Document:

Exhibit 4.1
    

MORGAN STANLEY

AND

THE BANK OF NEW YORK, Trustee

 

Junior Subordinated Indenture

Dated as of October 12, 2006

 

 

 TABLE
OF CONTENTS

	 	 	 	ARTICLE
        1

      DEFINITIONS	Page
	 	 	 	 	 
	Section	1.01.	 	Certain
            Terms Defined 	1 
	 	 	 	 	 
	 	 	 	ARTICLE
        2

      SECURITIES	 
	 	 	 	 	 
	 Section	 2.01 	 .  	 Forms
            Generally  	 9
	 Section	 2.02 	 .  	 Form
            of Trustee’s Certificate of Authentication  	 10
	 Section	 2.03 	 .  	 Amount
            Unlimited; Issuable in Series  	 10
	 Section	 2.04 	 .  	 Authentication
            and Delivery of Securities  	 13
	 Section	 2.05 	 .  	 Execution
            of Securities  	 16
	 Section	 2.06 	 .  	 Certificate
            of Authentication  	 17
	 Section	 2.07 	 .  	 Denomination
            and Date of Securities; Payments of Interest  	 17
	 Section	 2.08 	 .  	 Registration,
            Transfer and Exchange  	 18
	 Section	 2.09 	 .  	 Mutilated,
            Defaced, Destroyed, Lost and Stolen Securities  	 21 
	 Section	 2.10 	 .  	 Cancellation
            of Securities; Destruction Thereof  	 23
	 Section	 2.11 	 .  	 Temporary
            Securities  	 23
	 	 	 	 	 
	 	 	 	ARTICLE
        3

      COVENANTS OF THE ISSUER	 
	 	 	 	 	 
	 Section	 3.01 	 .  	 Payment
            of Principal and Interest  	 24
	 Section	 3.02 	 .  	 Offices
            for Payments, etc  	 25
	 Section	 3.03 	 .  	 Appointment
            to Fill a Vacancy in Office of Trustee  	 26
	 Section	 3.04 	 .  	 Paying
            Agents  	 26
	 Section	 3.05 	 .  	 Written
            Statement to Trustee  	 27
	 Section	 3.06 	 .  	Luxembourg Publications  	27
	 	 	 	 	 
	 	 	 	ARTICLE
        4

      SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE	 
	 	 	 	 	 
	 Section	 4.01 	 .  	 Issuer
            to Furnish Trustee Information as to Names and  	  
	  	 	 	Addresses
            of Securityholders	 28
	 Section	 4.02 	 .	 Preservation
            and Disclosure of Securityholders Lists  	 28
	 Section	 4.03 	 .  	 Reports
            by the Issuer  	 28
	 Section	 4.04 	 .  	 Reports
            by the Trustee  	 28

 

	 	 	 	ARTICLE
          5

        REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS IN DEFAULT OR EVENT OF DEFAULT
	 
	 	 	 	 	 
	 Section	 5.01 	 .  	 Event
            of Default Defined; Acceleration of Maturity; Waiver of  	  
	  	  	 	Event
            of Default	 28 
	 Section	 5.02 	 .  	 Collection
            of Indebtedness by Trustee; Trustee May Prove  	  
	  	  	  	Debt 	 31 
	 Section	 5.03 	 .  	 Applications
            of Proceeds  	 34
	 Section	 5.04 	 .  	 Suits
            for Enforcement  	 35
	 Section	 5.05 	 .  	 Restoration
            of Rights on Abandonment of Proceedings  	 35
	 Section	 5.06 	 .  	 Limitations
            on Suits by Securityholder; Default Defined  	 35 
	 Section	 5.07 	 .  	 Unconditional
            Right of Securityholders to Institute Certain Suits  	37 
	 Section	 5.08 	 .  	 Powers
            and Remedies Cumulative; Delay or Omission Not  	  
	  	  	 	Waiver
            of Default; Restoration of Rights and Remedies	 37 
	 Section	 5.09 	 .  	 Control
            by Holders of Securities  	 38
	 Section	 5.10 	 .  	 Waiver
            of Past Defaults  	 39
	 Section	 5.11 	 .  	 Trustee
            to Give Notice of Default, But May Withhold in  	  
	  	  	 	Certain
            Circumstances	 39
	 Section	 5.12 	 .  	 Right
            of Court to Require Filing of Undertaking to Pay Costs  	 40
	 	 	 	 	 
