Exhibit 10.1

 

 

 

 

 

 
TRANSACTION AGREEMENT

 

 
dated as of

 

 
April 21, 2011

 

 
between

 

 
MORGAN STANLEY

 
and

 

 
MITSUBISHI UFJ FINANCIAL GROUP, INC.
 
 
 

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TABLE OF CONTENTS
 
Page
 
 
ARTICLE 1
Definitions
   
Section 1.01.  Definitions
1
Section 1.02.  Other Definitional and Interpretative Provisions
4
 
ARTICLE 2
Transactions
   
Section 2.01.  Closing
5
 
ARTICLE 3
Representations and Warranties of the Company
   
Section 3.01.  Organization, Authority and Significant Subsidiaries
5
Section 3.02.  Capitalization
6
Section 3.03.  Authorization, Enforceability of Transaction Documents
6
Section 3.04.  Authorization of Common Stock and Series D Preferred Shares
7
Section 3.05.  Shareholder Approvals
8
Section 3.06.  No Material Adverse Effect
8
 
ARTICLE 4
Representations and Warranties of the Investor
   
Section 4.01.  Investor Status
8
Section 4.02.  Listing and Reporting Requirements
10
Section 4.03.  Foreign Jurisdictions
10
Section 4.04.  Ownership of Series B Preferred Shares; Authorization of the
Transaction Documents
11
Section 4.05.  No Reliance on Advice
11
 
ARTICLE 5
Covenants
   
Section 5.01.  Regulatory Matters
11
Section 5.02.  NYSE Listing
13
Section 5.03.  Publicity
13
Section 5.04.  Tax Treatment
13
Section 5.05.  Adjustment of Conversion Rate
13

 
 
 

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Section 5.06.  Transfer Restrictions
14
Section 5.07.  Requisite Shareholder Approval
14
Section 5.08.  New Committee
14
Section 5.09.  Registration Rights Agreements
14
 
ARTICLE 6
Conditions to Closing
   
Section 6.01.  Conditions to Obligations of the Company and the Investor
15
Section 6.02.  Conditions to Obligation of the Investor
15
Section 6.03.  Conditions to Obligation of the Company
16
 
ARTICLE 7
Exchange Election
   
Section 7.01.  Right To Exchange
16
Section 7.02.  Exchange Closing
17
Section 7.03.  Effect Of Exchange
17
Section 7.04.  Definitions
18
 
ARTICLE 8
Termination
   
Section 8.01.  Grounds for Termination
18
Section 8.02.  Effect of Termination
19
 
ARTICLE 9
Miscellaneous
   
Section 9.01. Survival of Representations, Warranties and Agreements
19
Section 9.02.  Notices
19
Section 9.03.  Amendments and Waivers
21
Section 9.04.  Expenses
21
Section 9.05.  Successors and Assigns
21
Section 9.06.  Governing Law
21
Section 9.07.  Jurisdiction
21
Section 9.08.  Process Agent
22
Section 9.09.  Counterparts; Effectiveness; Third Party Beneficiaries
22
Section 9.10.  Entire Agreement
22
Section 9.11.  Severability
22
Section 9.12.  Specific Performance
22

 
EXHIBIT A
Form of Investor Agreement Amendment

EXHIBIT B
Form of Corporate Counsel Opinion (New Shares)

EXHIBIT C
Form of Corporate Counsel Opinion (Series D Preferred Shares)

 
 
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EXHIBIT D
Form of Certificate of Designations of Preferences and Rights of the 10% Series
D Non-Cumulative Non-Voting Perpetual Convertible Preferred Stock ($1,000
Liquidation Preference Per Share)

 
SCHEDULE A
Required Approvals

 
 
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TRANSACTION AGREEMENT
 
TRANSACTION AGREEMENT (this “Agreement”) dated as of April 21, 2011 between
MORGAN STANLEY, a Delaware corporation (the “Company”), and MITSUBISHI UFJ
FINANCIAL GROUP, INC., a joint stock company organized under the laws of Japan
(the “Investor”).
 
W  I  T  N  E  S  S  E  T  H :
 
WHEREAS, the Investor is the record and beneficial owner of all of the issued
and outstanding shares of the Company’s 10% Series B Non-Cumulative Non-Voting
Perpetual Convertible Preferred Stock, par value $0.01 per share (the “Series B
Preferred Shares”);
 
WHEREAS, the Company and the Investor are parties to an Investor Agreement dated
as of October 13, 2008 (as amended on October 27, 2008, the “Investor
Agreement”);
 
WHEREAS, the Company desires the Investor to convert all of the Series B
Preferred Shares owned by it into Common Stock; and
 
WHEREAS, in connection with such conversion, the Company and the Investor have
agreed to make certain changes to the Investor Agreement and other matters.
 
NOW THEREFORE, in consideration of the premises and of the respective
representations, warranties, covenants and conditions contained herein, the
parties hereto agree as follows:
 
 
ARTICLE 1
Definitions
 
Section 1.01.  Definitions.  (a). As used herein, the following terms have the
following meanings:
 
“Adjusted Conversion Rate” means initially 49.1713 shares of Common Stock per
Series B Preferred Share, subject to adjustment in the same manner, and at the
same time, as the Conversion Rate (as such term is defined in the Series B CoD)
in connection with any issuance, dividend or distribution described in Section
11(a)(i) of the Series B CoD.
 
“Applicable Law” means, with respect to any Person, any transnational, domestic
or foreign federal, state or local law (statutory, common or otherwise),
constitution, treaty, convention, ordinance, code, rule, regulation, order,
injunction, judgment, decree, ruling or other similar requirement enacted,
 
 
 

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adopted, promulgated or applied by a Governmental Authority that is binding upon
or applicable to such Person, as amended unless expressly specified otherwise.
 
“Bankruptcy Exceptions” means applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and general equitable principles, regardless of whether such
enforceability is considered in a proceeding at law or in equity.
 
“Business Day” means any day other than a Saturday, Sunday or a legal holiday in
New York City or in Tokyo, Japan, or any other day on which commercial banks in
New York City or in Tokyo, Japan are authorized or required by law or government
decree to close.
 
“Bylaws” means the Amended and Restated Bylaws of the Company.
 
“Certificate of Incorporation” means the Amended and Restated Certificate of
Incorporation of the Company.
 
“Closing Date” means the date of the Closing.
 
“Common Stock” means the common stock, par value $.01 per share, of the Company.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
 
“Federal Reserve” means the Board of Governors of the Federal Reserve System.
 
“Governmental Authority” means any transnational, domestic or foreign federal,
state or local governmental, regulatory or administrative authority, securities
exchanges, self-regulatory organizations, department, court, agency or official,
including any political subdivision thereof.
 
“Investor Agreement Amendment” means an amendment to the Investor Agreement in
the form attached hereto as Exhibit A.
 
“Material Adverse Effect” means any fact, circumstance, event, change, effect or
occurrence that, individually or in the aggregate with all other facts,
circumstances, events, changes, effects or occurrences, has a material adverse
effect on (i) the business, assets, liabilities, results of operation or
financial condition of the Company and its subsidiaries taken as a whole or
(ii) the ability of the Company to consummate the Transactions, other than, in
each case, any adverse effect (A) resulting from the announcement of the
Transactions or
 
 
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(B) attributable to the Company’s indirect minority ownership in Mitsubishi UFJ
Morgan Stanley Securities, Co. Ltd.
 
“NYSE” means the New York Stock Exchange.
 
“Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
Governmental Authority.
 
“Required Approvals” means (i) a determination from the Federal Reserve that the
consummation of the Transactions would not cause the Federal Reserve’s prior
determination that the Investor does not control the Company to change and, if
deemed necessary by the Federal Reserve, approval of the Transactions pursuant
to Sections 3 and 4 of the Bank Holding Company Act of 1956, as amended, and
Section 163 of the Dodd-Frank Act; (ii) a determination from the Federal Deposit
Insurance Corporation that the consummation of the Transactions would not cause
the Federal Deposit Insurance Corporation’s prior determination  that the
Investor is not deemed to control the Company for purposes of Section 3(w)(5) of
the Federal Deposit Insurance Act to change; (iii) all approvals or
authorizations of, filings and registrations with, and notifications to, all
Governmental Authorities, including those set forth on Schedule A hereto, that
are necessary to consummate the Transactions and (iv) the Requisite Shareholder
Approval.
 
“SEC” means the Securities and Exchange Commission.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
“Series B CoD” means the Amended Certificate of Designations of Preferences and
Rights of the Series B Preferred Shares.
 
“Shares” means, collectively, the New Shares and the Series D Preferred Shares.
 
“Transaction Documents” means this Agreement and the Investor Agreement
Amendment.
 
“Transactions” means the transactions contemplated by the Transaction Documents.
 
(b) Each of the following terms is defined in the Section set forth opposite
such term:
 
 
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Term
 
Section

 
Agreement
Preamble  
Closing
2.01
 
Code
5.04
 
Company
Preamble
 
Company Preferred Stock
Exchange
3.02
7.01
 
Exchange Closing
7.02
 
Exchange Date
7.01
 
Investor
Preamble
 
Investor Agreement
Recitals
 
New Shares
2.01
 
Registration Rights Agreement
5.09
 
Requisite Shareholder Approval
5.07

 
Series A Preferred Stock
Series B Preferred Shares
3.02
Recitals
 
Series D CoD
7.02
 
Series D Preferred Shares
7.01
 
Significant Subsidiary
Substantial Detriment
Voting Debt
3.01
5.01(e)
3.02

 
Section 1.02.  Other Definitional and Interpretative Provisions.  The words
“hereof”, “herein” and “hereunder” and words of like import used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.  References to Articles, Sections, Exhibits and Schedules are to
Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise
specified.  All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein.  Any capitalized terms used in any Exhibit or Schedule but not otherwise
defined therein, shall have the meaning as defined in this Agreement.  Any
singular term in this Agreement shall be deemed to include the plural, and any
plural term the singular.  Whenever the words “include”, “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation”, whether or not they are in fact followed by
those words or words of like import.  “Writing”, “written” and comparable terms
refer to printing, typing and other means of reproducing words (including
electronic media) in a visible form.  References to any statute shall be deemed
to refer to such statute as amended from time to time and to any rules or
regulations promulgated thereunder.  References to any agreement or contract are
to that agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof.  References to any Person
include the successors and permitted assigns of that Person.  References from or
through any
 
 
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date mean, unless otherwise specified, from and including or through and
including, respectively.  References to “law”, “laws” or to a particular statute
or law shall be deemed also to include any and all Applicable Law.
 
ARTICLE 2
Transactions
 
Section 2.01. Closing.  The consummation of the Transactions (the “Closing”)
shall take place at the offices of Davis Polk & Wardwell LLP, 450 Lexington
Avenue, New York, New York, as soon as reasonably practicable after the
satisfaction of the conditions set forth in ‎Article 6 but in no event later
than two Business Days thereafter, or at such other time or place as the Company
and the Investor may agree.  At the Closing:
 
(a) the Investor shall convert all of the Series B Preferred Shares owned by it
into Common Stock pursuant to, and in accordance with, Section 9 and Section
10(b) of the Series B CoD, whereupon the Company shall deliver to the Investor
the number of shares of Common Stock, registered in the name of the Investor, to
which the Investor is entitled as a result of such conversion pursuant to the
Series B CoD (such shares of Common Stock, the “New Shares”) (it being
understood that, as of the date hereof, after giving effect to the adjustment to
the Conversion Rate contemplated by Section 5.05, it is anticipated that the
Company shall deliver to the Investor 385,464,097 New Shares pursuant to this
Section upon conversion of the Series B Preferred Shares); and
 
(b) each of the Company and the Investor shall deliver to each other duly
executed counterparts of the Investor Agreement Amendment.
 
 
ARTICLE 3
Representations and Warranties of the Company
 
The Company represents and warrants to the Investor as of the date hereof that:
 
Section 3.01.  Organization, Authority and Significant Subsidiaries. The Company
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as currently conducted,
and, except as would not be reasonably likely to have a Material Adverse Effect,
has been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business so as to require such
qualification;
 
 
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each subsidiary of the Company that is a “significant subsidiary” within the
meaning of Rule 1-01(w) of Regulation S-X under the Securities Act (individually
a “Significant Subsidiary” and collectively the “Significant Subsidiaries”) has
been duly organized and is validly existing in good standing under the laws of
its jurisdiction of organization.
 
Section 3.02.  Capitalization.  The authorized capital stock of Company consists
of 3,500,000,000 shares of Company Common Stock, and 30,000,000 shares of
preferred stock (“Company Preferred Stock”), par value $0.01 per share, of
which, as of March 31, 2011, (1) 1,545,064,012 shares of Common Stock were
issued and outstanding, (2) 46,000 shares of Company Preferred Stock are
designated as Floating Rate Non-Cumulative Preferred Stock, Series A, 44,000 of
which were outstanding (the “Series A Preferred Stock”), which shares of Series
A Preferred Stock are represented by 44,000,000 depositary receipts, each
representing 1/1,000 of a share of Series A Preferred Stock, (3) 7,839,209
shares of Company Preferred Stock are designated as 10% Series B Non-Cumulative
Non-Voting Perpetual Convertible Preferred Stock, of which 7,839,209 shares were
outstanding, (4) 1,160,791 shares of Company Preferred Stock are designated as
10% Series C Non-Cumulative Non-Voting Perpetual Preferred Stock, of which
519,882 shares were outstanding, and (5) 69,651,276 shares of Common Stock were
subject to issuance pursuant to outstanding options, restricted stock units,
performance share units, warrants and convertible securities.  As of such date,
the Company held 58,849,062 shares of Company Common Stock in its
treasury.  Except as listed above or in connection with the Transactions, the
Series B CoD and the Series D CoD, the Company has not reserved any shares of
Common Stock.  No bonds, debentures, notes or other indebtedness having the
right to vote on any matters on which the shareholders of the Company may vote
(“Voting Debt”) are issued and outstanding.  Except (x) as listed above, (y) as
set forth in this Agreement and (z) for the granting of additional equity awards
to employees and directors in the ordinary course of business, the Company does
not have and is not bound by any outstanding subscriptions, options, warrants,
calls, repurchase rights, commitments, or agreements of any character calling
for the purchase or issuance of, or securities or rights convertible into or
exchangeable or exercisable for, any shares of Common Stock or any other equity
securities of the Company or Voting Debt or any securities representing the
right to purchase or otherwise receive any shares of capital stock of the
Company (including any rights plan or agreement).
 
Section 3.03.  Authorization, Enforceability of Transaction Documents. (a) The
Company has the power and authority to enter into the Transaction Documents and
to carry out its obligations hereunder and thereunder.  The execution, delivery
and performance of the Transaction Documents by the Company and the consummation
of the Transactions have been duly authorized by all necessary corporate action
on the part of the Company.
 
 
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(b) This Agreement has been, and at the Closing the Investor Agreement Amendment
will be, validly executed and delivered by the Company and assuming due
authorization, execution and delivery of such agreement by the Investor, this
Agreement constitutes and the Investor Agreement Amendment will constitute a
valid and binding obligation of the Company, enforceable against it in
accordance with its terms, except to the extent that the enforcement thereof may
be limited by the Bankruptcy Exceptions.
 
(c) As of the date of execution of the Transaction Documents, neither the
execution, delivery and performance by the Company hereof and thereof, nor the
consummation of the Transactions, nor compliance by the Company with any of the
provisions thereof, will violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration of or result in the creation of, any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company or any Significant Subsidiary under any of the terms, conditions or
provisions of (i) its certificate of incorporation or bylaws or (ii) any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Company or any Significant Subsidiary is a
party or by which it may be bound, or to which the Company or any Significant
Subsidiary or any of the properties or assets of the Company or any Significant
Subsidiary may be subject, or (iii) subject to receipt of the Required Approvals
and compliance with the statutes and regulations referred to in the next
paragraph, any statute, rule or regulation or any judgment, ruling, order, writ,
injunction or decree applicable to the Company or any Significant Subsidiary or
any of their respective properties or assets except, in the case of clauses
(ii) and (iii), for those occurrences that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
 
(d) Other than in connection or in compliance with the provisions of the
Securities Act and the securities or blue sky laws of the various states, and
other than the Required Approvals, to the best knowledge of the Company, no
notice to, filing with, exemption or review by, or authorization, consent or
approval of, any Governmental Authority or any third party is necessary for the
Transactions.
 
Section 3.04.  Authorization of Common Stock and Series D Preferred Shares.  (a)
The New Shares have been duly authorized by all necessary corporate action on
the part of the Company.  Upon the issuance of the New Shares, the New Shares
will (i) be validly issued, fully paid and nonassessable, (ii) not have been
issued in violation of any preemptive or other similar right, and (iii) if such
shares are treasury shares, be free of any adverse claim.
 
 
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(b) The Series D Preferred Shares have been duly authorized by all necessary
corporate action on the part of the Company.  Upon the issuance of the Series D
Preferred Shares in exchange for the Series B Preferred Shares as contemplated
in Article 7, the Series D Preferred Shares will (i) be validly issued, fully
paid and nonassessable and (ii) not have been issued in violation of any
preemptive or other similar right.
 
Section 3.05.  Shareholder Approvals.  No approval of the Company’s stockholders
is required under any law, under the regulations and policies of any securities
exchange in connection therewith, or under the Certificate of Incorporation or
the Bylaws to effect the Transactions, other than the Requisite Shareholder
Approval.
 
Section 3.06.  No Material Adverse Effect.  Since December 31, 2010 and except
as described in the SEC Reports, no event or circumstance has occurred that,
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect.
 
 
ARTICLE 4
Representations and Warranties of the Investor
 
The Investor represents and warrants to the Company that:
 
Section 4.01.  Investor Status.  (a) The Investor is (i) a QIB and an
“accredited investor” within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act, (ii) aware that the issuance of the Shares to it is
being made in reliance on a private placement exemption from registration under
the Securities Act and (iii) acquiring the Shares for its own account or for the
account of a QIB.
 
(b) The Investor understands and agrees on behalf of itself and on behalf of any
investor account for which it is acquiring the Shares, and each subsequent
holder of Shares by its acceptance thereof will be deemed to agree, that such
Shares are being offered in a transaction not involving any public offering
within the meaning of the Securities Act, that such Shares have not been and
will not be registered under the Securities Act and that such Shares may be
offered, resold, pledged or otherwise transferred only in accordance with any
applicable provision of the Investor Agreement as amended (i) in a transaction
not involving a public offering, (ii) pursuant to an exemption from registration
under the Securities Act provided by Rule 144 thereunder (if available),
(iii) pursuant to an effective registration statement under the Securities Act,
or (iv) to the Company or one of its subsidiaries, in each of cases (i) through
(iv) in accordance with any applicable securities laws of any State of the
United States, and that it will, and each subsequent holder is required to,
notify any subsequent purchaser
 
 
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of Shares from it of the resale restrictions referred to above, as applicable,
and will provide the Company and the transfer agent such certificates and other
information as they may reasonably require to confirm that the transfer by it
complies with the foregoing restrictions, if applicable.
 
(c) The Investor understands that, unless sold pursuant to a registration
statement that has been declared effective under the Securities Act or in
compliance with Rule 144, the Company may require that the Shares bear a legend
or other restriction substantially to the following effect (it being agreed that
if the Shares are not certificated, other appropriate restrictions shall be
implemented to give effect to the following):
 
THIS SECURITY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, (THE “SECURITIES
ACT”), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
 
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) IN A
TRANSACTION NOT INVOLVING A PUBLIC OFFERING, (ii) PURSUANT TO ANY OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, INCLUDING
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) SUBJECT TO THE ISSUER’S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (ii) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO IT, (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR (iv) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, IN EACH OF
CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
 
(d) In addition, for so long as the holder of the relevant Shares is subject to
transfer restrictions contained in the Investor Agreement as amended, the
Company may require that the Shares bear a legend or other restriction
substantially to the following effect: “THIS SECURITY IS SUBJECT TO RESTRICTIONS
ON TRANSFER SET FORTH IN AN INVESTOR AGREEMENT AS AMENDED, DATED [     ], AMONG
THE COMPANY
 
 
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AND CERTAIN OTHER PARTIES THERETO.”  Such legend shall be removed at the request
of any holder thereof that is not subject to the transfer restrictions contained
in the Investor Agreement as amended.
 
(e) The Investor further represents and warrants that it (i) is able to fend for
itself in the Transactions, (ii) has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of its
prospective investment in the Shares and (iii) has the ability to bear the
economic risks of its prospective investment and can afford the complete loss of
such investment.
 
(f) The Investor acknowledges that (i) it has conducted its own investigation of
the Company and the terms of the Shares, (ii) it has had access to the Company’s
public filings with the SEC and to such financial and other information as it
deems necessary to make its decision to purchase the Shares, and (iii) has been
offered the opportunity to ask questions of the Company and received answers
thereto, as it deemed necessary in connection with the decision to purchase the
Shares.
 
(g) The Investor understands that the Company will rely upon the truth and
accuracy of the foregoing representations, acknowledgements and agreements and
agrees that if any of the representations and acknowledgements deemed to have
been made by it by its purchase of the Shares is no longer accurate, it shall
promptly notify the Company.  If it is acquiring Shares as a fiduciary or agent
for one or more investor accounts, it represents that it has sole investment
discretion with respect to each such account and it has full power to make the
foregoing representations, acknowledgements and agreements on behalf of such
account.
 
Section 4.02.  Listing and Reporting Requirements.  The Investor acknowledges
that the Common Stock is listed on the NYSE and the Company is required to file
reports containing certain business and financial information with the SEC
pursuant to the reporting requirements of the Exchange Act and that it is able
to obtain copies of such reports.
 
Section 4.03.  Foreign Jurisdictions.  The Investor acknowledges that no action
has been or will be taken in any jurisdiction outside the United States by the
Company that would permit an offering of the Shares, or possession or
distribution of offering materials in connection with such issue of Shares, in
any jurisdiction outside the United States where action for that purpose is
required.  Each such person outside the United States will comply with all
Applicable Laws in each foreign jurisdiction in which it purchases, offers,
sells or delivers Shares or has in its possession or distributes any offering
material, in all cases at its own expense.
 
 
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Section 4.04.  Ownership of Series B Preferred Shares; Authorization of the
Transaction Documents.  (a) The Investor is the record and beneficial owner of
7,839,209 Series B Preferred Shares, free and clear of any lien, security
interest, charge or encumbrance.
 
(b) The Investor has full right, power, authority and capacity to enter into the
Transaction Documents and to consummate the Transactions and has taken all
necessary action to authorize the execution, delivery and performance of the
Transaction Documents.
 
