8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant To Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 12, 2006

Morgan Stanley

(Exact Name of Registrant

as Specified in Charter)

	Delaware
	(State or Other Jurisdiction of Incorporation)
1-11758		36-3145972
(Commission File Number)		(IRS Employer Identification No.)
1585 Broadway, New York, New York		10036
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 761-4000

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

Item 8.01 Other Events.

     Morgan Stanley, a Delaware corporation (the “Company”), and Morgan Stanley Capital Trust VII, a statutory trust formed under the laws of the State of Delaware (the “Trust”), closed on October 12, 2006 the public offering of $1,100,000,000 aggregate principal amount of the Trust’s 6.60% Capital Securities (the “Capital Securities”), representing preferred undivided beneficial interests in the assets of the Trust, pursuant to an Underwriting Agreement dated October 5, 2006, among the Company, the Trust and Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Wachovia Capital Markets, LLC, A.G. Edwards & Sons, Inc., RBC Dain Rauscher Inc., HSBC Securities (USA) Inc. and Wells Fargo Securities, LLC as representatives of the several underwriters named in Schedule II thereto (the “Underwriting Agreement”). The Capital Securities were issued pursuant to an Amended and Restated Trust Agreement dated as of October 12, 2006, among the Company, The Bank of New York as property trustee, The Bank of New York (Delaware) as Delaware trustee and certain other parties named therein (the “Amended and Restated Trust Agreement”). The Capital Securities are guaranteed by the Company pursuant to a Guarantee Agreement (the “Guarantee”) between the Company and The Bank of New York, as Guarantee Trustee.

     The proceeds from the sale of the Capital Securities, together with the proceeds from the sale by the Trust of its common securities, were invested by the Trust in 6.60% Junior Subordinated Debentures (the “Junior Subordinated Debentures”) redeemable on January 15, 2046 (the “Scheduled Redemption Date”) or thereafter if sufficient proceeds are raised from the sale by the Company of certain replacement securities, or on October 15, 2066 if the Company is unable to raise such proceeds prior to such date. The Junior Subordinated Debentures were issued pursuant to a Junior Subordinated Indenture (the “Indenture”) dated October 12, 2006, between the Company and The Bank of New York. The Capital Securities, the Junior Subordinated Debentures and the Guarantee have been registered under the Securities Act of 1933, as amended, on a registration statement on Form S 3 (File Nos. 333-131266 and 333-131266-04) (the “Registration Statement”).

     On October 12, 2006, in connection with the closing of the Capital Securities offering, the Company entered into a Replacement Capital Covenant (the “RCC”), whereby the Company agreed for the benefit of certain of its debtholders named therein that it would not cause the redemption or repurchase of the Capital Securities or the Junior Subordinated Debentures on or after the Scheduled Redemption Date unless such repurchases or redemptions are made from the proceeds of the issuance of certain qualified securities and pursuant to the other terms and conditions set forth in the RCC.

     A copy of the Amended and Restated Trust Agreement, the Junior Subordinated Debentures, the Indenture and the RCC are attached as exhibits hereto and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits.

     The following exhibits are filed as part of this Report on Form 8-K:

4.1	Junior Subordinated Indenture of the Company relating to the Junior Subordinated Debentures dated as of October 12, 2006, to become Exhibit 4-bbb to the Registration Statement.
4.2	Junior Subordinated Debenture, to become Exhibit 4-ccc to the Registration Statement.
4.3	Amended and Restated Trust Agreement of the Trust dated as of October 12, 2006 used in connection with the issuance of the Capital Securities (including form of Capital Securities Certificate as Exhibit D thereto), to become Exhibit 4-ddd to the Registration Statement.
5.1/8.1	Legality and Tax Opinion by Davis Polk & Wardwell relating to the Capital Securities, dated October 12, 2006, to become Exhibit 5-f and Exhibit 8-a to the Registration Statement.

99.1 Replacement Capital Covenant by the Registrant dated October 12, 2006.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		MORGAN STANLEY
Date:	October 12, 2006	By:	/s/ Martin M. Cohen
			Name:	Martin M. Cohen
			Title:	Assistant Secretary

EX-4.1

Exhibit 4.1

MORGAN STANLEY

AND

THE BANK OF NEW YORK, Trustee

Junior Subordinated Indenture

Dated as of October 12, 2006

TABLE OF CONTENTS

			ARTICLE 1 DEFINITIONS	Page
Section	1.01.		Certain Terms Defined	1
			ARTICLE 2 SECURITIES
Section	2.01	.	Forms Generally	9
Section	2.02	.	Form of Trustee’s Certificate of Authentication	10
Section	2.03	.	Amount Unlimited; Issuable in Series	10
Section	2.04	.	Authentication and Delivery of Securities	13
Section	2.05	.	Execution of Securities	16
Section	2.06	.	Certificate of Authentication	17
Section	2.07	.	Denomination and Date of Securities; Payments of Interest	17
Section	2.08	.	Registration, Transfer and Exchange	18
Section	2.09	.	Mutilated, Defaced, Destroyed, Lost and Stolen Securities	21
Section	2.10	.	Cancellation of Securities; Destruction Thereof	23
Section	2.11	.	Temporary Securities	23
			ARTICLE 3 COVENANTS OF THE ISSUER
Section	3.01	.	Payment of Principal and Interest	24
Section	3.02	.	Offices for Payments, etc	25
Section	3.03	.	Appointment to Fill a Vacancy in Office of Trustee	26
Section	3.04	.	Paying Agents	26
Section	3.05	.	Written Statement to Trustee	27
Section	3.06	.	Luxembourg Publications	27
			ARTICLE 4 SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE
Section	4.01	.	Issuer to Furnish Trustee Information as to Names and
			Addresses of Securityholders	28
Section	4.02	.	Preservation and Disclosure of Securityholders Lists	28
Section	4.03	.	Reports by the Issuer	28
Section	4.04	.	Reports by the Trustee	28

			ARTICLE 5 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS IN DEFAULT OR EVENT OF DEFAULT
Section	5.01	.	Event of Default Defined; Acceleration of Maturity; Waiver of
			Event of Default	28
Section	5.02	.	Collection of Indebtedness by Trustee; Trustee May Prove
			Debt	31
Section	5.03	.	Applications of Proceeds	34
Section	5.04	.	Suits for Enforcement	35
Section	5.05	.	Restoration of Rights on Abandonment of Proceedings	35
Section	5.06	.	Limitations on Suits by Securityholder; Default Defined	35
Section	5.07	.	Unconditional Right of Securityholders to Institute Certain Suits	37
Section	5.08	.	Powers and Remedies Cumulative; Delay or Omission Not
			Waiver of Default; Restoration of Rights and Remedies	37
Section	5.09	.	Control by Holders of Securities	38
Section	5.10	.	Waiver of Past Defaults	39
Section	5.11	.	Trustee to Give Notice of Default, But May Withhold in
			Certain Circumstances	39
Section	5.12	.	Right of Court to Require Filing of Undertaking to Pay Costs	40
			ARTICLE 6 CONCERNING THE TRUSTEE
Section	6.01	.	Duties and Responsibilities of the Trustee; During Default;
			Prior to Default	40
Section	6.02	.	Certain Rights of the Trustee	42
Section	6.03	.	Trustee Not Responsible for Recitals, Disposition of Securities
			or Application of Proceeds Thereof	43
Section	6.04	.	Trustee and Agents May Hold Securities or Coupons;
			Collections, etc	43
Section	6.05	.	Moneys Held by Trustee	43
Section	6.06	.	Compensation and Indemnification of Trustee and Its Prior Claim	43
Section	6.07	.	Right of Trustee to Rely on Officer’s Certificate, etc	44
Section	6.08	.	Indentures Not Creating Potential Conflicting Interests for the
			Trustee	44
Section	6.09	.	Persons Eligible for Appointment as Trustee	44
Section	6.10	.	Resignation and Removal; Appointment of Successor Trustee	45
Section	6.11	.	Acceptance of Appointment by Successor Trustee	47
Section	6.12	.	Merger, Conversion, Consolidation or Succession to Business
			of Trustee	48
Section	6.13	.	Preferential Collection of Claims Against the Issuer	49
Section	6.14	.	Appointment of Authenticating Agent	49

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			ARTICLE 7 CONCERNING THE SECURITYHOLDERS
Section	7.01	.	Evidence of Action Taken by Securityholders	50
Section	7.02	.	Proof of Execution of Instruments and of Holding of Securities	50
Section	7.03	.	Holders to be Treated as Owners	52
Section	7.04	.	Securities Owned by Issuer Deemed Not Outstanding	52
Section	7.05	.	Right of Revocation of Action Taken	53
			ARTICLE 8 SUPPLEMENTAL INDENTURES
Section	8.01	.	Supplemental Indentures Without Consent of Securityholders	53
Section	8.02	.	Supplemental Indentures With Consent of Securityholders	55
Section	8.03	.	Effect of Supplemental Indenture	57
Section	8.04	.	Documents to be Given to Trustee	57
Section	8.05	.	Notation on Securities in Respect of Supplemental Indentures	57
Section	8.06	.	Subordination Unimpaired	57
			ARTICLE 9 CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section	9.01	.	Covenant Not to Merge, Consolidate, Sell or Convey Property
			Except Under Certain Conditions	58
Section	9.02	.	Successor Corporation Substituted	58
Section	9.03	.	Opinion of Counsel Delivered to Trustee	59
			ARTICLE 10 SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
Section	10.01	.	Satisfaction and Discharge of Indenture	59
Section	10.02	.	Application by Trustee of Funds Deposited for Payment of Securities	64
Section	10.03	.	Repayment of Moneys Held by Paying Agent	65
Section	10.04	.	Return of Moneys Held by Trustee and Paying Agent
			Unclaimed for Two Years	65
Section	10.05	.	Indemnity for U.S. Government Obligations	65
			ARTICLE 11 MISCELLANEOUS PROVISIONS
Section	11.01	.	Incorporators, Stockholders, Officers and Directors of Issuer
			Exempt from Individual Liability	66
Section	11.02	.	Provisions of Indenture for the Sole Benefit of Parties and
			Holders of Securities and Coupons	66
Section	11.03	.	Successors and Assigns of Issuer Bound by Indenture	66

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Section	11.04	.	Notices and Demands on Issuer, Trustee and Holders of
			Securities and Coupons	66
Section	11.05	.	Officer’s Certificates and Opinions of Counsel; Statements to
			be Contained Therein	67
Section	11.06	.	Payments Due on Saturdays, Sundays and Holidays	68
Section	11.07	.	Conflict of Any Provision of Indenture with Trust Indenture
			Act of 1939	68
Section	11.08	.	New York Law to Govern	68
Section	11.09	.	Counterparts	69
Section	11.10	.	Effect of Headings	69
Section	11.11	.	Securities in a Foreign Currency	69
Section	11.12	.	Judgment Currency	69
			ARTICLE 12 REDEMPTION OF SECURITIES AND SINKING FUNDS
Section	12.01	.	Applicability of Article	70
Section	12.02	.	Notice of Redemption; Partial Redemptions	70
Section	12.03	.	Payment of Securities Called for Redemption	72
Section	12.04	.	Exclusion of Certain Securities from Eligibility for Selection
			for Redemption	73
Section	12.05	.	Mandatory and Optional Sinking Funds	73
			ARTICLE 13 SUBORDINATION
Section	13.01	.	Securities and Coupons Subordinated to Senior Indebtedness	76
Section	13.02	.	Disputes with Holders of Certain Senior Indebtedness	78
Section	13.03	.	Subrogation	78
Section	13.04	.	Obligation of Issuer Unconditional	79
Section	13.05	.	Payments on Securities and Coupons Permitted	79
Section	13.06	.	Effectuation of Subordination by Trustee	80
Section	13.07	.	Knowledge of Trustee	80
Section	13.08	.	Trustee May Hold Senior Indebtedness	80
Section	13.09	.	Rights of Holders of Senior Indebtedness Not Impaired	80
Section	13.10	.	Article Applicable to Paying Agents	80
Section	13.11	.	Trustee; Compensation Not Prejudiced	81

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     THIS INDENTURE, dated as of October 12, 2006 between MORGAN STANLEY, a Delaware corporation (the “Issuer”), and THE BANK OF NEW YORK, as trustee (the “Trustee”),

W I T N E S S E T H :

     WHEREAS, the Issuer has duly authorized the issue from time to time of its junior subordinated unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series (the “Securities”) up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture;

     WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to provide, among other things, for the authentication, delivery and administration of the Securities; and

     WHEREAS, all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done;

      NOW, THEREFORE:

     In consideration of the premises and the purchases of the Securities by the holders thereof, the Issuer and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective holders from time to time of the Securities and of the coupons, if any, appertaining thereto as follows:

ARTICLE 1
DEFINITIONS

     Section 1.01 . Certain Terms Defined. The following terms (except as otherwise expressly provided or unless the context otherwise clearly requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section. All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939 or the definitions of which in the Securities Act of 1933 are referred to in the Trust Indenture Act of 1939, including terms defined therein by reference to the Securities Act of 1933 (except as herein otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this Indenture. All accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with generally accepted accounting principles, and the term “generally accepted accounting principles” means such accounting principles as are generally accepted at the time of any computation.

The words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular.

     “1998 Junior Subordinated Indenture” means the junior subordinated indenture, dated as of March 1, 1998, between Morgan Stanley (formerly known as Morgan Stanley, Dean Witter, Discover & Co.) and The Bank of New York, as trustee.

     “2004 Junior Subordinated Indenture” means the junior subordinated indenture, dated as of October 1, 2004, between Morgan Stanley and The Bank of New York, as trustee.

     “Additional Interest ” means compounded interest arising on any deferred interest payments, as defined in any series of Securities.

     “Additional Sums” has the meaning specified in Section 2.03(r) of this Indenture.

      “Authenticating Agent” shall have the meaning set forth in Section 6.14.

     “Authorized Newspaper” means a newspaper (which, in the case of The City of New York, will, if practicable, be The Wall Street Journal (Eastern Edition), in the case of the United Kingdom, will, if practicable, be the Financial Times (London Edition) and, in the case of Luxembourg, will, if practicable, be the Luxemburger Wort) published in an official language of the country of publication customarily published at least once a day for at least five days in each calendar week and of general circulation in The City of New York, the United Kingdom or in Luxembourg, as applicable. If it shall be impractical in the opinion of the Trustee to make any publication of any notice required hereby in an Authorized Newspaper, any publication or other notice in lieu thereof which is made or given with the approval of the Trustee shall constitute a sufficient publication of such notice.

     “Board of Directors” means either the Board of Directors of the Issuer or any committee of such Board duly authorized to act on its behalf.

     “Board Resolution” means a copy of one or more resolutions, certified by the secretary or an assistant secretary of the Issuer to have been duly adopted or consented to by the Board of Directors and to be in full force and effect, and delivered to the Trustee.

     “Business Day” means, with respect to any Security, unless otherwise specified pursuant to Section 2.03, a day that in the city (or in any of the cities, if more than one) in which amounts are payable, as specified in the form of such

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Security, is not a day on which banking institutions are authorized or required by law or regulation to close.

     “Capital Securities” means, with respect to a Morgan Stanley Capital Trust, the undivided beneficial interests in the assets of such trust that rank pari passu with the Common Securities issued by such trust; provided , that upon the occurrence of an Event of Default with respect to the Securities held by such trust, the rights of holders of such Common Securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights of holders of such Capital Securities.

     “Capital Securities Guarantee” means, with respect to a Morgan Stanley Capital Trust, any Guarantee that the Guarantor enters into with The Bank of New York or any other Person that operates directly or indirectly for the benefit of holders of the Capital Securities of such trust.

     “Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time after the execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties on such date.

     “Common Securities” means, with respect to a Morgan Stanley Capital Trust, the undivided beneficial interests in the assets of such trust that rank pari passu with the Capital Securities issued by such trust; provided, that upon the occurrence of an Event of Default with respect to the Securities held by such trust, the rights of holders of such Common Securities to payment in respect to distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights of holders of such Capital Securities.

     “Common Securities Guarantee” means, with respect to a Morgan Stanley Capital Trust, any Guarantee that the Guarantor enters into with any Person that operates directly or indirectly for the benefit of holders of the Common Securities of such trust.

     “Corporate Trust Office” means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date as of which this Indenture is dated, located in New York, New York.

      “Coupon” means any interest coupon appertaining to a Security.

     “covenant defeasance” shall have the meaning set forth in Section 10.01(c) .

      “Default” shall have the meaning set forth in Section 5.06.

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     “Depositary” means, with respect to the Securities of any series issuable or issued in the form of one or more Registered Global Securities, the Person designated as Depositary by the Issuer pursuant to Section 2.03 until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, “Depositary” as used with respect to the Securities of any such series shall mean the Depositary with respect to the Registered Global Securities of that series.

     “Direct Action” means a legal proceeding instituted by a holder of the Capital Securities of a Morgan Stanley Capital Trust directly against the Issuer for the enforcement of payment to such holder of any amounts payable in respect of the Securities held by such trust having a principal amount equal to the aggregate liquidation amount of the Capital Securities held by such holder, if an Event of Default or a Default attributable to the failure of the Issuer to pay any amounts payable in respect of such Securities on the date such amounts are otherwise payable (in accordance with the terms hereof and thereof) has occurred and is continuing.

     “Dollar” means the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.

     “Event of Default” means any event or condition specified as such in Section 5.01.

     “Existing Morgan Stanley Trusts” means, collectively, Morgan Stanley Capital Trust II, Morgan Stanley Capital Trust III, Morgan Stanley Capital Trust IV, Morgan Stanley Capital Trust V and Morgan Stanley Capital Trust VI.

     “Foreign Currency” means a currency issued by the government of a country other than the United States (or any currency unit comprised of any such currencies).

     “Guarantor” means the Issuer in its capacity as guarantor under any Trust Securities Guarantee.

     “Holder”, “Holder of Securities”, “Securityholder” or other similar terms mean (a) in the case of any Registered Security, the Person in whose name such Security is registered in the security register kept by the Issuer for that purpose in accordance with the terms hereof, and (b) in the case of any Unregistered Security, the bearer of such Security, or any Coupon appertaining thereto, as the case may be.

     “Indenture” means this instrument as originally executed and delivered or, if amended or supplemented as herein provided, as so amended or

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supplemented or both, and shall include the forms and terms of particular series of Securities established as contemplated hereunder.

     “Interest” means, when used with respect to non-interest bearing Securities, interest payable after maturity.

     “Issuer” means (except as otherwise provided in Article 6) Morgan Stanley, a Delaware corporation, and, subject to Article 9, its successors and assigns.

     “Issuer Order” means a written statement, request or order of the Issuer signed in its name by any one of the following: the Chairman of the Board, the President, the Chief Financial Officer, the Chief Strategic and Administrative Officer, the Chief Legal Officer, the Treasurer, any Assistant Treasurer or any other person authorized by the Board of Directors to execute any such written statement, request or order.

       “Judgment Currency” shall have the meaning set forth in Section 11.12.

     “Morgan Stanley Capital Trust” means a Morgan Stanley Capital Trust, a Delaware statutory business trust, or any permitted successor thereto, or any substantially similar Delaware statutory business trust sponsored by the Issuer.

     “Officer’s Certificate” means a certificate (i) signed by any one of the following: the Chairman of the Board, the President, the Chief Financial Officer, the Chief Strategic and Administrative Officer, the Chief Legal Officer, the Treasurer, any Assistant Treasurer or any other person authorized by the Board of Directors to execute any such certificate and (ii) delivered to the Trustee. Each such certificate shall comply with Section 314 of the Trust Indenture Act of 1939 and include the statements provided for in Section 11.05.

     “Opinion of Counsel” means an opinion in writing signed by the Chief Legal Officer of the Issuer, or by such other legal counsel who may be an employee of or counsel to the Issuer and who shall be satisfactory to the Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture Act of 1939 and include the statements provided for in Section 11.05.

     “original issue date” of any Security (or portion thereof) means the earlier of (a) the date of such Security or (b) the date of any Security (or portion thereof) for which such Security was issued (directly or indirectly) on registration of transfer, exchange or substitution.

     “Original Issue Discount Security” means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 5.01.

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     “Outstanding” when used with reference to Securities, shall, subject to the provisions of Section 7.04, mean, as of any particular time, all Securities authenticated and delivered by the Trustee under this Indenture, except

     (a) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

     (b) Securities, or portions thereof, for the payment or redemption of which moneys or U.S. Government Obligations (as provided for in Section 10.01) in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Issuer) or shall have been set aside, segregated and held in trust by the Issuer for the Holders of such Securities (if the Issuer shall act as its own paying agent), provided that if such Securities, or portions thereof, are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as herein provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and

     (c) Securities which shall have been paid or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.09 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such Security is held by a person in whose hands such Security is a legal, valid and binding obligation of the Issuer).

     In determining whether the Holders of the requisite principal amount of Outstanding Securities of any or all series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 5.01.

     “Periodic Offering” means an offering of Securities of a series from time to time, the specific terms of which Securities, including, without limitation, the rate or rates of interest, if any, thereon, the stated maturity or maturities thereof and the redemption provisions, if any, with respect thereto, are to be determined by the Issuer or its agents upon the issuance of such Securities.

     “Person” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

     “principal” whenever used with reference to the Securities or any Security or any portion thereof, shall be deemed to include “and premium, if any”.

      “record date” shall have the meaning set forth in Section 2.07.

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     “Redemption Notice Period” shall have the meaning set forth in Section 12.02.

     “Registered Global Security”, means a Security evidencing all or a part of a series of Registered Securities, issued to the Depositary for such series in accordance with Section 2.04, and bearing the legend prescribed in Section 2.04.

     “Registered Security” means any Security registered on the Security register of the Issuer.

      “Required Currency” shall have the meaning set forth in Section 11.12.

     “Responsible Officer” when used with respect to the Trustee means the chairman of the Board of Directors, any vice chairman of the board of directors, the chairman of the trust committee, the chairman of the executive committee, any vice chairman of the executive committee, the president, any vice president, (whether or not designated by numbers or words added before or after the title “vice president”) the cashier, the secretary, the treasurer, any trust officer, any assistant trust officer, any assistant vice president, any assistant cashier, any assistant secretary, any assistant treasurer, or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject.

     “Security” or “Securities” has the meaning stated in the first recital of this Indenture, or, as the case may be, Securities that have been authenticated and delivered under this Indenture.

     “Senior Indentures” means (i) an Indenture dated June 15, 1988, between Morgan Stanley (formerly known as Morgan Stanley Group Inc.) and JPMorgan Chase Bank (formerly known as Chemical Bank), Trustee, as the same may be amended from time to time, (ii) an Indenture between Morgan Stanley (formerly known as Dean Witter, Discover & Co.) and The First National Bank of Chicago, as trustee, dated as of February 24, 1993, as the same may be amended from time to time, (iii) an Amended and Restated Senior Indenture between Morgan Stanley (formerly known as Morgan Stanley Dean Witter & Co.) and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as trustee, dated as of May 1, 1999, as supplemented by a First Supplemental Senior Indenture dated as of September 15, 2000 and a Second Supplemental Senior Indenture dated as of October 8, 2002 and by a Third Supplemental Senior Indenture dated as of August 29, 2003, as the same may be amended from time to time, (iv) a Senior Indenture dated as of May 15, 1999, between Morgan Stanley (formerly known as Morgan Stanley Dean Witter & Co.) and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), Trustee, as the same may be amended from time to time,

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and (v) a Senior Indenture between Morgan Stanley and JPMorgan Chase Bank, as trustee, dated as of November 1, 2004, as the same may be amended from time to time.

     “Senior Indebtedness” means (i) obligations (other than non-recourse obligations, the Securities or any other obligations specifically designated as being subordinate in right of payment to Senior Indebtedness) of, or guaranteed or assumed by, the Issuer for borrowed money or evidenced by bonds, debentures, notes or similar instruments, including obligations with respect to securities issued under the Issuer’s Senior Indentures, Senior Subordinated Indentures, 1998 Junior Subordinated Indenture or 2004 Junior Subordinated Indenture, and amendments, renewals, extensions, modifications and refundings of any of such indebtedness or of such obligations, (ii) capitalized lease obligations of the Issuer, (iii) obligations of the Issuer issued or assumed as the deferred purchase price of property, (iv) obligations, contingent or otherwise, of the Issuer in respect of any letters of credit, bankers acceptance, security purchase facilities or similar credit transactions, (v) obligations of the Issuer in respect of interest rate, foreign exchange rate and commodity forward contracts, options and swaps and similar arrangements, (vi) guarantees by the Issuer of the capital securities issued by the Existing Morgan Stanley Trusts, and (vii) all obligations of the type referred to in clauses (i) through (vi) of other Persons which the Issuer has guaranteed or is responsible or liable for as obligor or otherwise; subject to, if provided in the supplemental indenture under which a series of Securities is issued or in the form of Security for such series, any modifications to this definition of Senior Indebtedness, including additional obligations that the Issuer may determine to include within this definition and obligations that may be excluded from this definition, pursuant to Section 2.3 hereof.

     “Senior Subordinated Indentures” means (i) an Amended and Restated Subordinated Indenture between Morgan Stanley (formerly known as Morgan Stanley Dean Witter & Co.) and J.P. Morgan Trust Company, National Association, as successor to The First National Bank of Chicago, as trustee, dated as of May 1, 1999, as the same may be amended from time to time, and (ii) a Subordinated Indenture, dated as of October 1, 2004, between Morgan Stanley and J.P. Morgan Trust Company, National Association, as trustee, as the same may be amended from time to time.

     “Trust Agreement” means, with respect to a Morgan Stanley Capital Trust, the Amended and Restated Trust Agreement of such trust.

       “Trust Indenture Act of 1939” means the Trust Indenture Act of 1939.

     “Trustee” means the Person identified as “Trustee” in the first paragraph hereof and, subject to the provisions of Article 6, shall also include any successor trustee. “Trustee” shall also mean or include each Person who is then a trustee

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hereunder and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the trustee with respect to the Securities of such series.

     “Trust Securities” means, with respect to a Morgan Stanley Capital Trust, the Common Securities and the Capital Securities issued by such trust.

     “Trust Securities Guarantee” means, with respect to a Morgan Stanley Capital Trust, the Common Securities Guarantee and the Capital Securities Guarantee covering the Common Securities and the Capital Securities, respectively, of such trust.

     “Unregistered Security” means any Security other than a Registered Security.

     “U.S. Government Obligations” shall have the meaning set forth in Section 10.01(a) .

     “Yield to Maturity” means the yield to maturity on a series of securities, calculated at the time of issuance of such series, or, if applicable, at the most recent redetermination of interest on such series, and calculated in accordance with accepted financial practice.

ARTICLE 2
SECURITIES

     Section 2.01. Forms Generally. The Securities of each series and the Coupons, if any, to be attached thereto shall be substantially in such form (not inconsistent with this Indenture) as shall be established by or pursuant to one or more Board Resolutions (as set forth in a Board Resolution or, to the extent established pursuant to rather than set forth in a Board Resolution, an Officer’s Certificate detailing such establishment) or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have imprinted or otherwise reproduced thereon such legend or legends or endorsements, not inconsistent with the provisions of this Indenture, as may be required to comply with any law or with any rules or regulations pursuant thereto, or with any rules of any securities exchange or to conform to general usage, all as may be determined by the officers executing such Securities and Coupons, if any, as evidenced by their execution of such Securities and Coupons.

     The definitive Securities and Coupons, if any, shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities and

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Coupons, if any, as evidenced by their execution of such Securities and Coupons, if any.

     Section 2.02 . Form of Trustee’s Certificate of Authentication. The Trustee’s certificate of authentication on all Securities shall be in substantially the following form:

      “This is one of the Securities referred to in the within-mentioned Junior Subordinated Indenture.

		as Trustee
	By:
Dated:____________________________
		Authorized Signatory

     If at any time there shall be an Authenticating Agent appointed with respect to any series of Securities, then the Trustee’s Certificate of Authentication to be borne by the Securities of each such series shall be substantially as follows:

     “This is one of the Securities referred to in the within-mentioned Junior Subordinated Indenture.

		as Authenticating Agent
	By:
Dated:____________________________
		Authorized Signatory

     Section 2.03. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

     The Securities may be issued in one or more series and the Securities of each such series shall rank equally and pari passu with the Securities of each other series, but all Securities issued hereunder shall be subordinate and junior in right of payment, to the extent and in the manner set forth in Article 13, to all Senior Indebtedness of the Issuer. There shall be established in or pursuant to one or more Board Resolutions (and, to the extent established pursuant to rather than set forth in a Board Resolution, in an Officer’s Certificate detailing such establishment) or established in one or more indentures supplemental hereto, prior to the initial issuance of Securities of any series,

     (a) the designation of the Securities of the series, which shall distinguish the Securities of the series from the Securities of all other series;

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     (b) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.08, 2.09, 2.11, 8.05 or 12.03);

     (c) if other than Dollars, the coin or currency in which the Securities of that series are denominated (including, but not limited to, any Foreign Currency);

     (d) the date or dates on which the principal of the Securities of the series is payable and any provisions for the advancement of any such date;

     (e) the rate or rates at which the Securities of the series shall bear interest, if any, the rate or rates and extent to which Additional Interest, if any, shall be payable in respect of any Securities of such series, the date or dates from which such interest shall accrue, on which such interest shall be payable and (in the case of Registered Securities) on which a record shall be taken for the determination of Holders to whom interest is payable and/or the method by which such rate or rates or date or dates shall be determined;

     (f) the place or places where the principal of and any interest on Securities of the series shall be payable (if other than as provided in Section 3.02), the place or places where the Securities of the series may be presented for registration of transfer or exchange and the place or places where notices and demands to or upon the Issuer in respect of the Securities of the series may be made;

     (g) any provisions relating to the deferral of interest payments on the Securities of the series at the option of the Issuer or otherwise, including the duration of any such deferral or extension period and the maximum period during which interest payments may be deferred or extended;

     (h) the right, if any, of the Issuer to redeem Securities of the series, in whole or in part, at its option and the period or periods within which, the price or prices at which and any terms and conditions, including the Redemption Notice Period, upon which Securities of the series may be so redeemed, pursuant to any sinking fund or otherwise;

     (i) the obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series pursuant to any mandatory redemption, sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which, the period or periods within which and any terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;

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     (j) any securities exchange or quotation system on which the Securities of the series may be listed or quoted, as applicable;

     (k) if other than denominations of $25 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable;

     (l) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof;

     (m) if other than the coin or currency in which the Securities of that series are denominated, the coin or currency in which payment of the principal of or interest on the Securities of such series shall be payable;

     (n) if the Securities of a series may be converted into or exchanged for stock or other securities of the Issuer or other entities, the terms upon which such series may be converted or exchanged, any specific terms relating to the adjustment thereof and the period during which such Securities may be so converted or exchanged;

     (o) if the principal of or interest on the Securities of such series are to be payable, at the election of the Issuer or a Holder thereof, in a coin or currency other than that in which the Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election may be made;

     (p) if the amount of payments of principal of and interest on the Securities of the series may be determined with reference to an index based on a coin or currency other than that in which the Securities of the series are denominated, the manner in which such amounts shall be determined;

     (q) whether the Securities of the series will be issuable as Registered Securities (and if so, whether such Securities will be issuable as Registered Global Securities) or Unregistered Securities (with or without Coupons), or any combination of the foregoing, any restrictions applicable to the offer, sale or delivery of Unregistered Securities or the payment of interest thereon and, if other than as provided in Section 2.08. the terms upon which Unregistered Securities of any series may be exchanged for Registered Securities of such series and vice versa;

     (r) whether and under what circumstances the Issuer will pay any additional amounts (“Additional Sums”) on the Securities of the series held by a person who is not a U.S. person or held in a Morgan Stanley Capital Trust in respect of any tax, assessment or governmental charge withheld or deducted and, if so, whether the Issuer will have the option to redeem such Securities rather than pay such Additional Sums;

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     (s) if the Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Security of such series) only upon receipt of certain certificates or other documents or satisfaction of other conditions, the form and terms of such certificates, documents or conditions;

     (t) any trustees, depositaries, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the Securities of such series;

     (u) any additions, modifications or deletions in the Defaults, Events of Default or covenants of the Issuer set forth herein with respect to the Securities of such series;

     (v) any modifications, including additions to or exclusions from, the definition of Senior Indebtedness; and

      (w) any other terms of the series.

     All Securities of any one series and Coupons, if any, appertaining thereto, shall be substantially identical, except in the case of Registered Securities as to denomination and except as may otherwise be provided by or pursuant to the Board Resolution or Officer’s Certificate referred to above or as set forth in any such indenture supplemental hereto. All Securities of any one series need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to such Board Resolution, such Officer’s Certificate or in any such indenture supplemental hereto.

     Section 2.04 . Authentication and Delivery of Securities. The Issuer may deliver Securities of any series having attached thereto appropriate Coupons, if any, executed by the Issuer to the Trustee for authentication together with the applicable documents referred to below in this Section, the Trustee shall thereupon authenticate and deliver such Securities to or upon the order of the Issuer (contained in the Issuer Order referred to below in this Section) or pursuant to such procedures acceptable to the Trustee and to such recipients as may be specified from time to time by an Issuer Order. The maturity date, original issue date, interest rate and any other terms of the Securities of such series and Coupons, if any, appertaining thereto (including Redemption Notice Periods) shall be determined by or pursuant to such Issuer Order and procedures. If provided for in such procedures, such Issuer Order may authorize authentication and delivery pursuant to oral instructions from the Issuer or its duly authorized agent, which instructions shall be promptly confirmed in writing. In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive (in the case of subparagraphs (b), (c) and (d) below only at or before the time of

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the first request of the Issuer to the Trustee to authenticate Securities of such series) and (subject to Section 6.01) shall be fully protected in relying upon, unless and until such documents have been superceded or revoked:

     (a) an Issuer Order requesting such authentication and setting forth delivery instructions if the Securities and Coupons, if any, are not to be delivered to the Issuer, provided that, with respect to Securities of a series subject to a Periodic Offering, (i) such Issuer Order may be delivered by the Issuer to the Trustee prior to the delivery to the Trustee of such Securities for authentication and delivery, (ii) the Trustee shall authenticate and deliver Securities of such series for original issue from time to time, in an aggregate principal amount not exceeding the aggregate principal amount established for such series, pursuant to an Issuer Order or pursuant to procedures acceptable to the Trustee as may be specified from time to time by an Issuer Order, (iii) the maturity date or dates, original issue date or dates, interest rate or rates and any other terms of Securities of such series (including Redemption Notice Periods) shall be determined by an Issuer Order or pursuant to such procedures and (iv) if provided for in such procedures, such Issuer Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Issuer or its duly authorized agent or agents, which oral instructions shall be promptly confirmed in writing;

     (b) any Board Resolution, Officer’s Certificate and/or executed supplemental indenture referred to in Sections 2.01 and 2.03 by or pursuant to which the forms and terms of the Securities and Coupons, if any, were established;

     (c) an Officer’s Certificate setting forth the form or forms and terms of the Securities and Coupons, if any, stating that the form or forms and terms of the Securities and Coupons, if any, have been established pursuant to Sections 2.01 and 2.03 and comply with this Indenture, and covering such other matters as the Trustee may reasonably request; and

     (d) at the option of the Issuer, either an Opinion of Counsel, or a letter addressed to the Trustee permitting it to rely on an Opinion of Counsel, substantially to the effect that:

     (i) the forms of the Securities and Coupons, if any, have been duly authorized and established in conformity with the provisions of this Indenture;

     (ii) in the case of an underwritten offering, the terms of the Securities have been duly authorized and established in conformity with the provisions of this Indenture, and, in the case of an offering that is not underwritten, certain terms of the Securities have been established pursuant to a Board Resolution, an Officer’s Certificate or a supplemental

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indenture in accordance with this Indenture, and when such other terms as are to be established pursuant to procedures set forth in an Issuer Order shall have been established, all such terms will have been duly authorized by the Issuer and will have been established in conformity with the provisions of this Indenture;

     (iii) when the Securities and Coupons, if any, have been executed by the Issuer and authenticated by the Trustee in accordance with the provisions of this Indenture and delivered to and duly paid for by the purchasers thereof, they will have been duly issued under this Indenture and will be valid and legally binding obligations of the Issuer, enforceable in accordance with their respective terms, and will be entitled to the benefits of this Indenture; and

     (iv) the execution and delivery by the Issuer of, and the performance by the Issuer of its obligations under, the Securities and Coupons, if any, will not contravene any provision of applicable law or the certificate of incorporation or by-laws of the Issuer or any agreement or other instrument binding upon the Issuer or any of its subsidiaries that is material to the Issuer and its subsidiaries, considered as one enterprise, or, to the best of such counsel’s knowledge, any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Issuer or any subsidiary, and no consent, approval or authorization of any governmental body or agency is required for the performance by the Issuer of its obligations under the Securities and Coupons, if any, except such as are specified and have been obtained and 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 Securities and Coupons, if any.

     In rendering such opinions, such counsel may qualify any opinions as to enforceability by stating that such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting the rights and remedies of creditors and is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). Such counsel may rely, as to all matters governed by the laws of jurisdictions other than the State of New York and the federal law of the United States, upon opinions of other counsel (copies of which shall be delivered to the Trustee), who shall be counsel reasonably satisfactory to the Trustee, in which case the opinion shall state that such counsel believes he and the Trustee are entitled so to rely. Such counsel may also state that, insofar as such opinion involves factual matters, he has relied, to the extent he deems proper, upon certificates of officers of the Issuer and its subsidiaries and certificates of public officials.

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     The Trustee shall have the right to decline to authenticate and deliver any Securities under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors or board of trustees, executive committee, or a trust committee of directors or trustees or Responsible Officers shall determine that such action would expose the Trustee to personal liability to existing Holders or would affect the Trustee’s own rights, duties or immunities under the Securities, this Indenture or otherwise.

     If the Issuer shall establish pursuant to Section 2.03 that the Securities of a series are to be issued in the form of one or more Registered Global Securities, then the Issuer shall execute and the Trustee shall, in accordance with this Section and the Issuer Order with respect to such series, authenticate and deliver one or more Registered Global Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of all of the Securities of such series issued and not yet cancelled, (ii) shall be registered in the name of the Depositary for such Registered Global Security or Securities or the nominee of such Depositary, (iii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions and (iv) shall bear a legend substantially to the following effect: “Unless and until it is exchanged in whole or in part for Securities in definitive registered form, this Security may not be transferred except as a whole by the Depositary to the nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.”

     Each Depositary designated pursuant to Section 2.03 must, at the time of its designation and at all times while it serves as Depositary, be a clearing agency registered under the Securities Exchange Act of 1934 and any other applicable statute or regulation.

     Section 2.05 . Execution of Securities.The Securities and, if applicable, each Coupon appertaining thereto shall be signed on behalf of the Issuer by one of the following: the Chairman of the Board, the President, the Chief Financial Officer, the Chief Strategic and Administrative Officer, the Chief Legal Officer, the Treasurer, any Assistant Treasurer or any other person authorized by the Board of Directors to execute Securities or, if applicable, Coupons, which Securities or Coupons may, but need not, be attested. Such signatures may be the manual or facsimile signatures of the present or any future such officers. Minor errors or defects in any such reproduction of any such signature shall not affect the validity or enforceability of any Security that has been duly authenticated and delivered by the Trustee.

     In case any officer of the Issuer who shall have signed any of the Securities or Coupons, if any, shall cease to be such officer before the Security or

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Coupon so signed (or the Security to which the Coupon so signed appertains) shall be authenticated and delivered by the Trustee or disposed of by the Issuer, such Security or Coupon nevertheless may be authenticated and delivered or disposed of as though the person who signed such Security or Coupon had not ceased to be such officer of the Issuer; and any Security or Coupon may be signed on behalf of the Issuer by such persons as, at the actual date of the execution of such Security or Coupon, shall be the proper officers of the Issuer, although at the date of the execution and delivery of this Indenture any such person was not such an officer.

     Section 2.06 . Certificate of Authentication.Only such Securities as shall bear thereon a certificate of authentication substantially in the form hereinbefore recited, executed by the Trustee by the manual signature of one of its authorized officers, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. No Coupon shall be entitled to the benefits of this Indenture or shall be valid and obligatory for any purpose until the certificate of authentication on the Security to which such Coupon appertains shall have been duly executed by the Trustee. The execution of such certificate by the Trustee upon any Security executed by the Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.

      Section 2.07 . Denomination and Date of Securities; Payments of Interest. The Securities of each series shall be issuable as Registered Securities or Unregistered Securities in denominations established as contemplated by Section 2.03 or, with respect to the Registered Securities of any series, if not so established, in denominations of $1,000 and any integral multiple thereof. If denominations of Unregistered Securities of any series are not so established, such Securities shall be issuable in denominations of $1,000 and $5,000. The Securities of each series shall be numbered, lettered or otherwise distinguished in such manner or in accordance with such plan as the officers of the Issuer executing the same may determine with the approval of the Trustee, as evidenced by the execution and authentication thereof.

     Each Registered Security shall be dated the date of its authentication. Each Unregistered Security shall be dated as provided in the resolution or resolutions of the Board of Directors of the Issuer referred to in Section 2.03. The Securities of each series shall bear interest, if any, from the date, and such interest shall be payable on the dates, established as contemplated by Section 2.03.

     The Person in whose name any Registered Security of any series is registered at the close of business on any record date applicable to a particular series with respect to any interest payment date for such series shall be entitled to receive the interest, if any, payable on such interest payment date notwithstanding any transfer or exchange of such Registered Security subsequent to the record

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date and prior to such interest payment date, except if and to the extent the Issuer shall default in the payment of the interest due on such interest payment date for such series, in which case such defaulted interest shall be paid to the Persons in whose names Outstanding Registered Securities for such series are registered at the close of business on a subsequent record date (which shall be not less than five Business Days prior to the date of payment of such defaulted interest) established by notice given by mail by or on behalf of the Issuer to the Holders of Registered Securities not less than 15 days preceding such subsequent record date. The term “record date” as used with respect to any interest payment date (except a date for payment of defaulted interest) for the Securities of any series shall mean the date specified as such in the terms of the Registered Securities of such series established as contemplated by Section 2.03, or, if no such date is so established, if such interest payment date is the first day of a calendar month, the fifteenth day of the next preceding calendar month or, if such interest payment date is the fifteenth day of a calendar month, the first day of such calendar month, whether or not such record date is a Business Day.

     Section 2.08 . Registration, Transfer and Exchange. The Issuer will keep at each office or agency to be maintained for the purpose as provided in Section 3.02 for each series of Securities a register or registers in which, subject to such reasonable regulations as it may prescribe, it will provide for the registration of Registered Securities of such series and the registration of transfer of Registered Securities of such series. Such register shall be in written form in the English language or in any other form capable of being converted into such form within a reasonable time. At all reasonable times such register or registers shall be open for inspection by the Trustee.

     Upon due presentation for registration of transfer of any Registered Security of any series at any such office or agency to be maintained for the purpose as provided in Section 3.02, the Issuer shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Registered Security or Registered Securities of the same series, maturity date, interest rate and original issue date in authorized denominations for a like aggregate principal amount.

     Unregistered Securities (except for any temporary global Unregistered Securities) and Coupons (except for Coupons attached to any temporary global Unregistered Securities) shall be transferable by delivery.

     At the option of the Holder thereof, Registered Securities of any series (other than a Registered Global Security, except as set forth below) may be exchanged for a Registered Security or Registered Securities of such series having authorized denominations and an equal aggregate principal amount, upon surrender of such Registered Securities to be exchanged at the agency of the Issuer that shall be maintained for such purpose in accordance with Section 3.02

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and upon payment, if the Issuer shall so require, of the charges hereinafter provided. If the Securities of any series are issued in both registered and unregistered form, except as otherwise specified pursuant to Section 2.03, at the option of the Holder thereof, Unregistered Securities of any series may be exchanged for Registered Securities of such series having authorized denominations and an equal aggregate principal amount, upon surrender of such Unregistered Securities to be exchanged at the agency of the Issuer that shall be maintained for such purpose in accordance with Section 3.02, with, in the case of Unregistered Securities that have Coupons attached, all unmatured Coupons and all matured Coupons in default thereto appertaining, and upon payment, if the Issuer shall so require, of the charges hereinafter provided. At the option of the Holder thereof, if Unregistered Securities of any series, maturity date, interest rate and original issue date are issued in more than one authorized denomination, except as otherwise specified pursuant to Section 2.03, such Unregistered Securities may be exchanged for Unregistered Securities of such series having authorized denominations and an equal aggregate principal amount, upon surrender of such Unregistered Securities to be exchanged at the agency of the Issuer that shall be maintained for such purpose in accordance with Section 3.02 or as specified pursuant to Section 2.03 with, in the case of Unregistered Securities that have Coupons attached, all unmatured Coupons and all matured Coupons in default thereto appertaining, and upon payment, if the Issuer shall so require, of the charges hereinafter provided. Unless otherwise specified pursuant to Section 2.03, Registered Securities of any series may not be exchanged for Unregistered Securities of such series. Whenever any Securities are so surrendered for exchange, the Issuer shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities and Coupons surrendered upon any exchange or transfer provided for in this Indenture shall be promptly cancelled and disposed of by the Trustee and the Trustee will deliver a certificate of disposition thereof to the Issuer.

     All Registered Securities presented for registration of transfer, exchange, redemption or payment shall (if so required by the Issuer or the Trustee) be duly endorsed by, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Issuer and the Trustee duly executed by the Holder or his attorney duly authorized in writing.

     The Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any exchange or registration of transfer of Securities. No service charge shall be made for any such transaction.

     The Issuer shall not be required to exchange or register a transfer of (a) any Securities of any series for a period of 15 days next preceding the first mailing of notice of redemption of Securities of such series to be redeemed or (b)

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any Securities selected, called or being called for redemption, in whole or in part, except, in the case of any Security to be redeemed in part, the portion thereof not so to be redeemed.

     Notwithstanding any other provision of this Section 2.08, unless and until it is exchanged in whole or in part for Securities in definitive registered form, a Registered Global Security representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary for such series to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary.