	 	 	 	ARTICLE
        6

      CONCERNING THE TRUSTEE 	 
	 	 	 	 	 
	 Section	 6.01 	 .  	 Duties
            and Responsibilities of the Trustee; During Default;  	  
	  	  	 	Prior
            to Default	 40 
	 Section	 6.02 	 .  	 Certain
            Rights of the Trustee  	 42
	 Section	 6.03 	 .  	 Trustee
            Not Responsible for Recitals, Disposition of Securities  	  
	  	  	 	or
            Application of Proceeds Thereof	 43
	 Section	 6.04 	 .  	 Trustee
            and Agents May Hold Securities or Coupons;  	  
	  	  	 	Collections,
            etc 	 43
	 Section	 6.05 	 .  	 Moneys
            Held by Trustee  	 43
	 Section	 6.06 	 .  	 Compensation
            and Indemnification of Trustee and Its Prior Claim  	43 
	 Section	 6.07 	 .  	 Right
            of Trustee to Rely on Officer’s Certificate, etc  	 44
	 Section	 6.08 	 .  	 Indentures
            Not Creating Potential Conflicting Interests for the  	  
	  	  	 	Trustee	 44 
	 Section	 6.09 	 .  	 Persons
            Eligible for Appointment as Trustee  	 44 
	 Section	 6.10 	 .  	 Resignation
            and Removal; Appointment of Successor Trustee  	 45
	 Section	 6.11 	 .  	 Acceptance
            of Appointment by Successor Trustee  	 47
	 Section	 6.12 	 .  	 Merger,
            Conversion, Consolidation or Succession to Business  	  
	  	  	 	of
            Trustee 	 48
	 Section	 6.13 	 .	 Preferential
            Collection of Claims Against the Issuer  	 49
	 Section	 6.14 	 .  	 Appointment
            of Authenticating Agent  	 49

 ii

  

	 	 	 	ARTICLE
        7

            CONCERNING
            THE SECURITYHOLDERS	 
	 	 	 	 	 
	 Section	 7.01 	 .  	 Evidence
            of Action Taken by Securityholders  	 50
	 Section	 7.02 	 .  	 Proof
            of Execution of Instruments and of Holding of Securities  	 50
	 Section	 7.03 	 .  	 Holders
            to be Treated as Owners  	 52
	 Section	 7.04 	 .  	 Securities
            Owned by Issuer Deemed Not Outstanding  	 52
	 Section	 7.05 	 .  	 Right
            of Revocation of Action Taken  	 53
	 	 	 	 	 
	 	 	 	ARTICLE
        8

            SUPPLEMENTAL
            INDENTURES	 
	 	 	 	 	 
	 Section	 8.01 	 .  	 Supplemental
            Indentures Without Consent of Securityholders  	 53
	 Section	 8.02 	 .  	 Supplemental
            Indentures With Consent of Securityholders  	 55
	 Section	 8.03 	 .  	 Effect
            of Supplemental Indenture  	 57
	 Section	 8.04 	 .  	 Documents
            to be Given to Trustee  	 57
	 Section	 8.05 	 .  	 Notation
            on Securities in Respect of Supplemental Indentures  	 57
	 Section	 8.06 	 .  	 Subordination
            Unimpaired  	 57 
	 	 	 	 	 
	 	 	 	ARTICLE
        9

            CONSOLIDATION,
            MERGER, SALE OR CONVEYANCE	 
	 	 	 	 	 
	 Section	 9.01 	 .  	 Covenant
            Not to Merge, Consolidate, Sell or Convey Property  	  
	 	 	 	Except
            Under Certain Conditions 	 58
	 Section	 9.02 	 .  	 Successor
            Corporation Substituted  	 58
	 Section	 9.03 	 .  	 Opinion
            of Counsel Delivered to Trustee  	 59
	 	 	 	 	 