(c) This Agreement has been, and at the Closing the Investor Agreement Amendment
will be, validly executed and delivered by the Investor and assuming due
authorization, execution and delivery of such agreement by the Company, this
Agreement constitutes and the Investor Agreement Amendment will constitute a
valid and binding obligation of the Investor, enforceable against it in
accordance with its terms, except to the extent that the enforcement thereof may
be limited by the Bankruptcy Exceptions
 
Section 4.05.  No Reliance on Advice.  The Investor understands and agrees that
nothing in this Agreement, the Company’s public filings with the SEC or any
other materials presented to the Investor in connection with the purchase and
sale of the New Shares or the Exchange constitutes legal, tax or investment
advice.  The Investor has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of the Shares and has made its own assessment and has
satisfied itself concerning the relevant tax and other economic considerations
relevant to its investment in the Shares.
 
 
ARTICLE 5
Covenants
 
The Company and the Investor agree that:
 
Section 5.01.  Regulatory Matters.  (a) The parties shall cooperate with each
other and use their respective reasonable best efforts to promptly prepare and
file all necessary documentation, to effect all applications, notices, petitions
and filings, to obtain as promptly as practicable all permits, consents,
approvals and authorizations of all third parties (including any unions, works
councils or other labor organizations) and Governmental Authorities that are
necessary or advisable to consummate the Transactions as promptly as
practicable.  Each of the Company and the Investor shall have the right to
review in advance, and, to the extent practicable, each will consult the other
on, in each case subject to Applicable Law relating to the confidentiality of
information, the information that appears in any filing made with, or written
materials submitted to, any third party
 
 
11

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or any Governmental Authority in connection with the Transactions.  In
exercising the foregoing right, each of the parties shall act reasonably and as
promptly as practicable.  The parties shall consult with each other with respect
to the obtaining of all permits, consents, approvals and authorizations of all
third parties and Governmental Authorities necessary or advisable to consummate
the Transactions and each party will keep the other apprised of the status of
matters relating to completion of the Transactions.
 
(b) Each of the parties shall, upon request, furnish to the other all
information concerning itself, its subsidiaries, directors, officers and
stockholders, and such other matters as may be reasonably necessary or advisable
in connection with any statement, filing, notice or application made by or on
behalf of any of them or any of their respective subsidiaries to any
Governmental Authority in connection with the Transactions.
 
(c) Each of the parties shall promptly advise the other upon receiving any
communication from any Governmental Authority regarding any Required Approvals
that causes such party to believe that there is a reasonable likelihood that any
Required Approval will not be obtained or that the receipt of any such Required
Approval may be materially delayed.
 
(d) From the date of this Agreement through the Closing, (i) the parties shall
further cooperate with each other and use their respective reasonable best
efforts to enter into a written agreement or agreements to implement such
information sharing and other processes as are necessary to comply with the
disclosure and other regulatory requirements that will, or will continue to,
apply under Applicable Law (including the Exchange Act, the Banking Act of Japan
and the Financial Instruments and Exchange Law of Japan and the rules and
regulations promulgated thereunder) after the consummation of the Transactions
and (ii) the Company shall cooperate with the Investor to provide such
information as is necessary and to take such action from time to time as may be
necessary for the Investor to apply the equity method of accounting for its
investment in the Company after the consummation of the Transactions; provided
that, without limitation of any of the Investor’s other remedies with respect to
any breach of this Section 5.01(d) by the Company, the Company’s performance of
its covenants and obligations under this Section 5.01(d) shall not be a
condition to the Closing.
 
(e) Notwithstanding anything to the contrary contained in this Agreement, the
parties hereby agree and acknowledge that neither this Section 5.01 nor the
“reasonable best efforts” standard shall require, or be construed to require,
the Company or any of its subsidiaries or other affiliates or the Investor or
any of its subsidiaries or other affiliates, in order to obtain any permits,
consents, approvals or authorizations, or any terminations or waivers of any
applicable waiting periods, to propose, negotiate or offer to effect, or consent
 
 
12

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or commit to, any terms, condition or restrictions that are reasonably likely to
materially and adversely impact (i) the Investor’s or any of its subsidiaries’
ability to own or operate any of their respective businesses or operations or
ability to conduct any such businesses or operations substantially as conducted
as of the date of this Agreement, (ii) the Company’s or any of its subsidiaries’
ability to own or operate any of their respective businesses or operations or
ability to conduct any such businesses or operations substantially as conducted
as of the date of this Agreement or (iii) the Investor’s ability to acquire,
hold, dispose of or vote the Shares and realize the economic incidents of
ownership of such Shares (any such effect described in clauses (i), (ii) or
(iii), a “Substantial Detriment”).
 
Section 5.02.  NYSE Listing.  The Company shall use its reasonable best efforts
to cause the New Shares to be approved for listing on the NYSE (to the extent
not already done), subject to official notice of issuance, prior to the Closing.
 
Section 5.03.  Publicity.  No written public release or written announcement
concerning any of the Transaction Documents shall be issued by any party without
the prior written consent of the other party (which consent shall not be
unreasonably withheld), except as such release or announcement may be required
by law or the rules or regulations of any securities exchange, in which case the
party required to make the release or announcement shall, to the extent
reasonably practicable, allow the other party reasonable time to comment on such
release or announcement in advance of such issuance.  The provisions of this
‎Section 5.03 shall not restrict the ability of a party to summarize or describe
the Transactions in any prospectus or similar offering document so long as the
other party is provided a reasonable opportunity to review such disclosure in
advance.
 
Section 5.04.  Tax Treatment.  The parties agree (i) to treat the Transactions
as a tax-free “recapitalization” within the meaning of Section 368(a)(1)(E) of
the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) that no
“other property or money” (other than any cash received in lieu of fractional
shares) has been received in connection with the Transactions that has the
effect of distribution of a dividend under Section 356(a)(2) of the Code, and
the Company shall not withhold from any amount hereunder (other than any cash
received in lieu of fractional shares or any cash dividend paid on the Series B
Preferred Shares or the Series D Preferred Shares).
 
Section 5.05.  Adjustment of Conversion Rate.  With effect as of immediately
prior to the Closing, the Board of Directors of the Company shall increase the
Conversion Rate from the Conversion Rate (as such term is defined in the Series
B CoD) to the Adjusted Conversion Rate pursuant to, and in accordance with,
Section 11(a)(xii) of the Series B CoD.  Such increase in the Conversion Rate
shall remain in effect for 20 Business Days.  The Company shall give the
Conversion Agent (as such term is defined in the Series B CoD) and
 
 
13

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DTC (as such term is defined in the Series B CoD) notice of such increase in the
Conversion Rate (and that such increase will be effective for 20 Business Days)
at least 15 days prior to the Closing.  If the Closing does not occur, no
increase in the Conversion Rate pursuant to this Section 5.05 shall become
effective.
 
Section 5.06.  Transfer Restrictions.  The Investor agrees that, except pursuant
to the Exchange, until the Closing has occurred or this Agreement has been
terminated, it shall not, directly or indirectly, sell, transfer, pledge,
encumber, assign, distribute, gift or otherwise dispose of any or all of the
Series B Preferred Shares or Common Stock issuable upon conversion of the Series
B Preferred Shares.
 
Section 5.07.  Requisite Shareholder Approval.  The Company shall take, in
accordance with Applicable Law and its Certificate of Incorporation and Bylaws,
all action necessary to convene a shareholders’ meeting as promptly as
practicable after the execution of this Agreement, to consider and vote upon
such matters as may be required by the rules of the NYSE in order to effect the
Transactions (the “Requisite Shareholder Approval”), shall recommend to its
shareholders that they approve such matters, and shall not postpone or adjourn
such meeting except to the extent required by Applicable Law.
 
Section 5.08.  New Committee.  The Company shall take, in accordance with
Applicable Law and its Certificate of Incorporation and Bylaws, all action
necessary to constitute the Global Operations and Technology Committee and
appoint the Investor Director (as defined in the Investor Agreement Amendment)
as a member of such committee, in each case subject to the occurrence of the
Closing.
 
Section 5.09.  Registration Rights Agreements.  (a) Effective as of the Closing,
the definition of the term “Registrable Securities” under the Registration
Rights Agreement, dated as of October 13, 2008, between the Company and the
Investor (as amended, the “Registration Rights Agreement”) shall be deemed to
include any shares of Common Stock issued upon conversion of the Series D
Preferred Shares.  This Section 5.09(a) shall be deemed to amend the
Registration Rights Agreement accordingly.
 
(b) Section 2.6 of the Registration Rights Agreement is hereby amended to read
as follows:  “The registration rights granted under this Article II shall
terminate with respect to any Holder as of the later of (1) the last day of the
first calendar month in which the sum of the Shares held by such Holder and the
maximum number of Shares issuable upon conversion of other Securities held by
such Holder may be sold in a single transaction without limitation under Rule
144 and (2) the last day of the first calendar month in which the sum of the
Shares held by such Holder and the maximum number of Shares issuable upon
 
 
14

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conversion of other Securities held by such Holder are less than 10.0% of the
total shares of Common Stock then outstanding.”  This Section 5.09(b) shall be
deemed to amend the Registration Rights Agreement accordingly.
 
 
ARTICLE 6
Conditions to Closing
 
Section 6.01.  Conditions to Obligations of the Company and the Investor.  The
obligations of the Company and the Investor to consummate the Closing are
subject to the satisfaction of the following conditions:
 
(a) No provision of any Applicable Law shall prohibit the consummation of the
Closing.
 
(b) The Required Approvals shall have been obtained or made and shall be in full
force and effect and all waiting periods under the Required Approvals shall have
expired or been terminated, in each case without the imposition of any term,
condition or consequence the acceptance of which would constitute a Substantial
Detriment, and no Governmental Authority shall have instituted an investigation
or proceeding that would reasonably be expected to result in a judgment,
injunction, order or decree prohibiting the Closing.
 
Section 6.02.  Conditions to Obligation of the Investor.  The obligation of the
Investor to consummate the Closing is subject to the satisfaction of the
following further conditions:
 
(a) The representations and warranties of the Company contained in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date (except for (x)
such representations or warranties made as of the date hereof or as of another
date, which shall be true and correct as of such date and (y) the
representations and warranties contained in Section 3.06, which shall be true
and correct as of the date hereof), and the Investor shall have received a
certificate of the chief executive officer of the Company, dated as of the
Closing Date, certifying to that fact.
 
(b) The Company shall have performed in all material respects all of its
covenants and obligations in this Agreement that are to be performed at or prior
to the Closing (excluding any covenants or obligations under Section 5.01(d),
5.02 or 5.07), and the Investor shall have received a certificate of a senior
officer of the Company, dated as of the Closing Date, certifying to that fact.
 
 
15

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(c) The New Shares shall have been approved for listing on the NYSE, subject to
official notice of issuance.
 
(d) The Investor shall have received a written opinion, dated the Closing Date,
from Davis Polk & Wardwell LLP, as counsel to the Company, as to the validity of
the New Shares, in the form attached hereto as Exhibit B.
 
(e) The Company shall have taken all action necessary to constitute the Global
Operations and Technology Committee and appoint the Investor Director (as
defined in the Investor Agreement Amendment) as a member of such committee, in
each case subject to the occurrence of the Closing.
 
(f) The Company shall have duly executed and delivered to the Investor the
Investor Agreement Amendment.
 
Section 6.03  .  Conditions to Obligation of the Company.  The obligation of the
Company to consummate the Closing is subject to the satisfaction of the
following further conditions:
 
(a) The representations and warranties of the Investor contained in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date (except for any
such representations or warranties made as of the date hereof or as of another
date, which shall be true and correct as of such date).
 
(b) The Investor shall have performed in all material respects all of its
covenants and obligations in this Agreement that are to be performed at or prior
to the Closing.
 
(c) The Investor shall have duly executed and delivered to the Company the
Investor Agreement Amendment.
 
 
ARTICLE 7
Exchange Election
 
Section 7.01.  Right To Exchange.  At any time prior to the earlier of (x) the
Closing and (y) the termination of this Agreement pursuant to Section 8.01, the
Investor may irrevocably elect, in its sole discretion, to exchange (the
“Exchange”) all, but not less than all, of the Series B Preferred Shares then
held by it for an equal number of newly issued shares of the Company’s 10%
Series D Non-Cumulative Non-Voting Perpetual Convertible Preferred Stock, par
 
 
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value $0.01 per share (the “Series D Preferred Shares”), having the terms set
forth in the Series D CoD, if the Closing Price of the Common Stock has exceeded
150% of the then applicable Conversion Price on any Trading Day preceding the
date the Investor provides notice to the Company of such election.  Such notice
shall be given in accordance with Section 9.02 and shall specify the date (the
“Exchange Date”) on which the Exchange is to occur, which shall be a Business
Day and which shall be no earlier than the third Business Day immediately
succeeding the date, determined in accordance with Section 9.02, on which the
Company receives such notice.
 
Section 7.02.  Exchange Closing.  The consummation of the Exchange (the
“Exchange Closing”) shall take place at the offices of Davis Polk & Wardwell
LLP, 450 Lexington Avenue, New York, New York, on the Exchange Date, or at such
other time or place as the Company and the Investor may agree.  At the Exchange
Closing, the Investor shall present and surrender the certificate representing
all of the Series B Preferred Shares then held by it, whereupon the Company
shall deliver to the Investor a certificate, in substantially the same form as
the certificate so surrendered, representing an equal number of Series D
Preferred Shares, registered in the name of the Investor or, if the Series B
Preferred Shares are not held in certificated form, the Investor and the Company
shall deliver a letter to BNY Mellon Shareowner Services, acting in its capacity
as registrar and transfer agent for the Series B Preferred Shares and the Series
D Preferred Shares, instructing it to reflect on its books (i) the delivery by
the Investor to the Company of all Series B Preferred Shares then held by the
Investor and (ii) the issuance by the Company to the Investor of an equal number
of newly issued Series D Preferred Shares.  At the Exchange Closing, the Company
shall cause Davis Polk & Wardwell LLP, as counsel to the Company, to deliver a
written opinion, dated the date of the Exchange Closing, as to the validity of
the Series D Preferred Shares, in the form attached hereto as Exhibit C.  Prior
to the Exchange Closing, the Company shall file a Certificate of Designations of
Preferences and Rights (the “Series D CoD”) with respect to the Series D
Preferred Shares in the form attached hereto as Exhibit D in the office of the
Secretary of State of the State of Delaware.
 
Section 7.03.  Effect Of Exchange. (a) Following the Exchange Closing,
 
(i) non-cumulative cash dividends shall be payable on the Series D Preferred
Shares in accordance with the Series D CoD from and including the Dividend
Payment Date for the Series B Preferred Shares immediately preceding the date on
which the Exchange Closing occurs; provided that if the Exchange Closing occurs
after a Dividend Record Date for the Series B Preferred Shares and on or prior
to the immediately succeeding Dividend Payment Date for the Series B Preferred
Shares, dividends on the Series D Preferred Shares shall be payable from and
including such immediately succeeding Dividend Payment Date (it being
 
 
17

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understood that in such circumstances, dividends for the period that includes
the date of the Exchange Closing shall be payable on the Series B Preferred
Shares, notwithstanding that the Investor will have exchanged the Series B
Preferred Shares for Series D Preferred Shares prior to the relevant Dividend
Payment Date for the Series B Preferred Shares and the Series B Preferred Shares
shall no longer be outstanding on such Dividend Payment Date); and
 
(ii) all references in this Agreement (other than references in this Article 7)
and in the Investor Agreement attached hereto as Exhibit A to the words “Series
B” shall be deemed to be references to the words “Series D,” unless the context
otherwise requires.
 
(b) The consummation of the Exchange Closing shall not affect the Company’s and
the Investor’s other rights and obligations under this Agreement (including,
without limitation, the obligation to effect the Closing pursuant to Section
2.01).
 
Section 7.04.  Definitions.  For purposes of this Article 7, each of the terms
“Closing Price,” “Conversion Price” and “Trading Day” shall have the meaning
given to such terms in the Series B CoD.
 
 
ARTICLE 8
Termination
 
Section 8.01.  Grounds for Termination.  This Agreement may be terminated at any
time prior to the Closing:
 
(a) by either the Investor or the Company if the Closing shall not have occurred
by October 14, 2011; provided that the right to terminate this Agreement under
this ‎Section 8.01(a) shall not be available to any party whose failure to
fulfill any obligation under this Agreement shall have been the cause of, or
shall have resulted in, the failure of the Closing to occur on or prior to such
date;
 
(b) by either the Investor or the Company in the event that any Governmental
Authority shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Transactions and such order,
decree, ruling or other action shall have become final and nonappealable; or
 
(c) by the mutual written consent of the Investor and the Company.
 
 
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The party desiring to terminate this Agreement pursuant to ‎Section 8.01(a) or
‎Section 8.01(b) shall give notice of such termination to the other party.
 
Section 8.02.  Effect of Termination.  In the event of termination of this
Agreement as provided in ‎Section 8.01, this Agreement shall forthwith become
void and there shall be no liability on the part of either party hereto except
that nothing herein shall relieve either party from liability for any breach of
any covenant of this Agreement; provided that Section 7.03(a) shall survive the
termination of this Agreement following an Exchange Closing and provided further
that Section 5.09(b) shall survive termination of this Agreement.
 
ARTICLE 9
Miscellaneous
 
Section 9.01.  Survival of Representations, Warranties and
Agreements.  Notwithstanding any investigation made by any party to this
Agreement, all covenants, agreements, representations and warranties made by the
Company and the Investor herein (excluding any covenants or obligations of the
Company under Section 5.01(d)) shall survive the execution of this Agreement and
the Closing.
 
Section 9.02. Notices.  All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile and electronic mail
transmission), and shall be given,
 
if to the Investor, to:
 
Mitsubishi UFJ Financial Group, Inc.
7-1, Marunouchi 2-chome
Chiyoda-ku, Tokyo 100-8388, Japan
Attention:      General Manager
Strategic Alliance Office
Corporate Planning Division
Facsimile No.:  +81 (3) 3240 5324
E-mail:  Tetsuya_Niimi@hd.mufg.jp

with a copy to:
 
Sullivan & Cromwell LLP
125 Broad Street
New York, NY  10004
Attention:  Donald J. Toumey
Keiji Hatano
Facsimile No.:  (212) 558-3588
Email:  toumeyd@sullcrom.com
 
 
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hatanok@sullcrom.com

if to the Company, to:
 
Morgan Stanley
1585 Broadway
New York, NY  10036
Attention:  Ruth Porat
Facsimile No.:  (212) 507-0437
Email:  ruth.porat@morganstanley.com
with a copy to:
 
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY  10017
Attention:  Thomas J. Reid
       Marc O. Williams
Facsimile No.: (212) 701-5800
Email:  tom.reid@davispolk.com
marc.williams@davispolk.com

or such other address, facsimile number or email address as such party may
hereafter specify for the purpose by notice to the other parties hereto.  All
such notices, requests and other communications shall be (i) deemed to have been
duly given when delivered by hand or overnight courier service, or when received
by facsimile transmission or electronic mail transmission if promptly confirmed
(in the case of electronic mail transmission, by means such as by the “return
receipt requested” function, return electronic mail or other written
acknowledgment by the intended recipient) and (ii) deemed received on the date
of receipt by the recipient thereof if received prior to 5 p.m. in the place of
receipt and such day is a business day in the place of receipt.  Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
 
Section 9.03 .  Amendments and Waivers.  (a). Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement, or
in the case of a waiver, by the party against whom the waiver is to be
effective.
 
(b) No failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
 
 
20

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Section 9.04.  Expenses.  Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
 
Section 9.05.  Successors and Assigns.  The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
 
Section 9.06.  Governing Law.  This Agreement will be governed by, construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed wholly within the State of Delaware, without
giving effect to the conflicts of laws principles thereof that would govern,
construe or enforce the Agreement under laws other than the State of Delaware.
 
Section 9.07.  Jurisdiction.  The Investor irrevocably submits to the
nonexclusive jurisdiction of any Delaware State or United States Federal court
sitting in the County of New Castle, Delaware over any suit, action or
proceeding arising out of or relating to this Agreement or the
Transactions.  The Investor irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of venue
of any such suit, action or proceeding brought in such a court and any claim
that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS.  EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT  BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION ‎9.07.
 
Section 9.08.  Process Agent.  The Investor irrevocably appoints MUFG North
America, 1251 Avenue of the Americas, New York, NY 10020-1104, to act
 
 
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as its agent for service of process and any other documents in proceedings in
the State of New York, the State of Delaware or any other proceedings in
connection with this Agreement.
 
Section 9.09.  Counterparts; Effectiveness; Third Party Beneficiaries.  This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.  This Agreement shall become effective when each party
hereto shall have received a counterpart hereof signed by the other party
hereto.  Until and unless each party has received a counterpart hereof signed by
the other party hereto, this Agreement shall have no effect and no party shall
have any right or obligation hereunder (whether by virtue of any other oral or
written agreement or other communication).  No provision of this Agreement is
intended to confer any rights, benefits, remedies, obligations, or liabilities
hereunder upon any Person other than the parties hereto and their respective
successors and assigns.
 
Section 9.10.  Entire Agreement.  This Agreement, the Investor Agreement, the
Investor Agreement Amendment and the Registration Rights Agreement constitute
the entire agreement between the parties with respect to the subject matter
hereof and thereof and supersedes all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter hereof
and thereof.
 
Section 9.11.  Severability.  If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other
Governmental Authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the Transactions is
not affected in any manner materially adverse to any party.  Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the Transactions be consummated
as originally contemplated to the fullest extent possible.
 
Section 9.12.  Specific Performance.  The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms and provisions hereof in any Delaware
State or United States Federal court sitting in the County of New Castle,
Delaware, in addition to any other remedy to which they are entitled at law or
in equity.
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
 
MORGAN STANLEY
         
By:
/s/ James P. Gorman    
Name:
James P. Gorman    
Title:
President & Chief Executive Officer  

MITSUBISHI UFJ FINANCIAL GROUP, INC.
         
