,079,000 ============= I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. __ Thomas A. Renyi | Gerald L. Hassell | Alan R. Griffith | Directors | __| EX-25.F 14 ex-25f.txt ================================================================================ EXHIBIT 25-f FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) MORGAN STANLEY CAPITAL TRUST VIII (Exact name of obligor as specified in its charter) Delaware 20-1390869 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip code) _____________ Capital Securities (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ------------------------------------------------------------------------------------------ Name Address - ------------------------------------------------------------------------------------------ Superintendent of Banks of the State of One State Street, New York, New York N.Y. 10004-1417, and Albany, N.Y. 12223 Federal Reserve Bank of New York 33 Liberty Street, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of October, 2005. THE BANK OF NEW YORK By: /s/ VAN K. BROWN ------------------------------ Name: VAN K. BROWN Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,753,000 Interest-bearing balances........................... 6,045,000 Securities: Held-to-maturity securities......................... 2,183,000 Available-for-sale securities....................... 21,741,000 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices.............. 5,486,000 Securities purchased under agreements to resell.............................................. 192,000 Loans and lease financing receivables: Loans and leases held for sale...................... 0 Loans and leases, net of unearned income............................................ 32,953,000 LESS: Allowance for loan and lease losses...................................... 558,000 Loans and leases, net of unearned income and allowance.............................. 32,395,000 Trading Assets......................................... 6,114,000 Premises and fixed assets (including capitalized leases)............................................. 812,000 Other real estate owned................................ 0 Investments in unconsolidated subsidiaries and associated companies................................ 278,000 Customers' liability to this bank on acceptances outstanding......................................... 68,000 Intangible assets: Goodwill............................................ 2,039,000 Other intangible assets............................. 736,000 Other assets........................................... 5,237,000 ----------- Total assets........................................... $86,079,000 =========== LIABILITIES Deposits: In domestic offices................................. $38,768,000 Noninterest-bearing................................. 18,417,000 Interest-bearing.................................... 20,351,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,246,000 Noninterest-bearing................................. 462,000 Interest-bearing.................................... 25,784,000 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices........................................... 1,224,000 Securities sold under agreements to repurchase........................................ 126,000 Trading liabilities.................................... 2,927,000 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,245,000 Not applicable Bank's liability on acceptances executed and outstanding......................................... 69,000 Subordinated notes and debentures...................... 1,440,000 Other liabilities...................................... 5,976,000 ----------- Total liabilities...................................... $78,021,000 =========== Minority interest in consolidated subsidiaries........................................ 139,000 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,000 Surplus (exclude all surplus related to preferred stock).............................................. 2,089,000 Retained earnings...................................... 4,716,000 Accumulated other comprehensive income................. -21,000 Other equity capital components........................ 0 Total equity capital................................... 7,919,000 Total liabilities, minority interest, and equity capital............................................. $86,079,000 ============= I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. __ Thomas A. Renyi | Gerald L. Hassell | Alan R. Griffith | Directors | __| EX-25.G 15 ex-25g.txt ================================================================================ EXHIBIT 25-g FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) MORGAN STANLEY CAPITAL TRUST IX (Exact name of obligor as specified in its charter) Delaware 20-1391139 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip code) _____________ Capital Securities (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ------------------------------------------------------------------------------------------ Name Address - ------------------------------------------------------------------------------------------ Superintendent of Banks of the State of One State Street, New York, New York N.Y. 10004-1417, and Albany, N.Y. 12223 Federal Reserve Bank of New York 33 Liberty Street, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of October, 2005. THE BANK OF NEW YORK By: /s/ VAN K. BROWN ------------------------------ Name: VAN K. BROWN Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,753,000 Interest-bearing balances........................... 6,045,000 Securities: Held-to-maturity securities......................... 2,183,000 Available-for-sale securities....................... 21,741,000 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices.............. 5,486,000 Securities purchased under agreements to resell.............................................. 