     If at any time the Depositary for any Registered Securities of a series represented by one or more Registered Global Securities notifies the Issuer that it is unwilling or unable to continue as Depositary for such Registered Securities or if at any time the Depositary for such Registered Securities shall no longer be eligible under Section 2.04, the Issuer shall appoint a successor Depositary eligible under Section 2.04 with respect to such Registered Securities. If a successor Depositary eligible under Section 2.04 for such Registered Securities is not appointed by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such ineligibility, the Issuer’s election pursuant to Section 2.03 that such Registered Securities be represented by one or more Registered Global Securities shall no longer be effective and the Issuer will execute, and the Trustee, upon receipt of an Officer’s Certificate for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive registered form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Registered Global Security or Securities representing such Registered Securities in exchange for such Registered Global Security or Securities.

     The Issuer may at any time and in its sole discretion determine that the Registered Securities of any series issued in the form of one or more Registered Global Securities shall no longer be represented by a Registered Global Security or Securities. In such event the Issuer will execute, and the Trustee, upon receipt of an Officer’s Certificate for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive registered form without coupons, in any authorized denominations, in an aggregate principal amount equal to the principal amount of the Registered Global Security or Securities representing such Registered Securities, in exchange for such Registered Global Security or Securities.

     If specified by the Issuer pursuant to Section 2.03 with respect to Securities represented by a Registered Global Security, the Depositary for such Registered Global Security may surrender such Registered Global Security in

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exchange in whole or in part for Securities of the same series in definitive registered form on such terms as are acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall execute, and the Trustee shall authenticate and deliver, without service charge,

     (a) to the Person specified by such Depositary a new Registered Security or Securities of the same series, of any authorized denominations as requested by such Person, in an aggregate principal amount equal to and in exchange for such Person’s beneficial interest in the Registered Global Security; and

     (b) to such Depositary a new Registered Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Registered Global Security and the aggregate principal amount of Registered Securities authenticated and delivered pursuant to clause (a) above.

     Upon the exchange of a Registered Global Security for Securities in definitive registered form without coupons, in authorized denominations, such Registered Global Security shall be cancelled by the Trustee or an agent of the Issuer or the Trustee. Securities in definitive registered form without coupons issued in exchange for a Registered Global Security pursuant to this Section 2.08 shall be registered in such names and in such authorized denominations as the Depositary for such Registered Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee or an agent of the Issuer or the Trustee. The Trustee or such agent shall deliver such Securities to or as directed by the Persons in whose names such Securities are so registered.

     All Securities issued upon any transfer or exchange of Securities shall be valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange.

     Notwithstanding anything herein or in the terms of any series of Securities to the contrary, none of the Issuer, the Trustee or any agent of the Issuer or the Trustee (any of which, other than the Issuer, shall rely on an Officer’s Certificate and an Opinion of Counsel) shall be required to exchange any Unregistered Security for a Registered Security if such exchange would result in adverse Federal income tax consequences to the Issuer (such as, for example, the inability of the Issuer to deduct from its income, as computed for Federal income tax purposes, the interest payable on the Unregistered Securities) under then applicable United States Federal income tax laws.

      Section 2.09 . Mutilated, Defaced, Destroyed, Lost and Stolen Securities. In case any temporary or definitive Security or any Coupon appertaining to any Security shall become mutilated, defaced or be destroyed, lost or stolen, the Issuer

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in its discretion may execute, and upon the written request of any officer of the Issuer, the Trustee shall authenticate and deliver a new Security of the same series, maturity date, interest rate and original issue date, bearing a number or other distinguishing symbol not contemporaneously outstanding, in exchange and substitution for the mutilated or defaced Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen with Coupons corresponding to the Coupons appertaining to the Securities so mutilated, defaced, destroyed, lost or stolen, or in exchange or substitution for the Security to which such mutilated, defaced, destroyed, lost or stolen Coupon appertained, with Coupons appertaining thereto corresponding to the Coupons so mutilated, defaced, destroyed, lost or stolen. In every case the applicant for a substitute Security or Coupon shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as may be required by them to indemnify and defend and to save each of them harmless and, in every case of destruction, loss or theft, evidence to their satisfaction of the destruction, loss or theft of such Security or Coupon and of the ownership thereof and in the case of mutilation or defacement shall surrender the Security and related Coupons to the Trustee or such agent.

     Upon the issuance of any substitute Security or Coupon, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee or its agent) connected therewith. In case any Security or Coupon which has matured or is about to mature or has been called for redemption in full shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer may instead of issuing a substitute Security, pay or authorize the payment of the same or the relevant Coupon (without surrender thereof except in the case of a mutilated or defaced Security or Coupon), if the applicant for such payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such security or indemnity as any of them may require to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security or Coupon and of the ownership thereof.

     Every substitute Security or Coupon of any series issued pursuant to the provisions of this Section by virtue of the fact that any such Security or Coupon is destroyed, lost or stolen shall constitute an additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Security or Coupon shall be at any time enforceable by anyone and shall be entitled to all the benefits of (but shall be subject to all the limitations of rights set forth in) this Indenture equally and proportionately with any and all other Securities or Coupons of such series duly authenticated and delivered hereunder. All Securities and Coupons shall be held and owned upon the express condition that, to the extent permitted by law, the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, defaced or destroyed, lost or stolen Securities and Coupons and shall

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preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

     Section 2.10 . Cancellation of Securities; Destruction Thereof. All Securities and Coupons surrendered for payment, redemption, registration of transfer or exchange, or for credit against any payment in respect of a sinking or analogous fund, if surrendered to the Issuer or any agent of the Issuer or the Trustee or any agent of the Trustee, shall be delivered to the Trustee or its agent for cancellation or, if surrendered to the Trustee, shall be cancelled by it; and no Securities or Coupons shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee or its agent shall return such cancelled Securities and Coupons held by it to the Issuer. If the Issuer or its agent shall acquire any of the Securities or Coupons, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities or Coupons unless and until the same are delivered to the Trustee or its agent for cancellation.

     Section 2.11 . Temporary Securities. Pending the preparation of definitive Securities for any series, the Issuer may execute and the Trustee shall authenticate and deliver temporary Securities for such series (printed, lithographed, typewritten or otherwise reproduced, in each case in form satisfactory to the Trustee). Temporary Securities of any series shall be issuable as Registered Securities without coupons, or as Unregistered Securities with or without coupons attached thereto, of any authorized denomination, and substantially in the form of the definitive Securities of such series but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Issuer with the concurrence of the Trustee as evidenced by the execution and authentication thereof. Temporary Securities may contain such references to any provisions of this Indenture as may be appropriate. Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities. Without unreasonable delay the Issuer shall execute and shall furnish definitive Securities of such series and thereupon temporary Registered Securities of such series may be surrendered in exchange therefor without charge at each office or agency to be maintained by the Issuer for that purpose pursuant to Section 3.02 and, in the case of Unregistered Securities, at any agency maintained by the Issuer for such purpose as specified pursuant to Section 2.03, and the Trustee shall authenticate and deliver in exchange for such temporary Securities of such series an equal aggregate principal amount of definitive Securities of the same series having authorized denominations and, in the case of Unregistered Securities, having attached thereto any appropriate Coupons. Until so exchanged, the temporary Securities of any series shall be entitled to the same benefits under this Indenture as definitive Securities of such series, unless otherwise established pursuant to Section 2.03. The provisions of

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this Section are subject to any restrictions or limitations on the issue and delivery of temporary Unregistered Securities of any series that may be established pursuant to Section 2.03 (including any provision that Unregistered Securities of such series initially be issued in the form of a single global Unregistered Security to be delivered to a depositary or agency located outside the United States and the procedures pursuant to which definitive or global Unregistered Securities of such series would be issued in exchange for such temporary global Unregistered Security).

ARTICLE 3
COVENANTS OF THE ISSUER

     Section 3.01. Payment of Principal and Interest. The Issuer covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay or cause to be paid the principal of, and interest on, each of the Securities of such series (together with any additional amounts payable pursuant to the terms of such Securities) at the place or places, at the respective times and in the manner provided in such Securities and in the Coupons, if any, appertaining thereto and in this Indenture. The interest on Securities with Coupons attached (together with any additional amounts payable pursuant to the terms of such Securities) shall be payable only upon presentation and surrender of the several Coupons for such interest installments as are evidenced thereby as they severally mature. If any temporary Unregistered Security provides that interest thereon may be paid while such Security is in temporary form, the interest on any such temporary Unregistered Security (together with any additional amounts payable pursuant to the terms of such Security) shall be paid, as to the installments of interest evidenced by Coupons attached thereto, if any, only upon presentation and surrender thereof, and, as to the other installments of interest, if any, only upon presentation of such Securities for notation thereon of the payment of such interest, in each case subject to any restrictions that may be established pursuant to Section 2.03. The interest on Registered Securities (together with any additional amounts payable pursuant to the terms of such Securities) shall be payable only to or upon the written order of the Holders thereof and, at the option of the Issuer, may be paid by wire transfer or by mailing checks for such interest payable to or upon the written order of such Holders at their last addresses as they appear on the registry books of the Issuer; provided, however, that, if the Securities of such series are held by a Morgan Stanley Capital Trust or a trustee of such trust and a holder of a Capital Security of such trust brings a successful Direct Action with respect to any interest payable on such Securities, such interest will be payable directly to such holder. In such event, the Issuer will have the right to set-off such payment to such holder against its obligation to pay interest on such Securities to such Morgan Stanley Capital Trust.

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     Section 3.02 . Offices for Payments, etc. So long as any Registered Securities are authorized for issuance pursuant to this Indenture or are outstanding hereunder, the Issuer will maintain in the Borough of Manhattan, The City of New York, an office or agency where the Registered Securities of each series may be presented for payment, where the Securities of each series may be presented for exchange as is provided in this Indenture and, if applicable, pursuant to Section 2.03 and where the Registered Securities of each series may be presented for registration of transfer as in this Indenture provided.

     The Issuer initially appoints the Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of New York, as its agency for the foregoing purposes. The Issuer may subsequently appoint a different office or agency of the Issuer in the Borough of Manhattan, The City of New York. The Issuer further initially appoints the Trustee at said Corporate Trust Office as Security registrar for each series of Securities. The Issuer will have the right to remove and replace from time to time the Security registrar for any series of Securities; provided that no such removal or replacement will be effective until a successor Security registrar with respect to such series of Securities has been appointed by the Issuer and has accepted such appointment.

     The Issuer will maintain one or more offices or agencies in a city or cities located outside the United States (including any city in which such an agency is required to be maintained under the rules of any stock exchange on which the Securities of such series are listed) where the Unregistered Securities, if any, of each series and Coupons, if any, appertaining thereto may be presented for payment. No payment on any Unregistered Security or Coupon will be made upon presentation of such Unregistered Security or Coupon at an agency of the Issuer within the United States nor will any payment be made by transfer to an account in, or by mail to an address in, the United States unless pursuant to applicable United States laws and regulations then in effect such payment can be made without adverse tax consequences to the Issuer. Notwithstanding the foregoing, payments in Dollars of Unregistered Securities of any series and Coupons appertaining thereto which are payable in Dollars may be made at an agency of the Issuer maintained in the Borough of Manhattan, The City of New York if such payment in Dollars at each agency maintained by the Issuer outside the United States for payment on such Unregistered Securities is illegal or effectively precluded by exchange controls or other similar restrictions.

     The Issuer will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the Issuer in respect of the Securities of any series, the Coupons appertaining thereto or this Indenture may be served.

     The Issuer will give to the Trustee written notice of the location of each such office or agency and of any change of location thereof. In case the Issuer

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shall fail to maintain any agency required by this Section to be located in the Borough of Manhattan, The City of New York, or shall fail to give such notice of the location or of any change in the location of any of the above agencies, presentations and demands may be made and notices may be served at the Corporate Trust Office of the Trustee.

     The Issuer may from time to time designate one or more additional offices or agencies where the Securities of a series and any Coupons appertaining thereto may be presented for payment, where the Securities of that series may be presented for exchange as provided in this Indenture and pursuant to Section 2.03 and where the Registered Securities of that series may be presented for registration of transfer as in this Indenture provided, and the Issuer may from time to time rescind any such designation, as the Issuer may deem desirable or expedient; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain the agencies provided for in this Section. The Issuer will give to the Trustee prompt written notice of any such designation or rescission thereof.

     Section 3.03 . Appointment to Fill a Vacancy in Office of Trustee. The Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so that there shall at all times be a Trustee with respect to each series of Securities hereunder.

     Section 3.04 . Paying Agents. Whenever the Issuer shall appoint a paying agent other than the Trustee with respect to the Securities of any series, it will cause such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section,

     (a) that it will hold all sums received by it as such agent for the payment of the principal of or interest on the Securities of such series (whether such sums have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust for the benefit of the Holders of the Securities of such series, or Coupons appertaining thereto, if any, or of the Trustee,

     (b) that it will give the Trustee notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to make any payment of the principal of or interest on the Securities of such series when the same shall be due and payable, and

     (c) that it will pay any such sums so held in trust by it to the Trustee upon the Trustee’s written request at any time during the continuance of the failure referred to in clause (b) above.

     The Issuer will, on or prior to each due date of the principal of or interest on the Securities of such series, deposit with the paying agent a sum sufficient to

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pay such principal or interest so becoming due, and (unless such paying agent is the Trustee) the Issuer will promptly notify the Trustee of any failure to take such action.

     If the Issuer shall act as its own paying agent with respect to the Securities of any series, it will, on or before each due date of the principal of or interest on the Securities of such series, set aside, segregate and hold in trust for the benefit of the Holders of the Securities of such series or the Coupons appertaining thereto a sum sufficient to pay such principal or interest so becoming due. The Issuer will promptly notify the Trustee of any failure to take such action.

     Anything in this Section to the contrary notwithstanding, but subject to Section 10.01 and to the terms of any series of Securities, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust for any such series by the Issuer or any paying agent hereunder, as required by this Section, such sums to be held by the Trustee upon the trusts herein contained.

     Anything in this Section to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the provisions of Sections 10.03 and 11.04.

     Section 3.05 . Written Statement to Trustee. The Issuer will furnish to the Trustee on or before March 31 in each year (beginning with March 31, 2007) a brief certificate (which need not comply with Section 11.05) from the principal executive, financial or accounting officer of the Issuer stating that in the course of the performance by the signer of his duties as an officer of the Issuer he would normally have knowledge of any default or non-compliance by the Issuer in the performance of any covenants or conditions contained in this Indenture, stating whether or not he has knowledge of any such default or non-compliance and, if so, specifying each such default or non-compliance of which the signer has knowledge and the nature thereof.

     Section 3.06. Luxembourg Publications. In the event of the publication of any notice pursuant to Section 5.11, 6.10(a), 6.11, 8.02, 10.04, 12.02 or 12.05, the party making such publication in the Borough of Manhattan, The City of New York and London shall also, to the extent that notice is required to be given to Holders of Securities of any series by applicable Luxembourg law or stock exchange regulation, as evidenced by an Officer’s Certificate delivered to such party, make a similar publication in Luxembourg.

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ARTICLE 4
SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE

     Section 4.01. Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders. If and so long as the Trustee shall not be the Security registrar for the Securities of any series, the Issuer and any other obligor on the Securities will furnish or cause to be furnished to the Trustee a list in such form as the Trustee may reasonably require of the names and addresses of the Holders of the Registered Securities of such series pursuant to Section 312 of the Trust Indenture Act of 1939 (a) semi-annually not more than 15 days after each record date for the payment of interest on such Registered Securities, as hereinabove specified, as of such record date and on dates to be determined pursuant to Section 2.03 for non-interest bearing Registered Securities in each year, and (b) at such other times as the Trustee may request in writing, within thirty days after receipt by the Issuer of any such request as of a date not more than 15 days prior to the time such information is furnished.

     Section 4.02. Preservation and Disclosure of Securityholders Lists. This Section intentionally left blank.

     Section 4.03 . Reports by the Issuer. The Issuer covenants to file with the Trustee, within 15 days after the Issuer is required to file the same with the Commission, copies of the annual reports and of the information, documents, and other reports that the Issuer may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 or pursuant to Section 314 of the Trust Indenture Act of 1939.

     Section 4.04 . Reports by the Trustee. Any Trustee’s report required under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on or before May 15 in each year beginning May 15, 2007, as provided in Section 313(c) of the Trust Indenture Act of 1939, so long as any Securities are Outstanding hereunder, and shall be dated as of a date convenient to the Trustee no more than 60 days prior thereto.

ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS IN DEFAULT OR EVENT OF DEFAULT

     Section 5.01. Event of Default Defined; Acceleration of Maturity; Waiver of Event of Default. “Event of Default” with respect to Securities of any series wherever used herein, means each one of the following events which shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or

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regulation of any administrative or governmental body) unless it is specifically deleted or modified in the supplemental indenture, if any, under which such series of Securities is issued:

     (a) failure to pay in full the interest accrued on any Securities of such series upon the conclusion of an extension of the interest payment period of the number of payment periods specified herein or pursuant to Section 2.03 and continuance of that failure for a period of 30 days; or

     (b) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Issuer or for any substantial part of its property or ordering the winding up or liquidation of its affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

     (c) the Issuer shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Issuer or for any substantial part of its property, or make any general assignment for the benefit of creditors; or

     (d) any other Event of Default provided in the supplemental indenture under which such series of Securities is issued or in the form of Security for such series.

     If an Event of Default described in clause (a) or (d) (if the Event of Default under clause (a) or (d) is with respect to less than all series of Securities then Outstanding) occurs and is continuing, then, and in each and every such case, except for any series of Securities the principal of which shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities of each such affected series then Outstanding hereunder (voting as a single class) or, if the Securities of such series are held by a Morgan Stanley Capital Trust or a trustee of such trust and should the Trustee or such Holders of the Outstanding Securities fail to make the declaration referred to below, the holders of at least 25% in aggregate liquidation amount of the outstanding Capital Securities of such trust (voting as a separate class), by notice in writing to the Issuer (and to the Trustee if given by Securityholders or the holders of Capital Securities), may declare the entire principal (or, if any of the Securities of any such affected series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such Securities) of all Securities of all such affected series or of such

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series held by a Morgan Stanley Capital Trust, as the case may be, and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration, the same shall become immediately due and payable.

     If an Event of Default described in clause (b), (c) or (d) (if the Event of Default under clause (d) is with respect to all series of Securities then Outstanding) occurs and is continuing, then and in each and every such case, unless the principal of all the Securities shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities then Outstanding hereunder (treated as one class), or, if the Securities of any such series are held by a Morgan Stanley Capital Trust or a trustee of such trust and should the Trustee or such Holders of the Outstanding Securities fail to make the declaration referred to below, the holders of at least 25% in aggregate liquidation amount of the outstanding Capital Securities of such trust (treated as a separate class), by notice in writing to the Issuer (and to the Trustee if given by Securityholders or the holders of Capital Securities), may declare the entire principal (or, if any Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of all the Securities then Outstanding or of such series held by a Morgan Stanley Capital Trust, as the case may be, and interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable.

     The foregoing provisions, however, are subject to the condition that if, at any time after the principal (or, if the Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of the Securities of any series (or of all the Securities, as the case may be) shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of each such series (or of all the Securities, as the case may be) and the principal of any and all Securities of each such series (or of all the Securities, as the case may be) which shall have become due otherwise than by acceleration (with interest upon such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series (or at the respective rates of interest or Yields to Maturity of all the Securities, as the case may be) to the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee and each predecessor Trustee, its agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith, and if any and all Defaults under the Indenture, other than the non-payment of the principal of Securities which shall have become due by

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acceleration, shall have been cured, waived or otherwise remedied as provided herein then and in every such case the Holders of a majority in aggregate principal amount of all the Securities of each such series or of all the Securities then Outstanding, in each case voting as a single class (except that each such series of Securities held by a Morgan Stanley Capital Trust shall vote as a separate class), by written notice to the Issuer and to the Trustee, may waive all Defaults with respect to each such series (or with respect to all the Securities, as the case may be) and rescind and annul such declaration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent Default or shall impair any right consequent thereon; provided however, that if the Securities of such series are held by a Morgan Stanley Capital Trust or a trustee of such trust, (i) such waiver or rescission and annulment shall not be effective until the holders of a majority in aggregate liquidation amount of the Capital Securities of such trust shall have consented to such waiver or rescission and annulment and (ii) should the Holders of the Securities of such series fail to waive such Defaults and rescind and annul such declaration and its consequences, the holders of a majority in aggregate liquidation amount of the Capital Securities of such trust shall have such right.

     If the Securities of a series are held by a Morgan Stanley Capital Trust or a trustee of such trust and an Event of Default or Default attributable to the failure of the Issuer to pay any amounts payable in respect of such Securities on the date such amounts are otherwise payable has occurred and is continuing, a holder of Capital Securities of such trust may institute a Direct Action. If the Issuer makes any payment to a holder of such Capital Securities as a result of a Direct Action, the Issuer will have the right to set-off any such payment against its obligation to make any corresponding payment to such Morgan Stanley Capital Trust on such Securities.

     For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities.

     Section 5.02 . Collection of Indebtedness by Trustee; Trustee May Prove Debt. The Issuer covenants that (a) in case default shall be made in the payment of any installment of interest on any of the Securities of any series when such interest shall have become due and payable, and such default shall have continued for a period of 30 days or (b) in case default shall be made in the payment of all or

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any part of the principal of any of the Securities of any series when the same shall have become due and payable, whether upon maturity of the Securities of such series or upon any redemption or by declaration or otherwise then upon demand of the Trustee, the Issuer will pay to the Trustee for the benefit of the Holders of the Securities of such series the whole amount that then shall have become due and payable on all Securities of such series, and such Coupons, for principal or interest, as the case may be (with interest to the date of such payment upon the overdue principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series); and in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including reasonable compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and any expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of its negligence or bad faith.

     Until such demand is made by the Trustee, the Issuer may pay the principal of and interest on the Securities of any series to the Holders, whether or not the Securities of such series be overdue.

     In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against the Issuer or other obligor upon the Securities and collect in the manner provided by law out of the property of the Issuer or other obligor upon the Securities, wherever situated the moneys adjudged or decreed to be payable.

     In case there shall be pending proceedings relative to the Issuer or any other obligor upon the Securities under Title 11 of the United States Code or any other applicable Federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor upon the Securities, or to the creditors or property of the Issuer or such other obligor, the Trustee, irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise:

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     (a) to file and prove a claim or claims for the whole amount of principal and interest (or, if the Securities of any series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of such series) owing and unpaid in respect of the Securities of any series, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Securityholders allowed in any judicial proceedings relative to the Issuer or other obligor upon the Securities, or to the creditors or property of the Issuer or such other obligor,

     (b) unless prohibited by applicable law and regulations, to vote on behalf of the holders of the Securities of any series in any election of a trustee or a standby trustee in arrangement, reorganization, liquidation or other bankruptcy or insolvency proceedings or person performing similar functions in comparable proceedings, and

     (c) to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all amounts received with respect to the claims of the Securityholders and of the Trustee on their behalf; and any trustee, receiver, or liquidator, custodian or other similar official is hereby authorized by each of the Securityholders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith.

     Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of any series or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

     All rights of action and of asserting claims under this Indenture, or under any of the Securities of any series or Coupons appertaining to such Securities, may be enforced by the Trustee without the possession of any of the Securities of such series or Coupons appertaining to such Securities or the production thereof on any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Trustee shall be brought in its own name as trustee

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of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Trustee, each predecessor Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Securities or Coupons appertaining to such Securities in respect of which such action was taken.

     In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the Holders of the Securities or Coupons appertaining to such Securities in respect to which such action was taken and it shall not be necessary to make any Holders of such Securities or Coupons appertaining to such Securities parties to any such proceedings.

     Section 5.03 . Applications of Proceeds. Any moneys collected by the Trustee pursuant to this Article in respect of any series shall, subject to the subordination provisions hereof, be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or interest, upon presentation of the several Securities and Coupons appertaining to such Securities in respect of which monies have been collected and stamping (or otherwise noting) thereon the payment, or issuing Securities of such series in reduced principal amounts in exchange for the presented Securities of like series if only partially paid, or upon surrender thereof if fully paid:

     FIRST: To the payment of costs and expenses applicable to such series in respect of which moneys have been collected, including reasonable compensation to the Trustee and each predecessor Trustee and their respective agents and attorneys and of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith;

     SECOND: In case the principal of the Securities of such series in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in such Securities, such payments to be made ratably to the persons entitled thereto, without discrimination or preference;

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     THIRD: In case the principal of the Securities of such series in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for principal and interest, with interest upon the overdue principal, and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the same rate as the rate of interest or Yield to Maturity (in the case of Original Issue Discount Securities) specified in the Securities of such series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal and interest or Yield to Maturity, without preference or priority of principal over interest or Yield to Maturity, or of interest or Yield to Maturity over principal, or of any installment of interest over any other installment of interest, or of any Security of such series over any other Security of such series, ratably to the aggregate of such principal and accrued and unpaid interest or Yield to Maturity; and

     FOURTH: To the payment of the remainder, if any, to the Issuer or any other person lawfully entitled thereto.

     Section 5.04 . Suits for Enforcement. In case a Default has occurred, has not been waived and is continuing, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

     Section 5.05 . Restoration of Rights on Abandonment of Proceedings.In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the Issuer and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Issuer, the Trustee and the Securityholders and any rights of holders of Capital Securities to institute a Direct Action shall continue as though no such proceedings had been taken.

      Section 5.06 . Limitations on Suits by Securityholder; Default Defined. No Holder of any Security of any series or of any Coupon appertaining thereto shall have any right by virtue or by availing of any provision of this Indenture to

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institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of default and of the continuance thereof, as hereinbefore provided, and unless also the Holders of not less than 25% in aggregate principal amount of the Securities of each affected series then Outstanding (treated as a single class) shall have made written request upon the Trustee to institute such action or proceedings in its own name as trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such action or proceeding and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 5.09; it being understood and intended, and being expressly covenanted by the taker and Holder of every Security or Coupon with every other taker and Holder and the Trustee, that no one or more Holders of Securities of any series or Coupons appertaining to such Securities shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other such Holder of Securities or Coupons appertaining to such Securities, or to obtain or seek to obtain priority over or preference to any other such Holder or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders of Securities of the applicable series and Coupons appertaining to such Securities. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

     “Default” with respect to Securities of any series wherever used herein, means each one of the following events which shall have occurred and be continuing (whatever the reason for such Default and whether it shall be voluntary or involuntary or be 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) unless it is specifically deleted or modified in the supplemental indenture, if any, under which such series of Securities is issued:

     (a) default in the payment of any installment of interest upon any of the Securities of such series as and when the same shall become due and payable, and continuance of such default for a period of 30 days; provided, however, that a valid extension of an interest payment period in accordance with the terms of the Securities of such series shall not constitute a default in the payment of interest for this purpose; or

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     (b) default in the payment of all or any part of the principal on any of the Securities of such series as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise; or

     (c) failure on the part of the Issuer duly to observe or perform any other of the covenants or agreements on the part of the Issuer in the Securities of such series (other than a covenant or warranty in respect of the Securities of such series a default in the performance or breach of which is elsewhere in this Section or in Section 5.01 specifically dealt with) or contained in this Indenture for a period of 60 days after the date on which written notice specifying such failure, stating that such notice is a “Notice of Default” hereunder and demanding that the Issuer remedy the same, shall have been given by registered or certified mail, return receipt requested, to the Issuer by the Trustee, or to the Issuer and the Trustee by the holders of at least 25% in aggregate principal amount of the Outstanding Securities of all series affected thereby and, if the Securities of such series are held by a Morgan Stanley Capital Trust or a trustee of such trust and should the Trustee or such Holders of the Outstanding Securities fail to give such notice, the holders of at least 25% in aggregate liquidation amount of the outstanding Capital Securities of such trust shall have the right to give such notice; or

     (d) an Event of Default with respect to such series specified in Section 5.01; or

     (e) any other Default provided in the supplemental indenture under which such series of Securities is issued or in the form of Security for such series.

     Section 5.07 . Unconditional Right of Securityholders to Institute Certain Suits. Notwithstanding any other provision in this Indenture and any provision of any Security, the right of any Holder of any Security or Coupon to receive payment of the principal of and interest on such Security or Coupon on or after the respective due dates expressed in such Security or Coupon, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder; provided however, that if a series of Securities is held by a Morgan Stanley Capital Trust, the Holder of such Securities shall not give such consent without the consent of each holder of the Capital Securities of such trust. Notwithstanding the foregoing, nothing in this Section shall be deemed to impair the right of any holder of Capital Securities to institute a Direct Action.

     Section 5.08. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default; Restoration of Rights and Remedies. Except as provided in Section 5.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Securities or Coupons or to holders of the Capital Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to

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every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

     No delay or omission of the Trustee or of any Holder of Securities or Coupons or of any holder of Capital Securities to exercise any right or power accruing upon any Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Default or an acquiescence therein; and, subject to Section 5.06 every power and remedy given by this Indenture or by law to the Trustee or to the Holders of Securities or Coupons or to holders of Capital Securities may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders of Securities or Coupons or by the holders of Capital Securities.

     If the Trustee, any Holder or any holder of Capital Securities has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee, such Holder or such holder of Capital Securities, then and in every case the Company, the Trustee, the Holders and such holder of Capital Securities shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee, the Holders and the holders of Capital Securities shall continue as though no such proceeding had been instituted.

     Section 5.09 . Control by Holders of Securities.The Holders of a majority in aggregate principal amount of the Securities of each series affected (with all such series voting as a single class) at the time Outstanding shall have the right to 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 with respect to the Securities of such series by this Indenture;provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and provided further that (subject to the provisions of Section 6.01) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of directors, the executive committee, or a trust committee of directors or Responsible Officers of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability or if the Trustee in good faith shall so determine that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders of the Securities of all series so affected not joining in the giving of said direction, it being understood that (subject to Section 6.01) the Trustee shall have no duty to

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ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders.

     Nothing in this Indenture shall impair the right of the Trustee in its discretion to take any action deemed proper by the Trustee and which is not inconsistent with such direction or directions by Securityholders.

     Section 5.10 . Waiver of Past Defaults.Prior to the acceleration of the maturity of any Securities as provided in Section 5.01, the Holders of a majority in aggregate principal amount of the Securities of all series at the time Outstanding with respect to which a Default shall have occurred and be continuing (voting as a single class) may on behalf of the Holders of all such Securities waive any past Default and its consequences, except a Default in the payment of principal or interest (unless such Default has been cured and a sum 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 hereof which cannot be modified or amended without the consent of the Holder of each Security affected;provided, that if the Securities of such series are held by a Morgan Stanley Capital Trust or a trustee of such trust, such waiver shall not be effective as to such Securities unless the holders of at least a majority in aggregate liquidation amount of the Capital Securities of such trust shall have consented to such waiver; provided further, that if the consent of the Holder of each Outstanding Security of such series is required, such waiver shall not be effective unless each holder of the Capital Securities of such trust shall have consented to such waiver. In the case of any such waiver, the Issuer, the Trustee, the Holders of all such Securities and the holders of any Capital Securities shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.

     Upon any such waiver, such default shall cease to exist and be deemed to have been cured and not to have occurred, and any Default or Event of Default arising therefrom shall be deemed to have been cured, and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

     Section 5.11 . Trustee to Give Notice of Default, But May Withhold in Certain Circumstances. The Trustee shall, within ninety days after the occurrence of a default with respect to the Securities of any series, give notice of all defaults with respect to that series known to the Trustee (a) if any Unregistered Securities of that series are then Outstanding, to the Holders thereof, by publication at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York and at least once in an Authorized Newspaper in London (and, if required by Section 3.06, at least once in an Authorized

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Newspaper in Luxembourg) and (b) by mail to all Holders of Registered Securities of such series and to such other Holders of Securities as have, within two years preceding such transmission, filed their names and addresses with the Trustee for that purpose, unless in each case such defaults shall have been cured before the mailing or publication of such notice (the term “defaults” for the purpose of this Section being hereby defined to mean any event or condition which is, or with notice or lapse of time or both would become, a Default or Event of Default); provided that, except in the case of default in the payment of the principal of or interest on any of the Securities of such series, or in the payment of any sinking fund installment on such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or trustees and/or Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders of such series.

     Section 5.12 . Right of Court to Require Filing of Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Security or Coupon by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder or group of Securityholders of any series holding in the aggregate more than 10% in aggregate principal amount of the Securities of such series, or, in the case of any suit relating to or arising under clause (d) of Section 5.01 or clause (c) or (e) of Section 5.06 (if the suit relates to Securities of more than one but less than all series), 10% in aggregate principal amount of Securities then Outstanding and affected thereby, or in the case of any suit relating to or arising under clause (b) or (c) of Section 5.01, 10% in aggregate principal amount of all Securities then Outstanding, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of or interest (including any Additional Interest) on any Security on or after the due date expressed in such Security or any date fixed for redemption.

ARTICLE 6
CONCERNING THE TRUSTEE

     Section 6.01. Duties and Responsibilities of the Trustee; During Default; Prior to Default. With respect to the Holders of any series of Securities issued hereunder, the Trustee, prior to the occurrence of a Default with respect to the

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Securities of a particular series and after the curing or waiving of all Defaults which may have occurred with respect to such series, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case a Default with respect to the Securities of a series has occurred (which has not been cured or waived), the Trustee shall exercise with respect to such series of Securities such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

     No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that

     (a) prior to the occurrence of a Default with respect to the Securities of any series and after the curing or waiving of all such Defaults with respect to such series which may have occurred:

     (i) the duties and obligations of the Trustee with respect to the Securities of any series shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

     (ii) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such statements, certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture;

     (b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and

     (c) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders pursuant to Section 5.09 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture.

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     None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there shall be reasonable ground for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it.

     The provisions of this Section 6.01 are in furtherance of and subject to Section 315 of the Trust Indenture Act of 1939.

     Section 6.02 . Certain Rights of the Trustee. In furtherance of and subject to the Trust Indenture Act of 1939, and subject to Section 6.01:

     (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, Officer’s Certificate or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, coupon, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

     (b) any request, direction, order or demand of the Issuer mentioned herein shall be sufficiently evidenced by an Officer’s Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the secretary or an assistant secretary of the Issuer;

     (c) the Trustee may consult with counsel and any written advice or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in reliance thereon in accordance with such advice or Opinion of Counsel;

     (d) the Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred therein or thereby;

     (e) the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture;

     (f) prior to the occurrence of a Default hereunder and after the curing or waiving of all Defaults, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, appraisal, bond,

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debenture, note, coupon, security, or other paper or document unless requested in writing so to do by the Holders of not less than a majority in aggregate principal amount of the Securities of all series affected then Outstanding; providedthat, if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding; the reasonable expenses of every such investigation shall be paid by the Issuer or, if paid by the Trustee or any predecessor Trustee, shall be repaid by the Issuer upon demand; and

     (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys not regularly in its employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder.

     Section 6.03 . Trustee Not Responsible for Recitals, Disposition of Securities or Application of Proceeds Thereof. The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the validity or sufficiency of this Indenture or of the Securities or Coupons. The Trustee shall not be accountable for the use or application by the Issuer of any of the Securities or of the proceeds thereof.

     Section 6.04 . Trustee and Agents May Hold Securities or Coupons; Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities or Coupons with the same rights it would have if it were not the Trustee or such agent and may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it would have if it were not the Trustee or such agent.

     Section 6.05. Moneys Held by Trustee. Subject to the provisions of Section 10.04 hereof, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or the Trustee shall be under any liability for interest on any moneys received by it hereunder.

     Section 6.06 . Compensation and Indemnification of Trustee and Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time to time,

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and the Trustee shall be entitled to, such compensation as the parties shall agree in writing from time to time (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and the Issuer covenants and agrees to pay or reimburse the Trustee and each predecessor Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and other persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Issuer also covenants to indemnify the Trustee and each predecessor Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Indenture or the trusts hereunder and its duties hereunder, including the costs and expenses of defending itself against or investigating any claim of liability in the premises. The obligations of the Issuer under this Section to compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture. Such additional indebtedness shall be a senior claim to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities or Coupons, and the Securities are hereby subordinated to such senior claim.

      Section 6.07 . Right of Trustee to Rely on Officer’s Certificate, etc. Subject to Sections 6.01 and 6.02, whenever in the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof.

     Section 6.08. Indentures Not Creating Potential Conflicting Interests for the Trustee. The following indenture is hereby specifically described for the purposes of Section 310(b)(1) of the Trust Indenture Act of 1939: this Indenture with respect to the Securities of any other series.

     Section 6.09 . Persons Eligible for Appointment as Trustee. The Trustee for each series of Securities hereunder shall at all times be a corporation organized and doing business under the laws of the United States of America or of

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any State or the District of Columbia having a combined capital and surplus of at least $5,000,000, and which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by Federal, State or District of Columbia authority. Such corporation shall have its principal place of business in the Borough of Manhattan, The City of New York if there be such a corporation in such location willing to act upon reasonable and customary terms and conditions. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 6.10.

     The provisions of this Section 6.09 are in furtherance of and subject to Section 310(a) of the Trust Indenture Act of 1939.

     Section 6.10 . Resignation and Removal; Appointment of Successor Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign with respect to one or more or all series of Securities by giving written notice of resignation to the Issuer and (i) if any Unregistered Securities of a series affected are then Outstanding, by giving notice of such resignation to the Holders thereof, by publication at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York, and at least once in an Authorized Newspaper in London (and, if required by Section 3.06, at least once in an Authorized Newspaper in Luxembourg), (ii) if any Unregistered Securities of a series affected are then Outstanding, by mailing notice of such resignation to the Holders thereof who have filed their names and addresses with the Trustee within the two years preceding the notice at such addresses as were so furnished to the Trustee and (iii) by mailing notice of such resignation to the Holders of then Outstanding Registered Securities of each series affected at their addresses as they shall appear on the registry books. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees with respect to the applicable series by written instrument in duplicate, executed by authority of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor trustee shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series for at least six months may, subject to the provisions of Section 5.12, on behalf of himself and all others similarly situated, petition any such court for the appointment of a

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successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

      (b)  In case at any time any of the following shall occur:

      (i) the Trustee shall fail to comply with the provisions of Section 310(b) of the Trust Indenture Act of 1939 with respect to any series of Securities after written request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months; or

     (ii) the Trustee shall cease to be eligible in accordance with the provisions of Section 6.09 and Section 310(a) of the Trust Indenture Act of 1939 and shall fail to resign after written request therefor by the Issuer or by any Securityholder; or

     (iii) the Trustee shall become incapable of acting with respect to any series of Securities, or shall be adjudged a bankrupt or insolvent, or a receiver or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

then, in any such case, the Issuer may remove the Trustee with respect to the applicable series of Securities and appoint a successor trustee for such series by written instrument, in duplicate, executed by order of the Board of Directors of the Issuer, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 315(e) of the Trust Indenture Act of 1939, any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months may on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee with respect to such series. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee. If no successor trustee shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing of such notice of removal, the retiring trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series for at least six months may, subject to the provisions of Section 5.12, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

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     (c) The Holders of a majority in aggregate principal amount of the Securities of each series at the time outstanding may at any time remove the Trustee with respect to Securities of such series and appoint a successor trustee with respect to the Securities of such series by delivering to the Trustee so removed, to the successor trustee so appointed and to the Issuer the evidence provided for in Section 7.01 of the action in that regard taken by the Securityholders.

     (d) Any resignation or removal of the Trustee with respect to any series and any appointment of a successor trustee with respect to such series pursuant to any of the provisions of this Section 6.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 6.11.

     Section 6.11 . Acceptance of Appointment by Successor Trustee. Any successor trustee appointed as provided in Section 6.10 shall execute and deliver to the Issuer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee with respect to all or any applicable series shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations with respect to such series of its predecessor hereunder, with like effect as if originally named as trustee for such series hereunder; but, nevertheless, on the written request of the Issuer or of the successor trustee, upon payment of its charges then unpaid, the trustee ceasing to act shall, subject to Section 10.04, pay over to the successor trustee all moneys at the time held by it hereunder and shall execute and deliver an instrument transferring to such successor trustee all such rights, powers, duties and obligations. Upon request of any such successor trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 6.06.

     If a successor trustee is appointed with respect to the Securities of one or more (but not all) series, the Issuer, the predecessor Trustee and each successor trustee with respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor Trustee with respect to the Securities of any series as to which the predecessor Trustee is not retiring shall continue to be vested in the predecessor Trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, it being understood that nothing herein or in such supplemental indenture shall constitute

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such trustees co-trustees of the same trust and that each such trustee shall be trustee of a trust or trusts under separate indentures.

     No successor trustee with respect to any series of Securities shall accept appointment as provided in this Section 6.11 unless at the time of such acceptance such successor trustee shall be qualified under Section 310(b) of the Trust Indenture Act of 1939 and eligible under the provisions of Section 6.09.

     Upon acceptance of appointment by any successor trustee as provided in this Section 6.11 the Issuer shall give notice thereof (a) if any Unregistered Securities of a series affected are then Outstanding, to the Holders thereof, by publication of such notice at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York and at least once in an Authorized Newspaper in London (and, if required by Section 3.05, at least once in an Authorized Newspaper in Luxembourg), (b) if any Unregistered Securities of a series affected are then Outstanding, to the Holders thereof who have filed their names and addresses with the Trustee within the two years preceding the notice, by mailing such notice to such Holders at such addresses as were so furnished to the Trustee (and the Trustee shall make such information available to the Issuer for such purpose) and (c) to the Holders of Registered Securities of each series affected, by mailing such notice to such Holders at their addresses as they shall appear on the registry books. If the acceptance of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may be combined with the notice called for by Section 6.10. If the Issuer fails to give such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be given at the expense of the Issuer.

     Section 6.12 . Merger, Conversion, Consolidation or Succession to Business of Trustee. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be qualified under Section 310(b) of the Trust Indenture Act of 1939 and eligible under the provisions of Section 6.09, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

     In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Securities of any series shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee and deliver such Securities so authenticated; and, in case at that time any of the Securities of any series shall not have been authenticated, any successor to the Trustee may authenticate such

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Securities either in the name of any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificate shall have the full force which it is anywhere in the Securities of such series or in this Indenture provided that the certificate of the Trustee shall have; provided, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Securities of any series in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.

     Section 6.13. Preferential Collection of Claims Against the Issuer . This Section intentionally left blank.

     Section 6.14 . Appointment of Authenticating Agent. As long as any Securities of a series remain Outstanding, the Trustee may, by an instrument in writing, appoint with the approval of the Issuer an authenticating agent (the “Authenticating Agent”) which shall be authorized to act on behalf of the Trustee to authenticate Securities, including Securities issued upon exchange, registration of transfer, partial redemption or pursuant to Section 2.09. Securities of each such series authenticated by such Authenticating Agent shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee. Whenever reference is made in this Indenture to the authentication and delivery of Securities of any series by the Trustee or to the Trustee’s Certificate of Authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent for such series and a Certificate of Authentication executed on behalf of the Trustee by such Authenticating Agent. Such Authenticating Agent shall at all times be a corporation organized and doing business under the laws of the United States of America or of any State, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $5,000,000 (determined as provided in Section 6.09 with respect to the Trustee) and subject to supervision or examination by Federal or State authority.

     Any corporation into which any Authenticating Agent may be merged or converted, or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency business of any Authenticating Agent, shall continue to be the Authenticating Agent with respect to all series of Securities for which it served as Authenticating Agent without the execution or filing of any paper or any further act on the part of the Trustee or such Authenticating Agent. Any Authenticating Agent may at any time, and if it shall cease to be eligible shall, resign by giving written notice of resignation to the Trustee and to the Issuer.

     Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14 with respect to one or more

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series of Securities, the Trustee shall upon receipt of an Issuer Order appoint a successor Authenticating Agent and the Issuer shall provide notice of such appointment to all Holders of Securities of such series in the manner and to the extent provided in Section 11.04. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all rights, powers, duties and responsibilities of its predecessor hereunder, with like effect as if originally named as Authenticating Agent. The Issuer agrees to pay to the Authenticating Agent for such series from time to time reasonable compensation. The Authenticating Agent for the Securities of any series shall have no responsibility or liability for any action taken by it as such at the direction of the Trustee.

     Sections 6.02, 6.03, 6.04, 6.06, 6.09 and 7.03 shall be applicable to any Authenticating Agent.

ARTICLE 7
CONCERNING THE SECURITYHOLDERS

     Section 7.01. Evidence of Action Taken by Securityholders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by a specified percentage in principal amount of the Securityholders of any or all series or holders of Capital Securities interested therein may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such specified percentage of Securityholders or holders of Capital Securities in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee. Proof of execution of any instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Sections 6.01 and 6.02) conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Article.

     Section 7.02 . Proof of Execution of Instruments and of Holding of Securities. Subject to Sections 6.01 and 6.02, the execution of any instrument by a Securityholder or, if a series of Securities is held by a Morgan Stanley Capital Trust, a holder of Capital Securities or, in each case, his agent or proxy may be proved in the following manner:

     (a) The fact and date of the execution by any Holder or, if a series of Securities is held by a Morgan Stanley Capital Trust, by any holder of Capital Securities of any instrument may be proved by the certificate of any notary public or other officer of any jurisdiction authorized to take acknowledgments of deeds or administer oaths that the person executing such instruments acknowledged to him the execution thereof, or by an affidavit of a witness to such execution sworn

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to before any such notary or other such officer. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute sufficient proof of the authority of the person executing the same. The fact of the holding by any Holder or, if a series of Securities is held by a Morgan Stanley Capital Trust, by any holder of Capital Securities of an Unregistered Security of any series, and the identifying number of such Security and the date of his holding the same, may be proved by the production of such Security or by a certificate executed by any trust company, bank, banker or recognized securities dealer wherever situated satisfactory to the Trustee, if such certificate shall be deemed by the Trustee to be satisfactory. Each such certificate shall be dated and shall state that on the date thereof a Security of such series bearing a specified identifying number was deposited with or exhibited to such trust company, bank, banker or recognized securities dealer by the person named in such certificate. Any such certificate may be issued in respect of one or more Unregistered Securities of one or more series specified therein. The holding by the person named in any such certificate of any Unregistered Securities of any series specified therein shall be presumed to continue for a period of one year from the date of such certificate unless at the time of any determination of such holding (i) another certificate bearing a later date issued in respect of the same Securities shall be produced, or (ii) the Security of such series specified in such certificate shall be produced by some other person, or (iii) the Security of such series specified in such certificate shall have ceased to be Outstanding. Subject to Sections 6.01 and 6.02, the fact and date of the execution of any such instrument and the amount and numbers of Securities of any series held by the person so executing such instrument and the amount and numbers of any Security or Securities for such series may also be proven in accordance with such reasonable rules and regulations as may be prescribed by the Trustee for such series or in any other manner which the Trustee for such series may deem sufficient.

