Document:

Exhibit 4.3

  MORGAN STANLEY CAPITAL TRUST VII

  AMENDED AND RESTATED TRUST AGREEMENT 

among
    

MORGAN
    STANLEY, as Depositor,

       THE BANK OF NEW YORK, as Property Trustee, 

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

and

 the
    Administrators named herein

 

 

 

  October 12, 2006

	
      MORGAN STANLEY CAPITAL TRUST VII
		 
	 

		 
	 

		 
	
      Certain Sections of this Trust Agreement relating to
		 
	
      Sections 310 through 318 of the Trust Indenture Act of 1939:
		 

	
      Trust Indenture
	  	 

		
      Trust Agreement
	  	 

	
	
      Act Section
	  	 

		
      Section
	  	 

	
	
      310(a)(1) 
		 

		
      8.7
		 

	
	
      (a)(2) 
		 

		
      8.7
		 

	
	
      (a)(3) 
		 

		
      8.9
		 

	
	
      (a)(4) 
		 

		
      2.7(a)(ii)
		       
	
      (b)
		 

		
      8.8,
      10.10(b) 
		       
	
      311(a)  
		 

		
      8.13, 10.10(b)
		
       
	  
	
      (b)
		 

		
      8.13, 10.10(b)
		
       
	  
	
      312(a)
		 

		
      10.10(b)
		
       
	  
	
      (b)
		 

		
      10.10(b)
		
       
	  
	
      (c)
		 

		
      5.7
		 

	
	
      313(a) 
		 

		
      8.15(a)
		
       
	  
	
      (b)
		 

		
      8.15(a), 8.15(b)
		
       
	  
	
      (c)
		 

		
      8.15(a), 10.8
		
       
	  
	
      (d)
		 

		
      8.15(a)
		
       
	  
	
      314(a) 
		 

		
      8.16
		 

	
	
      (b)
		 

		
      Not Applicable
		 

	
	
      (c)(1) 
		 

		
      8.16, 8.17
		 

	
	
      (c)(2) 
		 

		
      8.16, 8.17
		 

	
	
      (c)(3) 
		 

		
      8.16, 8.17
		 

	
	
      (e)
		 

		
      8.17
		 

	
	
      315(a)  
		 

		
      8.1(d)
		
       
	  
	
      (b)
		 

		
      8.2
		 

	
	
      (c)
		 

		
      8.1(c)
		
       
	  
	
      (d)
		 

		
      8.1(d)
		
       
	  
	
      (e)
		 

		
      Not Applicable
		 

	
	
      316
	  (a) 	 

		
      Not Applicable
		 

	
	
      (a)(1)(A)
		 

		
      Not Applicable
		 

	
	
      (a)(1)(B)
		 

		
      Not Applicable
		 

	
	
      (a)(2) 
		 

		
      Not Applicable
		 

	
	
      (b)
		 

		
      5.13
		 

	
	
      (c)
		 

		
      6.7
		 

	
	
      317(a)
	  (1) 	 

		
      Not Applicable
		 

	
	
      (a)(2) 
		 

		
      8.14
		 

	
	
      (b)
		 

		
      5.10
		 

	
	
      318(a)
		 

		
      10.10(a)
		
       
	  

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

   

	 	 	 	Table
        of Contents	 
	 	 	 	 	Page
	 	 	 	 	 
	 	 	 	ARTICLE
        I

            DEFINED
            TERMS	 
	 	 	 	 	 
	 	 	 	 	 
	SECTION	1.1	.	 Definitions 	1
	 	 	 	 	 
	 	 	 	ARTICLE
          II

        CONTINUATION
        OF THE ISSUER TRUST
	 
	 	 	 	 	 
	 SECTION  	 2.1 	 .  	 Name  	 12  
	 SECTION  	 2.2 	 .  	 Office
        of the Delaware Trustee; Principal Place of Business  	 12  
	 SECTION  	 2.3 	 .  	 Initial
        Contribution of Trust Property; Organizational Expenses  	 12  
	 SECTION  	 2.4 	 .  	 Issuance
        of the Trust Securities  	 12  
	 SECTION  	 2.5 	 .  	 Issuance
        of the Common Securities; Subscription and Purchase of Junior  	  
	  	  	  	 Subordinated
        Debentures  	 13  
	 SECTION  	 2.6 	 .  	 Declaration
        of Trust  	 13  
	 SECTION  	 2.7 	 .  	 Authorization
        to Enter into Certain Transactions  	 14  
	 SECTION  	 2.8 	 .  	 Assets
        of Trust  	 17  
	 SECTION  	 2.9 	 .  	 Title
        to Trust Property  	 17  
	 	 	 	 	 
	 	 	 	ARTICLE
        III

          PAYMENT
          ACCOUNT	 
	SECTION	3.1	.  	Payment
        Account.	17
	 	 	 	 	 
	 	 	 	ARTICLE
        IV

      DISTRIBUTIONS; REDEMPTION	 
	 	 	 	 	 
	 SECTION  	 4.1 	 .  	 Distributions  	 17  
	 SECTION  	 4.2 	 .  	 Redemption  	 19  
	 SECTION  	 4.3 	 .  	 Subordination
        of Common Securities  	 21  
	 SECTION  	 4.4 	 .  	 Payment
        Procedures  	 22  
	 SECTION  	 4.5 	 .  	 Tax
        Returns and Reports  	 22  
	 SECTION  	 4.6 	 .  	 Payment
        of Taxes, Duties, Etc. of the Issuer Trust  	 23  
	 SECTION  	 4.7 	 .  	 Payments
        under Indenture or Pursuant to Direct Actions  	 23  
	 SECTION  	 4.8 	 .  	 Liability
        of the Holder of Common Securities  	 23  

	ARTICLE
      V 
      TRUST
    SECURITIES CERTIFICATES 
	 	 	 	 	 
	
      SECTION 
    	
      5.1
		
      . 
    	
      Initial Ownership 
    	
      23 
    
	
      SECTION 
    	
      5.2
		
      . 
    	
      The Trust Securities Certificates 
    	
      23 
    
	
      SECTION 
    	
      5.3
		
      . 
    	
      Execution and Delivery of Trust Securities Certificates 
    	
      24 
    
	
      SECTION 
    	
      5.4
		
      . 
    	
      Global Capital Security 
    	
      24 
    
	
      SECTION 
    	
      5.5
		
      . 
    	
      Registration of Transfer and Exchange Generally; Certain Transfers and 
    	 

	
	 

		
                 
	  	 	Exchanges;
    Capital Securities Certificates 	
      25 
    
	
      SECTION 
    	
      5.6
		
      . 
    	
      Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates 
    	
      27 
    
	
      SECTION 
    	
      5.7
		
      . 
    	
      Persons Deemed Holders 
    	
      27 
    
	
      SECTION 
    	
      5.8
		
      . 
    	
      Access
      to List of Holders’ Names and Addresses 
    	
      27 
    
	
      SECTION 
    	
      5.9
		
      . 
    	
      Maintenance of Office or Agency 
    	
      27 
    
	
      SECTION 
    	
      5.10
		
      . 
    	
       Appointment of Paying Agent 
	  	
      28 
    
	
      SECTION 
    	
      5.11
		
      . 
    	
       Ownership of Common Securities by Depositor 
	  	
      28 
    
	
      SECTION 
    	
      5.12
		
      . 
    	
       Notices to Clearing Agency 
	  	
      29 
    
	
      SECTION 
    	
      5.13
		
      . 
    	
       Rights of Holders 
	  	
      29 
    
	 	 	 	 	 
	 	 	 	ARTICLE
    VI
    ACTS
    OF HOLDERS; MEETINGS; VOTING  	 
	 	 	 	 	 
	
      SECTION 
    	
      6.1
		
      . 
    	
      Limitations
      on Holder’s Voting Rights 
    	
      31 
    
	
      SECTION 
    	
      6.2
		
      . 
    	
      Notice of Meetings 
    	
      32 
    
	
      SECTION 
    	
      6.3
		
      . 
    	
      Meetings of Holders 
    	
      32 
    
	
      SECTION 
    	
      6.4
		
      . 
    	
      Voting Rights 
    	
      32 
    
	
      SECTION 
    	
      6.5
		
      . 
    	
      Proxies, etc 
    	
      33 
    
	
      SECTION 
    	
      6.6
		
      . 
    	
      Holder Action by Written Consent 
    	
      33 
    
	
      SECTION 
    	
      6.7
		
      . 
    	
      Record Date for Voting and Other Purposes 
    	
      33 
    
	
      SECTION 
    	
      6.8
		
      . 
    	
      Acts of Holders 
    	
      33 
    
	
      SECTION 
    	
      6.9
		
      . 
    	
      Inspection of Records 
    	
      34 
    
	 	 	 	 	 
	 	 	 	ARTICLE
      VII 
      REPRESENTATIONS
    AND WARRANTIES 	 
	 	 	 	 	 
	
      SECTION 
    	
      7.1
		
      . 
    	
      Representations
      and Warranties of the Property Trustee and the Delaware Trustee
    	34  

	
	
      SECTION 
    	
      7.2
		
      . 
    	
      Representations and Warranties of Depositor 
    	
      35 
    
	 	 	 	 	 
	 	 	 	ARTICLE
      VIII 

      THE
    ISSUER TRUSTEES; THE ADMINISTRATORS	 
	 	 	 	 	 
	
      SECTION 
    	
      8.1
		
      . 
    	
      Certain Duties and Responsibilities 
    	
      36 
    
	
      SECTION 
    	
      8.2
		
      . 
    	
      Certain Notices 
    	
      38 
    

	
      SECTION 
    	
      8.3
		
      . 
    	Certain
    Rights of Property Trustee	
      38 
    
	
      SECTION 
    	
      8.4
		
      . 
    	Not
    Responsible for Recitals or Issuance of Securities	
      40 
    
	
      SECTION 
    	
      8.5
		
      . 
    	May
    Hold Securities  	
      41 
    
	
      SECTION 
    	
      8.6
		
      . 
    	Compensation;
    Indemnity; Fees  	
      41 
    
	
      SECTION 
    	
      8.7
		
      . 
    	Corporate
    Property Trustee Required; Eligibility of Trustees and	 

	
	 

		
       	 	  Administrators  	
      42    
	
      SECTION 
    	
      8.8
		
      . 
    	Conflicting
    Interests  	
      42 
    
	
      SECTION 
    	
      8.9
		
      . 
    	Co-Trustees
    and Separate Trustee  	
      43 
    
	
      SECTION 
    	
      8.10
		
      . 
    	
      Resignation and Removal; Appointment of Successor 
    	
      44 
    
	
      SECTION 
    	
      8.11
		
      . 
    	
      Acceptance of Appointment by Successor 
    	
      45 
    
	
      SECTION 
    	
      8.12
		
      . 
    	
      Merger, Conversion, Consolidation or Succession to Business 
    	
      46 
    
	
      SECTION 
    	
      8.13
		
      . 
    	
      Preferential Collection of Claims Against Depositor or Issuer Trust 
    	
      46 
    
	
      SECTION 
    	
      8.14
		
      . 
    	
      Trustee May File Proofs of Claim 
    	
      46 
    
	
      SECTION 
    	
      8.15
		
      . 
    	
      Reports by Property Trustee 
    	
      47 
    
	
      SECTION 
    	
      8.16
		
      . 
    	
      Reports to the Property Trustee 
    	
      47 
    
	
      SECTION 
    	
      8.17
		
      . 
    	
      Evidence of Compliance with Conditions Precedent 
    	
      47 
    
	
      SECTION 
    	
      8.18
		
      . 
    	
      Number of Issuer Trustees 
    	
      47 
    
	
      SECTION 
    	
      8.19
		
      . 
    	
      Delegation of Power 
    	
      48 
    
	
      SECTION 
    	
      8.20
		
      . 
    	
      Appointment of Administrators 
    	
      48 
    
	 	 	 	 	 
	 	 	 	ARTICLE
      IX

DISSOLUTION, LIQUIDATION AND MERGER	 

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

	

	 	 	 	 	 
	 	 	 	ARTICLE
      X

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

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

  AGREEMENT

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

  W I T N E S S E T H:

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

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

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

  ARTICLE I

  

  DEFINED TERMS

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

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

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

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

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

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

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

       “Act” has
the meaning specified in Section 6.8.

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

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

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

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

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

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

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

2

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

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

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

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

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

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

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

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

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

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

  3

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

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

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

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

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

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

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

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

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

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

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

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

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

  4

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

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

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

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

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

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

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

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

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

       “Event of Default” means
  any one of the following events (whatever the reason for such Event of Default
  and whether it shall be voluntary or involuntary or be effected by operation
  of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):

       (a) the occurrence of a Debenture Default; or

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

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

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

  5

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

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

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

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

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

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

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

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

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

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

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

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

  6

       “Issuer Trust” means
Morgan Stanley Capital Trust VII.

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

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

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

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

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

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

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

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

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

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

  7

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

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

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

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

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

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

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

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

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

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

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

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

8

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

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

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

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

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

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

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

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

  9

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

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

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

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

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

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

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

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

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

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

  10

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

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

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

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

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

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

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

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

  11

  ARTICLE II

  CONTINUATION OF THE ISSUER TRUST

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

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

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

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

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

       SECTION 2.4. Issuance of the Trust Securities.

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

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

  12

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

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

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

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

       SECTION 2.6. Declaration of Trust.

