Exhibit
10.1


      

 

      SEPARATION
AGREEMENT

      


      


      by and
between

      


      MORGAN
STANLEY

      


      and

      


      MSCI
INC.

      


      Dated as
of May 22, 2009

       

       

      
 

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        TABLE
OF CONTENTS

        
          
            

          

           

          PAGE

        

      

      
        
          	
                  ARTICLE
      1

                	 
      
	
                  DEFINITIONS

                	 
      
	 	 
	
                  Section
      1.01.  Definitions

                	
                  3

                
	
                  Section
      1.02. Interpretation

                	
                  6

                
	 	 
	
                  ARTICLE
      2

                	 
      
	
                  CONFIDENTIALITY
      AND ACCESS TO INFORMATION

                	 
      
	 	 
	
                  Section
      2.01.  Confidentiality

                	
                  7

                
	
                  Section
      2.02.  Access to and Delivery
      of Information

                	
                  8

                
	 	 
	
                  ARTICLE
      3

                	 
      
	
                  INSURANCE
      MATTERS

                	 
      
	 	 
	
                  Section
      3.01.  Insurance Prior to the
      End Date

                	
                  9

                
	
                  Section
      3.02.  Ownership of Existing
      Policies and Programs

                	
                  9

                
	
                  Section
      3.03.  Maintenance of Post-Sale
      Insurance by MSCI

                	
                  10

                
	
                  Section
      3.04.  Rights Under Shared
      Policies

                	
                  10

                
	
                  Section
      3.05.  Administration and
      Reserves

                	
                  12

                
	
                  Section
      3.06.  Insurance
      Premiums

                	
                  12

                
	
                  Section
      3.07.  Agreement for Waiver of
      Conflict and Shared Defense

                	
                  12

                
	
                  Section
      3.08.  Duty to Mitigate
      Settlements

                	
                  13

                
	
                  Section
      3.09.  Non-Waiver of Rights to
      Coverage

                	
                  13

                
	 	 
	
                  ARTICLE
      4

                	 
      
	
                  OTHER
      AGREEMENTS

                	 
      
	 	 
	
                  Section
      4.01.  Settlement of
      Intercompany Accounts

                	
                  13

                
	 	 
	
                  ARTICLE
      5

                	 
      
	
                  INDEMNIFICATION

                	 
      
	 	 
	
                  Section
      5.01.  Indemnification

                	
                  14

                
	
                  Section
      5.02.  Notice of
      Claims

                	
                  14

                
	
                  Section
      5.03.  Retention of
      Records

                	
                  14

                
	 	 
	
                  ARTICLE
      6

                	 
      
	
                  MISCELLANEOUS

                	 
      
	 	 
	
                  Section
      6.01.  Notices

                	
                  15

                


        

         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

           

        

        
          	
                  Section
      6.02.  Amendments; No
      Waivers

                	
                  16

                
	
                  Section
      6.03.  Expenses

                	
                  16

                
	
                  Section
      6.04.  Successors and
      Assigns

                	
                  16

                
	
                  Section
      6.05.  Governing
      Law

                	
                  16

                
	
                  Section
      6.06.  Counterparts;
      Effectiveness; Third-Party Beneficiaries

                	
                  17

                
	
                  Section
      6.07.  Entire
      Agreement

                	
                  17

                
	
                  Section
      6.08.  Tax
      Matters

                	
                  17

                
	
                  Section
      6.09.  Jurisdiction

                	
                  17

                
	
                  Section
      6.10.  WAIVER OF JURY
      TRIAL

                	
                  18

                
	
                  Section
      6.11.  Severability

                	
                  18

                
	
                  Section
      6.12.  Survival

                	
                  18

                
	
                  Section
      6.13.  Captions

                	
                  18

                
	
                  Section
      6.14.  Specific
      Performance

                	
                  18

                
	
                  Section
      6.15.  Performance

                	
                  18

                
	
                  Section
      6.16.  Limited
      Liability

                	
                  19

                
	
                  Section
      6.17.  Mutual
      Drafting

                	
                  19

                
	
                  Section
      6.18.  Effect if Sale Does Not
      Occur

                	
                  19

                
	
                  Section
      6.19.  Corporate
      Authorization

                	
                  19

                


        

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      SEPARATION
AGREEMENT

      


      THIS
SEPARATION AGREEMENT dated as of May 22, 2009 between Morgan Stanley, a Delaware
corporation (“Morgan
Stanley”) and MSCI Inc., a Delaware corporation (“MSCI”) (collectively, the
“Parties”).

      


      RECITALS

      


      WHEREAS,
Morgan Stanley intends to sell all of the outstanding shares of class A common
stock, par value $0.01 per share, of MSCI (“MSCI Class A Common Stock”) owned by Morgan
Stanley (the “Sale”, and
the date of the consummation of the
disposition of all shares of MSCI Class A Common Stock held by Morgan Stanley,
the “Sale
Date”);

      


      WHEREAS,
the Parties hereto have determined to set forth certain agreements that will
govern the relationship between the Parties in connection with the
Sale;

      


      NOW
THEREFORE, in consideration of the mutual covenants contained herein, the
Parties hereto agree as follows:

      


      


      ARTICLE
1


      DEFINITIONS

      


      Section
1.01. Definitions.
Unless otherwise defined herein, each capitalized term shall have the meaning
specified for such term in the Tax Sharing Agreement between Morgan Stanley, on
behalf of itself and the members of the MS Group, and MSCI, on behalf of itself
and the members of the MSCI Group, dated as of November 20, 2007 (the “Tax Sharing Agreement”). As
used in this Agreement:

      


      “Action” means any demand,
claim, suit, action, arbitration, inquiry, investigation or other proceeding by
or before any Governmental Authority or any arbitration or mediation
tribunal.