     (b) In the case of Registered Securities, the ownership of such Securities shall be proved by the Security register or by a certificate of the Security registrar.

     The Issuer may set a record date for purposes of determining the identity of Holders of Registered Securities or, if a series of Securities is held by a Morgan Stanley Capital Trust, of holders of registered Capital Securities of any series entitled to vote or consent to any action referred to in Section 7.01, which record date may be set at any time or from time to time by notice to the Trustee, for any date or dates (in the case of any adjournment or reconsideration) not more than 60 days nor less than five days prior to the proposed date of such vote or consent, and thereafter, notwithstanding any other provisions hereof, with respect to Registered Securities of any series, only Holders of Registered Securities or, if a series of Securities is held by a Morgan Stanley Capital Trust, holders of registered Capital Securities of such series of record on such record date shall be entitled to so vote or give such consent or revoke such vote or consent.

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     Section 7.03 . Holders to be Treated as Owners. The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem and treat the person in whose name any Security shall be registered upon the Security register for such series as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account of the principal of and, subject to the provisions of this Indenture, interest on such Security and for all other purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary. The Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the Holder of any Unregistered Security and the Holder of any Coupon or, if a series of Securities is held by a Morgan Stanley Capital Trust, the holder of any unregistered Capital Security as the absolute owner of such Unregistered Security or Coupon (whether or not such Unregistered Security or Coupon shall be overdue) for the purpose of receiving payment thereof or on account thereof and for all other purposes and neither the Issuer, the Trustee, nor any agent of the Issuer or the Trustee shall be affected by any notice to the contrary. All such payments so made to any such person, or upon his order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Unregistered Security or Coupon.

     Notwithstanding the foregoing, if the Securities of such series are held by a Morgan Stanley Capital Trust, nothing in this Section 7.03 shall be deemed to impair the right of any holder of Capital Securities to institute a Direct Action or to declare an Event of Default and accelerate the maturity of such series.

     Section 7.04 . Securities Owned by Issuer Deemed Not Outstanding. In determining whether the Holders of the requisite aggregate principal amount of Outstanding Securities of any or all series have concurred in any direction, consent or waiver under this Indenture, Securities which are owned by the Issuer or any other obligor on the Securities with respect to which such determination is being made or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities with respect to which such determination is being made shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver only Securities which the Trustee knows are so owned shall be so disregarded; provided, that, if the Securities of such series are held by a Morgan Stanley Capital Trust or a trustee of such trust, the provisions of this Section 7.04 shall not apply. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Issuer or any other obligor upon the Securities or any person directly or indirectly controlling or controlled by or under direct or indirect

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common control with the Issuer or any other obligor on the Securities. In case of a dispute as to such right, the advice of counsel shall be full protection in respect of any decision made by the Trustee in accordance with such advice. Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly an Officer’s Certificate listing and identifying all Securities, if any, known by the Issuer to be owned or held by or for the account of any of the above-described persons; and, subject to Sections 6.01 and 6.02, the Trustee shall be entitled to accept such Officer’s Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein are Outstanding for the purpose of any such determination.

     Section 7.05 . Right of Revocation of Action Taken.At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 7.01, of the taking of any action by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action, any Holder of a Security or, if any such series is held by a Morgan Stanley Capital Trust, any holder of a Capital Security the serial number of which is shown by the evidence to be included among the serial numbers of the Securities the Holders of which have consented to such action may, by filing written notice at the Corporate Trust Office and upon proof of holding as provided in this Article, revoke such action so far as concerns such Security. Except as aforesaid any such action taken by the Holder of any Security shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Security and of any Securities issued in exchange or substitution therefor or on registration of transfer thereof, irrespective of whether or not any notation in regard thereto is made upon any such Security. Any action taken by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action shall be conclusively binding upon the Issuer, the Trustee and the Holders of all the Securities affected by such action.

ARTICLE 8
SUPPLEMENTAL INDENTURES

     Section 8.01. Supplemental Indentures Without Consent of Securityholders. The Issuer, when authorized by a resolution of its Board of Directors (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to an Issuer Order), and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:

     (a) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Securities of one or more series any property or assets;

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     (b) to evidence the succession of another corporation to the Issuer, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Issuer pursuant to Article 9;

     (c) to add to the covenants of the Issuer such further covenants, restrictions, conditions or provisions as the Issuer and the Trustee shall consider to be for the protection of the Holders of Securities or Coupons, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions a Default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, that in respect of any such additional covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such a Default or Event of Default or may limit the remedies available to the Trustee upon such a Default or Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Securities of such series to waive such a Default or Event of Default;

     (d) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture, or to make any other provisions as the Issuer may deem necessary or desirable, provided that no such action shall adversely affect the interests of the Holders of the Securities or Coupons;

     (e) to establish the forms or terms of Securities of any series or of the Coupons appertaining to such Securities as permitted by Sections 2.01 and 2.03; and

     (f) to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Section 6.11.

     The Trustee is hereby authorized to join with the Issuer in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

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     Any supplemental indenture authorized by the provisions of this Section may be executed without the consent of the Holders of any of the Securities at the time outstanding, notwithstanding any of the provisions of Section 8.02.

      Section 8.02 . Supplemental Indentures With Consent of Securityholders. With the consent (evidenced as provided in Article 7) of the Holders of not less than a majority in aggregate principal amount of the Securities at the time Outstanding of all series affected by such supplemental indenture (voting as one class), the Issuer, when authorized by a resolution of its Board of Directors (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to an Issuer Order), and the Trustee may, from time to time and at any time, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Securities of each such series or of the Coupons appertaining to such Securities; provided, that no such supplemental indenture shall (a) extend the final maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on redemption thereof, or make the principal thereof (including any amount in respect of original issue discount), or interest thereon payable in any coin or currency other than that provided in the Securities and Coupons or in accordance with the terms thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the maturity thereof pursuant to Section 5.01 or the amount thereof provable in bankruptcy pursuant to Section 5.02, or alter the provisions of Sections 11.11 or 11.12 or impair or affect the right of any Securityholder to institute suit for the payment thereof or, if the Securities provide therefor, any right of repayment at the option of the Securityholder, in each case without the consent of the Holder of each Security so affected, or (b) reduce the aforesaid percentage of Securities of any series, the consent of the Holders of which is required for any such supplemental indenture, without the consent of the Holders of each Security so affected; and provided further, that, if the Securities of such series are held by a Morgan Stanley Capital Trust or a trustee of such trust, so long as any of the Capital Securities of such trust remain outstanding, no such modification may be made that adversely affects the holders of such Capital Securities in any material respect, and no termination of this Indenture may occur, without the prior consent of the holders of at least a majority of the aggregate liquidation amount of the outstanding Capital Securities of such trust unless and until the principal of such Securities and all accrued and unpaid interest thereon have been paid in full, and none of the modifications described in clauses (a) and (b) above may be made without the prior written consent of all the holders of Capital Securities of such Morgan Stanley Capital Trust. In addition, the Issuer may not amend this Indenture to remove the rights of holders of Capital Securities of a Morgan

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Stanley Capital Trust to institute a Direct Action without the prior written consent of all the holders of Capital Securities of such trust or to remove the obligation to obtain the consent of such holders of Capital Securities in accordance with this Section, without the consent of the required percentage of holders of the Capital Securities of such Trust; and provided further, that the Issuer shall, if then required under applicable laws, regulations or policies, seek the prior approval of the Securities and Exchange Commission or any self-regulatory organization then having jurisdiction before exercising its rights, if any, to enter into a supplemental indenture to shorten the maturity of the Securities as a result of an adverse tax event.

     A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of Holders of Securities of such series, or of Coupons appertaining to such Securities, with respect to such covenant or provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series or of the Coupons appertaining to such Securities.

     Upon the request of the Issuer, accompanied by a copy of a resolution of the Board of Directors (which resolution may provide general terms or parameters for such action and may provide that the specific terms of such action may be determined in accordance with or pursuant to an Issuer Order) certified by the secretary or an assistant secretary of the Issuer authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of the Holders of the Securities as aforesaid and other documents, if any, required by Section 7.01, the Trustee shall join with the Issuer in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

     It shall not be necessary for the consent of the Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

     Promptly after the execution by the Issuer and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall give notice thereof (a) to the Holders of then Outstanding Registered Securities of each series affected thereby, by mailing a notice thereof by first-class mail to such Holders at their addresses as they shall appear on the Security register, (b) if any Unregistered Securities of a series affected thereby are then Outstanding, to the Holders thereof who have filed their names and addresses with the Trustee within two years preceding such notice, by mailing a notice thereof by first-class mail to such Holders at such addresses as were so furnished

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to the Trustee and (c) if any Unregistered Securities of a series affected thereby are then Outstanding, to all Holders thereof, by publication of a notice thereof at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York and at least once in an Authorized Newspaper in London (and, if required by Section 3.06, at least once in an Authorized Newspaper in Luxembourg), and in each case such notice shall set forth in general terms the substance of such supplemental indenture. Any failure of the Issuer to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

     Section 8.03 . Effect of Supplemental Indenture.Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuer and the Holders of Securities of each series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

     Section 8.04 . Documents to be Given to Trustee. The Trustee, subject to the provisions of Sections 6.01 and 6.02, may receive an Officer’s Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article 8 complies with the applicable provisions of this Indenture.

     Section 8.05. Notation on Securities in Respect of Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article may bear a notation in form approved by the Trustee for such series as to any matter provided for by such supplemental indenture or as to any action taken by Securityholders. If the Issuer or the Trustee shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Issuer, authenticated by the Trustee and delivered in exchange for the Securities of such series then Outstanding.

     Section 8.06 . Subordination Unimpaired. This Indenture may not be amended to alter the subordination of any of the Outstanding Securities without the written consent of each holder of Senior Indebtedness then outstanding that would be adversely affected thereby.

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ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE

     Section 9.01. Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions. The Issuer covenants that it will not merge or consolidate with any other person or sell, lease or convey all or substantially all of its assets to any other person, unless (a) either the Issuer shall be the continuing corporation, or the successor corporation or the person which acquires by sale, lease or conveyance substantially all the assets of the Issuer (if other than the Issuer) shall be a corporation organized under the laws of the United States of America or any State thereof or the District of Columbia and shall expressly assume the due and punctual payment of the principal of and interest on all the Securities and Coupons, if any, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed by the Issuer, by supplemental indenture satisfactory to the Trustee, executed and delivered to the Trustee by such corporation, and (b) the Issuer, such person or such successor corporation, as the case may be, shall not, immediately after such merger or consolidation, or such sale, lease or conveyance, be in default in the performance of any such covenant or condition.

     Section 9.02 . Successor Corporation Substituted. In case of any such consolidation, merger, sale, lease or conveyance, and following such an assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Issuer, with the same effect as if it had been named herein. Such successor corporation may cause to be signed, and may issue either in its own name or in the name of the Issuer prior to such succession any or all of the Securities issuable hereunder which together with any Coupons appertaining thereto theretofore shall not have been signed by the Issuer and delivered to the Trustee; and, upon the order of such successor corporation, instead of the Issuer, and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities together with any Coupons appertaining thereto which previously shall have been signed and delivered by the officers of the Issuer to the Trustee for authentication, and any Securities which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All of the Securities so issued together with any Coupons appertaining thereto shall in all respects have the same legal rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Securities had been issued at the date of the execution hereof.

     In case of any such consolidation, merger, sale, lease or conveyance such changes in phrasing and form (but not in substance) may be made in the Securities and Coupons thereafter to be issued as may be appropriate.

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     In the event of any such sale or conveyance (other than a conveyance by way of lease) the Issuer or any successor corporation which shall theretofore have become such in the manner described in this Article shall be discharged from all obligations and covenants under this Indenture and the Securities and may be liquidated and dissolved.

     Section 9.03 . Opinion of Counsel Delivered to Trustee. The Trustee, subject to the provisions of Sections 6.01 and 6.02, may receive an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, lease or conveyance, and any such assumption, and any such liquidation or dissolution, complies with the applicable provisions of this Indenture.

ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS

     Section 10.01. Satisfaction and Discharge of Indenture. (a) If at any time (i) the Issuer shall have paid or caused to be paid the principal of and interest on all the Securities of any series Outstanding hereunder and all unmatured Coupons appertaining thereto (other than Securities of such series and Coupons appertaining thereto which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.09) as and when the same shall have become due and payable, or (ii) the Issuer shall have delivered to the Trustee for cancellation all Securities of any series theretofore authenticated and all unmatured Coupons appertaining thereto (other than any Securities of such series and Coupons appertaining thereto which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.09) or (iii) in the case of any series of Securities where the exact amount (including the currency of payment) of principal of and interest due on which can be determined at the time of making the deposit referred to in clause (B) below, (A) all the Securities of such series and all unmatured Coupons appertaining thereto not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and (B) the Issuer shall have irrevocably deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the Trustee or any paying agent to the Issuer in accordance with Section 10.04) or, in the case of any series of Securities the payments on which may only be made in Dollars, direct obligations of the United States of America, backed by its full faith and credit (“U.S. Government Obligations”), maturing as to principal and interest at such times and in such amounts as will insure the availability of cash, or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (1) the principal and interest on all Securities of such series and

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Coupons appertaining thereto on each date that such principal or interest is due and payable and (2) any mandatory sinking fund payments on the dates on which such payments are due and payable in accordance with the terms of the Indenture and the Securities of such series; and if, in any such case, the Issuer shall also pay or cause to be paid all other sums payable hereunder by the Issuer with respect to the Securities of such series, then this Indenture shall cease to be of further effect with respect to the Securities of such series and the Coupons appertaining thereto (except as to (i) rights of registration of transfer and exchange of Securities of such Series and of Coupons appertaining thereto and the Issuer’s right of optional redemption, if any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities or Coupons, (iii) rights of holders of Securities and Coupons appertaining thereto to receive payments of principal thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration), and remaining rights of the Holders to receive mandatory sinking fund payments, if any, (iv) the rights, obligations, duties and immunities of the Trustee hereunder, (v) the rights of the Holders of Securities of such series and Coupons appertaining thereto as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them, and (vi) the obligations of the Issuer under Section 3.02) and the Trustee, on demand of the Issuer accompanied by an Officer’s Certificate and an Opinion of Counsel and at the cost and expense of the Issuer, shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture as to such series; provided, that the rights of Holders of the Securities and Coupons to receive amounts in respect of principal of and interest on the Securities and Coupons held by them shall not be delayed longer than required by then-applicable mandatory rules or policies of any securities exchange upon which the Securities are listed. The Issuer agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Securities of such series.

     (b) The following provisions shall apply to the Securities of each series unless specifically otherwise provided in a Board Resolution, Officer’s Certificate or indenture supplemental hereto provided pursuant to Section 2.03. In addition to discharge of the Indenture pursuant to the next preceding paragraph, in the case of any series of Securities the exact amounts (including the currency of payment) of principal of and interest due on which can be determined at the time of making the deposit referred to in clause (i) below, the Issuer shall be deemed to have paid and discharged the entire indebtedness on all the Securities of such a series and the Coupons appertaining thereto on the 91st day after the date of the deposit referred to in clause (i) below, and the provisions of this Indenture with respect to the Securities of such series and Coupons appertaining thereto shall no longer be in effect (except as to (A) rights of registration of transfer and exchange of Securities of such series and of Coupons appertaining thereto and the Issuer’s right of optional redemption, if any, (B) substitution of mutilated, defaced,

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destroyed, lost or stolen Securities or Coupons, (C) rights of Holders of Securities and Coupons appertaining thereto to receive payments of principal thereof and interest thereon, upon the original stated due dates therefor (but not upon acceleration), and remaining rights of the Holders to receive mandatory sinking fund payments, if any, (D) the rights, obligations, duties and immunities of the Trustee hereunder, (E) the rights of the Holders of Securities of such series and Coupons appertaining thereto as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them and (F) the obligations of the Issuer under Section 3.02) and the Trustee, at the expense of the Issuer, shall at the Issuer’s request, execute proper instruments acknowledging the same, if

     (i) with reference to this provision the Issuer has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of such series and Coupons appertaining thereto (A) cash in an amount, or (B) in the case of any series of Securities the payments on which may only be made in Dollars, U.S. Government Obligations, maturing as to principal and interest at such times and in such amounts as will insure the availability of cash or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (1) the principal and interest on all Securities of such series and Coupons appertaining thereto on each date that such principal or interest is due and payable and (2) any mandatory sinking fund payments on the dates on which such payments are due and payable in accordance with the terms of the Indenture and the Securities of such series;

     (ii) such deposit will not result in a breach or violation of, or constitute a default under, any agreement or instrument to which the Issuer is a party or by which it is bound;

     (iii) the Issuer has delivered to the Trustee an Opinion of Counsel based on the fact that (x) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (y) since the date hereof, there has been a change in the applicable Federal income tax law, in either case to the effect that, and such opinion shall confirm that, the Holders of the Securities of such series and Coupons appertaining thereto will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to Federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred;

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     (iv) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance contemplated by this provision have been complied with;

     (v) no event or condition shall exist that, pursuant to the provisions of Section 13.01, would prevent the Issuer from making payments of the principal of or interest on the Securities of such series and Coupons appertaining thereto on the date of such deposit or at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period); and

     (vi) the Issuer has delivered to the Trustee an Opinion of Counsel to the effect that (x) the trust funds will not be subject to any rights of holders of Senior Indebtedness, including without limitation those arising under Article 13 of this Indenture, and (y) after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, except that if a court were to rule under any such law in any case or proceeding that the trust funds remained property of the Issuer, no opinion is given as to the effect of such laws on the trust funds except the following: (A) assuming such trust funds remained in the Trustee’s possession prior to such court ruling to the extent not paid to Holders of Securities of such series and Coupons appertaining thereto, the Trustee will hold, for the benefit of such Holders, a valid and perfected security interest in such trust funds that is not avoidable in bankruptcy or otherwise, (B) such Holders will be entitled to receive adequate protection of their interests in such trust funds if such trust funds are used, and (C) no property, rights in property or other interests granted to the Trustee or such Holders in exchange for or with respect to any of such funds will be subject to any prior rights of holders of Senior Indebtedness, including without limitation those arising under Article 13 of this Indenture.

     (c) The Issuer shall be released from its obligations under Section 9.01 with respect to the Securities of any Series, and any Coupons appertaining thereto, Outstanding on and after the date the conditions set forth below are satisfied (hereinafter, “covenant defeasance”). For this purpose, such covenant defeasance means that, with respect to the Outstanding Securities of any Series, the Issuer may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in such Section, whether directly or indirectly by reason of any reference elsewhere herein to such Section or by reason of any reference in such Section to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an

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Event of Default, but the remainder of this Indenture and such Securities and Coupons shall be unaffected thereby. The following shall be the conditions to application of this subsection (c) of this Section 10.01:

     (i) The Issuer has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the holders of the Securities of such series and Coupons appertaining thereto, (A) cash in an amount, or (B) in the case of any series of Securities the payments on which may only be made in Dollars, U.S. Government Obligations maturing as to principal and interest at such times and in such amounts as will insure the availability of cash or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (1) the principal and interest on all Securities of such series and Coupons appertaining thereto and (2) any mandatory sinking fund payments on the day on which such payments are due and payable in accordance with the terms of the Indenture and the Securities of such series.

     (ii) No Default or Event of Default or event which with notice or lapse of time or both would become a Default or an Event of Default with respect to the Securities shall have occurred and be continuing on the date of such deposit or, insofar as subsections 5.01(b) and 5.01(c) are concerned, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).

     (iii) Such covenant defeasance shall not cause the Trustee to have a conflicting interest as defined in Section 6.08 and for purposes of the Trust Indenture Act of 1939 with respect to any securities of the Issuer.

     (iv) Such covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Issuer is a party or by which it is bound.

     (v) Such covenant defeasance shall not cause any Securities then listed on any registered national securities exchange under the Securities Exchange Act of 1934, as amended, to be delisted.

     (vi) No event or condition shall exist that, pursuant to the provisions of Section 13.01, would prevent the Issuer from making payments of the principal of or interest on the Securities of such series and Coupons appertaining thereto on the date of such deposit or at any time

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during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).

     (vii) The Issuer shall have delivered to the Trustee an Officer’s Certificate and Opinion of Counsel to the effect that the Holders of the Securities of such series and Coupons appertaining thereto will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred.

     (viii) The Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the covenant defeasance contemplated by this provision have been complied with.

     (ix) The Issuer has delivered to the Trustee an Opinion of Counsel to the effect that (x) the trust funds will not be subject to any rights of holders of Senior Indebtedness, including without limitation those arising under Article 13 of this Indenture, and (y) after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, except that if a court were to rule under any such law in any case or proceeding that the trust funds remained property of the Issuer, no opinion is given as to the effect of such laws on the trust funds except the following: (A) assuming such trust funds remained in the Trustee’s possession prior to such court ruling to the extent not paid to Holders of Securities of such series and Coupons appertaining thereto, the Trustee will hold, for the benefit of such Holders, a valid and perfected security interest in such trust funds that is not avoidable in bankruptcy or otherwise, (B) such Holders will be entitled to receive adequate protection of their interests in such trust funds if such trust funds are used, and (C) no property, rights in property or other interests granted to the Trustee or such Holders in exchange for or with respect to any of such funds will be subject to any prior rights of holders of Senior Indebtedness, including without limitation those arising under Article 13 of this Indenture.

     Section 10.02 . Application by Trustee of Funds Deposited for Payment of Securities. Subject to Section 10.04, all moneys deposited with the Trustee (or other trustee) pursuant to Section 10.01 shall be held in trust and applied by it to the payment, either directly or through any paying agent (including the Issuer acting as its own paying agent), to the Holders of the particular Securities of such series and of Coupons appertaining thereto for the payment or redemption of

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which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such money need not be segregated from other funds except to the extent required by law.

     Section 10.03 . Repayment of Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to Securities of any series, all moneys then held by any paying agent under the provisions of this Indenture with respect to such series of Securities shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys.

     Section 10.04 . Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any paying agent for the payment of the principal of or interest on any Security of any series or Coupons attached thereto and not applied but remaining unclaimed for two years after the date upon which such principal or interest shall have become due and payable, shall, upon the written request of the Issuer and unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for such series or such paying agent, and the Holder of the Securities of such series and of any Coupons appertaining thereto shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property laws, thereafter look only to the Issuer for any payment which such Holder may be entitled to collect, and all liability of the Trustee or any paying agent with respect to such moneys shall thereupon cease; provided, however, that the Trustee or such paying agent, before being required to make any such repayment with respect to moneys deposited with it for any payment (a) in respect of Registered Securities of any series, shall at the expense of the Issuer, mail by first-class mail to Holders of such Securities at their addresses as they shall appear on the Security register, and (b) in respect of Unregistered Securities of any series, shall at the expense of the Issuer cause to be published once, in an Authorized Newspaper in the Borough of Manhattan, The City of New York and once in an Authorized Newspaper in London (and if required by Section 3.06, once in an Authorized Newspaper in Luxembourg), notice, that such moneys remain and that, after a date specified therein, which shall not be less than thirty days from the date of such mailing or publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.

     Section 10.05 . Indemnity for U.S. Government Obligations. The Issuer shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 10.01 or the principal or interest received in respect of such obligations.

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ARTICLE 11
MISCELLANEOUS PROVISIONS

     Section 11.01. Incorporators, Stockholders, Officers and Directors of Issuer Exempt from Individual Liability. No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any Security, or because of any indebtedness evidenced thereby, shall be had against any incorporator, as such or against any past, present or future stockholder, officer or director, as such, of the Issuer or of any successor, either directly or through the Issuer or any successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities and the Coupons appertaining thereto by the Holders thereof and as part of the consideration for the issue of the Securities and the Coupons appertaining thereto.

     Section 11.02 . Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities and Coupons. Nothing in this Indenture, in the Securities or in the Coupons appertaining thereto, expressed or implied, shall give or be construed to give to any person, firm or corporation, other than the parties hereto and their successors and the holders of Senior Indebtedness and the Holders of the Securities or Coupons, if any, any legal or equitable right, remedy or claim under this Indenture or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and their successors, the holders of the Senior Indebtedness and the Holders of the Securities or Coupons, if any.

     Section 11.03 . Successors and Assigns of Issuer Bound by Indenture. All the covenants, stipulations, promises and agreements in this Indenture contained by or in behalf of the Issuer shall bind its successors and assigns, whether so expressed or not.

     Section 11.04. Notices and Demands on Issuer, Trustee and Holders of Securities and Coupons. Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders of Securities or Coupons to or on the Issuer may be given or served by being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until another address of the Issuer is filed by the Issuer with the Trustee) to Morgan Stanley, 1585 Broadway, New York, New York 10036, Attention: Secretary. Any notice, direction, request or demand by the Issuer or any Holder of Securities or Coupons to or upon the Trustee shall be deemed to have been sufficiently given or served by being deposited postage prepaid, first-class mail (except as otherwise specifically provided herein) addressed (until another address of the Trustee is filed by the Trustee with the

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Issuer) to The Bank of New York, 101 Barclay St, Floor 8 West, New York, New York 10286, Attention: Corporate Trust Administration.

     Where this Indenture provides for notice to Holders of Registered Securities, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder entitled thereto, at his last address as it appears in the Security register. In any case where notice to such Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

     In case, by reason of the suspension of or irregularities in regular mail service, it shall be impracticable to mail notice to the Issuer when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be reasonably satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice.

     Section 11.05 . Officer’s Certificates and Opinions of Counsel; Statements to be Contained Therein. Upon any application or demand by the Issuer to the Trustee to take any action under any of the provisions of this Indenture, the Issuer shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished.

     Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based (c) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an opinion as to whether or not such covenant or condition has been complied with and (d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

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     Any certificate, statement or opinion of an officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of or representations by counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous. Any certificate, statement or opinion of counsel may be based, insofar as it relates to factual matters, information with respect to which is in the possession of the Issuer, upon the certificate, statement or opinion of or representations by an officer or officers of the Issuer, unless such counsel knows that the certificate, statement or opinion or representations with respect to the matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.

     Any certificate, statement or opinion of an officer of the Issuer or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of or representations by an accountant or firm of accountants in the employ of the Issuer, unless such officer or counsel, as the case may be, knows that the certificate or opinion or representations with respect to the accounting matters upon which his certificate, statement or opinion may be based as aforesaid are erroneous, or in the exercise of reasonable care should know that the same are erroneous.

     Any certificate or opinion of any independent firm of public accountants filed with and directed to the Trustee shall contain a statement that such firm is independent.

     Section 11.06 . Payments Due on Saturdays, Sundays and Holidays. If the date of maturity of interest on or principal of the Securities of any series or any Coupons appertaining thereto or the date fixed for redemption or repayment of any such Security or Coupon shall not be a Business Day, then payment of interest or principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date.

     Section 11.07 . Conflict of Any Provision of Indenture with Trust Indenture Act of 1939. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an “incorporated provision”) included in this Indenture by operation of, Sections 310 to 318, inclusive, of the Trust Indenture Act of 1939, such imposed duties or incorporated provision shall control.

     Section 11.08 . New York Law to Govern. This Indenture and each Security and Coupon shall be deemed to be a contract under the laws of the State of

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New York, and for all purposes shall be construed in accordance with the laws of such State, except as may otherwise be required by mandatory provisions of law.

     Section 11.09 . Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.

     Section 11.10 . Effect of Headings. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

     Section 11.11 . Securities in a Foreign Currency. Unless otherwise specified in an Officer’s Certificate delivered pursuant to Section 2.03 of this Indenture with respect to a particular series of Securities, whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in aggregate principal amount of Securities of all series or all series affected by a particular action at the time Outstanding and, at such time, there are Outstanding Securities of any series which are denominated in a Foreign Currency, then the principal amount of Securities of such series which shall be deemed to be Outstanding for the purpose of taking such action shall be that amount of Dollars that could be obtained for such amount at the Market Exchange Rate. For purposes of this Section 11.11, Market Exchange Rate shall mean the noon Dollar buying rate in New York City for cable transfers of that currency published by the Federal Reserve Bank of New York. If such Market Exchange Rate is not available for any reason with respect to such currency, the Trustee shall use, in its sole discretion and without liability on its part, such quotation of the Federal Reserve Bank of New York as of the most recent available date, or quotations from one or more major banks in The City of New York or in the country of issue of the currency in question, or such other quotations as the Trustee shall deem appropriate. The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Securities of a series denominated in a currency other than Dollars in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture.

     All decisions and determinations of the Trustee regarding the Market Exchange Rate or any alternative determination provided for in the preceding paragraph shall be in its sole discretion and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all purposes and irrevocably binding upon the Issuer and all Holders.

     Section 11.12 . Judgment Currency. The Issuer agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of or interest on the Securities of any series (the

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“Required Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a New York Banking Day, then, to the extent permitted by applicable law, the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the New York Banking Day preceding the day on which a final unappealable judgment is entered, and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture. For purposes of the foregoing, “New York Banking Day” means any day except a Saturday, Sunday or a legal holiday in The City of New York or a day on which banking institutions in The City of New York are authorized or required by law or executive order to close.

ARTICLE 12
REDEMPTION OF SECURITIES AND SINKING FUNDS

     Section 12.01. Applicability of Article. The provisions of this Article shall be applicable to the Securities of any series which are redeemable before their maturity or to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 2.03 for Securities of such series. The Issuer covenants that it shall, if then required under applicable laws, regulations or policies, seek the prior approval of the Securities and Exchange Commission or any self-regulatory organization then having jurisdiction before redeeming any of the Securities.

     Section 12.02 . Notice of Redemption; Partial Redemptions. Notice of redemption to the Holders of Registered Securities of any series to be redeemed as a whole or in part at the option of the Issuer shall be given by mailing notice of such redemption by first class mail, postage prepaid, to such Holders of Securities of such series at their last addresses as they shall appear upon the registry books at least 30 days and not more than 60 days prior to the date fixed for redemption, or within such other redemption notice period as has been designated for any

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Securities of such series pursuant to Section 2.03 or Section 2.04 (the “Redemption Notice Period”). Notice of redemption to the Holders of Unregistered Securities to be redeemed as a whole or in part, who have filed their names and addresses with the Trustee within the two years preceding such notice of redemption, shall be given by mailing notice of such redemption, by first class mail, postage prepaid, at least 30 and not more than 60 days prior to the date fixed for redemption or within any applicable Redemption Notice Period to such Holders at such addresses as were so furnished to the Trustee (and, in the case of any such notice given by the Issuer, the Trustee shall make such information available to the Issuer for such purpose). Notice of redemption to all other Holders of Unregistered Securities shall be published in an Authorized Newspaper in the Borough of Manhattan, The City of New York and in an Authorized Newspaper in London (and, if required by Section 3.06, in an Authorized Newspaper in Luxembourg), in each case, once in each of three successive calendar weeks, the first publication to be not less than 30 nor more than 60 days prior to the date fixed for redemption or within any applicable Redemption Notice Period; provided that notice to Holders of Unregistered Securities held only in global form may be made, at the option of the Issuer, through the customary notice provisions of the clearing system or systems through which beneficial interests in such Unregistered Securities are owned. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives the notice. Failure to give notice by mail, or any defect in the notice to the Holder of any Security of a series designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security of such series.

     The notice of redemption to each such Holder shall specify the principal amount of each Security of such series held by such Holder to be redeemed, the date fixed for redemption, the redemption price (or if not then ascertainable, the manner of calculation thereof), the place or places of payment, that payment will be made upon presentation and surrender of such Securities and, in the case of Securities with Coupons attached thereto, of all Coupons appertaining thereto maturing after the date fixed for redemption, that such redemption is pursuant to the mandatory or optional sinking fund, or both, if such be the case, that interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon or on the portions thereof to be redeemed will cease to accrue. In case any Security of a series is to be redeemed in part only the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued.

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     The notice of redemption of Securities of any series to be redeemed at the option of the Issuer shall be given by the Issuer or, at the Issuer’s request, by the Trustee in the name and at the expense of the Issuer.

     On or before the redemption date specified in the notice of redemption given as provided in this Section, the Issuer will deposit with the Trustee or with one or more paying agents (or, if the Issuer is acting as its own paying agent, set aside, segregate and hold in trust as provided in Section 3.04) an amount of money or other property sufficient to redeem on the redemption date all the Securities of such series so called for redemption at the appropriate redemption price, together with accrued interest to the date fixed for redemption. The Issuer will deliver to the Trustee at least 65 days prior to the date fixed for redemption or at least 5 days prior to the first day of any applicable Redemption Notice Period an Officer’s Certificate stating the aggregate principal amount of Securities to be redeemed. In case of a redemption at the election of the Issuer prior to the expiration of any restriction on such redemption, the Issuer shall deliver to the Trustee, prior to the giving of any notice of redemption to Holders pursuant to this Section, an Officer’s Certificate stating that such restriction has been complied with.

     If less than all the Securities of a series are to be redeemed, the Trustee shall select, in such manner as it shall deem appropriate and fair, Securities of such Series to be redeemed in whole or in part. Securities may be redeemed in part in multiples equal to the minimum authorized denomination for Securities of such series or any multiple thereof. The Trustee shall promptly notify the Issuer in writing of the Securities of such series selected for redemption and, in the case of any Securities of such series selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities of any series shall relate, in the case of any Security redeemed or to be redeemed only in part, to the portion of the principal amount of such Security which has been or is to be redeemed.

     Section 12.03. Payment of Securities Called for Redemption. If notice of redemption has been given as above provided, the Securities or portions of Securities specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption, and on and after said date (unless the Issuer shall default in the payment of such Securities at the redemption price, together with interest accrued to said date) interest on the Securities or portions of Securities so called for redemption shall cease to accrue, and the unmatured Coupons, if any, appertaining thereto shall be void, and, except as provided in Sections 6.05 and 10.04, such Securities shall cease from and after the date fixed for redemption to be entitled to any benefit or security under this Indenture, and the Holders thereof shall have no right in respect of such Securities

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except the right to receive the redemption price thereof and unpaid interest to the date fixed for redemption. On presentation and surrender of such Securities at a place of payment specified in said notice, together with all Coupons, if any, appertaining thereto maturing after the date fixed for redemption, said Securities or the specified portions thereof shall be paid and redeemed by the Issuer at the applicable redemption price, together with interest accrued thereon to the date fixed for redemption; provided that payment of interest becoming due on or prior to the date fixed for redemption shall be payable in the case of Securities with Coupons attached thereto, to the Holders of the Coupons for such interest upon surrender thereof, and in the case of Registered Securities, to the Holders of such Registered Securities registered as such on the relevant record date subject to the terms and provisions of Sections 2.03 and 2.07 hereof.

     If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid or duly provided for, bear interest from the date fixed for redemption at the rate of interest or Yield to Maturity (in the case of an Original Issue Discount Security) borne by such Security.

     If any Security with Coupons attached thereto is surrendered for redemption and is not accompanied by all appurtenant Coupons maturing after the date fixed for redemption, the surrender of such missing Coupon or Coupons may be waived by the Issuer and the Trustee, if there be furnished to each of them such security or indemnity as they may require to save each of them harmless.

     Upon presentation of any Security redeemed in part only, the Issuer shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of the Issuer, a new Security or Securities of such series, of authorized denominations, in principal amount equal to the unredeemed portion of the Security so presented.

     Section 12.04 . Exclusion of Certain Securities from Eligibility for Selection for Redemption. Securities shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in an Officer’s Certificate delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such written statement as directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer.

     Section 12.05 . Mandatory and Optional Sinking Funds. The minimum amount of any sinking fund payment provided for by the terms of the Securities of any series is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of the

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Securities of any series is herein referred to as an “optional sinking fund payment”. The date on which a sinking fund payment is to be made is herein referred to as the “sinking fund payment date”.

     In lieu of making all or any part of any mandatory sinking fund payment with respect to any series of Securities in cash, the Issuer may at its option (a) deliver to the Trustee Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Issuer or receive credit for Securities of such series (not previously so credited) theretofore purchased or otherwise acquired (except as aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant to Section 2.10, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant to this Section, or (c) receive credit for Securities of such series (not previously so credited) redeemed by the Issuer through any optional redemption provision contained in the terms of such series. Securities so delivered or credited shall be received or credited by the Trustee at the sinking fund redemption price specified in such Securities.

     On or before the 60th day next preceding each sinking fund payment date or the 30th day next preceding the last day of any applicable Redemption Notice Period relating to a sinking fund payment date for any series, the Issuer will deliver to the Trustee an Officer’s Certificate (which need not contain the statements required by Section 11.05) (a) specifying the portion of the mandatory sinking fund payment to be satisfied by payment of cash and the portion to be satisfied by credit of Securities of such series and the basis for such credit, (b) stating that none of the Securities of such series has theretofore been so credited, (c) stating that no defaults in the payment of interest or Defaults or Events of Default with respect to such series have occurred (which have not been waived or cured) and are continuing and (d) stating whether or not the Issuer intends to exercise its right to make an optional sinking fund payment with respect to such series and, if so, specifying the amount of such optional sinking fund payment which the Issuer intends to pay on or before the next succeeding sinking fund payment date. Any Securities of such series to be credited and required to be delivered to the Trustee in order for the Issuer to be entitled to credit therefor as aforesaid which have not theretofore been delivered to the Trustee shall be delivered for cancellation pursuant to Section 2.10 to the Trustee with such Officer’s Certificate (or reasonably promptly thereafter if acceptable to the Trustee). Such Officer’s Certificate shall be irrevocable and upon its receipt by the Trustee the Issuer shall become unconditionally obligated to make all the cash payments or payments therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Issuer, on or before any such 60th day or 30th day, if applicable, to deliver such Officer’s Certificate and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Issuer (i) that the mandatory sinking fund payment for such series due on the next succeeding

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sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof and (ii) that the Issuer will make no optional sinking fund payment with respect to such series as provided in this Section.

     If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $50,000 (or the equivalent thereof in any Foreign Currency) or a lesser sum in Dollars (or the equivalent thereof in any Foreign Currency) if the Issuer shall so request with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest to the date fixed for redemption. If such amount shall be $50,000 (or the equivalent thereof in any Foreign Currency) or less and the Issuer makes no such request then it shall be carried over until a sum in excess of $50,000 (or the equivalent thereof in any Foreign Currency) is available. The Trustee shall select, in the manner provided in Section 12.02, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such series to absorb said cash, as nearly as may be, and shall (if requested in writing by the Issuer) inform the Issuer of the serial numbers of the Securities of such series (or portions thereof) so selected. Securities shall be excluded from eligibility for redemption under this Section if they are identified by registration and certificate number in an Officer’s Certificate delivered to the Trustee at least 60 days prior to the sinking fund payment date or at least 30 days prior to the last day of any applicable Redemption Notice Period relating to a sinking fund payment date as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b) an entity specifically identified in such Officer’s Certificate as directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer. The Trustee, in the name and at the expense of the Issuer (or the Issuer, if it shall so request the Trustee in writing) shall cause notice of redemption of the Securities of such series to be given in substantially the manner provided in Section 12.02 (and with the effect provided in Section 12.03) for the redemption of Securities of such series in part at the option of the Issuer. The amount of any sinking fund payments not so applied or allocated to the redemption of Securities of such series shall be added to the next cash sinking fund payment for such series and, together with such payment, shall be applied in accordance with the provisions of this Section. Any and all sinking fund moneys held on the stated maturity date of the Securities of any particular series (or earlier, if such maturity is accelerated), which are not held for the payment or redemption of particular Securities of such series shall be applied, together with other moneys, if necessary, sufficient for the purpose, to the payment of the principal of, and interest on, the Securities of such series at maturity.

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     On or before each sinking fund payment date, the Issuer shall pay to the Trustee in cash or shall otherwise provide for the payment of all interest accrued to the date fixed for redemption on Securities to be redeemed on the next following sinking fund payment date.

     The Trustee shall not redeem or cause to be redeemed any Securities of a series with sinking fund moneys or give any notice of redemption of Securities for such series by operation of the sinking fund during the continuance of a default in payment of interest on such Securities or of any Default except that, where the giving of notice of redemption of any Securities shall theretofore have been made, the Trustee shall redeem or cause to be redeemed such Securities, provided that it shall have received from the Issuer a sum sufficient for such redemption. Except as aforesaid, any moneys in the sinking fund for such series at the time when any such default or Default shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or Default, be deemed to have been collected under Article 5 and held for the payment of all such Securities. In case such Default shall have been waived as provided in Section 5.10 or the default cured on or before the sixtieth day preceding the sinking fund payment date in any year, such moneys shall thereafter be applied on the next succeeding sinking fund payment date in accordance with this Section to the redemption of such Securities.

ARTICLE 13
SUBORDINATION

     Section 13.01. Securities and Coupons Subordinated to Senior Indebtedness. The Issuer covenants and agrees, and each Holder of a Security or Coupon, by his acceptance thereof, likewise covenants and agrees, that the indebtedness represented by the Securities and any Coupons and the payment of the principal of and interest on each and all of the Securities and of any Coupons is hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in full of Senior Indebtedness.

     In the event (a) of any insolvency or bankruptcy proceedings or any receivership, liquidation, reorganization or other similar proceedings in respect of the Issuer or a substantial part of its property, or of any proceedings for liquidation, dissolution or other winding up of the Issuer, whether or not involving insolvency or bankruptcy, or (b) subject to the provisions of Section 13.02 that (i) a default shall have occurred with respect to the payment of principal of or interest on or other monetary amounts due and payable on any Senior Indebtedness, or (ii) there shall have occurred an event of default (other than a default in the payment of principal or interest or other monetary amounts due and payable) in respect of any Senior Indebtedness, as defined therein or in the instrument under which the same is outstanding, permitting the holder or holders

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thereof to accelerate the maturity thereof (with notice or lapse of time, or both), and such event of default shall have continued beyond the period of grace, if any, in respect thereof, and, in the cases of subclauses (i) and (ii) of this clause (b), such default or event of default shall not have been cured or waived or shall not have ceased to exist, or (c) that the principal of and accrued interest on the Securities of any series shall have been declared due and payable pursuant to Section 5.01 and such declaration shall not have been rescinded and annulled as provided in Section 5.01 then:

     (i) the holders of all Senior Indebtedness shall first be entitled to receive payment of the full amount due thereon, or provision shall be made for such payment in money or money’s worth, before the Holders of any of the Securities or Coupons are entitled to receive a payment on account of the principal of or interest on the indebtedness evidenced by the Securities or of the Coupons, including, without limitation, any payments made pursuant to Article 12.

     (ii) any payment by, or distribution of assets of, the Issuer of any kind or character, whether in cash, property or securities, to which the Holders of any of the Securities or Coupons or the Trustee would be entitled except for the provisions of this Article shall be paid or delivered by the person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of such Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of such Senior Indebtedness held or represented by each, to the extent necessary to make payment in full of all Senior Indebtedness remaining unpaid after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness, before any payment or distribution is made to the holders of the indebtedness evidenced by the Securities or Coupons or to the Trustee under this instrument; and

     (iii) in the event that, notwithstanding the foregoing, any payment by, or distribution of assets of, the Issuer of any kind or character, whether in cash, property or securities, in respect of principal of or interest on the Securities or in connection with any repurchase by the Issuer of the Securities, shall be received by the Trustee or the Holders of any of the Securities or Coupons before all Senior Indebtedness is paid in full, or provision made for such payment in money or money’s worth, such payment or distribution in respect of principal of or interest on the Securities or in connection with any repurchase by the Issuer of the Securities shall be paid over to the holders of such Senior Indebtedness or

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their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any such Senior Indebtedness may have been issued, ratably as aforesaid, for application to the payment of all Senior Indebtedness remaining unpaid until all such Senior Indebtedness shall have been paid in full, after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness.

     Notwithstanding the foregoing, at any time after the 91st day following the date of deposit of cash or, in the case of Securities payable only in Dollars, U.S. Government Obligations pursuant to Section 10.01(b) or Section 10.01(c) (provided all other conditions set out in such Section shall have been satisfied) the funds so deposited and any interest thereon will not be subject to any rights of holders of Senior Indebtedness including, without limitation, those arising under this Article 13.

      Section 13.02 . Disputes with Holders of Certain Senior Indebtedness. Any failure by the Issuer to make any payment on or perform any other obligation under Senior Indebtedness, other than any indebtedness incurred by the Issuer or assumed or guaranteed, directly or indirectly, by the Issuer for money borrowed (or any deferral, renewal, extension or refunding thereof) or any indebtedness or obligation as to which the provisions of this Section shall have been waived by the Issuer in the instrument or instruments by which the Issuer incurred, assumed, guaranteed or otherwise created such indebtedness or obligation, shall not be deemed a default or event of default under Section 13.01(b) if (a) the Issuer shall be disputing its obligation to make such payment or perform such obligation and (b) either (i) no final judgment relating to such dispute shall have been issued against the Issuer which is in full force and effect and is not subject to further review, including a judgment that has become final by reason of the expiration of the time within which a party may seek further appeal or review, and (ii) in the event of a judgment that is subject to further review or appeal has been issued, the Issuer shall in good faith be prosecuting an appeal or other proceeding for review and a stay of execution shall have been obtained pending such appeal or review.

     Section 13.03 . Subrogation. Subject to the payment in full of all Senior Indebtedness, the Holders of the Securities and any Coupons shall be subrogated (equally and ratably with the holders of all obligations of the Issuer which by their express terms are subordinated to Senior Indebtedness of the Issuer to the same extent as the Securities are subordinated and which are entitled to like rights of subrogation) to the rights of the holders of Senior Indebtedness to receive payments or distributions of cash, property or securities of the Issuer applicable to the Senior Indebtedness until all amounts owing on the Securities and any Coupons shall be paid in full, and as between the Issuer, its creditors other than holders of such Senior Indebtedness and the Holders, no such payment or distribution made to the holders of Senior Indebtedness by virtue of this Article

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that otherwise would have been made to the Holders shall be deemed to be a payment by the Issuer on account of such Senior Indebtedness, it being understood that the provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of Senior Indebtedness, on the other hand.