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

  13

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

       SECTION 2.7. Authorization to Enter into Certain Transactions.

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

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

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

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

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

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

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

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

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

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

  14

  
         (A) the establishment of the Payment Account;

  
         (B) the receipt of the Junior Subordinated Debentures;

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

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

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

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

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

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

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

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

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

  15

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

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

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

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

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

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

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

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

  16

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

       SECTION 2.8. Assets of Trust.

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

       SECTION 2.9. Title to Trust Property.

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

  ARTICLE III

  

  PAYMENT ACCOUNT

       SECTION 3.1. Payment Account.

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

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

  ARTICLE IV

  

  DISTRIBUTIONS; REDEMPTION

  SECTION 4.1. Distributions.

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

17

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

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

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

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

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

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

       SECTION 4.2. Redemption.

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

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

  
         (i) the Redemption Date;

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

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

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

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

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

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

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

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

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

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

       SECTION 4.3. Subordination of Common Securities.

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

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

       SECTION 4.4. Payment Procedures.

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

       SECTION 4.5. Tax Returns and Reports.

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

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

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

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

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

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

       SECTION 4.8. Liability of the Holder of Common Securities.

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

  ARTICLE V

  

  TRUST SECURITIES CERTIFICATES

       SECTION 5.1. Initial Ownership.

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

       SECTION 5.2. The Trust Securities Certificates.

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

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

23

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

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

       SECTION 5.3. Execution and Delivery of Trust Securities Certificates.

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

       SECTION 5.4. Global Capital Security.

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

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

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

  24

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

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

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

       (f) The rights of owners of beneficial interests in a Global Capital Security shall be exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such owners and the Clearing Agency.

       SECTION 5.5. Registration of Transfer and Exchange Generally; Certain Transfers and Exchanges; Capital Securities Certificates.

       (a)
  The Property Trustee shall keep or cause to be kept at its Corporate Trust
  Office a register or registers for the purpose of registering Capital Securities
  Certificates and transfers and exchanges of Capital Securities Certificates
  in which the registrar and transfer agent with respect to the Capital Securities
  (the “Securities Registrar”), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Capital Securities Certificates and Common Securities Certificates (subject to Section 5.11 in the case of Common Securities Certificates) and registration of transfers and exchanges of Capital
Securities Certificates as herein provided. Such register is herein sometimes referred to as the “Securities Register.” The Property Trustee is hereby appointed “Securities Registrar” for
the purpose of registering Capital Securities and transfers of Capital Securities
as herein provided.

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       Upon surrender for registration of transfer of any Capital Security at the offices or agencies of the Property Trustee designated for that purpose an
Administrator shall execute, and the Property Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Capital Securities of the same series of any authorized denominations of like tenor and
aggregate Liquidation Amount and bearing such legends as may be required by this Trust Agreement.

       At the option of the Holder, Capital Securities may be exchanged for other Capital Securities of any authorized denominations, of like tenor and aggregate
Liquidation Amount and bearing such legends as may be required by this Trust Agreement, upon surrender of the Capital Securities to be exchanged at such office or agency. Whenever any securities are so surrendered for exchange, an Administrator
shall execute and the Property Trustee shall authenticate and deliver the Capital Securities that the Holder making the exchange is entitled to receive.

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

       Every
  Capital Security presented or surrendered for transfer or exchange shall (if
  so required by the Property Trustee) be duly endorsed, or be accompanied by
  a written instrument of transfer in form satisfactory to the Property Trustee
  and the Securities Registrar, duly executed by the Holder thereof or such Holder’s
attorney duly authorized in writing.

       No service charge shall be made to a Holder for any transfer or exchange of Capital Securities, but the Property Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Capital Securities.

       Neither the Issuer Trust nor the Property Trustee shall be required, pursuant to the provisions of this Section, (i) to issue, register the transfer of or
exchange any Capital Security during a period beginning at the opening of business 15 days before the first mailing of the notice of redemption, or (ii) to register the transfer of or exchange any Capital Security so selected for redemption in whole
or in part, except, in the case of any such Capital Security to be redeemed in part, any portion thereof not to be redeemed.

       (b) Certain Transfers and Exchanges. Trust Securities may only be transferred, in whole or in part, in accordance with the terms and conditions set forth in
this Trust Agreement. To the fullest extent permitted by law, any transfer or purported transfer of any Trust Security not made in accordance with this Trust Agreement shall be null and void.

  
         (i) Non-Global Security to Non-Global Security. A Capital Security that is not a Global Capital Security may be transferred, in whole or in part, to a Person
    who takes delivery in the form of another Trust Security that is not a Global Security as provided in Section 5.5(a) .

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         (ii) Free Transferability. Subject to this Section 5.5, Capital Securities shall be freely transferable.

  
         (iii) Exchanges Between Global Capital Security and Non-Global Capital Security. A beneficial interest in a Global Capital Security may be exchanged for a
    Capital Security that is not a Global Capital Security as provided in Section 5.4.

       SECTION 5.6. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.

       If (a) any mutilated Trust Securities Certificate shall be surrendered to the Securities Registrar, or if the Securities Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Trust Securities Certificate and (b) there shall be delivered to the Securities Registrar and the Administrators such security or indemnity as may be required by them to save each of them
harmless, then in the absence of notice that such Trust Securities Certificate shall have been acquired by a bona fide purchaser, the Administrators, or any one of them, on behalf of the Issuer Trust shall execute and make available for delivery,
and the Property Trustee shall authenticate, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities Certificate of like class, tenor and denomination. In connection with the
issuance of any new Trust Securities Certificate under this Section, the Administrators or the Securities Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Trust Securities Certificate issued pursuant to this Section shall constitute conclusive evidence of an undivided beneficial interest in the assets of the Issuer Trust corresponding to that evidenced by the lost, stolen or
destroyed Trust Certificate, as if originally issued, whether or not the lost, stolen or destroyed Trust Securities Certificate shall be found at any time.

       SECTION 5.7. Persons Deemed Holders.

       The Issuer Trustees or the Securities Registrar shall treat the Person in whose name any Trust Securities are issued as the owner of such Trust Securities for
the purpose of receiving Distributions and for all other purposes whatsoever, and none of the Issuer Trustees, the Administrators nor the Securities Registrar shall be bound by any notice to the contrary.

       SECTION
5.8. Access to List of Holders’ Names and Addresses.

       Each Holder and each Owner shall be deemed to have agreed not to hold the Depositor, the Property Trustee, or the Administrators accountable by reason of the
disclosure of its name and address, regardless of the source from which such information was derived.

       SECTION 5.9. Maintenance of Office or Agency.

       The Property Trustee shall designate, with the consent of the Administrators, which consent shall not be unreasonably withheld, an office or offices or agency
or agencies where Capital Securities Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuer Trustees in respect of the Trust Securities Certificates may be served. The Property
Trustee initially designates its Corporate Trust Office at

  27

  101 Barclay Street, Floor 8 West, New York, NY 10286, Attention: Corporate Trust Administration, as its corporate trust office for such purposes. The Property Trustee shall give prompt
written notice to the Depositor, the Administrators and to the Holders of any change in the location of the Securities Register or any such office or agency.

       SECTION 5.10. Appointment of Paying Agent.

       The
  Paying Agent shall make Distributions to Holders from the Payment Account and
  shall report the amounts of such Distributions to the Property Trustee and
  the Administrators. Any Paying Agent shall have the revocable power to withdraw
  funds from the Payment Account solely for the purpose of making the Distributions
  referred to above. The Property Trustee may revoke such power and remove any
  Paying Agent in its sole discretion. The Paying Agent shall initially be the
  Property Trustee. Any Person acting as Paying Agent shall be permitted to resign
  as Paying Agent upon 30 days’ written notice to the Administrators and
  the Property Trustee. In the event that the Property Trustee shall no longer
  be the Paying Agent or a successor Paying Agent shall resign or its authority
  to act be revoked, the Property Trustee shall appoint a successor (which shall
  be a bank or trust company) that is reasonably acceptable to the Administrators
  to act as Paying Agent. Such successor Paying Agent or any additional Paying
  Agent appointed by the Property Trustee shall execute and deliver to the Issuer
  Trustees an instrument in which such successor Paying Agent or additional Paying
  Agent shall agree with the Issuer Trustees that as Paying Agent, such successor
  Paying Agent or additional Paying Agent will hold all sums, if any, held by
  it for payment to the Holders in trust for the benefit of the Holders entitled
  thereto until such sums shall be paid to such Holders. The Paying Agent shall
  return all unclaimed funds to the Property Trustee and upon removal of a Paying
  Agent such Paying Agent shall also return all funds in its possession to the
  Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 herein shall
  apply to the Bank also in its role as Paying Agent, for so long as the Bank
  shall act as Paying Agent and, to the extent applicable, to any other paying
  agent appointed hereunder. Any reference in this Trust Agreement to the Paying
  Agent shall include any co-paying agent chosen by the Property Trustee unless
the context requires otherwise.

       SECTION 5.11. Ownership of Common Securities by Depositor.

       At
  the Closing Date, the Depositor shall acquire and retain beneficial and record
  ownership of the Common Securities. Neither the Depositor nor any successor
  Holder of the Common Securities may transfer less than all the Common Securities,
  and the Depositor or any such successor Holder may transfer the Common Securities
  only (i) in connection with a consolidation or merger of the Depositor into
  another Person or any conveyance, transfer or lease by the Depositor of its
  properties and assets substantially as an entirety to any Person, pursuant
  to Section 9.01 of the Indenture, or (ii) to an Affiliate of the Depositor
  in compliance with applicable law (including the Securities Act and applicable
  state securities and blue sky laws). To the fullest extent permitted by law,
  any attempted transfer of the Common Securities, other than as set forth in
  the immediately preceding sentence, shall be void. The Administrators shall
  cause each Common Securities Certificate issued to the Depositor to contain
  a legend stating “THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR
  OR AN AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION
5.11 OF THE TRUST AGREEMENT.”

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       SECTION 5.12. Notices to Clearing Agency.

       To the extent that a notice or other communication to the Holders is required under this Trust Agreement, for so long as Capital Securities are represented by a
Global Capital Securities Certificate, the Administrators and the Issuer Trustees shall give all such notices and communications specified herein to be given to the Clearing Agency, and shall have no obligations to the Owners.

       SECTION 5.13. Rights of Holders.

       (a) The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity as such) in accordance with Section 2.9, and the
Holders shall not have any right or title therein other than the undivided beneficial interest in the assets of the Issuer Trust conferred by their Trust Securities and they shall have no right to call for any partition or division of property,
profits or rights of the Issuer Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. The Trust Securities shall have no preemptive or
similar rights and when issued and delivered to Holders against payment of the purchase price therefor, as provided herein, will be fully paid and nonassessable by the Issuer Trust. Except as otherwise provided in Section 4.8, the Holders of the
Trust Securities, in their capacities as such, shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of
Delaware.

       (b) For so long as any Capital Securities remain Outstanding, if, upon a Debenture Event of Default, the Debt Securities Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Junior Subordinated Debentures fail to declare the principal of all of the Junior Subordinated Debentures to be immediately due and payable, the Holders of at least 25% in Liquidation Amount of
the Capital Securities then Outstanding shall have such right to make such declaration by a notice in writing to the Property Trustee, the Depositor and the Debt Securities Trustee.

       At any time after such a declaration of acceleration with respect to the Junior Subordinated Debentures has been made and before a judgment or decree for
payment of the money due has been obtained by the Debt Securities Trustee as provided in the Indenture, the Holders of a Majority in Liquidation Amount of the Capital Securities, by written notice to the Property Trustee, the Depositor and the Debt
Securities Trustee, may waive all defaults and rescind and annul such declaration and its consequences if:

  
         (i) the Depositor has paid or deposited with the Debt Securities Trustee a sum sufficient to pay

  
    
           (A) all overdue installments of interest on all of the Junior Subordinated Debentures,

    
           (B) any accrued Additional Interest (as defined in the Indenture) on all of the Junior Subordinated Debentures,

  

  29

  
    
           (C) the principal of (and premium, if any, on) any Junior Subordinated Debentures which have become due otherwise than by such declaration of acceleration and
      interest and Additional Interest thereon at the rate borne by the Junior Subordinated Debentures, and

    
           (D) all sums paid or advanced by the Debt Securities Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the
      Debt Securities Trustee and the Property Trustee, their agents and counsel; and

  

  
         (ii) all Debenture Defaults with respect to the Junior Subordinated Debentures, other than the non-payment of the principal of the Junior Subordinated
  Debentures which has become due solely by such acceleration, have been cured or waived as provided in Section 5.10 of the Indenture.

       If the Property Trustee fails to annul any such declaration and waive such default, the Holders of at least a Majority in Liquidation Amount of the Capital
Securities shall also have the right to rescind and annul such declaration and its consequences by written notice to the Depositor, the Property Trustee and the Debt Securities Trustee, subject to the satisfaction of the conditions set forth in
Clause (i) and (ii) of this Section 5.13(b) .

       The Holders of at least a Majority in Liquidation Amount of the Capital Securities may, on behalf of the Holders of all the Capital Securities, waive any past
Debenture Default, except a default in the payment of principal or interest (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration has been deposited with
the Debt Securities Trustee) or a default in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Junior Subordinated Debentures. No such rescission shall
affect any subsequent default or impair any right consequent thereon. 