      


      “Agreement” means this
Separation Agreement together with all Schedules hereto and all amendments,
modifications and changes hereto and thereto.

      


      “Ancillary Agreements” means
the Tax Sharing Agreement, the Employee Matters Agreement, the Services
Agreement and the Shareholder Agreement.

      


      
        
          
          

        

        
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      “Applicable Law” means any
federal, state, local or foreign law (statutory, common or otherwise),
constitution, treaty, convention, ordinance, code, rule, regulation, order,
injunction, judgment, decree, ruling, directive, guidance, instruction,
direction, permission, waiver, notice, condition, limitation, restriction or
prohibition or other similar requirement enacted, adopted, promulgated, imposed,
issued or applied by a Governmental Authority that is binding upon or applicable
to such Person, its properties or assets or its business or operations, as
amended unless expressly specified otherwise.

      


      “Business Day” means any day,
other than a Saturday, a Sunday or a day on which banks in New York, New York
are authorized or obligated by law to close.

      


      “Claims” has the meaning set
forth in Section 5.01.

      


      “Claims Administration” means
the processing of claims made under Morgan Stanley Policies, including the
reporting of claims to the insurance carrier, management and defense of claims,
and providing for appropriate releases upon settlement of claims.

      


      “Claims Made Policies” has the
meaning set forth in Section 3.04(a).

       

      “Confidential Information” has
the meaning set forth in Section 2.01.

       

      “Disposing Party” has the
meaning set forth in Section 5.03.

      


      “Employed Lawyers E&O
Policy” has the meaning set forth in Section 3.02.

      


      “Employee Matters Agreement”
means the Employee Matters Agreement between Morgan Stanley and MSCI dated as of
May 22, 2009.

      


      “End Date” has the meaning set
forth in Section 3.02.

      


      “FIFO Basis” means, with
respect to the payment of Unrelated Claims pursuant to the same Shared Policy,
the payment in full of each successful claim (regardless of whether a Morgan
Stanley Insured Party or a MSCI Insured Party is the claimant) in the order in
which such successful claim is approved by the insurance carrier, until the
limit of the applicable Shared Policy is met.

      


      “Governmental Authority” means
any multinational, foreign, federal, state, local or other governmental,
statutory or administrative authority, regulatory body or commission or any
court, tribunal or judicial or arbitral authority which has any jurisdiction or
control over either Party (or their Affiliates).

      


      
        “Indemnifying Party” has the
meaning set forth in Section 5.01.

      

       

      
        
          
          

        

        
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      “Indemnitee” has the meaning
set forth in Section 5.01.

      


      “Insured Party” means a Morgan
Stanley Insured Party or a MSCI Insured Party.

      


      “Liabilities” means any and all
claims, debts, liabilities and obligations, absolute or contingent, matured or
not matured, liquidated or unliquidated, accrued or unaccrued, known or unknown,
whenever arising, including all costs and expenses relating thereto, and
including, without limitation, those debts, liabilities and obligations arising
under this Agreement, any Applicable Law, or any award of any arbitrator of any
kind, and those arising under any agreement, commitment or
undertaking.

      


      “Losses” means, with respect to
any person, any and all damages, losses, liabilities and expenses incurred or
suffered by such person (including, without limitation, reasonable expenses of
investigation and reasonable attorneys’ fees and expenses in connection with any
and all Actions or threatened Actions).

      


      “Morgan Stanley Business” means
the business conducted by the MS Group from time to time (but excluding the MSCI
Business), whether before, on or after the Sale.

      


      “Morgan Stanley Insured Party”
means any member of the MS Group that is named insured, additional named insured
or insured under any Shared Policy.

      


      “Morgan Stanley Policies” has
the meaning set forth in Section 3.02.

      


      “MSCI Business” means the
business conducted by the MSCI Group from time to time, whether before, on or
after the Sale.

      


      “MSCI Insured Party” means any
member of the MSCI Group that is named insured, additional named insured or
insured under any Shared Policy.

      


      “Non-Paying Party” has the
meaning set forth in Section 4.01.

      


      “Occurrence Based Policies” has
the meaning set forth in Section 3.04(a).

      


      “Paying Party” has the meaning
set forth in Section 4.01.

      


      “Receiving Party” has the
meaning set forth in Section 5.03.

      


      “Related Claims” means a claim
or claims against a Shared Policy made by one or more MSCI Insured Parties, on
the one hand, and one or more Morgan Stanley Insured Parties, on the other hand,
filed in connection with Losses suffered by either a MSCI Insured Party or a
Morgan Stanley Insured Party, as the

      


      
        
          
          

        

        
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      case may
be, arising out of the same underlying transaction or series of transactions or
event or series of events that have also given rise to Losses suffered by a
Morgan Stanley Insured Party or a MSCI Insured Party, as the case may be, which
Losses are the subject of a claim or claims by such Person against a Shared
Policy.