     Section 13.04 . Obligation of Issuer Unconditional. Nothing contained in this Article or elsewhere in this Indenture or in the Securities or any Coupons is intended to or shall impair, as among the Issuer, its creditors other than the holders of Senior Indebtedness and the Holders, the obligation of the Issuer, which is absolute and unconditional, to pay to the Holders the principal of and interest on the Securities and the amounts owed pursuant to any Coupons as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Issuer other than the holders of Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness in respect of cash, property or securities of the Issuer received upon the exercise of any such remedy.

     Upon payment or distribution of assets of the Issuer referred to in this Article, the Trustee and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which any such dissolution, winding up, liquidation or reorganization proceeding affecting the affairs of the Issuer is pending or upon a certificate of the trustee in bankruptcy, receiver, assignee for the benefit of creditors, liquidating trustee or agent or other person making any payment or distribution, delivered to the Trustee or to the Holders, for the purpose of ascertaining the persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other indebtedness of the Issuer, the amount thereof or payable thereon, the amount paid or distributed thereon and all other facts pertinent thereto or to this Article.

     Section 13.05 . Payments on Securities and Coupons Permitted. Nothing contained in this Article or elsewhere in this Indenture or in the Securities or Coupons shall affect the obligations of the Issuer to make, or prevent the Issuer from making, payment of the principal of or interest on the Securities and of any Coupons in accordance with the provisions hereof and thereof, except as otherwise provided in this Article.

     Section 13.06 . Effectuation of Subordination by Trustee.Each holder of Securities or Coupons, by his acceptance thereof, authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article and appoints the Trustee his attorney-in-fact for any and all such purposes.

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     Section 13.07 . Knowledge of Trustee. Notwithstanding the provisions of this Article or any other provisions of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of moneys to or by the Trustee, or the taking of any other action by the Trustee, unless and until the Trustee shall have received written notice thereof mailed or delivered to the Trustee at its Corporate Trust Office from the Issuer, any Holder, any paying agent or the holder or representative of any class of Senior Indebtedness; provided that if at least three Business Days prior to the date upon which by the terms hereof any such moneys may become payable for any purpose (including, without limitation, the payment of the principal or interest on any Security or interest on any Coupon) the Trustee shall not have received with respect to such moneys the notice provided for in this Section, then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such moneys and to apply the same to the purpose for which they were received and shall not be affected by any notice to the contrary that may be received by it within three Business Days prior to or on or after such date.

     Section 13.08 . Trustee May Hold Senior Indebtedness. The Trustee shall be entitled to all the rights set forth in this Article with respect to any Senior Indebtedness at the time held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in Section 6.03 or elsewhere in this Indenture shall deprive the Trustee of any of its rights as such holder.

      Section 13.09 . Rights of Holders of Senior Indebtedness Not Impaired. No right of any present or future holder of any Senior Indebtedness to enforce the subordination herein shall at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Issuer or by any noncompliance by the Issuer with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with.

     With respect to the holders of Senior Indebtedness, (a) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, (b) the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, (c) no implied covenants or obligations shall be read into this Indenture against the Trustee and (d) the Trustee shall not be deemed to be a fiduciary as to such holders.

     Section 13.10 . Article Applicable to Paying Agents. In case at any time any paying agent other than the Trustee shall have been appointed by the Issuer and be then acting hereunder, the term “Trustee” as used in this Article shall in such case (unless the context shall require otherwise) be construed as extending to and including such paying agent within its meaning as fully for all intents and purposes as if such paying agent were named in this Article in addition to or in

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place of the Trustee,provided, however, that Sections 13.07 and 13.08 shall not apply to the Issuer if it acts as its own paying agent.

     Section 13.11. Trustee; Compensation Not Prejudiced. Nothing in this Article shall apply to claims of, or payments to, the Trustee pursuant to Section 6.06.

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     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of October 12, 2006.

	MORGAN STANLEY
[CORPORATE SEAL]
	By:	/s/ Jai Sooklal
		Name:	Jai Sooklal
		Title:	Assistant Treasurer
Attest:
By:   /s/ Jeanne E. Greeley
Jeanne E. Greeley	THE BANK OF NEW YORK, TRUSTEE
Assistant Secretary
	By:	/s/ Franca M. Ferrera
		Name:	Franca M. Ferrera
		Title:	Assistant Vice President

STATE OF NEW YORK	)
	)	ss.:
COUNTY OF NEW YORK	)

     On this 12^th of October, 2006 before me personally came Jai Sooklal, to me personally known, who, being by me duly sworn, did depose and say that he is an Assistant Treasurer of Morgan Stanley, one of the corporations described in and which executed the above instrument; that he knows the corporate seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.

[NOTARIAL SEAL] 

/s/ Elizabeth M. Dempsey

Notary Public 

STATE OF NEW YORK	)
	)	ss.:
COUNTY OF NEW YORK	)

     On this 12^th of October, 2006 before me personally came Franca M. Ferrera, to me personally known, who, being by me duly sworn, did depose and say that she is an Assistant Vice President of The Bank of New York, one of the corporations described in and which executed the above instrument and that he signed his name thereto by like authority.

[NOTARIAL SEAL] 

/s/ Elizabeth M. Dempsey

Notary Public 

CROSS REFERENCE SHEET

Between

     Provisions of Trust Indenture Act of 1939 and Junior Subordinated Indenture to be dated as of October 12, 2006 between MORGAN STANLEY and THE BANK OF NEW YORK, Trustee.

Section of the Act		Section of the Indenture
310(a)	(1) and (2)	6.09
310(a)	(3) and (4)	Inapplicable
310	(b)	6.08 and 6.10(a), (b) and (d)
310	(c)	Inapplicable
311	(a)	6.13
311	(b)	6.13
312	(a)	4.01
312	(b)	4.02
312	(c)	4.02
313	(a)	4.04
313(b)	(1)	Inapplicable
313(b)	(2)	Inapplicable
313	(c)	4.04
313	(d)	4.03
314	(a)	4.03
314	(b)	Inapplicable
314(c)	(1) and (2)	11.05
314(c)	(3)	Inapplicable
314	(d)	Inapplicable
314	(e)	11.05
314	(f)	Inapplicable
315(a)	, (c) and (d)	6.01
315	(b)	5.11
315	(e)	5.12
316(a)	(1)	5.09
316(a)	(2)	Inapplicable
316	(b)	5.07
317(a)	(1)	5.02
317(a)	(2)	5.02 (a)
317	(b)	3.04(a) and (b)
318	(a)	11.07

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Junior Subordinated Indenture.

EX-4.2

Exhibit 4.2

     THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY, OR OTHERWISE PROTECTED BY, ANY FEDERAL AGENCY OR THE SECURITIES INVESTOR PROTECTION CORPORATION. THIS OBLIGATION IS SUBORDINATED TO THE SENIOR INDEBTEDNESS OF THE ISSUER AS SET FORTH HEREIN AND IS NOT SECURED.

JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE

REGISTERED	REGISTERED
No. 1	US$1,100,010,000
	CUSIP: 61747SAB4

MORGAN STANLEY
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE

     Morgan Stanley, a Delaware corporation (together with its successors and assigns, the “Issuer”), for value received, hereby promises to pay to The Bank of New York, as Property Trustee (the “Property Trustee,” which term includes any successor Property Trustee for Morgan Stanley Capital Trust VII) for Morgan Stanley Capital Trust VII, a statutory trust formed under the laws of the State of Delaware (the “Issuer Trust”), or registered assignees, the principal sum of US$1,100,010,000 (UNITED STATES DOLLARS ONE BILLION ONE HUNDRED MILLION TEN THOUSAND) on January 15, 2046 (the “Scheduled Redemption Date”) or thereafter out of the net proceeds from the sale of certain Replacement Securities, as described on the reverse hereof, or, if the Issuer is unable to raise such proceeds, on October 15, 2066 (or if this day is not a business day, the following business day). The Issuer further promises to pay interest on said principal sum at the annual rate of 6.60% from and including October 12, 2006 to but excluding the date the principal hereof is paid or duly made available for payment (except as provided below). Interest is payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year (each an “Interest Payment Date”), commencing January 15, 2007.

     Interest on this Debenture shall accrue from and including the most recent Interest Payment Date on which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for, from and including October 12, 2006 to but excluding the date the principal hereof has been paid or duly made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date shall, subject to certain exceptions described herein, be paid to the Person in whose name this Debenture (or one or more predecessor Debentures) is registered at the close of business on the 15th calendar day (whether or not a Business Day) next preceding such Interest Payment Date (each such date a “Record Date”). “Business Day” means any day, other than a Saturday or Sunday, that is not a day on which banking

institutions in The City of New York are authorized or required by law or executive order to remain closed. A Holder of US$1,000,000 or more in aggregate principal amount of Debentures having the same Interest Payment Date, the interest on which is payable in U.S. dollars, shall be entitled to receive payments of interest, other than interest due at maturity or on any date of redemption or repayment, by wire transfer of immediately available funds if appropriate wire transfer instructions have been received by the Paying Agent in writing not less than 15 calendar days prior to the applicable Interest Payment Date.

     Reference is hereby made to the further provisions of this Debenture set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place, including, without limitation, the provisions relating to the subordination of this Debenture to the Issuer’s Senior Indebtedness, the deferral of interest during Optional Deferral Periods, the Alternative Payment Mechanism to be used to pay any Deferred Interest and the right of the Issuer to redeem the Debentures prior to the Scheduled Redemption Date, each as defined on the reverse hereof.

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

2

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

DATED: October 12, 2006

MORGAN STANLEY
By:	/s/ Jai Sooklal
	Name:	Jai Sooklal
	Title:	Assistant Treasurer

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Debentures referred to in the within-mentioned Junior Subordinated Indenture.

DATED: October 12, 2006

THE BANK OF NEW YORK,      as Trustee
By:	/s/ Frank Ferrera
	Authorized Signatory

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REVERSE OF SECURITY

     This debenture is one of a duly authorized issue of 6.60% Junior Subordinated Debentures due October 15, 2066 (the “Final Maturity Date”), and redeemable on such earlier date or dates as provided herein, of the Issuer (the “Debentures”). The Debentures are issuable under the Junior Subordinated Indenture, dated as of October 12, 2006, between Morgan Stanley (the “Issuer”) and The Bank of New York, as Trustee (the “Trustee,” which term includes any successor trustee under the Junior Subordinated Indenture) (the “Junior Subordinated Indenture”), to which Junior Subordinated Indenture reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities of the Issuer, the Trustee and holders of the Debentures and the terms upon which the Debentures are, and are to be, authenticated and delivered. The Issuer has appointed The Bank of New York at its corporate trust office in The City of New York as the paying agent (the “Paying Agent,” which term includes any additional or successor Paying Agent appointed by the Issuer) with respect to the Debentures. To the extent not inconsistent herewith, the terms of the Junior Subordinated Indenture are hereby incorporated by reference herein. Capitalized terms not otherwise defined herein have the meaning given to such terms in the Junior Subordinated Indenture.

     This Debenture shall not be subject to any sinking fund, shall not be subject to repayment at the option of the holder and, except as provided below, shall not be redeemable prior to the Final Maturity Date.

     The Issuer covenants (the “Replacement Capital Obligation”) to redeem the Debentures on January 15, 2046 (the “Scheduled Redemption Date”), but only out of net proceeds raised from the sale to third party purchasers of one or more issuances of Replacement Securities in the amounts specified below.

     The Replacement Capital Obligation is limited. Except as described below, and subject to the occurrence of a Market Disruption Event, the Issuer shall use its Commercially Reasonable Efforts to raise sufficient net proceeds from the sale of Replacement Securities to redeem the Debentures in full on the Scheduled Redemption Date only to the extent that it has raised sufficient net proceeds within the 180-day period prior to the date on which the Issuer gives its notice of redemption pursuant to the Junior Subordinated Indenture, which shall be not more than 30 and not less than 15 days prior to the Scheduled Redemption Date. If the Issuer has not raised sufficient net proceeds to permit redemption in full of the Debentures on the Scheduled Redemption Date at their principal plus accrued and unpaid interest thereon, it shall apply any available proceeds so raised first to pay the accrued and unpaid installments of interest in chronological order and second to repay all principal outstanding on the Debentures. Except as described below, and subject to the occurrence of a Market Disruption Event, the Issuer shall continue using its Commercially Reasonable Efforts to raise sufficient

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proceeds to permit repayment of the balance of the amount due on the Debentures as soon as commercially practicable and shall use any proceeds raised on each Interest Payment Date following the Scheduled Redemption Date to reduce the balance outstanding on such Interest Payment Date until the Debentures are paid in full. The Issuer shall not otherwise redeem the Debentures on or after the Scheduled Redemption Date. The Replacement Capital Obligation shall continue to apply until (i) the Issuer has raised sufficient net proceeds from the sale of Replacement Securities to permit redemption in full in accordance with the Replacement Capital Obligation, (ii) the Debentures are otherwise paid in full on the Final Maturity Date or (iii) the occurrence of an Event of Default resulting in the acceleration of the principal amount of the Debentures.

     The Issuer shall only have the right to modify or terminate the Replacement Capital Obligation with the consent of the Holders of a majority in principal amount of the Debentures; provided that the Replacement Capital Obligation may be amended or supplemented from time to time by a written instrument signed only by the Issuer (and without the consent of the Holders) if (i) such amendment eliminates Common Stock, Mandatorily Convertible Preferred Stock and/or Debt Exchangeable for Equity (but only to the extent exchangeable for Common Stock) as a type of security or securities qualifying as Capital Replacement Securities and the Issuer has been advised in writing by a nationally recognized independent accounting firm that there is more than an insubstantial risk that the failure to do so would result in a reduction in the Issuer’s earnings per share as calculated for financial reporting purposes or (ii) such amendment or supplement is not adverse to the Holders then in effect or imposes additional restrictions on the types of securities qualifying as Capital Replacement Securities, and, in either case described in this clause (ii), an officer of the Issuer has delivered to the Holders a written certificate stating that, in his or her determination, such amendment or supplement is not adverse to the Holders. In no event, however, shall the Issuer’s failure to obtain such consent be an Event of Default hereunder.

     Any principal amount of this Debenture remaining outstanding, together with accrued and unpaid interest, will be due and payable on the Final Maturity Date, regardless of the amount of Capital Replacement Securities the Issuer has issued and sold by that time.

     “Commercially Reasonable Efforts” to sell securities in accordance with the Replacement Capital Obligation or the Alternative Payment Mechanism means commercially reasonable efforts by the Issuer to complete the offer and sale of the Issuer’s securities to third parties that are not Subsidiaries of the Issuer in public offerings or private placements. The Issuer shall not be considered to have made commercially reasonable efforts to effect a sale of securities if it determines to not pursue or complete such sale due to pricing, coupon, dividend rate or dilution considerations.

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     The Issuer shall not be required to redeem the Debentures on the Scheduled Redemption Date or any Interest Payment Date following the Scheduled Redemption Date, as the case may be (each a “Required Repayment Date”), to the extent it provides written certification to the Trustee no more than 30 and no less than 15 days in advance of the Required Repayment Date certifying that (i) a Market Disruption Event was existing during the 180-day period preceding the date of such certificate or, in the case of any required redemption after the Scheduled Redemption Date, the 90-day period preceding the date of such certificate and (ii) either (a) the Market Disruption Event continued for the entire 180-day period or 90-day period, as the case may be, or (b) the Market Disruption Event continued for only part of such period, but the Issuer was unable after Commercially Reasonable Efforts to raise sufficient net proceeds during the rest of such period to permit redemption of the Debentures in full.

     Net proceeds that the Issuer is permitted to apply to redemption of the Debentures on and after the Scheduled Redemption Date shall be applied first to pay Deferred Interest to the extent of eligible proceeds raised under the Alternative Payment Mechanism, second to pay current interest that the Issuer is not paying from other sources and third to redeem the principal of the Debentures, subject to a minimum principal amount of US$5,000,000 to be redeemed on any Required Repayment Date; provided that if the Issuer is obligated to sell Replacement Securities in accordance with the Replacement Capital Obligation and apply the net proceeds to payments of principal of or interest on any outstanding securities in addition to the Debentures (the “Other Securities”), then on any date and for any period the amount of net proceeds received by the Issuer from such sales and available for such payments shall be applied to the Debentures and the Other Securities having the same scheduled repayment date or scheduled redemption date as the Debentures pro rata in accordance with their respective outstanding principal amounts, and none of such net proceeds shall be applied to any Other Securities having a later scheduled repayment date or scheduled redemption date until the principal of and all accrued and unpaid interest on the Debentures has been paid in full.

     “Replacement Securities” means securities that in the determination of the Issuer’s Board of Directors reasonably construing the definitions and other terms of the Replacement Capital Obligation meet one of the following criteria:

     (a) Common Stock (which shall be valued, for purposes of the Replacement Capital Obligation, at 400% of the net proceeds raised);

     (b) Debt Exchangeable for Equity;

     (c) Qualifying Non-Cumulative Preferred Stock;

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     (d) Non-Cumulative Preferred Stock having either:

     (i) (A) no maturity or a maturity of at least 60 years and (B) a Replacement Capital Intention; or

     (ii) (A) maturity of at least 40 years, (B) either (1) a Legally Binding Replacement Covenant or (2), subject to any then required regulatory approval, a Mandatory Trigger Provision, (C) an Optional Deferral Provision and (D) a Replacement Capital Intention;

     (e) cumulative preferred stock with

     (i) (A) no prepayment obligation on the part of the issuer thereof, whether at the election of the holders or otherwise, (B) no maturity or a maturity of at least 60 years and (C) a Legally Binding Replacement Covenant; or

     (ii) a requirement that such securities convert into Common Stock of the Issuer within three years from the date of issuance at a conversion ratio within a range established at the time of issuance of such securities; or

     (iii) having either (A) (1) a maturity, if any, of at least 60 years and (2) a Replacement Capital Intention or (B) a maturity of at least 40 years and a Legally Binding Replacement Covenant;

     (f) Other securities that rank upon a liquidation, dissolution or winding-up of the Issuer either (i) pari passu with or junior to the Debentures or (ii) pari passu with the claims of the Issuer’s trade creditors and junior to all of the Issuer’s long-term indebtedness for money borrowed (other than the Issuer’s long-term indebtedness for money borrowed from time to time outstanding that by its terms ranks pari passu with such securities on a liquidation, dissolution or winding-up of the Issuer); and

     (i) may include New Equity Settlement provisions and (A) have a maturity, if any, of at least 60 years, an Optional Deferral Provision and a Legally Binding Replacement Covenant or (B) having a maturity of at least 40 years and a Legally Binding Replacement Covenant; or

     (ii) include New Equity Settlement provisions and either (A) have a maturity, if any, of at least 40 years and, subject to any then required regulatory approval, a Mandatory Trigger Provision and a Replacement Capital Intention or (B) have a maturity, if any, of at least 25 years, a Legally Binding Replacement Covenant and, subject to any then required regulatory approval, a Mandatory Trigger Provision;

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     (g) preferred stock issued by the Issuer that has (1) no maturity or a maturity of at least 60 years, (2) a Replacement Capital Intention and (3) an Optional Deferral Provision;

     (h) securities issued by the Issuer or a Subsidiary of the Issuer that (i) rank pari passu with or junior to the Debentures upon a liquidation, dissolution or winding up of the Issuer, (ii) either (A) have no maturity or a maturity of at least 60 years and a Replacement Capital Intention or (B) have no maturity or a maturity at least 30 years and are subject to a Legally Binding Replacement Covenant and (iii) have an Optional Deferral Provision;

     (i) securities issued by the Issuer or a Subsidiary of the Issuer that (i) rank pari passu with the Debentures, (ii) have a Mandatory Trigger Provision and an Optional Deferral Provision and (iii) have no maturity or a maturity at least 30 years and a Replacement Capital Intention; and

     (j) cumulative preferred stock issued by the Issuer or a Subsidiary of the Issuer that either (1) has no maturity or a maturity of at least 60 years and a Replacement Capital Intention or (2) has a maturity of at least 40 years and is subject to a Legally Binding Replacement Covenant.

     Additionally, and notwithstanding the foregoing, any securities or combinations of securities if issued by the Issuer to any of its Subsidiaries, without the contemporaneous issuance of a security or combination of securities that otherwise would satisfy the definition of “Replacement Securities” by the Subsidiary to a Person other than a Subsidiary of the Issuer, shall not qualify as Replacement Securities.

     “Common Stock” means the common stock of the Issuer.

     “Debt Exchangeable for Equity” means a security (or combination of securities) that:

     (i) gives the holder a beneficial interest in (a) debt securities of the Issuer that are non-cumulative and that are the most junior subordinated debt of the Issuer (or rank pari passu with the most junior subordinated debt of the Issuer) and (b) a fractional interest in a stock purchase contract;

     (ii) includes a remarketing feature pursuant to which the subordinated debt of the Issuer is remarketed to new investors commencing within five years from the date of issuance of the security or earlier in the event of an early settlement event based on one or more financial tests set forth in the terms of such securities or related transaction agreements;

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     (iii) provides for the proceeds raised in the remarketing to be used to purchase Qualifying Non-Cumulative Preferred Stock;

     (iv) includes a replacement capital covenant substantially similar to the Replacement Capital Covenant, provided that such replacement capital covenant will apply to such security (or combination of securities) and to the Qualifying Non-Cumulative Preferred Stock and will not include Debt Exchangeable for Equity in its definition of “replacement securities;” and

     (v) after the issuance of such Qualifying Non-Cumulative Preferred Stock, provides the holder of the security with a beneficial interest in such Qualifying Non-Cumulative Preferred Stock.

     “Distribution Date” means, as to any securities or combination of securities, the dates on which periodic Distributions on such securities are scheduled to be made.

     “Distribution Period” means, as to any securities or combination of securities, each period from and including a Distribution Date for such securities to but not including the next succeeding Distribution Date for such securities.

     “Distributions” means, as to a security or combination of securities, dividends, interest payments or other income distributions to the holders thereof that are not Subsidiaries of the Issuer.

      “Legally Binding Replacement Covenant” means, as to any security or combination of securities, a covenant made by the Issuer, substantially similar to the Replacement Capital Covenant, to the effect that the Issuer shall redeem or repurchase such securities only if and to the extent that the total redemption or repurchase price is equal to or less than the proceeds received by the Issuer or by a Subsidiary of the Issuer during the six (6) months prior to the applicable redemption or repurchase date from the sale of Replacement Securities that are as or more equity-like than the securities being redeemed or repurchased.

     “Mandatory Trigger Provision” means as to any security or combination of securities (together in this definition, “securities”), provisions in the terms thereof or of the related transaction agreements that (A) require, or at its option in the case of Non-Cumulative Preferred Stock permit, the issuer of such securities to make payment of Distributions on such securities only pursuant to the issuance and sale of Common Stock or rights to purchase Common Stock up to a maximum of 2% of the Issuer’s market capitalization or such issuer’s Settlement Stock, within two years of a failure by such issuer to satisfy one or more financial tests set forth in the terms of such securities or related transaction agreements, in an amount such that the net proceeds of such sale are at least equal to the amount of unpaid Distributions on such securities (including without limitation

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all deferred and accumulated amounts) and in either case require the application of the net proceeds of such sale to pay such unpaid Distributions, provided that the amount of Settlement Stock the net proceeds of which such issuer may apply to pay such Distributions pursuant to such provision may not exceed 25% of the liquidation or principal amount of such securities, (B) prohibit such issuer from repurchasing any of the Issuer’s Common Stock prior to the date six months after such issuer applies the net proceeds of the sales described in clause (A) to pay such unpaid Distributions in full and (C) upon any liquidation, dissolution, winding up, reorganization or in connection with any insolvency, receivership or proceeding under any bankruptcy law with respect to such issuer, limit the claim of the holders of such securities (other than Non-Cumulative Preferred Stock) for Distributions that accumulate during a period in which such issuer fails to satisfy one or more financial tests set forth in the terms of such securities or related transaction agreements to (x) 25% of the principal amount of such securities then outstanding in the case of securities not permitting the issuance and sale pursuant to the provisions described in clause (A) above of securities other than Common Stock or rights to acquire Common Stock or (y) two years of accumulated and unpaid Distributions (including compounded amounts thereon) in all other cases. No remedy other than Permitted Remedies will arise by the terms of such securities or related transaction agreements in favor of the holders of such securities as a result of such issuer’s failure to pay Distributions because of the Mandatory Trigger Provision or as a result of such issuer’s exercise of its right under an Optional Deferral Provision until Distributions have been deferred for one or more Distribution Periods that total together at least ten years.

     “New Equity Settlement” means, with respect to any securities or combination of securities referred to in the definition of Replacement Securities, that such securities or related transaction agreements include a provision to the effect that, if the Issuer has exhausted its rights to defer Distributions at its option pursuant to an Optional Deferral Provision and such deferral continues beyond a specific date specified in such security or if any Mandatory Trigger Provision has become applicable, the Issuer shall, unless a Market Disruption Event has occurred and is continuing, (a) use its commercially reasonable efforts to sell shares of its Common Stock and/or, at its option, Settlement Stock to the extent the securities do not include a Mandatory Trigger Provision, in an amount such that the net proceeds of such sale shall equal or exceed such Distributions and (b) apply the net proceeds of such sale to pay such Distributions in full.

     “Non-Cumulative Preferred Stock” means preferred stock of the Issuer or of a Subsidiary of the Issuer that (i) ranks pari passu with or junior to other preferred stock of the Issuer and (ii) the terms of which provide for Distributions that may be suspended by the Issuer for any number of Distribution Periods without any remedy arising by the terms of such stock or related transaction agreements in favor of the holders of such stock as a result of the stock issuer’s failure to pay Distributions, other than: (x) rights in favor of the holders thereof

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permitting such holders to elect one or more directors of the Issuer or a Subsidiary of the Issuer (including any such rights required by the listing requirements of any stock or securities exchange on which such stock may be listed or traded) and/or (y) prohibitions on the Issuer or a Subsidiary of the Issuer paying Distributions on or repurchasing Common Stock or other stock that ranks junior as to Distributions to such stock for so long as Distributions on such stock, including deferred distributions, have not been paid in full.

     “Optional Deferral Provision” means, as to any security or combination of securities, a provision in the terms thereof or of the related transaction agreements that permits the Issuer, in its sole discretion, to defer in whole or in part payment of Distributions on such securities for one or more consecutive Distribution Periods of up to ten years without any remedy other than Permitted Remedies as a result of the Issuer’s failure to pay Distributions.

     “Permitted Remedies” means, as to any security or combination of securities, any one or more of (i) prohibitions on the Issuer or a Subsidiary of the Issuer paying Distributions on or repurchasing Common Stock or other securities that rank junior as to Distributions to such securities for so long as Distributions on such securities, including deferred distributions, have not been paid in full and (ii) provisions obliging the Issuer to pay certain deferred Distributions pursuant to a New Equity Settlement.

     “Person” means any individual, corporation, partnership, joint venture, trust, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof.

     “Qualifying Non-Cumulative Preferred Stock” means Non-Cumulative Preferred Stock that, either by its terms or when taken together with any related transaction agreements:

     (i) ranks pari passu with or junior to other preferred stock of the Issuer; and

     (ii) (A) is perpetual or has a mandatory redemption or maturity date that is not less than 60 years after the date of initial issuance of such securities and (B) has (1) either a Legally Binding Replacement Covenant or, subject to any then required regulatory approval, a Mandatory Trigger Provision, (2) a Replacement Capital Intention and (3) an Optional Deferral Provision; or

     (iii) (A) has a mandatory redemption or maturity date that is not less than 40 years after the date of initial issuance of such securities, (B) has a Legally Binding Replacement Covenant and (C) (1), subject to any

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then required regulatory approval, includes a Mandatory Trigger Provision and (2) has an Optional Deferral Provision;

provided that, as used in the definition of “Debt Exchangeable for Equity,” “Qualifying Non-Cumulative Preferred Stock” means Non-Cumulative Preferred

Stock that, either by its terms or when taken together with any related transaction agreements, is perpetual and ranks pari passu with or junior to other preferred stock of the Issuer.

     “Replacement Capital Covenant” means the replacement capital covenant dated the date hereof by the Issuer in favor of, and for the benefit of, each Covered Debtholder (as defined therein), a copy of which will be filed by the Issuer with the Securities and Exchange Commission (“SEC”) as an exhibit to the registration statement pertaining to the offering of securities (the “Capital Securities”) by the Issuer Trust to the public.

     “Replacement Capital Intention” means, as to any security or combination of securities, that the Issuer has publicly stated its intention, either in the prospectus or other offering document under which such securities were initially offered for sale or in filings with the SEC made by the Issuer under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), prior to or contemporaneously with the issuance of such securities, that the Issuer will redeem or repurchase such securities only with the proceeds of specified replacement capital securities that have terms and provisions at the time of redemption or repurchase that are as or more equity-like than the securities then being redeemed or repurchased, raised within six (6) months prior to the applicable redemption or repurchase date.

     “Settlement Stock” means Non-Cumulative Preferred Stock that is perpetual with no prepayment obligation on the part of the issuer thereof, whether at the election of the holders or otherwise, is callable at the option of such issuer and either:

     (i) has a Legally Binding Replacement Covenant; or

     (ii) has a Replacement Capital Intention and a Mandatory Trigger Provision.

     “Share Buy-Back Covenant” means, as to any security or combination of securities, a covenant made by the Issuer to the effect that it shall not repurchase any of its Common Stock for a period of six (6) months following the payment of all deferred Distributions with proceeds from the sale of Common Stock pursuant to a New Equity Settlement.

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     “Subsidiary” of the Issuer means, at any time, any Person the shares of stock or other ownership interests of which having ordinary voting power to elect a majority of the board of directors or other managers of such Person are at the time owned, or the management or policies of which are otherwise at the time controlled, directly or indirectly through one or more intermediaries (including other Subsidiaries) or both, by the Issuer.

     This Debenture may be redeemed at the option of the Issuer (i) on or after October 15, 2011, in whole at any time or in part from time to time, (ii) prior to October 15, 2011, (a) in whole (but not in part) at any time within 90 days following the occurrence and continuation of a Tax Event or an Investment Company Event (the “90-Day Period”) or (b) in whole or in part at any time following the occurrence of a Regulatory Capital Event for as long as such event is continuing. In each case, the Debentures shall be redeemed at a redemption price equal to the accrued and unpaid interest on the Debentures so redeemed to but excluding the date fixed for redemption, plus 100% of the principal amount thereof (the “Redemption Price”).

     In addition, subject to obtaining any then required regulatory approval, the Issuer may redeem Debentures at the Early Redemption Price on any date (such date, the “Early Redemption Date”) before October 15, 2011, in whole or in part, following the occurrence of a Rating Agency Event for as long as such event is continuing (such right to redeem, the “Rating Agency Call”).

     “Early Redemption Price” means, with respect to any Debentures to be redeemed in accordance with the Rating Agency Call, the greater of (1) 100% of the principal amount of the Debentures to be redeemed, and (2) the sum of the present values of the remaining scheduled payments of principal (discounted from October 15, 2011) and interest that would have been payable to and including October 15, 2011 (discounted from their respective Interest Payment Dates) on the Debentures to be redeemed (not including any portion of such payments of interest accrued to the Early Redemption Date) to the Early Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 50 basis points, as calculated by the Premium Calculation Agent; plus, in either case (1) or (2), accrued and unpaid interest on the principal amount being redeemed to the Early Redemption Date.

     “Treasury Rate” means, with respect to any date of redemption, the yield, under the heading that represents the average for the immediately preceding week, appearing in the most recently published statistical release designated H.15(519) or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption Treasury Constant Maturities, for the maturity corresponding to the comparable treasury issue (if no maturity is within three months before or after the Remaining Term,

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yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate will be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month); or if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such date of redemption.

     The Treasury Rate will be calculated on the third Business Day preceding the Early Redemption Date.

     “Premium Calculation Agent” means Morgan Stanley & Co. Incorporated, or if that firm is unwilling or unable to select the Comparable Treasury Issue, an investment banking institution of national standing appointed by the Trustee after consultation with the Issuer.

     “Comparable Treasury Issue” means the U.S. Treasury security selected by the Premium Calculation Agent as having a maturity comparable to the term remaining from the Early Redemption Date to October 15, 2011 (the “Remaining Term”) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable term.

     “Comparable Treasury Price” means, with respect to an Early Redemption Date (1) the average of five Reference Treasury Dealer Quotations for such Early Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Premium Calculation Agent obtains fewer than five such Reference Treasury Dealer Quotations, the average of all such quotations.

     “Reference Treasury Dealer” means (1) Morgan Stanley & Co. Incorporated and its successors, provided, however, that if the foregoing shall cease to be a primary U.S. government securities dealer in New York City (a “Primary Treasury Dealer”) Morgan Stanley will substitute therefor another Primary Treasury Dealer and (2) any other Primary Treasury Dealers selected by the Premium Calculation Agent after consultation with the Issuer.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Early Redemption Date, the average, as determined by the Premium Calculation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Premium Calculation Agent at 5:00

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p.m., New York City time, on the third Business Day preceding such redemption date.

     The Issuer will notify the Issuer Trust of the Redemption Price or Early Redemption Price promptly after the calculation thereof and the Issuer Trust shall have no responsibility for calculating the Redemption Price or Early Redemption Price.

     Notice of redemption shall be mailed to the registered Holders of the Debentures designated for redemption at their addresses as the same shall appear on the Debenture register not less than 15 nor more than 30 days prior to the date fixed for redemption (the “Redemption Notice Period”), subject to all the conditions and provisions of the Junior Subordinated Indenture. In the event of redemption of this Debenture in part only, a new Debenture or Debentures for the amount of the unredeemed portion hereof shall be issued in the name of the holder hereof upon the cancellation hereof.

     The Issuer’s right to redeem the Debentures prior to October 15, 2011 as a consequence of a Tax Event or an Investment Company Event shall be subject to the condition that if at the time there is available to the Issuer or the Issuer Trust established pursuant to the Amended and Restated Trust Agreement dated as of October 12, 2006, among the Issuer, as depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, the Administrators and the several Holders party thereto (the “Trust Agreement”), the opportunity to eliminate, within the 90-Day Period, the Tax Event or Investment Company Event by taking some ministerial action (“Ministerial Action”), such as filing a form or making an election, or pursuing some other similar reasonable measure that shall have no adverse effect on the Issuer, the Issuer Trust or the holders of the Capital Securities and shall involve no material cost, the Issuer shall pursue such measures in lieu of redemption; provided further, that the Issuer shall have no right to redeem the Debentures while either it or the Issuer Trust is pursuing any Ministerial Action pursuant to the Trust Agreement. For the avoidance of doubt, the 90-Day Period shall not run during the undertaking of any such Ministerial Action by the Issuer or the Issuer Trust.

     The Redemption Price or Early Redemption Price, as the case may be, shall be paid prior to 12:00 noon, New York time, on the date of such redemption or such earlier time as the Issuer determines; provided, that the Issuer shall deposit with the Trustee an amount sufficient to pay the Redemption Price prior to the redemption date or the Early Redemption Price prior to the Early Redemption Date, as the case may be.

     The term “Tax Event” means the receipt by the Issuer of an opinion of counsel to the Issuer experienced in such matters, who shall not be an officer or employee of the Issuer or any of its affiliates, to the effect that, as a result of any

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amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official or administrative pronouncement or action or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which pronouncement, action or decision is announced on or after October 5, 2006, there is more than an in substantial risk that (i) the Issuer Trust is, or will be within 90 days of the delivery of such opinion, subject to United States federal income tax with respect to income received or accrued on the Debentures, (ii) interest payable by the Issuer to the Issuer Trust on the Debentures is not, or within 90 days of the delivery of such opinion will not be, deductible by the Issuer, in whole or in part, for United States federal income tax purposes or (iii) the Issuer Trust is, or shall be within 90 days of the delivery of the opinion, subject to more than a de minimis amount of other taxes, duties or other governmental charges.

     “Investment Company Event” means the receipt by the Issuer of an opinion of counsel to the Issuer experienced in such matters, who shall not be an officer or employee of the Issuer or any of its affiliates, to the effect that, as a result of the occurrence of a change in law or regulation or a written change (including any announced prospective change) in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Issuer Trust is or will be considered an “investment company” that is required to be registered under the Investment Company Act of 1940, as amended, which change or prospective change becomes effective or would become effective, as the case may be, on or after October 5, 2006.

     “Regulatory Capital Event” means the determination by the Issuer, based on the opinion of counsel experienced in such matters, who may be an employee of the Issuer or any of its affiliates, that as a result of: (i) any amendment to, clarification of or change (including any announced prospective change) in applicable laws or regulations or official interpretations thereof or policies with respect thereto or (ii) any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment, clarification, change, pronouncement or decision is effective or announced on or after October 5, 2006, there is more than an insubstantial risk that the Capital Securities shall no longer constitute tier 1 capital of the Issuer or any holding company of which the Issuer is a subsidiary for the purposes of the capital adequacy guidelines or policies of the SEC or any applicable regulatory body or governmental authority.

     “Rating Agency Event” means the determination by the Issuer that a change by any nationally recognized statistical rating organization within the meaning of Rule 15c3-1 under the Exchange Act that currently publishes a rating for

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Morgan Stanley (a “Rating Agency”) in the equity credit criteria for securities such as the Capital Securities or the Debentures has occurred, resulting in a lower equity credit to the Issuer than the equity credit assigned by such Rating Agency to the Capital Securities or the Debentures on October 5, 2006.

     Interest payments on this Debenture shall include interest accrued to but excluding the Interest Payment Dates or the Final Maturity Date (or any earlier redemption or repayment date), as the case may be. Interest payments for this Debenture shall be computed and paid on the basis of a 360-day year of twelve 30-day months and the actual days elapsed in a partial month in such period. Accrued interest that is not paid on the applicable Interest Payment Date shall bear additional interest on the amount thereof at the rate per annum of 6.60% (the “Coupon Rate”), compounded quarterly and computed on the basis of a 360-day year of twelve 30-day months and the actual days elapsed in a partial month in such period. The amount of any interest payable for any full interest period shall be computed by dividing the rate per annum by four. The term “interest” as used herein includes quarterly interest payments, interest on quarterly interest payments not paid on the applicable Interest Payment Date and Additional Sums, as applicable.

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

     Section 5.01 of the Junior Subordinated Indenture provides that (i) if an Event of Default due to the default in payment of interest on any series of debt securities issued under the Junior Subordinated Indenture, including the series of Debentures of which this Debenture forms a part, shall have occurred and be continuing, either the Trustee or the holders of not less than 25% in principal amount of the debt securities of each affected series (voting as a single class) may then declare the principal of all debt securities of all such series and interest accrued thereon to be due and payable immediately and (ii) if an Event of Default due to certain events of bankruptcy, insolvency and reorganization of the Issuer, shall have occurred and be continuing, either the Trustee or the holders of not less than 25% in principal amount of all debt securities issued under the Junior Subordinated Indenture then outstanding (treated as one class) may declare the principal of all such debt securities and interest accrued thereon to be due and payable immediately, but upon certain conditions such declarations may be annulled and past Defaults may be waived (except a continuing Default in payment of principal or interest on such debt securities) by the holders of a

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majority in principal amount of the debt securities of all affected series then outstanding.

     So long as no Event of Default has occurred and is continuing, the Issuer shall have the right at any time, and from time to time, during the term of the Debentures to defer payments of interest for a period not exceeding 40 consecutive quarters (the “Optional Deferral Period”), during which Optional Deferral Period no interest shall be due and payable; provided, that no Optiona Deferral Period may extend beyond the Final Maturity Date or the acceleration of the principal of the Debentures following an Event of Default. Interest, the payment of which has been deferred because of an Optional Deferral Period, shall bear interest thereon at the Coupon Rate compounded quarterly for each quarter of the Optional Deferral Period and computed on the basis of a 360-day year of twelve 30-day months and the actual days elapsed in a partial month in such period (“Additional Interest”). The Coupon Rate payable for any full interest period shall be computed by dividing the rate per annum by four. At the end of the Optional Deferral Period, all interest accrued and unpaid on this Debenture, including any Additional Sums and Additional Interest (together, “Deferred Interest”) shall become due and payable, and the Issuer shall pay such Deferred Interest to the Holders of this Debenture in whose names this Debenture is registered in the Securities Register on the Record Date with respect to the first Interest Payment Date after the end of the Optional Deferral Period. Before the termination of any Optional Deferral Period, the Issuer may further extend such period; provided, that such period together with all such further extensions thereof shall not exceed 40 consecutive quarters, or extend beyond the Final Maturity Date or the acceleration of the principal of the Debentures following an Event of Default. In the event that any Debentures are called for redemption on a date prior to the end of an Optional Deferral Period, with respect to such Debentures, such Optional Deferral Period shall be deemed to end on such date or an earlier date determined by the Issuer, subject to the Issuer’s compliance with the Alternative Payment Mechanism. Upon the termination of any Optional Deferral Period and upon the payment of all Deferred Interest then due, the Issuer may commence a new Optional Deferral Period, subject to the foregoing requirements. No interest shall be due and payable during an Optional Deferral Period, except at the end thereof, but the Issuer may prepay at any time all or any portion of the interest accrued during an Optional Deferral Period.

     If the Property Trustee (as defined in the Trust Agreement) is the only Holder of the Debentures at the time the Issuer selects an Optional Deferral Period, the Issuer shall give written notice to the Issuer Trustees (as defined in the Trust Agreement) of its selection of such Optional Deferral Period at least 15 Business Days prior to the date the Distributions (as defined in the Trust Agreement) on the Trust Securities (as defined in the Trust Agreement) would have been payable but for the election to begin such Optional Deferral Period.

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     If the Property Trustee is not the only Holder, or is not itself the Holder, of the Debentures at the time the Issuer selects an Optional Deferral Period, the Issuer shall give the Holders of the Debentures and the Trustee written notice of its selection of such Optional Deferral Period at least 10 Business Days before the earlier of the next succeeding Interest Payment Date or the date the Issuer is required to give notice of the record or payment date of such interest payment to Holders of the Debentures.

     In the event of any bankruptcy, insolvency or similar proceedings described in Section 5.01(b) or (c) of the Junior Subordinated Indenture prior to the redemption or repayment of the Debentures, Holders of the Debentures shall only have a claim for, or right to receive, distributions with respect to Deferred Interest, including accrued interest on the deferred payments, to the extent such interest (including accrued interest on the deferred payments) relates to the first two years of the Optional Deferral Period.

     The Issuer covenants that it shall not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Issuer’s capital stock, (ii) make any payment of principal of, or interest or premium, if any, on, or repay, repurchase or redeem any debt securities of the Issuer that rank pari passu in all respects with or junior in interest to the Debentures or (iii) make any guarantee payments on any guarantee of debt securities of any of the Issuer’s Subsidiaries if the guarantee ranks equal or junior to the Debentures (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of the Issuer (1) in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, (2) in connection with a dividend reinvestment or stockholder stock purchase plan or (3) in connection with the issuance of capital stock of the Issuer (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into prior to the applicable Optional Deferral Period, (b) as a result of an exchange, redemption or conversion of any class or series of the Issuer’s capital stock (or any capital stock of a Subsidiary of the Issuer) for any class or series of the Issuer’s capital stock or of any class or series of the Issuer’s indebtedness for any class or series of the Issuer’s capital stock, (c) the purchase of fractional interests in shares of the Issuer’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection with any stockholder’s rights plan, or the issuance of rights, stock or other property under any stockholder’s rights plan, or the redemption or repurchase of rights pursuant thereto, (e) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock, (f) payments under the Guarantee executed and delivered by the Issuer and The

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Bank of New York, as trustee, for the benefit of the holders of any Capital Securities, as amended from time to time (the “Guarantee”) or (g) any payments, purchases or acquisitions in connection with any market-making transactions in the Issuer’s capital stock in the ordinary course of the Issuer’s or any of the Issuer’s affiliate’s business), if at such time the Issuer has given notice of its election of an Optional Deferral Period as provided in the Junior Subordinated Indenture and has not rescinded such notice, or such Optional Deferral Period, or any deferral thereof, is continuing.

     If any Optional Deferral Period lasts longer than one year, unless required to do so by any applicable regulatory authority and subject to the exceptions listed in the parenthetical in the preceding paragraph, the Issuer shall not repurchase any of its Common Stock for a one-year period following the payment of all Deferred Interest on the Debentures pursuant to the Alternative Payment Mechanism.

     Subject to certain conditions and the exclusion described below, if the Issuer defers interest on the Debentures, the Issuer shall be required, not later than (i) the Business Day immediately following the first Interest Payment Date during an Optional Deferral Period on which it elects to pay current interest or (ii) if earlier, the Business Day following the fifth anniversary of the commencement of an Optional Deferral Period, to use its Commercially Reasonable Efforts to begin selling to persons that are not affiliates of the Issuer Qualifying Securities (the “Alternative Payment Mechanism”). The Issuer shall be required pursuant to the Alternative Payment Mechanism, with respect to any subsequent Interest Payment Date during an Optional Deferral Period until the Deferred Interest has been paid in full, to use its Commercially Reasonable Efforts to sell Qualifying Securities until it has raised an amount of net proceeds that, together with the net proceeds of any sales of Qualifying Securities within the 180 days preceding such Interest Payment Date, is sufficient to pay the Deferred Interest (including interest on the deferred payments) on such Interest Payment Date, provided that, if, due to a Market Disruption Event or otherwise, the Issuer is able to raise some, but not all, of the net proceeds from the sale of Qualifying Securities necessary to pay all Deferred Interest (including interest on the deferred payments) on any Interest Payment Date, the Issuer shall apply any such available net proceeds on such Interest Payment Date to pay accrued and unpaid installments of interest in chronological order. The Issuer shall not pay Deferred Interest (including interest on the deferred payments) on the Debentures from any source other than the net proceeds from the sale of Qualifying Securities, unless otherwise required at the time by any applicable regulatory authority. In addition, such applicable regulatory authority may prevent the Issuer from selling Qualifying Securities or may prevent the Issuer from using the proceeds of any sales of Qualifying Securities to pay any Deferred Interest.