	 	 	 	ARTICLE
        10

            SATISFACTION
            AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS	 
	 	 	 	 	 
	 Section	 10.01 	 .  	 Satisfaction
            and Discharge of Indenture  	 59
	 Section	 10.02 	 .  	 Application
            by Trustee of Funds Deposited for Payment of Securities   	64  
	 Section	 10.03 	 .  	 Repayment
            of Moneys Held by Paying Agent  	 65
	 Section	 10.04 	 .  	 Return
            of Moneys Held by Trustee and Paying Agent  	  
	 	 	 	Unclaimed
            for Two Years  	 65
	 Section	 10.05 	 .  	 Indemnity
            for U.S. Government Obligations  	 65 
	 	 	 	 	 
	 	 	 	ARTICLE
        11

            MISCELLANEOUS
            PROVISIONS	 
	 	 	 	 	 
	 Section	 11.01 	 .  	 Incorporators,
            Stockholders, Officers and Directors of Issuer  	  
	   	 	 	Exempt
            from Individual Liability	 66
	 Section	 11.02 	 .  	 Provisions
            of Indenture for the Sole Benefit of Parties and  	  
	 	 	 	Holders
            of Securities and Coupons 	 66
	Section  	11.03 	.  	Successors
            and Assigns of Issuer Bound by Indenture  	66  

 iii

	 Section	 11.04 	 .  	 Notices
            and Demands on Issuer, Trustee and Holders of  	  
	 	 	 	Securities
            and Coupons	 66 
	 Section	 11.05 	 .  	 Officer’s
            Certificates and Opinions of Counsel; Statements to  	  
	 	 	 	be
            Contained Therein	 67
	 Section	 11.06 	 .  	 Payments
            Due on Saturdays, Sundays and Holidays  	 68
	 Section	 11.07 	 .  	 Conflict
            of Any Provision of Indenture with Trust Indenture  	  
	 	 	 	Act
            of 1939  	 68 
	 Section	 11.08 	 .  	 New
            York Law to Govern  	 68 
	 Section	 11.09 	 .  	 Counterparts  	 69
	 Section	 11.10 	 .  	 Effect
            of Headings  	 69
	 Section	 11.11 	 .  	 Securities
            in a Foreign Currency  	 69
	 Section	 11.12 	 .  	 Judgment
            Currency  	69 
	 	 	 	 	 
	 	 	 	ARTICLE
          12

        REDEMPTION
        OF SECURITIES AND
        SINKING FUNDS
	 
	 	 	 	 	 
	 Section	 12.01 	 .  	 Applicability
            of Article  	 70
	 Section	 12.02 	 .  	 Notice
            of Redemption; Partial Redemptions  	 70 
	 Section	 12.03 	 .  	 Payment
            of Securities Called for Redemption  	 72
	 Section	 12.04 	 .  	 Exclusion
            of Certain Securities from Eligibility for Selection  	  
	 	 	 	for
            Redemption 	 73
	 Section	 12.05 	 .  	 Mandatory
            and Optional Sinking Funds  	 73 
	 	 	 	 	 
	 	 	 	ARTICLE
          13

    SUBORDINATION
	 
	 	 	 	 	 
	 Section	 13.01 	 .  	 Securities
            and Coupons Subordinated to Senior Indebtedness  	 76
	 Section	 13.02 	 .  	 Disputes
            with Holders of Certain Senior Indebtedness  	 78
	 Section	 13.03 	 .  	 Subrogation  	 78 
	 Section	 13.04 	 .  	 Obligation
            of Issuer Unconditional  	 79
	 Section	 13.05 	 .  	 Payments
            on Securities and Coupons Permitted  	79 
	 Section	 13.06 	 .  	 Effectuation
            of Subordination by Trustee  	 80
	 Section	 13.07 	 .  	 Knowledge
            of Trustee  	 80
	 Section	 13.08 	 .  	 Trustee
            May Hold Senior Indebtedness  	 80
	 Section	 13.09 	 .  	 Rights
            of Holders of Senior Indebtedness Not Impaired  	 80
	 Section	 13.10 	 .  	 Article
            Applicable to Paying Agents  	 80 
	 Section	 13.11 	 .  	 Trustee;
            Compensation Not Prejudiced  	 81

 iv

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

W I T N E S S E T H :