       Upon receipt by the Property Trustee of written notice declaring such an acceleration, or rescission and annulment thereof, by Holders of the Capital Securities
all or part of which is represented by Global Capital Securities, a record date shall be established for determining Holders of Outstanding Capital Securities entitled to join in such notice, which record date shall be at the close of business on
the day the Property Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having joined in such notice prior to the day which is 90 days after such
record date, such notice of declaration of acceleration, or rescission and annulment, as the case may be, shall automatically and without further action by any Holder be canceled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, after expiration of such 90-day period, a new written notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is identical to a written notice which has been
canceled pursuant to the proviso to the preceding sentence, in which event a new record date shall be established pursuant to the provisions of this Section 5.13(b) .

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       (c)
  For so long as any Capital Securities remain Outstanding, to the fullest extent
  permitted by law and subject to the terms of this Trust Agreement and the Indenture,
  upon a Debenture Event of Default specified in Section 5.01(a) or a Debenture
  Default specified in Section 5.06(a) or 5.06(b) of the Indenture or a failure
  to comply with the Alternative Payment Mechanism or the Replacement Capital
  Obligation (each as defined in the Junior Subordinated Debentures), any Holder
  of Capital Securities shall have the right to institute a proceeding directly
  against the Depositor, pursuant to Section 5.01 of the Indenture, for enforcement
  of payment to such Holder of the principal amount of or interest on Junior
  Subordinated Debentures having an aggregate principal amount equal to the aggregate
  Liquidation Amount of the Capital Securities of such Holder (a “Direct Action”).
  Except as set forth in Sections 5.13(b) and 5.13(c), the Holders of Capital
  Securities shall have no right to exercise directly any right or remedy available
to the holders of, or in respect of, the Junior Subordinated Debentures.

  ARTICLE VI

  ACTS OF HOLDERS; MEETINGS; VOTING

       SECTION
6.1. Limitations on Holder’s Voting Rights.

       (a) Except as provided in this Trust Agreement and in the Indenture and as otherwise required by law, no Holder of Capital Securities shall have any right to
vote or in any manner otherwise control the administration, operation and management of the Issuer Trust or the obligations of the parties hereto, nor shall anything herein set forth or contained in the terms of the Trust Securities Certificates be
construed so as to constitute the Holders from time to time as members of an association.

       (b) So long as any Junior Subordinated Debentures are held by the Property Trustee on behalf of the Issuer Trust, the Property Trustee shall not (i) direct the
time, method and place of conducting any proceeding for any remedy available to the Debt Securities Trustee, or executing any trust or power conferred on the Property Trustee with respect to such Junior Subordinated Debentures, (ii) waive any past
default that may be waived under Section 5.10 of the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Junior Subordinated Debentures shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Junior Subordinated Debentures, where such consent shall be required, without, in each case, obtaining the prior approval of the Holders of at least a Majority in Liquidation Amount of the Capital
Securities, provided, however, that where a consent under the Indenture would require the consent of each Holder of Junior Subordinated Debentures affected thereby, no such consent shall be given by the Property Trustee without the prior written
consent of each Holder of Capital Securities. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the Holders of Capital Securities, except by a subsequent vote of the Holders of Capital Securities. The
Property Trustee shall notify all Holders of the Capital Securities of any notice of default received with respect to the Junior Subordinated Debentures. In addition to obtaining the foregoing approvals of the Holders of the Capital Securities,
prior to taking any of the foregoing actions, the Property Trustee shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that such action will not cause the Issuer Trust to be taxable as a
corporation, a partnership

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  or any other arrangement other than as a grantor trust for United States Federal income tax purposes.

       (c) If any proposed amendment to the Trust Agreement provides for, or the Issuer Trust otherwise proposes to effect, (i) any action that would adversely affect
in any material respect the interests, powers, preferences or special rights of the Capital Securities, whether by way of amendment to the Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination of the Issuer Trust, other
than pursuant to the terms of this Trust Agreement, then the Holders of Outstanding Capital Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval
of the Holders of at least a Majority in Liquidation Amount of the Capital Securities.

       SECTION 6.2. Notice of Meetings.

       Notice of all meetings of the Holders, stating the time, place and purpose of the meeting, shall be given by the Property Trustee pursuant to Section 10.8 to
each Holder of record, at his registered address, at least 15 days and not more than 90 days before the meeting. At any such meeting, any business properly before the meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.

       SECTION 6.3. Meetings of Holders.

       No annual meeting of Holders is required to be held. The Property Trustee, however, shall call a meeting of Holders to vote on any matter upon the written
request of the Holders of record of 25% of the aggregate Liquidation Amount of the Capital Securities and the Administrators or the Property Trustee may, at any time in their discretion, call a meeting of Holders of Capital Securities to vote on any
matters as to which Holders are entitled to vote.

       Holders of at least a Majority in Liquidation Amount of the Capital Securities, present in person or represented by proxy, shall constitute a quorum at any
meeting of Holders of the Capital Securities.

       If a quorum is present at a meeting, an affirmative vote by the Holders of record present, in person or by proxy, holding Capital Securities representing at
least a Majority in Liquidation Amount of the Capital Securities held by the Holders present, either in person or by proxy, at such meeting shall constitute the action of the Holders of Capital Securities, unless this Trust Agreement requires a
greater number of affirmative votes.

       SECTION 6.4. Voting Rights.

       Holders
  shall be entitled to one vote for each $25 of Liquidation Amount represented
  by their Outstanding Trust Securities in respect of any matter as to which
such Holders are entitled to vote.

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       SECTION 6.5. Proxies, etc.

       At any meeting of Holders, any Holder entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been
placed on file with the Property Trustee, or with such other officer or agent of the Issuer Trust as the Property Trustee may direct, for verification prior to the time at which such vote shall be taken. Pursuant to a resolution of the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one or more officers of the Property Trustee. Only Holders of record shall be entitled to vote. When Trust Securities are held jointly by several Persons, any one of them may
vote at any meeting in person or by proxy in respect of such Trust Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast,
such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Holder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest
on the challenger. No proxy shall be valid more than three years after its date of execution.

       SECTION 6.6. Holder Action by Written Consent.

       Any action which may be taken by Holders at a meeting may be taken without a meeting if Holders holding at least a Majority in Liquidation Amount of all Trust
Securities entitled to vote in respect of such action (or such larger proportion thereof as shall be required by any other provision of this Trust Agreement) shall consent to the action in writing.

       SECTION 6.7. Record Date for Voting and Other Purposes.

       For the purposes of determining the Holders who are entitled to notice of and to vote at any meeting or by written consent, or to participate in any
distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrators or Property Trustee may from time to time fix a date, not more
than 90 days prior to the date of any meeting of Holders or the payment of a distribution or other action, as the case may be, as a record date for the determination of the identity of the Holders of record for such purposes.

       SECTION 6.8. Acts of Holders.

       Any
  request, demand, authorization, direction, notice, consent, waiver or other
  action provided or permitted by this Trust Agreement to be given, made or taken
  by Holders may be embodied in and evidenced by one or more instruments of substantially
  similar tenor signed by such Holders in person or by an agent duly appointed
  in writing; and, except as otherwise expressly provided herein, such action
  shall become effective when such instrument or instruments are delivered to
  the Property Trustee. Such instrument or instruments (and the action embodied
  therein and evidenced thereby) are herein sometimes referred to as the “Act” of
  the Holders signing such instrument or instruments. Proof of execution of any
  such instrument or of a writing appointing any such agent shall be sufficient
  for any purpose of this Trust Agreement and (subject to Section 8.1) conclusive
in favor of the Issuer Trustees, if made in the manner provided in this Section.

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       The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer
acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which any Issuer Trustee or Administrator receiving the same deems sufficient.

       The ownership of Trust Securities shall be proved by the Securities Register.

       Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Trust Security shall bind every future Holder of the
same Trust Security and the Holder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Issuer Trustees, the
Administrators or the Issuer Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security.

       Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to
all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount.

       If any dispute shall arise among the Holders, the Administrators or the Issuer Trustees with respect to the authenticity, validity or binding nature of any
request, demand, authorization, direction, consent, waiver or other Act of such Holder or Issuer Trustee under this Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter.

       SECTION 6.9. Inspection of Records.

       Upon
  reasonable notice to the Administrators and the Property Trustee, the records
  of the Issuer Trust shall be open to inspection by Holders during normal business
  hours for any purpose reasonably related to such Holder’s interest as
a Holder.

  ARTICLE VII

  REPRESENTATIONS AND WARRANTIES

       SECTION 7.1. Representations and Warranties of the Property Trustee and the Delaware Trustee.

       The Property Trustee and the Delaware Trustee, each severally on behalf of and as to itself, hereby represents and warrants for the benefit of the Depositor and
the Holders that:

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       (a) The Property Trustee is a banking corporation with trust powers, duly organized, validly existing and in good standing under the laws of New York, with
trust power and authority to execute and deliver, and to carry out and perform its obligations under the terms of this Trust Agreement.

       (b)
  The execution, delivery and performance by the Property Trustee of this Trust
  Agreement have been duly authorized by all necessary corporate action on the
  part of the Property Trustee; and this Trust Agreement has been duly executed
  and delivered by the Property Trustee, and constitutes a legal, valid and binding
  obligation of the Property Trustee, enforceable against it in accordance with
  its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency,
  and other similar laws affecting creditors’ rights generally and to general
  principles of equity and the discretion of the court (regardless of whether
  the enforcement of such remedies is considered in a proceeding in equity or
at law).

       (c) The Delaware Trustee is duly organized, validly existing and in good standing as a banking corporation under the laws of the State of Delaware, with trust
power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, the Trust Agreement.

       (d)
  The execution, delivery and performance by the Delaware Trustee of this Trust
  Agreement have been duly authorized by all necessary corporate action on the
  part of the Delaware Trustee; and this Trust Agreement has been duly executed
  and delivered by the Delaware Trustee, and constitutes a legal, valid and binding
  obligation of the Delaware Trustee, enforceable against it in accordance with
  its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency,
  and other similar laws affecting creditors’ right generally and to general
  principles of equity and the discretion of the court (regardless of whether
  the enforcement of such remedies is considered in a proceeding in equity or
at law).

       (e) The Delaware Trustee is an entity which has its principal place of business in the State of Delaware.

       (f)
  The Property Trustee is a national- or state-chartered bank and has capital
and surplus of at least $50,000,000.

       SECTION 7.2. Representations and Warranties of Depositor.

       The Depositor hereby represents and warrants for the benefit of the Holders that:

       (a) the Trust Securities Certificates issued at the Closing Date on behalf of the Issuer Trust have been duly authorized and will have been duly and validly
executed, issued and delivered by the Issuer Trustees pursuant to the terms and provisions of, and in accordance with the requirements of, this Trust Agreement, and the Holders will be, as of each such date, entitled to the benefits of this Trust
Agreement; and

       (b) there are no taxes, fees or other governmental charges payable by the Issuer Trust (or the Issuer Trustees on behalf of the Issuer Trust) under the laws of
the State of Delaware or 

  35

  any political subdivision thereof in connection with the execution, delivery and performance by either the Property Trustee or the Delaware Trustee, as the case may be, of this Trust
Agreement.

  ARTICLE VIII

  THE ISSUER TRUSTEES; THE ADMINISTRATORS

       SECTION 8.1. Certain Duties and Responsibilities.

       (a)
  The duties and responsibilities of the Issuer Trustees and the Administrators
  shall be as provided by this Trust Agreement and, in the case of the Property
  Trustee, by the Trust Indenture Act. Notwithstanding the foregoing, no provision
  of this Trust Agreement shall require the Issuer Trustees or the Administrators
  to expend or risk their own funds or otherwise incur any financial liability
  in the performance of any of their duties hereunder, or in the exercise of
  any of their rights or powers, if they shall have reasonable grounds for believing
  that repayment of such funds or adequate indemnity against such risk or liability
  is not reasonably assured to it. Whether or not therein expressly so provided,
  every provision of this Trust Agreement relating to the conduct or affecting
  the liability of or affording protection to the Issuer Trustees or the Administrators
  shall be subject to the provisions of this Section. Nothing in this Trust Agreement
  shall be construed to release an Administrator from liability for its own grossly
  negligent action, its own grossly negligent failure to act, or its own willful
  misconduct. To the extent that, at law or in equity, an Issuer Trustee or Administrator
  has duties and liabilities relating to the Issuer Trust or to the Holders,
  such Issuer Trustee or Administrator shall not be liable to the Issuer Trust
  or to any Holder for such Issuer Trustee’s or Administrator’s good
  faith reliance on the provisions of this Trust Agreement. The provisions of
  this Trust Agreement, to the extent that they restrict the duties and liabilities
  of the Issuer Trustees and Administrators otherwise existing at law or in equity,
  are agreed by the Depositor and the Holders to replace such other duties and
liabilities of the Issuer Trustees and Administrators.

       (b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall be made only from the revenue and proceeds from the
Trust Property and only to the extent that there shall be sufficient revenue or proceeds from the Trust Property to enable the Property Trustee or a Paying Agent to make payments in accordance with the terms hereof. Each Holder, by its acceptance of
a Trust Security, agrees that it will look solely to the revenue and proceeds from the Trust Property to the extent legally available for distribution to it as herein provided and that neither the Issuer Trustees nor the Administrators are
personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.1(b) does not limit the liability of the Issuer Trustees expressly set forth elsewhere
in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act.