      


      “Representatives” has the
meaning set forth in Section 2.01.

      


      “Services Agreement” means the
Services Agreement by and between Morgan Stanley and MSCI Inc. dated as of
November 20, 2007, as amended on July 21, 2008.

      


      “Shareholder Agreement” means
the Amended and Restated Shareholder Agreement by and between Morgan Stanley and
MSCI Inc. dated as of July 21, 2008.

      


      “Shared Policies” has the
meaning set forth in Section 3.04(a).

       

      “Sale Time” means 12:00 p.m. on
the Sale Date.

      


      “Third Party” means a Person
that is not an Affiliate of the MSCI Group or MS Group.

      


      “Unrelated Claims” means a
claim or claims against a Shared Policy that is not a Related
Claim.

      


      Section
1.02. Interpretation.
In this Agreement, unless the context clearly indicates otherwise:

      


      (a) words
used in the singular include the plural and words used in the plural include the
singular;

      


      (b) references
to any Person include such Person’s successors and assigns but, if applicable,
only if such successors and assigns are permitted by this
Agreement;

      


      
        (c)  references
to any gender include the other gender;

      

      


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

      


      (e) references
to any Article, Section or Schedules mean such Article or Section of, or such
Schedule to, this Agreement, as the case may be, and references in any Section
or definition to any clause mean such clause of such Section or
definition;

      


      
        
          
          

        

        
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      (f) the words
“herein,” “hereunder,” “hereof,” “hereto” and words of similar import shall be
deemed references to this Agreement as a whole and not to any particular Section
or other provision hereof;

      


      (g) references
to any agreement, instrument or other document mean such agreement, instrument
or other document as amended, supplemented and modified from time to time to the
extent permitted by the provisions thereof and by this Agreement;

      


      (h) references
to any law (including statutes and ordinances) mean such law (including all
rules and regulations promulgated thereunder) as amended, modified, codified or
reenacted, in whole or in part, and in effect at the time of determining
compliance or applicability;

      


      (i) relative
to the determination of any period of time, “from” means “from and including,”
“to” means “to but excluding” and “through” means “through and
including”;

      


      (j) accounting
terms used herein shall have the meanings historically ascribed to them by
Morgan Stanley and its Subsidiaries, including MSCI, in its and their internal
accounting and financial policies and procedures in effect prior to the date of
this Agreement;

      


      (k) the
titles to Articles and headings of Sections contained in this Agreement have
been inserted for convenience of reference only and shall not be deemed to be a
part of or to affect the meaning or interpretation of this
Agreement;

      


      (l) any
portion of this Agreement obligating a Party to take any action or refrain from
taking any action, as the case may be, shall mean that such Party shall also be
obligated to cause its relevant Affiliates to take such action or refrain from
taking such action, as the case may be; and

      


      (m) unless
otherwise specified in this Agreement, all references to dollar amounts herein
shall be in respect of lawful currency of the United States.

       

      


      ARTICLE
2


      CONFIDENTIALITY AND ACCESS TO INFORMATION

      


      Section
2.01. Confidentiality.
Each Party acknowledges that it may have in its possession, and, in connection
with this Agreement and the Ancillary Agreements, may receive, confidential
information of the other Party or any member of its Group (including information
in the possession of such other Party relating to its clients or customers)
(“Confidential
Information”). Each Party

      


      
        
          
          

        

        
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      shall
hold and shall cause its directors, officers, employees, agents, consultants and
advisors (“Representatives”) to hold in
strict confidence and not to use except as permitted by this Agreement or any
Ancillary Agreement all such Confidential Information concerning the other Party
unless (i) such Party or any of its Representatives is compelled to disclose
such Confidential Information by judicial or administrative process or by other
requirements of Applicable Law or (ii) such Confidential Information can be
shown to have been (A) in the public domain through no fault of such Party or
any of its Representatives, (B) lawfully acquired after the Sale Date on a
non-confidential basis from other sources not known by such Party to be under
any legal obligation to keep such information confidential or (C) developed by
such Party or any of its Representatives without the use of any Confidential
Information of the other Party. Notwithstanding the foregoing, such Party may
disclose such Confidential Information to its Representatives so long as such
Persons are informed by such Party of the confidential nature of such
Confidential Information and are directed by such Party to treat such
information confidentially. The obligation of each Party and its Representatives
to hold any such Confidential Information in confidence shall be satisfied if
they exercise the same level of care with respect to such Confidential
Information as they would with respect to their own proprietary information. If
such Party or any of its Representatives becomes legally compelled to disclose
any documents or information subject to this Section 2.01, such Party will
promptly notify the other Party and, upon request, use reasonable efforts to
cooperate with the other Party’s efforts to seek a protective order or other
remedy. If no such protective order or other remedy is obtained or if the other
Party waives in writing such Party’s compliance with this Section 2.01, such
Party may furnish only that portion of the information which it concludes, after
consultation with counsel, is legally required to be disclosed and will exercise
its reasonable efforts to obtain reliable assurance that confidential treatment
will be accorded such information. Each Party agrees to be responsible for any
breach of this Section 2.01 by it and its Representatives.