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

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

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

      NOW, THEREFORE:

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

ARTICLE 1

DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

2

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

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

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

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

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

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

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

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

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

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

3

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

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

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

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

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

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

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

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

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

4

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

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

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

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

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

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

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

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

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

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

5

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

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

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

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

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

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

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

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

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

6

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

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

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

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

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

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

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

7

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

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

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

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

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

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

8

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

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

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

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

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

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

ARTICLE 2

SECURITIES

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

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

9

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

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

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

	 	 	

	 	 	as Trustee
	 	 	 
	 	 	 
	 	By:	 
	Dated:____________________________	 	

	 	 	Authorized Signatory
	 	 	 

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

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

	 	 	

	 	 	as Authenticating Agent
	 	 	 
	 	 	 
	 	By:	 
	Dated:____________________________	 	

	 	 	Authorized Signatory
	 	 	 

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

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

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

10

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

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

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

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

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

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

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

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

11

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

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

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

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

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

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

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

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

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

12

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

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

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

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

      (w) any other terms
of the series.

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

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

13

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

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

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

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

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

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

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

14

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

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

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

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

15

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

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

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

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

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

16

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

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

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

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

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

17

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

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

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

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

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

18

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

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

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

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

19

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

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

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

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

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

20

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

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

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

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

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

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

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

21

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

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

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

22

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

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

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

23

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

ARTICLE 3

COVENANTS OF THE ISSUER

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

24

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

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

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

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

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

25

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

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

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

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

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

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

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

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

26

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

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

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

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

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

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

27

ARTICLE 4

SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE

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

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

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

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

ARTICLE 5

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

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

28

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

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

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

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

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

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

29

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

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

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

30

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

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

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

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

31

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

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

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

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

32

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

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

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

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

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

33

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

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

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

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

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

34

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

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

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

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

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

35

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

     “Default” with respect to Securities of any series wherever used herein, means each one of the following events which shall have occurred and be continuing (whatever the reason for such Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body) unless it is specifically deleted or modified in the supplemental
indenture, if any, under which such series of Securities is issued: 

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

36

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

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

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

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

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

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

37

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

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

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

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

38

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

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

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

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

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

39

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

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

ARTICLE 6

CONCERNING THE TRUSTEE

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

40

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

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

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

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

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

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

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

41

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

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

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

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

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

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

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

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

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

42

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

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

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

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

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

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

43

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

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

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

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

44

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

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

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

45

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

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

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

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

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

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

46

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

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

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

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

47

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

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

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

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

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

48

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

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

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

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

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

49

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

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

ARTICLE 7

CONCERNING THE SECURITYHOLDERS

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

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

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

50

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

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

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

51

  

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

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

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

52

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

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

ARTICLE 8

SUPPLEMENTAL INDENTURES

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

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

53

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

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

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

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

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

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

54

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

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

55

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

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

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

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

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

56

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

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

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

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

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

57

ARTICLE 9

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

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

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

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

58

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

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

ARTICLE 10

SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS

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

59

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

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

60

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

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

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

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

61

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

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

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

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

62

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

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

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

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

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

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

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

63

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

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

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

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

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

64

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

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

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

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

65

ARTICLE 11

MISCELLANEOUS PROVISIONS

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

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

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

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

66

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

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

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

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

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

67

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

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

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

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

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

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

68

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

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

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

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

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

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

69

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

ARTICLE 12

REDEMPTION OF SECURITIES AND SINKING
FUNDS

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

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

70

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

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

71

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

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

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

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

72

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

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

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

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

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

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

73

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

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

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

74

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

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

75

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

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

ARTICLE 13

SUBORDINATION

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

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

76

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

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

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

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

77

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

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

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

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

78

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

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

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

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

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

79

 