       (c) The Property Trustee, before the occurrence of any Event of Default and after the curing of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Trust Agreement (including pursuant to Section 10.10), and no implied covenants shall be read into this Trust Agreement against the Property Trustee. If an Event of Default has occurred
(that has not been cured or waived pursuant to Article V of the Indenture), the Property Trustee shall enforce this Trust Agreement for the benefit of the Holders

  36

  and shall exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.

       (d) No provision of this Trust Agreement shall be construed to relieve the Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:

  
         (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred:

  
    
           (A) the duties and obligations of the Property Trustee shall be determined solely by the express provisions of this Trust Agreement (including pursuant to
      Section 10.10), and the Property Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Trust Agreement (including pursuant to Section 10.10); and

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

  

  
         (ii) the Property Trustee shall not be liable for any error of judgment made in good faith by an authorized officer of the Property Trustee, unless it shall be
  proved that the Property Trustee was negligent in ascertaining the pertinent facts;

  
         (iii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of
  the Holders of at least a Majority in Liquidation Amount of the Capital Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon
  the Property Trustee under this Trust Agreement;

  
         (iv)
    the Property Trustee’s sole duty with respect to the custody, safe keeping
    and physical preservation of the Junior Subordinated Debentures and the Payment
    Account shall be to deal with such property in a similar manner as the Property
    Trustee deals with similar property for its own account, subject to the protections
    and limitations on liability afforded to the Property Trustee under this Trust
  Agreement and the Trust Indenture Act;

  
         (v) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree with the Depositor; and money held by

  37

  
    the Property Trustee need not be segregated from other funds held by it except in relation to the Payment Account maintained by the Property Trustee pursuant to Section 3.1 and except to the
    extent otherwise required by law;

  
         (vi) the Property Trustee shall not be responsible for monitoring the compliance by the Administrators or the Depositor with their respective duties under this
    Trust Agreement, nor shall the Property Trustee be liable for the default or misconduct of any other Issuer Trustee, the Administrators or the Depositor; and

  
         (vii) no provision of this Trust Agreement shall require the Property Trustee to expend or risk its own funds or otherwise incur personal financial liability in
    the performance of any of its duties or in the exercise of any of its rights or powers, if the Property Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms
    of this Trust Agreement or adequate indemnity against such risk or liability is not reasonably assured to it.

       (e) The Administrators shall not be responsible for monitoring the compliance by the Issuer Trustees or the Depositor with their respective duties under this
Trust Agreement, nor shall either Administrator be liable for the default or misconduct of any other Administrator, the Issuer Trustees or the Depositor.

       SECTION 8.2. Certain Notices.

       Within ten Business Days after the occurrence of any Event of Default actually known to a Responsible Officer of the Property Trustee, the Property Trustee
shall transmit, in the manner and to the extent provided in Section 10.8, notice of such Event of Default to the Holders and the Administrators, unless such Event of Default shall have been cured or waived.

       Within
  ten Business Days after the receipt of notice of the Depositor’s exercise
  of its right to defer the payment of interest on the Junior Subordinated Debentures
  pursuant to the Indenture, the Property Trustee shall transmit, in the manner
  and to the extent provided in Section 10.8, notice of such exercise to the
Holders and the Administrators, unless such exercise shall have been revoked.

       SECTION 8.3. Certain Rights of Property Trustee.

       Subject to the provisions of Section 8.1:

       (a) the Property Trustee may conclusively rely and shall be fully protected in acting or refraining from acting in good faith upon any resolution, Opinion of
Counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

       (b)
  any direction or act of the Depositor contemplated by this Trust Agreement
shall be sufficiently evidenced by an Officer’s Certificate;

  38

       (c) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement
or any filing under tax or securities laws) or any re-recording, refiling or registration thereof;

       (d) the Property Trustee may consult with counsel of its own choosing (which counsel may be counsel to the Depositor or any of its Affiliates, and may include
any of its employees) and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon and in accordance with such
advice; the Property Trustee shall have the right at any time to seek instructions concerning the administration of this Trust Agreement from any court of competent jurisdiction;

       (e) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction
of any of the Holders pursuant to this Trust Agreement, unless such Holders shall have offered to the Property Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction; provided, that nothing contained in this Section 8.3(e) shall be taken to relieve the Property Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by
this Trust Agreement;

       (f) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other paper or document, unless requested in writing to do so by one or more Holders, but the Property Trustee may make such
further inquiry or investigation into such facts or matters as it may see fit;

       (g) the Property Trustee may execute any of the trusts or powers hereunder or perform any of its duties hereunder either directly or by or through its agents or
attorneys, provided that the Property Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

       (h) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder, the Property Trustee (i) may request instructions from the Holders (which instructions may only be given by the Holders of the same proportion in Liquidation Amount of the Trust Securities as
would be entitled to direct the Property Trustee under the terms of the Trust Securities in respect of such remedy, right or action), (ii) may refrain from enforcing such remedy or right or taking such other action until such instructions are
received, and (iii) shall be fully protected in acting in accordance with such instructions;

       (i) except as otherwise expressly provided by this Trust Agreement, the Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement. No provision of this Trust Agreement shall be deemed to impose any duty or obligation on any Issuer Trustee or Administrator to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it, in any jurisdiction in 

  39

  which it shall be illegal, or in which the Property Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts, or to exercise any such
right, power, duty or obligation. No permissive power or authority available to any Issuer Trustee or Administrator shall be construed to be a duty;

       (j) if (i) in performing its duties under this Trust Agreement the Property Trustee is required to decide between alternative courses of action or (ii) in
construing any of the provisions of this Trust Agreement the Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein or (iii) the Property Trustee is unsure of the application of any provision of this
Trust Agreement, then, except as to any matter as to which the Holders are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver a notice to the Depositor requesting written instructions of the Depositor as to
the course of action to be taken and the Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing to take, or to refrain from taking, by the Depositor; provided, however,
that if the Property Trustee does not receive such instructions of the Depositor within ten Business Days after it has delivered such notice, or such reasonably shorter period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement as it shall deem advisable and in the best interests of the Holders, in which event the
Property Trustee shall have no liability except for its own bad faith, negligence or willful misconduct;

       (k)
  whenever in the administration of this Trust Agreement, the Property Trustee
  shall deem it desirable that a matter be established before undertaking, suffering
  or omitting any action hereunder, the Property Trustee (unless other evidence
  is herein specifically prescribed) may, in the absence of bad faith on its
  part, request and conclusively rely upon an Officer’s Certificate which,
  upon receipt of such request, shall be promptly delivered by the Depositor
or the Administrator;

       (l)
  when the Property Trustee incurs expenses or renders services in connection
  with a Bankruptcy Event, such expenses (including the fees and expenses of
  its counsel) and the compensation for such services are intended to constitute
  expenses of administration under any bankruptcy law or law relating to creditors’ rights
generally; and

       (m) the Property Trustee shall not be charged with knowledge of an Event of Default unless such Event of Default has occurred as a result of the act or failure
to act of the Property Trustee, a Responsible Officer of the Property Trustee obtains actual knowledge of such event or the Property Trustee receives written notice of such event from Holders of at least 25% of the Outstanding Trust Securities
(based upon Liquidation Amount).

       SECTION 8.4. Not Responsible for Recitals or Issuance of Securities.

       The recitals contained herein and in the Trust Securities Certificates shall be taken as the statements of the Issuer Trust, and the Issuer Trustees and the
Administrators do not assume any responsibility for their correctness. The Issuer Trustees and the Administrators shall not be accountable for the use or application by the Depositor of the proceeds of the Junior Subordinated Debentures.

  40

       SECTION 8.5. May Hold Securities.

       The
  Administrators, any Issuer Trustee or any other agent of any Issuer Trustee
  or the Issuer Trust, in its individual or any other capacity, may become the
  owner or pledgee of Trust Securities and, subject to Sections 8.8 and 8.13,
  and except as provided in the definition of the term “Outstanding” in
  Article I, may otherwise deal with the Issuer Trust with the same rights it
would have if it were not an Administrator, Issuer Trustee or such other agent.

       SECTION 8.6. Compensation; Indemnity; Fees.

       The Depositor, as borrower, agrees:

       (a) to pay to the Issuer Trustees from time to time such reasonable compensation for all services rendered by them hereunder as the parties shall agree from
time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

       (b) to reimburse the Issuer Trustees upon request for all reasonable expenses, disbursements and advances incurred or made by the Issuer Trustees in accordance
with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to their negligence or willful
misconduct; and

       (c)
  to the fullest extent permitted by applicable law, to indemnify and hold harmless
  (i) each Issuer Trustee, (ii) each Administrator, (iii) any Affiliate of any
  Issuer Trustee, (iv) any officer, director, shareholder, employee, representative
  or agent of any Issuer Trustee, and (v) any employee or agent of the Issuer
  Trust (referred to herein as an “Indemnified Person”) from and against
  any loss, damage, liability, tax, penalty, expense or claim of any kind or
  nature whatsoever incurred by such Indemnified Person arising out of or in
  connection with the creation, operation or dissolution of the Issuer Trust
  or any act or omission performed or omitted by such Indemnified Person in good
  faith on behalf of the Issuer Trust and in a manner such Indemnified Person
  reasonably believed to be within the scope of authority conferred on such Indemnified
  Person by this Trust Agreement, except that no Indemnified Person (other than
  an Administrator) shall be entitled to be indemnified in respect of any loss,
  damage or claim incurred by such Indemnified Person by reason of negligence
  or willful misconduct with respect to such acts or omissions, and further provided
  that no Administrator shall be entitled to be indemnified in respect of any
  loss, damage or claim incurred by such Administrator by reason of gross negligence
or willful misconduct with respect to such acts or omissions.

       The provisions of this Section 8.6 shall survive the termination of this Trust Agreement or the earlier resignation or removal of any Issuer Trustee.

       No Issuer Trustee may claim any lien or charge on any Trust Property as a result of any amount due pursuant to this Section 8.6.

       The Depositor, any Administrator and any Issuer Trustee (subject to Section 8.8) may engage in or possess an interest in other business ventures of any nature
or description, 

  41

  independently or with others, similar or dissimilar to the business of the Issuer Trust, and the Issuer Trust and the Holders of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Issuer Trust, shall not be deemed wrongful or improper. Neither the
Depositor, any Administrator, nor any Issuer Trustee shall be obligated to present any particular investment or other opportunity to the Issuer Trust even if such opportunity is of a character that, if presented to the Issuer Trust, could be taken
by the Issuer Trust, and the Depositor, any Administrator or any Issuer Trustee shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Issuer Trustee may engage or be interested in any financial or other transaction with the Depositor or any Affiliate of the Depositor, or may act as depository for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Depositor or its Affiliates.

       In the event that the Property Trustee is also acting as Paying Agent or Securities Registrar hereunder, the rights and protections afforded to the Property
Trustee pursuant to this Article VIII shall also be afforded to such Paying Agent or Securities Registrar.

       SECTION 8.7. Corporate Property Trustee Required; Eligibility of Trustees and Administrators.

       (a)
  There shall at all times be a Property Trustee hereunder with respect to the
  Trust Securities. The Property Trustee shall be a Person that is a national-
  or state-chartered bank and eligible pursuant to the Trust Indenture Act to
  act as such and has a combined capital and surplus of at least $50,000,000.
  If any such Person publishes reports of condition at least annually, pursuant
  to law or to the requirements of its supervising or examining authority, then
  for the purposes of this Section, the combined capital and surplus of such
  Person shall be deemed to be its combined capital and surplus as set forth
  in its most recent report of condition so published. If at any time the Property
  Trustee with respect to the Trust Securities shall cease to be eligible in
  accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.

       (b) There shall at all times be one or more Administrators hereunder. Each Administrator shall be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more persons authorized to bind that entity. An employee, officer or Affiliate of the Depositor may serve as an Administrator.

       (c) There shall at all times be a Delaware Trustee. The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of
the State of Delaware or (ii) a legal entity with its principal place of business in the State of Delaware and that otherwise meets the requirements of applicable Delaware law that shall act through one or more persons authorized to bind such
entity.

       SECTION 8.8. Conflicting Interests.

       (a) If the Property Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or

  42

  resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust Agreement.

       (b) The Guarantee Agreement and the Indenture shall be deemed to be sufficiently described in this Trust Agreement for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.

       SECTION 8.9. Co-Trustees and Separate Trustee.

       Unless an Event of Default shall have occurred and be continuing, at any time or times, for the purpose of meeting the legal requirements of the Trust Indenture
Act or of any jurisdiction in which any part of the Trust Property may at the time be located, the Property Trustee shall have power to appoint, and upon the written request of the Property Trustee, the Depositor and the Administrators shall for
such purpose join with the Property Trustee in the execution, delivery, and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Property Trustee either to act as co-trustee, jointly with
the Property Trustee, of all or any part of such Trust Property, or to the extent required by law to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in
such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. Any co-trustee or separate trustee appointed pursuant to this Section shall either
be (i) a natural person who is at least 21 years of age and a resident of the United States or (ii) a legal entity with its principal place of business in the United States that shall act through one or more persons authorized to bind such
entity.

       Should any written instrument from the Depositor be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or
separate trustee such property, title, right, or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Depositor.

       Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms,
namely:

       (a) The Trust Securities shall be executed by one or more Administrators, and the Capital Securities shall be authenticated by the manual signature of the
Property Trustee and delivered and all rights, powers, duties, and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Property Trustees specified
hereunder, shall be exercised, solely by the Property Trustee and not by such co-trustee or separate trustee.