192,000 Loans and lease financing receivables: Loans and leases held for sale...................... 0 Loans and leases, net of unearned income............................................ 32,953,000 LESS: Allowance for loan and lease losses...................................... 558,000 Loans and leases, net of unearned income and allowance.............................. 32,395,000 Trading Assets......................................... 6,114,000 Premises and fixed assets (including capitalized leases)............................................. 812,000 Other real estate owned................................ 0 Investments in unconsolidated subsidiaries and associated companies................................ 278,000 Customers' liability to this bank on acceptances outstanding......................................... 68,000 Intangible assets: Goodwill............................................ 2,039,000 Other intangible assets............................. 736,000 Other assets........................................... 5,237,000 ----------- Total assets........................................... $86,079,000 =========== LIABILITIES Deposits: In domestic offices................................. $38,768,000 Noninterest-bearing................................. 18,417,000 Interest-bearing.................................... 20,351,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,246,000 Noninterest-bearing................................. 462,000 Interest-bearing.................................... 25,784,000 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices........................................... 1,224,000 Securities sold under agreements to repurchase........................................ 126,000 Trading liabilities.................................... 2,927,000 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,245,000 Not applicable Bank's liability on acceptances executed and outstanding......................................... 69,000 Subordinated notes and debentures...................... 1,440,000 Other liabilities...................................... 5,976,000 ----------- Total liabilities...................................... $78,021,000 =========== Minority interest in consolidated subsidiaries........................................ 139,000 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,000 Surplus (exclude all surplus related to preferred stock).............................................. 2,089,000 Retained earnings...................................... 4,716,000 Accumulated other comprehensive income................. -21,000 Other equity capital components........................ 0 Total equity capital................................... 7,919,000 Total liabilities, minority interest, and equity capital............................................. $86,079,000 ============= I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. __ Thomas A. Renyi | Gerald L. Hassell | Alan R. Griffith | Directors | __| EX-25.H 16 ex-25h.txt ================================================================================ EXHIBIT 25-h FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) MORGAN STANLEY CAPITAL TRUST X (Exact name of obligor as specified in its charter) Delaware 20-1391361 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip code) _____________ Capital Securities (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ------------------------------------------------------------------------------------------ Name Address - ------------------------------------------------------------------------------------------ Superintendent of Banks of the State of One State Street, New York, New York N.Y. 10004-1417, and Albany, N.Y. 12223 Federal Reserve Bank of New York 33 Liberty Street, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of October, 2005. THE BANK OF NEW YORK By: /s/ VAN K. BROWN ------------------------------ Name: VAN K. BROWN Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,753,000 Interest-bearing balances........................... 6,045,000 Securities: Held-to-maturity securities......................... 2,183,000 Available-for-sale securities....................... 21,741,000 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices.............. 5,486,000 Securities purchased under agreements to resell.............................................. 192,000 Loans and lease financing receivables: Loans and leases held for sale...................... 0 Loans and leases, net of unearned income............................................ 32,953,000 LESS: Allowance for loan and lease losses...................................... 558,000 Loans and leases, net of unearned income and allowance.............................. 32,395,000 Trading Assets......................................... 6,114,000 Premises and fixed assets (including capitalized leases)............................................. 812,000 Other real estate owned................................ 0 Investments in unconsolidated subsidiaries and associated companies................................ 278,000 Customers' liability to this bank on acceptances outstanding......................................... 68,000 Intangible assets: Goodwill............................................ 2,039,000 Other intangible assets............................. 736,000 Other assets........................................... 5,237,000 ----------- Total assets........................................... $86,079,000 =========== LIABILITIES Deposits: In domestic offices................................. $38,768,000 Noninterest-bearing................................. 18,417,000 Interest-bearing.................................... 20,351,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,246,000 Noninterest-bearing................................. 462,000 Interest-bearing.................................... 