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

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

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

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

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

80

 

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

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

 

 

 

 

81

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

	 	MORGAN STANLEY
	[CORPORATE SEAL]	 	 	 
	 	By:  	 /s/ Jai Sooklal
	 	 	
	

	 	 	Name: 	Jai Sooklal
	 	 	Title: 	Assistant Treasurer
	Attest:	 	 	 
	 	 	 	 
	By:   /s/ Jeanne E. Greeley                  	 	 	 
	       Jeanne E. Greeley	THE BANK OF NEW YORK, TRUSTEE
	       Assistant Secretary	 	 	 
	 	By:	 /s/ Franca M. Ferrera
	 	 	
	

	 	 	Name: 	Franca M. Ferrera
	 	 	Title: 	Assistant Vice President
	 	 	 	 

	
STATE OF NEW YORK 
        	
) 
        	 
        	 

        
	 

        	
) 
        	 
        	
ss.: 
        
	
COUNTY OF NEW YORK 
        	
) 
        	 
        	 

        

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

	 [NOTARIAL SEAL]  
	 
	 
	 
	/s/ Elizabeth M. Dempsey
	
      
    
	 Notary Public  

	
STATE OF NEW YORK 
        	
) 
        	 
        	 

        
	 

        	
) 
        	 
        	
ss.: 
        
	
COUNTY OF NEW YORK 
        	
) 
        	 
        	 

        

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

	
[NOTARIAL SEAL]         
	 
	 
	 
	/s/ Elizabeth M. Dempsey
	
  
	Notary Public  

 

	 	CROSS REFERENCE SHEET	 
	 	
	 
	 	Between	 

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

	
Section of the Act        	         	 	
Section of the Indenture        	         
	

        	

        	
        	 	

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

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Junior Subordinated Indenture.Exhibit 4.2

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

JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE

  	
    REGISTERED	
    REGISTERED
	
    No. 1	
    US$1,100,010,000
	 

		
    CUSIP:
    61747SAB4

MORGAN STANLEY

JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE

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

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

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

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

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

2

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

DATED: October 12, 2006

  	MORGAN
      STANLEY
	 	 	 
	By:	/s/
      Jai Sooklal 
	 	

	 	Name:	Jai
      Sooklal 
	 	Title:	Assistant
      Treasurer 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

DATED: October 12, 2006

  	THE
          BANK OF NEW YORK,

             as
      Trustee
	 	 	 
	By:	/s/
          Frank Ferrera
	 	

	 	Authorized
      Signatory

3

REVERSE OF SECURITY

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

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

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

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

4

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

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

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

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

5

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

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

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

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

     (b) Debt Exchangeable for Equity;

     (c) Qualifying Non-Cumulative Preferred Stock;

6

     (d) Non-Cumulative Preferred Stock having either: 

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

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

     (e) cumulative preferred stock with

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

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

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

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

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

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

7

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

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

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

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

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

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

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

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

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

8

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

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

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

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

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

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

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

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

9

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

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

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

10

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

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

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

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

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

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

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

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

11

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

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

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

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

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

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

     (i) has a Legally Binding Replacement Covenant; or

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

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

  12

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

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

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

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

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

13

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

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

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

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

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

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

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

14

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

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

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

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

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

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

15

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

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

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

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

16

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

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

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

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

17

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

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

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

18

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

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

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

19

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

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

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

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

20

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

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

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

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

21

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

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

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

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

22

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

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

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

23

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

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

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

24

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

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

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

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

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

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

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

25

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

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

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

26

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

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

27

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

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

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

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

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

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

28

ABBREVIATIONS

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

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

		 
		 

	

 

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

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

29

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

 ____________________________________________________

  [PLEASE
    INSERT SOCIAL SECURITY OR OTHER

              IDENTIFYING NUMBER OF ASSIGNEE]

	 

	 
	 

	 
	 

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

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

	 Dated:
        ________________ 

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

 Signature
    Guaranty: ____________________________ 

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

 30

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}]]