     “Qualifying Securities” means (i) “Qualifying Warrants,” which are net share settled warrants to purchase the Issuer’s Common Stock that have an

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exercise price greater than the Current Stock Market Price of the Issuer’s Common Stock as of their date of issuance, that the Issuer is not entitled to redeem for cash and that the holders of such warrants are not entitled to require the Issuer to repurchase for cash in any circumstance and (ii) “Perpetual Non-Cumulative Preferred Stock” which means Non-Cumulative Perpetual Preferred Stock that is either non-callable or callable with a Legally Binding Replacement Covenant or callable with a Replacement Capital Intention and a Mandatory Trigger Provision.

     The “Current Stock Market Price” of the Issuer’s Common Stock on any date shall be the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions by the New York Stock Exchange or, if the Issuer’s Common Stock is not then listed on the New York Stock Exchange, as reported by the principal U.S. securities exchange on which the Issuer’s Common Stock is traded or quoted. If the Issuer’s Common Stock is not either listed or quoted on any U.S. securities exchange on the relevant date, the “Current Stock Market Price” shall be the last quoted bid price for the Issuer’s Common Stock in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or similar organization. If the Issuer’s Common Stock is not so quoted, the “Current Stock Market Price” shall be the average of the mid-point of the last bid and ask prices for the Issuer’s Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Issuer for this purpose.

     The Issuer shall not be required to issue Qualifying Warrants prior to the fifth anniversary of the commencement of any Optional Deferral Period pursuant to the Alternative Payment Mechanism to the extent that the number of shares of the Issuer’s Common Stock underlying any issuance of Qualifying Warrants applied to pay such interest, together with the shares underlying all prior issuances of Qualifying Warrants during such Optional Deferral Period so applied, would exceed 2% of the total number of issued and outstanding shares of the Issuer’s Common Stock as of the date of the Issuer’s then most recent publicly available consolidated financial statements (the “Warrant Issuance Cap”). In addition, the Issuer may not issue Perpetual Non-Cumulative Preferred Stock if the net proceeds of any issuance of Perpetual Non-Cumulative Preferred Stock applied to pay interest, together with the net proceeds of all prior issuances of Perpetual Non-Cumulative Preferred Stock so applied, would exceed 25% of the aggregate liquidation amount of the issuance of the Capital Securities (the “Preferred Stock Issuance Cap”).

     Once the Issuer reaches the Warrant Issuance Cap for any Optional Deferral Period, the Issuer shall not be required to issue more Qualifying Warrants prior to the fifth anniversary of the commencement of such Optional

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Deferral Period even if the number of underlying shares referred to above subsequently increases because of a subsequent increase in the number of outstanding shares of the Issuer’s Common Stock. The Warrant Issuance Cap shall cease to apply following the fifth anniversary of the commencement of any Optional Deferral Period, at which point the Issuer shall have the right to pay any Deferred Interest, regardless of the time at which it was deferred, using the Alternative Payment Mechanism, subject to the Preferred Stock Issuance Cap, the Share Cap and any Market Disruption Event. For the avoidance of doubt, if the Warrant Issuance Cap has been reached during an Optional Deferral Period and the Issuer subsequently pays all deferred payments (including accrued interest thereon), the Warrant Issuance Cap shall cease to apply, and shall only apply again once the Issuer starts a new Optional Deferral Period. The Preferred Stock Issuance Cap shall apply so long as the Debentures remain outstanding.

     The Issuer shall not be required to issue Qualifying Warrants pursuant to the Alternative Payment Mechanism to the extent that the total number of shares of the Issuer’s Common Stock underlying such Qualifying Warrants, together with all prior issuances of Qualifying Warrants, exceeds 40 million shares (the “Share Cap”). The Issuer shall use its commercially reasonable efforts to increase the Share Cap from time to time to a number of shares that would allow the Issuer to satisfy its obligations with respect to the Alternative Payment Mechanism. The Share Cap shall be adjusted proportionately for any change in the number of outstanding shares of the Issuer’s Common Stock by reason of any stock split, reverse stock split, stock dividend, reclassification, recapitalization, split-up, combination, exchange of shares or other similar transaction, effective upon the effective date of any such transaction.

     If, due to a Market Disruption Event, the Warrant Issuance Cap, Preferred Stock Issuance Cap, Share Cap or otherwise, the Issuer was able to raise some, but not all, eligible proceeds necessary to pay all Deferred Interest (including compounded interest thereon) on any Interest Payment Date, the Issuer shall apply any available eligible proceeds to pay accrued and unpaid installments of interest on the applicable Interest Payment Date in chronological order. If the Issuer has outstanding securities in addition to, and that rank pari passu with, the Debentures under which the Issuer is obligated to sell Qualifying Securities and apply the net proceeds to the payment of deferred interest or distributions, then on any date and for any period the amount of net proceeds received by the Issuer from those sales and available for payment of the Deferred Interest and distributions shall be applied to the Debentures and such other securities on a pro rata basis in proportion to the total amounts that are due on the Debentures and such securities, or on such other basis as any regulator applicable to the Issuer may approve.

     The Issuer shall not be required to sell Qualifying Securities in accordance with the Alternative Payment Mechanism during any quarterly period preceding any Interest Payment Date to the extent it provides written certification to the

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Trustee (which the Trustee shall promptly forward upon receipt to each holder of record of Capital Securities) no more than 30 and no less than 15 days in advance of such Interest Payment Date certifying that (i) a Market Disruption Event was existing after the immediately preceding Interest Payment Date and (ii) either (a) the Market Disruption Event continued for the entire period from the Business Day immediately following the preceding Interest Payment Date to the Business Day immediately preceding the date on which that certification is provided or (b) the Market Disruption Event continued for only part of such period, but the Issuer was unable after Commercially Reasonable Efforts to raise sufficient eligible proceeds during the rest of such period to pay all accrued and unpaid interest.

     If the Issuer is involved in a business combination where immediately after its consummation more than 50% of the surviving entity’s voting stock is owned by the shareholders of the other party to the business combination, then the Alternative Payment Mechanism shall not apply to any interest that is deferred and unpaid as of the date of consummation of the business combination.

     A “Market Disruption Event” means, for purposes of sales of Qualifying Securities pursuant to the Alternative Payment Mechanism or sales of Replacement Securities pursuant to the Replacement Capital Obligation described below, as applicable (collectively, the “Permitted Securities”), the occurrence or existence of any of the following events or sets of circumstances (i) trading in securities generally (or shares of the Issuer’s securities specifically) on the New York Stock Exchange or any other national securities exchange or over-the-counter market on which the Issuer’s Common Stock and/or preferred stock is then listed or traded shall have been suspended or its settlement generally shall have been materially disrupted or minimum prices shall have been established on any such market or exchange by the SEC, by the relevant exchange or any other regulatory body or governmental authority having jurisdiction, (ii) the Issuer is required to obtain the consent or approval of its shareholders or of a regulatory body (including, without limitation, any securities exchange) or governmental authority to issue the Permitted Securities, and fails to obtain such consent or approval notwithstanding the Issuer’s commercially reasonable efforts to such effect, (iii) an event occurs and is continuing as a result of which the offering document for the offer and sale of the Permitted Securities would, in the Issuer’s reasonable judgment, contain an untrue statement of a material fact or omit to state a material fact required to be stated in that offering document or necessary to make the statements in that offering document not misleading and either (a) the disclosure of that event at the time the event occurs, in the Issuer’s reasonable judgment, would have a material adverse effect on its business or (b) the disclosure relates to a previously undisclosed proposed or pending material business transaction and the Issuer has a bona fide business reason for keeping the same confidential or the disclosure of which would impede the Issuer’s ability to consummate that transaction; provided that one or more events described under this clause (iii) shall not constitute a Market Disruption Event with respect to

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more than one Interest Payment Date for purposes of the Alternative Payment Mechanism or with respect to more than one three-month period for purposes of the Replacement Capital Obligation, (iv) the Issuer reasonably believes that the offering document for the offer and sale of the Permitted Securities would not be in compliance with a rule or regulation of the SEC (for reasons other than those referred to in the immediately preceding clause (iii)) and the Issuer is unable to comply with such rule or regulation or such compliance is impracticable, provided that no single suspension contemplated by this clause (iv) may exceed 90 consecutive days and multiple suspension periods contemplated by this subsection may not exceed an aggregate of 180 days in any 360-day period, (v) there is a material adverse change in general domestic or international economic, political or financial conditions, including without limitation as a result of terrorist activities, or the effect of international conditions on the financial markets in the United States, that impacts the markets on which the Issuer’s securities are trading, such as to make it, in the judgment of the Issuer, impracticable to proceed with the offer and sale of the permitted securities, (vi) a material disruption shall have occurred in commercial banking or securities settlement or clearing services in the United States or (vii) a banking moratorium shall have been declared by federal or state authorities of the United States, that results in a disruption of any of the markets in which the Issuer’s securities are trading.

     If an Event of Default or a Default attributable to (i) the failure of the Issuer to pay any amounts payable in respect of the Debentures on the date such amounts are otherwise payable or (ii) a breach of the Alternative Payment Mechanism or the Replacement Capital Obligation has occurred and is continuing, a registered holder of Capital Securities may institute a legal proceeding directly against the Issuer for enforcement of payment to such registered holder of an amount equal to the amount payable in respect of Debentures having a principal amount equal to the aggregate Liquidation Amount (as defined in the Trust Agreement) of the Capital Securities held by such registered holder (a “Direct Action”). The Issuer shall have the right to set off any payment made to such registered holder of Capital Securities by the Issuer in connection with a Direct Action.

     As long as any Debentures are held by the Issuer Trust, the Issuer covenants (i) to continue to hold, directly or indirectly, 100% of the Common Securities (as defined in the Trust Agreement), provided that certain successors that are permitted pursuant to the Junior Subordinated Indenture may succeed to the Issuer’s ownership of the Common Securities, (ii) as holder of the Common Securities, not to voluntarily dissolve, windup or liquidate the Issuer Trust, other than (a) in connection with a distribution of Debentures to the holders of the Capital Securities in liquidation of the Issuer Trust or (b) in connection with certain mergers, consolidations or amalgamations permitted by the Trust Agreement and (iii) to use its reasonable efforts, consistent with the terms and

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provisions of the Trust Agreement, to cause the Issuer Trust to continue not to be taxable as a corporation for United States federal income tax purposes.

     If, and for so long as, (i) the Issuer Trust is the holder of all the Debentures and (ii) the Issuer Trust is required to pay any additional taxes, duties or other governmental charges as a result of a Tax Event, the Issuer shall pay as additional sums on the Debentures (“Additional Sums”) such amounts as may be required so that the Distributions (as defined in the Trust Agreement) paid by the Issuer

Trust shall not be reduced as a result of any such additional taxes, duties or other governmental charges

     The Issuer, as borrower, agrees to pay all debts and other obligations (other than with respect to the Capital Securities issued by the Issuer Trust) and all costs and expenses of the Issuer Trust (including costs and expenses relating to the organization of the Issuer Trust, the fees and expenses of the Issuer Trustees (as defined in the Trust Agreement) for the Issuer Trust and the costs and expenses relating to the operation of the Issuer Trust) and to pay any and all taxes and all costs and expenses with respect thereto (other than United States withholding taxes) to which the Issuer Trust might become subject. The foregoing obligations of the Issuer under the Debentures owned by the Issuer Trust are for the benefit of, and shall be enforceable by, any Person to whom any such debts, obligations, costs, expenses and taxes are owed (a “Creditor”) whether or not such Creditor has received notice thereof. Any such Creditor may enforce such obligations of the Issuer directly against the Issuer, and the Issuer irrevocably waives any right or remedy to require that any such Creditor take any action against the Issuer Trust or any other Person before proceeding against the Issuer. The Issuer agrees to execute any additional agreements as may be necessary or desirable to give full effect to the foregoing.

     The provisions of Section 3.04 and Section 10.01 of the Junior Subordinated Indenture relating to discharge, defeasance and covenant defeasance are not applicable to this Debenture.

     This Debenture and all other obligations of the Issuer hereunder shall constitute part of the junior subordinated debt of the Issuer, shall be issued under the Junior Subordinated Indenture and shall be subordinate and junior in right of payment, to the extent and in the manner set forth in the Junior Subordinated Indenture, to all Senior Indebtedness (as defined in the Junior Subordinated Indenture) of the Issuer.

     This Debenture, and any Debenture or Debentures issued upon transfer or exchange hereof, is issuable only in fully registered form, without coupons, and is issuable only in denominations of US$25 and any integral multiple of US$25 in excess thereof, unless otherwise indicated on the face thereof.

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

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

     The Junior Subordinated Indenture permits the Issuer and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of the debt securities of all series issued under the Junior Subordinated Indenture then outstanding and affected (voting as one class), to execute

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supplemental indentures adding any provisions to or changing in any manner the rights of the holders of each series so affected; provided that the Issuer and the Trustee may not, without the consent of the holder of each outstanding debt security affected thereby and the prior written consent of each registered holder of Capital Securities, to the extent that the Debentures are held by any Morgan Stanley Capital Trust (including Morgan Stanley Capital Trust VII), (i) extend the final maturity of any such debt security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, except as otherwise provided herein or in the Junior Subordinated Indenture, or reduce any amount payable on redemption or repayment thereof, or change the currency of payment thereof, or impair or affect the rights of any holder to institute suit for the payment thereof without the consent of the holder of each debt security so affected or (ii) reduce the aforesaid percentage in principal amount of debt securities the consent of the holders of which is required for any such supplemental indenture; provided, however, that neither this Debenture nor the Junior Subordinated Indenture may be amended to alter the subordination provisions hereof or thereof without the written consent of each holder of Senior Indebtedness then outstanding that would be adversely affected thereby. In addition, so long as any of the Capital Securities remain outstanding, no such modification may be made that adversely affects the holders of such Capital Securities in any material respect, and no termination of the Junior Subordinated Indenture may occur, and no waiver of any Event of Default or Default may be effective, without the prior consent of the holders of at least a majority of the aggregate Liquidation Amount of the outstanding Capital Securities unless and until the principal of (and premium, if any, on) the Debentures and all accrued and unpaid interest thereon have been paid in full and certain other conditions are satisfied. So long as the Issuer acts in accordance with the terms of the Debentures, the Issuer may defer interest payable on the Debentures in accordance with the terms hereof without the consent of the Issuer Trust or the holders of Capital Securities. However, the Issuer may not amend this Debenture or the Junior Subordinated Indenture to remove the rights of registered holders of Capital Securities to institute a Direct Action without the prior written consent of all the registered holders of Capital Securities of the Trust.

     So long as this Debenture shall be outstanding, the Issuer shall cause to be maintained an office or agency for the payment of the principal of and premium, if any, and interest on this Debenture as herein provided in the Borough of Manhattan, The City of New York, and an office or agency in said Borough of Manhattan for the registration, transfer and exchange as aforesaid of the Debentures. Under Section 3.02 of the Junior Subordinated Indenture, the Issuer has initially appointed the Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of New York, as its agency for the foregoing purposes. The Issuer may subsequently designate other agencies for the payment of said principal, premium and interest at such place or places (subject to applicable laws

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and regulations) as the Issuer may decide. So long as there shall be such an agency, the Issuer shall keep the Trustee advised of the names and locations of such agencies, if any are so designated other than that of the Trustee.

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

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

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

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

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

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ABBREVIATIONS

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

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

UNIF GIFT MIN ACT –		Custodian
(Minor)	(Cust)
Under Uniform Gifts to Minors Act
(State)

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

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

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

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

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

Dated: ________________

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

Signature Guaranty: ____________________________

     Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act.

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EX-4.3

Exhibit 4.3

MORGAN STANLEY CAPITAL TRUST VII

AMENDED AND RESTATED TRUST AGREEMENT

among

MORGAN STANLEY, as Depositor,

     THE BANK OF NEW YORK, as Property Trustee,

THE BANK OF NEW YORK (DELAWARE), as Delaware Trustee

and

the Administrators named herein

October 12, 2006

MORGAN STANLEY CAPITAL TRUST VII

Certain Sections of this Trust Agreement relating to

Sections 310 through 318 of the Trust Indenture Act of 1939:

Trust Indenture	Trust Agreement
Act Section	Section
310(a)(1)	8.7
(a)(2)	8.7
(a)(3)	8.9
(a)(4)	2.7(a)(ii)
(b)	8.8, 10.10(b)
311(a)	8.13, 10.10(b)
(b)	8.13, 10.10(b)
312(a)	10.10(b)
(b)	10.10(b)
(c)	5.7
313(a)	8.15(a)
(b)	8.15(a), 8.15(b)
(c)	8.15(a), 10.8
(d)	8.15(a)
314(a)	8.16
(b)	Not Applicable
(c)(1)	8.16, 8.17
(c)(2)	8.16, 8.17
(c)(3)	8.16, 8.17
(e)	8.17
315(a)	8.1(d)
(b)	8.2
(c)	8.1(c)
(d)	8.1(d)
(e)	Not Applicable
316 (a)	Not Applicable
(a)(1)(A)	Not Applicable
(a)(1)(B)	Not Applicable
(a)(2)	Not Applicable
(b)	5.13
(c)	6.7
317(a) (1)	Not Applicable
(a)(2)	8.14
(b)	5.10
318(a)	10.10(a)

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Trust Agreement.

			Table of Contents
				Page
			ARTICLE I DEFINED TERMS
SECTION	1.1	.	Definitions	1
			ARTICLE II CONTINUATION OF THE ISSUER TRUST
SECTION	2.1	.	Name	12
SECTION	2.2	.	Office of the Delaware Trustee; Principal Place of Business	12
SECTION	2.3	.	Initial Contribution of Trust Property; Organizational Expenses	12
SECTION	2.4	.	Issuance of the Trust Securities	12
SECTION	2.5	.	Issuance of the Common Securities; Subscription and Purchase of Junior
			Subordinated Debentures	13
SECTION	2.6	.	Declaration of Trust	13
SECTION	2.7	.	Authorization to Enter into Certain Transactions	14
SECTION	2.8	.	Assets of Trust	17
SECTION	2.9	.	Title to Trust Property	17
			ARTICLE III PAYMENT ACCOUNT
SECTION	3.1	.	Payment Account.	17
			ARTICLE IV DISTRIBUTIONS; REDEMPTION
SECTION	4.1	.	Distributions	17
SECTION	4.2	.	Redemption	19
SECTION	4.3	.	Subordination of Common Securities	21
SECTION	4.4	.	Payment Procedures	22
SECTION	4.5	.	Tax Returns and Reports	22
SECTION	4.6	.	Payment of Taxes, Duties, Etc. of the Issuer Trust	23
SECTION	4.7	.	Payments under Indenture or Pursuant to Direct Actions	23
SECTION	4.8	.	Liability of the Holder of Common Securities	23

ARTICLE V TRUST SECURITIES CERTIFICATES
SECTION	5.1	.	Initial Ownership	23
SECTION	5.2	.	The Trust Securities Certificates	23
SECTION	5.3	.	Execution and Delivery of Trust Securities Certificates	24
SECTION	5.4	.	Global Capital Security	24
SECTION	5.5	.	Registration of Transfer and Exchange Generally; Certain Transfers and
			Exchanges; Capital Securities Certificates	25
SECTION	5.6	.	Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates	27
SECTION	5.7	.	Persons Deemed Holders	27
SECTION	5.8	.	Access to List of Holders’ Names and Addresses	27
SECTION	5.9	.	Maintenance of Office or Agency	27
SECTION	5.10	.	Appointment of Paying Agent	28
SECTION	5.11	.	Ownership of Common Securities by Depositor	28
SECTION	5.12	.	Notices to Clearing Agency	29
SECTION	5.13	.	Rights of Holders	29
			ARTICLE VI ACTS OF HOLDERS; MEETINGS; VOTING
SECTION	6.1	.	Limitations on Holder’s Voting Rights	31
SECTION	6.2	.	Notice of Meetings	32
SECTION	6.3	.	Meetings of Holders	32
SECTION	6.4	.	Voting Rights	32
SECTION	6.5	.	Proxies, etc	33
SECTION	6.6	.	Holder Action by Written Consent	33
SECTION	6.7	.	Record Date for Voting and Other Purposes	33
SECTION	6.8	.	Acts of Holders	33
SECTION	6.9	.	Inspection of Records	34
			ARTICLE VII REPRESENTATIONS AND WARRANTIES
SECTION	7.1	.	Representations and Warranties of the Property Trustee and the Delaware Trustee	34
SECTION	7.2	.	Representations and Warranties of Depositor	35
			ARTICLE VIII THE ISSUER TRUSTEES; THE ADMINISTRATORS
SECTION	8.1	.	Certain Duties and Responsibilities	36
SECTION	8.2	.	Certain Notices	38

SECTION	8.3	.	Certain Rights of Property Trustee	38
SECTION	8.4	.	Not Responsible for Recitals or Issuance of Securities	40
SECTION	8.5	.	May Hold Securities	41
SECTION	8.6	.	Compensation; Indemnity; Fees	41
SECTION	8.7	.	Corporate Property Trustee Required; Eligibility of Trustees and
			Administrators	42
SECTION	8.8	.	Conflicting Interests	42
SECTION	8.9	.	Co-Trustees and Separate Trustee	43
SECTION	8.10	.	Resignation and Removal; Appointment of Successor	44
SECTION	8.11	.	Acceptance of Appointment by Successor	45
SECTION	8.12	.	Merger, Conversion, Consolidation or Succession to Business	46
SECTION	8.13	.	Preferential Collection of Claims Against Depositor or Issuer Trust	46
SECTION	8.14	.	Trustee May File Proofs of Claim	46
SECTION	8.15	.	Reports by Property Trustee	47
SECTION	8.16	.	Reports to the Property Trustee	47
SECTION	8.17	.	Evidence of Compliance with Conditions Precedent	47
SECTION	8.18	.	Number of Issuer Trustees	47
SECTION	8.19	.	Delegation of Power	48
SECTION	8.20	.	Appointment of Administrators	48
			ARTICLE IX DISSOLUTION, LIQUIDATION AND MERGER

SECTION	9.1	.	Dissolution Upon Expiration Date	49
SECTION	9.2	.	Early Termination	49
SECTION	9.3	.	Termination	49
SECTION	9.4	.	Liquidation	49
SECTION	9.5	.	Mergers, Consolidations, Amalgamations or Replacements of the Issuer Trust	51

			ARTICLE X MISCELLANEOUS PROVISIONS
SECTION	10.1	.	Limitation of Rights of Holders	52
SECTION	10.2	.	Amendment	52
SECTION	10.3	.	Separability	53
SECTION	10.4	.	Governing Law	54
SECTION	10.5	.	Payments Due on Non-Business Day	54
SECTION	10.6	.	Successors	54
SECTION	10.7	.	Headings	55
SECTION	10.8	.	Reports, Notices and Demands	55
SECTION	10.9	.	Agreement Not to Petition	55
SECTION	10.10		Trust Indenture Act; Conflict with Trust Indenture Act	56
SECTION	10.11		Acceptance of Terms of Trust Agreement, Guarantee and Indenture	57
SECTION	10.12		Counterparts	57

Exhibit A	Certificate of Trust
Exhibit B	Form of Certificate Depositary Agreement
Exhibit C	Form of Common Securities Certificate
Exhibit D	Form of Capital Securities Certificate
Exhibit E	Form of Expense Agreement

AGREEMENT

     Amended and Restated Trust Agreement, dated as of October 12, 2006, among (i) Morgan Stanley, formerly known as Morgan Stanley Dean Witter & Co., a Delaware corporation (including any successors or assigns, the “Depositor”), (ii) The Bank of New York, a New York banking corporation, as property trustee (in such capacity, the “Property Trustee”), (iii) The Bank of New York (Delaware), a Delaware banking corporation, as Delaware trustee (the “Delaware Trustee”) (the Property Trustee and the Delaware Trustee are referred to collectively herein as the “Issuer Trustees”), (iv) two individuals selected by the holders of the Common Securities (as defined herein) to act as administrators with respect to the Issuer Trust (the “Administrators”) and (v) the several Holders, as hereinafter defined.

W I T N E S S E T H:

     WHEREAS, the Issuer Trust (as defined herein) has been established under the Delaware Statutory Trust Act pursuant to a certain Trust Agreement, dated as of September 24, 2001 (the “Original Trust Agreement”), and by the filing of the Certificate of Trust of the Issuer Trust with the Secretary of State of the State of Delaware on September 24, 2001 (the “Certificate of Trust”), which Certificate of Trust is attached as Exhibit A; and

     WHEREAS, the Depositor, the Property Trustee and the Delaware Trustee desire to amend and restate the Original Trust Agreement in its entirety as set forth herein to provide for, among other things, (i) the issuance and sale of the Common Securities by the Issuer Trust to the Depositor, (ii) the issuance and sale of the Capital Securities by the Issuer Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the Issuer Trust from the Depositor of all of the right, title and interest in the Junior Subordinated Debentures and (iv) the appointment of the Administrators.

     NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each party, for the benefit of the other parties and for the benefit of the Holders, hereby amends and restates the Original Trust Agreement in its entirety and agrees, intending to be legally bound, as follows:

ARTICLE I

DEFINED TERMS

     SECTION 1.1. Definitions. For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires:

     (a) The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

     (b) All other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

     (c) The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”;

     (d) All accounting terms used but not defined herein have the meanings assigned to them in accordance with United States generally accepted accounting principles as in effect at the time of computation;

     (e) Unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Trust Agreement; and

     (f) The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision.

     “Act” has the meaning specified in Section 6.8.

     “Additional Amount” means, with respect to Trust Securities of a given Liquidation Amount and a given period, the amount of Additional Interest (as defined in the Junior Subordinated Debt Indenture) paid by the Depositor on Junior Subordinated Debentures having a principal amount equal to such Liquidation Amount for such period.

     “Additional Sums” means any additional amounts paid by the Depositor as specified in Section 2.03(r) of the Junior Subordinated Debt Indenture.

     “Administrators” means each Person appointed in accordance with Section 8.20 solely in such Person’s capacity as Administrator of the Issuer Trust and not in such Person’s individual capacity, or any successor Administrator appointed as herein provided; with the initial Administrators being Alexander C. Frank and Debra M. Aaron.

     “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “Applicable Procedures” means, with respect to any transfer or transaction involving a Global Capital Security or beneficial interest therein, the rules and procedures of the Depositary for such Capital Security, in each case to the extent applicable to such transaction and as in effect from time to time.

     “Bankruptcy Event” means, with respect to any Person:

     (a) the entry of a decree or order by a court having jurisdiction in the premises judging such Person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjudication or composition of or in respect of such Person under any applicable federal or State bankruptcy, insolvency, reorganization or other similar law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such

2

Person or of any substantial part of its property or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or

     (b) the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or State bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or similar official) of such Person or of any substantial part of its property or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its willingness to be adjudicated a bankrupt, or the taking of corporate action by such Person in furtherance of any such action.

“Bankruptcy Laws” has the meaning specified in Section 10.9.

     “Board of Directors” means the board of directors of the Depositor or the Executive Committee of the board of directors of the Depositor (or any other committee of the board of directors of the Depositor performing similar functions) or a committee designated by the board of directors of the Depositor (or any such committee), comprised of two or more members of the board of directors of the Depositor or officers of the Depositor, or both.

     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Depositor to have been duly adopted by the Depositor’s Board of Directors, or such committee of the Board of Directors or officers of the Depositor to which authority to act on behalf of the Board of Directors has been delegated, and to be in full force and effect on the date of such certification, and delivered to the Issuer Trustees.

     “Business Day” means a day other than (a) a Saturday or Sunday and (b) a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed.

     “Capital Securities Certificate” means a certificate evidencing ownership of Capital Securities, substantially in the form attached as Exhibit D.

     “Capital Security” means a preferred undivided beneficial interest in the assets of the Issuer Trust, having a Liquidation Amount of $25 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein.

     “Certificate Depositary Agreement” means the agreement between the Issuer Trust and the Depositary, as the initial Clearing Agency, dated as of October 12, 2006, substantially in the form attached as Exhibit B, as the same may be amended and supplemented from time to time.

“Certificate of Trust” has the meaning specified in the preamble to this Trust Agreement.

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     “Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act. The Depositary shall be the initial Clearing Agency.

     “Clearing Agency Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

“Closing Date” has the meaning specified in the Underwriting Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

     “Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

     “Common Securities Certificate” means a certificate evidencing ownership of Common Securities, substantially in the form attached as Exhibit C.

     “Common Securities Subscription Agreement” means the common securities subscription agreement between the Issuer Trust and the Depositor dated October 12, 2006.

     “Common Security” means an undivided beneficial interest in the assets of the Issuer Trust, having a Liquidation Amount of $25 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions and a Liquidation Distribution as provided herein.

     “Corporate Trust Office” means the principal office of the Property Trustee located in the City of New York which at the time of the execution of this Trust Agreement is located at 101 Barclay Street, Floor 8 West, New York, New York 10286; Attention: Corporate Trust Administration, or such other address as the Property Trustee may designate from time to time by notice to the Holders and the Depositor, or the principal corporate trust office of any successor Property Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Depositor).

“Debenture Default” means a “Default” as defined in the Indenture.

“Debenture Event of Default” means an “Event of Default” as defined in the Indenture.

     “Debenture Redemption Date” means, with respect to any Junior Subordinated Debentures to be redeemed under the Indenture, the date fixed for redemption of such Junior Subordinated Debentures under the Indenture, including the date of any early redemption pursuant to the terms thereof, and the Scheduled Redemption Date.

     “Debt Securities Trustee” means The Bank of New York, a New York banking corporation, as Trustee under the Indenture and any successor.

4

     “Delaware Statutory Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. §3801, et seq., as it may be amended from time to time.

     “Delaware Trustee” means the corporation identified as the “Delaware Trustee” in the preamble to this Trust Agreement solely in its capacity as Delaware Trustee of the Issuer Trust and not in its individual capacity, or its successor in interest in such capacity, or any successor trustee appointed as herein provided.

“Depositor” has the meaning specified in the preamble to this Trust Agreement.

     “Depositary” means The Depository Trust Company or any successor thereto.

     “Direct Action” has the meaning specified in Section 5.13.

“Distribution Date” has the meaning specified in Section 4.1(a) .

     “Distribution Period” means with respect to the Trust Securities, the period from one Distribution Date to the immediately following Distribution Date.

     “Distributions” means amounts payable in respect of the Trust Securities as provided in Section 4.1.

“Early Termination Event” has the meaning specified in Section 9.2.

     “Event of Default” means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be 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):

(a) the occurrence of a Debenture Default; or

     (b) default by the Issuer Trust or the Property Trustee in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or

     (c) default by the Issuer Trust or the Property Trustee in the payment of any Redemption Price of any Trust Security when it becomes due and payable; or

     (d) default in the performance, or breach, in any material respect, of any covenant or warranty of the Issuer Trustees in this Trust Agreement (other than a covenant or warranty, a default in the performance of which or the breach of which is dealt with in clause (b) or (c) above) and continuation of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Issuer Trustees and the Depositor by the Holders of at least 25% in aggregate Liquidation Amount of the Outstanding Capital Securities, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

5

     (e) the occurrence of any Bankruptcy Event with respect to the Property Trustee or all or substantially all of its property if a successor Property Trustee has not been appointed within a period of 90 days thereof.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and any successor statute thereto, in each case as amended from time to time.

     “Expense Agreement” means the Agreement as to Expenses and Liabilities, dated as of the Closing Date, between the Depositor, in its capacity as holder of the Common Securities, and the Issuer Trust, substantially in the form attached as Exhibit E, as amended from time to time.

“Expiration Date” has the meaning specified in Section 9.1.

     “Final Maturity Date” means, with respect to the Junior Subordinated Debentures, October 15, 2066.

     “Global Capital Securities Certificate” means a Capital Securities Certificate evidencing ownership of Global Capital Securities.

     “Global Capital Security” means a Capital Security, the ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 5.4.

     “Guarantee Agreement” means the Capital Securities Guarantee Agreement executed and delivered by the Depositor and The Bank of New York, as Guarantee Trustee, contemporaneously with the execution and delivery of this Trust Agreement, for the benefit of the holders of the Capital Securities, as amended from time to time.

     “Holder” means a Person in whose name a Trust Security or Trust Securities is registered in the Securities Register; any such Person shall be a beneficial owner within the meaning of the Delaware Statutory Trust Act.

     “Indenture” means the Junior Subordinated Indenture, dated as of October 12, 2006, between the Depositor and the Debt Securities Trustee (as amended or supplemented from time to time and including the forms and terms of the Junior Subordinated Debentures established as contemplated thereunder) relating to the issuance of the Junior Subordinated Debentures.

“Investment Company Act” means the Investment Company Act of 1940, as amended.

     “Investment Company Event” means the receipt by the Depositor of an Opinion of Counsel experienced in such matters, who shall not be an officer or employee of the Depositor or any of its Affiliates, to the effect that, as a result of the occurrence of a change in law or regulation or a written change (including any announced prospective change) in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Issuer Trust is or will be considered an “investment company” that is required to be registered under the Investment Company Act, which change or prospective change becomes effective or would become effective, as the case may be, on or after October 5, 2006.

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“Issuer Trust” means Morgan Stanley Capital Trust VII.

“Issuer Trustees” means, collectively, the Property Trustee and the Delaware Trustee.

     “Junior Subordinated Debentures” means the aggregate principal amount of the Depositor’s 6.60% Junior Subordinated Deferrable Interest Debentures maturing on October 15, 2066, issued pursuant to the Indenture.

     “Junior Subordinated Debenture Subscription Agreement” means the junior subordinated debenture subscription agreement between the Issuer Trust and the Depositor dated October 12, 2006 and any other junior subordinated debenture subscription agreement between the Issuer Trust and the Depositor relating to up to $150,000,000 aggregate principal amount of additional junior subordinated debentures issuable in connection with the exercise by the Underwriters of their option to purchase an additional $150,000,000 aggregate liquidation amount of Capital Securities.

     “Lien” means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever.

     “Like Amount” means (a) with respect to a redemption of Trust Securities, Trust Securities having a Liquidation Amount equal to that portion of the principal amount of Junior Subordinated Debentures to be contemporaneously redeemed in accordance with the Indenture, allocated to the Common Securities and to the Capital Securities based upon the relative Liquidation Amounts of such classes and (b) with respect to a distribution of Junior Subordinated Debentures to Holders of Trust Securities in connection with a dissolution or liquidation of the Issuer Trust, Junior Subordinated Debentures having a principal amount equal to the Liquidation Amount of the Trust Securities of the Holder to whom such Junior Subordinated Debentures are distributed.

“Liquidation Amount” means the stated amount of $25 per Trust Security.

     “Liquidation Date” means the date on which Junior Subordinated Debentures are to be distributed to Holders of Trust Securities in connection with a dissolution and liquidation of the Issuer Trust pursuant to Section 9.4.

“Liquidation Distribution” has the meaning specified in Section 9.4(d) .

     “Majority in Liquidation Amount of the Capital Securities” or “Majority in Liquidation Amount of the Common Securities” means, except as provided by the Trust Indenture Act, Capital Securities or Common Securities, as the case may be, representing more than 50% of the aggregate Liquidation Amount of all then Outstanding Capital Securities or Common Securities, as the case may be.

     “Officer’s Certificate” means a certificate signed by the Chairman of the Board, the President, the Chief Financial Officer, the Chief Administrative Officer, the Chief Legal Officer, any Executive Vice President, the Treasurer and any Assistant Treasurer of the Depositor, or any

7

other person authorized by the Board of Directors of the Depositor to execute any such written statement, and delivered to the party provided herein. Any Officer’s Certificate delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall include:

     (a) a statement by the officer signing the Officer’s Certificate that such officer has read the covenant or condition and the definitions relating thereto;

     (b) a brief statement of the nature and scope of the examination or investigation undertaken by such officer in rendering the Officer’s Certificate;

     (c) a statement that such officer has made such examination or investigation as, in such officer’s opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and

     (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with.

     “Opinion of Counsel” means a written opinion of counsel, who may, unless otherwise specified herein, be counsel for, or an officer or employee of, the Depositor or any Affiliate of the Depositor.

“Optional Deferral Period” has the meaning specified in Section 4.1(a)(iii) .

     “Original Trust Agreement” has the meaning specified in the preamble to this Trust Agreement.

     “Outstanding,” with respect to Trust Securities, means, as of the date of determination, all Trust Securities theretofore executed and delivered under this Trust Agreement, except:

     (a) Trust Securities theretofore canceled by the Property Trustee or delivered to the Property Trustee for cancellation;

     (b) Trust Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Property Trustee or any Paying Agent for the Holders of such Trust Securities, provided that if such Trust Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement; and

     (c) Trust Securities which have been paid or in exchange for or in lieu of which other Trust Securities have been executed and delivered pursuant to Sections 5.4, 5.5, 5.6 and 5.13; provided, however, that in determining whether the Holders of the requisite Liquidation Amount of the Outstanding Capital Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Capital Securities owned by the Depositor, or any Issuer Trustee, any Administrator or any Affiliate of the Depositor or any Issuer Trustee shall be disregarded and deemed not to be Outstanding, except that (a) in determining whether any Issuer Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Capital Securities that such Issuer Trustee or such Administrator, as the case may be, actually knows to be so owned shall be so disregarded and (b) the foregoing

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shall not apply at any time when all of the outstanding Capital Securities are owned by the Depositor, one or more of the Issuer Trustees, one or more of the Administrators and/or any such Affiliate. Capital Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrators the pledgee’s right so to act with respect to such Capital Securities and that the pledgee is not the Depositor or any Affiliate of the Depositor.

     “Owner” means each Person who is the beneficial owner of Global Capital Securities as reflected in the records of the Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as reflected in the records of a Person maintaining an account with such Clearing Agency (directly or indirectly), in accordance with the rules of such Clearing Agency.

     “Paying Agent” means any paying agent or co-paying agent appointed pursuant to Section 5.10 and shall initially be the Property Trustee.

     “Payment Account” means a segregated non-interest-bearing corporate trust account maintained with the Property Trustee in its trust department for the benefit of the Holders in which all amounts paid in respect of the Junior Subordinated Debentures will be held and from which the Property Trustee, through the Paying Agent, shall make payments to the Holders in accordance with Sections 4.1 and 4.2.

     “Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, company, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof, or any other entity of whatever nature.

     “Property Trustee” means the Person identified as the “Property Trustee” in the preamble to this Trust Agreement solely in its capacity as Property Trustee of the Issuer Trust and not in its individual capacity, or its successor in interest in such capacity, or any successor property trustee appointed as herein provided.

     “Rating Agency Event” means the determination by the Depositor of a change by any nationally recognized statistical rating organization within the meaning of Rule 15c3-1 under the Exchange Act that publishes, as of October 5, 2006, a rating for the Depositor in the equity credit criteria for securities such as the Capital Securities or the underlying Junior Subordinated Debentures resulting in a lower equity credit to the Depositor than the equity credit assigned by such rating agency to the Capital Securities or the Junior Subordinated Debentures as of October 5, 2006.

     “Redemption Date” means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this Trust Agreement including the date of any early redemption pursuant to the terms of the Indenture, and the Scheduled Maturity Date; provided that each Debenture Redemption Date and the Final Maturity Date of the Junior Subordinated Debentures shall be a Redemption Date for a Like Amount of Trust Securities, including but not limited to any date of redemption pursuant to the occurrence of any Special Event of which the Depositor shall notify the Issuer Trust promptly after the Depositor’s determination of such Special Event.

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     “Redemption Price” means, with respect to any Trust Security, the Liquidation Amount of such Trust Security, plus accumulated and unpaid Distributions to but excluding the Redemption Date; provided, that, in the case of an early Redemption Date resulting from the occurrence of a Rating Agency Event, the Redemption Price will equal the Early Redemption Price as defined in the Indenture.

     “Regulatory Capital Event” means the determination of the Depositor, based on the receipt by the Depositor of an Opinion of Counsel experienced in such matters, that as a result of any amendment to, clarification of or change (including any announced prospective change) in applicable laws or regulations or official interpretations thereof or policies with respect thereto or any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment, clarification, change, pronouncement or decision is effective or announced on or after October 5, 2006, there is more than an insubstantial risk that the Capital Securities will no longer constitute tier 1 capital of the Depositor or any holding company of which the Depositor is a subsidiary for the purposes of the capital adequacy guidelines or policies of the Commission or any applicable regulatory body or governmental authority.

“Relevant Trustee” has the meaning specified in Section 8.10.

     “Responsible Officer” when used with respect to the Property Trustee means any officer assigned to the Corporate Trust Office, including any vice president, assistant vice president, assistant treasurer, assistant secretary, trust officer or any other officer of the Property Trustee customarily performing functions similar to those performed by any of the above designated officers and having direct responsibility for the administration of this Trust Agreement, and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

     “Scheduled Redemption Date” means, with respect to the Junior Subordinated Debentures, January 15, 2046.

     “Securities Act” means the Securities Act of 1933, as amended, and any successor statute thereto, in each case as amended from time to time.

     “Securities Register” and “Securities Registrar” have the respective meanings specified in Section 5.5.

“Senior Indebtedness” has the meaning specified in the Indenture.

     “Special Event” means any Tax Event, Investment Company Event, Rating Agency Event or Regulatory Capital Event.

     “Tax Event” means the receipt by the Depositor of an Opinion of Counsel experienced in such matters, who shall not be an officer or employee of the Depositor or any of its Affiliates, to the effect that, as a result of any amendment to, or change (including any announced prospective change), in the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein affecting taxation or as a result of any official or administrative pronouncement or action or judicial decision interpreting or applying such laws

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or regulations, which amendment or change is effective or which pronouncement, action or decision is announced on or after October 5, 2006, there is more than an insubstantial risk that (i) the Issuer Trust is, or will be within 90 days of the delivery of such Opinion of Counsel, subject to United States Federal income tax with respect to income received or accrued on the Junior Subordinated Debentures, (ii) interest payable by the Depositor to the Issuer Trust on the Junior Subordinated Debentures is not, or within 90 days of the delivery of such Opinion of Counsel will not be, deductible by the Depositor, in whole or in part, for United States Federal income tax purposes, or (iii) the Issuer Trust is, or will be within 90 days of the delivery of such Opinion of Counsel, subject to more than a de minimis amount of other taxes, duties or other governmental charges.

     “Trust Agreement” means this Amended and Restated Trust Agreement, as the same may be modified, amended or supplemented in accordance with the applicable provisions hereof, including (i) all Exhibits hereto, and (ii) for all purposes of this Amended and Restated Trust Agreement any such modification, amendment or supplement, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Amended and Restated Trust Agreement and any modification, amendment or supplement, respectively.

     “Trust Indenture Act” means the Trust Indenture Act of 1939 or any successor statute, in each case as amended from time to time.

     “Trust Property” means (a) the Junior Subordinated Debentures, (b) any cash on deposit in, or owing to, the Payment Account, and (c) all proceeds and rights in respect of the foregoing or any other property and assets for the time being held or deemed to be held by the Property Trustee pursuant to the terms of this Trust Agreement.

     “Trust Securities Certificate” means any one of the Common Securities Certificates or the Capital Securities Certificates.

“Trust Security” means any one of the Common Securities or the Capital Securities.

“Underwriters” has the meaning specified in the Underwriting Agreement.

     “Underwriting Agreement” means the Underwriting Agreement, dated as of October 5, 2006, among the Issuer Trust, the Depositor and the Underwriters, as the same may be amended from time to time.

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ARTICLE II

CONTINUATION OF THE ISSUER TRUST

     SECTION 2.1. Name. The Issuer Trust continued hereby shall be known as “Morgan Stanley Capital Trust VII,” as such name may be modified from time to time by the Administrators following written notice to the Holders of Trust Securities and the Issuer Trustees, in which name the Administrators and the Issuer Trustees may engage in the transactions contemplated hereby, make and execute contracts and other instruments on behalf of the Issuer Trust and sue and be sued.

SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business.

     The address of the Delaware Trustee in the State of Delaware is White Clay Center, Route 273, Newark, DE 19711, Attention: Corporate Trust Administration, or such other address in the State of Delaware as the Delaware Trustee may designate by written notice to the Holders and the Depositor. The principal executive office of the Issuer Trust is in care of Morgan Stanley, 1585 Broadway, New York, NY 10036, Attention: Office of the Secretary.

SECTION 2.3. Initial Contribution of Trust Property; Organizational Expenses.

     The Issuer Trust acknowledges receipt in trust from the Depositor in connection with this Trust Agreement of the sum of $10, which constitutes the initial Trust Property. The Depositor shall pay all organizational expenses of the Issuer Trust as they arise or shall, upon request of any Issuer Trustee, promptly reimburse such Issuer Trustee for any such expenses paid by such Issuer Trustee. The Depositor shall make no claim upon the Trust Property for the payment of such expenses.

SECTION 2.4. Issuance of the Trust Securities.

     The Depositor, both on its own behalf and on behalf of the Issuer Trust pursuant to the Original Trust Agreement, executed and delivered the Underwriting Agreement. Contemporaneously with the execution and delivery of this Trust Agreement, an Administrator, on behalf of the Issuer Trust, shall execute, manually or by facsimile, in accordance with Section 5.3, the Property Trustee shall authenticate in accordance with Section 5.3, and the Issuer Trust shall deliver to the Underwriters, Capital Securities Certificates, registered in the names requested by the Underwriters, in an aggregate amount of 40,000,000 Capital Securities having an aggregate Liquidation Amount of $1,000,000,000, against receipt of the aggregate purchase price of such Capital Securities of $1,000,000,000 by the Issuer Trust.

     If the Underwriters exercise their option to purchase all or any portion of an additional 6,000,000 Capital Securities pursuant to the terms of the Underwriting Agreement, then an Administrator, on behalf of the Issuer Trust, shall execute, manually or by facsimile, in accordance with Section 5.3, the Property Trustee shall authenticate in accordance with Section 5.3, and the Issuer Trust shall deliver to the Underwriters, additional Capital Securities Certificates, registered in the names requested by the Underwriters, in an aggregate amount of up to 6,000,000 additional Capital Securities having an aggregate Liquidation Amount of up to

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$150,000,000, against receipt of the aggregate purchase price of such additional Capital Securities of up to $150,000,000 by the Issuer Trust.