By:
/s/ Katsunori Nagayasu    
Name:
Katsunori Nagayasu    
Title:
President & Chief Executive Officer    

 
 
 
 

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Exhibit A

Form of Investor Agreement Amendment
 
 
 

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

 
 
AMENDED AND RESTATED
 
INVESTOR AGREEMENT
 
BY AND BETWEEN
 
MORGAN STANLEY
 
AND
 
INVESTOR
 
DATED AS OF [          ], 2011
 
 
 

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TABLE OF CONTENTS
 
 
Page
 
ARTICLE I
 
DEFINITIONS
       
Section 1.1
Definitions
1
     
ARTICLE II
 
REPRESENTATIONS AND WARRANTIES
       
Section 2.1
Representations and Warranties of the Company
5
Section 2.2
Representations and Warranties of the Investor
5
   
ARTICLE III
 
BOARD REPRESENTATION AND VOTING; STANDSTILL PROVISIONS
       
Section 3.1
Board of Directors
6
Section 3.2
Voting
7
Section 3.3
Standstill Restrictions
7
Section 3.4
Standstill Period
9
Section 3.6
Cooperation
9
   
ARTICLE IV
 
TRANSFER RESTRICTIONS
       
Section 4.1
Transfer Restrictions
9
     
ARTICLE V
 
PREEMPTIVE RIGHTS
       
Section 5.1
Preemptive Rights
11
Section 5.2
Notice
11
Section 5.3
Purchase Mechanism
12
Section 5.4
Cooperation
13
Section 5.5
Limitation of Rights
13
Section 5.6
Termination of Preemptive Rights
13
   
ARTICLE VI
 
[RESERVED]
     
ARTICLE VII
 
EFFECTIVENESS AND TERMINATION
       
Section 7.1
Termination
13

 
 
 

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ARTICLE VIII
 
CONFIDENTIALITY
       
Section 8.1
Company Proprietary Information
14
Section 8.2
Investor Proprietary Information
14
   
ARTICLE VIII
 
MISCELLANEOUS
       
Section 9.1
Successors and Assigns
15
Section 9.2
Amendments; Waiver
15
Section 9.3
Notices
16
Section 9.4
Governing Law
17
Section 9.5
Submission to Jurisdiction
17
Section 9.6
Headings
17
Section 9.7
Entire Agreement
17
Section 9.8
Severability
18
Section 9.9
Counterparts
18
Section 9.10
Interpretation
18
Section 9.11
Specific Performance
18
Section 9.12
Process Agent
18
Section 9.13
No Third Party Beneficiaries
18

 
 
 

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AMENDED AND RESTATED INVESTOR AGREEMENT (this “Agreement”), by and between
Morgan Stanley, a Delaware corporation (the “Company”) and Mitsubishi UFJ
Financial Group, Inc., a joint stock company organized under the laws of Japan
(the “Investor”), dated as of [           ], 2011.
 
 
W I T N E S S E T H:
 
WHEREAS, the Company and the Investor have entered into a Securities Purchase
Agreement, dated September 29, 2008 and amended by the First Amendment to
Securities Purchase Agreement, dated as of October 3, 2008, the Second Amendment
to Securities Purchase Agreement, dated as of October 8, 2008 and the Third
Amendment to Securities Purchase Agreement, dated as of October 13, 2008 (such
Securities Purchase Agreement, as so amended and as it may be further amended
from time to time, the “Purchase Agreement”), pursuant to which the Investor
purchased and acquired from the Company, and the Company issued and sold to the
Investor, (i) shares of the 10% Series B Non-Cumulative Non-Voting Perpetual
Convertible Preferred Stock, par value $.01 per share of the Company (the
“Series B Preferred Stock”), which is convertible into shares of Common Stock,
par value $.01 per share of the Company (the “Common Stock”), and (ii) shares of
the 10% Series C Non-Cumulative Non-Voting Perpetual Preferred Stock, par value
$.01 per share of the Company, (together with Series B Preferred Stock,
“Preferred Stock”);
 
WHEREAS, the Company and the Investor have entered into the Transaction
Agreement dated as of April 21, 2011 (the “Transaction Agreement”) and the
execution and delivery of this Agreement is a condition to the closing of the
transactions contemplated therein;
 
WHEREAS, the Company and the Investor are parties to that certain Investor
Agreement, dated as of October 13, 2008 and amended by the First Amendment to
Investor Agreement, dated as of October 27, 2008 (the Investor Agreement, as so
amended, the “Investor Agreement”); and
 
WHEREAS, the Company and the Investor have determined to further amend and
restate the Investor Agreement as set forth herein.
 
NOW, THEREFORE, in consideration of the premises and of the respective
representations, warranties, covenants and conditions contained herein, the
parties hereto agree as follows:
 
ARTICLE I

 
DEFINITIONS
 
Section 1.1 Definitions.  In addition to other terms defined elsewhere in this
Agreement, as used in this Agreement, the following terms shall have the
meanings ascribed to them below:
 
“Affiliate” or “affiliate” means, with respect to a specified Person, any other
Person that directly or indirectly controls, is controlled by, or is under
common control with, the specified Person (as used in this definition, the term
“control” means the possession, directly or
 
 
 

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indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, by
contract or otherwise).
 
“Agreement” shall have the meaning assigned in the preamble hereto.
 
“Applicable Law” shall have the meaning assigned in the Transaction Agreement.
 
“Beneficially Own” shall mean, with respect to any securities, having
“beneficial ownership” of such securities for purposes of Rule 13d-3 or 13d-5
under the Exchange Act as in effect on the date hereof, and “Beneficial
Ownership” shall have the corresponding meaning. “Board” shall mean the Board of
Directors of the Company.
 
“Business Day” shall mean any day other than a Saturday, Sunday or a legal
holiday in New York City or in Tokyo, Japan, or any other day on which
commercial banks in New York City or in Tokyo, Japan are authorized or required
by law or government decree to close.
 
“Closing Date” shall have the meaning assigned in the Purchase Agreement.
 
“Common Stock” shall have the meaning assigned in the recitals hereto.
 
“Company” shall have the meaning assigned in the preamble hereto.
 
“Company Proprietary Information” shall have the meaning set forth in
Section 8.1.
 
“Controlled Affiliate” shall mean any Affiliate of the specified Person that is,
directly or indirectly, controlled (as defined in the definition of “Affiliate”)
by the specified Person.
 
“Covered Securities” shall mean Common Stock and any securities convertible into
or exercisable or exchangeable for Common Stock that are not Excluded
Securities.
 
“Designated Securities” shall have the meaning assigned in Section 5.2(a).
 
“Director” shall mean any member of the Board.
 
“Economic Interest Percentage” shall mean, calculated at any particular point in
time, the ratio, expressed as a percentage, of (x) the aggregate number of
shares of Common Stock Beneficially Owned by the Investor at the relevant time
(for purposes of this definition, treating the Series B Preferred Stock as fully
converted into the underlying Common Stock) to (y) the total number of shares of
Common Stock outstanding at the relevant time, on a Fully Diluted Basis.
 
“Exchange Act” shall mean the Securities Exchange Act of 1934, or any successor
federal statute, and the rules and regulations promulgated thereunder, all as
amended, and as the same may be in effect from time to time.
 
 
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“Excluded Securities” shall mean any securities that are (i) issued by the
Company pursuant to any employment contract, employee or benefit plan, stock
purchase plan, stock ownership plan, stock option or equity compensation plan or
other similar plan whereby stock is being issued or offered to a trust, other
entity or otherwise, to or for the benefit of any employees, potential
employees, officers or directors of the Company, (ii) issued by the Company in
connection with a business combination or other merger, acquisition or
disposition transaction, (iii) issued with reference to the common stock of a
subsidiary (e.g., a carve-out transaction), (iv) issued in connection with a
dividend investment or stockholder purchase plan or (v) issued upon the
conversion, exchange or exercise of any security or right or purchase obligation
outstanding as of the date hereof in accordance with its terms as such terms
exist as of the date hereof.
 
“Fully Diluted Basis” shall mean based on the total number of shares of the
relevant class of stock or type of equity interest that would be outstanding on
the relevant date assuming the exercise of all options, warrants and other
rights or obligations (including purchase contracts) to acquire such relevant
class of stock or type of equity interest (without regard to exercisability,
vesting or similar provisions and restrictions thereof) and the conversion or
exchange of all securities convertible into or exchangeable for stock or equity
interest (without regard to exercisability, vesting or similar provisions and
restrictions thereof).
 
“Governmental Entity” shall have the meaning assigned in the Purchase Agreement.
 
“Hedge” shall mean, in respect of the Common Stock, to enter into any swap or
any other agreement, transaction or series of transactions that hedges or
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of such Common Stock, whether any such transaction, swap or series
of transactions is to be settled by delivery of securities, in cash or
otherwise.
 
“Investor” shall have the meaning assigned in the preamble hereto.
 
“Investor Director” shall have the meaning assigned in Section 3.1(a).
 
“Investor Nominee” shall have the meaning assigned in Section 3.1(a).
 
“Investor Percentage Interest” shall mean, as of any date, the percentage equal
to (i) the aggregate number of shares of Common Stock Beneficially Owned by the
Investor (treating the Series B Preferred Stock and any other securities of the
Company convertible into or exercisable or exchangeable for Common Stock that
are Beneficially Owned by the Investor or its Affiliates as fully converted into
or exercised or exchanged for the underlying Common Stock) divided by (ii) the
total number of outstanding shares of Common Stock (treating (x) the Series B
Preferred Stock and any other securities of the Company convertible into or
exercisable or exchangeable for Common Stock that are Beneficially Owned by the
Investor or its Affiliates as fully converted into or exercised or exchanged for
the underlying Common Stock and (y) all shares of Common Stock issuable upon
conversion or exercise or exchange of any other then outstanding securities
convertible into or exercisable or exchangeable for Common Stock, to the
 
 
3

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extent such other securities are Covered Securities sold in a Qualified
Offering, as having been issued).
 
“Investor Proprietary Information” shall have the meaning set forth in Section
8.2.
 
“Investor Rights Termination Event” shall be deemed to have occurred if, at the
close of any Business Day following the Closing Date, the Investor’s Economic
Interest Percentage is less than 10%.
 
“Nominee Disclosure Information” shall have the meaning assigned in
Section 3.1(b).
 
“Person” shall mean a legal person, including any individual, corporation,
company, partnership, joint venture, association, joint-stock company, trust,
limited liability company or unincorporated association or any other entity or
organization, including a government or any agency or political subdivision
thereof, or any other entity of whatever nature.
 
“Preemptive Rights Expiration Date” shall have the meaning assigned in
Section 5.6.
 
“Preferred Stock” shall have the meaning assigned in the recitals hereto.
 
“Private Placement” shall have the meaning set forth in Section 5.2(b).
 
“Process Agent” shall have the meaning set forth in Section 9.12.
 
“Purchase Agreement” shall have the meaning assigned in the recitals hereto.
 
“Qualified Offering” shall mean a public or nonpublic offering of Covered
Securities for cash, and, for the avoidance of doubt, shall include all Covered
Securities issued in respect of such offering pursuant to the exercise of
preemptive rights.
 
“Registration Rights Agreement” shall mean the Registration Rights Agreement,
dated as of October 13, 2008, as amended by the amendment dated April 21, 2011.
 
“Related Agreements” shall mean the Purchase Agreement and Registration Rights
Agreement.
 
“SEC” shall mean the U.S. Securities and Exchange Commission.
 
“Securities” shall mean shares of Common Stock and Preferred Stock.
 
“Securities Act” shall mean the U.S. Securities Act of 1933, and any similar or
successor federal statute, and the rules and regulations promulgated thereunder,
all as amended, and as the same may be in effect from time to time.
 
“Standstill Period” shall have the meaning set forth in Section 3.4.
 
 
4

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“Subsidiary” shall mean, with respect to any Person, any other Person more than
fifty percent (50%) of the shares of the voting stock or other voting interests
of which are owned or controlled, or the ability to select or elect more than
fifty percent (50%) of the directors or similar managers is held, directly or
indirectly, by such first Person or one or more of its Subsidiaries or by such
first Person and one or more of its Subsidiaries.  A Subsidiary that is directly
or indirectly wholly owned by another Person except for directors’ qualifying
shares shall be deemed wholly owned for the purposes of this Agreement.
 
“Transaction Agreement Closing Date” shall mean the closing provided for in
Section 2.01 of the Transaction Agreement.
 
“Transfer” shall have the meaning set forth in Section 4.1.
 
ARTICLE II
REPRESENTATIONS AND WARRANTIES
 
Section 2.1 Representations and Warranties of the Company.   The Company
represents and warrants to the Investor as of the date hereof as follows:
 
(a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, and has
all requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the transactions
contemplated hereby.
 
(b) This Agreement and all transactions and obligations contemplated hereby have
been duly and validly authorized by all necessary action on the part of the
Company.
 
(c) This Agreement has been duly executed and delivered by the Company and,
assuming due authorization and valid execution and delivery by the Investor, is
a valid and legally binding obligation of the Company, enforceable against it in
accordance with its terms subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights.
 
Section 2.2 Representations and Warranties of the Investor.   The Investor
represents and warrants to the Company as of the date hereof as follows:
 
(a) The Investor has been duly incorporated and is validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the transactions
contemplated hereby.
 
(b) This Agreement and all transactions and obligations contemplated hereby have
been duly and validly authorized by all necessary action on the part of the
Investor.
 
(c) This Agreement has been duly executed and delivered by the Investor and,
assuming due authorization and valid execution and delivery by the Company, is a
valid and
 
 
5

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legally binding obligation of the Investor, enforceable against it in accordance
with its terms subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors’ rights.
 
ARTICLE III
BOARD REPRESENTATION AND VOTING; STANDSTILL PROVISIONS
 
Section 3.1 Board of Directors.  (a)  Until an Investor Rights Termination
Event, the Company shall take all lawful action to cause the number (specified
in subsection (e) of this Section 3.1) of the Investor’s senior officers or
directors designated by the Investor in writing to the Company (each, an
“Investor Nominee”) who satisfy any applicable regulatory requirements
applicable to directors or director nominees to the Board to be members of the
Board (each such Investor Nominee elected to the Board, an “Investor
Director”).  The Investor may designate one Investor Director to be appointed as
a member of such committees of the Board as the Investor may designate, subject
to any applicable legal or stock exchange requirements and except as necessary
to maintain best practices in corporate governance regarding such
appointment.  For the avoidance of doubt, the Company acknowledges that each
Investor Director shall be entitled to vote on all matters in his or her
discretion.  Moreover, the Company acknowledges that each Investor Director, in
his or her capacity as such, will have the same access as other directors to
management and other directors with respect to matters relating to the
operation, financial and all other policies of the Company and the ability to
participate in the processes by which those policies are made.  Without
limitation of the foregoing, each Investor Director shall have the same ability
as other directors to attend (in his or her capacity as a director) all meetings
of committees of the Board, including the Audit, Nominating/Governance,
Compensation Committees and the newly constituted Global Operations and
Technology Committee.  For purposes of this Section 3.1, Investor shall mean
Mitsubishi UFJ Financial Group, Inc., notwithstanding any Transfer to a
Controlled Affiliate.
 
(b) Until an Investor Rights Termination Event, at any annual or special meeting
of shareholders of the Company at which Directors are to be elected (and at
which a seat held by an Investor Director is subject to election), the Company
shall, provided the Investor shall have complied with the immediately succeeding
sentence of this paragraph (b), renominate each such Investor Director, or
nominate another Investor Nominee or other Nominees designated by the Investor
in writing to be elected to the Board, and shall use its best efforts to cause
such person(s) to be elected to such position.  The Investor shall notify the
Company of its proposed nominee(s) to the Board, in writing, no later than the
latest date on which stockholders of the Company may make nominations to the
Board in accordance with the bylaws of the Company, together with all
information concerning such nominee(s) reasonably requested by the Company, so
that the Company can comply with applicable disclosure rules (the “Nominee
Disclosure Information”); provided that in the event the Investor fails to
provide any such notice, the Investor Nominee(s) shall be the person(s) then
serving as the Investor Director(s) as long as the Investor provides the Nominee
Disclosure Information to the Company promptly upon request by the Company.
 
(c) In the event of the death, disability, resignation or removal of an Investor
Director, the Board will promptly elect to the Board an Investor Nominee to fill
the resulting
 
 
6

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vacancy, which such individual shall then be deemed an Investor Director for all
purposes hereunder.
 
(d) All obligations of the Company pursuant to this Section 3.1 shall terminate,
and the Investor shall cause the Investor Director(s) to resign from the Board,
immediately upon the occurrence of an Investor Rights Termination Event.
 
(e) Until the first time at which the Investor Percentage Interest has been less
than 20% for a period of six consecutive months, the Investor shall continue to
have the right to designate two Investor Nominees pursuant to Section 3.1(a).
From such date until an Investor Rights Termination Event, the Investor shall
have the right to designate one Investor Nominee pursuant to Section 3.1(a).
 
Section 3.2 Voting.  The Investor agrees to cause each share of Common Stock
Beneficially Owned by it that is entitled to vote in any election for Directors
to be present in person or represented by proxy at all meetings of stockholders
of the Company, so that all such shares shall be counted as present for
determining the presence of a quorum at such meetings.   The provisions of this
Section 3.2 shall not apply at any time that the Company is not in compliance
with its obligations under Section 3.1 or following the occurrence of an
Investor Rights Termination Event.
 
Section 3.3 Standstill Restrictions.   During the Standstill Period (as defined
in Section 3.4), the Investor shall not, and shall not permit any of its
Affiliates to, without the prior written consent of the Company:
 
(i)  
acquire, agree to acquire or make any public proposal to acquire, directly or
indirectly, Beneficial Ownership of any voting securities or assets of the
Company or its Subsidiaries, except (A) the acquisition of securities or assets
by the Investor or any of its wholly owned Subsidiaries from the Investor or any
such Subsidiary, (B) Beneficial Ownership resulting from the acquisition of
interests in any unrelated Person that has Beneficial Ownership of shares of
Common Stock, provided, in the case of this clause (B) that (1) the acquisition
of Beneficial Ownership of Common Stock was not the primary purpose of the
acquisition of interests in such unrelated Person, (2) the Investor or the
relevant Affiliate divests, or causes the unrelated Person to divest, any such
shares of Common Stock reasonably promptly in a commercially reasonable manner,
and (3) any such shares of Common Stock shall not be counted in any calculation
of the Investor’s Economic Interest Percentage, (C) pursuant to the exercise of
preemptive rights pursuant to Article V, or, prior to the time Investor first
takes an action described in Section 5.6(ii), purchases of Common Stock in the
open market up to a cap, which cap shall be an Investor Percentage Interest of
22.4% (provided that if such limitation would result in the Investor being
limited to an Economic Interest Percentage of less than 20%, then such
limitation shall instead be equal to the lesser of (x) an Economic Interest
Percentage of 20% and (y) an Investor Percentage

 
 
7

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Interest of 24.9%), or (D) on behalf of customers in the ordinary course of
their respective financial services businesses;

 
(ii)  
deposit any shares of Common Stock in a voting trust or similar arrangement or
subject any shares of Common Stock to any voting agreement, pooling arrangement
or similar arrangement, or grant any proxy with respect to any shares of Common
Stock;

 
(iii)  
publicly propose to enter into, directly or indirectly, any merger or other
business combination or similar transaction with, or change in control
transaction involving, the Company or its Subsidiaries;

 
(iv)  
make, or in any way join in, directly or indirectly, any “solicitation” of
“proxies” (as such terms are used in the proxy rules of the SEC) to vote any
securities of the Company or its Subsidiaries (it being understood that (A) the
Investor is entitled to exercise the voting rights with respect to the
Securities in its discretion (and without regard to the recommendation of the
Board or management of the Company), (B) the Investor may publicly propose that
that Board take actions that the Investor supports or refrain from taking
actions that the Investor opposes and (C) the Investor may vote in favor of
proposals made by other stockholders (and without regard to the recommendation
of the Board with respect thereto));

 
(v)  
[Reserved.]

 
(vi)  
seek a release of the restrictions contained in this Section 3.3, in any manner
that would require public disclosure thereof;

 
(vii)  
form, join or in any way participate in a “group” (within the meaning of Section
13(d)(3) of the Exchange Act) that, with respect to any securities of the
Company or its Subsidiaries, would be required under Section 13(d) of the
Exchange Act and the rules and regulations thereunder to file a Statement on
Schedule 13D with the SEC as a “person” (within the meaning of Section 13(d)(3)
of the Exchange Act); or

 
(viii)  
publicly disclose any plan or proposal with respect to the foregoing.

 
Notwithstanding anything to the contrary herein, the Company acknowledges that
the Investor may provide guidance and participate with respect to matters
relating to the Company’s business, including operational and financial
policies.  It is understood between the Company and Investor that (A) the
Investor is entitled to exercise the voting rights with respect to the
Securities in its discretion (and without regard to the recommendation of the
Board or management of the Company), (B) the Investor may privately or publicly
propose that the Board or the Company take actions that the Investor supports or
refrain from taking actions that the Investor opposes and (C) the Investor may
publicly state its position with regard to proposals made by other stockholders
and vote in favor of or against proposals made by other stockholders (and
without regard to the recommendation of the Board with respect thereto.
 
 
8

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The restrictions on the Investor contained in this Section 3.3 shall not apply
at any time that the Company is not in compliance with its obligations under
Section 3.1.
 
Section 3.4 Standstill Period.   “Standstill Period” shall mean the period from
the date hereof until the earlier of (i) October 13, 2013, and (ii) the
occurrence of an Investor Rights Termination Event; provided, however, that the
parties shall, prior to the expiration of the Standstill Period, discuss in good
faith whether to extend the Standstill Period (with no obligation to
extend).  In addition, the Standstill Period shall be suspended, and the
restrictions of Section 3.3 shall not apply, upon the failure of any Investor
Nominee to be elected to the Board within 60 calendar days following any annual
or special meeting of shareholders of the Company at which an Investor Nominee
stood for election but was nevertheless not elected, provided that the
Standstill Period shall resume and the restrictions of Section 3.3 shall apply,
from and after the date that such Investor Nominee (or an alternate designated
by the Investor) is elected or appointed to the Board.
 
Section 3.5 Cooperation.   The Company shall cooperate with the Investor to
provide such information as is necessary to and to take such action from time to
time as may be  necessary for the Investor to apply the equity method of
accounting for its investment in the Company.  Upon the Transaction Agreement
Closing, (i) the number of directors on the Board shall be increased by one and
(ii) the Board will elect to the Board a senior officer or director of the
Investor to be designated by the Investor in writing to the Company who
satisfies any applicable regulatory requirements applicable to directors or
director nominees to the Board to be a member of the Board and an Investor
Director hereunder.  So long as the Investor is entitled pursuant to this
Article III to designate two Investor Directors, the Company agrees to maintain
a Board having at least 14 members, provided that the size of the Board may
temporarily be less than 14 members for a reasonable period of time necessary to
fill any temporary vacancy on the Board.  In the event that the Company and the
Investor have not entered into the written agreement or agreements referred to
in Section 5.01(d)(i) of the Transaction Agreement, then the Company and the
Investor shall further cooperate with each other and use their respective
reasonable best efforts to enter such an agreement or agreements promptly
thereafter.  The Company and the Investor shall cooperate for the purpose of
complying with the disclosure and other regulatory requirements that will, or
will continue to, apply under Applicable Law (including the Exchange Act, the
Banking Act of Japan and the Financial Instruments and Exchange Law of Japan and
the rules and regulations promulgated thereunder).
 