       (b) The rights, powers, duties, and obligations hereby conferred or imposed upon the Property Trustee in respect of any property covered by such appointment
shall be conferred or imposed upon and exercised or performed by the Property Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that
under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee shall be incompetent or unqualified to 

  43

  perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee.

       (c) The Property Trustee at any time, by an instrument in writing executed by it, with the written concurrence of the Depositor, may accept the resignation of
or remove any co-trustee or separate trustee appointed under this Section, and, in case a Debenture Default has occurred and is continuing, the Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Depositor. Upon the written request of the Property Trustee, the Depositor shall join with the Property Trustee in the execution, delivery and performance of all instruments and agreements necessary or
proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section.

       (d) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Property Trustee or any other trustee
hereunder.

       (e) The Property Trustee shall not be liable by reason of any act of a co-trustee or separate trustee or any employees or agents of a co-trustee and separate
trustee nor shall it be liable for the supervision of a co-trustee or separate trustee or employees or agents of a co-trustee and separate trustee.

       (f) Any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee.

       SECTION 8.10. Resignation and Removal; Appointment of Successor.

       No
  resignation or removal of any Issuer Trustee (the “Relevant Trustee”)
  and no appointment of a successor Issuer Trustee pursuant to this Article shall
  become effective until the acceptance of appointment by the successor Issuer
Trustee in accordance with the applicable requirements of Section 8.11.

       Subject to the immediately preceding paragraph, a Relevant Trustee may resign at any time by giving written notice thereof to the Holders. The Relevant Trustee
shall appoint a successor by requesting from at least three Persons meeting the eligibility requirements its expenses and charges to serve as the Relevant Trustee on a form provided by the Administrators, and selecting the Person who agrees to the
lowest expenses and charges. If the instrument of acceptance by the successor Issuer Trustee required by Section 8.11 shall not have been delivered to the Relevant Trustee within 60 days after the giving of such notice of resignation, the Relevant
Trustee may petition, at the expense of the Issuer Trust, any court of competent jurisdiction for the appointment of a successor Relevant Trustee.

       Unless a Debenture Default shall have occurred and be continuing, the Property Trustee or the Delaware Trustee may be removed at any time by an Act of the
Holders of a Majority in Liquidation Amount of the Common Securities. The Property Trustee or the Delaware Trustee may be removed at any time by Act of the Holders of at least a Majority in Liquidation Amount of the Capital Securities, delivered to
the Relevant Trustee (in its individual capacity and on behalf of the Issuer Trust) (i) for cause, or (ii) if a Debenture Default shall have occurred and be 

  44

  continuing at any time. If the instrument of such removal shall not have been delivered to the Relevant Trustee within 60 days after such Act, the Relevant Trustee may petition, at the
expense of the Issuer Trust, any court of competent jurisdiction for appointment of a successor Relevant Trustee.

       If any Issuer Trustee shall resign, it shall appoint its successor. If a resigning Issuer Trustee shall fail to appoint a successor, or if an Issuer Trustee
shall be removed or become incapable of acting as Issuer Trustee, or if any vacancy shall occur in the office of any Issuer Trustee for any cause, the Holders of the Capital Securities, by Act of the Holders of record of not less than 25% in
aggregate Liquidation Amount of the Capital Securities then Outstanding delivered to such Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and such successor Issuer Trustee shall comply with the applicable
requirements of Section 8.11. If no successor Relevant Trustee shall have been so appointed by the Holders of the Capital Securities and accepted appointment in the manner required by Section 8.11, any Holder, on behalf of himself and all others
similarly situated, or any other Issuer Trustee, may petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee.

       The Property Trustee shall give notice of each resignation and each removal of an Issuer Trustee and each appointment of a successor Issuer Trustee to all
Holders in the manner provided in Section 10.8 and shall give notice to the Depositor and to the Administrators. Each notice shall include the name of the successor Relevant Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.

       Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any Delaware Trustee who is a natural person dies or becomes, in the
opinion of the Holders of the Common Securities, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by the Property Trustee following the procedures regarding expenses and charges set forth
above (with the successor in each case being a Person who satisfies the eligibility requirements for Administrators or Delaware Trustee, as the case may be, set forth in Section 8.7) .

       SECTION 8.11. Acceptance of Appointment by Successor.

       In case of the appointment hereunder of a successor Relevant Trustee, the retiring Relevant Trustee and each such successor Relevant Trustee with respect to the
Trust Securities shall execute, acknowledge and deliver an amendment hereto wherein each successor Relevant Trustee shall accept such appointment and which (a) shall contain such provisions as shall be necessary or desirable to transfer and confirm
to, and to vest in, each successor Relevant Trustee all the rights, powers, trusts and duties of the retiring Relevant Trustee with respect to the Trust Securities and the Issuer Trust, and (b) shall add to or change any of the provisions of this
Trust Agreement as shall be necessary to provide for or facilitate the administration of the Issuer Trust by more than one Relevant Trustee and upon the execution and delivery of such amendment the resignation or removal of the retiring Relevant
Trustee shall become effective to the extent provided therein and each such successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee;
but, on request of the Issuer Trust or any successor Relevant Trustee such retiring Relevant Trustee shall, upon payment of its charges, duly assign, transfer and deliver to 

  45

  such successor Relevant Trustee all Trust Property, all proceeds thereof and money held by such retiring Relevant Trustee hereunder with respect to the Trust Securities and the Issuer
Trust.

       Upon request of any such successor Relevant Trustee, the Issuer Trust shall execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.

       No successor Relevant Trustee shall accept its appointment unless at the time of such acceptance such successor Relevant Trustee shall be qualified and eligible
under this Article.

       SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business.

       Any Person into which an Issuer Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Issuer Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of such Issuer Trustee, shall be the successor of such Issuer Trustee hereunder, provided that such Person
shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.

       SECTION 8.13. Preferential Collection of Claims Against Depositor or Issuer Trust.

       If and when the Property Trustee shall be or become a creditor of the Depositor (or any other obligor upon the Trust Securities), the Property Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Depositor (or any such other obligor) as is required by the Trust Indenture Act.

       SECTION 8.14. Trustee May File Proofs of Claim.

       In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other similar judicial proceeding
relative to the Issuer Trust or any other obligor upon the Trust Securities or the property of the Issuer Trust or of such other obligor, the Property Trustee (irrespective of whether any Distributions on the Trust Securities shall then be due and
payable and irrespective of whether the Property Trustee shall have made any demand on the Issuer Trust for the payment of any past due Distributions) shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such
proceeding or otherwise:

       (a) to file and prove a claim for the whole amount of any Distributions owing and unpaid in respect of the Trust Securities and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the Property Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding, and

       (b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver,
assignee, trustee, liquidator, 

  46

  sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Property Trustee and, in the event the Property
Trustee shall consent to the making of such payments directly to the Holders, to pay to the Property Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel, and
any other amounts due the Property Trustee.

       Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or compensation affecting the Trust Securities or the rights of any Holder thereof or to authorize the Property Trustee to vote in respect of the claim of any Holder in any such proceeding.

       SECTION 8.15. Reports by Property Trustee.

       (a) Not later than May 15 of each year commencing with May 15, 2007, the Property Trustee shall provide to the Holders of the Trust Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form, in the manner and at the times provided by Section 313 of the Trust Indenture Act. The Property Trustee shall also comply with the requirements of Section 313(d) of the
Trust Indenture Act.

       (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Property Trustee with the Depositor.

       SECTION 8.16. Reports to the Property Trustee.

       Each of the Depositor and the Administrators on behalf of the Issuer Trust shall provide to the Property Trustee, the Commission and the Holders of the Trust
Securities, as applicable, such documents, reports and information as required by Section 314(a)(1) - (3) (if any) of the Trust Indenture Act and the compliance certificates required by Section 314(a)(4) and (c) of the Trust Indenture Act (provided
that any certificate to be provided pursuant to Section 314(a)(4) of the Trust Indenture Act shall be provided within 120 days of the end of each fiscal year of the Issuer Trust).

       SECTION 8.17. Evidence of Compliance with Conditions Precedent.

       Each of the Depositor and the Administrators on behalf of the Issuer Trust shall provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement which relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given pursuant to Section 314(c) shall comply with Section
314(e) of the Trust Indenture Act.

       SECTION 8.18. Number of Issuer Trustees.

       (a) The number of Issuer Trustees shall be two. The Property Trustee and the Delaware Trustee may be the same Person, in which case the number of Issuer
Trustees may be one.

  47

       (b) If an Issuer Trustee ceases to hold office for any reason, a vacancy shall occur. The vacancy shall be filled with an Issuer Trustee appointed in accordance
with Section 8.10.

       (c) The death, resignation, retirement, removal, bankruptcy, dissolution, termination, incompetence or incapacity to perform the duties of an Issuer Trustee
shall not operate to dissolve, terminate or annul the Issuer Trust or terminate this Trust Agreement.

       SECTION 8.19. Delegation of Power.

       (a) Any Administrator may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the
purpose of executing any documents contemplated in Section 2.7(a) or making any governmental filing; and

       (b) The Administrators shall have power to delegate from time to time to such of their number the doing of such things and the execution of such instruments
either in the name of the Issuer Trust or the names of the Administrators or otherwise as the Administrators may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of this Trust
Agreement.

       SECTION 8.20. Appointment of Administrators.

       (a) The number of Administrators shall be such number as shall be fixed from time to time by the Holders of a Majority in Liquidation Amount of the Common
Securities. The Administrators shall be appointed by the Holders of a Majority in Liquidation Amount of the Common Securities and may be removed by the Holders of a Majority in Liquidation Amount of the Common Securities or may resign at any time.
Upon any resignation or removal, the Depositor shall appoint a successor Administrator. Each Administrator shall execute this Trust Agreement thereby agreeing to comply with, and be legally bound by, all of the terms, conditions and provisions of
this Trust Agreement. If at any time there is no Administrator, the Property Trustee or any Holder who has been a Holder of Trust Securities for at least six months may petition any court of competent jurisdiction for the appointment of one or more
Administrators.

       (b) Whenever a vacancy in the number of Administrators shall occur, until such vacancy is filled by the appointment of an Administrator in accordance with this
Section 8.20, the Administrators in office, regardless of their number (and notwithstanding any other provision of this Trust Agreement), shall have all the powers granted to the Administrators and shall discharge all the duties imposed upon the
Administrators by this Trust Agreement.

       (c) Notwithstanding the foregoing, or any other provision of this Trust Agreement, in the event any Administrator or a Delaware Trustee who is a natural person
dies or becomes, in the opinion of the Holders of a Majority in Liquidation Amount of the Common Securities, incompetent, or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by the remaining Administrators,
if there were at least two of them prior to such vacancy, and by the Depositor, if there were not two such Administrators immediately prior to such vacancy (with the successor in each case being a Person who satisfies the eligibility requirement for
Administrators or Delaware Trustee, as the case may be, set forth in Section 8.7) .

  48

  ARTICLE IX

  DISSOLUTION, LIQUIDATION AND MERGER

       SECTION 9.1. Dissolution Upon Expiration Date.

       Unless
  earlier dissolved, the Issuer Trust shall automatically dissolve on October
  15, 2066 (the “Expiration Date”), and thereafter the Trust Property
shall be distributed in accordance with Section 9.4.

       SECTION 9.2. Early Termination.

       The
  first to occur of any of the following events is an “Early Termination Event” and
the occurrence of which shall cause the dissolution of the Issuer Trust:

       (a) the occurrence of the appointment of a receiver or other similar official in any liquidation, insolvency or similar proceeding with respect to the Depositor
or all or substantially all of its property, or a court or other governmental agency shall enter a decree or order and such decree or order shall remain unstayed and undischarged for a period of 60 days, unless the Depositor shall transfer the
Common Securities as provided by Section 5.11, in which case this provision shall refer instead to any such successor Holder of the Common Securities;

       (b) the written direction to the Property Trustee from the Holder of the Common Securities at any time to dissolve the Issuer Trust and to distribute a Like
Amount of the Junior Subordinated Debentures to Holders in exchange for the Capital Securities (which direction, subject to Section 9.4(a) and to obtaining any required regulatory approval, is optional and wholly within the discretion of the Holders
of the Common Securities);

       (c) the redemption of all of the Capital Securities in connection with the redemption of all the Junior Subordinated Debentures or the maturity of the Junior
Subordinated Debentures; and

       (d) the entry of an order for dissolution of the Issuer Trust by a court of competent jurisdiction.

       SECTION 9.3. Termination.

       As soon as is practicable after the occurrence of an event referred to in Section 9.1 or 9.2, and upon the completion of the winding up and liquidation of the
Issuer Trust, the Administrators or the Issuer Trustees (each of whom is hereby authorized to take such action) shall file a certificate of cancellation with the Secretary of State of the State of Delaware terminating the Trust and, upon such
filing, the respective obligations and responsibilities of the Issuer Trustees, the Administrators and the Issuer Trust shall terminate.

       SECTION 9.4. Liquidation.