     SECTION 2.5. Issuance of the Common Securities; Subscription and Purchase of Junior Subordinated Debentures.

     Contemporaneously with the execution and delivery of this Trust Agreement, an Administrator, on behalf of the Issuer Trust, shall execute or cause to be executed in accordance with Section 5.2 and deliver to the Depositor a Common Securities Certificate, registered in the name of the Depositor, in an aggregate amount of 400 Common Securities having an aggregate Liquidation Amount of $10,000 against receipt of the aggregate purchase price of such Common Securities of $10,000 by the Issuer Trust. Contemporaneously therewith, an Administrator, on behalf of the Issuer Trust, shall subscribe for and purchase from the Depositor the Junior Subordinated Debentures, registered in the name of the Issuer Trust and having an aggregate principal amount equal to $10,000 and, in satisfaction of the purchase price for such Junior Subordinated Debentures, the Property Trustee, on behalf of the Issuer Trust, shall deliver to the Depositor the sum of $1,000,010,000 (being the sum of the amounts delivered to the Property Trustee pursuant to (i) the second sentence of Section 2.4, and (ii) the first sentence of this Section 2.5) and receive on behalf of the Issuer Trust the Junior Subordinated Debentures.

     If the Underwriters exercise their option to purchase additional Capital Securities pursuant to the terms of the Underwriting Agreement, then an Administrator, on behalf of the Issuer Trust, shall subscribe for and purchase from the Depositor, Junior Subordinated Debentures, registered in the name of the Issuer Trust and having an aggregate principal amount of up to $150,000,000 and, in satisfaction of the purchase price for such Junior Subordinated Debentures, the Property Trustee, on behalf of the Issuer Trust, shall deliver to the Depositor an aggregate amount equal to the sum of the amounts delivered to the Property Trustee pursuant to the third sentence of Section 2.4, and receive on behalf of the Issuer Trust such Junior Subordinated Debentures.

SECTION 2.6. Declaration of Trust.

     The exclusive purposes and functions of the Issuer Trust are to (a) issue and sell Trust Securities and use the proceeds from such sale to acquire the Junior Subordinated Debentures, and (b) engage in only those other activities necessary, convenient or incidental thereto. The Depositor hereby appoints the Issuer Trustees as trustees of the Issuer Trust, to have all the rights, powers and duties to the extent set forth herein, and the Issuer Trustees hereby accept such appointment. The Property Trustee hereby declares that it will hold the Trust Property in trust upon and subject to the conditions set forth herein for the benefit of the Issuer Trust and the Holders. The Depositor hereby appoints the Administrators, with such Administrators having all rights, powers and duties set forth herein with respect to accomplishing the purposes of the Issuer Trust, and the Administrators hereby accept such appointment, provided, however, that it is the intent of the parties hereto that such Administrators shall not be trustees with respect to the Issuer Trust and this Trust Agreement shall be construed in a manner consistent with such intent. The Property Trustee shall have the right and power to perform those duties assigned to the Administrators. The Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of the Property Trustee or the

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Administrators set forth herein. The Delaware Trustee shall be one of the trustees of the Issuer Trust for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Delaware Statutory Trust Act and for taking such actions as are required to be taken by a Delaware trustee under the Delaware Statutory Trust Act.

SECTION 2.7. Authorization to Enter into Certain Transactions.

     (a) The Issuer Trustees and the Administrators shall conduct the affairs of the Issuer Trust in accordance with the terms of this Trust Agreement. Subject to the limitations set forth in paragraph (b) of this Section and in accordance with the following provisions (i), (ii) and (iii), the Issuer Trustees and the Administrators shall act as follows:

     (i) Each Administrator, acting singly or jointly, is authorized, on behalf of the Trust, to:

     (A) comply with the Underwriting Agreement regarding the issuance and sale of the Capital Securities;

     (B) assist in compliance with the Securities Act, applicable state securities or blue sky laws, and the Trust Indenture Act;

     (C) assist in the listing of the Capital Securities upon such securities exchange or exchanges as shall be determined by the Depositor, with the registration of the Capital Securities under the Exchange Act, if required, and the preparation and filing of all periodic and other reports and other documents pursuant to the foregoing;

     (D) execute the Trust Securities on behalf of the Issuer Trust in accordance with this Trust Agreement;

     (E) execute and deliver an application for a taxpayer identification number for the Issuer Trust;

     (F) execute on behalf of the Issuer Trust any documents that the Administrators have the power to execute pursuant to this Trust Agreement, including without limitation Junior Subordinated Debenture Subscription Agreements, Common Securities Subscription Agreements, a Certificate Depositary Agreement and an Expense Agreement, all by and between the Issuer Trust and the Depositor; and

     (G) take any action incidental to the foregoing as necessary or advisable to give effect to the terms of this Trust Agreement (and any actions taken in furtherance of the above prior to the date of this Trust Agreement by the Administrators are hereby ratified and confirmed in all respects).

     (ii) The Property Trustee shall have the power and authority to act on behalf of the Issuer Trust with respect to the following matters:

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(A) the establishment of the Payment Account;

(B) the receipt of the Junior Subordinated Debentures;

     (C) the receipt and collection of interest, principal and any other payments made in respect of the Junior Subordinated Debentures in the Payment Account;

     (D) the distribution of amounts owed to the Holders in respect of the Trust Securities;

     (E) the exercise of all of the rights, powers and privileges of a holder of the Junior Subordinated Debentures;

     (F) the sending of notices of default and other information regarding the Trust Securities and the Junior Subordinated Debentures to the Holders in accordance with this Trust Agreement;

     (G) the distribution of the Trust Property in accordance with the terms of this Trust Agreement;

     (H) to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Issuer Trust and the execution of the certificate of cancellation with the Secretary of State of the State of Delaware; and

     (I) after an Event of Default (other than under the definition of such term if such Event of Default is by or with respect to the Property Trustee), compliance with the provisions of this Trust Agreement and the taking of any action to give effect to the terms of this Trust Agreement and protect and conserve the Trust Property for the benefit of the Holders (without consideration of the effect of any such action on any particular Holder);

provided, however, that nothing in this Section 2.7(a)(ii) shall require the Property Trustee to take any action that is not otherwise required in this Trust Agreement.

     (b) So long as this Trust Agreement remains in effect, the Issuer Trust (or the Issuer Trustees or Administrators acting on behalf of the Issuer Trust) shall not undertake any business, activities or transaction except as expressly provided herein or contemplated hereby. In particular, neither the Issuer Trustees nor the Administrators shall (i) acquire any investments, reinvest the proceeds derived from investments, or engage in any activities not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Holders, except as expressly provided herein, (iii) take any action that would reasonably be expected to cause the Issuer Trust to fail or cease to qualify as a grantor trust for United States Federal income tax purposes or to cause the Issuer Trust to become taxable as a corporation or a partnership for United States Federal income tax purposes, (iv) incur any indebtedness for borrowed money or issue any other debt, (v) issue any securities or other evidences of beneficial ownership of, or

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beneficial interests in, the Issuer Trust other than the Trust Securities or (vi) take or consent to any action that would result in the placement of a Lien on any of the Trust Property. The Property Trustee shall defend all claims and demands of all Persons at any time claiming any Lien on any of the Trust Property adverse to the interest of the Issuer Trust or the Holders in their capacity as Holders.

     (c) In connection with the issue and sale of the Capital Securities, the Depositor shall have the right and responsibility to assist the Issuer Trust with respect to, or effect on behalf of the Issuer Trust, the following (and any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed in all respects):

     (i) the preparation and filing by the Issuer Trust, and execution on behalf of the Issuer Trust, of a registration statement, a free writing prospectus and a prospectus in relation to the Capital Securities, including any amendments thereto and the taking of any action necessary or desirable to sell the Capital Securities in a transaction or a series of transactions not exempt from the registration requirements of the Securities Act;

     (ii) the determination of the States in which to take appropriate action to qualify or register for sale all or part of the Capital Securities and the determination of any and all such acts, other than actions that must be taken by or on behalf of the Issuer Trust, and the advice to the Issuer Trustees of actions they must take on behalf of the Issuer Trust, and the preparation for execution and filing of any documents to be executed and filed by the Issuer Trust or on behalf of the Issuer Trust, as the Depositor deems necessary or advisable in order to comply with the applicable laws of any such States in connection with the sale of the Capital Securities;

     (iii) the negotiation of the terms of, and the execution and delivery of, the Underwriting Agreement providing for the sale of the Capital Securities;

     (iv) compliance with the listing requirements of the Capital Securities upon such securities exchange or exchanges as shall be determined by the Depositor, the registration of the Capital Securities under the Exchange Act, if required, and the preparation and filing of all periodic and other reports and other documents pursuant to the foregoing; and

     (v) the taking of any other actions necessary or desirable to carry out any of the foregoing activities.

     (d) Notwithstanding anything herein to the contrary, the Administrators and the Property Trustee are authorized and directed to conduct the affairs of the Issuer Trust and to operate the Issuer Trust so that the Issuer Trust will not be deemed to be an “investment company” required to be registered under the Investment Company Act, and will not be taxable as a corporation, a partnership or any other arrangement other than as a grantor trust for United States Federal income tax purposes and so that the Junior Subordinated Debentures will be treated as indebtedness of the Depositor for United States Federal income tax purposes. In this connection, the Property Trustee and the Holders of Common Securities are authorized to take

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any action, not inconsistent with applicable law, the Certificate of Trust or this Trust Agreement, that the Property Trustee and Holders of Common Securities determine in their discretion to be necessary or desirable for such purposes, as long as such action does not adversely affect in any material respect the interests of the Holders of the Outstanding Capital Securities. In no event shall the Administrators or the Issuer Trustees be liable to the Issuer Trust or the Holders for any failure to comply with this section that results from a change in law or regulations or in the interpretation thereof.

SECTION 2.8. Assets of Trust.

The assets of the Issuer Trust shall consist solely of the Trust Property.

SECTION 2.9. Title to Trust Property.

     Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its capacity as such) and shall be held and administered by the Property Trustee for the benefit of the Issuer Trust and the Holders in accordance with this Trust Agreement.

ARTICLE III

PAYMENT ACCOUNT

SECTION 3.1. Payment Account.

     (a) On or prior to the Closing Date, the Property Trustee shall establish the Payment Account. The Property Trustee and its agents shall have exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Holders and for distribution as herein provided, including (and subject to) any priority of payments provided for herein.

     (b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal of or interest on, and any other payments or proceeds with respect to, the Junior Subordinated Debentures. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof.

ARTICLE IV

DISTRIBUTIONS; REDEMPTION

SECTION 4.1. Distributions.

     (a) The Trust Securities represent undivided beneficial interests in the Trust Property, and Distributions (including of Additional Amounts) will be made on the Trust Securities at the rate and on the dates that payments of interest (including of Additional Interest, as defined in the Indenture) are made on the Junior Subordinated Debentures. Accordingly:

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     (i) Distributions on the Trust Securities shall be cumulative and will accumulate whether or not there are funds of the Issuer Trust available for the payment of Distributions. Distributions shall accumulate from and including October 12, 2006, and, except in the event (and to the extent) that the Depositor exercises its right to defer the payment of interest on the Junior Subordinated Debentures pursuant to the Indenture, shall be payable quarterly in arrears not later than 10:00 a.m. (New York City time) on January 15, April 15, July 15 and October 15 of each year, commencing on January 15, 2007. If any date on which a Distribution is otherwise payable on the Trust Securities is not a Business Day, then the payment of such Distribution shall be made on the next succeeding day that is a Business Day (without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date on which such payment was originally payable (each date on which distributions are payable in accordance with this Section 4.1(a), a “Distribution Date”).

     (ii) The Trust Securities shall be entitled to Distributions payable at a rate of 6.60% per annum of the Liquidation Amount of the Trust Securities. The amount of Distributions payable for any period less than a full Distribution Period shall be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed in a partial month in a period. Distributions on the Trust Securities will accumulate from and including the most recent Distribution Date to which Distributions have been paid or duly provided for, or, if no Distributions have been paid or duly provided for, from and including October 12, 2006 to but excluding the date the Liquidation Amount has been paid or duly made available for payment. Distributions payable for each full Distribution Period will be computed by dividing the rate per annum by four (4). The amount of Distributions payable for any period shall include any Additional Amounts in respect of such period.

     (iii) So long as no Debenture Event of Default has occurred and is continuing, the Depositor has the right under the Indenture to defer the payment of interest on the Junior Subordinated Debentures at any time and from time to time for a period not exceeding 40 consecutive quarterly periods (an “Optional Deferral Period”), provided that no Optional Deferral Period may extend beyond the Final Maturity Date or the acceleration of the Junior Subordinated Debentures following a Debenture Event of Default. As a consequence of any such deferral, quarterly Distributions on the Trust Securities by the Issuer Trust will also be deferred to the extent and except as provided in the Junior Subordinated Debentures, and the amount of Distributions to which Holders of the Trust Securities are entitled that have been so deferred will accumulate additional Distributions thereon at the rate per annum of 6.60%, compounded quarterly from and including the most recent Distribution payment date on which Distributions were paid, computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed in a partial month in such period. Additional Distributions payable for each full Distribution Period will be computed by dividing the rate per annum by four (4). The term “Distributions” as used in Section 4.1 shall include any such additional Distributions provided pursuant to this Section 4.1(a)(iii) .

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     (iv) In the event of any bankruptcy, insolvency or similar proceedings in respect of the Depositor, as described in Section 5.01(b) or (c) of the Indenture, prior to the redemption or repayment of the Junior Subordinated Debentures, Holders of the Junior Subordinated Debentures shall only have a claim for, or right to receive, distributions with respect to deferred interest, including accrued interest on the deferred payments, to the extent such interest (including accrued interest on the deferred payments) relates to the first two years of the Optional Deferral Period and, consequently, Holders of the Trust Securities shall only have a claim for, or right to receive, Distributions as so reduced.

     (v) Distributions on the Trust Securities shall be made by the Property Trustee from the Payment Account and shall be payable not later than 10:00 a.m. (New York City time) on each Distribution Date only to the extent that the Issuer Trust has funds then on hand and available in the Payment Account for the payment of such Distributions.

     (b) Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the Holders thereof as they appear on the Securities Register for the Trust Securities at the close of business on the relevant record date, which shall be at the close of business on the 15th calendar day next preceding the relevant Distribution Date, whether or not a Business Day.

SECTION 4.2. Redemption.

     (a) On each Debenture Redemption Date and on the Final Maturity Date of the Junior Subordinated Debentures, the Issuer Trust will be required to redeem a Like Amount of Trust Securities at the Redemption Price.

     (b) Notice of redemption shall be given by the Property Trustee by first-class mail, postage prepaid, mailed not less than 15 nor more than 30 days prior to the Redemption Date to each Holder of Trust Securities to be redeemed, at such Holder’s address appearing in the Security Register. All notices of redemption shall state:

(i) the Redemption Date;

     (ii) the Redemption Price or, if the Redemption Price cannot be calculated prior to the time the notice is required to be sent, the manner of calculation of the Redemption Price provided pursuant to the Indenture together with a statement that the Redemption Price will be calculated on the third Business Day prior to the Redemption Date (and if the manner of calculation of the Redemption Price is provided, a further notice shall be sent of the Redemption Price on the date, or as soon as practicable thereafter, that notice of such Redemption Price is received pursuant to the Indenture);

(iii) the CUSIP number or CUSIP numbers of the Capital Securities affected;

     (iv) if less than all the Outstanding Trust Securities are to be redeemed, the identification and the total Liquidation Amount of the particular Trust Securities to be redeemed;

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     (v) that, on the Redemption Date, the Redemption Price will become due and payable upon each such Trust Security to be redeemed and that Distributions thereon will cease to accumulate on and after said date, except as provided in Section 4.2(d) below; and

     (vi) the place or places where Trust Securities are to be surrendered for the payment of the Redemption Price.

     The Issuer Trust in issuing the Trust Securities shall use “CUSIP” numbers, and the Property Trustee shall indicate the “CUSIP” numbers of the Trust Securities in notices of redemption and related materials as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Trust Securities or as contained in any notice of redemption and related material.

     (c) The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with the applicable proceeds from the contemporaneous redemption of Junior Subordinated Debentures. Redemptions of the Trust Securities shall be made and the Redemption Price shall be payable on each Redemption Date only to the extent that the Issuer Trust has funds then on hand and legally available in the Payment Account for the payment of such Redemption Price.

     (d) If the Issuer Trust gives a notice of redemption in respect of any Capital Securities, then, by 12:00 noon, New York City time, on the Redemption Date, subject to Section 4.2(c), the Property Trustee will, with respect to Capital Securities held in book-entry form, irrevocably deposit with the Clearing Agency for such Capital Securities, to the extent available therefor, funds sufficient to pay the applicable Redemption Price and will give such Clearing Agency irrevocable instructions and authority to pay the Redemption Price to the Holders of the Capital Securities. With respect to Capital Securities that are not held in book-entry form, the Property Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying Agent, to the extent available therefor, funds sufficient to pay the applicable Redemption Price and will give the Paying Agent irrevocable instructions and authority to pay the Redemption Price to the Holder of the Capital Securities upon surrender of their Capital Securities Certificates. Notwithstanding the foregoing, Distributions payable on or prior to the Redemption Date for any Trust Securities called for redemption shall be payable to the Holders of such Trust Securities as they appear on the Securities Register for the Trust Securities on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then, upon the date of such deposit, all rights of Holders holding Trust Securities so called for redemption will cease, except the right of such Holders to receive the Redemption Price and any Distribution payable in respect of the Trust Securities on or prior to the Redemption Date, but without interest, and such Securities will cease to be Outstanding. In the event that any date on which any applicable Redemption Price is payable is not a Business Day, then payment of the applicable Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) with the same force and effect as if made on such date. In the event that payment of the Redemption Price in respect of any Trust Securities called for redemption is improperly withheld or refused and not paid either by the Issuer Trust or by the Depositor pursuant to the Guarantee Agreement, Distributions on such Trust Securities will continue to accumulate, as set

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forth in Section 4.1, from and including the Redemption Date originally established by the Issuer Trust for such Trust Securities to but excluding the date such applicable Redemption Price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the applicable Redemption Price.

     (e) Subject to Section 4.3(a), if less than all the Outstanding Trust Securities are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of such Trust Securities to be redeemed shall be allocated pro rata to the Common Securities and the Capital Securities based on the relative aggregate Liquidation Amounts of such classes. The particular Capital Securities to be redeemed shall be selected on a pro rata basis based on their respective Liquidation Amounts not more than 30 days prior to the Redemption Date by the Property Trustee from the Outstanding Capital Securities not previously called for redemption by any method the Property Trustee deems fair and appropriate, or if the Capital Securities are then held in the form of a Global Capital Security in accordance with the customary procedures for the Clearing Agency. The Property Trustee shall promptly notify the Securities Registrar in writing of the Capital Securities selected for redemption and, in the case of any Capital Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Capital Securities shall relate, in the case of any Capital Securities redeemed or to be redeemed only in part, to the portion of the aggregate Liquidation Amount of Capital Securities that has been or is to be redeemed.

SECTION 4.3. Subordination of Common Securities.

     (a) Payment of Distributions (including Additional Amounts, if applicable) on, the Redemption Price of, and the Liquidation Distribution in respect of, the Trust Securities, as applicable, shall be made, subject to Section 4.2(e), pro rata among the Common Securities and the Capital Securities based on the Liquidation Amount of such Trust Securities; provided, however, that if on any Distribution Date or Redemption Date any Event of Default resulting from a Debenture Event of Default specified in Section 5.01(a) or a Debenture Default specified in Section 5.06(a) or 5.06(b) of the Indenture shall have occurred and be continuing, no payment of any Distribution (including any Additional Amounts) on, Redemption Price of, or Liquidation Distribution in respect of, any Common Security, and no other payment on account of the redemption, liquidation or other acquisition of Common Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions (including any Additional Amounts) on all Outstanding Capital Securities for all Distribution Periods terminating on or prior thereto, or, in the case of payment of the Redemption Price, the full amount of such Redemption Price on all Outstanding Capital Securities then called for redemption, or in the case of payment of the Liquidation Distribution the full amount of such Liquidation Distribution on all Outstanding Capital Securities, shall have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions (including any Additional Amounts) on, the Redemption Price of, or the Liquidation Distribution in respect of Capital Securities then due and payable. The existence of an Event of Default does not entitle the Holders of Trust Securities to accelerate the maturity thereof.

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     (b) In the case of the occurrence of any Event of Default resulting from a Debenture Event of Default specified in Section 5.01(a) of the Indenture or any Debenture Default specified in Section 5.06(a) or 5.06(b) of the Indenture, the Holder of the Common Securities shall have no right to act with respect to any such Event of Default under this Trust Agreement until the effects of all such Events of Default with respect to the Capital Securities have been cured, waived or otherwise eliminated. Until all such Events of Default under this Trust Agreement with respect to the Capital Securities have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the Holders of the Capital Securities and not on behalf of the Holder 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.

SECTION 4.4. Payment Procedures.

     Payments of Distributions (including any Additional Amounts) in respect of the Capital Securities shall be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Securities Register or, if the Capital Securities are held by a Clearing Agency, such Distributions shall be made to the Clearing Agency in immediately available funds, which will credit the relevant accounts on the applicable Distribution Dates. Payments of Distributions, other than Distributions payable at maturity, to Holders of $1,000,000 or more in aggregate Liquidation Amount of Capital Securities may be made by wire transfer of immediately available funds upon written request of such Holder to the Securities Registrar not later than 15 calendar days prior to the date on which the Distribution is payable. Payments in respect of the Common Securities shall be made in such manner as shall be mutually agreed between the Property Trustee and the Holder of the Common Securities.

SECTION 4.5. Tax Returns and Reports.

     The Administrators shall prepare (or cause to be prepared), at the Depositor’s expense, and file all United States Federal, state and local tax and information returns and reports required to be filed by or in respect of the Issuer Trust. In this regard, the Administrators shall (a) prepare and file (or cause to be prepared and filed) all Internal Revenue Service forms required to be filed in respect of the Issuer Trust in each taxable year of the Issuer Trust and (b) prepare and furnish (or cause to be prepared and furnished) to each Holder all Internal Revenue Service forms required to be provided by the Issuer Trust. The Administrators shall provide the Depositor and the Property Trustee with a copy of all such returns and reports promptly after such filing or furnishing. The Issuer Trustees shall comply with United States Federal withholding and backup withholding tax laws and information reporting requirements with respect to any payments to Holders under the Trust Securities.

     On or before December 15 of each year during which any Capital Securities are Outstanding, the Administrators shall furnish to the Property Trustee such information as may be reasonably requested by the Property Trustee in order that the Property Trustee may prepare the information which it is required to report for such year on Internal Revenue Service Forms 1096 and 1099 pursuant to Section 6049 of the Code. Such information shall include the amount of original issue discount includible in income for each Outstanding Capital Security during such year.

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SECTION 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust.

     Upon receipt under the Junior Subordinated Debentures of Additional Sums, the Property Trustee shall promptly pay, or cause the Administrators to pay in connection with the filing of any tax returns or reports pursuant to Section 4.5, any taxes, duties or governmental charges of whatsoever nature (other than withholding taxes) imposed on the Issuer Trust by the United States or any other taxing authority.

SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions.

     Any amount payable hereunder to any Holder of Capital Securities shall be reduced by the amount of any corresponding payment such Holder has directly received pursuant to Section 5.01 of the Indenture or Section 5.13 of this Trust Agreement.

SECTION 4.8. Liability of the Holder of Common Securities.

     The Holder of Common Securities shall be liable for the debts and obligations of the Issuer Trust (other than with respect to the Trust Securities) to the extent not satisfied out of the Issuer Trust’s assets.

ARTICLE V

TRUST SECURITIES CERTIFICATES

SECTION 5.1. Initial Ownership.

     Upon the creation of the Issuer Trust and the contribution by the Depositor pursuant to Section 2.3 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are Outstanding, the Depositor shall be the sole beneficial owner of the Issuer Trust.

SECTION 5.2. The Trust Securities Certificates.

     (a) The Trust Securities Certificates shall be issued in multiples of $25 and shall be executed on behalf of the Issuer Trust by manual or facsimile signature of at least one Administrator. Trust Securities Certificates bearing the manual signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Issuer Trust, shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the delivery of such Trust Securities Certificates or did not hold such offices at the date of delivery of such Trust Securities Certificates. A transferee of a Trust Securities Certificate shall become a Holder, and shall be entitled to the rights and subject to the obligations of a Holder hereunder, upon due registration of such Trust Securities Certificate in such transferee’s name pursuant to Section 5.5.

     (b) Upon their original issuance, Capital Securities Certificates shall be issued in the form of one or more fully registered Global Capital Securities Certificates which will be deposited with or on behalf of the Depositary and registered in the name of the Depositary’s nominee. Unless and until it is exchangeable in whole or in part for the Capital Securities in

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definitive form, a global security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of such Depositary or a nominee of such successor.

     (c) Common Securities Certificates representing the Common Securities shall be issued to the Depositor in the form of one or more definitive Common Securities Certificates.

SECTION 5.3. Execution and Delivery of Trust Securities Certificates.

     At the Closing Date, and on the date, if any, on which the Underwriters exercise their option to purchase additional Capital Securities pursuant to the terms of the Underwriting Agreement, as applicable, at least one of the Administrators shall cause Trust Securities Certificates, in an aggregate Liquidation Amount as provided in Sections 2.4 and 2.5, to be executed on behalf of the Issuer Trust by manual or facsimile signature. The Capital Securities so executed shall be delivered to the Property Trustee and upon such delivery the Property Trustee shall manually authenticate upon the written order of the Depositor such Capital Securities Certificates and deliver such Capital Securities Certificates upon the written order of the Depositor, executed by an authorized officer thereof, without further corporate action by the Depositor, in authorized denominations.

SECTION 5.4. Global Capital Security.

     (a) Any Global Capital Security issued under this Trust Agreement shall be registered in the name of the nominee of the Clearing Agency and delivered to such custodian therefor, and such Global Capital Security shall constitute a single Capital Security for all purposes of this Trust Agreement.

     (b) Notwithstanding any other provision in this Trust Agreement, a Global Capital Security may not be exchanged in whole or in part for Capital Securities registered, and no transfer of the Global Capital Security in whole or in part may be registered, in the name of any Person other than the Clearing Agency for such Global Capital Security, or its nominee thereof unless (i) such Clearing Agency advises the Property Trustee in writing that such Clearing Agency is no longer willing or able to properly discharge its responsibilities as Clearing Agency with respect to such Global Capital Security or if it ceases to be a Clearing Agency under the Exchange Act, and the Depositor is unable to locate a qualified successor within 90 days after receiving such notice or becoming aware that the Depositary is no longer so registered, or (ii) the Issuer Trust at its option advises the Depositary in writing that it elects to terminate the book-entry system through the Clearing Agency.

     (c) If a Capital Security is to be exchanged in whole or in part for a beneficial interest in a Global Capital Security, then either (i) such Global Capital Security shall be so surrendered for exchange or cancellation as provided in this Article V or (ii) the aggregate Liquidation Amount thereof shall be reduced or increased by an amount equal to the portion thereof to be so exchanged or cancelled or equal to the Liquidation Amount of such other Capital Security to be so exchanged for a beneficial interest therein, as the case may be, by means of an appropriate adjustment made on the records of the Security Registrar, whereupon the Property Trustee, in

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accordance with the Applicable Procedures, shall instruct the Clearing Agency or its authorized representative to make a corresponding adjustment to its records. Upon any such surrender or adjustment of a Global Capital Security by the Clearing Agency, accompanied by registration instructions, the Property Trustee shall, subject to Section 5.4(b) and as otherwise provided in this Article V, authenticate and deliver any Capital Securities issuable in exchange for such Global Capital Security (or any portion thereof) in accordance with the instructions of the Clearing Agency. The Property Trustee shall not be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be fully protected in relying on, such instructions.

     (d) Every Capital Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Capital Security or any portion thereof, whether pursuant to this Article V or Article IV or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Capital Security, unless such Global Capital Security is registered in the name of a Person other than the Clearing Agency for such Global Capital Security or a nominee thereof.

     (e) The Clearing Agency or its nominee, as the registered owner of a Global Capital Security, shall be considered the Holder of the Capital Securities represented by such Global Capital Security for all purposes under this Trust Agreement and the Capital Securities, and owners of beneficial interests in such Global Capital Security shall hold such interests pursuant to the Applicable Procedures and, except as otherwise provided herein, shall not be entitled to receive physical delivery of any such Capital Securities in definitive form and shall not be considered the Holders thereof under this Trust Agreement. Accordingly, any such owner’s beneficial interest in the Global Capital Security shall be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Clearing Agency or its nominee. Neither the Property Trustee nor the Securities Registrar shall have any liability in respect of any transfers effected by the Clearing Agency.

     (f) The rights of owners of beneficial interests in a Global Capital Security shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such owners and the Clearing Agency.

     SECTION 5.5. Registration of Transfer and Exchange Generally; Certain Transfers and Exchanges; Capital Securities Certificates.

     (a) The Property Trustee shall keep or cause to be kept at its Corporate Trust Office a register or registers for the purpose of registering Capital Securities Certificates and transfers and exchanges of Capital Securities Certificates in which the registrar and transfer agent with respect to the Capital Securities (the “Securities Registrar”), subject to such reasonable regulations as it may prescribe, shall provide for the registration of Capital Securities Certificates and Common Securities Certificates (subject to Section 5.11 in the case of Common Securities Certificates) and registration of transfers and exchanges of Capital Securities Certificates as herein provided. Such register is herein sometimes referred to as the “Securities Register.” The Property Trustee is hereby appointed “Securities Registrar” for the purpose of registering Capital Securities and transfers of Capital Securities as herein provided.

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     Upon surrender for registration of transfer of any Capital Security at the offices or agencies of the Property Trustee designated for that purpose an Administrator shall execute, and the Property Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Capital Securities of the same series of any authorized denominations of like tenor and aggregate Liquidation Amount and bearing such legends as may be required by this Trust Agreement.

     At the option of the Holder, Capital Securities may be exchanged for other Capital Securities of any authorized denominations, of like tenor and aggregate Liquidation Amount and bearing such legends as may be required by this Trust Agreement, upon surrender of the Capital Securities to be exchanged at such office or agency. Whenever any securities are so surrendered for exchange, an Administrator shall execute and the Property Trustee shall authenticate and deliver the Capital Securities that the Holder making the exchange is entitled to receive.

     All Capital Securities issued upon any transfer or exchange of Capital Securities shall be the valid obligations of the Issuer Trust, evidencing the same debt, and entitled to the same benefits under this Trust Agreement, as the Capital Securities surrendered upon such transfer or exchange.

     Every Capital Security presented or surrendered for transfer or exchange shall (if so required by the Property Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Property Trustee and the Securities Registrar, duly executed by the Holder thereof or such Holder’s attorney duly authorized in writing.

     No service charge shall be made to a Holder for any transfer or exchange of Capital Securities, but the Property Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Capital Securities.

     Neither the Issuer Trust nor the Property Trustee shall be required, pursuant to the provisions of this Section, (i) to issue, register the transfer of or exchange any Capital Security during a period beginning at the opening of business 15 days before the first mailing of the notice of redemption, or (ii) to register the transfer of or exchange any Capital Security so selected for redemption in whole or in part, except, in the case of any such Capital Security to be redeemed in part, any portion thereof not to be redeemed.

     (b) Certain Transfers and Exchanges. Trust Securities may only be transferred, in whole or in part, in accordance with the terms and conditions set forth in this Trust Agreement. To the fullest extent permitted by law, any transfer or purported transfer of any Trust Security not made in accordance with this Trust Agreement shall be null and void.

     (i) Non-Global Security to Non-Global Security. A Capital Security that is not a Global Capital Security may be transferred, in whole or in part, to a Person who takes delivery in the form of another Trust Security that is not a Global Security as provided in Section 5.5(a) .

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     (ii) Free Transferability. Subject to this Section 5.5, Capital Securities shall be freely transferable.

     (iii) Exchanges Between Global Capital Security and Non-Global Capital Security. A beneficial interest in a Global Capital Security may be exchanged for a Capital Security that is not a Global Capital Security as provided in Section 5.4.

SECTION 5.6. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.

     If (a) any mutilated Trust Securities Certificate shall be surrendered to the Securities Registrar, or if the Securities Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Trust Securities Certificate and (b) there shall be delivered to the Securities Registrar and the Administrators such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Trust Securities Certificate shall have been acquired by a bona fide purchaser, the Administrators, or any one of them, on behalf of the Issuer Trust shall execute and make available for delivery, and the Property Trustee shall authenticate, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities Certificate of like class, tenor and denomination. In connection with the issuance of any new Trust Securities Certificate under this Section, the Administrators or the Securities Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Trust Securities Certificate issued pursuant to this Section shall constitute conclusive evidence of an undivided beneficial interest in the assets of the Issuer Trust corresponding to that evidenced by the lost, stolen or destroyed Trust Certificate, as if originally issued, whether or not the lost, stolen or destroyed Trust Securities Certificate shall be found at any time.

SECTION 5.7. Persons Deemed Holders.

     The Issuer Trustees or the Securities Registrar shall treat the Person in whose name any Trust Securities are issued as the owner of such Trust Securities for the purpose of receiving Distributions and for all other purposes whatsoever, and none of the Issuer Trustees, the Administrators nor the Securities Registrar shall be bound by any notice to the contrary.

SECTION 5.8. Access to List of Holders’ Names and Addresses.

     Each Holder and each Owner shall be deemed to have agreed not to hold the Depositor, the Property Trustee, or the Administrators accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived.

SECTION 5.9. Maintenance of Office or Agency.

     The Property Trustee shall designate, with the consent of the Administrators, which consent shall not be unreasonably withheld, an office or offices or agency or agencies where Capital Securities Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuer Trustees in respect of the Trust Securities Certificates may be served. The Property Trustee initially designates its Corporate Trust Office at

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101 Barclay Street, Floor 8 West, New York, NY 10286, Attention: Corporate Trust Administration, as its corporate trust office for such purposes. The Property Trustee shall give prompt written notice to the Depositor, the Administrators and to the Holders of any change in the location of the Securities Register or any such office or agency.

SECTION 5.10. Appointment of Paying Agent.

     The Paying Agent shall make Distributions to Holders from the Payment Account and shall report the amounts of such Distributions to the Property Trustee and the Administrators. Any Paying Agent shall have the revocable power to withdraw funds from the Payment Account solely for the purpose of making the Distributions referred to above. The Property Trustee may revoke such power and remove any Paying Agent in its sole discretion. The Paying Agent shall initially be the Property Trustee. Any Person acting as Paying Agent shall be permitted to resign as Paying Agent upon 30 days’ written notice to the Administrators and the Property Trustee. In the event that the Property Trustee shall no longer be the Paying Agent or a successor Paying Agent shall resign or its authority to act be revoked, the Property Trustee shall appoint a successor (which shall be a bank or trust company) that is reasonably acceptable to the Administrators to act as Paying Agent. Such successor Paying Agent or any additional Paying Agent appointed by the Property Trustee shall execute and deliver to the Issuer Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Issuer Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Holders in trust for the benefit of the Holders entitled thereto until such sums shall be paid to such Holders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall apply to the Bank also in its role as Paying Agent, for so long as the Bank shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this Trust Agreement to the Paying Agent shall include any co-paying agent chosen by the Property Trustee unless the context requires otherwise.

SECTION 5.11. Ownership of Common Securities by Depositor.

     At the Closing Date, the Depositor shall acquire and retain beneficial and record ownership of the Common Securities. Neither the Depositor nor any successor Holder of the Common Securities may transfer less than all the Common Securities, and the Depositor or any such successor Holder may transfer the Common Securities only (i) in connection with a consolidation or merger of the Depositor into another Person or any conveyance, transfer or lease by the Depositor of its properties and assets substantially as an entirety to any Person, pursuant to Section 9.01 of the Indenture, or (ii) to an Affiliate of the Depositor in compliance with applicable law (including the Securities Act and applicable state securities and blue sky laws). To the fullest extent permitted by law, any attempted transfer of the Common Securities, other than as set forth in the immediately preceding sentence, shall be void. The Administrators shall cause each Common Securities Certificate issued to the Depositor to contain a legend stating “THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT.”

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SECTION 5.12. Notices to Clearing Agency.

     To the extent that a notice or other communication to the Holders is required under this Trust Agreement, for so long as Capital Securities are represented by a Global Capital Securities Certificate, the Administrators and the Issuer Trustees shall give all such notices and communications specified herein to be given to the Clearing Agency, and shall have no obligations to the Owners.

SECTION 5.13. Rights of Holders.

     (a) The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity as such) in accordance with Section 2.9, and the Holders shall not have any right or title therein other than the undivided beneficial interest in the assets of the Issuer Trust conferred by their Trust Securities and they shall have no right to call for any partition or division of property, profits or rights of the Issuer Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. The Trust Securities shall have no preemptive or similar rights and when issued and delivered to Holders against payment of the purchase price therefor, as provided herein, will be fully paid and nonassessable by the Issuer Trust. Except as otherwise provided in Section 4.8, the Holders of the Trust Securities, in their capacities as such, shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware.

     (b) For so long as any Capital Securities remain Outstanding, if, upon a Debenture Event of Default, the Debt Securities Trustee fails or the holders of not less than 25% in principal amount of the outstanding Junior Subordinated Debentures fail to declare the principal of all of the Junior Subordinated Debentures to be immediately due and payable, the Holders of at least 25% in Liquidation Amount of the Capital Securities then Outstanding shall have such right to make such declaration by a notice in writing to the Property Trustee, the Depositor and the Debt Securities Trustee.

     At any time after such a declaration of acceleration with respect to the Junior Subordinated Debentures has been made and before a judgment or decree for payment of the money due has been obtained by the Debt Securities Trustee as provided in the Indenture, the Holders of a Majority in Liquidation Amount of the Capital Securities, by written notice to the Property Trustee, the Depositor and the Debt Securities Trustee, may waive all defaults and rescind and annul such declaration and its consequences if:

     (i) the Depositor has paid or deposited with the Debt Securities Trustee a sum sufficient to pay

     (A) all overdue installments of interest on all of the Junior Subordinated Debentures,

     (B) any accrued Additional Interest (as defined in the Indenture) on all of the Junior Subordinated Debentures,

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     (C) the principal of (and premium, if any, on) any Junior Subordinated Debentures which have become due otherwise than by such declaration of acceleration and interest and Additional Interest thereon at the rate borne by the Junior Subordinated Debentures, and

     (D) all sums paid or advanced by the Debt Securities Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Debt Securities Trustee and the Property Trustee, their agents and counsel; and

     (ii) all Debenture Defaults with respect to the Junior Subordinated Debentures, other than the non-payment of the principal of the Junior Subordinated Debentures which has become due solely by such acceleration, have been cured or waived as provided in Section 5.10 of the Indenture.

     If the Property Trustee fails to annul any such declaration and waive such default, the Holders of at least a Majority in Liquidation Amount of the Capital Securities shall also have the right to rescind and annul such declaration and its consequences by written notice to the Depositor, the Property Trustee and the Debt Securities Trustee, subject to the satisfaction of the conditions set forth in Clause (i) and (ii) of this Section 5.13(b) .

     The Holders of at least a Majority in Liquidation Amount of the Capital Securities may, on behalf of the Holders of all the Capital Securities, waive any past Debenture Default, except a default in the payment of principal or interest (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with the Debt Securities Trustee) or a default in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Junior Subordinated Debentures. No such rescission shall affect any subsequent default or impair any right consequent thereon.

     Upon receipt by the Property Trustee of written notice declaring such an acceleration, or rescission and annulment thereof, by Holders of the Capital Securities all or part of which is represented by Global Capital Securities, a record date shall be established for determining Holders of Outstanding Capital Securities entitled to join in such notice, which record date shall be at the close of business on the day the Property Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; provided, that, unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having joined in such notice prior to the day which is 90 days after such record date, such notice of declaration of acceleration, or rescission and annulment, as the case may be, shall automatically and without further action by any Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new written notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is identical to a written notice which has been canceled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 5.13(b) .

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     (c) For so long as any Capital Securities remain Outstanding, to the fullest extent permitted by law and subject to the terms of this Trust Agreement and the Indenture, upon a Debenture Event of Default specified in Section 5.01(a) or a Debenture Default specified in Section 5.06(a) or 5.06(b) of the Indenture or a failure to comply with the Alternative Payment Mechanism or the Replacement Capital Obligation (each as defined in the Junior Subordinated Debentures), any Holder of Capital Securities shall have the right to institute a proceeding directly against the Depositor, pursuant to Section 5.01 of the Indenture, for enforcement of payment to such Holder of the principal amount of or interest on Junior Subordinated Debentures having an aggregate principal amount equal to the aggregate Liquidation Amount of the Capital Securities of such Holder (a “Direct Action”). Except as set forth in Sections 5.13(b) and 5.13(c), the Holders of Capital Securities shall have no right to exercise directly any right or remedy available to the holders of, or in respect of, the Junior Subordinated Debentures.

ARTICLE VI

ACTS OF HOLDERS; MEETINGS; VOTING

SECTION 6.1. Limitations on Holder’s Voting Rights.

     (a) Except as provided in this Trust Agreement and in the Indenture and as otherwise required by law, no Holder of Capital Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Issuer Trust or the obligations of the parties hereto, nor shall anything herein set forth or contained in the terms of the Trust Securities Certificates be construed so as to constitute the Holders from time to time as members of an association.

     (b) So long as any Junior Subordinated Debentures are held by the Property Trustee on behalf of the Issuer Trust, the Property Trustee shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debt Securities Trustee, or executing any trust or power conferred on the Property Trustee with respect to such Junior Subordinated Debentures, (ii) waive any past default that may be waived under Section 5.10 of the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Junior Subordinated Debentures shall be due and payable or (iv) consent to any amendment, modification or termination of the Indenture or the Junior Subordinated Debentures, where such consent shall be required, without, in each case, obtaining the prior approval of the Holders of at least a Majority in Liquidation Amount of the Capital Securities, provided, however, that where a consent under the Indenture would require the consent of each Holder of Junior Subordinated Debentures affected thereby, no such consent shall be given by the Property Trustee without the prior written consent of each Holder of Capital Securities. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the Holders of Capital Securities, except by a subsequent vote of the Holders of Capital Securities. The Property Trustee shall notify all Holders of the Capital Securities of any notice of default received with respect to the Junior Subordinated Debentures. In addition to obtaining the foregoing approvals of the Holders of the Capital Securities, prior to taking any of the foregoing actions, the Property Trustee shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that such action will not cause the Issuer Trust to be taxable as a corporation, a partnership

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or any other arrangement other than as a grantor trust for United States Federal income tax purposes.

     (c) If any proposed amendment to the Trust Agreement provides for, or the Issuer Trust otherwise proposes to effect, (i) any action that would adversely affect in any material respect the interests, powers, preferences or special rights of the Capital Securities, whether by way of amendment to the Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination of the Issuer Trust, other than pursuant to the terms of this Trust Agreement, then the Holders of Outstanding Capital Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of at least a Majority in Liquidation Amount of the Capital Securities.

SECTION 6.2. Notice of Meetings.

     Notice of all meetings of the Holders, stating the time, place and purpose of the meeting, shall be given by the Property Trustee pursuant to Section 10.8 to each Holder of record, at his registered address, at least 15 days and not more than 90 days before the meeting. At any such meeting, any business properly before the meeting may be so considered whether or not stated in the notice of the meeting. Any adjourned meeting may be held as adjourned without further notice.

SECTION 6.3. Meetings of Holders.

     No annual meeting of Holders is required to be held. The Property Trustee, however, shall call a meeting of Holders to vote on any matter upon the written request of the Holders of record of 25% of the aggregate Liquidation Amount of the Capital Securities and the Administrators or the Property Trustee may, at any time in their discretion, call a meeting of Holders of Capital Securities to vote on any matters as to which Holders are entitled to vote.

     Holders of at least a Majority in Liquidation Amount of the Capital Securities, present in person or represented by proxy, shall constitute a quorum at any meeting of Holders of the Capital Securities.

     If a quorum is present at a meeting, an affirmative vote by the Holders of record present, in person or by proxy, holding Capital Securities representing at least a Majority in Liquidation Amount of the Capital Securities held by the Holders present, either in person or by proxy, at such meeting shall constitute the action of the Holders of Capital Securities, unless this Trust Agreement requires a greater number of affirmative votes.

SECTION 6.4. Voting Rights.

     Holders shall be entitled to one vote for each $25 of Liquidation Amount represented by their Outstanding Trust Securities in respect of any matter as to which such Holders are entitled to vote.

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SECTION 6.5. Proxies, etc.

     At any meeting of Holders, any Holder entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Property Trustee, or with such other officer or agent of the Issuer Trust as the Property Trustee may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a resolution of the Property Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property Trustee. Only Holders of record shall be entitled to vote. When Trust Securities are held jointly by several Persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Holder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. No proxy shall be valid more than three years after its date of execution.

SECTION 6.6. Holder Action by Written Consent.

     Any action which may be taken by Holders at a meeting may be taken without a meeting if Holders holding at least a Majority in Liquidation Amount of all Trust Securities entitled to vote in respect of such action (or such larger proportion thereof as shall be required by any other provision of this Trust Agreement) shall consent to the action in writing.

SECTION 6.7. Record Date for Voting and Other Purposes.

     For the purposes of determining the Holders who are entitled to notice of and to vote at any meeting or by written consent, or to participate in any distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrators or Property Trustee may from time to time fix a date, not more than 90 days prior to the date of any meeting of Holders or the payment of a distribution or other action, as the case may be, as a record date for the determination of the identity of the Holders of record for such purposes.

SECTION 6.8. Acts of Holders.

     Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as otherwise expressly provided herein, such action shall become effective when such instrument or instruments are delivered to the Property Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor of the Issuer Trustees, if made in the manner provided in this Section.

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     The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which any Issuer Trustee or Administrator receiving the same deems sufficient.

The ownership of Trust Securities shall be proved by the Securities Register.

     Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Trust Security shall bind every future Holder of the same Trust Security and the Holder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Issuer Trustees, the Administrators or the Issuer Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security.

     Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount.

     If any dispute shall arise among the Holders, the Administrators or the Issuer Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, consent, waiver or other Act of such Holder or Issuer Trustee under this Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter.