25,784,000 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices........................................... 1,224,000 Securities sold under agreements to repurchase........................................ 126,000 Trading liabilities.................................... 2,927,000 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,245,000 Not applicable Bank's liability on acceptances executed and outstanding......................................... 69,000 Subordinated notes and debentures...................... 1,440,000 Other liabilities...................................... 5,976,000 ----------- Total liabilities...................................... $78,021,000 =========== Minority interest in consolidated subsidiaries........................................ 139,000 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,000 Surplus (exclude all surplus related to preferred stock).............................................. 2,089,000 Retained earnings...................................... 4,716,000 Accumulated other comprehensive income................. -21,000 Other equity capital components........................ 0 Total equity capital................................... 7,919,000 Total liabilities, minority interest, and equity capital............................................. $86,079,000 ============= I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. __ Thomas A. Renyi | Gerald L. Hassell | Alan R. Griffith | Directors | __| EX-25.I 17 ex-25i.txt ================================================================================ EXHIBIT 25-i FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) MORGAN STANLEY (Exact name of obligor as specified in its charter) Delaware 36-3145972 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip code) _____________ Guarantee of Capital Securities of Morgan Stanley Capital Trust VI (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ------------------------------------------------------------------------------------------ Name Address - ------------------------------------------------------------------------------------------ Superintendent of Banks of the State of One State Street, New York, New York N.Y. 10004-1417, and Albany, N.Y. 12223 Federal Reserve Bank of New York 33 Liberty Street, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of October, 2005. THE BANK OF NEW YORK By: /s/ VAN K. BROWN ------------------------------ Name: VAN K. BROWN Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,753,000 Interest-bearing balances........................... 6,045,000 Securities: Held-to-maturity securities......................... 2,183,000 Available-for-sale securities....................... 21,741,000 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices.............. 5,486,000 Securities purchased under agreements to resell.............................................. 192,000 Loans and lease financing receivables: Loans and leases held for sale...................... 0 Loans and leases, net of unearned income............................................ 32,953,000 LESS: Allowance for loan and lease losses...................................... 558,000 Loans and leases, net of unearned income and allowance.............................. 32,395,000 Trading Assets......................................... 6,114,000 Premises and fixed assets (including capitalized leases)............................................. 812,000 Other real estate owned................................ 0 Investments in unconsolidated subsidiaries and associated companies................................ 278,000 Customers' liability to this bank on acceptances outstanding......................................... 68,000 Intangible assets: Goodwill............................................ 2,039,000 Other intangible assets............................. 736,000 Other assets........................................... 5,237,000 ----------- Total assets........................................... $86,079,000 =========== LIABILITIES Deposits: In domestic offices................................. $38,768,000 Noninterest-bearing................................. 18,417,000 Interest-bearing.................................... 20,351,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,246,000 Noninterest-bearing................................. 462,000 Interest-bearing.................................... 25,784,000 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices........................................... 1,224,000 Securities sold under agreements to repurchase........................................ 126,000 Trading liabilities.................................... 2,927,000 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,245,000 Not applicable Bank's liability on acceptances executed and outstanding......................................... 69,000 Subordinated notes and debentures...................... 1,440,000 Other liabilities...................................... 5,976,000 ----------- Total liabilities...................................... $78,021,000 =========== Minority interest in consolidated subsidiaries........................................ 139,000 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,000 Surplus (exclude all surplus related to preferred stock).............................................. 2,089,000 Retained earnings...................................... 4,716,000 Accumulated other comprehensive income................. -21,000 Other equity capital components........................ 0 Total equity capital................................... 