       (a) If an Early Termination Event specified in clause (a), (b) or (d) of Section 9.2 occurs or upon the Expiration Date, the Issuer Trust shall be wound up and
liquidated by the

  49

  Property
  Trustee as expeditiously as the Property Trustee determines to be possible
  by distributing, after paying or making reasonable provision to pay all claims
  and obligations of the Issuer Trust in accordance with Section 3808(e) of the
  Delaware Statutory Trust Act, to each Holder a Like Amount of Junior Subordinated
  Debentures, subject to Section 9.4(d) . Notice of liquidation shall be given
  by the Property Trustee by first-class mail, postage prepaid, mailed not later
  than 15 nor more than 45 days prior to the Liquidation Date to each Holder
  of Trust Securities at such Holder’s address appearing in the Securities
Register. All notices of liquidation shall:

  
         (i) state the Liquidation Date;

  
         (ii) state that, from and after the Liquidation Date, the Trust Securities will no longer be deemed to be Outstanding and any Trust Securities Certificates not
    surrendered for exchange will be deemed to represent a Like Amount of Junior Subordinated Debentures; and

  
         (iii) provide such information with respect to the mechanics by which Holders may exchange Trust Securities Certificates for Junior Subordinated Debentures, or
    if Section 9.4(d) applies, receive a Liquidation Distribution, as the Administrators or the Property Trustee shall deem appropriate.

       (b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the liquidation of the Issuer Trust and distribution of the Junior Subordinated Debentures
to Holders, the Property Trustee shall establish a record date for such distribution (which shall be not more than 30 days prior to the Liquidation Date) and, either itself acting as exchange agent or through the appointment of a separate exchange
agent, shall establish such procedures as it shall deem appropriate to effect the distribution of Junior Subordinated Debentures in exchange for the Outstanding Trust Securities Certificates.

       (c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation Date, (i) the Capital Securities and Common Securities will no longer be deemed to be
Outstanding, (ii) the Clearing Agency for the Capital Securities or its nominee, as the registered holder of the Global Capital Securities Certificate, shall receive a registered global certificate or certificates representing the Junior
Subordinated Debentures to be delivered upon such distribution with respect to Capital Securities held by the Clearing Agency or its nominee, and, (iii) any Capital Securities Certificates not held by the Clearing Agency for the Capital Securities
or its nominee as specified in clause (ii) above will be deemed to represent Junior Subordinated Debentures having a principal amount equal to the stated Liquidation Amount of the Capital Securities represented thereby and bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on such Capital Securities until such certificates are presented to the Securities Registrar for transfer or reissuance.

       (d) If, notwithstanding the other provisions of this Section 9.4, whether because of an order for dissolution entered by a court of competent jurisdiction or
otherwise, distribution of the Junior Subordinated Debentures is not practical, or if any Early Termination Event specified in clause (c) of Section 9.2 occurs, the Issuer Trust shall be dissolved and wound up and the Trust Property shall be
liquidated by the Property Trustee in such manner as the Property Trustee 

  50

  determines.
  In such event, on the date of the dissolution of the Issuer Trust, unless the
  Trust Securities have been redeemed or are to be redeemed on such date pursuant
  to Article IV, Holders will be entitled to receive out of the assets of the
  Issuer Trust available for distribution to Holders, after paying or making
  reasonable provision to pay all claims and obligations of the Issuer Trust
  in accordance with Section 3808(e) of the Delaware Statutory Trust Act, an
  amount equal to the aggregate of Liquidation Amount per Trust Security plus
  accumulated and unpaid Distributions thereon to but excluding the date of payment
  (such amount being the “Liquidation
Distribution”). If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Issuer Trust has insufficient assets available
to pay in full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Issuer Trust on the Trust Securities
shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holders of the Common Securities will be entitled to receive Liquidation Distributions upon any such dissolution pro rata (determined as aforesaid) with Holders of Capital Securities, except that, if a Debenture Event of Default or Debenture Default specified in Section
5.06(a) or 5.06(b) of the Indenture has occurred and is continuing, the Capital Securities shall have a priority over the Common Securities as provided in Section 4.3.

       SECTION
  9.5. Mergers, Consolidations, Amalgamations or Replacements of the Issuer Trust.

       The
  Issuer Trust may not merge with or into, consolidate, amalgamate, or be replaced
  by, or convey, transfer or lease its properties and assets substantially as
  an entirety to, any entity, except pursuant to this Section 9.5 or Section
  9.4. At the request of the Holders of the Common Securities, and with the consent
  of the Holders of at least a Majority in Liquidation Amount of the Capital
  Securities, the Issuer Trust may merge with or into, consolidate, amalgamate,
  or be replaced by or convey, transfer or lease its properties and assets substantially
  as an entirety to a trust organized as such under the laws of any State; provided,
  however, that (i) such successor entity either (a) expressly assumes all of
  the obligations of the Issuer Trust with respect to the Capital Securities
  or (b) substitutes for the Capital Securities other securities having substantially
  the same terms as the Capital Securities (the “Successor Securities”)
  so long as the Successor Securities have the same priority as the Capital Securities
  with respect to distributions and payments upon liquidation, redemption and
  otherwise, (ii) a trustee of such successor entity possessing the same powers
  and duties as the Property Trustee is appointed to hold the Junior Subordinated
  Debentures, (iii) such merger, consolidation, amalgamation, replacement, conveyance,
  transfer or lease does not cause the Capital Securities (including any Successor
  Securities) to be downgraded by any nationally recognized statistical rating
  organization, (iv) such merger, consolidation, amalgamation, replacement, conveyance,
  transfer or lease does not adversely affect the rights, preferences and privileges
  of the Holders of the Capital Securities (including any Successor Securities)
  in any material respect, (v) such successor entity has a purpose substantially
  identical to that of the Issuer Trust, (vi) prior to such merger, consolidation,
  amalgamation, replacement, conveyance, transfer or lease, the Issuer Trustee
  has received an Opinion of Counsel from independent counsel experienced in
  such matters to the effect that (a) such merger, consolidation, amalgamation,
  replacement, conveyance, transfer or lease does not adversely affect the rights,
  preferences and privileges of the Holders of the Capital Securities (including
  any Successor Securities) in any material respect, and (b) following such merger,
  consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Issuer Trust 

  51

  nor such
  successor entity will be required to register as an “investment company” under
  the Investment Company Act and (vii) the Depositor or any permitted transferee
  to whom it has transferred the Common Securities hereunder own all of the common
  securities of such successor entity and guarantees the obligations of such
  successor entity under the Successor Securities at least to the extent provided
  by the Guarantee Agreement. Notwithstanding the foregoing, the Issuer Trust
  shall not, except with the consent of Holders of 100% in Liquidation Amount
  of the Capital Securities, consolidate, amalgamate, merge with or into, or
  be replaced by or convey, transfer or lease its properties and assets substantially
  as an entirety to any other entity or permit any other entity to consolidate,
  amalgamate, merge with or into, or replace it if such consolidation, amalgamation,
  merger, replacement, conveyance, transfer or lease would cause the Issuer Trust
  or the successor entity to be taxable as a corporation, a partnership or any
  other arrangement other than as a grantor trust for United States Federal income
tax purposes.

  ARTICLE X

  MISCELLANEOUS PROVISIONS

       SECTION 10.1. Limitation of Rights of Holders.

       Except as set forth in Section 9.2, the death, incapacity, dissolution, termination or bankruptcy of any Person having an interest, beneficial or otherwise, in
Trust Securities shall not operate to terminate this Trust Agreement, nor dissolve or terminate the Issuer Trust, nor entitle the legal representatives, successors or heirs of such Person or any Holder for such Person, to claim an accounting, take
any action or bring any proceeding in any court for a partition or winding-up of the arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. Any merger or similar agreement
authorized in accordance with this Trust Agreement shall be executed by one or more of the Administrators on behalf of the Issuer Trust.

       SECTION 10.2. Amendment.

       (a) This Trust Agreement may be amended from time to time by the Property Trustee and the Holders of a Majority in Liquidation Amount of the Common Securities,
without the consent of any Holder of the Capital Securities (i) to cure any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or
questions arising under this Trust Agreement, provided, however, that such amendment shall not adversely affect in any material respect the interests of any Holder or (ii) to modify, eliminate or add to any provisions of this Trust Agreement to such
extent as shall be necessary to ensure that the Issuer Trust will not be taxable as a corporation, a partnership or any other arrangement other than as a grantor trust for United States Federal income tax purposes at any time that any Trust
Securities are Outstanding or to ensure that the Issuer Trust will not be required to register as an investment company under the Investment Company Act.

       (b) Except as provided in Section 10.2(c) hereof, any provision of this Trust Agreement may be amended by the Property Trustee and the Holders of a Majority in
Liquidation Amount of the Common Securities with (i) the consent of Holders of at least a 

  52

  Majority
  in Liquidation Amount of the Capital Securities and (ii) receipt by the Issuer
  Trustees of an Opinion of Counsel to the effect that such amendment or the
  exercise of any power granted to the Issuer Trustees in accordance with such
  amendment will not cause the Issuer Trust to be taxable as a corporation, a
  partnership or any other arrangement other than as a grantor trust for United
  States Federal income tax purposes or affect the Issuer Trust’s exemption from status of an “investment company” under
the Investment Company Act.

       (c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent of each affected Holder, this Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on the Trust Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the Trust Securities as of a specified date or (ii) restrict the
right of a Holder to institute suit for the enforcement of any such payment on or after such date.

       (d)
  Notwithstanding any other provisions of this Trust Agreement, no Issuer Trustee
  shall enter into or consent to any amendment to this Trust Agreement which
  would cause the Issuer Trust to fail or cease to qualify for the exemption
  from status as an “investment company” under the Investment Company
  Act or to fail or cease to qualify as a grantor trust for United States Federal
income tax purposes.

       (e) Notwithstanding anything in this Trust Agreement to the contrary, without the consent of the Depositor and the Administrators, this Trust Agreement may not
be amended in a manner which imposes any additional obligation on the Depositor or the Administrators.

       (f) In the event that any amendment to this Trust Agreement is made, the Administrators or the Property Trustee shall promptly provide to the Depositor a copy
of such amendment.

       (g)
  Neither the Property Trustee nor the Delaware Trustee shall be required to
  enter into any amendment to this Trust Agreement which affects its own rights,
  duties or immunities under this Trust Agreement. The Property Trustee shall
  be entitled to receive an Opinion of Counsel and an Officer’s Certificate
  stating that any amendment to this Trust Agreement is in compliance with this
Trust Agreement.

       (h) Any amendments to this Trust Agreement, pursuant to Section 10.2(a), shall become effective when notice of such amendment is given to the Holders of the
Trust Securities.

       (i) Notwithstanding any other provision of this Trust Agreement, no amendment to this Trust Agreement may be made if, as a result of such amendment, it would
cause the Issuer Trust to be taxable as a corporation, a partnership or any other arrangement other than as a grantor trust for United States Federal income tax purposes.

       SECTION 10.3. Separability.

       In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

  53

       SECTION 10.4. Governing Law.

       THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE HOLDERS, THE ISSUER TRUST, THE DEPOSITOR, THE ISSUER TRUSTEES AND THE ADMINISTRATORS SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER, THAT THERE SHALL NOT BE APPLICABLE TO THE HOLDERS,
THE ISSUER TRUST, THE DEPOSITOR, THE ISSUER TRUSTEES, THE ADMINISTRATORS OR THIS TRUST AGREEMENT ANY PROVISION OF THE LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING TO TRUSTS THAT RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH
THE TERMS HEREOF (A) THE FILING WITH ANY COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (C) THE
NECESSITY FOR OBTAINING COURT OR OTHER GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF
RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING, STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST
ASSETS OR (G) THE ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE LIMITATIONS OR LIABILITIES OR AUTHORITIES AND POWERS OF THE ISSUER TRUSTEES
OR THE ADMINISTRATORS AS SET FORTH OR REFERENCED IN THIS TRUST AGREEMENT. SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THE ISSUER TRUST.

       SECTION 10.5. Payments Due on Non-Business Day.

       If the date fixed for any payment on any Trust Security shall be a day that is not a Business Day, then such payment need not be made on such date but may be
made on the next succeeding day that is a Business Day, with the same force and effect as though made on the date fixed for such payment, and no Distributions shall accumulate on such unpaid amount for the period after such date.

       SECTION 10.6. Successors.

       This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to the Depositor, the Issuer Trust, the Administrators and any Issuer
Trustee, including any successor by operation of law. Except in connection with a consolidation, merger or sale 

  54

  involving
  the Depositor that is permitted under Article IX of the Indenture and pursuant
  to which the assignee agrees in writing to perform the Depositor’s obligations
hereunder, the Depositor shall not assign its obligations hereunder.

       SECTION 10.7. Headings.

       The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement.

       SECTION 10.8. Reports, Notices and Demands.

       Any
  report, notice, demand or other communication that by any provision of this
  Trust Agreement is required or permitted to be given or served to or upon any
  Holder or the Depositor may be given or served in writing by deposit thereof,
  first-class postage prepaid, in the United States mail, hand delivery or facsimile
  transmission, in each case, addressed, (a) in the case of a Holder of Capital
  Securities, to such Holder as such Holder’s name and address may appear
  on the Securities Register; and (b) in the case of the Holder of Common Securities
  or the Depositor, to Morgan Stanley, 1585 Broadway, New York, NY 10036, Attention:
  Office of the Secretary, facsimile no.: (212) 761-0331 or to such other address
  as may be specified in a written notice by the Depositor to the Property Trustee.
  Such notice, demand or other communication to or upon a Holder shall be deemed
  to have been sufficiently given or made, for all purposes, upon hand delivery,
  mailing or transmission. Such notice, demand or other communication to or upon
  the Depositor shall be deemed to have been sufficiently given or made only
upon actual receipt of the writing by the Depositor.