      


      Section
2.02. Access to and Delivery
of Information. (a) For a period of six years after the Sale Date (or
longer with respect to any open audit periods, provided that the Group
requesting such access shall have given reasonable notice of the open audit
period to the other Group prior to the end of such six year period), each Group
shall afford promptly the other Group and its agents and, to the extent required
by Applicable Law, authorized representatives of any Governmental Authority of
competent jurisdiction, reasonable access during normal business hours to its
books of account, financial and other records (including accountant’s work
papers, to the extent consents have been obtained), information, employees and
auditors to the extent necessary or useful for such other Group in connection
with any audit, investigation, dispute or litigation, complying with their
obligations under this Agreement or any Ancillary Agreement, any regulatory
proceeding, any regulatory filings, complying with

      


      
        
          
          

        

        
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        reporting
disclosure requirements or any other requirements imposed by any Governmental
Authority or any other reasonable business purpose of the Group requesting such
access; provided that
any such access shall not unreasonably interfere with the conduct of the
business of the Group providing such access; provided further that in the
event any Party reasonably determines that affording any such access or
delivery (as provided for below) to the other Party would be commercially
detrimental in any material respect or violate any Applicable Law or agreement
to which such Party or member of its Group is a party, or waive any
attorney-client privilege applicable to such Party or any member of its Group,
the Parties shall use reasonable efforts to permit the compliance with such
request in a manner that avoids any such harm or consequence. Without limiting
the generality of the foregoing, Morgan Stanley agrees to cooperate with MSCI
and use reasonable efforts to promptly deliver to MSCI the items, and perform
the functions, specified on Schedule 2.02(a) hereto.

      

      


      (b)
Without limiting the generality of the foregoing, until the end of the first
full MSCI fiscal year occurring after the Sale Date (and for a reasonable period
of time afterwards as required for each Party to prepare consolidated financial
statements or complete a financial statement audit for the fiscal year during
which the Sale Date occurs), each Party shall use reasonable efforts, to
cooperate with and deliver the other Party’s information requests to enable the
other Party to meet its timetable for dissemination of its earnings releases,
financial statements and enable such other Party’s auditors to timely complete
their audit of the annual financial statements and review of the quarterly
financial statements.

      


      


      ARTICLE
3


      INSURANCE MATTERS

      


      Section
3.01. Insurance Prior to the
End Date. Except as may otherwise be expressly provided in this Article
3, MSCI does hereby agree, for itself and on behalf of the MSCI Group, that the
MS Group shall not have any Liability whatsoever as a result of the insurance
policies, insurance contracts and claim administration contracts and practices
related to the foregoing of the MS Group in effect at any time prior to the End
Date (as defined in Section 3.02), including as a result of the level or scope
of any such insurance policies, insurance contracts, claim administration
contracts, the creditworthiness of any insurance carrier, the terms and
conditions of any policy or contract and the adequacy or timeliness of any
notice to any insurance carrier or claims administrator with respect to any
actual claim or potential claim or otherwise.

      


      Section
3.02. Ownership of Existing
Policies and Programs. Morgan Stanley or any member of the MS Group will
continue to own all insurance policies, insurance contracts and claim
administration contracts of any kind of any

       

      
        
          
          

        

        
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      member of
the MS Group which were or are in effect at any time at or prior to the Sale
Time (other than insurance policies, insurance contracts and claim
administration contracts established by any member of the MSCI Group to cover
only the MSCI Group on or after the End Date), including general liability
(whether primary, excess or umbrella), fiduciary liability, automobile, aircraft
hull and liability, all risk property (including business interruption) and
casualty, directors and officers liability, employer’s liability, workers’
compensation, comprehensive crime, errors and omissions and property/boiler and
machinery insurance policies, together with all rights, benefits and privileges
thereunder (collectively, the “Morgan Stanley Policies”). The
Parties acknowledge that separate insurance policies were entered into by the
MSCI Group as of July 15, 2008 (except in the case of an insurance policy
covering employed lawyers errors and omissions (the “Employed Lawyers E&O
Policy”), which was entered into by the MSCI Group as of July 1, 2008),
in respect of the MSCI Business. As used herein, “End Date” shall refer to July
15, 2008, or, in the case of the Employed Lawyers E&O Policy, to July 1,
2008. Subject to the MSCI Group’s rights under Section 3.04, the Parties
acknowledge that coverage of the MSCI Group under the Morgan Stanley Policies
ceased as of the End Date. Nothing contained herein shall be construed to be an
attempted assignment of or a change to any part of the ownership of the Morgan
Stanley Policies. Subject to the provisions of this Agreement, the members of
the MS Group shall retain all of their respective rights, benefits and
privileges, if any, under the Morgan Stanley Policies.