7,919,000 Total liabilities, minority interest, and equity capital............................................. $86,079,000 ============= I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. __ Thomas A. Renyi | Gerald L. Hassell | Alan R. Griffith | Directors | __| EX-25.J 18 ex-25j.txt ================================================================================ EXHIBIT 25-j FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) MORGAN STANLEY (Exact name of obligor as specified in its charter) Delaware 36-3145972 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip code) _____________ Guarantee of Capital Securities of Morgan Stanley Capital Trust VII (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ------------------------------------------------------------------------------------------ Name Address - ------------------------------------------------------------------------------------------ Superintendent of Banks of the State of One State Street, New York, New York N.Y. 10004-1417, and Albany, N.Y. 12223 Federal Reserve Bank of New York 33 Liberty Street, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of October, 2005. THE BANK OF NEW YORK By: /s/ VAN K. BROWN ------------------------------ Name: VAN K. BROWN Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,753,000 Interest-bearing balances........................... 6,045,000 Securities: Held-to-maturity securities......................... 2,183,000 Available-for-sale securities....................... 21,741,000 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices.............. 5,486,000 Securities purchased under agreements to resell.............................................. 192,000 Loans and lease financing receivables: Loans and leases held for sale...................... 0 Loans and leases, net of unearned income............................................ 32,953,000 LESS: Allowance for loan and lease losses...................................... 558,000 Loans and leases, net of unearned income and allowance.............................. 32,395,000 Trading Assets......................................... 6,114,000 Premises and fixed assets (including capitalized leases)............................................. 812,000 Other real estate owned................................ 0 Investments in unconsolidated subsidiaries and associated companies................................ 278,000 Customers' liability to this bank on acceptances outstanding......................................... 68,000 Intangible assets: Goodwill............................................ 2,039,000 Other intangible assets............................. 736,000 Other assets........................................... 5,237,000 ----------- Total assets........................................... $86,079,000 =========== LIABILITIES Deposits: In domestic offices................................. $38,768,000 Noninterest-bearing................................. 18,417,000 Interest-bearing.................................... 20,351,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,246,000 Noninterest-bearing................................. 462,000 Interest-bearing.................................... 25,784,000 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices........................................... 1,224,000 Securities sold under agreements to repurchase........................................ 126,000 Trading liabilities.................................... 2,927,000 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,245,000 Not applicable Bank's liability on acceptances executed and outstanding......................................... 69,000 Subordinated notes and debentures...................... 1,440,000 Other liabilities...................................... 5,976,000 ----------- Total liabilities...................................... $78,021,000 =========== Minority interest in consolidated subsidiaries........................................ 139,000 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,000 Surplus (exclude all surplus related to preferred stock).............................................. 2,089,000 Retained earnings...................................... 4,716,000 Accumulated other comprehensive income................. -21,000 Other equity capital components........................ 0 Total equity capital................................... 7,919,000 Total liabilities, minority interest, and equity capital............................................. $86,079,000 ============= I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. __ Thomas A. Renyi | Gerald L. Hassell | Alan R. Griffith | Directors | __| EX-25.K 19 ex-25k.txt ================================================================================ EXHIBIT 25-k FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) MORGAN STANLEY (Exact name of obligor as specified in its charter) Delaware 36-3145972 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip code) _____________ Guarantee of Capital Securities of Morgan Stanley Capital Trust VIII (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ------------------------------------------------------------------------------------------ Name Address - ------------------------------------------------------------------------------------------ Superintendent of Banks of the State of One State Street, New York, New York N.Y. 10004-1417, and Albany, N.Y. 12223 Federal Reserve Bank of New York 33 Liberty Street, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of October, 2005. THE BANK OF NEW YORK By: /s/ VAN K. BROWN ------------------------------ Name: VAN K. BROWN Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,753,000 Interest-bearing balances........................... 6,045,000 Securities: Held-to-maturity securities......................... 2,183,000 Available-for-sale securities....................... 21,741,000 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices.............. 5,486,000 Securities purchased under agreements to resell.............................................. 192,000 Loans and lease financing receivables: Loans and leases held for sale...................... 0 Loans and leases, net of unearned income............................................ 32,953,000 LESS: Allowance for loan and lease losses...................................... 