SECTION 6.9. Inspection of Records.

     Upon reasonable notice to the Administrators and the Property Trustee, the records of the Issuer Trust shall be open to inspection by Holders during normal business hours for any purpose reasonably related to such Holder’s interest as a Holder.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

     SECTION 7.1. Representations and Warranties of the Property Trustee and the Delaware Trustee.

     The Property Trustee and the Delaware Trustee, each severally on behalf of and as to itself, hereby represents and warrants for the benefit of the Depositor and the Holders that:

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     (a) The Property Trustee is a banking corporation with trust powers, duly organized, validly existing and in good standing under the laws of New York, with trust power and authority to execute and deliver, and to carry out and perform its obligations under the terms of this Trust Agreement.

     (b) The execution, delivery and performance by the Property Trustee of this Trust Agreement have been duly authorized by all necessary corporate action on the part of the Property Trustee; and this Trust Agreement has been duly executed and delivered by the Property Trustee, and constitutes a legal, valid and binding obligation of the Property Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency, and other similar laws affecting creditors’ rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law).

     (c) The Delaware Trustee is duly organized, validly existing and in good standing as a banking corporation under the laws of the State of Delaware, with trust power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, the Trust Agreement.

     (d) The execution, delivery and performance by the Delaware Trustee of this Trust Agreement have been duly authorized by all necessary corporate action on the part of the Delaware Trustee; and this Trust Agreement has been duly executed and delivered by the Delaware Trustee, and constitutes a legal, valid and binding obligation of the Delaware Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency, and other similar laws affecting creditors’ right generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law).

     (e) The Delaware Trustee is an entity which has its principal place of business in the State of Delaware.

     (f) The Property Trustee is a national- or state-chartered bank and has capital and surplus of at least $50,000,000.

SECTION 7.2. Representations and Warranties of Depositor.

The Depositor hereby represents and warrants for the benefit of the Holders that:

     (a) the Trust Securities Certificates issued at the Closing Date on behalf of the Issuer Trust have been duly authorized and will have been duly and validly executed, issued and delivered by the Issuer Trustees pursuant to the terms and provisions of, and in accordance with the requirements of, this Trust Agreement, and the Holders will be, as of each such date, entitled to the benefits of this Trust Agreement; and

     (b) there are no taxes, fees or other governmental charges payable by the Issuer Trust (or the Issuer Trustees on behalf of the Issuer Trust) under the laws of the State of Delaware or

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any political subdivision thereof in connection with the execution, delivery and performance by either the Property Trustee or the Delaware Trustee, as the case may be, of this Trust Agreement.

ARTICLE VIII

THE ISSUER TRUSTEES; THE ADMINISTRATORS

SECTION 8.1. Certain Duties and Responsibilities.

     (a) The duties and responsibilities of the Issuer Trustees and the Administrators shall be as provided by this Trust Agreement and, in the case of the Property Trustee, by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Trust Agreement shall require the Issuer Trustees or the Administrators to expend or risk their own funds or otherwise incur any financial liability in the performance of any of their duties hereunder, or in the exercise of any of their rights or powers, if they shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Issuer Trustees or the Administrators shall be subject to the provisions of this Section. Nothing in this Trust Agreement shall be construed to release an Administrator from liability for its own grossly negligent action, its own grossly negligent failure to act, or its own willful misconduct. To the extent that, at law or in equity, an Issuer Trustee or Administrator has duties and liabilities relating to the Issuer Trust or to the Holders, such Issuer Trustee or Administrator shall not be liable to the Issuer Trust or to any Holder for such Issuer Trustee’s or Administrator’s good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of the Issuer Trustees and Administrators otherwise existing at law or in equity, are agreed by the Depositor and the Holders to replace such other duties and liabilities of the Issuer Trustees and Administrators.

     (b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall be made only from the revenue and proceeds from the Trust Property and only to the extent that there shall be sufficient revenue or proceeds from the Trust Property to enable the Property Trustee or a Paying Agent to make payments in accordance with the terms hereof. Each Holder, by its acceptance of a Trust Security, agrees that it will look solely to the revenue and proceeds from the Trust Property to the extent legally available for distribution to it as herein provided and that neither the Issuer Trustees nor the Administrators are personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.1(b) does not limit the liability of the Issuer Trustees expressly set forth elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act.

     (c) The Property Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Trust Agreement (including pursuant to Section 10.10), and no implied covenants shall be read into this Trust Agreement against the Property Trustee. If an Event of Default has occurred (that has not been cured or waived pursuant to Article V of the Indenture), the Property Trustee shall enforce this Trust Agreement for the benefit of the Holders

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and shall exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

     (d) No provision of this Trust Agreement shall be construed to relieve the Property Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

     (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred:

     (A) the duties and obligations of the Property Trustee shall be determined solely by the express provisions of this Trust Agreement (including pursuant to Section 10.10), and the Property Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Trust Agreement (including pursuant to Section 10.10); and

     (B) in the absence of bad faith on the part of the Property Trustee, the Property Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Property Trustee and conforming to the requirements of this Trust Agreement; but in the case of any such certificates or opinions that by any provision hereof or of the Trust Indenture Act are specifically required to be furnished to the Property Trustee, the Property Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Trust Agreement;

     (ii) the Property Trustee shall not be liable for any error of judgment made in good faith by an authorized officer of the Property Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts;

     (iii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of at least a Majority in Liquidation Amount of the Capital Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement;

     (iv) the Property Trustee’s sole duty with respect to the custody, safe keeping and physical preservation of the Junior Subordinated Debentures and the Payment Account shall be to deal with such property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections and limitations on liability afforded to the Property Trustee under this Trust Agreement and the Trust Indenture Act;

     (v) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree with the Depositor; and money held by

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the Property Trustee need not be segregated from other funds held by it except in relation to the Payment Account maintained by the Property Trustee pursuant to Section 3.1 and except to the extent otherwise required by law;

     (vi) the Property Trustee shall not be responsible for monitoring the compliance by the Administrators or the Depositor with their respective duties under this Trust Agreement, nor shall the Property Trustee be liable for the default or misconduct of any other Issuer Trustee, the Administrators or the Depositor; and

     (vii) no provision of this Trust Agreement shall require the Property Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Property Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Trust Agreement or adequate indemnity against such risk or liability is not reasonably assured to it.

     (e) The Administrators shall not be responsible for monitoring the compliance by the Issuer Trustees or the Depositor with their respective duties under this Trust Agreement, nor shall either Administrator be liable for the default or misconduct of any other Administrator, the Issuer Trustees or the Depositor.

SECTION 8.2. Certain Notices.

     Within ten Business Days after the occurrence of any Event of Default actually known to a Responsible Officer of the Property Trustee, the Property Trustee shall transmit, in the manner and to the extent provided in Section 10.8, notice of such Event of Default to the Holders and the Administrators, unless such Event of Default shall have been cured or waived.

     Within ten Business Days after the receipt of notice of the Depositor’s exercise of its right to defer the payment of interest on the Junior Subordinated Debentures pursuant to the Indenture, the Property Trustee shall transmit, in the manner and to the extent provided in Section 10.8, notice of such exercise to the Holders and the Administrators, unless such exercise shall have been revoked.

SECTION 8.3. Certain Rights of Property Trustee.

Subject to the provisions of Section 8.1:

     (a) the Property Trustee may conclusively rely and shall be fully protected in acting or refraining from acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

     (b) any direction or act of the Depositor contemplated by this Trust Agreement shall be sufficiently evidenced by an Officer’s Certificate;

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     (c) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any filing under tax or securities laws) or any re-recording, refiling or registration thereof;

     (d) the Property Trustee may consult with counsel of its own choosing (which counsel may be counsel to the Depositor or any of its Affiliates, and may include any of its employees) and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice; the Property Trustee shall have the right at any time to seek instructions concerning the administration of this Trust Agreement from any court of competent jurisdiction;

     (e) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Holders pursuant to this Trust Agreement, unless such Holders shall have offered to the Property Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; provided, that nothing contained in this Section 8.3(e) shall be taken to relieve the Property Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Trust Agreement;

     (f) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other paper or document, unless requested in writing to do so by one or more Holders, but the Property Trustee may make such further inquiry or investigation into such facts or matters as it may see fit;

     (g) the Property Trustee may execute any of the trusts or powers hereunder or perform any of its duties hereunder either directly or by or through its agents or attorneys, provided that the Property Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

     (h) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Property Trustee (i) may request instructions from the Holders (which instructions may only be given by the Holders of the same proportion in Liquidation Amount of the Trust Securities as would be entitled to direct the Property Trustee under the terms of the Trust Securities in respect of such remedy, right or action), (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (iii) shall be fully protected in acting in accordance with such instructions;

     (i) except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Trust Agreement. No provision of this Trust Agreement shall be deemed to impose any duty or obligation on any Issuer Trustee or Administrator to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in

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which it shall be illegal, or in which the Property Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such right, power, duty or obligation. No permissive power or authority available to any Issuer Trustee or Administrator shall be construed to be a duty;

     (j) if (i) in performing its duties under this Trust Agreement the Property Trustee is required to decide between alternative courses of action or (ii) in construing any of the provisions of this Trust Agreement the Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein or (iii) the Property Trustee is unsure of the application of any provision of this Trust Agreement, then, except as to any matter as to which the Holders are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver a notice to the Depositor requesting written instructions of the Depositor as to the course of action to be taken and the Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing to take, or to refrain from taking, by the Depositor; provided, however, that if the Property Trustee does not receive such instructions of the Depositor within ten Business Days after it has delivered such notice, or such reasonably shorter period of time set forth in such notice (which to the extent practicable shall not be less than two Business Days), it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement as it shall deem advisable and in the best interests of the Holders, in which event the Property Trustee shall have no liability except for its own bad faith, negligence or willful misconduct;

     (k) whenever in the administration of this Trust Agreement, the Property Trustee shall deem it desirable that a matter be established before undertaking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an Officer’s Certificate which, upon receipt of such request, shall be promptly delivered by the Depositor or the Administrator;

     (l) when the Property Trustee incurs expenses or renders services in connection with a Bankruptcy Event, such expenses (including the fees and expenses of its counsel) and the compensation for such services are intended to constitute expenses of administration under any bankruptcy law or law relating to creditors’ rights generally; and

     (m) the Property Trustee shall not be charged with knowledge of an Event of Default unless such Event of Default has occurred as a result of the act or failure to act of the Property Trustee, a Responsible Officer of the Property Trustee obtains actual knowledge of such event or the Property Trustee receives written notice of such event from Holders of at least 25% of the Outstanding Trust Securities (based upon Liquidation Amount).

SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.

     The recitals contained herein and in the Trust Securities Certificates shall be taken as the statements of the Issuer Trust, and the Issuer Trustees and the Administrators do not assume any responsibility for their correctness. The Issuer Trustees and the Administrators shall not be accountable for the use or application by the Depositor of the proceeds of the Junior Subordinated Debentures.

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SECTION 8.5. May Hold Securities.

     The Administrators, any Issuer Trustee or any other agent of any Issuer Trustee or the Issuer Trust, in its individual or any other capacity, may become the owner or pledgee of Trust Securities and, subject to Sections 8.8 and 8.13, and except as provided in the definition of the term “Outstanding” in Article I, may otherwise deal with the Issuer Trust with the same rights it would have if it were not an Administrator, Issuer Trustee or such other agent.

SECTION 8.6. Compensation; Indemnity; Fees.

The Depositor, as borrower, agrees:

     (a) to pay to the Issuer Trustees from time to time such reasonable compensation for all services rendered by them hereunder as the parties shall agree from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

     (b) to reimburse the Issuer Trustees upon request for all reasonable expenses, disbursements and advances incurred or made by the Issuer Trustees in accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to their negligence or willful misconduct; and

     (c) to the fullest extent permitted by applicable law, to indemnify and hold harmless (i) each Issuer Trustee, (ii) each Administrator, (iii) any Affiliate of any Issuer Trustee, (iv) any officer, director, shareholder, employee, representative or agent of any Issuer Trustee, and (v) any employee or agent of the Issuer Trust (referred to herein as an “Indemnified Person”) from and against any loss, damage, liability, tax, penalty, expense or claim of any kind or nature whatsoever incurred by such Indemnified Person arising out of or in connection with the creation, operation or dissolution of the Issuer Trust or any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Issuer Trust and in a manner such Indemnified Person reasonably believed to be within the scope of authority conferred on such Indemnified Person by this Trust Agreement, except that no Indemnified Person (other than an Administrator) shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of negligence or willful misconduct with respect to such acts or omissions, and further provided that no Administrator shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Administrator by reason of gross negligence or willful misconduct with respect to such acts or omissions.

     The provisions of this Section 8.6 shall survive the termination of this Trust Agreement or the earlier resignation or removal of any Issuer Trustee.

     No Issuer Trustee may claim any lien or charge on any Trust Property as a result of any amount due pursuant to this Section 8.6.

     The Depositor, any Administrator and any Issuer Trustee (subject to Section 8.8) may engage in or possess an interest in other business ventures of any nature or description,

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independently or with others, similar or dissimilar to the business of the Issuer Trust, and the Issuer Trust and the Holders of Trust Securities shall have no rights by virtue of this Trust Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Issuer Trust, shall not be deemed wrongful or improper. Neither the Depositor, any Administrator, nor any Issuer Trustee shall be obligated to present any particular investment or other opportunity to the Issuer Trust even if such opportunity is of a character that, if presented to the Issuer Trust, could be taken by the Issuer Trust, and the Depositor, any Administrator or any Issuer Trustee shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other opportunity. Any Issuer Trustee may engage or be interested in any financial or other transaction with the Depositor or any Affiliate of the Depositor, or may act as depository for, trustee or agent for, or act on any committee or body of holders of, securities or other obligations of the Depositor or its Affiliates.

     In the event that the Property Trustee is also acting as Paying Agent or Securities Registrar hereunder, the rights and protections afforded to the Property Trustee pursuant to this Article VIII shall also be afforded to such Paying Agent or Securities Registrar.

     SECTION 8.7. Corporate Property Trustee Required; Eligibility of Trustees and Administrators.

     (a) There shall at all times be a Property Trustee hereunder with respect to the Trust Securities. The Property Trustee shall be a Person that is a national- or state-chartered bank and eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee with respect to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

     (b) There shall at all times be one or more Administrators hereunder. Each Administrator shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more persons authorized to bind that entity. An employee, officer or Affiliate of the Depositor may serve as an Administrator.

     (c) There shall at all times be a Delaware Trustee. The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity with its principal place of business in the State of Delaware and that otherwise meets the requirements of applicable Delaware law that shall act through one or more persons authorized to bind such entity.

SECTION 8.8. Conflicting Interests.

     (a) If the Property Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Property Trustee shall either eliminate such interest or

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resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust Agreement.

     (b) The Guarantee Agreement and the Indenture shall be deemed to be sufficiently described in this Trust Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.

SECTION 8.9. Co-Trustees and Separate Trustee.

     Unless an Event of Default shall have occurred and be continuing, at any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property may at the time be located, the Property Trustee shall have power to appoint, and upon the written request of the Property Trustee, the Depositor and the Administrators shall for such purpose join with the Property Trustee in the execution, delivery, and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Property Trustee either to act as co-trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to the extent required by law to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. Any co-trustee or separate trustee appointed pursuant to this Section shall either be (i) a natural person who is at least 21 years of age and a resident of the United States or (ii) a legal entity with its principal place of business in the United States that shall act through one or more persons authorized to bind such entity.

     Should any written instrument from the Depositor be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right, or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Depositor.

     Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely:

     (a) The Trust Securities shall be executed by one or more Administrators, and the Capital Securities shall be authenticated by the manual signature of the Property Trustee and delivered and all rights, powers, duties, and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Property Trustees specified hereunder, shall be exercised, solely by the Property Trustee and not by such co-trustee or separate trustee.

     (b) The rights, powers, duties, and obligations hereby conferred or imposed upon the Property Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Property Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee shall be incompetent or unqualified to

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perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee.

     (c) The Property Trustee at any time, by an instrument in writing executed by it, with the written concurrence of the Depositor, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, in case a Debenture Default has occurred and is continuing, the Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Depositor. Upon the written request of the Property Trustee, the Depositor shall join with the Property Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section.

     (d) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Property Trustee or any other trustee hereunder.

     (e) The Property Trustee shall not be liable by reason of any act of a co-trustee or separate trustee or any employees or agents of a co-trustee and separate trustee nor shall it be liable for the supervision of a co-trustee or separate trustee or employees or agents of a co-trustee and separate trustee.

     (f) Any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee.

SECTION 8.10. Resignation and Removal; Appointment of Successor.

     No resignation or removal of any Issuer Trustee (the “Relevant Trustee”) and no appointment of a successor Issuer Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Issuer Trustee in accordance with the applicable requirements of Section 8.11.

     Subject to the immediately preceding paragraph, a Relevant Trustee may resign at any time by giving written notice thereof to the Holders. The Relevant Trustee shall appoint a successor by requesting from at least three Persons meeting the eligibility requirements its expenses and charges to serve as the Relevant Trustee on a form provided by the Administrators, and selecting the Person who agrees to the lowest expenses and charges. If the instrument of acceptance by the successor Issuer Trustee required by Section 8.11 shall not have been delivered to the Relevant Trustee within 60 days after the giving of such notice of resignation, the Relevant Trustee may petition, at the expense of the Issuer Trust, any court of competent jurisdiction for the appointment of a successor Relevant Trustee.

     Unless a Debenture Default shall have occurred and be continuing, the Property Trustee or the Delaware Trustee may be removed at any time by an Act of the Holders of a Majority in Liquidation Amount of the Common Securities. The Property Trustee or the Delaware Trustee may be removed at any time by Act of the Holders of at least a Majority in Liquidation Amount of the Capital Securities, delivered to the Relevant Trustee (in its individual capacity and on behalf of the Issuer Trust) (i) for cause, or (ii) if a Debenture Default shall have occurred and be

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continuing at any time. If the instrument of such removal shall not have been delivered to the Relevant Trustee within 60 days after such Act, the Relevant Trustee may petition, at the expense of the Issuer Trust, any court of competent jurisdiction for appointment of a successor Relevant Trustee.

     If any Issuer Trustee shall resign, it shall appoint its successor. If a resigning Issuer Trustee shall fail to appoint a successor, or if an Issuer Trustee shall be removed or become incapable of acting as Issuer Trustee, or if any vacancy shall occur in the office of any Issuer Trustee for any cause, the Holders of the Capital Securities, by Act of the Holders of record of not less than 25% in aggregate Liquidation Amount of the Capital Securities then Outstanding delivered to such Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and such successor Issuer Trustee shall comply with the applicable requirements of Section 8.11. If no successor Relevant Trustee shall have been so appointed by the Holders of the Capital Securities and accepted appointment in the manner required by Section 8.11, any Holder, on behalf of himself and all others similarly situated, or any other Issuer Trustee, may petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee.

     The Property Trustee shall give notice of each resignation and each removal of an Issuer Trustee and each appointment of a successor Issuer Trustee to all Holders in the manner provided in Section 10.8 and shall give notice to the Depositor and to the Administrators. Each notice shall include the name of the successor Relevant Trustee and the address of its Corporate Trust Office if it is the Property Trustee.

     Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any Delaware Trustee who is a natural person dies or becomes, in the opinion of the Holders of the Common Securities, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by the Property Trustee following the procedures regarding expenses and charges set forth above (with the successor in each case being a Person who satisfies the eligibility requirements for Administrators or Delaware Trustee, as the case may be, set forth in Section 8.7) .

SECTION 8.11. Acceptance of Appointment by Successor.

     In case of the appointment hereunder of a successor Relevant Trustee, the retiring Relevant Trustee and each such successor Relevant Trustee with respect to the Trust Securities shall execute, acknowledge and deliver an amendment hereto wherein each successor Relevant Trustee shall accept such appointment and which (a) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Relevant Trustee all the rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and the Issuer Trust, and (b) shall add to or change any of the provisions of this Trust Agreement as shall be necessary to provide for or facilitate the administration of the Issuer Trust by more than one Relevant Trustee and upon the execution and delivery of such amendment the resignation or removal of the retiring Relevant Trustee shall become effective to the extent provided therein and each such successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee; but, on request of the Issuer Trust or any successor Relevant Trustee such retiring Relevant Trustee shall, upon payment of its charges, duly assign, transfer and deliver to

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such successor Relevant Trustee all Trust Property, all proceeds thereof and money held by such retiring Relevant Trustee hereunder with respect to the Trust Securities and the Issuer Trust.

     Upon request of any such successor Relevant Trustee, the Issuer Trust shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Relevant Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.

     No successor Relevant Trustee shall accept its appointment unless at the time of such acceptance such successor Relevant Trustee shall be qualified and eligible under this Article.

SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business.

     Any Person into which an Issuer Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which such Issuer Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of such Issuer Trustee, shall be the successor of such Issuer Trustee hereunder, provided that such Person shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.

SECTION 8.13. Preferential Collection of Claims Against Depositor or Issuer Trust.

     If and when the Property Trustee shall be or become a creditor of the Depositor (or any other obligor upon the Trust Securities), the Property Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Depositor (or any such other obligor) as is required by the Trust Indenture Act.

SECTION 8.14. Trustee May File Proofs of Claim.

     In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other similar judicial proceeding relative to the Issuer Trust or any other obligor upon the Trust Securities or the property of the Issuer Trust or of such other obligor, the Property Trustee (irrespective of whether any Distributions on the Trust Securities shall then be due and payable and irrespective of whether the Property Trustee shall have made any demand on the Issuer Trust for the payment of any past due Distributions) shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such proceeding or otherwise:

     (a) to file and prove a claim for the whole amount of any Distributions owing and unpaid in respect of the Trust Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Property Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and

     (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator,

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sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Property Trustee and, in the event the Property Trustee shall consent to the making of such payments directly to the Holders, to pay to the Property Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel, and any other amounts due the Property Trustee.

     Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or compensation affecting the Trust Securities or the rights of any Holder thereof or to authorize the Property Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 8.15. Reports by Property Trustee.

     (a) Not later than May 15 of each year commencing with May 15, 2007, the Property Trustee shall provide to the Holders of the Trust Securities such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form, in the manner and at the times provided by Section 313 of the Trust Indenture Act. The Property Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act.

     (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Property Trustee with the Depositor.

SECTION 8.16. Reports to the Property Trustee.

     Each of the Depositor and the Administrators on behalf of the Issuer Trust shall provide to the Property Trustee, the Commission and the Holders of the Trust Securities, as applicable, such documents, reports and information as required by Section 314(a)(1) - (3) (if any) of the Trust Indenture Act and the compliance certificates required by Section 314(a)(4) and (c) of the Trust Indenture Act (provided that any certificate to be provided pursuant to Section 314(a)(4) of the Trust Indenture Act shall be provided within 120 days of the end of each fiscal year of the Issuer Trust).

SECTION 8.17. Evidence of Compliance with Conditions Precedent.

     Each of the Depositor and the Administrators on behalf of the Issuer Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Agreement which relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given pursuant to Section 314(c) shall comply with Section 314(e) of the Trust Indenture Act.

SECTION 8.18. Number of Issuer Trustees.

     (a) The number of Issuer Trustees shall be two. The Property Trustee and the Delaware Trustee may be the same Person, in which case the number of Issuer Trustees may be one.

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     (b) If an Issuer Trustee ceases to hold office for any reason, a vacancy shall occur. The vacancy shall be filled with an Issuer Trustee appointed in accordance with Section 8.10.

     (c) The death, resignation, retirement, removal, bankruptcy, dissolution, termination, incompetence or incapacity to perform the duties of an Issuer Trustee shall not operate to dissolve, terminate or annul the Issuer Trust or terminate this Trust Agreement.

SECTION 8.19. Delegation of Power.

     (a) Any Administrator may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in Section 2.7(a) or making any governmental filing; and

     (b) The Administrators shall have power to delegate from time to time to such of their number the doing of such things and the execution of such instruments either in the name of the Issuer Trust or the names of the Administrators or otherwise as the Administrators may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of this Trust Agreement.

SECTION 8.20. Appointment of Administrators.

     (a) The number of Administrators shall be such number as shall be fixed from time to time by the Holders of a Majority in Liquidation Amount of the Common Securities. The Administrators shall be appointed by the Holders of a Majority in Liquidation Amount of the Common Securities and may be removed by the Holders of a Majority in Liquidation Amount of the Common Securities or may resign at any time. Upon any resignation or removal, the Depositor shall appoint a successor Administrator. Each Administrator shall execute this Trust Agreement thereby agreeing to comply with, and be legally bound by, all of the terms, conditions and provisions of this Trust Agreement. If at any time there is no Administrator, the Property Trustee or any Holder who has been a Holder of Trust Securities for at least six months may petition any court of competent jurisdiction for the appointment of one or more Administrators.

     (b) Whenever a vacancy in the number of Administrators shall occur, until such vacancy is filled by the appointment of an Administrator in accordance with this Section 8.20, the Administrators in office, regardless of their number (and notwithstanding any other provision of this Trust Agreement), shall have all the powers granted to the Administrators and shall discharge all the duties imposed upon the Administrators by this Trust Agreement.

     (c) Notwithstanding the foregoing, or any other provision of this Trust Agreement, in the event any Administrator or a Delaware Trustee who is a natural person dies or becomes, in the opinion of the Holders of a Majority in Liquidation Amount of the Common Securities, incompetent, or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by the remaining Administrators, if there were at least two of them prior to such vacancy, and by the Depositor, if there were not two such Administrators immediately prior to such vacancy (with the successor in each case being a Person who satisfies the eligibility requirement for Administrators or Delaware Trustee, as the case may be, set forth in Section 8.7) .

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ARTICLE IX

DISSOLUTION, LIQUIDATION AND MERGER

SECTION 9.1. Dissolution Upon Expiration Date.

     Unless earlier dissolved, the Issuer Trust shall automatically dissolve on October 15, 2066 (the “Expiration Date”), and thereafter the Trust Property shall be distributed in accordance with Section 9.4.

SECTION 9.2. Early Termination.

     The first to occur of any of the following events is an “Early Termination Event” and the occurrence of which shall cause the dissolution of the Issuer Trust:

     (a) the occurrence of the appointment of a receiver or other similar official in any liquidation, insolvency or similar proceeding with respect to the Depositor or all or substantially all of its property, or a court or other governmental agency shall enter a decree or order and such decree or order shall remain unstayed and undischarged for a period of 60 days, unless the Depositor shall transfer the Common Securities as provided by Section 5.11, in which case this provision shall refer instead to any such successor Holder of the Common Securities;

     (b) the written direction to the Property Trustee from the Holder of the Common Securities at any time to dissolve the Issuer Trust and to distribute a Like Amount of the Junior Subordinated Debentures to Holders in exchange for the Capital Securities (which direction, subject to Section 9.4(a) and to obtaining any required regulatory approval, is optional and wholly within the discretion of the Holders of the Common Securities);

     (c) the redemption of all of the Capital Securities in connection with the redemption of all the Junior Subordinated Debentures or the maturity of the Junior Subordinated Debentures; and

     (d) the entry of an order for dissolution of the Issuer Trust by a court of competent jurisdiction.

SECTION 9.3. Termination.

     As soon as is practicable after the occurrence of an event referred to in Section 9.1 or 9.2, and upon the completion of the winding up and liquidation of the Issuer Trust, the Administrators or the Issuer Trustees (each of whom is hereby authorized to take such action) shall file a certificate of cancellation with the Secretary of State of the State of Delaware terminating the Trust and, upon such filing, the respective obligations and responsibilities of the Issuer Trustees, the Administrators and the Issuer Trust shall terminate.

SECTION 9.4. Liquidation.

     (a) If an Early Termination Event specified in clause (a), (b) or (d) of Section 9.2 occurs or upon the Expiration Date, the Issuer Trust shall be wound up and liquidated by the

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Property Trustee as expeditiously as the Property Trustee determines to be possible by distributing, after paying or making reasonable provision to pay all claims and obligations of the Issuer Trust in accordance with Section 3808(e) of the Delaware Statutory Trust Act, to each Holder a Like Amount of Junior Subordinated Debentures, subject to Section 9.4(d) . Notice of liquidation shall be given by the Property Trustee by first-class mail, postage prepaid, mailed not later than 15 nor more than 45 days prior to the Liquidation Date to each Holder of Trust Securities at such Holder’s address appearing in the Securities Register. All notices of liquidation shall:

(i) state the Liquidation Date;

     (ii) state that, from and after the Liquidation Date, the Trust Securities will no longer be deemed to be Outstanding and any Trust Securities Certificates not surrendered for exchange will be deemed to represent a Like Amount of Junior Subordinated Debentures; and

     (iii) provide such information with respect to the mechanics by which Holders may exchange Trust Securities Certificates for Junior Subordinated Debentures, or if Section 9.4(d) applies, receive a Liquidation Distribution, as the Administrators or the Property Trustee shall deem appropriate.

     (b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the liquidation of the Issuer Trust and distribution of the Junior Subordinated Debentures to Holders, the Property Trustee shall establish a record date for such distribution (which shall be not more than 30 days prior to the Liquidation Date) and, either itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish such procedures as it shall deem appropriate to effect the distribution of Junior Subordinated Debentures in exchange for the Outstanding Trust Securities Certificates.

     (c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation Date, (i) the Capital Securities and Common Securities will no longer be deemed to be Outstanding, (ii) the Clearing Agency for the Capital Securities or its nominee, as the registered holder of the Global Capital Securities Certificate, shall receive a registered global certificate or certificates representing the Junior Subordinated Debentures to be delivered upon such distribution with respect to Capital Securities held by the Clearing Agency or its nominee, and, (iii) any Capital Securities Certificates not held by the Clearing Agency for the Capital Securities or its nominee as specified in clause (ii) above will be deemed to represent Junior Subordinated Debentures having a principal amount equal to the stated Liquidation Amount of the Capital Securities represented thereby and bearing accrued and unpaid interest in an amount equal to the accumulated and unpaid Distributions on such Capital Securities until such certificates are presented to the Securities Registrar for transfer or reissuance.

     (d) If, notwithstanding the other provisions of this Section 9.4, whether because of an order for dissolution entered by a court of competent jurisdiction or otherwise, distribution of the Junior Subordinated Debentures is not practical, or if any Early Termination Event specified in clause (c) of Section 9.2 occurs, the Issuer Trust shall be dissolved and wound up and the Trust Property shall be liquidated by the Property Trustee in such manner as the Property Trustee

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determines. In such event, on the date of the dissolution of the Issuer Trust, unless the Trust Securities have been redeemed or are to be redeemed on such date pursuant to Article IV, Holders will be entitled to receive out of the assets of the Issuer Trust available for distribution to Holders, after paying or making reasonable provision to pay all claims and obligations of the Issuer Trust in accordance with Section 3808(e) of the Delaware Statutory Trust Act, an amount equal to the aggregate of Liquidation Amount per Trust Security plus accumulated and unpaid Distributions thereon to but excluding the date of payment (such amount being the “Liquidation Distribution”). If, upon any such dissolution, the Liquidation Distribution can be paid only in part because the Issuer Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the next succeeding sentence, the amounts payable by the Issuer Trust on the Trust Securities shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holders of the Common Securities will be entitled to receive Liquidation Distributions upon any such dissolution pro rata (determined as aforesaid) with Holders of Capital Securities, except that, if a Debenture Event of Default or Debenture Default specified in Section 5.06(a) or 5.06(b) of the Indenture has occurred and is continuing, the Capital Securities shall have a priority over the Common Securities as provided in Section 4.3.

SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of the Issuer Trust.

     The Issuer Trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, any entity, except pursuant to this Section 9.5 or Section 9.4. At the request of the Holders of the Common Securities, and with the consent of the Holders of at least a Majority in Liquidation Amount of the Capital Securities, the Issuer Trust may merge with or into, consolidate, amalgamate, or 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; provided, however, that (i) such successor entity either (a) expressly assumes all of the obligations of the Issuer Trust with respect to the Capital Securities or (b) substitutes for the Capital Securities other securities having substantially the same terms as the Capital Securities (the “Successor 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, (ii) a trustee of such successor entity possessing the same powers and duties as the Property Trustee is appointed to hold the Junior Subordinated Debentures, (iii) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Capital Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (iv) such 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, (v) such successor entity has a purpose substantially identical to that of the Issuer Trust, (vi) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Issuer Trustee has received an Opinion of Counsel from independent counsel experienced in such matters to the effect that (a) such 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, and (b) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Issuer Trust

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nor such successor entity will be required to register as an “investment company” under the Investment Company Act and (vii) the Depositor or any permitted transferee to whom it has transferred the Common Securities hereunder own all of the common securities of such successor entity and guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Guarantee Agreement. Notwithstanding the foregoing, the Issuer Trust shall not, except with the consent of Holders of 100% in Liquidation Amount of the Capital Securities, consolidate, amalgamate, merge with or into, 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 consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Issuer Trust or the successor entity to be taxable as a corporation, a partnership or any other arrangement other than as a grantor trust for United States Federal income tax purposes.

ARTICLE X

MISCELLANEOUS PROVISIONS

SECTION 10.1. Limitation of Rights of Holders.

     Except as set forth in Section 9.2, the death, incapacity, dissolution, termination or bankruptcy of any Person having an interest, beneficial or otherwise, in Trust Securities shall not operate to terminate this Trust Agreement, nor dissolve or terminate the Issuer Trust, nor entitle the legal representatives, successors or heirs of such Person or any Holder for such Person, to claim an accounting, take any action or bring any proceeding in any court for a partition or winding-up of the arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. Any merger or similar agreement authorized in accordance with this Trust Agreement shall be executed by one or more of the Administrators on behalf of the Issuer Trust.

SECTION 10.2. Amendment.

     (a) This Trust Agreement may be amended from time to time by the Property Trustee and the Holders of a Majority in Liquidation Amount of the Common Securities, without the consent of any Holder of the Capital Securities (i) to cure any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Trust Agreement, provided, however, that such amendment shall not adversely affect in any material respect the interests of any Holder or (ii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to ensure that the Issuer Trust will not be taxable as a corporation, a partnership or any other arrangement other than as a grantor trust for United States Federal income tax purposes at any time that any Trust Securities are Outstanding or to ensure that the Issuer Trust will not be required to register as an investment company under the Investment Company Act.

     (b) Except as provided in Section 10.2(c) hereof, any provision of this Trust Agreement may be amended by the Property Trustee and the Holders of a Majority in Liquidation Amount of the Common Securities with (i) the consent of Holders of at least a

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Majority in Liquidation Amount of the Capital Securities and (ii) receipt by the Issuer Trustees of an Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Issuer Trustees in accordance with such amendment will not cause the Issuer Trust to be taxable as a corporation, a partnership or any other arrangement other than as a grantor trust for United States Federal income tax purposes or affect the Issuer Trust’s exemption from status of an “investment company” under the Investment Company Act.

     (c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent of each affected Holder, this Trust Agreement may not be amended to (i) 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 (ii) restrict the right of a Holder to institute suit for the enforcement of any such payment on or after such date.

     (d) Notwithstanding any other provisions of this Trust Agreement, no Issuer Trustee shall enter into or consent to any amendment to this Trust Agreement which would cause the Issuer Trust to fail or cease to qualify for the exemption from status as an “investment company” under the Investment Company Act or to fail or cease to qualify as a grantor trust for United States Federal income tax purposes.

     (e) Notwithstanding anything in this Trust Agreement to the contrary, without the consent of the Depositor and the Administrators, this Trust Agreement may not be amended in a manner which imposes any additional obligation on the Depositor or the Administrators.

     (f) In the event that any amendment to this Trust Agreement is made, the Administrators or the Property Trustee shall promptly provide to the Depositor a copy of such amendment.

     (g) Neither the Property Trustee nor the Delaware Trustee shall be required to enter into any amendment to this Trust Agreement which affects its own rights, duties or immunities under this Trust Agreement. The Property Trustee shall be entitled to receive an Opinion of Counsel and an Officer’s Certificate stating that any amendment to this Trust Agreement is in compliance with this Trust Agreement.

     (h) Any amendments to this Trust Agreement, pursuant to Section 10.2(a), shall become effective when notice of such amendment is given to the Holders of the Trust Securities.

     (i) Notwithstanding any other provision of this Trust Agreement, no amendment to this Trust Agreement may be made if, as a result of such amendment, it would cause the Issuer Trust to be taxable as a corporation, a partnership or any other arrangement other than as a grantor trust for United States Federal income tax purposes.

SECTION 10.3. Separability.

     In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

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SECTION 10.4. Governing Law.

     THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE HOLDERS, THE ISSUER TRUST, THE DEPOSITOR, THE ISSUER TRUSTEES AND THE ADMINISTRATORS SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER, THAT THERE SHALL NOT BE APPLICABLE TO THE HOLDERS, THE ISSUER TRUST, THE DEPOSITOR, THE ISSUER TRUSTEES, THE ADMINISTRATORS OR THIS TRUST AGREEMENT ANY PROVISION OF THE LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING TO TRUSTS THAT RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH THE TERMS HEREOF (A) THE FILING WITH ANY COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING, STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS OR (G) THE ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE LIMITATIONS OR LIABILITIES OR AUTHORITIES AND POWERS OF THE ISSUER TRUSTEES OR THE ADMINISTRATORS AS SET FORTH OR REFERENCED IN THIS TRUST AGREEMENT. SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THE ISSUER TRUST.

SECTION 10.5. Payments Due on Non-Business Day.

     If the date fixed for any payment on any Trust Security shall be a day that is not a Business Day, then such payment need not be made on such date but may be made on the next succeeding day that is a Business Day, with the same force and effect as though made on the date fixed for such payment, and no Distributions shall accumulate on such unpaid amount for the period after such date.

SECTION 10.6. Successors.

     This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to the Depositor, the Issuer Trust, the Administrators and any Issuer Trustee, including any successor by operation of law. Except in connection with a consolidation, merger or sale

54

involving the Depositor that is permitted under Article IX of the Indenture and pursuant to which the assignee agrees in writing to perform the Depositor’s obligations hereunder, the Depositor shall not assign its obligations hereunder.

SECTION 10.7. Headings.

     The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement.

SECTION 10.8. Reports, Notices and Demands.

     Any report, notice, demand or other communication that by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Holder or the Depositor may be given or served in writing by deposit thereof, first-class postage prepaid, in the United States mail, hand delivery or facsimile transmission, in each case, addressed, (a) in the case of a Holder of Capital Securities, to such Holder as such Holder’s name and address may appear on the Securities Register; and (b) in the case of the Holder of Common Securities or the Depositor, to Morgan Stanley, 1585 Broadway, New York, NY 10036, Attention: Office of the Secretary, facsimile no.: (212) 761-0331 or to such other address as may be specified in a written notice by the Depositor to the Property Trustee. Such notice, demand or other communication to or upon a Holder shall be deemed to have been sufficiently given or made, for all purposes, upon hand delivery, mailing or transmission. Such notice, demand or other communication to or upon the Depositor shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Depositor.

     Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon the Property Trustee, the Delaware Trustee, the Administrators, or the Issuer Trust shall be given in writing addressed (until another address is published by the Issuer Trust) as follows: (a) with respect to the Property Trustee to The Bank of New York, 101 Barclay Street, Floor 8 West, New York, NY 10286, Attention: Corporate Trust Administration; (b) with respect to the Delaware Trustee to The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware 19711, Attention: Corporate Trust Administration; and (c) with respect to the Administrators, to them at the address above for notices to the Depositor, marked “Attention: Office of the Secretary.” Such notice, demand or other communication to or upon the Issuer Trust, the Property Trustee or the Administrators shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Issuer Trust, the Property Trustee, or such Administrator.

SECTION 10.9. Agreement Not to Petition.

     Each of the Issuer Trustees, the Administrators and the Depositor agree for the benefit of the Holders that, until at least one year and one day after the Issuer Trust has been terminated in accordance with Article IX, they shall not file, or join in the filing of, a petition against the Issuer Trust under any bankruptcy, insolvency, reorganization or other similar law (including, without limitation, the United States Bankruptcy Code) (collectively, “Bankruptcy Laws”) or otherwise join in the commencement of any proceeding against the Issuer Trust under any Bankruptcy Law. In the event the Depositor takes action in violation of this Section 10.9, the Property

55

Trustee agrees, for the benefit of Holders, that at the expense of the Depositor, it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by the Depositor against the Issuer Trust or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as counsel for the Issuer Trustee or the Issuer Trust may assert. If any Issuer Trustee or Administrator takes action in violation of this Section 10.9, the Depositor agrees, for the benefit of the Holders, that at the expense of the Depositor, it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by such Person against the Depositor or the commencement of such action and raise the defense that such Person has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as counsel for the Issuer Trustee or the Issuer Trust may assert. The provisions of this Section 10.9 shall survive the termination of this Trust Agreement.

SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.

     (a) Trust Indenture Act; Application. (i) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required to be a part of this Trust Agreement and shall, to the extent applicable, be governed by such provisions; (ii) if and to the extent that any provision of this Trust Agreement limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control; (iii) for purposes of this Trust Agreement, the Property Trustee, to the extent permitted by applicable law and/or the rules and regulations of the Commission, shall be the only Issuer Trustee which is a trustee for the purposes of the Trust Indenture Act; and (iv) the application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the Capital Securities and the Common Securities as equity securities representing undivided beneficial interests in the assets of the Issuer Trust.

     Lists of Holders of Capital Securities. (i) Each of the Depositor and the Administrators on behalf of the Trust shall provide the Property Trustee with such information as is required under Section 312(a) of the Trust Indenture Act at the times and in the manner provided in Section 312(a) and (ii) the Property Trustee shall comply with its obligations under Sections 310(b), 311 and 312(b) of the Trust Indenture Act. In no event, however, shall the Depositor’s or Administrators’ failure to comply with any section of the Trust Indenture Act give rise to a right to accelerate the Junior Subordinated Debentures.

     (b) Disclosure of Information. The disclosure of information as to the names and addresses of the Holders of Trust Securities in accordance with Section 312 of the Trust Indenture Act, regardless of the source from which such information was derived, shall not be deemed to be a violation of any existing law or any law hereafter enacted which does not specifically refer to Section 312 of the Trust Indenture Act, nor shall the Property Trustee be held accountable by reason of mailing any material pursuant to a request made under Section 312(b) of the Trust Indenture Act.

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SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture.

     THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE GUARANTEE AGREEMENT AND THE INDENTURE, AND THE AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AGREEMENT AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE ISSUER TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE ISSUER TRUST AND SUCH HOLDER AND SUCH OTHERS.

SECTION 10.12. Counterparts.

     This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

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MORGAN STANLEY,
as Depositor
By:	/s/ Jai Sooklal
	Name:	Jai Sooklal
	Title:	Assistant Treasurer
THE BANK OF NEW YORK,
as Property Trustee, and
not in its individual capacity
By:	/s/ Franca M. Ferrera
	Name:	Franca M. Ferrera
	Title:	Assitant Vice President
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee, and not
in its individual capacity
By:	/s/ Vincent E. Sampson
	Name:	Vincent E. Sampson
	Title:	President
/s/ Alexander C. Frank

Name:	Alexander C. Frank
Title:	Administrator
/s/ Debra M. Aaron
Name:	Debra M. Aaron
Title:	Administrator

Exhibit A

CERTIFICATE OF TRUST

A-1

Exhibit B

FORM OF CERTIFICATE DEPOSITARY AGREEMENT

B-1

Exhibit C

FORM OF COMMON SECURITIES CERTIFICATE

THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT.

Certificate Number: C-

Number of Common Securities:

Certificate Evidencing Common Securities
of
Morgan Stanley Capital Trust VII
6.60% Common Securities
(liquidation amount $25 per Common Security)

     Morgan Stanley Capital Trust VII, a statutory trust created under the laws of the State of Delaware (the “Issuer Trust”), hereby certifies that Morgan Stanley (the “Holder”) is the registered owner             of ( ) common securities of the Issuer Trust representing undivided beneficial interests in assets of the Issuer Trust and designated the 6.60% Common Securities (liquidation amount $25 per Common Security) (the “Common Securities”). Except in accordance with Section 5.11 of the Trust Agreement (as defined below), the Common Securities are not transferable and any attempted transfer hereof other than in accordance therewith shall be void. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities are set forth in, and this certificate and the Common Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Issuer Trust, dated as of October 12, 2006, as the same may be amended from time to time (the “Trust Agreement”), among Morgan Stanley, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, two individuals selected by the holders of the Common Securities to act as administrators with respect to the Issuer Trust (the “Administrators”), and the holders of Trust Securities, including the designation of the terms of the Common Securities as set forth therein. The Holder is entitled to the benefits of a Common Securities Guarantee Agreement entered into by Morgan Stanley, as Guarantor, dated as of October 12, 2006 (the “Guarantee Agreement”), to the extent provided therein. The Issuer Trust will furnish a copy of the Trust Agreement and the Guarantee Agreement to the Holder without charge upon written request to the Issuer Trust at its principal place of business or registered office.

     Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder.

C-1

     The Issuer Trust, and by acceptance of a beneficial interest in the Common Securities, each beneficial owner of the Common Securities will be deemed to have agreed to treat, for United States Federal income tax purposes, the Junior Subordinated Debentures as indebtedness of the Depositor and to treat the Common Securities as evidence of a beneficial ownership interest in the Junior Subordinated Debentures through a grantor trust.

Terms used but not defined herein have the meanings set forth in the Trust Agreement.

     IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust has executed this certificate this day of , 200 .

MORGAN STANLEY CAPITAL TRUST VII

By:

Name:

Title: Administrator

C-2

Exhibit D

FORM OF CAPITAL SECURITIES CERTIFICATE

[THIS CAPITAL SECURITIES CERTIFICATE IS A GLOBAL CAPITAL SECURITIES CERTIFICATE WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS CAPITAL SECURITIES CERTIFICATE IS EXCHANGEABLE FOR CAPITAL SECURITIES CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT.]

THE ISSUER TRUST, AND BY ACCEPTANCE OF A BENEFICIAL INTEREST IN THE CAPITAL SECURITIES, EACH BENEFICIAL OWNER OF THE CAPITAL SECURITIES WILL BE DEEMED TO HAVE AGREED TO TREAT, FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THE JUNIOR SUBORDINATED DEBENTURES AS INDEBTEDNESS OF THE DEPOSITOR AND TO TREAT THE CAPITAL SECURITIES AS EVIDENCE OF A BENEFICIAL OWNERSHIP INTEREST IN THE JUNIOR SUBORDINATED DEBENTURES THROUGH A GRANTOR TRUST.