      


      Section
3.03. Maintenance of Post-Sale
Insurance by MSCI. As of the Sale Date, MSCI shall be responsible for
maintaining its own insurance policies and programs (including with respect to
general liability (whether primary, excess or umbrella), fiduciary liability,
automobile, aircraft hull and liability, all risk property (including business
interruption) and casualty, directors and officers liability, employer’s
liability, workers’ compensation, comprehensive crime, errors and omissions and
property/boiler and machinery insurance policies) for activities and claims
involving any member of the MSCI Group. Each member of the MSCI Group, as
appropriate, shall be responsible for all administrative and financial matters
relating to insurance policies established and maintained by any member of the
MSCI Group and claims relating to any period at or after the End Date involving
any member of the MSCI Group.

      


      Section
3.04. Rights Under Shared
Policies. (a) At and after the Sale Time: (i) MSCI and the other members
of the MSCI Group will have the right to assert claims for any Losses with
respect to the MSCI Business under Morgan Stanley Policies that cover any member
of the MSCI Group and/or any or all of the MSCI Business within the definition
of the named insured, additional named insured, additional insured or insured
(excluding, for the avoidance of doubt, any group health and welfare insurance
policies) (“Shared
Policies”) with Third Party insurers that are “occurrence based”
insurance policies (“Occurrence
Based Policies”)
arising out of insured occurrences occurring from the date coverage

      


      
        
          
          

        

        
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      thereunder
first commenced until the End Date to the extent that the terms and conditions
of any such Occurrence Based Policies and agreements relating thereto so allow;
(ii) MSCI and the other members of the MSCI Group will have the right to
prosecute or continue to prosecute claims with respect to the MSCI Business
properly asserted under Occurrence Based Policies for claims which arose at or
prior to the End Date to the extent that the terms and conditions of any such
Occurrence Based Policies and agreements relating thereto so allow; and (iii)
MSCI and the other members of the MSCI Group will have the right to assert
and/or continue to prosecute claims with respect to the MSCI Business under
Shared Policies with Third Party insurers that are made under liability
insurance policies written on a “claims made” basis (“Claims Made Policies”) arising
out of insured incidents occurring from the date coverage thereunder first
commenced until the End Date to the extent that the terms and conditions of any
such Claims Made Policies and agreements relating thereto so allow; provided, that in the case of
clauses (i), (ii) and (iii), (A) subject to Section 3.04(b), the MS Group may
generally (but not specifically with respect to, and having a material adverse
effect on, the MSCI Group), at any time, without liability or obligation to the
MSCI Group, amend, commute, terminate, buy-out, extinguish liability under or
otherwise modify any Shared Policies (and such claims shall be subject to any
such amendments, commutations, terminations, buy-outs, extinguishments and
modifications), (B) such claims will be subject to (and recovery thereon will be
reduced by the amount of) any applicable deductibles, retentions or
self-insurance provisions, and, with respect to any such deductibles, retentions
or self-insurance provisions which require a payment by a member of the MS Group
in respect thereof, MSCI shall reimburse such member of the MS Group for a pro rata portion of such
payment based on MSCI’s interest in such claim, (C) MSCI shall be responsible
for and shall pay any claims handling expenses or residual Liability arising
from such claims and (D) such claims will be subject to exhaustion of existing
sublimits and aggregate limits as provided in Section 3.04(b). No member of the
MS Group will bear any Liability for the failure of an insurer to pay any claim
under any Shared Policy. It is understood that any Claims Made Policies may not
provide any coverage to the MSCI Group for incidents occurring prior to the End
Date but that are asserted with the insurance carrier after the End
Date.

      


      (b) In the
event that after the End Date Morgan Stanley proposes to amend, commute,
terminate, buy-out, extinguish liability under or otherwise modify any Shared
Policies under which MSCI, the MSCI Business or the other members of the MSCI
Group has or may in the future have rights to assert claims pursuant to this
Article 3 in a manner that would adversely affect any such rights of MSCI, the
MSCI Business or the other members of the MSCI Group, Morgan Stanley will give
MSCI prior notice thereof.

      


      (c) To the
extent that the limits of any Shared Policy preclude payment in full of
Unrelated Claims filed by any member of the MS Group, on the one

       

      
        
          
          

        

        
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      hand, and
any member of the MSCI Group, on the other hand, the insurance proceeds
available under such Shared Policy shall be paid to Morgan Stanley and/or MSCI,
as applicable, on a FIFO Basis. In the event that any member of the MS Group, on
the one hand, and any member of the MSCI Group, on the other hand, file Related
Claims under any Shared Policy, each of Morgan Stanley and MSCI shall receive a
pro rata amount of the
available insurance proceeds, based on the relationship the Loss incurred by
each such Party bears to the total Loss to both such Parties from the occurrence
or event underlying the Related Claims.

      


      Section
3.05. Administration and
Reserves. (a) From and after the Sale, the MS Group will be responsible
for the Claims Administration with respect to claims of the MS Group under
Shared Policies.

      


      (b) From and
after the Sale, the MSCI Group will be responsible for the Claims Administration
with respect to claims of the MSCI Group under Shared Policies. MSCI shall
provide advance notice to Morgan Stanley of any such claims.