ARTICLE IV
TRANSFER RESTRICTIONS
 
Section 4.1 Transfer Restrictions.  (a)  Prior to October 13, 2011, the Investor
shall not, within any period of three months, offer, sell, pledge or otherwise
transfer (“Transfer”)  Securities or Hedge its direct or indirect exposure to
Common Stock, in one transaction or a series of transactions involving
Securities, having an aggregate value exceeding $2.5 billion, in each case,
other than (i) to a Controlled Affiliate that agrees to be bound by the
provisions of this Agreement as if it were the Investor hereunder or (ii) as may
be required by order or decree of any Governmental Entity having jurisdiction
over the Investor or in the reasonable discretion of the Investor to comply with
any applicable statute, rule or regulation.  In the event that prior to October
13, 2011, any Person who was a transferee pursuant to clause (i) of the
preceding
 
 
9

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sentence ceases to be a Controlled Affiliate of Investor, then any prior
Transfer to such Person pursuant to clause (i) shall become null and void and
ownership and title to any such securities so Transferred shall revert to
Investor.  The Investor shall immediately notify the Company if it engages in
any of the transactions referred to in this Section 4.1.
 
(b) At any time during which Investor is permitted to Transfer any Securities,
the Investor shall not, without prior approval of the Board, knowingly Transfer
such Securities to any one Person (or group of related Persons) if such Transfer
would result in such Person (or group of related Persons) Beneficially Owning in
excess of 5% the then-outstanding shares of Common Stock.  The foregoing shall
not apply to Transfers (i) consisting only of block trades executed at
prevailing market prices obtainable at the time of such Transfer through brokers
in transactions on the NYSE, provided that the transferor does not know or have
reason to believe that such Transfer would result in such Person (or group of
related Persons) Beneficially Owning in excess of 5% of the then-outstanding
shares of Common Stock, or (ii) effected through widely distributed public
offerings.
 
(c) The Investor’s rights under this Agreement will not be transferable to any
transferee of any shares of Common Stock or Preferred Stock, other than a
transferee that is and remains a wholly owned Subsidiary of the Investor.
 
(d) Any certificates for Securities issued pursuant to the Purchase Agreement or
issued upon conversion or exchange of Securities or issued in respect of any
transfer of Securities shall bear a legend or legends (and appropriate
comparable notations or other arrangements will be made with respect to any
uncertificated shares) referencing restrictions on transfer of such shares under
the Securities Act and under this Agreement; provided, that the holder of any
certificate(s) bearing any such legend (or any uncertificated shares subject to
such notations or arrangements) shall be entitled to receive from the Company
new certificates for a like number of Securities not bearing such legend (or the
elimination or termination of such notations or arrangements) upon the request
of such holder and upon (x) such time as such restriction is no longer
applicable, and (y) delivery of an opinion of counsel to such holder, which
opinion is reasonably satisfactory in form and substance to the Company and its
counsel, that the restriction referenced in such legend (or such notations or
arrangements) is no longer required in order to ensure compliance with the
Securities Act.
 
(e) Nothing in this Section 4.1 (other than Section 4.1(b)) shall restrict
Investor from Transferring, and the Investor is hereby permitted to Transfer,
any Securities in order to reduce the number of Securities owned by it below 24%
of “a class of voting stock” of the Company, as calculated for purposes of the
Bank Holding Company Act of 1956, as amended (the “BHCA”).  If at any time the
Company reduces the number of shares of its Common Stock outstanding, it shall
use reasonable best efforts to notify the Investor promptly if the Investor
would own a number of Securities exceeding 24% of “a class of voting stock” of
the Company, as calculated for purposes of the BHCA.  For purposes of such
calculation, the Company shall be permitted to rely on the number of shares of
Common Stock reported as Beneficially Owned by the Investor in its most recent
Schedule 13D filing with the SEC.
 
 
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ARTICLE V
PREEMPTIVE RIGHTS
 
Section 5.1 Preemptive Rights.  If the Company offers to sell Covered Securities
in a Qualified Offering, the Investor shall be afforded the opportunity to
acquire from the Company, for the same price and on the same terms as such
Covered Securities are offered, in the aggregate up to the amount of Covered
Securities required to permit the Investor’s Investor Percentage Interest
immediately after giving effect to the issuance of such Covered Securities
(including the issuance of Covered Securities pursuant to this Section 5.1) to
be equal to the Investor’s Investor Percentage Interest immediately prior to the
issuance of any such Covered Securities, but only to the extent that the
Investor Percentage Interest does not as a consequence exceed 22.4% (provided
that if such limitation would result in the Investor being limited to an
Economic Interest Percentage of less than 20%, then such limitation shall
instead be equal to the lesser of (x) an Economic Interest Percentage of 20% and
(y) an Investor Percentage Interest of 24.9%).  For the avoidance of doubt, in
the event that the issuance of Covered Securities in a Qualified Offering
involves the purchase of a package of securities that includes Covered
Securities and other securities in the same Qualified Offering, Investor shall
have the right to acquire a pro rata portion of such other securities, together
with a pro rata portion of such Covered Securities, at the price and on the
terms that such other securities are purchased by the other purchaser or
purchasers of such Covered Securities and other securities and, if the Investor
chooses to acquire Covered Securities pursuant to this Section 5.1, it shall
also acquire a pro rata portion of such other securities at such price and on
such terms.
 
Section 5.2 Notice.  (a)  In the event the Company intends to make a Qualified
Offering of Covered Securities that is an underwritten public offering or a
private offering made to Qualified Institutional Buyers (as such term is defined
in Rule 144A under the Securities Act) for resale pursuant to Rule 144A under
the Securities Act, the Company shall give the Investor written notice of its
intention (including, in the case of a registered public offering and to the
extent possible, a copy of the prospectus included in the registration statement
filed in respect of such offering), describing, to the extent then known, the
anticipated amount of securities, price and other material terms upon which the
Company proposes to offer the same.  The Investor shall have 24 hours (which
shall not include any hours during any day that is not a Business Day) from the
date and time of receipt of any such notice to notify the Company in writing
that it intends to exercise such preemptive purchase rights and as to the amount
of Covered Securities the Investor desires to purchase, up to the maximum amount
calculated pursuant to Section 5.1 (the “Designated Securities”).  Such notice
shall constitute a non-binding indication of interest of Investor to purchase
the Designated Securities so specified at the range of prices and other terms
set forth in the Company’s notice to it.  The failure to respond during such
24-hour period shall constitute a waiver of preemptive rights in respect of such
offering.  To the extent the Company shall give the Investor notice of any such
offer prior to the public announcement thereof, the Investor shall agree to
confidentiality and restriction on trading terms reasonably acceptable to the
Company.  The failure of the Investor to agree to such terms within 24 hours
(which shall not include any hours during any day that is not a Business Day)
after the date and time of receipt of the Company’s notice as described in this
clause shall constitute a waiver of the Investor’s preemptive rights in respect
of such offering.
 
 
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(b) If the Company proposes to make a Qualified Offering of Covered Securities
that is not an underwritten public offering or Rule 144A offering (a “Private
Placement”), the Company shall give the Investor written notice of its
intention, describing, to the extent then known, the anticipated amount of
securities, price and other material terms upon which the Company proposes to
offer the same.  The Investor shall have 48 hours (which shall not include any
hours during any day that is not a Business Day) from the date and time of
receipt of the notice required by the immediately preceding sentence to notify
the Company in writing that it intends to exercise such preemptive purchase
rights and as to the amount of Designated Securities the Investor desires to
purchase, up to the maximum amount calculated pursuant to Section 5.1.  Such
notice shall constitute a non-binding indication of interest of the Investor to
purchase the amount of Designated Securities so specified (or a proportionately
lesser amount if the amount of Covered Securities to be offered in such Private
Placement is subsequently reduced) upon the price and other terms set forth in
the Company’s notice to it.  The failure of the Investor to respond during the
48-hour period (which shall not include any hours during any day that is not a
Business Day) referred to in the second preceding sentence shall constitute a
waiver of the preemptive rights in respect of such offering.  To the extent the
Company shall give the Investor notice of any such offer prior to the public
announcement thereof, the Investor shall agree to confidentiality and
restriction on trading terms reasonably acceptable to the Company.  The failure
of the Investor to agree to such terms within 48 hours (which shall not include
any hours during any day that is not a Business Day) after the date and time of
receipt of the Company’s notice as described in this clause shall constitute a
waiver of the Investor’s preemptive rights in respect of such offering.
 
Section 5.3 Purchase Mechanism.  (a)  If the Investor exercises its preemptive
purchase rights provided in Section 5.2(a), the Company shall offer the
Investor, if such underwritten public offering or Rule 144A offering is
consummated, the Designated Securities (as adjusted to reflect the actual size
of such offering when priced) at the same price as the Covered Securities are
offered to the investors in such offering and shall provide written notice of
such price to the Investor as soon as practicable prior to such
consummation.  Contemporaneously with the execution of any underwriting
agreement or purchase agreement entered into between the Company and the
underwriters or initial purchasers of such underwritten public offering or Rule
144A offering, the Investor shall, if it continues to wish to exercise its
preemptive rights with respect to such offering, enter into an instrument in
form and substance reasonably satisfactory to the Company acknowledging the
Investor’s binding obligation to purchase the Designated Securities to be
acquired by it and containing representations, warranties and agreements of the
Investor that are customary in private placement transactions and, in any event,
no less favorable to the Investor than any underwriting or purchase agreement
entered into by the Company in connection with such offering, and the Investor’s
failure to enter into such an instrument at or prior to such time shall
constitute a waiver of preemptive rights in respect of such offering.  Any
offers and sales pursuant to this Article V in the context of a registered
public offering shall be also conditioned on reasonably acceptable
representations and warranties of the Investor regarding its status as the type
of offeree to whom a private sale can be made concurrently with a registered
offering in compliance with applicable securities laws.
 
(b) If the Investor exercises its preemptive rights provided in Section 5.2(b),
the closing of the purchase of the Covered Securities with respect to which such
right has been
 
 
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exercised shall be conditioned on the consummation of the Private Placement
giving rise to such preemptive purchase rights and shall take place
simultaneously with the closing of the Private Placement or on such other date
as the Company and the Investor shall agree in writing; provided that the actual
amount of Covered Securities to be sold to the Investor pursuant to its exercise
of preemptive rights hereunder shall be reduced if the aggregate amount of
Covered Securities sold in the Private Placement is reduced and, at the option
of the Investor (to be exercised by delivery of written notice to the Company
within five Business Days of receipt of notice of such increase), shall be
increased if such aggregate amount of Covered Securities sold in the Private
Placement is increased.  In connection with its purchase of Designated
Securities, Investor shall, if it continues to wish to exercise its preemptive
rights with respect to such offering, execute an agreement containing
representations, warranties and agreements of Investor that are substantially
similar in all material respects to the agreements executed by other purchasers
in such Private Placement.
 
Section 5.4 Cooperation.  The Company and the Investor shall cooperate in good
faith to facilitate the exercise of the Investor’s preemptive rights hereunder,
including securing any required approvals or consents, in a manner that does not
jeopardize the timing, marketing, pricing or execution of any offering of the
Company’s securities.  In the event that within 60 days of the date hereof the
Company proposes to offer or sell securities in a single transaction or series
of transactions for aggregate proceeds in excess of $500,000,000, the Company
shall consult with Investor concerning such transaction or transactions prior to
undertaking such transaction.
 
Section 5.5 Limitation of Rights.  Notwithstanding the above, nothing set forth
in this Article V shall confer upon the Investor the right to purchase any
securities of the Company other than Designated Securities.
 
Section 5.6 Termination of Preemptive Rights.  The preemptive right to purchase
Covered Securities granted by this Article V shall not be available for any
offering that commences at any time after (i) October 13, 2013 (the “Preemptive
Rights Expiration Date”) or (ii) the date on which the Investor Transfers any of
the Securities that it acquired on the Closing Date or the Common Stock issued
upon conversion of any Securities, or Hedges its exposure to the Common Stock,
except as contemplated by clause (i) or (ii) of the first sentence of Section
4.1(a) and Section 4.1(e); provided, however, that the parties shall, no later
than 3 months prior to the Preemptive Rights Expiration Date, discuss in good
faith whether to extend the Preemptive Rights Expiration Date (with no
obligation to extend).
 
ARTICLE VI
[RESERVED]
 
ARTICLE VII
EFFECTIVENESS AND TERMINATION
 
Section 7.1 Termination.  Other than the termination provisions applicable to
particular Sections of this Agreement that are specifically provided elsewhere
in this Agreement, this Agreement shall terminate (a) upon the mutual written
agreement of the
 
 
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Company and the Investor or (b) at such time as the Investor no longer
Beneficially Owns any Securities.
 
ARTICLE VIII
CONFIDENTIALITY
 
Section 8.1 Company Proprietary Information.  (a)  The Investor hereby agrees
to, and to cause its employees, representatives and Controlled Affiliates to,
and shall instruct its Affiliates that are not Controlled Affiliates to, keep
confidential the Company Proprietary Information and to utilize the Company
Proprietary Information only for purposes related to the purpose for which such
information was disclosed.  “Company Proprietary Information” shall mean any and
all confidential information of the Company, including without limitation
non-public information relating to the Company’s finances and results,
technology, trade secrets, know-how, customers, business plans, marketing
activities, financial data and other business affairs that is disclosed by the
Company to the Investor Directors, the Investor (or its Affiliates and
representatives) or is learned by an Investor Director while acting in his or
her capacity as such; provided, however, that “Company Proprietary Information”
does not include any information that:  (i) is, or subsequently becomes,
publicly available without breach of these confidentiality provisions;  or (ii)
is or becomes known or available to the Investor from a source other than the
Company that, to the receiving party’s knowledge, is not prohibited from
disclosing such Company Proprietary Information to the receiving party by a
contractual, legal or fiduciary obligation owed by such other third party to the
Company.
 
(b) In the event that the Investor or any of its Affiliates or representatives
is requested pursuant to, or required by, applicable law, regulation or legal
process to disclose any Company Proprietary Information, then before
substantively responding to any such request or requirement, the Investor will
provide the Company with prompt written notice of any such request or
requirement so that the Company may seek a protective order or other appropriate
remedy, or both, or waive compliance with the provisions of this Section 8.1 or
other appropriate remedy, or if the Company so directs, the Investor will
exercise its own reasonable best efforts to assist the Company in obtaining a
protective order or other appropriate remedy at the Company’s expense.  If,
failing the entry of a protective order or other appropriate remedy or the
receipt of a waiver hereunder, disclosure of any Company Proprietary Information
is, in the opinion of the Investor’s counsel, required, the Investor may furnish
only that portion of the Company Proprietary Information which in the opinion of
the Investor’s counsel is required to be so furnished pursuant to law,
regulation or legal process.  In any event, the Investor will cooperate fully
with any action by the Company to obtain an appropriate protective order or
other reliable assurance that confidential treatment will be accorded the
Company Proprietary Information.
 
Section 8.2 Investor Proprietary Information.  (a)  The Company hereby agrees
to, and to cause its employees, representatives and Controlled Affiliates to,
and shall instruct its Affiliates that are not Controlled Affiliates to, keep
confidential the Investor Proprietary Information and to utilize the Investor
Proprietary Information only for purposes related to the purpose for which such
information was disclosed.  “Investor Proprietary Information” shall mean any
and all confidential information of the Investor, including without limitation
non-public information relating to the Investor’s finances and results,
technology, trade secrets, know-how, customers, business plans, marketing
activities, financial data and other business
 
 
14

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affairs that is disclosed by the Investor to the Company (or its Affiliates and
representatives) in connection with the Investor’s investment in the Company or
the Strategic Alliance as defined in the Purchase Agreement; provided, however,
that “Investor Proprietary Information” does not include any information
that:  (i) is, or subsequently becomes, publicly available without breach of
these confidentiality provisions;  or (ii) is or becomes known or available to
the Company from a source other than the Investor that, to the receiving party’s
knowledge, is not prohibited from disclosing such Investor Proprietary
Information to the receiving party by a contractual, legal or fiduciary
obligation owed by such other third party to the Investor.
 
(b) In the event that the Company or any of its Affiliates or representatives is
requested pursuant to, or required by, applicable law, regulation or legal
process to disclose any Investor Proprietary Information, then before
substantively responding to any such request or requirement, the Company will
provide the Investor with prompt written notice of any such request or
requirement so that the Investor may seek a protective order or other
appropriate remedy, or both, or waive compliance with the provisions of this
Section 8.2 or other appropriate remedy, or if the Investor so directs, the
Company will exercise its own reasonable best efforts to assist the Investor in
obtaining a protective order or other appropriate remedy at the Investor’s
expense.  If, failing the entry of a protective order or other appropriate
remedy or the receipt of a waiver hereunder, disclosure of any Investor
Proprietary Information is, in the opinion of the Company’s counsel, required,
the Company may furnish only that portion of the Investor Proprietary
Information which in the opinion of the Company’s counsel is required to be so
furnished pursuant to law, regulation or legal process.  In any event, the
Company will cooperate fully with any action by the Investor to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Investor Proprietary Information.
 
ARTICLE IX

 
MISCELLANEOUS
 
Section 9.1 Successors and Assigns.  Except as and to the extent set forth in
Section 4.1(a), neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto, in whole
or in part (whether by operation of law or otherwise), without the prior written
consent of each of the other parties.  Notwithstanding the foregoing, the
Investor may assign any of its rights or obligations under this Agreement to any
direct or indirect wholly owned Subsidiary of the Investor, but the assignor
shall remain liable for the assignee’s nonperformance of any such
obligations.  Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.  Any attempted assignment in violation of
this Section 9.1 shall be void.
 
Section 9.2 Amendments; Waiver.  This Agreement may be amended only by an
agreement in writing executed by the Company and the Investor.  Any party may
waive in whole or in part any benefit or right provided to it under this
Agreement, such waiver being effective only if contained in a writing executed
by the waiving party.  No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon breach thereof shall constitute
a
 
 
15

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waiver of any such breach or of any other covenant, duty, agreement or
condition, nor shall any delay or omission of any party to exercise any right
hereunder in any manner impair the exercise of any such right accruing to it
thereafter.
 
Section 9.3 Notices.  Except as otherwise provided in this Agreement, all
notices, requests, claims, demands, waivers and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
by hand or overnight courier service, or when received by facsimile transmission
or electronic mail transmission if promptly confirmed (in the case of electronic
mail transmission, by means such as by the “return receipt requested” function,
return electronic mail or other written acknowledgment by the intended
recipient), as follows:
 
 
If to the Company:

 
 
 
Morgan Stanley

 
Attention:  Chief Financial Officer

 
1585 Broadway

 
New York, NY 10036

 
E-mail:  ruth.porat@morganstanley.com

 
 
 
with copies to:

 
 
Davis Polk & Wardwell LLP

 
 
Attention:         Thomas J. Reid

 
Marc O. Williams

 
450 Lexington Avenue
New York, NY  10017
Fax:  (212) 701-5800
E-mail: tom.reid@davispolk.com

 
marc.williams@davispolk.com

 
 
If to the Investor:

 
 
Mitsubishi UFJ Financial Group, Inc.

 
Attention:
Chief Manager

 
Strategic Alliance Office

 
Corporate Planning Division

 
7-1, Marunouchi 2-chome

 
Chiyoda-ku, Tokyo 100-8388, Japan

 
Fax:
+81 (3) 3240 5324

 
E-mail:
Tetsuya_Niimi@hd.mufg.jp

 
 
with copies to:

 
 
Sullivan & Cromwell LLP

 
 
16

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Attention:
Donald J. Toumey

 
Keiji Hatano

 
125 Broad Street

 
New York, NY  10004

 
Fax:  (212) 558-3588

 
E-mail:
toumeyd@sullcrom.com

 
hatanok@sullcrom.com

 
or to such other address, facsimile number or telephone as either party may,
from time to time, designate in a written notice given in a like manner.
 
Section 9.4 Governing Law.  This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware applicable to
contracts executed in and to be performed entirely within such State, without
giving effect to the conflicts of laws principles thereof that would govern,
construe or enforce the Agreement under laws other than the State of Delaware.
 
Section 9.5 Submission to Jurisdiction.  The Investor irrevocably submits to the
non-exclusive jurisdiction of any Delaware State or United States Federal court
sitting in the County of New Castle, Delaware over any suit, action or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.  The Investor irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such suit, action or proceeding brought in such a court and any
claim that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND
(iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT  BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.5.
 
Section 9.6 Headings.  The descriptive headings of the several sections in this
Agreement are for convenience only and do not constitute a part of this
Agreement and shall not be deemed to limit or affect in any way the meaning or
interpretation of this Agreement.
 
Section 9.7 Entire Agreement.  This Agreement, the Related Agreements and the
schedules and exhibits attached to any such documents constitute the entire
agreement between the Company and the Investor with respect to the subject
matter hereof.  This
 
 
17

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Agreement and the Related Agreements supersede all prior agreements with respect
to the subject matter hereof.
 
Section 9.8 Severability.  If any term or provision of this Agreement or any
application thereof shall be declared or held invalid, illegal or unenforceable,
in whole or in part, whether generally or in any particular jurisdiction, such
provision shall be deemed amended to the extent, but only to the extent,
necessary to cure such invalidity, illegality or unenforceability, and the
validity, legality and enforceability of the remaining provisions, both
generally and in every other jurisdiction, shall not in any way be affected or
impaired thereby.
 
Section 9.9 Counterparts.  This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
 
Section 9.10 Interpretation.  When a reference is made in this Agreement to an
Article, Section, Exhibit or Schedule, such reference is to an Article or
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated.  The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.  Whenever the words “include,” “includes” and
“including” are used in this Agreement, they are deemed to be followed by the
words “without limitation.”  For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, (a) the
terms defined include the plural as well as the singular, (b) all accounting
terms not otherwise defined herein have the meanings assigned under generally
accepted accounting principles in the United States, and (c) the words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other
subdivision.
 
Section 9.11 Specific Performance.  The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement.
 
Section 9.12 Process Agent.  The Investor irrevocably appoints MUFG North
America, 1251 Avenue of the Americas, New York, NY 10020-1104, to act as its
agent for service of process and any other documents in proceedings in the State
of New York or the State of Delaware or any other proceedings in connection with
this Agreement.
 