558,000 Loans and leases, net of unearned income and allowance.............................. 32,395,000 Trading Assets......................................... 6,114,000 Premises and fixed assets (including capitalized leases)............................................. 812,000 Other real estate owned................................ 0 Investments in unconsolidated subsidiaries and associated companies................................ 278,000 Customers' liability to this bank on acceptances outstanding......................................... 68,000 Intangible assets: Goodwill............................................ 2,039,000 Other intangible assets............................. 736,000 Other assets........................................... 5,237,000 ----------- Total assets........................................... $86,079,000 =========== LIABILITIES Deposits: In domestic offices................................. $38,768,000 Noninterest-bearing................................. 18,417,000 Interest-bearing.................................... 20,351,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,246,000 Noninterest-bearing................................. 462,000 Interest-bearing.................................... 25,784,000 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices........................................... 1,224,000 Securities sold under agreements to repurchase........................................ 126,000 Trading liabilities.................................... 2,927,000 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,245,000 Not applicable Bank's liability on acceptances executed and outstanding......................................... 69,000 Subordinated notes and debentures...................... 1,440,000 Other liabilities...................................... 5,976,000 ----------- Total liabilities...................................... $78,021,000 =========== Minority interest in consolidated subsidiaries........................................ 139,000 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,000 Surplus (exclude all surplus related to preferred stock).............................................. 2,089,000 Retained earnings...................................... 4,716,000 Accumulated other comprehensive income................. -21,000 Other equity capital components........................ 0 Total equity capital................................... 7,919,000 Total liabilities, minority interest, and equity capital............................................. $86,079,000 ============= I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. __ Thomas A. Renyi | Gerald L. Hassell | Alan R. Griffith | Directors | __| EX-25.L 20 ex-25l.txt ================================================================================ EXHIBIT 25-l FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) MORGAN STANLEY (Exact name of obligor as specified in its charter) Delaware 36-3145972 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip code) _____________ Guarantee of Capital Securities of Morgan Stanley Capital Trust IX (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ------------------------------------------------------------------------------------------ Name Address - ------------------------------------------------------------------------------------------ Superintendent of Banks of the State of One State Street, New York, New York N.Y. 10004-1417, and Albany, N.Y. 12223 Federal Reserve Bank of New York 33 Liberty Street, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of October, 2005. THE BANK OF NEW YORK By: /s/ VAN K. BROWN ------------------------------ Name: VAN K. BROWN Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,753,000 Interest-bearing balances........................... 6,045,000 Securities: Held-to-maturity securities......................... 2,183,000 Available-for-sale securities....................... 21,741,000 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices.............. 5,486,000 Securities purchased under agreements to resell.............................................. 192,000 Loans and lease financing receivables: Loans and leases held for sale...................... 0 Loans and leases, net of unearned income............................................ 32,953,000 LESS: Allowance for loan and lease losses...................................... 558,000 Loans and leases, net of unearned income and allowance.............................. 32,395,000 Trading Assets......................................... 6,114,000 Premises and fixed assets (including capitalized leases)............................................. 812,000 Other real estate owned................................ 0 Investments in unconsolidated subsidiaries and associated companies................................ 278,000 Customers' liability to this bank on acceptances outstanding......................................... 68,000 Intangible assets: Goodwill............................................ 2,039,000 Other intangible assets............................. 736,000 Other assets........................................... 5,237,000 ----------- Total assets........................................... $86,079,000 =========== LIABILITIES Deposits: In domestic offices................................. $38,768,000 Noninterest-bearing................................. 18,417,000 Interest-bearing.................................... 20,351,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,246,000 Noninterest-bearing................................. 462,000 Interest-bearing.................................... 25,784,000 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices........................................... 1,224,000 Securities sold under agreements to repurchase........................................ 126,000 Trading liabilities.................................... 