      


      (c) Each
Party agrees to consider in good faith (but shall have no obligation to accept)
any requests by the other Party to provide assistance to, and cooperate with,
such Party or any member of its Group with respect to the Claims Administration
referred to in Sections 3.05(a) and 3.05(b). None of the members of either Group
and their respective directors, officers, agents and employees shall have any
liability, whether direct or indirect, in contract or tort or otherwise, to any
Person for or in connection with the provision of such assistance or
cooperation. All out of pocket expenses incurred by either Party in providing
any such assistance or cooperation shall be reimbursed promptly by the other
Party.

      


      Section
3.06. Insurance
Premiums. From and after the End Date, Morgan Stanley will pay all
premiums, taxes, assessments or similar charges (retrospectively-rated or
otherwise) as required under the terms and conditions of the respective Shared
Policies in respect of periods of coverage prior to the End Date, whereupon MSCI
will upon the request of Morgan Stanley promptly reimburse Morgan Stanley for
that portion of such additional premiums and other payments paid by Morgan
Stanley as are reasonably determined by Morgan Stanley to be attributable to the
MSCI Business. Notwithstanding the foregoing, to the extent that MSCI has
previously paid a premium (or has been allocated a portion of a premium by
Morgan Stanley) or satisfied a deductible amount under a Shared Policy, MSCI
shall not be required to pay such premium pursuant to the foregoing sentence or
satisfy such deductible again if MSCI makes a claim under such Shared Policy in
accordance with this Article 3.

      


      Section
3.07. Agreement for Waiver of
Conflict and Shared Defense. In the event that a Shared Policy provides
coverage for both a member of the MS Group, on the one hand, and a member of the
MSCI Group, on the other hand,

      


      
        
          
          

        

        
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relating
to the same occurrence, Morgan Stanley and MSCI agree to defend jointly, provided that in the event
there is a conflict of interest which in the reasonable opinion of either Party
would otherwise prevent the conduct of that joint defense, the Parties shall
cooperate to pursue coverage under such Shared Policy pursuant to appropriate
arrangements (which may require separate counsel) as permitted by such Shared
Policy. Nothing in this Section 3.07 will be construed to limit or otherwise
alter in any way the indemnity obligations of the Parties, including those
created by this Agreement, by operation of law or otherwise.

      


      Section
3.08. Duty to Mitigate
Settlements. To the extent that either Morgan Stanley or MSCI is
responsible for the Claims Administration for any claims under any Shared
Policies after the End Date, such Party shall use its reasonable efforts to
mitigate the amount of any settlements of such claims.

      


      Section
3.09. Non-Waiver of Rights to
Coverage. An insurance carrier that would otherwise be obligated to pay
any claim shall not be relieved of the responsibility with respect thereto, or,
solely by virtue of the provisions of this Article 3, have any subrogation
rights with respect thereto, it being expressly understood and agreed that no
insurance carrier or any Third Party shall be entitled to a benefit (i.e., a
benefit such Person would not be entitled to receive had the Sale not occurred
or in the absence of the provisions of this Article 3) by virtue of the
provisions hereof.


      


      ARTICLE
4


      OTHER AGREEMENTS

      


      Section
4.01. Settlement of
Intercompany Accounts. From and after the Sale Date, the Parties shall
use reasonable efforts to settle within 90 days after the Sale any intercompany
receivables, payables and other balances between the members of the MS Group, on
the one hand, and members of the MSCI Group, on the other hand, that are not
settled as of the Sale, except for any such intercompany receivable, payable or
other balance to the extent arising under or specifically provided for in this
Agreement or any Ancillary Agreement. When any payment is made by a Party (the
“Paying Party”) to the
other Party (the “Non-Paying
Party”) in connection with such a settlement, such payment made may be
made after deduction by the Paying Party of any unpaid amounts owed to it by the
Non-Paying Party.

      


      
        
          
          

        

        
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      ARTICLE
5


      INDEMNIFICATION

      


      Section
5.01. Indemnification.
Each of MS Group and MSCI Group (each, as applicable, the “Indemnifying Party”) agrees to
indemnify, defend and hold harmless the other Party, and if applicable, their
respective directors, officers, members, shareholders, partners, attorneys,
accountants, agents and their heirs, successors and assigns (each, as
applicable, the “Indemnitee”) from, against and
in respect of any damages, claims, losses, charges, actions, suits, proceedings,
deficiencies, taxes, interest, penalties and reasonable costs and expenses
(including without limitation reasonable attorney’s fees and disbursements)
(“Claims”), imposed on,
sustained, incurred or suffered by or asserted against any of the Indemnitees
relating to or arising out of any breach by any member of the Indemnifying Party
of this Agreement.

      


      Section
5.02. Notice of Claims.
The Indemnitee agrees to notify the Indemnifying Party, promptly in writing upon
the receipt by the Indemnitee of notice of any pending or threatened claim or
proceeding, including without limitation any audit or assessment with respect to
taxes, which arise out of, in connection with or result from the activities
contemplated hereby for which the Indemnifying Party has agreed to indemnify the
Indemnitee. The Indemnitee further agrees to reasonably cooperate and assist and
to instruct its employees, counsel and advisors to reasonably assist the
Indemnifying Party in the defense of such claims or proceedings. The
Indemnifying Party shall be entitled to participate, at its expense, in the
defense of its interest in any such claim or proceeding.