Section 9.13 No Third Party Beneficiaries.  Except for the transferees
contemplated by clause (i) of the second sentence of Section 4.1(a), nothing in
this Agreement, expressed or implied, is intended to confer upon any Person,
other than the parties hereto or their respective successors, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
 
 
18

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective authorized officers as of the date set forth at the head of
this Agreement.
 
 
MORGAN STANLEY
       
By:
     
Name:
     
Title:
   

MITSUBISHI UFJ FINANCIAL GROUP, INC.
       
By:
     
Name:
     
Title:
   

 
 
[Signature Page to Amended and Restated Investor Agreement]
 
 
 
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Exhibit B

Form of Corporate Counsel Opinion (New Shares)

[Date]
 
Mitsubishi UFJ Financial Group, Inc.
Attention: Chief Manager, Corporate Planning Division
7-1, Marunouchi 2-chome
Chiyoda-ku, Tokyo

Ladies and Gentlemen:

We have acted as special counsel for Morgan Stanley, a Delaware corporation (the
“Company”), in connection with the Transaction Agreement between Mitsubish UFJ
Financial Group, Inc. (“MUFG”) and the Company dated as of April 21, 2011 (the
“Transaction Agreement”) and an amendment to the Investor Agreement between MUFG
and the Company dated as of [_______], 2011 (together with the Transaction
Agreement, the “Transaction Documents”).  The Transaction Agreement sets forth
the terms and conditions under which MUFG will convert all the shares it holds
of the Company’s 10% Series B Non-Cumulative Non-Voting Perpetual Convertible
Stock, par value $0.01 per share (the “Series B Securities”), into shares of
common stock, par value $.01 per share, of the Company (the “Underlying
Securities”).  The Series B Securities were issued pursuant to the provisions of
the Amended Certificate of Designations of Preferences and Rights dated as of
October 13, 2008.
 
We have examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary or advisable for the
purpose of rendering this opinion.
 
Based upon the foregoing, we are of the opinion that:
 
 
1.
The Company has been duly incorporated, is validly existing as a corporation in
good standing under the laws of the State of Delaware, and has corporate power
and authority to own its property, conduct its business and enter into and
perform its obligations pursuant to the Transaction Documents.

 
2.
Each of the Transaction Documents has been duly authorized, executed and
delivered by the Company and each of the Transaction Documents is a valid and
binding agreement of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting

 
 
 

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creditors’ rights generally, concepts of reasonableness and equitable principles
of general applicability.

 
 
3.
The Underlying Securities initially issuable upon conversion of the Series B
Securities have been duly authorized and reserved and, when issued upon
conversion of the Series B Securities in accordance with the terms of the Series
B Securities, will be validly issued, fully paid and non-assessable, and the
issuance of such shares will not be subject to any preemptive rights under the
General Corporation Law of the State of Delaware or the certificate of
incorporation or the bylaws of the Company.

 
4.
Assuming the accuracy of the representations, warranties and agreements of the
Company and MUFG in the Transaction Agreement, it is not necessary in connection
with the issuance and delivery of the Underlying Securities to MUFG, in the
manner provided for in the Transaction Agreement, to register the Underlying
Securities under the Securities Act of 1933, as amended, it being understood
that no opinion is expressed as to any subsequent offer or resale of any
Underlying Security.

 
5.
The execution and delivery by the Company of each of the Transaction Documents,
and the performance by the Company of its obligations thereunder, do not
contravene any provision of the certificate of incorporation or the bylaws of
the Company.

In rendering the opinions in paragraph (2) above, we have assumed that (i) the
execution, delivery and performance by each party thereto of each Transaction
Document to which it is a party, (a) are within its corporate powers, (b) do not
contravene, or constitute a default under, the certificate of incorporation or
bylaws or other constitutive documents of such party, (c) require no action by
or in respect of, or filing with, any governmental body, agency or official and
(d) do not contravene, or constitute a default under, any provision of
applicable law or regulation or any judgment, injunction, order or decree or any
agreement or other instrument binding upon such party, provided that we make no
such assumption to the extent that we have specifically opined as to such
matters with respect to the Company, and (ii) each Transaction Document is a
valid, binding and enforceable agreement of MUFG.
 
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 General Corporation Law of the
State of Delaware and the federal laws of the United States of America, except
that we express no opinion as to any law, rule or regulation that is applicable
to the Company, the Transaction Documents, the Series B Securities or such
transactions solely because such law, rule or regulation is part of a
 
 
 

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

 
 
regulatory regime applicable to either party to the Transaction Documents or any
of its affiliates due to the specific assets or business of such party or such
affiliate.
 
This opinion is rendered solely to you in connection with the Transaction
Agreement.  This opinion may not be relied upon by you for any other purpose or
relied upon by any other person or furnished to any other person without our
prior written consent.
 
Very truly yours,
 
 
 

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Exhibit C

Form of Corporate Counsel Opinion (Series D Preferred Shares)

[Date]
 
Mitsubishi UFJ Financial Group, Inc.
Attention: Chief Manager, Corporate Planning Division
7-1, Marunouchi 2-chome
Chiyoda-ku, Tokyo

Ladies and Gentlemen:

We have acted as special counsel for Morgan Stanley, a Delaware corporation (the
“Company”), in connection with the Transaction Agreement between Mitsubish UFJ
Financial Group, Inc. (“MUFG”) and the Company dated as of April 21, 2011 (the
“Transaction Agreement”).  The Transaction Agreement sets forth the terms and
conditions under which MUFG will convert all the shares it holds of the
Company’s 10% Series B Non-Cumulative Non-Voting Perpetual Convertible Stock,
par value $0.01 per share (the “Series B Securities”), into shares of common
stock, par value $.01 per share, of the Company (the “Underlying
Securities”).  The Series B Securities were issued pursuant to the provisions of
the Amended Certificate of Designations of Preferences and Rights dated as of
October 13, 2008.  MUFG has the right under the terms and conditions set forth
in the Transaction Agreement to exchange the Series B Securities it holds for an
equal number of shares of the Company’s 10% Series D Non-Cumulative Non-Voting
Perpetual Convertible Stock, par value $0.01 per share (the “Series D
Securities”).  If issued, the Series D Securities will be convertible into the
Underlying Securities on the terms and conditions set forth in the Transaction
Agreement and the form of Certificate of Designations attached as Exhibit D to
the Transaction Agreement.
 
We have examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary or advisable for the
purpose of rendering this opinion.
 
Based upon the foregoing, we are of the opinion that:
 
 
1.
The Company has been duly incorporated, is validly existing as a corporation in
good standing under the laws of the State of Delaware, and has corporate power
and authority to own its property and conduct its business.

 
2.
The Series D Securities have been duly authorized and, when issued and delivered
to MUFG in exchange for the Series B

 
 
 

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Securities it holds pursuant to the Transaction Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such shares will not
be subject to any preemptive rights under the General Corporation Law of the
State of Delaware or the certificate of incorporation or the bylaws of the
Company.

 
 
3.
The Underlying Securities initially issuable upon conversion of the Series D
Securities have been duly authorized and reserved and, when issued upon
conversion of the Series D Securities in accordance with the terms of the Series
D Securities, will be validly issued, fully paid and non-assessable, and the
issuance of such shares will not be subject to any preemptive rights under the
General Corporation Law of the State of Delaware or the certificate of
incorporation or the bylaws of the Company.

 
4.
Assuming the accuracy of the representations, warranties and agreements of the
Company and MUFG in the Transaction Agreement, it is not necessary in connection
with the issuance and delivery of the Series D Securities to MUFG, in the manner
provided for in the Transaction Agreement, to register the Series D Securities
under the Securities Act of 1933, as amended, it being understood that no
opinion is expressed as to any subsequent offer or resale of any Series D
Security.

 
5.
Assuming the accuracy of the representations, warranties and agreements of the
Company and MUFG in the Transaction Agreement, it is not necessary in connection
with the issuance and delivery of the Underlying Securities to MUFG upon
conversion of the Series D Securities, in accordance with the terms of the
Series D Securities, to register the Underlying Securities under the Securities
Act of 1933, as amended, it being understood that no opinion is expressed as to
any subsequent offer or resale of any Underlying Security.

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 General Corporation Law of the
State of Delaware and the federal laws of the United States of America, except
that we express no opinion as to any law, rule or regulation that is applicable
to the Company, the Transaction Agreement, the Series B Securities, the Series D
Securities or such transactions solely because such law, rule or regulation is
part of a regulatory regime applicable to either party to the Transaction
Agreement or any of its affiliates due to the specific assets or business of
such party or such affiliate.
 
This opinion is rendered solely to you in connection with the Transaction
Agreement.  This opinion may not be relied upon by you for any other purpose or
 
 
 

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relied upon by any other person or furnished to any other person without our
prior written consent.
 
Very truly yours,
 
 
 

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Exhibit D

Form of Certificate of Designations of Preferences and Rights of the 10% Series
D Non-Cumulative Non-Voting Perpetual
Convertible Preferred Stock, par value $0.01 per share
 
 
 

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CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS
OF THE
10% SERIES D NON-CUMULATIVE NON-VOTING PERPETUAL
CONVERTIBLE PREFERRED STOCK
($1,000 LIQUIDATION PREFERENCE PER SHARE)
 
OF
 
MORGAN STANLEY
 
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
 
MORGAN STANLEY, a Delaware corporation (the “Corporation”), DOES HEREBY CERTIFY
that, pursuant to resolutions of the Board of Directors of the Corporation
adopted on April 20, 2011, the creation of Series D Non-Cumulative Non-Voting
Perpetual Convertible Preferred Stock, par value $0.01 per share, liquidation
preference $1,000 per share (“Series D”), of the Corporation was authorized and
the designation, preferences, privileges, voting rights, and other special
rights and qualifications, limitations and restrictions of the Series D, in
addition to those set forth in the Certificate of Incorporation and Bylaws of
the Corporation, are fixed as follows:
 
1.           Designation.  The distinctive serial designation of such series of
preferred stock is “Series D Non-Cumulative Non-Voting Perpetual Convertible
Preferred Stock.”  Each share of Series D shall be identical in all respects to
every other share of Series D, except as to the respective dates from which
dividends thereon shall accrue, to the extent such dates may differ as permitted
pursuant to Section 3 below.
 
2.           Number of Shares.  The authorized number of shares of Series D
shall be 7,839,209.  Shares of Series D that are purchased or otherwise acquired
by the Corporation, or converted into Common Stock or another series of
Preferred Stock, shall be cancelled and shall revert to authorized but unissued
shares of Preferred Stock provided that this Section 2 shall not apply to any
purchase or other acquisition of shares of Series D by any Subsidiary of the
Corporation.
 
3.           Dividends.
 
(a)           Rate.  Holders of shares of Series D shall be entitled to receive,
only when, as and if declared by the Board of Directors or a duly authorized
committee thereof out of funds of the Corporation legally available for payment,
non-cumulative cash dividends on the liquidation preference of $1,000 per share
at a rate per annum equal to 10%.  Declared dividends on the Series D shall be
payable from and including the date (the “Dividend Accrual Date”) that is the
Dividend Payment Date (as such term is defined in the Amended Certificate of
Designations of Preferences and Rights (the “Series B CoD”) of the Corporation’s
10% Series B Non-Cumulative Non-Voting Perpetual Convertible Preferred Stock)
immediately preceding the Issue Date; provided that if the Issue Date occurs
after a Dividend Record Date (as defined in the
 
 
 

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Series B CoD) and on or prior to the immediately succeeding Dividend Payment
Date (as defined in the Series B CoD), the “Dividend Accrual Date” shall be such
immediately succeeding Dividend Payment Date.  Declared dividends shall be
payable quarterly, in arrears, on each January 15, April 15, July 15 and October
15 (each such date a “Dividend Payment Date”), commencing on the first such date
after the Issue Date, unless the Issue Date occurs after a Dividend Record Date
(as defined in the Series B CoD) and on or prior to the immediately succeeding
Dividend Payment Date (as defined in the Series B CoD), in which case declared
dividends shall be payable, in arrears, commencing on the second such Dividend
Payment Date after the Issue Date.  If any date on which dividends would
otherwise be payable shall not be a Business Day (as defined below), then the
date of payment of dividends need not be made on such date, but such payment of
dividends may be made on the next succeeding day that is a Business Day with the
same force and effect as if made on the Dividend Payment Date, and no additional
dividends shall be payable nor shall interest accrue on the amount payable from
and after such Dividend Payment Date to the next succeeding Business
Day.  “Business Day” means any day that is not a Saturday or Sunday and that, in
New York City, is not a day on which banking institutions generally are
authorized or obligated by law or executive order to be closed.
 
Dividends on the Series D shall not be cumulative; Holders of Series D shall not
be entitled to receive any dividends not declared by the Board of Directors or a
duly authorized committee thereof and no interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend not so
declared.  Accordingly, if the Board of Directors (or a duly authorized
committee thereof) does not declare a dividend on the Series D payable in
respect of any Dividend Period before the related Dividend Payment Date, such
dividend will not accrue and the Corporation will have no obligation to pay a
dividend for that Dividend Period on that Dividend Payment Date or at any future
time, whether or not dividends on the Series D are declared for any future
Dividend Period.  Declared and unpaid dividends shall not bear interest.
 
Dividends that are payable on the Series D on any Dividend Payment Date will be
payable to holders of record of Series D as they appear on the stock register of
the Corporation on the applicable Dividend Record Date, which shall be the 15th
calendar day before such Dividend Payment Date or such other record date fixed
by the Board of Directors or a duly authorized committee of the Board of
Directors that is not more than 60 nor less than 10 days prior to such Dividend
Payment Date (each, a “Dividend Record Date”).  Any such day that is a Dividend
Record Date shall be a Dividend Record Date whether or not such day is a
Business Day.
 
The term “Dividend Period” means the period from and including each Dividend
Payment Date to but excluding the next succeeding Dividend Payment Date (other
than the initial Dividend Period, which shall commence on and include the
Dividend Accrual Date and shall end on but exclude the next Dividend Payment
Date).  Dividends payable on the Series D shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
 
(b)           Priority of Dividends. The Series D will rank (i) senior to the
Common Stock (as defined below) and any class or series of the Corporation’s
capital
 
 
 
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stock expressly stated to be junior to the Series D, (ii) junior to any class or
series of the Corporation’s capital stock expressly stated to be senior to the
Series D (issued with the requisite consent of the Holders of the Series D, if
required) and (iii) at least equally with each other class or series of
Preferred Stock (as defined below) that the Corporation may issue with respect
to the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up of the Corporation.  So long as any share of Series D
remains outstanding, no dividend or distribution shall be paid or declared on
Junior Stock, and no Junior Stock shall be purchased, redeemed or otherwise
acquired for consideration by the Corporation, directly or indirectly, during a
Dividend Period, unless the full dividend for the latest completed Dividend
Period on all outstanding shares of Series D has been declared and paid (or
declared and a sum sufficient for the payment thereof has been set aside). The
foregoing limitation shall not apply to (i) repurchases, redemptions or other
acquisitions of shares of Junior Stock in connection with (1) any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants or (2) a dividend
reinvestment or stockholder stock purchase plan; (ii) an exchange, redemption,
reclassification or conversion of any class or series of Junior Stock, or any
junior stock of a Subsidiary of the Corporation, for any class or series of
Junior Stock; (iii) the purchase of fractional interests in shares of Junior
Stock under the conversion or exchange provisions of Junior Stock or the
security being converted or exchanged; (iv) any declaration of a dividend in
connection with any stockholders’ rights plan, or the issuance of rights, stock
or other property under any stockholders’ rights plan, or the redemption or
repurchase of rights pursuant to the plan; or (v) 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 equal or junior to
that stock.  In addition, the foregoing limitation shall not restrict the
ability of Morgan Stanley & Co. Incorporated, or any other affiliate of the
Corporation, to engage in any market-making transactions in Junior Stock in the
ordinary course of business.
 
When dividends are not paid (or declared and a sum sufficient for payment
thereof set aside) on any Dividend Payment Date (or, in the case of Parity Stock
having dividend payment dates different from the Dividend Payment Dates, on a
dividend payment date falling within a related Dividend Period) in full upon the
Series D and any shares of Parity Stock, all dividends declared on the Series D
and all such Parity Stock and payable on such Dividend Payment Date (or, in the
case of Parity Stock having dividend payment dates different from the Dividend
Payment Dates, on a dividend payment date falling within the related Dividend
Period) shall be declared pro rata so that the respective amounts of such
dividends shall bear the same ratio to each other as all accrued but unpaid
dividends per share on the Series D and all Parity Stock payable on such
Dividend Payment Date (or, in the case of Parity Stock having dividend payment
dates different from the Dividend Payment Dates, on a dividend payment date
falling within the related Dividend Period) bear to each other.
 
Subject to the foregoing, dividends (payable in cash, securities or other
property) may be determined by the Board of Directors or a duly authorized
committee of the Board of Directors and may be declared and paid on the Common
Stock and any other stock ranking, as to dividends, equally with or junior to
the Series D, from time to time out of any funds legally available for such
payment, and the Series D shall not be entitled to participate in any such
dividends.
 
 
 
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4.           Liquidation Rights.
 
(a)           Voluntary or Involuntary Liquidation. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, Holders of Series D shall be entitled to receive out of the
assets of the Corporation or proceeds thereof available for distribution to
stockholders of the Corporation, after satisfaction of all liabilities, if any,
to creditors of the Corporation and subject to the rights of holders of any
shares of capital stock of the Corporation then outstanding ranking senior to or
pari passu with the Series D in respect of distributions upon liquidation,
dissolution or winding up of the Corporation, and before any distribution of
such assets or proceeds is made to or set aside for the holders of Common Stock
and any other classes or series of capital stock of the Corporation ranking
junior to the Series D as to such distribution, a liquidating distribution in an
amount equal to $1,000 per share, together with an amount equal to all
dividends, if any, that have been declared but not paid prior to the date of
payment of such distribution (but without any accumulation in respect of
dividends that have not been declared prior to such payment date). Holders of
the Series D will not be entitled to any other amounts from the Corporation
after they have received their full liquidation preference.
 
(b)           Partial Payment.  If in any distribution described in Section 4(a)
above the assets of the Corporation or proceeds thereof are not sufficient to
pay the Liquidation Preference (as defined below) in full to all Holders of
Series D and all holders of any stock of the Corporation ranking equally with
the Series D as to such distribution, the amounts paid to the Holders of Series
D and to the holders of all such other stock shall be paid pro rata in
accordance with the respective aggregate Liquidation Preference of the Holders
of Series D and the holders of all such other stock. In any such distribution,
the “Liquidation Preference” of any holder of stock of the Corporation shall
mean the amount otherwise payable to such holder in such distribution (assuming
no limitation on the assets of the Corporation available for such distribution),
including an amount equal to any declared but unpaid dividends (and, in the case
of any holder of stock other than Series D and on which dividends accrue on a
cumulative basis, an amount equal to any unpaid, accrued, cumulative dividends,
whether or not declared, as applicable). Holders of the Series D will not be
entitled to any other amounts from the Corporation after they have received the
full amounts provided for in this Section 4 and will have no right or claim to
any of the Corporation’s remaining assets.
 
(c)           Residual Distributions.  If the Liquidation Preference on the
Series D and any other shares of the Corporation’s stock ranking equally as to
such liquidation distribution has been paid in full, the holders of other stock
of the Corporation shall be entitled to receive all remaining assets of the
Corporation (or proceeds thereof) according to their respective rights and
preferences.
 
(d)           Merger, Consolidation and Sale of Assets Not Liquidation.  For
purposes of this Section 4, the merger or consolidation of the Corporation with
or into any other corporation or other entity, including a merger or
consolidation in which the Holders of Series D receive cash, securities or other
property for their shares, or the sale, lease or exchange (for cash,
 
 
 
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securities or other property) of all or substantially all of the assets of the
Corporation, shall not constitute a liquidation, dissolution or winding up of
the Corporation.
 
5.           Voting Rights.
 
(a)           General.  The Holders of Series D shall not have any voting rights
except as set forth below and as determined by the Board of Directors or an
authorized committee thereof or as otherwise from time to time required by law.
 
(b)           Right to Elect Two Directors Upon Nonpayment Events.  If and
whenever dividends on any shares of the Series D, or any other Voting Preferred
Stock, shall have not been declared and paid for the equivalent of six or more
Dividend Periods, whether or not for consecutive Dividend Periods (a
“Nonpayment”), the holders of such shares, voting together as a class with
holders of any and all other series of Voting Preferred Stock then outstanding,
will be entitled to vote for the election of a total of two additional members
of the Board of Directors (the “Preferred Stock Directors”); provided that the
election of any such directors shall not cause the Corporation to violate the
corporate governance requirements of the New York Stock Exchange (or any other
exchange on which the Corporation’s securities may be listed) that listed
companies must have a majority of  independent directors; and provided further
that the Board of Directors shall at no time include more than two Preferred
Stock Directors. In that event, the number of directors on the Board of
Directors shall automatically increase by two, and the new directors shall be
elected at a special meeting called at the request of the holders of record of
at least 20% of the Series D or of any other series of Voting Preferred Stock
(unless such request is received less than 90 days before the date fixed for the
next annual or special meeting of the stockholders, in which event such election
shall be held at such next annual or special meeting of stockholders), and at
each subsequent annual meeting. Such request to call a special meeting for the
initial election of the Preferred Stock Directors after a Nonpayment shall be
made by written notice, signed by the requisite holders of Series D or other
Voting Preferred Stock, and delivered to the Secretary of the Corporation in
such manner as provided for in Section 16 below, or as may otherwise be required
by law. The voting rights will continue until dividends on the shares of the
Series D and any such series of Voting Preferred Stock shall have been fully
paid (or declared and a sum sufficient for the payment of such dividends shall
have been set aside for such payment) for at least four regular dividend periods
following the Nonpayment.
 
If and when dividends for at least four regular dividend periods following a
Nonpayment have been fully paid (or declared and a sum sufficient for such
payment shall have been set aside) on the Series D and any other class or series
of Voting Preferred Stock, the holders of the Series D and all other holders of
Voting Preferred Stock shall be divested of the foregoing voting rights (subject
to revesting in the event of each subsequent Nonpayment), the term of office of
each Preferred Stock Director so elected shall terminate and the number of
directors on the Board of Directors shall automatically decrease by two. In
determining whether dividends have been paid for at least four regular dividend
periods following a Nonpayment, the Corporation may take account of any dividend
it elects to pay for any dividend period after the regular dividend date for
that period has passed.
 