       Any
  notice, demand or other communication which by any provision of this Trust
  Agreement is required or permitted to be given or served to or upon the Property
  Trustee, the Delaware Trustee, the Administrators, or the Issuer Trust shall
  be given in writing addressed (until another address is published by the Issuer
  Trust) as follows: (a) with respect to the Property Trustee to The Bank of
  New York, 101 Barclay Street, Floor 8 West, New York, NY 10286, Attention:
  Corporate Trust Administration; (b) with respect to the Delaware Trustee to
  The Bank of New York (Delaware), White Clay Center, Route 273, Newark, Delaware
  19711, Attention: Corporate Trust Administration; and (c) with respect to the
  Administrators, to them at the address above for notices to the Depositor,
  marked “Attention: Office of the Secretary.” Such notice, demand
  or other communication to or upon the Issuer Trust, the Property Trustee or
  the Administrators shall be deemed to have been sufficiently given or made
  only upon actual receipt of the writing by the Issuer Trust, the Property Trustee,
or such Administrator.

       SECTION 10.9. Agreement Not to Petition.

       Each
  of the Issuer Trustees, the Administrators and the Depositor agree for the
  benefit of the Holders that, until at least one year and one day after the
  Issuer Trust has been terminated in accordance with Article IX, they shall
  not file, or join in the filing of, a petition against the Issuer Trust under
  any bankruptcy, insolvency, reorganization or other similar law (including,
  without limitation, the United States Bankruptcy Code) (collectively, “Bankruptcy Laws”)
  or otherwise join in the commencement of any proceeding against the Issuer
  Trust under any Bankruptcy Law. In the event the Depositor takes action in
violation of this Section 10.9, the Property 

  55

  Trustee agrees, for the benefit of Holders, that at the expense of the Depositor, it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such petition
by the Depositor against the Issuer Trust or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as
counsel for the Issuer Trustee or the Issuer Trust may assert. If any Issuer Trustee or Administrator takes action in violation of this Section 10.9, the Depositor agrees, for the benefit of the Holders, that at the expense of the Depositor, it
shall file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by such Person against the Depositor or the commencement of such action and raise the defense that such Person has agreed in writing not to take
such action and should be estopped and precluded therefrom and such other defenses, if any, as counsel for the Issuer Trustee or the Issuer Trust may assert. The provisions of this Section 10.9 shall survive the termination of this Trust
Agreement.

       SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.

       (a) Trust Indenture Act; Application. (i) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required to be a part of this
Trust Agreement and shall, to the extent applicable, be governed by such provisions; (ii) if and to the extent that any provision of this Trust Agreement limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of
the Trust Indenture Act, such imposed duties shall control; (iii) for purposes of this Trust Agreement, the Property Trustee, to the extent permitted by applicable law and/or the rules and regulations of the Commission, shall be the only Issuer
Trustee which is a trustee for the purposes of the Trust Indenture Act; and (iv) the application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the Capital Securities and the Common Securities as equity securities
representing undivided beneficial interests in the assets of the Issuer Trust.

       Lists
  of Holders of Capital Securities. (i) Each of the Depositor and the Administrators
  on behalf of the Trust shall provide the Property Trustee with such information
  as is required under Section 312(a) of the Trust Indenture Act at the times
  and in the manner provided in Section 312(a) and (ii) the Property Trustee
  shall comply with its obligations under Sections 310(b), 311 and 312(b) of
  the Trust Indenture Act. In no event, however, shall the Depositor’s or Administrators’ failure
  to comply with any section of the Trust Indenture Act give rise to a right
to accelerate the Junior Subordinated Debentures.

       (b) Disclosure of Information. The disclosure of information as to the names and addresses of the Holders of Trust Securities in accordance with Section 312 of
the Trust Indenture Act, regardless of the source from which such information was derived, shall not be deemed to be a violation of any existing law or any law hereafter enacted which does not specifically refer to Section 312 of the Trust Indenture
Act, nor shall the Property Trustee be held accountable by reason of mailing any material pursuant to a request made under Section 312(b) of the Trust Indenture Act.

  56

       SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and Indenture.

       THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER
MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE GUARANTEE AGREEMENT AND THE
INDENTURE, AND THE AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AGREEMENT AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE ISSUER TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS
TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE ISSUER TRUST AND SUCH HOLDER AND SUCH OTHERS.

       SECTION 10.12. Counterparts.

       This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

  57

	 	
      MORGAN STANLEY, 
      
	 	
      as Depositor 
      
	 	 	 	 	
	 	 	 	 	
	 	By:	/s/
	      Jai Sooklal
	 	 	

	 	 	Name: 	
      Jai
      Sooklal
	 	 	Title: 	
      Assistant
      Treasurer 	  
	 	 	 	 	
	 	 	 	 	
	 	 	 	 	
	 	
      THE BANK OF NEW YORK, 
      
	 	
      as Property Trustee, and 
      
	 	
      not in its individual capacity 
      
	 	 	 	 	
	 	 	 	 	
	 	By:  	/s/
    Franca M. Ferrera
	 	 	

	 	 	 Name: 	Franca
    M. Ferrera
	 	 	 Title:	
      Assitant
      Vice President
	 	 	 	 	
	 	 	 	 
	 	 	 	 
	 	
      THE BANK OF NEW YORK (DELAWARE), 
      
	 	
      as Delaware Trustee, and not 
      
	 	
      in its individual capacity 
      
	 	 	 	 	
	 	 	 	 	
	 	By: 	/s/
	      Vincent E. Sampson
	 	 	

	 	 	Name:	Vincent
	      E. Sampson
	 	 	Title:	President
	 	 	 	 	
	 	 	 	 	
	 	/s/
      Alexander C. Frank
	 	
	

 	 	Name:	
       Alexander
      C. Frank 
    
	 	Title: 	
      Administrator 
    
	 	 	 	
	 	 	 	
	 	/s/
      Debra M. Aaron
	 	
	
	 	Name: 	
      Debra
      M. Aaron 
    
	 	Title: 	
      Administrator 
    

  Exhibit A

  CERTIFICATE OF TRUST

 

 

  A-1

  Exhibit B

  FORM OF CERTIFICATE DEPOSITARY AGREEMENT

 

 

  B-1

  Exhibit C

  FORM OF COMMON SECURITIES CERTIFICATE

  THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT.

  Certificate Number: C-

  

  Number of Common Securities:

  Certificate Evidencing Common Securities

  of

  Morgan Stanley Capital Trust VII

  6.60% Common Securities

  (liquidation amount $25
per Common Security)

       Morgan
  Stanley Capital Trust VII, a statutory trust created under the laws of the
  State of Delaware (the “Issuer Trust”), hereby certifies that Morgan
   Stanley (the “Holder”) is the registered owner                           of
   (                  )
common securities of the Issuer Trust representing undivided beneficial interests
in assets of the Issuer Trust and designated the 6.60% Common Securities (liquidation
amount $25
per Common Security) (the “Common Securities”). Except in accordance
with Section 5.11 of the Trust Agreement (as defined below), the Common Securities
are not transferable and any attempted transfer hereof other than in accordance
 therewith shall be void. The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set forth
in, and this certificate and the Common Securities represented hereby are issued
and shall  in all respects be subject to the terms and provisions of, the Amended
and Restated Trust Agreement of the Issuer Trust, dated as of October 12, 2006,
as the same may be amended from time to time (the “Trust Agreement”),
among Morgan  Stanley, as Depositor, The Bank of New York, as Property Trustee,
The Bank of New York (Delaware), as Delaware Trustee, two individuals selected
by the holders of the Common Securities to act as administrators with respect
to the Issuer Trust (the
“Administrators”), and the holders of Trust Securities, including the
designation of the terms of the Common Securities as set forth therein. The Holder
is entitled to the benefits of a Common Securities Guarantee Agreement entered
into by  Morgan Stanley, as Guarantor, dated as of October 12, 2006 (the “Guarantee
Agreement”),
to the extent provided therein. The Issuer Trust will furnish a copy of the Trust
Agreement and the Guarantee Agreement to the Holder without charge upon written
request to the Issuer Trust at its principal place of business or registered
office.

       Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder.

  C-1

       The Issuer Trust, and by acceptance of a beneficial interest in the Common Securities, each beneficial owner of the Common Securities will be deemed to have
agreed to treat, for United States Federal income tax purposes, the Junior Subordinated Debentures as indebtedness of the Depositor and to treat the Common Securities as evidence of a beneficial ownership interest in the Junior Subordinated
Debentures through a grantor trust.

  Terms used but not defined herein have the meanings set forth in the Trust Agreement.

       IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust has executed this certificate this  day of , 200 .

	 	
      MORGAN STANLEY CAPITAL TRUST VII 
      
	 	 	 

	
	 	 	 

	
	 	By:	
       
    
	 	 	

	 	Name:   
	 	
       Title:
      Administrator 
      

  C-2

  Exhibit D

  FORM OF CAPITAL SECURITIES CERTIFICATE

  [THIS CAPITAL SECURITIES CERTIFICATE IS A GLOBAL CAPITAL SECURITIES CERTIFICATE WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS CAPITAL SECURITIES CERTIFICATE IS EXCHANGEABLE FOR CAPITAL SECURITIES CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE TRUST AGREEMENT AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE TRUST AGREEMENT.]

  THE ISSUER TRUST, AND BY ACCEPTANCE OF A BENEFICIAL INTEREST IN THE CAPITAL SECURITIES, EACH BENEFICIAL OWNER OF THE CAPITAL SECURITIES WILL BE DEEMED TO HAVE AGREED TO TREAT, FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES, THE JUNIOR SUBORDINATED DEBENTURES AS INDEBTEDNESS OF THE DEPOSITOR AND TO TREAT THE CAPITAL SECURITIES AS EVIDENCE OF A BENEFICIAL OWNERSHIP INTEREST IN THE JUNIOR SUBORDINATED DEBENTURES THROUGH A GRANTOR
TRUST.

  [UNLESS
  THIS CAPITAL SECURITIES CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
  OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
  TO MORGAN STANLEY CAPITAL TRUST VII OR ITS AGENT FOR REGISTRATION OF TRANSFER,
  EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITIES CERTIFICATE ISSUED IS REGISTERED
  IN THE NAME OF SUCH NOMINEE AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
  OF DTC (AND ANY PAYMENT IS MADE TO SUCH ENTITY AS IS REQUESTED BY AN AUTHORIZED
  REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
  OR OTHERWISE BY OR TO A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, HAS AN INTEREST HEREIN.]

  NO EMPLOYEE
  BENEFIT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
  1974, AS AMENDED (“ERISA”), OTHER PLAN OR INDIVIDUAL RETIREMENT ACCOUNT SUBJECT TO SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR EMPLOYEE BENEFIT PLAN THAT IS A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, A CHURCH PLAN, AS DEFINED IN SECTION 3(33) OF ERISA, OR A NON-U.S. PLAN, AS
DESCRIBED IN SECTION 4(B)(4) OF ERISA, SUBJECT TO SIMILAR RULES UNDER OTHER APPLICABLE LAWS OR DOCUMENTS (“SIMILAR LAW”) (EACH, A “PLAN”), NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY
PLAN’S INVESTMENT IN THE ENTITY (A “PLAN ASSET ENTITY”), AND NO PERSON INVESTING “PLAN ASSETS” OF
ANY PLAN, MAY ACQUIRE OR HOLD THIS CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST
HEREIN, UNLESS SUCH PURCHASE AND HOLDING IS COVERED BY THE 

  D-1

  EXEMPTIVE
  RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
  EXEMPTION (“PTCE”) 96 23, 95 60, 91 38, 90 1 OR 84 14, OR THE STATUTORY EXEMPTION UNDER NEW
SECTION 408(B)(17)(A) OF ERISA (THE “STATUTORY EXEMPTION”), OR SIMILAR LAW, OR THERE IS NO BASIS ON WHICH THE PURCHASE AND HOLDING COULD CONSTITUTE A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA, SECTION 4975 OF THE CODE OR ANY
SIMILAR LAW. ANY PURCHASER OR HOLDER OF THE CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF THAT EITHER (A) THE PURCHASER AND HOLDER ARE NOT A PLAN OR A PLAN ASSET ENTITY
AND ARE NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH “PLAN ASSETS” OF
ANY PLAN, OR (B) THE PURCHASE AND HOLDING OF THE CAPITAL SECURITIES ARE COVERED
BY THE EXEMPTIVE RELIEF PROVIDED BY PTCE 96 23, 95 60, 91 38, 90 1 OR 84 14,
OR THE STATUTORY EXEMPTION, OR SIMILAR LAW, OR THERE IS NO BASIS ON WHICH THE
PURCHASE AND HOLDING COULD CONSTITUTE A PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW.