      


      Section
5.03. Retention of
Records. Except as otherwise required by Applicable Law or agreed to in
writing, each Party shall, and shall cause the members of its Group to, retain,
in accordance with the practice of such Party applicable to the retention of its
own information as in effect from time to time, any and all information in its
possession or control relating to the other Group’s business. Neither Party
shall destroy or otherwise dispose of any such information contrary to such
retention practice, unless, prior to such destruction or disposal, the Party
proposing such destruction or disposal (the “Disposing Party”) provides not
less than 30 days’ prior written notice to the other Party (the “Receiving Party”), specifying
the information proposed to be destroyed or disposed of and the scheduled date
for such destruction or disposal. If the Receiving Party shall request in
writing prior to the scheduled date for such destruction or disposal that any of
the information proposed to be destroyed or disposed of be delivered to the
Receiving Party, the Disposing Party shall promptly arrange for the delivery of
such of the information as was requested at the expense of the Receiving Party;
provided that in the
event that the Disposing Party reasonably determines that any such provision of
information would violate any Applicable Law or agreement to which such Party or
member of its Group is

      


      
        
          
          

        

        
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a party,
or waive any attorney-client privilege applicable to such Party or any member of
its Group, the Parties shall use reasonable efforts to permit the compliance
with such request in a manner that avoids any such harm or consequence. Any
records or documents that were subject to a litigation hold prior to the Sale
Date must be retained by the applicable Party until such Party is notified by
the other Party that the litigation hold is no longer in
effect.

      


      


      ARTICLE
6


      MISCELLANEOUS

      


      Section
6.01. Notices. Any
notice, instruction, direction or demand under the terms of this Agreement
required to be in writing shall be duly given upon delivery, if delivered by
hand, facsimile transmission, or mail, to the following addresses:

      


      (a)      If
to Morgan Stanley to:

      


      Morgan
Stanley

      1585
Broadway

      New York,
NY 10036

      Attn:
Martin M. Cohen, Director of Company Law

      Facsimile:
(212) 507-3334

       

      with a
copy to:

      


      Davis
Polk & Wardwell

      


      450
Lexington Avenue

      New York,
NY 10017

      Attn:  John
Bick, Esq.

      Facsimile:
(212) 450-3800

      


      (b)      If
to MSCI to:

      


      MSCI
Inc.


      88 Pine
Street

      New York,
NY

      Attn:
General Counsel

      Telephone:
(212) 804-3900

      


      or to
such other addresses or telecopy numbers as may be specified by like notice to
the other Party. All such notices, requests and other communications shall be
deemed given, (a) when delivered in person or by courier or a courier services,
(b) if sent by facsimile transmission (receipt confirmed) on a Business Day
prior to 5 p.m. in the place of receipt, on the date of transmission (or, if
sent after 5 p.m., on

      


      
        
          
          

        

        
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the
following Business Day) or (c) if mailed by certified mail (return receipt
requested), on the date specified on the return receipt.

      


      Section
6.02. Amendments; No
Waivers. (a) From and after the Sale, any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Morgan Stanley and MSCI, 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. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.

      


      Section
6.03. Expenses. (a)
Except as specifically provided otherwise in this Agreement or any Ancillary
Agreement, all costs and expenses incurred by the MS Group in connection with
the Sale, this Agreement and related transactions shall be paid by Morgan
Stanley, and all costs and expenses incurred by the MSCI Group in connection
with the Sale, this Agreement and related transactions shall be paid by
MSCI.

      


      (b) For
the avoidance of doubt, as specified in the Shareholder Agreement all
Registration Expenses (as defined therein) shall be paid by Morgan Stanley. Such
expenses shall be billed directly to Morgan Stanley by the applicable third
parties and MSCI shall not be required to pay any such expenses and thereafter
seek reimbursement from Morgan Stanley.

      


      Section
6.04. 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
permitted assigns; provided that neither Party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of the other Party hereto. If any Party
or any of its successors or permitted assigns (i) shall consolidate with or
merge into any other Person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii) shall transfer all
or substantially all of its properties and assets to any Person, then, and in
each such case, proper provisions shall be made so that the successors and
assigns of such Party shall assume all of the obligations of such Party under
this Agreement and the Ancillary Agreements.

      


      Section
6.05. Governing Law.
This Agreement shall be construed in accordance with and governed by the law of
the State of New York, without regard to the conflicts of laws rules
thereof.

       

      
        
          
          

        

        
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      Section
6.06. 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). Neither this Agreement nor any provision hereof 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 permitted assigns.

      


      Section
6.07. Entire Agreement.
This Agreement and the Ancillary Agreements constitute the entire understanding
of the Parties with respect to the subject matter hereof and thereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the Parties with respect to the subject matter hereof and
thereof. No representation, inducement, promise, understanding, condition or
warranty not set forth herein or in the Ancillary Agreement has been made or
relied upon by any Party hereto or any member of their Group with respect to the
transactions contemplated hereby or by the Ancillary Agreements. To the extent
that the provisions of this Agreement are inconsistent with the provisions of
any Ancillary Agreement, the provisions of such other Ancillary Agreement shall
prevail.