 
 
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Any Preferred Stock Director may be removed at any time without cause by the
holders of record of a majority of the outstanding shares of the Series D
together with all series of Voting Preferred Stock then outstanding (voting
together as a single class) to the extent such holders have the voting rights
described above. So long as a Nonpayment shall continue, any vacancy in the
office of a Preferred Stock Director (other than prior to the initial election
after a Nonpayment) may be filled by the written consent of the Preferred Stock
Director remaining in office, or if none remains in office, by a vote of the
holders of record of a majority of the outstanding shares of Series D and all
Voting Preferred Stock when they have the voting rights described above (voting
together as a single class); provided that the filling of each vacancy shall not
cause the Corporation to violate the corporate governance requirements of the
New York Stock Exchange (or any other exchange on which the Corporation’s
securities may be listed) that listed companies must have a majority of
independent directors.  Any such vote to remove, or to fill a vacancy in the
office of, a Preferred Stock Director may be taken only at a special meeting
called at the request of the holders of record of at least 20% of the Series D
or of any other series of Voting Preferred Stock (unless such request is
received less than 90 days before the date fixed for the next annual or special
meeting of the stockholders, in which event such election shall be held at such
next annual or special meeting of stockholders). The Preferred Stock Directors
shall each be entitled to one vote per director on any matter.
 
The term “Voting Preferred Stock” means any other class or series of Preferred
Stock of the Corporation ranking equally with the Series D as to payment of
dividends and the distribution of assets upon liquidation, dissolution or
winding up of the Corporation and upon which like voting rights have been
conferred and are exercisable. Voting Preferred Stock includes the Corporation’s
Floating Rate Non-Cumulative Preferred Stock, Series A (the “Series A”), the
Corporation’s 10% Series B Non-Cumulative Non-Voting Perpetual Convertible
Preferred Stock, and the Corporation’s 10% Series C Non-Cumulative Non-Voting
Perpetual Preferred Stock (the “Series C”),  in each case, if outstanding, and
any class or series of Preferred Stock, whether or not cumulative, that the
Corporation may issue in the future, to the extent their like voting rights are
exercisable at such time. Whether a plurality, majority or other portion of the
shares of Series D and any other Voting Preferred Stock have been voted in favor
of any matter shall be determined by reference to the relative liquidation
preferences of the shares voted.
 
(c)           Other Voting Rights.  So long as any shares of Series D are
outstanding, in addition to any other vote or consent of stockholders required
by law or by the Certificate of Incorporation, the vote or consent of the
holders of at least two-thirds of the shares of Series D and any Voting
Preferred Stock at the time outstanding and entitled to vote thereon, voting
together as a single class, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be
necessary for effecting or validating:
 
(i)           Authorization of Senior Stock. Any amendment or alteration of the
provisions of the Certificate of Incorporation or this Certificate of
Designations to authorize or create, or increase the authorized amount of, any
shares of any class or series of stock of the Corporation ranking senior to the
 
 
 
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Series D with respect to the payment of dividends or the distribution of assets
upon any liquidation, dissolution or winding up of the Corporation;
 
(ii)           Amendment of Series D.  Any amendment, alteration or repeal of
any provision of the Certificate of Incorporation or this Certificate of
Designations, whether by merger, consolidation or otherwise, so as to materially
and adversely affect the special rights, preferences, privileges and voting
powers of the Series D, taken as a whole; or
 
(iii)           Share Exchanges, Reclassifications, Mergers and Consolidations.
Any consummation of a binding share exchange or reclassification involving the
Series D, or of a merger or consolidation of the Corporation with another
entity, unless in each case (x) the shares of Series D remain outstanding or are
converted into or exchanged for preference securities of the surviving or
resulting entity or its ultimate parent, and (y) such shares remaining
outstanding as securities of the Corporation or such other entity as permitted
by clause (x)  or such preference securities, as the case may be, have such
rights, preferences, privileges and voting powers, and limitations and
restrictions thereof, taken as a whole, as are not materially less favorable to
the holders thereof than the rights, preferences, privileges and voting powers
of the Series D, taken as a whole;
 
provided, however, that for all purposes of this Section 5(c), neither the
issuance of any Series D in accordance with the terms of the Transaction
Agreement (as defined below) as in effect on the date hereof nor the creation
and issuance, or an increase in the authorized or issued amount, of any other
class or series of Preferred Stock ranking equally with the Series D with
respect to the payment of dividends (whether such dividends are cumulative or
non-cumulative) and the distribution of assets upon liquidation, dissolution or
winding up of the Corporation will be deemed to adversely affect the rights,
preferences, privileges or voting powers of, and neither will require the
affirmative vote or consent of, the holders of outstanding shares of Series
D.  In addition, any conversion of the Series D pursuant hereto shall not be
deemed to adversely affect the rights, preferences, privileges and voting powers
of the Series D.  For purposes of clarification, no Holder of Series D shall
have any voting rights with respect to any binding share exchange,
reclassification, merger or consolidation which complies with the provisions of
clause (iii)(x) and (y) hereof.
 
If any amendment, alteration, repeal, share exchange, reclassification, merger
or consolidation specified in this Section 5(c) for which a vote is otherwise
required would adversely affect one or more but not all other series of Voting
Preferred Stock (including the Series D for this purpose), then only such series
of Preferred Stock as are adversely affected by and otherwise entitled to vote
on the matter shall vote on the matter together as a class in lieu of all other
series of Preferred Stock. If all series of a class of Preferred Stock that are
otherwise entitled to vote on the matter are not equally affected by the
proposed amendment, alteration, repeal, share exchange, reclassification, merger
or consolidation described above, there shall be
 
 
 
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required a two-thirds approval of the class and a two-thirds approval of each
series that will have a diminished status and that is otherwise entitled to vote
thereon.
 
(d)           Changes for Clarification. Without the consent of the holders of
the Series D, so long as such action does not adversely affect the rights,
preferences, privileges and voting powers, and limitations and restrictions
thereof, of the Series D, the Corporation may amend, alter, supplement or repeal
any terms of the Series D:
 
(i)           to cure any ambiguity, or to cure, correct or supplement any
provision contained in this Certificate of Designations that may be defective or
inconsistent; or
 
(ii)           to make any provision with respect to matters or questions
arising with respect to the Series D that is not inconsistent with the
provisions of this Certificate of Designations.
 
(e)           Procedures for Voting and Consents. The rules and procedures for
calling and conducting any meeting of the holders of Series D (including,
without limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written
consents and any other aspect or matter with regard to such a meeting or such
consents shall be governed by any rules the Board of Directors or a duly
authorized committee of the Board of Directors, in its discretion, may adopt
from time to time, which rules and procedures shall conform to the requirements
of the Certificate of Incorporation, the Bylaws, applicable law and any national
securities exchange or other trading facility on which the Series D is listed or
traded at the time. Whether the vote or consent of the holders of a plurality,
majority or other portion of the shares of Series D and any Voting Preferred
Stock has been cast or given on any matter on which the holders of shares of
Series D are entitled to vote shall be determined by the Corporation by
reference to the specified liquidation amounts of the shares voted or covered by
the consent.
 
(f)               Authorization of Certain Parity Stock.  Until October 13,
2013, if the Initial Holder or an Affiliate thereof beneficially owns shares of
Series D representing at least 15% of the shares of Series D initially issued to
the Initial Holder, in addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation, the consent of the
Initial Holder shall be necessary for effecting or validating any amendment or
alteration of the provisions of the Certificate of Incorporation or this
Certificate of Designations to authorize or create, or increase the authorized
amount of, any shares of any class or series of stock of the Corporation ranking
pari passu with the Series D with respect to the payment of dividends or the
distribution of assets upon any liquidation, dissolution or winding up of the
Corporation if such class or series of stock:
 
    (i)    is issued for consideration with a fair market value that is less
than the liquidation preference thereof; 
 
    (ii)    has a dividend rate that is (x) higher than the dividend rate
applicable to the Series D and (y) substantially higher than the dividend rate
that would then be carried by
 
 
 
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a substantially equivalent publicly traded security then issued by a similar
issuer with a long-term unsecured debt credit rating substantially equivalent to
that of the Corporation; or
 
    (iii)    is convertible or exchangeable into Common Stock at a per share
conversion or exchange price that is less than the closing price of the Common
Stock on the day prior to the date of issuance thereof or the date that a
binding agreement for the purchase and sale of such shares is entered into, if
different from the date of issuance;
 
provided, however, that this paragraph (f) shall not apply (and no vote or
consent of the Initial Holder or any other Holder of any Series D shall be
required) in connection with any of the following:  (A) any authorization,
creation or issuance of any preferred stock in connection with any merger,
business combination or share exchange involving an unaffiliated third party for
the purpose of replacing or substituting the outstanding series or class of
preferred stock of such third party; (B) any broadly distributed underwritten
offering of securities registered under the Securities Act of 1933, as amended;
or (C) any broadly distributed placement of securities in a transaction exempt
from registration under Rule 144A promulgated under the Securities Act of 1933.
 
6.           Redemption.  The shares of Series D shall not be redeemable.
 
7.           Rank.  Any stock of any class or classes or series of the
Corporation shall be deemed to rank:
 
(a)           prior to shares of the Series D, either as to dividends or upon
liquidation, dissolution or winding up, or both, if the holders of stock of such
class or classes or series shall be entitled by the terms thereof to the receipt
of dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the Holders of
shares of the Series D;
 
(b)           on a parity with shares of the Series D, either as to dividends or
upon liquidation, dissolution or winding up, or both, whether or not the
dividend rates, dividend payment dates, or redemption or liquidation prices per
share thereof be different from those of the Series D, if the holders of stock
of such class or classes or series shall be entitled by the terms thereof to the
receipt of dividends or of amounts distributed upon liquidation, dissolution or
winding up, as the case may be, in proportion to their respective dividend rates
or liquidation prices, without preference or priority of one over the other as
between the holders of such stock and the Holders of shares of Series D (the
term “Parity Preferred Stock” being used to refer to any stock on a parity with
the shares of Series D, either as to dividends or upon liquidation, dissolution
or winding up, or both, as the content may require); and
 
(c)           junior to shares of the Series D, either as to dividends or upon
liquidation, dissolution or winding up, or both, if such class or classes or
series shall be common stock or if the Holders of the Series D shall be entitled
to the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or priority to the
holders of stock of such class or classes or series.
 
 
 
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The Series D shall rank, as to dividends and upon liquidation, dissolution or
winding up, on a parity with the Series A, the Series C and any Parity Preferred
Stock issued hereafter.
 
8.           Additional Definitions.  As used herein with respect to Series D:
 
“Capital Stock” of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity of such Person, including any preferred stock,
excluding any debt securities convertible into such equity.
 
“Cash” means such coin or currency of the United States as at any time of
payment is legal tender for the payment of public and private debts.
 
“Close of Business” means 5:00 p.m., New York City time.
 
“Closing Price” of the Common Stock or any securities distributed in a Spin-Off,
as the case may be, means, as of any date of determination:
 
(a)           the closing price on that date or, if no closing price is
reported, the last reported sale price, of shares of the Common Stock or such
other securities on the New York Stock Exchange on that date; or
 
(b)           if the Common Stock or such other securities are not traded on the
New York Stock Exchange, the closing price on that date as reported in composite
transactions for the principal U.S. national or regional securities exchange on
which the Common Stock or such other securities are so traded or, if no closing
price is reported, the last reported sale price of shares of the Common Stock or
such other securities on the principal U.S. national or regional securities
exchange on which the Common Stock or such other securities are so traded on
that date; or
 
(c)           if the Common Stock or such other securities are not traded on a
U.S. national or regional securities exchange, the last quoted bid price on that
date for the Common Stock or such other securities in the over-the-counter
market as reported by Pink Sheets LLC or a similar organization; or
 
(d)           if the Common Stock or such other securities are not so quoted by
Pink Sheets LLC or a similar organization, the market price of the Common Stock
or such other securities on that date as determined by a nationally recognized
independent investment banking not affiliated with the Corporation retained by
the Corporation for this purpose.
 
For the purposes of this Certificate of Designations, all references herein to
the closing price and the last reported sale price of the Common Stock on the
New York Stock Exchange shall be such closing price and last reported sale price
as reflected on the website of the New York Stock Exchange (www.nyse.com) and as
reported by Bloomberg Professional Service; provided that in
 
 
 
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the event that there is a discrepancy between the closing price and the last
reported sale price as reflected on the website of the New York Stock Exchange
and as reported by Bloomberg Professional Service, the closing price and the
last reported sale price on the website of the New York Stock Exchange shall
govern.
 
“Common Stock” means the common stock, $0.01 par value, of the Corporation.
 
“Conversion Agent” shall mean BNY Mellon Shareowner Services, acting in its
capacity as conversion agent for the Series D, and its successors and assigns or
any other conversion agent appointed by the Corporation.
 
“Conversion Date” means each of a Mandatory Conversion Date and a Non-Mandatory
Conversion Date.
 
“Conversion Price” at any time means for each share of Series D the price equal
to $1,000 divided by the Conversion Rate in effect at such time (initially
$25.25).
 
“Conversion Rate” means initially 39.604 shares of Common Stock per share of
Series D, subject to adjustment in accordance with the provisions of this
Certificate of Designations.
 
“Depositary” means DTC or its nominee or any successor depositary appointed by
the Corporation.
 
“DTC” means The Depository Trust Company, together with its successors and
assigns.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Ex-Dividend Date” means the first date on which the Common Stock trades,
regular way, on the relevant exchange, or in the relevant market from which the
Closing Price was obtained, without the right to receive such dividend or
distribution.
 
“Fair Market Value” means the amount which a willing buyer would pay a willing
seller in an arm’s-length transaction as determined by the Board of Directors.
 
“Fundamental Change” means the occurrence, prior to the Mandatory Conversion
Date, of one of the following:
 
(i)           a “person” or “group” within the meaning of Section 13(d) of the
Exchange Act files a Schedule TO or any schedule, form or report under the
Exchange Act disclosing that such person or group has become the direct or
indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the
Exchange Act, of common equity of the Corporation representing more than 50% of
the voting power of the outstanding Common Stock;
 
 
 
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(ii)           consummation of any consolidation or merger of the Corporation or
similar transaction or any sale, lease or other transfer in one transaction or a
series of transactions of all or substantially all of the consolidated assets of
the Corporation and its subsidiaries, taken as a whole, to any Person other than
one of the Corporation’s subsidiaries, in each case pursuant to which the Common
Stock will be converted into, or receive a distribution of the proceeds in,
cash, securities or other property, other than pursuant to a transaction in
which the Persons that “beneficially owned” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, voting shares of the Corporation
immediately prior to such transaction beneficially own, directly or indirectly,
voting shares representing a majority of the total voting power of all
outstanding classes of voting shares of the continuing or surviving Person or
the ultimate parent entity thereof immediately after the transaction; or
 
(iii)           shares of the Common Stock or shares of any other stock into
which the Series D is convertible are not listed for trading on any United
States national securities exchange or cease to be traded in contemplation of a
delisting (other than as a result of a transaction described in clause
(ii) above);
 
provided, however, that a Fundamental Change with respect to clauses (i) and
(ii) above will not be deemed to have occurred if at least 90% of the
consideration received by holders of the Common Stock in the transaction or
transactions consists of shares of common stock or American Depositary Receipts
in respect of common stock that are traded on a U.S. national securities
exchange or that will be so traded when issued or exchanged in connection with a
Fundamental Change; and provided, further, that with respect to any shares of
Series D that are beneficially owned by the Initial Holder or its affiliates, a
Fundamental Change with respect to clauses (i) or (ii) above will not be deemed
to have occurred if the Initial Holder or any of its affiliates is part of the
person or group referred to in clause (i) above or is a counterparty to the
Corporation in any of the transactions referred to in clause (ii) above.
 
“Holder” means the Person in whose name the shares of Series D are registered,
which may be treated by the Corporation, Transfer Agent, Registrar, dividend
disbursing agent and Conversion Agent as the absolute owner of the shares of
Series D for the purpose of disbursing dividends and settling conversions and
for all other purposes.
 
“Initial Holder” means Mitsubishi UFJ Financial Group, Inc.
 
“Issue Date” means the date of original issuance of the Series D.
 
“Junior Stock” means any class or series of capital stock of the Corporation
that ranks junior to Series D as to the payment of dividends and rights in
dissolution, liquidation and winding up of the Corporation. Junior Stock
includes the Common Stock.
 
“Make-Whole Acquisition” means the occurrence, prior to the Mandatory Conversion
Date, of one of the following:
 
 
 
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(i)           a “person” or “group” within the meaning of Section 13(d) of the
Exchange Act files a Schedule TO or any schedule, form or report under the
Exchange Act disclosing that such person or group has become the direct or
indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the
Exchange Act, of common equity of the Corporation representing more than 50% of
the voting power of the outstanding Common Stock; or
 
(ii)           consummation of any consolidation or merger of the Corporation or
similar transaction or any sale, lease or other transfer in one transaction or a
series of transactions of all or substantially all of the consolidated assets of
the Corporation and its subsidiaries, taken as a whole, to any Person other than
one of the Corporation’s subsidiaries, in each case pursuant to which the Common
Stock will be converted into, or receive distributions of the proceeds in, cash,
securities or other property, other than pursuant to a transaction in which the
Persons that “beneficially owned” (as defined in Rule 13d-3 under the Exchange
Act) directly or indirectly, voting shares of the Corporation immediately prior
to such transaction beneficially own, directly or indirectly, voting shares
representing a majority of the total voting power of all outstanding classes of
voting shares of the continuing or surviving Person or the ultimate parent
entity thereof immediately after the transaction;
 
provided, however, that a Make-Whole Acquisition will not be deemed to have
occurred if at least 90% of the consideration received by holders of the Common
Stock in the transaction or transactions consists of shares of common stock or
American Depositary Receipts in respect of common stock that are traded on a
U.S. national securities exchange or that will be so traded when issued or
exchanged in connection with a Make-Whole Acquisition; and provided, further,
that with respect to any shares of Series D that are beneficially owned by the
Initial Holder or its affiliates, a Make-Whole Acquisition will not be deemed to
have occurred if the Initial Holder or any of its affiliates is part of the
person or group referred to in clause (i) above or is a counterparty to the
Corporation in any of the transactions referred to in clause (ii) above.
 
“Make-Whole Acquisition Stock Price” means the consideration paid per share of
Common Stock in a Make-Whole Acquisition. If such consideration consists only of
cash, the Make-Whole Acquisition Stock Price shall equal the amount of cash paid
per share of Common Stock. If such consideration consists of any property other
than cash, the Make-Whole Acquisition Stock Price shall be the average of the
Closing Price per share of Common Stock on each of the 10 consecutive Trading
Days up to, but not including, the Make-Whole Acquisition Effective Date.
 
“Mandatory Conversion Date” means the 3rd Trading Day immediately following the
first date after termination of the Transaction Agreement pursuant to Article 8
thereof as of which, for 20 Trading Days within any period of 30 consecutive
Trading Days beginning after such termination date and preceding such first
date, the Closing Price of the Common Stock has exceeded 150% of the then
applicable Conversion Price.
 
 
 
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“Non-Mandatory Conversion Date” means an Early Conversion Date, a Make-Whole
Acquisition Conversion Date or a Fundamental Change Conversion Date.
 
“Open of Business” means 9:00 a.m., New York City time.
 
 “Parity Stock” means any other class or series of stock of the Corporation that
ranks equally with the Series D in the payment of dividends and rights in
dissolution, liquidation and winding up of the Corporation.
 
 “Person” means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint-stock company, limited liability
company or trust.
 
“Preferred Stock” means any and all series of preferred stock of the
Corporation, including the Series D.
 
“Reference Price” means the price per share of Common Stock in connection with a
Fundamental Change. If the holders of shares of Common Stock receive only cash
in connection with the Fundamental Change, the Reference Price shall be the cash
amount paid per share. Otherwise the Reference Price shall be the average of the
Closing Price per share of Common Stock on each of the 10 Trading Days up to,
but not including, the effective date of the Fundamental Change.
 
“Registrar” shall mean BNY Mellon Shareowner Services, acting in its capacity as
registrar for the Series D, and its successors and assigns or any other
registrar appointed by the Corporation.
 
“Subsidiary” means with respect to any Person, any other Person more than fifty
percent (50%) of the shares of the voting stock or other voting interests of
which are owned or controlled, or the ability to select or elect more than fifty
percent (50%) of the directors or similar managers is held, directly or
indirectly, by such first Person or one or more of its Subsidiaries or by such
first Person and one or more of its Subsidiaries.
 
“Trading Day” means a day on which the Common Stock (i) is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the Close of Business and (ii) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
 
“Transaction Agreement” means the Transaction Agreement, dated as of April 21,
2011, between the Corporation and the Investor listed on the signature page
thereto.
 
“Transfer Agent” shall mean BNY Mellon Shareowner Services, acting in its
capacity as transfer agent for the Series D, and its respective successors and
assigns or any other transfer agent appointed by the Corporation.
 
 
 
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9.           Early Conversion at the Option of the Holder. Other than during a
Make-Whole Acquisition Conversion Period, any Holder shall have the right to
convert such Holder’s shares of Series D, in whole or in part (but in no event
less than one share of Series D), at any time prior to the Mandatory Conversion
Date (“Early Conversion”), into shares of Common Stock at the then applicable
Conversion Rate, subject to satisfaction of the conversion procedures set forth
in Section 10(b). The date of such Early Conversion is referred to herein as the
“Early Conversion Date.”
 
10.           Conversion.
 
(a)           Mandatory Conversion on Mandatory Conversion Date.
 
(i)           [Omitted Intentionally.]
 
(ii)           On the Mandatory Conversion Date, all of the outstanding shares
of Series D will mandatorily convert into shares of Common Stock at the then
applicable Conversion Rate. No action shall be required by the Holder
thereof.  The person or persons entitled to receive the shares of Common Stock
issuable upon mandatory conversion of Series D will be treated as the record
holder(s) of such shares of Common Stock as of the Close of Business on the
Mandatory Conversion Date.  Except as provided under Section 11(a)(xv), prior to
the Close of Business on the Mandatory Conversion Date, the shares of Common
Stock issuable upon conversion of the Series D will not be deemed to be
outstanding for any purpose and Holders shall have no rights with respect to
such shares of Common Stock, including voting rights, rights to respond to
tender offers and rights to receive any dividends or other distributions on the
Common Stock, by virtue of holding the Series D.
 
(iii)           In addition to the number of shares of Common Stock issuable
pursuant to this Section 10(a), if applicable, the Holders on a Mandatory
Conversion Date shall have the right to receive an amount equal to any declared
and unpaid dividends on the Series D for the most recent Dividend Period ending
on a Mandatory Conversion Date to the extent such Holders were the Holders of
record as of the Dividend Record Date for such dividend.
 