[UNLESS THIS CAPITAL SECURITIES CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO MORGAN STANLEY CAPITAL TRUST VII OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITIES CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF SUCH NOMINEE AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO SUCH ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, HAS AN INTEREST HEREIN.]

NO EMPLOYEE BENEFIT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OTHER PLAN OR INDIVIDUAL RETIREMENT ACCOUNT SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR EMPLOYEE BENEFIT PLAN THAT IS A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, A CHURCH PLAN, AS DEFINED IN SECTION 3(33) OF ERISA, OR A NON-U.S. PLAN, AS DESCRIBED IN SECTION 4(B)(4) OF ERISA, SUBJECT TO SIMILAR RULES UNDER OTHER APPLICABLE LAWS OR DOCUMENTS (“SIMILAR LAW”) (EACH, A “PLAN”), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY (A “PLAN ASSET ENTITY”), AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN, MAY ACQUIRE OR HOLD THIS CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE AND HOLDING IS COVERED BY THE

D-1

EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION (“PTCE”) 96 23, 95 60, 91 38, 90 1 OR 84 14, OR THE STATUTORY EXEMPTION UNDER NEW SECTION 408(B)(17)(A) OF ERISA (THE “STATUTORY EXEMPTION”), OR SIMILAR LAW, OR THERE IS NO BASIS ON WHICH THE PURCHASE AND HOLDING COULD CONSTITUTE A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW. ANY PURCHASER OR HOLDER OF THE CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF THAT EITHER (A) THE PURCHASER AND HOLDER ARE NOT A PLAN OR A PLAN ASSET ENTITY AND ARE NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH “PLAN ASSETS” OF ANY PLAN, OR (B) THE PURCHASE AND HOLDING OF THE CAPITAL SECURITIES ARE COVERED BY THE EXEMPTIVE RELIEF PROVIDED BY PTCE 96 23, 95 60, 91 38, 90 1 OR 84 14, OR THE STATUTORY EXEMPTION, OR SIMILAR LAW, OR THERE IS NO BASIS ON WHICH THE PURCHASE AND HOLDING COULD CONSTITUTE A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW.

D-2

CERTIFICATE NUMBER: C-	CUSIP NO. 61750K208
	Capital Securities

CERTIFICATE EVIDENCING CAPITAL SECURITIES OF
MORGAN STANLEY CAPITAL TRUST VII
 6.60% CAPITAL SECURITIES
(LIQUIDATION AMOUNT $25 PER CAPITAL SECURITY)

     Morgan Stanley Capital Trust VII, a statutory trust created under the laws of the State of Delaware (the “Issuer Trust”), hereby certifies that (the “Holder”) is the registered owner of $ in aggregate liquidation amount of capital securities of the Issuer Trust representing a preferred undivided beneficial interest in the assets of the Issuer Trust and designated the Morgan Stanley Capital Trust VII 6.60% Capital Securities (liquidation amount $25 per Capital Security) (the “Capital Securities”). The Capital Securities are transferable on the books and records of the Issuer Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.5 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Capital Securities are set forth in, and this certificate and the Capital Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Issuer Trust, dated as of October 12, 2006, as the same may be amended from time to time (the “Trust Agreement”), among Morgan Stanley, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, two individuals selected by the holders of the Common Securities to act as administrators with respect to the Issuer Trust (the “Administrators”) and the holders of Trust Securities, including the designation of the terms of the Capital Securities as set forth therein. The Holder is entitled to the benefits of the Capital Securities Guarantee Agreement entered into by Morgan Stanley, as Guarantor, and The Bank of New York, as Guarantee Trustee, dated as of October 12, 2006 (the “Guarantee Agreement”), to the extent provided therein. The Issuer Trust will furnish a copy of the Trust Agreement and the Guarantee Agreement to the Holder without charge upon written request to the Issuer Trust at its principal place of business or registered office.

     Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder.

     Terms used but not defined herein have the meanings set forth in the Trust Agreement.

D-3

     IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust has executed this certificate this day of , 200  .

MORGAN STANLEY CAPITAL TRUST VII

By:

Name:

Title: Administrator

AUTHENTICATED, COUNTERSIGNED AND
REGISTERED:
The Bank of New York,
as Property Trustee
By:
	Authorized Signatory
	Dated: _______________________

D-4

ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security to:

(Insert assignee’s social security or tax identification number)

(Insert address and zip code of assignee)

      and irrevocably appoints _____________________________________________________ agent to transfer this Capital Securities Certificate on the books of the Issuer Trust. The agent may substitute another to act for him or her.

Date: __________________	Signature:
		(Sign exactly as your name appears on the other side of this Capital Securities Certificate)
	Signature Guarantee

SIGNATURE GUARANTEE

     Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Property Trustee, which requirements include membership or participation in the Security Transfer Agent medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Property Trustee in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

D-5

Exhibit E

FORM OF EXPENSE AGREEMENT

     AGREEMENT AS TO EXPENSES AND LIABILITIES, dated as of October 12, 2006, between Morgan Stanley, a Delaware corporation, as Depositor (the “Depositor”), and Morgan Stanley Capital Trust VII, a Delaware statutory trust (the “Issuer Trust”).

     WHEREAS, the Issuer Trust intends to issue its Common Securities (the “Common Securities”) to and acquire 6.60% Junior Subordinated Debentures (the “Debentures”) from the Depositor, and to issue and sell 6.60% Capital Securities (the “Capital Securities”) with such powers, preferences and special rights and restrictions as are set forth in the Amended and Restated Trust Agreement of the Issuer Trust, dated as of October 12, 2006, among Morgan Stanley, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, two individuals selected by the holders of the Common Securities to act as administrators with respect to the Issuer Trust (the “Administrators”), and the holders of Trust Securities, as the same may be amended from time to time (the “Trust Agreement”);

     WHEREAS, the Depositor will own all of the Common Securities of the Trust;

     WHEREAS, capitalized terms used but not defined herein have the meanings set forth in the Trust Agreement;

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

E-1

ARTICLE I.

     Section 1.01. Guarantee by the Depositor. Subject to the terms and conditions hereof, the Depositor hereby irrevocably and unconditionally guarantees to each person or entity to whom the Issuer Trust is now or hereafter becomes indebted or liable (the “Beneficiaries”) the full payment, when and as due, of any and all Obligations (as hereinafter defined) to such Beneficiaries. As used herein, “Obligations” means any costs, expenses or liabilities of the Issuer Trust, other than obligations of the Issuer Trust to pay to holders of any Trust Securities the amounts due such holders pursuant to the terms of the Trust Securities. This Agreement is intended to be for the benefit of, and to be enforceable by, all such Beneficiaries, whether or not such Beneficiaries have received notice hereof.

     Section 1.02. Subordination of Guarantee. The guarantee and other liabilities and obligations of the Depositor under this Agreement shall constitute unsecured obligations of the Depositor and shall rank subordinate and junior in right of payment to all Senior Indebtedness (as defined in the Indenture) of the Depositor to the extent and in the manner set forth in the Indenture with respect to the Debentures, and the provisions of Article XIII of the Indenture will apply, mutatis mutandis, to the obligations of the Depositor hereunder. The obligations of the Depositor hereunder do not constitute Senior Indebtedness (as defined in the Indenture) of the Depositor.

     Section 1.03. Term of Agreement. This Agreement shall terminate and be of no further force and effect upon the dissolution or termination of the Issuer Trust, provided, however, that this Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time any holder of Capital Securities or any Beneficiary is required to repay any sums paid under the Capital Securities, under any Obligation, under the Guarantee Agreement dated the date hereof by the Depositor and The Bank of New York, as guarantee trustee, or under this Agreement for any reason whatsoever. This Agreement is continuing, irrevocable, unconditional and absolute.

     Section 1.04. Waiver of Notice. The Depositor hereby waives notice of acceptance of this Agreement and of any Obligation to which it applies or may apply, and the Depositor hereby waives presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands.

     Section 1.05. No Impairment. The obligations, covenants, agreements and duties of the Depositor under this Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following:

     (a) the extension of time for the payment by the Issuer Trust of all or any portion of the Obligations or for the performance of any other obligation under, arising out of, or in connection with, the Obligations;

     (b) any failure, omission, delay or lack of diligence on the part of the Beneficiaries to enforce, assert or exercise any right, privilege, power or remedy conferred on the Beneficiaries with respect to the Obligations or any action on the part of the Issuer Trust granting indulgence or extension of any kind; or

E-2

     (c) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer Trust or any of the assets of the Issuer Trust (other than the dissolution of the Issuer Trust in accordance with the terms thereof).

     There shall be no obligation of the Beneficiaries to give notice to, or obtain the consent of, the Depositor with respect to the happening or any of the foregoing.

     Section 1.06. Enforcement. A Beneficiary may enforce this Agreement directly against the Depositor and the Depositor waives any right or remedy to require that any action be brought against the Issuer Trust or any other person or entity before proceeding against the Depositor.

     Section 1.07. Subrogation. The Depositor shall be subrogated to all rights (if any) of any Beneficiary against the Issuer Trust in respect of any amounts paid to the Beneficiaries by the Depositor under this Agreement; provided, however, that the Depositor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights that it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Agreement or any payments are due to the holders of Capital Securities under the Trust Agreement.

ARTICLE II.

     Section 2.01. Assignment. This Agreement may not be assigned by either party hereto without the consent of the other, and any purported assignment without such consent shall be void; except that upon any transfer of the Common Securities, this Agreement shall be assigned and delegated by the Depositor to its successor with such transfer without any action by either party hereto.

     Section 2.02. Binding Effect. All guarantees and agreements contained in this Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Depositor and shall inure to the benefit of the Beneficiaries.

     Section 2.03. Amendment. So long as there remains any Beneficiary or any Capital Securities are outstanding, this Agreement shall not be modified or amended in any manner adverse to such Beneficiary or to the holders of the Capital Securities without the consent of such Beneficiary or the holders of the Capital Securities, as the case may be.

     Section 2.04. Notices. Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by delivering the same against receipt therefor by facsimile transmission (confirmed by mail), telex or by registered or certified mail, addressed as follows (and if so given, shall be deemed given when mailed or upon receipt of an answer-back, if sent by telex):

Morgan Stanley Capital Trust VII
c/o The Bank of New York
101 Barclay Street, Floor 8 West

E-3

New York, NY 10286
Attention: Corporate Trust Administration

With a copy to:

Morgan Stanley
1585 Broadway
New York, NY 10036
Attention: Office of the Secretary

     Section 2.05. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

E-4

THIS AGREEMENT is executed as of the day and year first above written.

MORGAN STANLEY

By:

Name:

Title: Administrator

MORGAN STANLEY CAPITAL TRUST VII

By:

Name:

Title: Administrator

E-5

EX-5.1

Exhibit 5.1/8.1

October 12, 2006

Morgan Stanley
1585 Broadway
New York, NY 10036

Ladies and Gentlemen:

     We have acted as counsel to Morgan Stanley, a Delaware corporation (the “Company”), and Morgan Stanley Capital Trust VII, a statutory trust formed under the laws of the State of Delaware (the “Trust”), in connection with the preparation and filing of a registration statement with the Securities and Exchange Commission on Form S-3 (as it may be amended or supplemented from time to time, the “Registration Statement”) for the purpose of registering under the Securities Act of 1933, as amended (the “Securities Act”) $22,533,773,000.13 aggregate initial offering price of debt securities, warrants, units, purchase contracts, depositary shares, capital securities, guarantees with respect to capital securities, preferred stock and common stock to be issued from time to time by the Company, as such amount may be increased from time to time upon due authorization by the Company, including: (1) capital securities of the Trust issued pursuant to an amended and restated trust agreement of such Trust to be entered into among the Company, as depositor of such Trust (the Company, in such capacity, the “Depositor”), The Bank of New York, as property trustee, The Bank of New York (Delaware), as Delaware trustee, two individuals selected by the Depositor as administrators with respect to such Trust (the “Administrators”) and the holders of the capital securities of such Trust and (ii) guarantees of the Company with respect to such capital securities.

     We have also acted as counsel to the Company in connection with the Underwriting Agreement dated October 5, 2006 (the “Underwriting Agreement”) among the Company and the several underwriters named in Schedule II thereto (the “Underwriters”). Pursuant to the Underwriting Agreement, the Company has agreed to sell, and the Underwriters severally have agreed to purchase, 44,000,000 of the Trust’s 6.60% Capital Securities (liquidation amount $25 per Capital Security) (the “Capital Securities”) representing preferred beneficial interests in the assets of the Trust under the Amended and Restated Trust Agreement dated as of October 12, 2006 (the “Trust Agreement”) among the Company, The Bank of New York, as property

trustee, The Bank of New York (Delaware), as Delaware Trustee, and the Administrators named therein. The Capital Securities include 4,000,000 Capital Securities purchased pursuant to the over-allotment option provided for in the Underwriting Agreement. Concurrently with the Trust’s issuance of the Capital Securities, the Company will purchase 400 of the Trust’s 6.60% Common Securities (liquidation amount $25 per Common Security) (the “Common Securities”), representing common beneficial interests in the assets of the Trust.

     The Trust will loan the proceeds from the issuance and sale of the Capital Securities and the Common Securities to the Company and, to evidence such loan, the Company will issue and deliver to the Trust $1,100,010,000 aggregate principal amount of the Company’s 6.60% Junior Subordinated Deferrable Interest Debentures (the “Debentures”) pursuant to the Junior Subordinated Indenture, dated as of October 12, 2006 (the “Junior Subordinated Debt Indenture”), between the Company and The Bank of New York, as trustee.

     In consideration for the loan of the proceeds from the issuance and sale of the Capital Securities, the Company will guarantee the payment of certain amounts with respect to the Capital Securities to the extent set forth in the Morgan Stanley Capital Trust VII Capital Securities Guarantee Agreement dated as of October 12, 2006 (the “Guarantee”) between the Company, as guarantor, and The Bank of New York, as guarantee trustee.

     We have examined originals or copies, certified or otherwise identified to our satisfaction, of such corporate records and other documents and certificates as we deemed necessary or appropriate as a basis for the opinions set forth herein. In such examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as copies and the authenticity of the originals of all such latter documents. In making our examination of executed documents or documents to be executed, we have assumed that the parties thereto, other than the Company, had or will have the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and execution and delivery by such parties of such documents and that such documents constitute valid and binding obligations of such parties.

Based upon and subject to the foregoing, we are of the opinion that:

     (1) The Capital Securities have been duly authorized, executed and delivered by the Company and the Trust Agreement is a valid and binding agreement of the Company, enforceable in accordance with its terms, except as the enforceability thereof (a) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors’ rights generally and (b) is subject to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

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     (2) The Junior Subordinated Debt Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (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 (a) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors’ rights generally and (b) is subject to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

     (3) The Debentures have been duly authorized by the Company and, when executed and authenticated in accordance with the provisions of the Junior Subordinated Debt Indenture and delivered and paid for by the Underwriters in accordance with the terms of the Underwriting Agreement, will be entitled to the benefits of the Junior Subordinated Debt Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms, except as the enforceability thereof (a) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors’ rights generally and (b) is subject to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

     (4) The Guarantee 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 obligation of the Company, enforceable in accordance with its terms, except as the enforceability thereof (a) may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium and other similar laws affecting creditors’ rights generally and (b) is subject to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.

     (5) The statements in each of the Time of Sale Prospectus and the Prospectus Supplement, each as defined in the Underwriting Agreement, under the caption “U.S. Federal Income Tax Considerations,” to the extent that they constitute summaries of matters of law or regulation or legal conclusions, fairly summarize the matters set forth therein in all material respects.

     We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, the Federal laws of the United States and the General Corporation Law of the State of Delaware.

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     We hereby consent to the filing of this opinion as an Exhibit to the Current Report of the Company on Form 8-K and to its incorporation by reference into the Registration Statement, and further consent to the reference to our name under the caption “Legal Matters” in the Prospectus (as defined in the Underwriting Agreement). In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.

Very truly yours,

/s/ Davis Polk & Wardwell

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EX-9.1

Exhibit 99.1

     REPLACEMENT CAPITAL COVENANT, dated as of October 12, 2006 (this “Replacement Capital Covenant”), by Morgan Stanley, a Delaware corporation (the “Issuer”), in favor of, and for the benefit of, each Covered Debtholder (as defined below).

RECITALS

     A. On the date hereof, the Issuer is issuing $1,100,010,000 aggregate principal amount of its 6.60% Junior Subordinated Deferrable Interest Debentures due October 15, 2066 (the “Notes”) to Morgan Stanley Capital Trust VII, a Delaware statutory trust (the “Trust”).

     B. On the date hereof, the Trust is issuing $1,100,000,000 aggregate liquidation amount of its 6.60% Trust Preferred Securities (the “Capital Securities” and, together with the Notes, the “Securities”).

     C. This Replacement Capital Covenant is the “Replacement Capital Covenant” referred to in the Prospectus Supplement, dated October 5, 2006, relating to the Securities.

     D. The Issuer is entering into this Replacement Capital Covenant and disclosing the content of this Replacement Capital Covenant in the manner provided below with the intent that the covenants provided for in this Replacement Capital Covenant be enforceable by each Covered Debtholder and that the Issuer be estopped from disregarding the covenants in this Replacement Capital Covenant, in each case to the fullest extent permitted by applicable law.

     E. The Issuer acknowledges that reliance by each Covered Debtholder upon the covenants in this Replacement Capital Covenant is reasonable and foreseeable by the Issuer and that, were the Issuer to disregard its covenants in this Replacement Capital Covenant, each Covered Debtholder would have sustained an injury as a result of its reliance on such covenants.

     NOW, THEREFORE, the Issuer hereby covenants and agrees as follows in favor of and for the benefit of each Covered Debtholder.

     Section 1. Definitions. Capitalized terms used in this Replacement Capital Covenant (including the Recitals) have the meanings set forth in Schedule I hereto.

     Section 2. Limitation on Redemption and Repurchase of Notes. The Issuer hereby promises and covenants to, and for the benefit of, each Covered Debtholder that the Issuer shall not, and shall cause the Trust not to, redeem or repurchase, and shall cause its Subsidiaries not to purchase, all or any part of the

Securities on or after the Scheduled Redemption Date and prior to the Final Maturity Date except to the extent that (a) the total redemption, repurchase or purchase price therefor is equal to or less than the sum of (i) 400% of the aggregate net cash proceeds received since the most recent Measurement Date by the Issuer or its Subsidiaries from Persons that are not Subsidiaries of the Issuer from the sale of Common Stock and rights to acquire Common Stock and (ii) 100% of the aggregate net cash proceeds received since the most recent Measurement Date by the Issuer or its Subsidiaries from Persons that are not Subsidiaries of the Issuer from the sale of Capital Replacement Securities (other than Common Stock or rights to acquire Common Stock) and (b) the Issuer has obtained any prior concurrence or approval of any then applicable regulatory authority if such concurrence or approval is then required under any applicable capital rules; provided, however that the provisions of this Section 2 shall not apply to repurchases of the Securities or any portion thereof by affiliates of the Issuer or its Subsidiaries in connection with market-making or other secondary-market activities. For the avoidance of doubt, persons covered by the Issuer’s dividend reinvestment plan and employee benefit plans shall be deemed not to be Subsidiaries of the Issuer for purposes of this Section 2.

     Section 3. Covered Debt. (a) The Issuer represents and warrants that the Initial Covered Debt is Eligible Debt.

     (b) (i) During the 30-day period immediately preceding any Redesignation Date with respect to the Covered Debt then in effect, the Issuer shall identify the series of Eligible Debt that will become the Covered Debt on the related Redesignation Date in accordance with the following procedures:

     (A) the Issuer shall identify each series of its then-outstanding long-term indebtedness for money borrowed that is Eligible Debt;

     (B) if only one series of the Issuer’s then-outstanding long-term indebtedness for money borrowed will be Eligible Debt as of the related Redesignation Date, such series shall become the Covered Debt on such Redesignation Date;

     (C) if the Issuer has more than one outstanding series of long-term indebtedness for money borrowed that will be Eligible Debt as of the related Redesignation Date, then the series that has the latest occurring final maturity date as of the related Redesignation Date shall become the Covered Debt on such Redesignation Date;

     (D) the series of outstanding long-term indebtedness for money borrowed that is determined to be Covered Debt

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pursuant to clause (B) or (C) above shall be the Covered Debt for purposes of this Replacement Capital Covenant for the period commencing on the related Redesignation Date and continuing to, but not including, the Redesignation Date as of which a new series of outstanding long-term indebtedness is next determined to be the Covered Debt pursuant to the procedures set forth in this Section 3(b); and

     (E) in connection with such identification of a new series of Covered Debt, the Issuer shall give the notice provided for in Section 4 and file with the Commission a current report on Form 8-K under the Exchange Act including as an exhibit or incorporating by reference this Replacement Capital Covenant within the time frame provided for in such section.

     (c) If at any time the Covered Debt is held by a Trust, a holder of the capital securities of such Trust may institute a legal proceeding directly against the Issuer for the enforcement of this Replacement Capital Covenant, and such capital securities shall be deemed to be “Covered Debt” so long as the Covered Debt held by the Trust remains Covered Debt.

     Section 4. Notice. In order to give effect to the intent of the Issuer described in Recital D, the Issuer covenants that:

     (a) simultaneously with the execution of this Replacement Capital Covenant or as soon as practicable after the date hereof, the Issuer shall (x) give notice to the Holders of the Initial Covered Debt, in the manner provided in the indenture relating to the Initial Covered Debt, of this Replacement Capital Covenant and the rights granted to such Holders hereunder and (y) file a copy of this Replacement Capital Covenant with the Commission as an Exhibit to a Form 8-K under the Exchange Act;

     (b) so long as the Issuer is a reporting company under the Exchange Act, the Issuer shall include in each annual report filed with the Commission on Form 10-K under the Exchange Act a description of the covenant set forth in Section 2 and identify the series of long-term indebtedness for borrowed money that is Covered Debt as of the date such Form 10-K is filed with the Commission;

     (c) within 30 days after a series of the Issuer’s long-term indebtedness for money borrowed (1) becomes Covered Debt or (2) ceases to be Covered Debt, the Issuer will give notice of such occurrence to the holders of such long-term indebtedness for money borrowed in the manner provided for in the indenture, fiscal agency agreement or other contract or instrument under which such long-term indebtedness for money borrowed was issued and report such change in the

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Issuer’s next quarterly report on Form 10-Q or annual report on Form 10-K, as applicable (or any successor to such forms);

     (d) if, and only if, the Issuer ceases to be a reporting company under the Exchange Act, the Issuer shall post on its website the information otherwise required to be included in Exchange Act filings pursuant to clauses (b) and (c) above; and

     (e) promptly upon request by any Holder of Covered Debt, the Issuer shall provide such Holder with a conformed copy of the executed version of this Replacement Capital Covenant.

     Section 5. Termination; Amendment. (a) The obligations of the Issuer pursuant to this Replacement Capital Covenant shall remain in full force and effect until the earliest (the “Termination Date”) to occur of (1) the date, if any, on which the Holders of a majority of the aggregate principal amount of the Covered Debt then in effect consent or agree to the elimination of such obligations as covenants in favor of such Holders, (2) the date on which the Issuer has no outstanding Eligible Debt (without giving effect to the rating requirement in clause (ii) of the definition of Eligible Senior Debt and Eligible Subordinated Debt), (3) the Final Maturity Date, or if earlier, the date on which the Issuer has raised sufficient net cash proceeds to permit redemption, repurchase or purchase of the Securities in full in accordance with this Replacement Capital Covenant and (4) the date, if any, on which an Event of Default occurs with respect to the Securities, resulting in the acceleration thereof. From and after the Termination Date, the obligations of the Issuer pursuant to this Replacement Capital Covenant shall be of no further force and effect with respect to the Covered Debtholders, or otherwise.

     (b) This Replacement Capital Covenant may be amended or supplemented from time to time by a written instrument signed by the Issuer with the consent of the Holders of a majority in principal amount of the Covered Debt then in effect; provided that this Replacement Capital Covenant may be amended or supplemented from time to time by a written instrument signed only by the Issuer (and without the consent of any Holders of Covered Debt) if (i) such amendment eliminates Common Stock, Mandatorily Convertible Preferred Stock and/or Debt Exchangeable for Equity (but only to the extent exchangeable for Common Stock) as a type of security or securities qualifying as Capital Replacement Securities and the Issuer has been advised in writing by a nationally recognized independent accounting firm that there is more than an insubstantial risk that the failure to do so would result in a reduction in the Issuer’s earnings per share as calculated for financial reporting purposes or (ii) such amendment or supplement is not adverse to the Holders of the Covered Debt then in effect or imposes additional restrictions on the types of securities qualifying as Capital Replacement Securities, and, in either case described in this clause (ii), an officer

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of the Issuer has delivered to the Holders of such Covered Debt in the manner provided for in the indenture, fiscal agency agreement or other instrument with respect to such Covered Debt a written certificate stating that, in his or her determination, such amendment or supplement is not adverse to the Holders of such Covered Debt.

     (c) For purposes of Sections 5(a) and 5(b), the Holders whose consent or agreement is required to terminate, amend or supplement the obligations of the Issuer under this Replacement Capital Covenant shall be the Holders of the Covered Debt then in effect as of a record date established by the Issuer that is not more than 45 days prior to the date on which the Issuer proposes that such termination, amendment or supplement becomes effective.

     Section 6. Miscellaneous. (a) THIS REPLACEMENT CAPITAL COVENANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     (b) This Replacement Capital Covenant shall be binding upon the Issuer and its successors and assigns, shall inure to the benefit of the Covered Debtholders as they exist from time to time and shall confer on such Covered Debtholders the right to sue the Issuer in any court of competent jurisdiction for any breach by the Issuer of the terms hereof (it being understood and agreed by the Issuer that any Person who is a Covered Debtholder at the time such Person owns Covered Debt shall retain its status as a Covered Debtholder for so long as the series of long-term indebtedness for borrowed money owned by such Person is Covered Debt and, if such Person initiates a claim or proceeding to enforce its rights under this Replacement Capital Covenant after the Issuer has violated its covenants in Section 2 and before the series of long-term indebtedness for money borrowed held by such Person is no longer Covered Debt, such Person’s rights under this Replacement Capital Covenant shall not terminate by reason of such series of long-term indebtedness for money borrowed no longer being Covered Debt). Except as specifically provided herein, this Replacement Capital Covenant shall have no other beneficiaries and no other Persons are entitled to rely on this Replacement Capital Covenant.

     (c) All demands, notices, requests and other communications to the Issuer under this Replacement Capital Covenant shall be deemed to have been duly given and made if in writing and (i) if served by personal delivery upon the Issuer, on the day so delivered (or, if such day is not a Business Day, the next succeeding Business Day), (ii) if delivered by registered post or certified mail, return receipt requested, or sent by a national or international courier service, on the date of receipt (or, if such date of receipt is not a Business Day, the next succeeding Business Day), or (iii) if sent by telecopier, on the day telecopied, or if not a Business Day, the next succeeding Business Day; provided that the telecopy is promptly confirmed by telephone confirmation thereof, in each case to the

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Issuer at the address set forth below, or at such other address as the Issuer may thereafter notify to Covered Debtholders or post on the Issuer’s website as the address for notices under this Replacement Capital Covenant:

Morgan Stanley
1585 Broadway
New York, New York 10036
(212) 762-4000
Attention: Jai Sooklal

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     IN WITNESS WHEREOF, the Issuer has caused this Replacement Capital Covenant to be executed by its duly authorized officer, as of the day and year first above written.

MORGAN STANLEY
By:	/s/ Jai Sooklal
	Name:	Jai Sooklal
	Title:	Assistant Treasurer

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DEFINITIONS

     “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

     “Business Day” means any day that is not a Saturday or Sunday and that is not day on which banking institutions generally in the City of New York are authorized or obligated by law or executive order to be closed.

     “Capital Replacement Securities” means securities that in the determination of the Issuer’s Board of Directors reasonably construing the definitions and other terms of this Replacement Capital Covenant, meet one of the following criteria:

     (a) Common Stock;

     (b) Debt Exchangeable for Equity;

     (c) Qualifying Non-Cumulative Preferred Stock;

     (d) Non-Cumulative Preferred Stock having either:

     (i) (A) no maturity or a maturity of at least 60 years and (B) a Replacement Capital Intention; or

     (ii) (A) maturity of at least 40 years, (B) either (1) a Legally Binding Replacement Covenant or (2) subject to any then required regulatory approval, a Mandatory Trigger Provision, (C) an Optional Deferral Provision and (D) a Replacement Capital Intention.

     (e) cumulative preferred stock with

     (i) (A) no prepayment obligation on the part of the issuer thereof, whether at the election of the holders or otherwise, (B) no maturity or a maturity of at least 60 years and (C) a Legally Binding Replacement Covenant; or

     (ii) a requirement that such securities convert into Common Stock of the Issuer within three years from the date of its issuance at a conversion ratio within a range established at the time of issuance of such securities; or

     (iii) having either (A) (1) a maturity, if any, of at least 60 years and (2) a Replacement Capital Intention or (B) a maturity of at least 40 years and a Legally Binding Replacement Covenant;

     (f) Other securities that rank upon a liquidation, dissolution or winding-up of the Issuer either (i) pari passu with or junior to the Notes or (ii) pari passu with the claims of the Issuer’s trade creditors and junior to all of the Issuer’s long-term indebtedness for money borrowed (other than the Issuer’s long-term indebtedness for money borrowed from time to time outstanding that by its terms ranks pari passu with such securities on a liquidation, dissolution or winding-up of the Issuer); and

     (i) may include New Equity Settlement provisions and (A) have a maturity, if any, of at least 60 years, an Optional Deferral Provision and a Legally Binding Replacement Covenant or (B) having a maturity of at least 40 years and a Legally Binding Replacement Covenant; or

     (ii) include New Equity Settlement provisions and either (A) have a maturity, if any, of at least 40 years and, subject to any then required regulatory approval, a Mandatory Trigger Provision and a Replacement Capital Intention or (B) have a maturity, if any, of at least 25 years, a Legally Binding Replacement Covenant and, subject to any then required regulatory approval, a Mandatory Trigger Provision;

     (g) preferred stock issued by the Issuer that has (1) no maturity or a maturity of at least 60 years, (2) a Replacement Capital Intention and (3) an Optional Deferral Provision;

     (h) securities issued by the Issuer or a Subsidiary of the Issuer that (i) rank pari passu with or junior to the Notes upon a liquidation, dissolution or winding up of the Issuer, (ii) either (A) have no maturity or a maturity of at least 60 years and a Replacement Capital Intention or (B) have no maturity or a maturity at least 30 years and are subject to a Legally Binding Replacement Covenant and (iii) have an Optional Deferral Provision;

     (i) securities issued by the Issuer or a Subsidiary of the Issuer that (i) rank pari passu with the Notes, (ii) have a Mandatory Trigger Provision and an Optional Deferral Provision and (iii) have no maturity or a maturity at least 30 years and a Replacement Capital Intention; and

     (j) cumulative preferred stock issued by the Issuer or a Subsidiary of the Issuer that either (1) has no maturity or a maturity of at least 60 years and a Replacement Capital Intention or (2) has a maturity of at least 40 years and is subject to a Legally Binding Replacement Covenant.

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     Additionally, and notwithstanding the foregoing, any securities or combinations of securities if issued by the Issuer to any of its Subsidiaries, without the contemporaneous issuance of a security or combination of securities that otherwise would satisfy the definition of “Capital Replacement Securities” by the Subsidiary to a Person other than a Subsidiary of the Issuer, shall not qualify as Capital Replacement Securities.

     “Commission” means the United States Securities and Exchange Commission.

     “Common Stock” means common stock of the Issuer.

     “Covered Debtholder” means each Person (whether a Holder or a beneficial owner holding through a participant in a clearing agency) that holds long-term indebtedness for money borrowed of the Issuer during the period that such long-term indebtedness for money borrowed is Covered Debt.

     “Covered Debt” means (i) at the date of this Replacement Capital Covenant and continuing to, but not including, the first Redesignation Date, the Initial Covered Debt and (ii) thereafter, commencing with each Redesignation Date and continuing to but not including the next succeeding Redesignation Date, the Eligible Debt identified pursuant to Section 3(b) as the Covered Debt for such period.

     “Debt Exchangeable for Equity” means a security (or combination of securities) that:

     (i) gives the holder a beneficial interest in (a) debt securities of the Issuer that are non-cumulative and that are the most junior subordinated debt of the Issuer (or rank pari passu with the most junior subordinated debt of the Issuer) and (b) a fractional interest in a stock purchase contract;

     (ii) includes a remarketing feature pursuant to which the subordinated debt of the Issuer is remarketed to new investors commencing within five years from the date of issuance of the security or earlier in the event of an early settlement event based on one or more financial tests set forth in the terms of such securities or related transaction agreements;

     (iii) provides for the proceeds raised in the remarketing to be used to purchase Qualifying Non-Cumulative Preferred Stock;

     (iv) includes a replacement capital covenant substantially similar to this Replacement Capital Covenant, provided that such replacement capital covenant will apply to such security (or combination of securities) and to the Qualifying Non-Cumulative Preferred Stock and will not include Debt Exchangeable for Equity in its definition of “capital replacement securities”; and

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     (v) after the issuance of such Qualifying Non-Cumulative Preferred Stock, provides the holder of the security with a beneficial interest in such Qualifying Non-Cumulative Preferred Stock.

     “Distribution Date” means, as to any securities or combination of securities, the dates on which periodic Distributions on such securities are scheduled to be made.

     “Distribution Period” means, as to any securities or combination of securities, each period from and including a Distribution Date for such securities to but not including the next succeeding Distribution Date for such securities.

     “Distributions” means, as to a security or combination of securities, dividends, interest payments or other income distributions to the holders thereof that are not Subsidiaries of the Issuer.

     “Eligible Debt” means, at any time, Eligible Subordinated Debt or, if no Eligible Subordinated Debt is then outstanding, Eligible Senior Debt.

     “Eligible Senior Debt” means, at any time in respect of any issuer, each series of outstanding long-term indebtedness for money borrowed of such issuer that:

     (i) upon a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks most senior among the issuer’s then outstanding classes of indebtedness for money borrowed;

     (ii) is then assigned a rating by at least one NRSRO (provided that this clause shall apply on a Redesignation Date only if on such date the issuer has outstanding senior long-term indebtedness for money borrowed that satisfies the requirements of clauses (i), (iii) and (iv) that is then assigned a rating by at least one NRSRO);

     (iii) has an outstanding principal amount of not less than $100,000,000; and

     (iv) was issued through or with the assistance of a commercial or investment banking firm or firms acting as underwriters, initial purchasers or placement or distribution agents.

     For purposes of this definition as applied to securities with a CUSIP number, each issuance of long-term indebtedness for money borrowed that has (or, if such indebtedness is held by a trust or other intermediate entity established directly or indirectly by the issuer, the securities of such intermediate entity have) a separate CUSIP number shall be deemed to be a series of the issuer’s long-term

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indebtedness for money borrowed that is separate from each other series of such indebtedness.

     “Eligible Subordinated Debt” means, at any time in respect of any issuer, each series of the issuer’s then-outstanding long-term indebtedness for money borrowed that:

     (i) upon a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks subordinate to the issuer’s then-outstanding most senior series of indebtedness for money borrowed;

     (ii) is then assigned a rating by at least one NRSRO (provided that this clause (ii) shall apply on a Redesignation Date only if on such date the issuer has outstanding subordinated long-term indebtedness for money borrowed that satisfies the requirements in clauses (i), (iii) and (iv) that is then assigned a rating by at least one NRSRO);

     (iii) has an outstanding principal amount of not less than $100,000,000; and

     (iv) was issued through or with the assistance of a commercial or investment banking firm or firms acting as underwriters, initial purchasers or placement or distribution agents.

     For purposes of this definition as applied to securities with a CUSIP number, each issuance of long-term indebtedness for money borrowed that has (or, if such indebtedness is held by a trust or other intermediate entity established directly or indirectly by the issuer, the securities of such intermediate entity have) a separate CUSIP number shall be deemed to be a series of the issuer’s long-term indebtedness for money borrowed that is separate from each other series of such indebtedness.

     “Exchange Act” means the Securities Exchange Act of 1934 or any statute successor thereto, in each case as amended from time to time.

     “Final Maturity Date” means October 15, 2066.

     “Holder” means, as to the Covered Debt then in effect, each holder of such Covered Debt as reflected on the securities register maintained by or on behalf of the Issuer with respect to such Covered Debt and each beneficial owner holding through a participant in a clearing agency.

     “Indenture” means the Junior Subordinated Indenture dated October 12, 2006 between the Issuer and The Bank of New York, as trustee thereunder, governing the Notes.

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     “Initial Covered Debt” means the Issuer’s junior subordinated debt securities underlying the 6.60% Capital Securities issued by Morgan Stanley Capital Trust VI (CUSIP: 617446 YW 3) and, pursuant to Section 3(c), the capital securities issued by such Trust.

     “Issuer” means the Person named as the “Issuer” in the first paragraph of this Replacement Capital Covenant, until a successor corporation shall have become such, and thereafter “Issuer” shall mean such successor corporation.

     “Legally Binding Replacement Covenant” means, as to any security or combination of securities, a covenant made by the Issuer, substantially similar to this Replacement Capital Covenant, to the effect that the Issuer will redeem or repurchase such securities only if and to the extent that the total redemption or repurchase price is equal to or less than the proceeds received by the Issuer or by a Subsidiary of the Issuer during the six (6) months prior to the applicable redemption or repurchase date from the sale of securities that are as or more equity-like than the securities being redeemed or repurchased.

     “Mandatory Trigger Provision” means as to any security or combination of securities (together in this definition, “securities”), provisions in the terms thereof or of the related transaction agreements that (A) require, or at its option in the case of Non-Cumulative Preferred Stock permit, the issuer of such securities to make payment of Distributions on such securities only pursuant to the issuance and sale of Common Stock or rights to purchase Common Stock up to a maximum of 2% of the Issuer’s market capitalization or Settlement Stock of such issuer, within two years of a failure by such issuer to satisfy one or more financial tests set forth in the terms of such securities or related transaction agreements, in an amount such that the net proceeds of such sale are at least equal to the amount of unpaid Distributions on such securities (including without limitation all deferred and accumulated amounts) and in either case require the application of the net proceeds of such sale to pay such unpaid Distributions, provided that the amount of Settlement Stock the net proceeds of which such issuer may apply to pay such Distributions pursuant to such provision may not exceed 25% of the liquidation or principal amount of such securities, (B) prohibit such issuer from repurchasing any of the Issuer’s Common Stock prior to the date six months after the issuer applies the net proceeds of the sales described in clause (A) to pay such unpaid Distributions in full and (C) upon any liquidation, dissolution, winding up, reorganization or in connection with any insolvency, receivership or proceeding under any bankruptcy law with respect to such issuer, limit the claim of the holders of such securities (other than Non-Cumulative Preferred Stock) for Distributions that accumulate during a period in which such issuer fails to satisfy one or more financial tests set forth in the terms of such securities or related transaction agreements to (x) 25% of the principal amount of such securities then outstanding in the case of securities not permitting the issuance and sale pursuant to the provisions described in clause (A) above of securities other than Common

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Stock or rights to acquire Common Stock or (y) two years of accumulated and unpaid Distributions (including compounded amounts thereon) in all other cases. No remedy other than Permitted Remedies will arise by the terms of such securities or related transaction agreements in favor of the holders of such securities as a result of such issuer’s failure to pay Distributions because of the Mandatory Trigger Provision or as a result of such issuer’s exercise of its right under an Optional Deferral Provision until Distributions have been deferred for one or more Distribution Periods that total together at least ten years.

     “Market Disruption Event” shall have the meaning given to it in the indenture relating to the relevant securities.

     “Measurement Date” means, with respect to any redemption, repurchase or purchase of Securities, the date 180 days prior to the delivery of notice of such redemption or the date of such repurchase or purchase.

     “New Equity Settlement” means, with respect to any securities or combination of securities referred to in the definition of Capital Replacement Securities, that such securities or related transaction agreements include a provision to the effect that, if the Issuer has exhausted its rights to defer Distributions at its option pursuant to an Optional Deferral Provision and such deferral continues beyond a specific date specified in such security or if any Mandatory Trigger Provision has become applicable, the Issuer shall, unless a Market Disruption Event has occurred and is continuing, (a) use its commercially reasonable efforts to sell shares of its Common Stock and/or, at its option, Settlement Stock to the extent the securities do not include a Mandatory Trigger Provision, in an amount such that the net proceeds of such sale shall equal or exceed such Distributions and (b) apply the net proceeds of such sale to pay such Distributions in full.

     “Non-Cumulative Preferred Stock” means preferred stock of the Issuer or of a Subsidiary of the Issuer that (i) ranks pari passu with or junior to other preferred stock of the Issuer and (ii) the terms of which provide for Distributions that may be suspended by the Issuer for any number of Distribution Periods without any remedy arising by the terms of such stock or related transaction agreements in favor of the holders of such stock as a result of the stock issuer’s failure to pay Distributions, other than: (x) rights in favor of the holders thereof permitting such holders to elect one or more directors of the Issuer or a Subsidiary of the Issuer (including any such rights required by the listing requirements of any stock or securities exchange on which such stock may be listed or traded) and/or (y) prohibitions on the Issuer or a Subsidiary of the Issuer paying Distributions on or repurchasing Common Stock or other stock that ranks junior as to Distributions to such stock for so long as Distributions on such stock, including deferred distributions, have not been paid in full.

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     “NRSRO” means a nationally recognized statistical rating organization within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act.

     “Optional Deferral Provision” means, as to any security or combination of securities, a provision in the terms thereof or of the related transaction agreements that permits the Issuer, in its sole discretion, to defer in whole or in part payment of Distributions on such securities for one or more consecutive Distribution Periods of up to ten years without any remedy other than Permitted Remedies as a result of the Issuer’s failure to pay Distributions.

     “Permitted Remedies” means, as to any security or combination of securities, any one or more of (i) prohibitions on the Issuer or a Subsidiary of the Issuer paying Distributions on or repurchasing Common Stock or other securities that rank junior as to Distributions to such securities for so long as Distributions on such securities, including deferred Distributions, have not been paid in full and (ii) provisions obliging the Issuer to pay certain deferred Distributions pursuant to a New Equity Settlement.

     “Person” means any individual, corporation, partnership, joint venture, trust, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof.

     “Qualifying Non-Cumulative Preferred Stock” means Non-Cumulative Preferred Stock that, either by its terms or when taken together with any related transaction agreements:

     (i) ranks pari passu with or junior to other preferred stock of the Issuer; and

     (ii) (A) is perpetual or has a mandatory redemption or maturity date that is not less than 60 years after the date of initial issuance of such securities and (B) has (1) either a Legally Binding Replacement Covenant or, subject to any then required regulatory approval, a Mandatory Trigger Provision, (2) a Replacement Capital Intention and (3) an Optional Deferral Provision; or

     (iii) (A) has a mandatory redemption or maturity date that is not less than 40 years after the date of initial issuance of such securities, (B) has a Legally Binding Replacement Covenant and (C) (1), subject to any then required regulatory approval, includes a Mandatory Trigger Provision and (2) has an Optional Deferral Provision;

provided that, as used in the definition of “Debt Exchangeable for Equity,” “Qualifying Non-Cumulative Preferred Stock” means Non-Cumulative Preferred Stock that, either by its terms or when taken together with any related transaction

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agreements, is perpetual and ranks pari passu with or junior to other preferred stock of the Issuer.

     “Redesignation Date” means, as to the then-effective Covered Debt, the earliest of (i) the date that is two years prior to the final maturity date of such Covered Debt, (ii) if the Issuer elects to redeem, or the Issuer or a Subsidiary of the Issuer elects to repurchase, such Covered Debt either in whole or in part with the consequence that after giving effect to such redemption or repurchase the outstanding principal amount of such Covered Debt is less than $100,000,000, the applicable redemption or repurchase date and (iii) if the then-effective Covered Debt is not Eligible Subordinated Debt, the date on which the Issuer issues long-term indebtedness for money borrowed that is Eligible Subordinated Debt.

     “Replacement Capital Covenant” has the meaning specified in the introduction to this instrument.

     “Replacement Capital Intention” means, as to any security or combination of securities, that the Issuer has publicly stated its intention, either in the prospectus or other offering document under which such securities were initially offered for sale or in filings with the Commission made by the Issuer under the Exchange Act prior to or contemporaneously with the issuance of such securities, that the Issuer will redeem or repurchase such securities only with the proceeds of specified replacement capital securities that have terms and provisions at the time of redemption or repurchase that are as or more equity-like than the securities then being redeemed or repurchased, raised within six (6) months prior to the applicable redemption or repurchase date.

     “Scheduled Redemption Date” means January 15, 2046.

     “Securities” has the meaning specified in Recital B.

     “Securities Act” means the Securities Act of 1933 or any successor statute thereto, in each case as amended from time to time.

     “Settlement Stock” means Non-Cumulative Preferred Stock that is perpetual with no prepayment obligation on the part of the issuer thereof, whether at the election of the holders or otherwise, is callable at the option of such issuer and either:

     (i) has a Legally Binding Replacement Covenant; or

     (ii) has a Replacement Capital Intention and a Mandatory Trigger Provision.

     “Share Buy-Back Covenant” means, as to any security or combination of securities, a covenant made by the Issuer to the effect that it will not repurchase

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any of its Common Stock for a period of six (6) months following the payment of all deferred Distributions with proceeds from the sale of Common Stock pursuant to a New Equity Settlement.

     “Subsidiary” of the Issuer means, at any time, any Person the shares of stock or other ownership interests of which having ordinary voting power to elect a majority of the board of directors or other managers of such Person are at the time owned, or the management or policies of which are otherwise at the time controlled, directly or indirectly through one or more intermediaries (including other Subsidiaries) or both, by the Issuer.

      “Termination Date” has the meaning specified in Section 4(a).

     “Trust” means a trust, the common securities of which are held directly or indirectly by the Issuer.

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