      


      Section
6.08. Tax Matters.
Except as otherwise expressly provided herein, this Agreement shall not govern
tax matters, which shall be exclusively governed by the Tax Sharing Agreement
and the Employee Matters Agreement.

      


      Section
6.09. Jurisdiction. Any
Action seeking to enforce any provision of, or based on any matter arising out
of or in connection with, this Agreement or the transactions contemplated hereby
may be brought in the United States District Court for the Southern District of
New York or any other New York State court sitting in New York County, and each
of the Parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any Party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each Party agrees that
service of process on such Party as provided in Section 6.01 shall be deemed
effective service of process on such Party.

      


      
        
          
          

        

        
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      Section
6.10. WAIVER OF JURY
TRIAL. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

      


      Section
6.11. Severability. If
any one or more of the provisions contained in this Agreement should be declared
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired thereby so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party. Upon such a declaration, the Parties shall
modify this Agreement so as to effect the original intent of the Parties as
closely as possible in an acceptable manner so that the transactions
contemplated hereby are consummated as originally contemplated to the fullest
extent possible.

      


      Section
6.12. Survival. All
covenants and agreements of the Parties contained in this Agreement shall
survive the Sale Date indefinitely, unless a specific survival or other
applicable period is expressly set forth herein.

      


      Section
6.13. Captions. The
captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof.

      


      Section
6.14. Specific
Performance. Each Party to this Agreement acknowledges and agrees that
damages for a breach or threatened breach of any of the provisions of this
Agreement would be inadequate and irreparable harm would occur. In recognition
of this fact, each Party agrees that, if there is a breach or threatened breach,
in addition to any damages, the other nonbreaching Party to this Agreement,
without posting any bond, shall be entitled to seek and obtain equitable relief
in the form of specific performance, temporary restraining order, temporary or
permanent injunction, attachment, or any other equitable remedy which may then
be available to obligate the breaching Party (i) to perform its obligations
under this Agreement or (ii) if the breaching Party is unable, for whatever
reason, to perform those obligations, to take any other actions as are
necessary, advisable or appropriate to give the other Party to this Agreement
the economic effect which comes as close as possible to the performance of those
obligations (including, but not limited to, transferring, or granting liens on,
the assets of the breaching Party to secure the performance by the breaching
Party of those obligations).

      


      Section
6.15. Performance. Each
Party shall cause to be performed all actions, agreements and obligations set
forth herein to be performed by any member of such Party’s Group.

      


      
        
          
          

        

        
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      Section
6.16. Limited
Liability. Notwithstanding any other provision of this Agreement, no
individual who is a stockholder, director, employee, officer, agent or
representative of MSCI or Morgan Stanley, nor any individual employed or
previously employed by MSCI or Morgan Stanley or their respective Affiliates and
serving or previously serving as a fiduciary of any benefit plan of MSCI or
Morgan Stanley or their respective Affiliates (or any body consisting of such
individuals), in his, her or its capacity as such, shall have any liability in
respect of or relating to the covenants or obligations of MSCI or Morgan Stanley
under this Agreement and, to the fullest extent legally permissible, each of
MSCI and Morgan Stanley, for itself and its respective stockholders, directors,
employees, officers and Affiliates, waives and agrees not to seek to assert or
enforce any such liability that any such Person otherwise might have pursuant to
Applicable Law.

      


      Section
6.17. Mutual Drafting.
This Agreement shall be deemed to be the joint work product of Morgan Stanley
and MSCI and any rule of construction that a document shall be interpreted or
construed against a drafter of such document shall not be
applicable.

      


      Section
6.18. Effect if Sale Does Not
Occur. Notwithstanding anything in this Agreement to the contrary, if the
Sale does not occur, this Agreement shall be of no force and
effect.

      


      Section
6.19. Corporate
Authorization. The officers of Morgan Stanley and MSCI are hereby
authorized, empowered and directed, in the name and on behalf of each of Morgan
Stanley and MSCI, respectively, to take or cause to be taken all such further
action, to execute and deliver or cause to be executed and delivered all such
further agreements, certificates, instruments and documents, to make or cause to
be made all such filings with governmental or regulatory authorities, and to pay
or cause to be paid all such fees and expenses, in each case which shall in such
officers’ judgment be deemed necessary, proper or advisable to effect and carry
out the intent of this Agreement, such determination to be evidenced
conclusively by such officers’ execution and delivery thereof or taking of
action in respect thereto.

      


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        IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their
names by a duly authorized officer as of the date first written
above.

      

       

      
         

        
          	 	
                  MORGAN
      STANLEY

                	 
	 	 	 
	 	 	 
	 	
                  By:

                	      
                  /s/
      Colm Kelleher

                	 
	 	
                  Name: Colm
      Kelleher

                	 
	 	
                  Title:  
      Chief
      Financial Officer

                	 


        

         

        
           

          
            	 	
                    MSCI
      INC.

                  	 
	 	 	 
	 	 	 
	 	
                    By:

                  	      
                    /s/
      Henry A. Fernandez

                  	 
	 	
                    Name: Henry
      A. Fernandez

                  	 
	 	
                    Title:  
      Chairman
      and CEO

                  	 


          

        

         

         

      

      


      Signature
Page to Separation Agreement