(b)           Conversion Procedures for a Non-Mandatory Conversion Date.  To
effect conversion on a Non-Mandatory Conversion Date, a Holder who:
 
(i)           holds a beneficial interest in a global certificate representing
the Series D must deliver to DTC the appropriate instruction form for conversion
pursuant to DTC’s conversion program and, if required, pay funds equal to the
dividend payable on the next Dividend Payment Date to which such Holder is not
entitled by virtue of Section 10(e) and, if required, pay all transfer or
similar taxes or duties, if any; or
 
(ii)           holds shares of Series D in certificated form must:
 
(A)           complete and manually sign the conversion notice on the back of
the Series D certificate or a facsimile of the conversion notice;
 
 
 
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(B)           deliver the completed conversion notice and the certificated
shares of Series D to be converted to the Conversion Agent;
 
(C)           if required, furnish appropriate endorsements and transfer
documents;
 
(D)           if required, pay funds equal to the dividend payable on the next
Dividend Payment Date to which such Holder is not entitled by virtue of
Section 10(e); and
 
(E)           if required, pay all transfer or similar taxes or duties, if any.
 
The conversion will be effective on the date on which a Holder has satisfied all
of the foregoing requirements, to the extent applicable, which shall be the
applicable Non-Mandatory Conversion Date.  A Holder will not be required to pay
any transfer or similar taxes or duties relating to the issuance or delivery of
Common Stock if such Holder exercises its conversion rights, but such Holder
will be required to pay any transfer or similar tax or duty that may be payable
relating to any transfer involved in the issuance or delivery of Common Stock in
a name other than the name of such Holder.  A certificate representing Common
Stock will be issued and delivered only after all applicable taxes and duties,
if any, payable by the Holder have been paid in full.
 
The person or persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record Holder(s) of such
shares of Common Stock as of the Close of Business on the applicable
Non-Mandatory Conversion Date.  No allowance or adjustment, except as set forth
in Section 11(a), shall be made in respect of dividends payable to Holders of
Common Stock of record as of any date prior to such applicable Non-Mandatory
Conversion Date.  Prior to such applicable Non-Mandatory Conversion Date, shares
of Common Stock issuable upon conversion of any shares of Series D shall not be
deemed outstanding for any purpose, and Holders shall have no rights with
respect to the Common Stock (including voting rights, rights to respond to
tender offers for the Common Stock and rights to receive any dividends or other
distributions on the Common Stock) by virtue of holding shares of Series D.
 
In the event that a conversion is effected with respect to shares of Series D
representing fewer than all the shares of Series D held by a Holder, upon such
conversion the Corporation shall execute and the Registrar shall countersign and
deliver to the Holder thereof, at the expense of the Corporation, a certificate
evidencing the shares of Series D as to which conversion was not effected.
 
The Corporation shall deliver the shares of Common Stock to which the Holder
converting pursuant to Section 9(a) is entitled on or prior to the third Trading
Day immediately following the applicable Non-Mandatory Conversion Date.
 
(c)           Conversion Upon Make-Whole Acquisition.
 
 
 
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(i)           In the event of a Make-Whole Acquisition, each Holder shall have
the option to convert its shares of Series D (a “Make-Whole Acquisition
Conversion”) at the then applicable Conversion Rate during the period (the
“Make-Whole Acquisition Conversion Period”) beginning on the effective date of
the Make-Whole Acquisition (the “Make-Whole Acquisition Effective Date”) and
ending on the date that is 30 days after the Make-Whole Acquisition Effective
Date and receive an additional number of shares of Common Stock in the form of
Make-Whole Shares as set forth in this Section 10(c).  The date of such
Make-Whole Acquisition Conversion is referred to herein as the “Make-Whole
Acquisition Conversion Date.”
 
(ii)           The number of “Make-Whole Shares” shall be determined for the
Series D by reference to the table below for the applicable Make-Whole
Acquisition Stock Price:
 
$21.375
 
$22.50
 
$25.00
 
$27.50
 
$30.00
 
$32.50
 
$35.00
 
$40.00
9.3474
 
8.2446
 
6.1634
 
4.4726
 
3.0670
 
1.8785
 
0.8903
 
0.0000

(A)           The exact Make-Whole Acquisition Stock Prices and Effective Dates
may not be set forth in the table above, in which case:
 
(1)           if the Make-Whole Acquisition Stock Price is between two
Make-Whole Acquisition Stock Price amounts in the table, the number of
Make-Whole Shares will be determined by straight-line interpolation between the
number of Make-Whole Shares set forth for the higher and lower Make-Whole
Acquisition Stock Price amounts;
 
(2)           if the Make-Whole Acquisition Stock Price is in excess of $40.00
per share (subject to adjustment pursuant hereto), no Make-Whole Shares will be
issued upon conversion of the Series D; and
 
(3)           if the Make-Whole Acquisition Stock Price is less than $21.375 per
share (subject to adjustment pursuant hereto), no Make-Whole Shares will be
issued upon conversion of the Series D.
 
(B)           The Make-Whole Acquisition Stock Prices set forth in the table
above (and the corresponding prices set forth in clauses (2) and (3) above) are
subject to adjustment pursuant hereto and shall be adjusted as of any date the
Conversion Rate is adjusted. The adjusted Make-Whole Acquisition Stock Prices
(and corresponding prices set forth in clauses (2) and (3) above) shall equal
the Make-Whole Acquisition Stock Prices (and corresponding prices set forth in
clauses (2) and (3) above), respectively, applicable immediately prior to such
adjustment multiplied by a fraction, the numerator of which is the Conversion
Rate immediately prior to the adjustment giving rise to the Make-Whole
Acquisition Stock Price adjustments and the denominator of which is the
Conversion Rate as so adjusted. The number of Make-Whole Shares in the table
 
 
 
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above shall also be subject to adjustment in the same manner as the Conversion
Rate pursuant to Section 11.
 
(iii)          On or before the twentieth day prior to the date on which the
Corporation anticipates consummating the Make-Whole Acquisition (or, if later,
within two Business Days after the Corporation becomes aware of a Make-Whole
Acquisition described in clause (i) of the definition of such term), a written
notice shall be sent by or on behalf of the Corporation, by first-class mail,
postage prepaid, to the Holders as they appear in the records of the
Corporation. Such notice shall contain:
 
(A)           the date on which the Make-Whole Acquisition is anticipated to be
effected;
 
(B)           the date, which shall be 30 days after the Make-Whole Acquisition
Effective Date, by which the Make-Whole Acquisition conversion option must be
exercised;
 
(C)           the amount of cash, securities and other consideration payable per
share of Common Stock or Series D, respectively; and
 
(D)           the instructions a Holder must follow to exercise its conversion
option in connection with such Make-Whole Acquisition.
 
(iv)           To exercise a Make-Whole Acquisition Conversion option, a Holder
must, no later than the Close of Business on the date by which the Make-Whole
Acquisition Conversion option must be exercised as specified in the notice
delivered under Section 10(c)(iii), comply with the procedures set forth in
Section 10(b).
 
(v)           If a Holder does not elect to exercise the Make-Whole Acquisition
Conversion option pursuant to this Section 10(c), the shares of Series D or
successor securities held by it shall remain outstanding but shall not be
eligible to receive Make-Whole Shares.
 
(vi)           Upon a Make-Whole Acquisition Conversion, the Conversion Agent
shall, except as otherwise provided in the instructions provided by the Holder
thereof in the written notice provided to the Corporation or its successor as
set forth in Section 10(b), deliver to the Holder such cash, securities or other
property as are issuable with respect to Make-Whole Shares in the Make-Whole
Acquisition.
 
(vii)           In the event that a Make-Whole Acquisition Conversion is
effected with respect to shares of Series D or successor securities representing
fewer than all the shares of Series D or successor securities held by a Holder,
upon such Make-Whole Acquisition Conversion, the Corporation or its successor
shall execute and the Conversion Agent shall, unless otherwise instructed in
writing, countersign and deliver to the Holder thereof, at the expense of the
Corporation or its successors, a certificate evidencing the shares of
 
 
 
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Series D or such successor securities held by the Holder as to which a
Make-Whole Acquisition Conversion was not effected.
 
(viii)           If a Holder elects to convert its shares of Series D in
connection with a Make-Whole Acquisition, such Holder shall not be entitled to
an adjusted conversion price pursuant to Section 10(g) to the extent such
Make-Whole Acquisition also constitutes a Fundamental Change.
 
(d)           Registration of Common Stock.  In the event that a Holder shall
not by written notice designate the name in which shares of Common Stock to be
issued upon conversion of such Series D should be registered or the address to
which the certificate or certificates representing such shares of Common Stock
should be sent, the Corporation shall be entitled to register such shares, and
make such payment, in the name of the Holder as shown on the records of the
Corporation and to send the certificate or certificates representing such shares
of Common Stock to the address of such Holder shown on the records of the
Corporation.
 
(e)           Dividends.  If a Non-Mandatory Conversion Date on which a Holder
elects to convert Series D is prior to the Close of Business on the Dividend
Record Date relating to any declared dividend for the Dividend Period in which
such Holder is electing to convert, such Holder will not have the right to
receive any declared dividends for that Dividend Period.  If a Non-Mandatory
Conversion Date on which a Holder elects to convert Series D is after the Close
of Business on the Dividend Record Date for any declared dividend and prior to
the Dividend Payment Date, such Holder shall receive that dividend on the
relevant Dividend Payment Date if such Holder was the Holder of record at the
Close of Business on the Dividend Record Date for that
dividend.  Notwithstanding the preceding sentence, if the Non-Mandatory
Conversion Date is after the Close of Business on the Dividend Record Date and
prior to the Open of Business on the Dividend Payment Date, whether or not such
Holder was the Holder of record at the Close of Business on the Dividend Record
Date, the Holder must pay to the Conversion Agent upon conversion of the shares
of Series D an amount in cash equal to the dividend payable on the Dividend
Payment Date for the then-current Dividend Period on the shares of Series D
being converted.
 
(f)           Outstanding Shares of Series D.  Shares of Series D shall cease to
be outstanding on the applicable Conversion Date, subject to the right of
Holders of such shares to receive shares of Common Stock issuable upon
conversion of such shares of Series D.
 
(g)           Conversion Upon Fundamental Change.
 
(i)           If the Reference Price in connection with a Fundamental Change is
less than the then applicable Conversion Price, a Holder may convert each share
of Series D during the period beginning on the effective date of the Fundamental
Change and ending on the date that is 30 days after the effective date of such
Fundamental Change at an adjusted conversion price equal to the greater of
(1) the Reference Price and (2) $12.6250, subject to adjustment as described
herein (the “Base Price”). The date of such conversion upon a Fundamental Change
is referred to herein as the “Fundamental Change Conversion Date.”
 
 
 
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(ii)           The Base Price shall be adjusted as of any date the Conversion
Rate of the Series D is adjusted pursuant hereto. The adjusted Base Price shall
equal the Base Price applicable immediately prior to such adjustment multiplied
by a fraction, the numerator of which is the Conversion Rate immediately prior
to the adjustment giving rise to the Base Price adjustment and the denominator
of which is the Conversion Rate as so adjusted.  If the Reference Price is less
than the Base Price, Holders shall receive a maximum of 79.2079 shares of Common
Stock per share of Series D (subject to adjustment in a manner inverse to the
adjustments to the Base Price).
 
(iii)           On or before the 20th day prior to the date on which the
Corporation anticipates consummating the Fundamental Change (or, if later,
within two Business Days after the Corporation becomes aware of a Fundamental
Change described in clause (i) of the definition of such term), a written notice
shall be sent by or on behalf of the Corporation, by first-class mail, postage
prepaid, to the Holders as they appear in the records of the Corporation. Such
notice shall contain:
 
(A)           the date on which the Fundamental Change is anticipated to be
effected; and
 
(B)           the date, which shall be 30 days after the effective date of a
Fundamental Change, by which the Fundamental Change conversion option must be
exercised.
 
(iv)           On the effective date of a Fundamental Change, another written
notice shall be sent by or on behalf of the Corporation, by first-class mail,
postage prepaid, to the Holders as they appear in the records of the
Corporation. Such notice shall contain:
 
(A)           the date that shall be 30 days after the effective date of the
Fundamental Change;
 
(B)           the adjusted conversion price following the Fundamental Change;
 
(C)           the amount of cash, securities and other consideration payable per
share of Common Stock or Series D, respectively; and
 
(D)           the instructions a Holder must follow to exercise its conversion
option in connection with such Fundamental Change.
 
(v)           To exercise its conversion option upon a Fundamental Change, a
Holder must, no later than the Close of Business on the date by which the
conversion option upon the Fundamental Change must be exercised as specified in
the notice delivered under Section 10(g)(iv), comply with the procedures set
forth in Section 10(b).
 
(vi)           If a Holder does not elect to exercise its conversion option upon
a Fundamental Change pursuant to this Section 10(g), the shares of Series D or
successor
 
 
 
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securities held by it will remain outstanding but shall not thereafter be
entitled to convert in accordance with Section 10(g).
 
(vii)           Upon a conversion upon a Fundamental Change, the Conversion
Agent shall, except as otherwise provided in the instructions provided by the
Holder thereof in the written notice provided to the Corporation or its
successor as set forth in Section 10(b), deliver to the Holder such cash,
securities or other property as are issuable with respect to the adjusted
conversion price following the Fundamental Change.
 
(viii)           In the event that a conversion upon a Fundamental Change is
effected with respect to shares of Series D or successor securities representing
fewer than all the shares of Series D or successor securities held by a Holder,
upon such conversion the Corporation or its successor shall execute and the
Conversion Agent shall, unless otherwise instructed in writing, countersign and
deliver to the Holder thereof, at the expense of the Corporation, a certificate
evidencing the shares of Series D or such successor securities held by the
Holder as to which a conversion upon a Fundamental Change was not effected.
 
(ix)           If a Holder elects to convert its shares of Series D in
connection with a Fundamental Change, such Holder shall not be entitled to
Make-Whole Shares pursuant to Section 10(c) to the extent such Fundamental
Change also constitutes a Make-Whole Acquisition.
 
(h)           A Holder cannot effect both a Make-Whole Acquisition Conversion
and a Fundamental Change Conversion with respect to a share of Series D.
 
(i)           Notwithstanding anything to the contrary in this Certificate of
Designations, a Holder of shares of Series D shall not, for a period of 35
calendar days after any Conversion Date, sell any shares of Common Stock or
other equity securities it receives upon conversion of the shares it converted
on such Conversion Date.
 
11.           Anti-Dilution Adjustments.
 
(a)           The Conversion Rate shall be adjusted from time to time by the
Corporation as follows:
 
(i)           If the Corporation, at any time or from time to time while any of
the Series D is outstanding, issues shares of Common Stock as a dividend or
distribution on shares of Common Stock, or if the Corporation effects a share
split or share combination in respect of the Common Stock, then the Conversion
Rate shall be adjusted based on the following formula:
 
[p21.jpg]
 
 
 
-21-

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

 
 
where
 
CR0
=
the Conversion Rate in effect immediately prior to the Close of Business on the
Record Date for such dividend or distribution, or the Close of Business on the
effective date of such share split or combination, as applicable;
     
CR'
=
the new Conversion Rate in effect immediately after the Close of Business on the
Record Date for such dividend or distribution, or the Close of Business on the
effective date of such share split or share combination, as applicable;
     
OS0
=
the number of shares of Common Stock outstanding immediately prior to the Close
of Business on the Record Date for such dividend or distribution, or the Close
of Business on the effective date of such share split or share combination, as
applicable; and
     
OS'
=
the number of shares of Common Stock outstanding immediately after such dividend
or distribution, or the Close of Business on the effective date of such share
split or share combination, as applicable.

 
The Corporation will not pay any dividend or make any distribution on shares of
Common Stock held in treasury by the Corporation.
 
(ii)           Except as otherwise provided for by Section 11(a)(iv) below, if
the Corporation, at any time or from time to time while any of the Series D is
outstanding, distributes to all or substantially all holders of its outstanding
shares of Common Stock any rights or warrants entitling them for a period of not
more than 45 calendar days from the Record Date of such distribution to
subscribe for or purchase shares of Common Stock at a price per share less than
the Closing Price of the Common Stock on the Trading Day immediately preceding
the Record Date of such distribution, the Conversion Rate shall be adjusted
based on the following formula:
 
[p22.jpg]

 
where
 
CR0
=
the Conversion Rate in effect immediately prior to the Close of Business on the
Record Date for such distribution;

 
 
 
-22-

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

 
 
 
CR'
=
the new Conversion Rate in effect immediately after the Close of Business on the
Record Date for such distribution;
     
OS0
=
the number of shares of Common Stock outstanding immediately prior to the Close
of Business on the Record Date for such distribution;
     
X
=
the total number of shares of Common Stock issuable pursuant to such rights or
warrants; and
     
Y
=
the number of shares of Common Stock equal to the aggregate price payable to
exercise such rights or warrants divided by the average of the Closing Prices of
the Common Stock over the ten consecutive Trading Day period ending on the
Trading Day immediately preceding the Ex-Dividend Date for such distribution.

 
To the extent that shares of Common Stock are not delivered pursuant to such
rights or warrants upon the expiration or termination of such rights or
warrants, the Conversion Rate shall be readjusted to the Conversion Rate which
would then be in effect had the adjustments made upon the distribution of such
rights or warrants been made on the basis of the delivery of only the number of
shares of Common Stock actually delivered.
 
In determining the aggregate price payable to exercise such rights or warrants,
there shall be taken into account any amount payable on exercise thereof, with
the value of such consideration, if other than Cash, to be determined in good
faith by the Corporation’s Board of Directors.
 
(iii)           If the Corporation, at any time or from time to time while any
of the Series D is outstanding, shall, by dividend or otherwise, distribute to
all or substantially all holders of its Common Stock shares of any class of
Capital Stock of the Corporation (other than Common Stock as covered by Section
11(a)(i) above), evidences of its indebtedness, assets, property or rights or
warrants to acquire the Corporation’s Capital Stock or other securities, but
excluding (i) dividends or distributions as to which an adjustment under Section
11(a)(i), Section 11(a)(ii) or Section 11(a)(iv) hereof shall apply, (ii)
dividends or distributions paid exclusively in Cash and (iii) Spin-Offs to which
the provision set forth below in this Section 11(a)(iii) shall apply (any of
such shares of Capital Stock, indebtedness, assets, property or rights or
warrants to acquire the Corporation’s Common Stock or other securities,
hereinafter in this Section 11(a)(iii) called the “Distributed Property”), then,
in each such case the Conversion Rate shall be adjusted based on the following
formula:
 
[p23.jpg]

 
 
 
-23-

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

 
 
 
Where
 
CR0
=
the Conversion Rate in effect immediately prior to the Close of Business on the
Record Date for such distribution;
     
CR'
=
the new Conversion Rate in effect immediately after the Close of Business on the
Record Date for such distribution;
     
SP0
=
the average of the Closing Prices of the Common Stock over the ten consecutive
Trading Day period ending on the Trading Day immediately preceding the
Ex-Dividend Date for such distribution; and
     
FMV
=
the fair market value (as determined in good faith by the Corporation’s Board of
Directors) of the portion of Distributed Property with respect to each
outstanding share of Common Stock on the Record Date for such distribution.

 
Notwithstanding the foregoing, if the then fair market value (as so determined)
of the portion of the Distributed Property so distributed applicable to one
share of Common Stock is equal to or greater than SP0 as set forth above, in
lieu of the foregoing adjustment, the Corporation shall distribute to each
Holder on the date the Distributed Property is distributed to holders of Common
Stock, but without requiring such Holder to convert its shares of Series D, the
amount of Distributed Property such Holder would have received had such Holder
owned a number of shares of Common Stock equal to the Conversion Rate on the
record date fixed for determination for stockholders entitled to receive such
distribution.  If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 11(a)(iii) by reference to the actual
or when issued trading market for any securities, it shall in doing so consider
the prices in such market over the same period used in computing the average of
the Closing Prices of the Common Stock for purposes of calculating SP0 in the
formula in this Section 11(a)(iii).
 
With respect to an adjustment pursuant to this Section 11(a)(iii) where there
has been a payment of a dividend or other distribution on the Common Stock
consisting of shares of Capital Stock of any class or series, or similar equity
interest, of or relating to a Subsidiary or other business unit of the
Corporation (a “Spin-Off”), the Conversion Rate in effect immediately before the
Close of Business on the tenth Trading Day immediately following, and including,
the effective date of the Spin-Off shall be increased based on the following
formula:
 
[p24.jpg]

 
 
 
-24-

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

 
 
where
 
CR0
=
the Conversion Rate in effect immediately prior to the Close of Business on the
10th Trading Day immediately following, and including, the effective date of the
Spin-Off;
     
CR'
=
the new Conversion Rate in effect from and after the Close of Business on the
10th Trading Day immediately following, and including, the effective date of the
Spin-Off;
     
FMV
=
the average of the Closing Prices of the Capital Stock or similar equity
interest distributed to holders of Common Stock applicable to one share of
Common Stock over the 10 consecutive Trading Day period immediately following,
and including, the effective date of the Spin-Off; and
     
MP0
=
the average of the Closing Prices of Common Stock over the 10 consecutive
Trading Day period immediately following, and including, the effective date of
the Spin-Off.

 
Such adjustment shall occur on the 10th Trading Day immediately following, and
including, the effective date of the Spin-Off (it being agreed that
notwithstanding Section 9(a), the Holder of the Series D shall not be entitled
to convert the Series D pursuant to an Early Conversion prior to such 10th
Trading Day).
 
For purposes of this Section 11(a)(iii), Section 11(a)(i) and Section 11(a)(ii)
hereof, any dividend or distribution to which this Section 11(a)(iii) is
applicable that also includes shares of Common Stock, or rights or warrants to
subscribe for or purchase shares of Common Stock to which Section 11(a)(i) or
11(a)(ii) hereof applies (or both), shall be deemed instead to be (1) a dividend
or distribution of the evidences of indebtedness, assets or shares of Capital
Stock other than such shares of Common Stock or rights or warrants to which
Section 11(a)(i) or 11(a)(ii) hereof applies (and any Conversion Rate adjustment
required by this Section 11 (a)(iii) with respect to such dividend or
distribution shall then be made) immediately followed by (2) a dividend or
distribution of such shares of Common Stock or such rights or warrants to which
Section 11(a)(i) or 11(a)(ii) hereof applies (and any further Conversion Rate
adjustment required by Section 11(a)(i) and 11(a)(ii) hereof with respect to
such dividend or distribution shall then be made), except (A) the Close of
Business on the Record Date of such dividend or distribution shall be
substituted for “the Close of Business on the Record Date,” “the Close of
Business on the Record Date or the Close of Business on the effective date,”
“after the Close of Business on the Record Date for such dividend or
distribution or the Close of Business on the effective date of such share split
or share combination” and “the Close of Business on the Record Date for such
distribution” within the meaning of Section 11(a)(i) and Section 11(a)(ii)
hereof and (B) any shares of Common Stock included in such dividend or
distribution shall not be
 
 
 
-25-

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

 
 
 
deemed “outstanding immediately prior to the Close of Business on the Record
Date or the Close of Business on the effective date” within the meaning of
Section 11(a)(i) hereof.
 