2,927,000 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,245,000 Not applicable Bank's liability on acceptances executed and outstanding......................................... 69,000 Subordinated notes and debentures...................... 1,440,000 Other liabilities...................................... 5,976,000 ----------- Total liabilities...................................... $78,021,000 =========== Minority interest in consolidated subsidiaries........................................ 139,000 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,000 Surplus (exclude all surplus related to preferred stock).............................................. 2,089,000 Retained earnings...................................... 4,716,000 Accumulated other comprehensive income................. -21,000 Other equity capital components........................ 0 Total equity capital................................... 7,919,000 Total liabilities, minority interest, and equity capital............................................. $86,079,000 ============= I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. __ Thomas A. Renyi | Gerald L. Hassell | Alan R. Griffith | Directors | __| EX-25.M 21 ex-25m.txt ================================================================================ EXHIBIT 25-m FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) MORGAN STANLEY (Exact name of obligor as specified in its charter) Delaware 36-3145972 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1585 Broadway New York, New York 10036 (Address of principal executive offices) (Zip code) _____________ Guarantee of Capital Securities of Morgan Stanley Capital Trust X (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ------------------------------------------------------------------------------------------ Name Address - ------------------------------------------------------------------------------------------ Superintendent of Banks of the State of One State Street, New York, New York N.Y. 10004-1417, and Albany, N.Y. 12223 Federal Reserve Bank of New York 33 Liberty Street, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of October, 2005. THE BANK OF NEW YORK By: /s/ VAN K. BROWN ------------------------------ Name: VAN K. BROWN Title: VICE PRESIDENT EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2005, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin.. $2,753,000 Interest-bearing balances........................... 6,045,000 Securities: Held-to-maturity securities......................... 2,183,000 Available-for-sale securities....................... 21,741,000 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices.............. 5,486,000 Securities purchased under agreements to resell.............................................. 192,000 Loans and lease financing receivables: Loans and leases held for sale...................... 0 Loans and leases, net of unearned income............................................ 32,953,000 LESS: Allowance for loan and lease losses...................................... 558,000 Loans and leases, net of unearned income and allowance.............................. 32,395,000 Trading Assets......................................... 6,114,000 Premises and fixed assets (including capitalized leases)............................................. 812,000 Other real estate owned................................ 0 Investments in unconsolidated subsidiaries and associated companies................................ 278,000 Customers' liability to this bank on acceptances outstanding......................................... 68,000 Intangible assets: Goodwill............................................ 2,039,000 Other intangible assets............................. 736,000 Other assets........................................... 5,237,000 ----------- Total assets........................................... $86,079,000 =========== LIABILITIES Deposits: In domestic offices................................. $38,768,000 Noninterest-bearing................................. 18,417,000 Interest-bearing.................................... 20,351,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................ 26,246,000 Noninterest-bearing................................. 462,000 Interest-bearing.................................... 25,784,000 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices........................................... 1,224,000 Securities sold under agreements to repurchase........................................ 126,000 Trading liabilities.................................... 2,927,000 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)........................... 1,245,000 Not applicable Bank's liability on acceptances executed and outstanding......................................... 69,000 Subordinated notes and debentures...................... 1,440,000 Other liabilities...................................... 5,976,000 ----------- Total liabilities...................................... $78,021,000 =========== Minority interest in consolidated subsidiaries........................................ 139,000 EQUITY CAPITAL Perpetual preferred stock and related surplus............................................. 0 Common stock........................................... 1,135,000 Surplus (exclude all surplus related to preferred stock).............................................. 2,089,000 Retained earnings...................................... 4,716,000 Accumulated other comprehensive income................. -21,000 Other equity capital components........................ 0 Total equity capital................................... 7,919,000 Total liabilities, minority interest, and equity capital............................................. $86,079,000 ============= I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. __ Thomas A. Renyi | Gerald L. Hassell | Alan R. Griffith | Directors | __| -----END PRIVACY-ENHANCED MESSAGE-----