(iv)           If the Corporation, at any time or from time to time while any of
the Series D is outstanding, distributes rights or warrants to all holders of
Common Stock entitling the holders thereof to subscribe for, purchase or convert
into shares of the Corporation’s Capital Stock (either initially or under
certain circumstances), which rights or warrants, until the occurrence of a
specified event or events (“Trigger Event”): (x) are deemed to be transferred
with such shares of Common Stock; (y) are not exercisable; and (z) are also
issued in respect of future issuances of Common Stock, shall be deemed not to
have been distributed for purposes of Section 11(a)(iii) above, (and no
adjustment to the Conversion Rate under Section 11(a)(iii) above will be
required) until the occurrence of the earliest Trigger Event and a distribution
or deemed distribution under the terms of such rights or warrants at which time
an appropriate adjustment (if any is required) to the Conversion Rate shall be
made in the same manner as provided for under Section 11(a)(iii) above.  If any
such rights or warrants are subject to events, upon the occurrence of which such
rights or warrants become exercisable to purchase different securities,
evidences of indebtedness or other assets, then the date of the occurrence of
any and each such event shall be deemed to be the date of distribution and
Record Date with respect to new rights or warrants with such rights (and a
termination or expiration of the existing rights or warrants without exercise by
any of the holders thereof).  In addition, in the event of any distribution (or
deemed distribution) of rights or warrants (of the type described in the
preceding sentence) with respect thereto that was counted for purposes of
calculating a distribution amount for which an adjustment to the Conversion Rate
under this Section 11(a)(iv) was made, (1) in the case of any such rights or
warrants that shall all have been redeemed or repurchased without exercise by
any holders thereof, the Conversion Rate shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger Event,
as the case may be, as though it were a Cash distribution, equal to the per
share redemption or repurchase price received by a holder or holders of Common
Stock with respect to such rights or warrants (assuming such holder had retained
such rights or warrants), made to all holders of Common Stock as of the date of
such redemption or repurchase, and (2) in the case of such rights or warrants
that shall have expired or been terminated without exercise by any holders
thereof, the Conversion Rate shall be readjusted as if such rights or warrants
had not been issued.
 
(v)           (1) If the Corporation, at any time or from time to time while any
of the Series D is outstanding, makes a regular, quarterly Cash dividend or
distribution to all or substantially all holders of Common Stock during any
quarterly fiscal period that exceeds $0.27 (the “Initial Dividend Threshold”),
the Conversion Rate shall be adjusted based on the following formula:
 
[p26.jpg]

 
 
 
-26-

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

 
 
where
 
CR0
=
the Conversion Rate in effect immediately prior to the Close of Business on the
Record Date for such dividend or distribution;
     
CR1
=
the new Conversion Rate in effect immediately after the Close of Business on the
Record Date for such dividend or distribution;
     
SP0
=
the average Closing Price of the Common Stock over the ten consecutive Trading
Days ending on the Trading Day immediately preceding the Ex-Dividend Date for
such dividend or distribution;
     
C
=
the amount in Cash per share the Corporation distributes or dividends to holders
of Common Stock in excess of the Initial Dividend Threshold.

 
The Initial Dividend Threshold shall be adjusted in a manner inversely
proportional to adjustments to the Conversion Rate; provided that no adjustment
shall be made to the Initial Dividend Threshold for any adjustment made to the
Conversion Rate pursuant to clauses (1) or (2) of this Section 11(a)(v).

(2)  If the Corporation pays any cash dividend or distribution that is not a
regular, quarterly cash dividend or distribution to all or substantially all
holders of Common Stock, the Conversion Rate shall be adjusted based on the
following formula:
 
[p27.jpg]

 
where
 
CR0
=
the Conversion Rate in effect immediately prior to the Close of Business on the
Record Date for such dividend or distribution;
     
CR1
=
the new Conversion Rate in effect immediately after the Close of Business on the
Record Date for such dividend or distribution;

 
 
 
-27-

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

 
 
 
SP0
=
the average Closing Price of the Common Stock over the ten consecutive Trading
Days ending on the Trading Day immediately preceding the Ex-Dividend Date for
such dividend or distribution; and
     
C
=
the amount in Cash per share the Corporation distributes or dividends to holders
of Common Stock

(3)  Notwithstanding the foregoing, if the portion of the Cash so distributed
applicable to one share of Common Stock is equal to or greater than SP0 as set
forth above, in lieu of the foregoing adjustment, the Corporation shall
distribute to each Holder on the date the Cash dividend or distribution is paid
to holders of Common Stock, but without requiring such Holder to convert its
shares of Series D, the amount of Cash such Holder would have received had such
Holder owned a number of shares of Common Stock equal to the Conversion Rate on
the Record Date for such dividend or distribution.  If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted
to be the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.
 
(4)  For the avoidance of doubt, for purposes of this Section 11(a)(v), in the
event of any reclassification of the Common Stock, as a result of which the
Series D becomes convertible into more than one class of Common Stock, if an
adjustment to the Conversion Rate is required pursuant to this Section 11(a)(v),
references in this Section to one share of Common Stock or Closing Price of one
share of Common Stock shall be deemed to refer to a unit or to the price of a
unit consisting of the number of shares of each class of Common Stock into which
the Series D is then convertible equal to the numbers of shares of such class
issued in respect of one share of Common Stock in such reclassification.  The
above provisions of this paragraph shall similarly apply to successive
reclassifications.
 
(vi)           If the Corporation or any of its Subsidiaries makes a payment of
Cash or other consideration in respect of a tender offer or exchange offer for
all or any portion of the Common Stock, where such Cash and the value of any
such other consideration included in the payment per share of Common Stock
validly tendered or exchanged exceeds the Closing Price of the Common Stock on
the Trading Day next succeeding the last date (the “expiration date”) on which
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it may be amended), the Conversion Rate shall be increased based on the
following formula:
 
[p28.jpg]

 
Where
 
CR0
=
the Conversion Rate in effect immediately prior to the Close of Business on the
expiration date;

 
 
 
-28-

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

 
 
 
CR'
=
the new Conversion Rate in effect immediately after the Close of Business on the
expiration date;
     
AC
=
the aggregate value of all Cash and any other consideration (as determined in
good faith by the Corporation’s Board of Directors) paid or payable for shares
purchased in such tender or exchange offer;
     
OS0
=
the number of shares of Common Stock outstanding immediately prior to the date
such tender or exchange offer expires;
     
OS'
=
the number of shares of Common Stock outstanding immediately after the date such
tender or exchange offer expires (after giving effect to such tender offer or
exchange offer); and
     
SP'
=
the average Closing Price of Common Stock over the ten consecutive Trading Days
ending on the Trading Day next succeeding the expiration date.

 
If the Corporation or a Subsidiary is obligated to purchase shares of Common
Stock pursuant to any such tender or exchange offer, but the Corporation or such
Subsidiary is permanently prevented by applicable law from effecting any such
purchases or all or any portion of such purchases are rescinded, then the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such tender or exchange offer had not been made or had only
been made in respect of the purchases that had been effected.  Except as set
forth in the preceding sentence, if an adjustment to the Conversion Rate
pursuant to this Section 11(a)(vi) with respect to any tender offer or exchange
offer would result in a decrease in the Conversion Rate, no adjustment shall be
made for such tender offer or exchange offer under this Section 11(a)(vi).
 
(vii)           For purposes of this Section 11(a) the term “Record Date” shall
mean, with respect to any dividend, distribution or other transaction or event
in which the holders of Common Stock have the right to receive any Cash,
securities or other property or in which the Common Stock (or other applicable
security) is exchanged for or converted into any combination of Cash, securities
or other property, the date fixed for determination of shareholders entitled to
receive such Cash, securities or other property (whether such date is fixed by
the Board of Directors or by statute, contract or otherwise).
 
(viii)           If application of the formulas provided in Sections 11(a)(i),
11(a)(ii), 11(a)(iii), 11(a)(iv), 11(a)(v) or 11(a)(vi) above would result in a
decrease in the Conversion Rate, no adjustment (other than a readjustment as
described in such sections) to the Conversion Rate shall be made except in the
case of a share split or combination of the Common Stock.
 
 
 
-29-

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

 
 
(ix)           If one or more events occur requiring an adjustment be made to
the Conversion Rate for a particular period, adjustments to the Conversion Rate
shall be determined by the Corporation’s Board of Directors to reflect the
combined impact of such Conversion Rate adjustments, as set out in this Section
11(a), during such period.
 
(x)           Notwithstanding any of the foregoing clauses in this Section 11,
no adjustment in the Conversion Rate shall be required unless the adjustment
would result in a change in the Conversion Rate of at least 1.00%; provided,
however, that any adjustment which by reason of this Section 11(a)(x) is not
required to be made shall be carried forward and the Corporation shall make such
adjustment, regardless of whether the aggregate adjustment is less than 1.00%,
within one year of the first such adjustment carried forward or in connection
with any conversion of Series D.  All calculations under this Section 11 shall
be made to the nearest one-ten thousandth (1/10,000) of a cent or to the nearest
one-ten thousandth (1/10,000) of a share, as the case may be.
 
No adjustment in the Conversion Rate need be made (i) for issuances of Common
Stock pursuant to any present or future plan for reinvestment of dividends or
interest payable on the Corporation’s securities or the investment of additional
optional amounts in shares of Common Stock under any plan, (ii) upon the
issuance of any shares of Common Stock or options or rights to purchase shares
pursuant to any present or future employee, director or consultant benefit plan
or program of, or assumed by, the Corporation or any of its Subsidiaries, (iii)
upon the issuance of any shares of Common Stock pursuant to any option, warrant,
right or exercisable, exchangeable or convertible security outstanding as of the
date the Series D was first issued, (iv) for a change in the par value of the
Common Stock, (v) for repurchases of shares of Common Stock in open market
transactions or privately negotiated transactions, or (vi) for accumulated and
unpaid dividends, other than as expressly contemplated by Section 11(a)(i).
 
No adjustment to the Conversion Rate need be made pursuant to Section 11(a)(i)
through (ix) above for a transaction if Holders are permitted to participate in
the transaction without conversion, concurrently with the holders of Common
Stock, on a basis and with notice that the Board of Directors of the Corporation
determines in good faith to be fair and appropriate in light of the basis and
notice to holders of Common Stock participating in the transaction.
 
Whenever a provision of this Certificate of Designations requires the
calculation of an average of the Closing Price over a span of multiple days, the
Corporation will make appropriate adjustments to account for any adjustment to
the Conversion Rate that becomes effective, or any event requiring an adjustment
to the Conversion Rate that becomes effective, or any event requiring an
adjustment to the Conversion Rate where the Ex-Dividend Date of the event
occurs, at any time during the period from which the average is to be
calculated.
 
(xi)           Upon conversion of the Series D, the Holders shall receive, in
addition to any shares of Common Stock issuable upon such conversion, any
associated rights issued under any shareholder rights agreement of the
Corporation that provides that each share of Common Stock issued upon conversion
of the Series D at any time prior to the distribution of separate certificates
representing such rights will be entitled to receive such rights unless, prior
to
 
 
 
-30-

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

 
 
conversion, the rights have separated from the Common Stock, expired, terminated
or been redeemed or exchanged in accordance with such rights plan, and no
adjustment shall be made to the Conversion Rate pursuant to Section 11(a)(iv)
hereof.  If, prior to any conversion, the rights have separated from the Common
Stock, the Conversion Rate shall be adjusted at the time of separation as if the
Corporation distributed to all holders of Common Stock, shares of Capital Stock,
evidences of indebtedness, assets, property or rights or warrants as described
in Section 11(a)(iv) hereof, subject to readjustment in the event of the
expiration, termination or redemption of such rights.
 
(xii)           Subject to applicable stock exchange rules and listing
standards, the Corporation shall be entitled to increase the Conversion Rate by
any amount for a period of at least 20 Business Days if the Board of Directors
determines that such increase would be in the best interests in the Corporation;
provided the Corporation has given to the Conversion Agent and DTC at least 15
days’ prior notice of any such increase in the Conversion Rate and the period
during which it will be in effect.  Subject to applicable stock exchange rules
and listing standards, the Corporation shall be entitled to increase the
Conversion Rate, in addition to the events requiring an increase in the
Conversion Rate pursuant to Section 11 hereof, as it in its discretion shall
determine to be advisable in order to avoid or diminish any tax to shareholders
in connection with any stock dividends, subdivisions of shares, distributions of
rights to purchase stock or securities or distributions of securities
convertible into or exchangeable for stock hereafter made by the Corporation to
its shareholders or other events.
 
(xiii)           Whenever the Conversion Rate is adjusted as herein provided,
the Corporation will issue a notice to the Conversion Agent and DTC containing
the relevant information and make this information available on the
Corporation’s website.  In addition, the Corporation shall provide upon the
request of a Holder of Series D, to the extent not posted on the Corporation
website, a brief statement setting forth in reasonable detail how the adjustment
to the Conversion Rate was determined and setting forth the adjusted Conversion
Rate.
 
(xiv)           For purposes of this Section 11, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Corporation but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock.
 
(xv)           If  the record date for a dividend or distribution on Common
Stock occurs prior to a Mandatory Conversion Date and the payment date for a
dividend or distribution on Common Stock occurs after a Mandatory Conversion
Date, and such dividend or distribution would have resulted in an adjustment to
the Conversion Rate if such dividend or distribution does not result in an
adjustment to the Conversion Rate but were paid prior to such Mandatory
Conversion Date, then without duplication the Corporation shall deem the Holders
to be holders of record of Common Stock for purposes of that dividend or
distribution.  In that case, the Holders will receive the number of shares of
Common Stock issuable upon the applicable Mandatory Conversion Date together
with the dividend or distribution on such shares of Common Stock so converted.
 
 
 
-31-

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

 
 
 
12.           Reorganization Events.
 
(a)           In the event of:
 
(i)           any consolidation or merger of the Corporation with or into
another Person or of another Person with or into the Corporation;
 
(ii)          any sale, transfer, lease or conveyance to another Person of the
property of the Company as an entirety or substantially as an entirety;
 
(iii)         any statutory share exchange of the Corporation with another
Person (other than in connection with a merger or acquisition); or
 
(iv)         any liquidation, dissolution or termination of the Corporation;
 
in each case in which holders of Common Stock would be entitled to receive cash,
securities or other property for their shares of Common Stock (any such event
specified in this Section 12(a), a “Reorganization Event”), each share of Series
D outstanding immediately prior to such Reorganization Event shall, without the
consent of Holders, become convertible into the kind of cash, securities and
other property receivable in such Reorganization Event by a holder of one share
of Common Stock that was not the counterparty to the Reorganization Event or an
affiliate of such other party (such cash, securities and other property, the
“Exchange Property”).
 
(b)           In the event that holders of the shares of the Common Stock have
the opportunity to elect the form of consideration to be received in such
transaction, the “Exchange Property” that Holders of the Series D will be
entitled to receive shall be deemed to be the weighted average of the types and
amounts of consideration received by the holders of Common Stock that
affirmatively make an election (or of all such holders if none make an
election).  The number of units of Exchange Property for each share of Series D
converted following the effective date of such Reorganization Event shall be
determined based on the Conversion Rate then in effect on the applicable
Conversion Date, determined as if the references to a “share of Common Stock” in
this Certificate of Designations were to “unit of Exchange Property.”
 
(c)           After a Reorganization Event, for purposes of determining whether
a Mandatory Conversion Date has occurred, the term “Closing Price” shall be
deemed to refer to the closing sale price, last quoted bid price or mid-point of
the last bid and ask prices, as the case may be, of any publicly traded
securities that comprise all or part of the Exchange Property.  For purposes of
this Section 12, references to Common Stock in the definition of “Trading Day”
shall be replaced by references to any publicly traded securities that comprise
all or part of the Exchange Property.
 
(d)           The above provisions of this Section 12 shall similarly apply to
successive Reorganization Events and the provisions of Section 11 shall apply to
any shares of capital stock of the Corporation (or any successor) received by
the holders of the Common Stock in any such Reorganization Event.
 
 
 
-32-

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

 
 
 
(e)           The Corporation (or any successor) shall, within 20 days of the
occurrence of any Reorganization Event, provide written notice to the Holders of
such occurrence of such event and of the kind and amount of the cash, securities
or other property that constitutes the Exchange Property.  Failure to deliver
such notice shall not affect the operation of this Section 12 or the validity of
any Reorganization Event.
 
13.           Fractional Shares.
 
(a)           No fractional shares of Common Stock shall be issued as a result
of any conversion of shares of Series D.
 
(b)           In lieu of any fractional share of Common Stock otherwise issuable
in respect of any mandatory conversion pursuant to Section 10(a) or a conversion
at the option of the Holder pursuant to Section 9(a), Section 10(c) or
Section 10(g), the Corporation shall pay an amount in cash (computed to the
nearest cent) equal to the same fraction of:
 
(i)           in the case of a mandatory conversion pursuant to Section 10(a), a
Make Whole Acquisition conversion pursuant to Section 10(c) or a Conversion Upon
Fundamental Change pursuant to Section 10(g), the average of the Closing Prices
over the five consecutive Trading Day period preceding the Trading Day
immediately preceding the applicable Conversion Date; or
 
(ii)           in the case of an Early Conversion pursuant to Section 9(a), the
Closing Price of the Common Stock on the second Trading Day immediately
preceding the Early Conversion Date.
 
(c)           If more than one share of the Series D is surrendered for
conversion at one time by or for the same Holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of shares of the Series D so surrendered.
 
14.           Reservation of Common Stock.
 
(a)           The Corporation shall at all times reserve and keep available out
of its authorized and unissued Common Stock or shares held in the treasury by
the Corporation, solely for issuance upon the conversion of shares of Series D
as provided in this Certificate of Designations, free from any preemptive or
other similar rights, such number of shares of Common Stock as shall from time
to time be issuable upon the conversion of all the shares of Series D then
outstanding.  For purposes of this Section 14(a), the number of shares of Common
Stock that shall be deliverable upon the conversion of all outstanding shares of
Series D shall be computed as if at the time of computation all such outstanding
shares were held by a single Holder.
 
(b)           Notwithstanding the foregoing, the Corporation shall be entitled
to deliver upon conversion of shares of Series D, as herein provided, shares of
Common Stock acquired by the Corporation (in lieu of the issuance of authorized
and unissued shares of Common Stock), so
 
 
 
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long as any such acquired shares are free and clear of all liens, charges,
security interests or encumbrances (other than liens, charges, security
interests and other encumbrances created by the Holders).
 
(c)           All shares of Common Stock delivered upon conversion of the Series
D shall be duly authorized, validly issued, fully paid and non-assessable, free
and clear of all liens, claims, security interests and other encumbrances (other
than liens, charges, security interests and other encumbrances created by the
Holders).
 
(d)           Prior to the delivery of any securities that the Corporation shall
be obligated to deliver upon conversion of the Series D, the Corporation shall
use its reasonable best efforts to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority.
 
(e)           The Corporation hereby covenants and agrees that, if at any time
the Common Stock shall be listed on the New York Stock Exchange or any other
national securities exchange or automated quotation system, the Corporation
will, if permitted by the rules of such exchange or automated quotation system,
list and keep listed, so long as the Common Stock shall be so listed on such
exchange or automated quotation system, all the Common Stock issuable upon
conversion of the Series D; provided, however, that if the rules of such
exchange or automated quotation system permit the Corporation to defer the
listing of such Common Stock until the first conversion of Series D into Common
Stock in accordance with the provisions hereof, the Corporation covenants to
list such Common Stock issuable upon conversion of the Series D in accordance
with the requirements of such exchange or automated quotation system at such
time.
 
15.           Record Holders. To the fullest extent permitted by applicable law,
the Corporation and the transfer agent for the Series D may deem and treat the
record holder of any share of Series D as the true and lawful owner thereof for
all purposes, and neither the Corporation nor such transfer agent shall be
affected by any notice to the contrary.
 
16.           Notices. All notices or communications in respect of Series D
shall be sufficiently given if given in writing and delivered in person or by
first class mail, postage prepaid, or if given in such other manner as may be
permitted in this Certificate of Designations, in the Certificate of
Incorporation or Bylaws or by applicable law.
 
17.           Preemptive or Subscription Rights.  Except as expressly provided
in any agreement between a Holder and the Corporation, no share of Series D
shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect
thereto, regardless of how such securities, or such warrants, rights or options,
may be designated, issued or granted.
 
18.           Repurchase.  Subject to the limitations imposed herein, the
Corporation may purchase and sell shares of Series D from time to time to such
extent, in such manner, and upon such terms as the Board or any duly authorized
committee of the Board may determine;
 
 
 
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provided, however, that the Corporation shall not use any of its funds for any
such purchase when there are reasonable grounds to believe that the Corporation
is, or by such purchase would be, rendered insolvent.
 
19.           Other Rights.  The shares of Series D shall not have any voting
powers, preferences or relative, participating, optional or other special
rights, or qualifications, limitations or restrictions thereof, other than as
set forth herein or in the Certificate of Incorporation of the Corporation or as
provided by applicable law.
 
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IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, does hereby
affirm that this certificate is the act and deed of the Corporation and that the
facts herein stated are true, and accordingly has hereunto set his hand this
____ day of [_______], 2011.
 
MORGAN STANLEY
         
By
     
Name:
     
Title:
   

 
 

 
 
 
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Schedule A

Required Approvals

Australia/Foreign Investments Review Board
Cayman Islands/Cayman Islands Monetary Authority or confirmation with Cayman
Islands/Cayman Islands Monetary Authority that no approval is required)
Ireland/Central Bank
Japan/Fair Trade Commission
Luxembourg/Commissariat aux Assurances
Singapore/Monetary Authority of Singapore (or confirmation with Monetary
Authority of Singapore that no approval is required)
Spain/Comisión Nacional del Mercado de Valores
Turkey/Capital Markets Board (or confirmation with Turkey/Capital Markets Board
that no approval is required)
United Kingdom/Financial Services Authority
United States/Federal Energy Regulatory Commission

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