  D-2

	
      CERTIFICATE NUMBER: C- 
    	 
		
      CUSIP NO. 61750K208 
    
	 

		 
		
                        Capital Securities 
	  

  CERTIFICATE EVIDENCING CAPITAL SECURITIES OF 

  MORGAN STANLEY CAPITAL TRUST VII

   6.60%
  CAPITAL SECURITIES

  (LIQUIDATION AMOUNT $25 PER CAPITAL
SECURITY)

       Morgan
  Stanley Capital Trust VII, a statutory trust created under the laws of the
  State of Delaware (the “Issuer Trust”), hereby certifies that (the
“Holder”) is the registered owner of $ in aggregate liquidation amount of capital securities of the Issuer Trust representing a preferred undivided beneficial interest in the assets of the Issuer Trust and designated the Morgan Stanley
Capital Trust VII 6.60% Capital Securities (liquidation amount $25 per Capital Security) (the “Capital Securities”). The Capital Securities are transferable on the books and records of the Issuer Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.5 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other
terms and provisions of the Capital Securities are set forth in, and this certificate and the Capital Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust
Agreement of the Issuer Trust, dated as of October 12, 2006, as the same may be amended from time to time (the “Trust Agreement”), among Morgan Stanley, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee, two individuals selected by the holders of the Common Securities to act as administrators with respect to the Issuer Trust (the “Administrators”) and the holders of Trust Securities, including the
designation of the terms of the Capital Securities as set forth therein. The Holder is entitled to the benefits of the Capital Securities Guarantee Agreement entered into by Morgan Stanley, as Guarantor, and The Bank of New York, as Guarantee
Trustee, dated as of October 12, 2006 (the “Guarantee Agreement”),
to the extent provided therein. The Issuer Trust will furnish a copy of the Trust
Agreement and the Guarantee Agreement to the Holder without charge upon written
request to the Issuer Trust at its principal place of business or registered
office.

       Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder.

       Terms used but not defined herein have the meanings set forth in the Trust Agreement.

  D-3

       IN WITNESS WHEREOF, one of the Administrators of the Issuer Trust has executed this certificate this  day of , 200  .

	 	 MORGAN
        STANLEY CAPITAL TRUST VII  
	 	 	  
	 	 	  
	 	By:	   
	 	 	

	 	Name:   
	 	  Title:
        Administrator  

	 
	 
	
      AUTHENTICATED, COUNTERSIGNED AND 
      
	
      REGISTERED: 
      
	 	 

	
	
      The Bank of New York, 
      
	
      as Property Trustee 
      
	 	 

	
	 	 

	
	By:	       
    
	 	

	
	 	
        Authorized Signatory 
	  
	 	 

	
	 	
      Dated:
_______________________
	 	 

  D-4

  ASSIGNMENT

	     FOR
          VALUE RECEIVED, the undersigned assigns and transfers this Capital
    Security to: 
	 
	

	(Insert
    assignee’s social security or tax identification number)
	 
	

	(Insert
    address and zip code of assignee)
	 
	      and
    irrevocably appoints _____________________________________________________ agent
    to transfer this Capital Securities Certificate on the books of the Issuer
    Trust. The agent may substitute another to act for him or her.

  

	Date:
	  __________________

		Signature:
		

	  

	
	 	 	

	 	 	(Sign
      exactly as your name appears on the other side of this Capital Securities
    Certificate)
	 	 	 
	 	 	 
	 	Signature
    Guarantee
	 	 	

 

  SIGNATURE GUARANTEE

       Signatures
  must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Property Trustee, which requirements
include membership or participation in the Security Transfer Agent medallion Program (“STAMP”) or such other “signature guarantee program” as
may be determined by the Property Trustee in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

  D-5

  Exhibit E

  FORM OF EXPENSE AGREEMENT

       AGREEMENT
  AS TO EXPENSES AND LIABILITIES, dated as of October 12, 2006, between Morgan
Stanley, a Delaware corporation, as Depositor (the “Depositor”), and Morgan Stanley Capital Trust VII, a Delaware statutory trust (the “Issuer Trust”).

       WHEREAS,
  the Issuer Trust intends to issue its Common Securities (the “Common Securities”) to and acquire 6.60% Junior Subordinated Debentures (the
“Debentures”) from the Depositor, and to issue and sell 6.60% Capital Securities (the “Capital Securities”) with such powers, preferences and special rights and restrictions as are set forth in the Amended and Restated Trust
Agreement of the Issuer Trust, dated as of October 12, 2006, among Morgan Stanley, as Depositor, The Bank of New York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee, two individuals selected by the holders of the Common
Securities to act as administrators with respect to the Issuer Trust (the “Administrators”), and the holders of Trust Securities, as the same may be amended from time to time (the “Trust Agreement”);

       WHEREAS, the Depositor will own all of the Common Securities of the Trust;

       WHEREAS, capitalized terms used but not defined herein have the meanings set forth in the Trust Agreement;

       NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

  E-1

  ARTICLE I.

       Section
  1.01. Guarantee by the Depositor. Subject to the terms and conditions hereof,
  the Depositor hereby irrevocably and unconditionally guarantees to each person
  or entity to whom the Issuer Trust is now or hereafter becomes indebted or
  liable (the “Beneficiaries”) the full payment, when and as due, of any and all Obligations (as hereinafter defined) to such Beneficiaries. As used herein,
“Obligations” means any costs, expenses or liabilities of the Issuer
Trust, other than obligations of the Issuer Trust to pay to holders of any Trust
Securities the amounts due such holders pursuant to the terms of the Trust Securities.
This Agreement is intended to be for the benefit of, and to be enforceable by,
all such Beneficiaries, whether or not such Beneficiaries have received notice
hereof.

       Section 1.02. Subordination of Guarantee. The guarantee and other liabilities and obligations of the Depositor under this Agreement shall constitute unsecured
obligations of the Depositor and shall rank subordinate and junior in right of payment to all Senior Indebtedness (as defined in the Indenture) of the Depositor to the extent and in the manner set forth in the Indenture with respect to the
Debentures, and the provisions of Article XIII of the Indenture will apply, mutatis mutandis, to the
obligations of the Depositor hereunder. The obligations of the Depositor hereunder do not constitute Senior Indebtedness (as defined in the Indenture) of the Depositor.

       Section 1.03. Term of Agreement. This Agreement shall terminate and be of no further force and effect upon the dissolution or termination of the Issuer Trust,
provided, however, that this Agreement shall continue to be effective or shall be reinstated, as the case may be, if at any time any holder of Capital Securities or any Beneficiary is required to repay any sums paid under the Capital Securities,
under any Obligation, under the Guarantee Agreement dated the date hereof by the Depositor and The Bank of New York, as guarantee trustee, or under this Agreement for any reason whatsoever. This Agreement is continuing, irrevocable, unconditional
and absolute.

       Section 1.04. Waiver of Notice. The Depositor hereby waives notice of acceptance of this Agreement and of any Obligation to which it applies or may apply, and
the Depositor hereby waives presentment, demand for payment, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands.

       Section 1.05. No Impairment. The obligations, covenants, agreements and duties of the Depositor under this Agreement shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:

       (a) the extension of time for the payment by the Issuer Trust of all or any portion of the Obligations or for the performance of any other obligation under,
arising out of, or in connection with, the Obligations;

       (b) any failure, omission, delay or lack of diligence on the part of the Beneficiaries to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Beneficiaries with respect to the Obligations or any action on the part of the Issuer Trust granting indulgence or extension of any kind; or

  E-2

       (c) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer Trust or any of the assets of the Issuer Trust (other than the dissolution of the Issuer Trust in accordance with the
terms thereof).

       There shall be no obligation of the Beneficiaries to give notice to, or obtain the consent of, the Depositor with respect to the happening or any of the
foregoing.

       Section 1.06. Enforcement. A Beneficiary may enforce this Agreement directly against the Depositor and the Depositor waives any right or remedy to require that
any action be brought against the Issuer Trust or any other person or entity before proceeding against the Depositor.

       Section 1.07. Subrogation. The Depositor shall be subrogated to all rights (if any) of any Beneficiary against the Issuer Trust in respect of any amounts paid
to the Beneficiaries by the Depositor under this Agreement; provided, however, that the Depositor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Agreement or any payments are due to the holders
of Capital Securities under the Trust Agreement.

  ARTICLE II.

       Section 2.01. Assignment. This Agreement may not be assigned by either party hereto without the consent of the other, and any purported assignment without such
consent shall be void; except that upon any transfer of the Common Securities, this Agreement shall be assigned and delegated by the Depositor to its successor with such transfer without any action by either party hereto.

       Section 2.02. Binding Effect. All guarantees and agreements contained in this Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Depositor and shall inure to the benefit of the Beneficiaries.

       Section 2.03. Amendment. So long as there remains any Beneficiary or any Capital Securities are outstanding, this Agreement shall not be modified or amended in
any manner adverse to such Beneficiary or to the holders of the Capital Securities without the consent of such Beneficiary or the holders of the Capital Securities, as the case may be.

       Section 2.04. Notices. Any notice, request or other communication required or permitted to be given hereunder shall be given in writing by delivering the same
against receipt therefor by facsimile transmission (confirmed by mail), telex or by registered or certified mail, addressed as follows (and if so given, shall be deemed given when mailed or upon receipt of an answer-back, if sent by
telex):

  
    Morgan Stanley Capital Trust VII

    c/o The Bank of New York

    101 Barclay Street, Floor 8 West

  E-3

  
    New York, NY 10286

    Attention: Corporate Trust Administration

  
    With a copy to:

  
    Morgan Stanley

    1585 Broadway

    New York, NY 10036

    Attention: Office of the Secretary

       Section 2.05. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

  E-4

  THIS AGREEMENT is executed as of the day and year first above written.

 

	 	 MORGAN
        STANLEY
	 	 	  
	 	 	  
	 	By:	   
	 	 	

	 	Name:   
	 	  Title:
        Administrator  
	 	 
	 	 
	 	 MORGAN
        STANLEY CAPITAL TRUST VII  
	 	 	  
	 	 	  
	 	By:	   
	 	 	

	 	Name:   
	 	  Title:
        Administrator  
	 	 

  E-5SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT (this “Agreement”), dated as of October ____, 2006, by and among Securac Corp., a Nevada corporation (the “Company”), and the subscribers identified on the signature page hereto (each a “Subscriber” and collectively “Subscribers”).

WHEREAS, the Company and the Subscribers are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded by the provisions of Section 4(2), Section 4(6) and/or Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “1933 Act”).

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Subscribers, as provided herein, and the Subscribers, in the aggregate, shall purchase up to Five Million Dollars ($5,000,000) (the "Purchase Price") of principal amount of promissory notes of the Company (“Note” or “Notes”), a form of which is annexed hereto as Exhibit A, convertible into shares of the Company's common stock, $0.01 par value (the "Common Stock") at a per share conversion price set forth in the Note (“Conversion Price”); and share purchase warrants (the “Warrants”), in the form annexed hereto as Exhibit B, to purchase shares of Common Stock (the “Warrant Shares”).  The Notes, shares of Common Stock issuable upon conversion of the Notes (the “Shares”), the Warrants and the Warrant Shares are collectively referred to herein as the "Securities"; and

WHEREAS, the aggregate proceeds of the sale of the Notes and the Warrants contemplated hereby shall be held in escrow pursuant to the terms of a Funds Escrow Agreement to be executed by the parties substantially in the form attached hereto as Exhibit C (the "Escrow Agreement").

NOW, THEREFORE, in consideration of the mutual covenants and other agreements contained in this Agreement the Company and the Subscribers hereby agree as follows:

1.          Closing.  Subject to the satisfaction or waiver of the terms and conditions of this Agreement, on the Closing Date, each Subscriber shall purchase and the Company shall sell to each Subscriber a Note in the principal amount designated on the signature page hereto for the purchase price set forth on the signature page hereto.  The consummation of the transactions contemplated herein shall take place at the offices of Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176, as soon as practicable following the satisfaction or waiver of all conditions to closing set forth in this Agreement (the “Closing Date”).

 

2.          Warrants.   On the Closing Date, the Company will issue and deliver Warrants to the Subscribers.  One Class A and one Class B Warrant will be issued for each two Shares which would be issued on the Closing Date assuming the complete conversion of the Notes issued on the Closing Date at the Conversion Price in effect on the Closing Date.  The per Warrant Share exercise price to acquire a Warrant Share upon exercise of a Class A Warrant shall be equal to the closing bid price of the Company’s Common Stock as reported by Bloomberg L.P. for the trading day preceding the Closing Date.   The per Warrant Share exercise price to acquire a Warrant Share upon exercise of a Class B Warrant shall be equal to 110% of the closing bid price of the Company’s Common Stock as reported by
Bloomberg L.P. for the trading day preceding the Closing Date. The Class A Warrants and Finder’s Warrants shall be exercisable until five (5) years after the Actual Effective Date (as defined in Section 11.1(iv) of this Agreement), and the Class B Warrants shall be exercisable until five (5) years after the Closing Date.  

 

3.          Security Interest.   The Subscribers will be granted a security interest in certain assets of the Company and Subsidiaries (as defined in Section 5(a) of this Agreement), including ownership 

 

of the Subsidiaries, to be memorialized in a “Security Agreement”, a form of which is annexed hereto as Exhibit D.  Each Subsidiary will execute and deliver to the Subscribers a form of “Guaranty” annexed hereto as Exhibit E. The Company will execute such other agreements, documents and financing statements reasonably requested by Subscribers, which will be filed at the Company’s expense with such jurisdictions, states and counties designated by the Subscribers.  The Company will also execute all such documents reasonably necessary in the opinion of Subscribers to memorialize and further protect the security interest described herein.  The Subscribers will appoint a Collateral Agent to represent them
collectively in connection with the security interest to be granted to the Subscribers.  The appointment will be pursuant to a “Collateral Agent Agreement”, a form of which is annexed hereto as Exhibit F.

 

4.    Subscriber's Representations and Warranties.  Each Subscriber hereby represents and warrants to and agrees with the Company only as to such Subscriber that:

 

 (a)               Organization and Standing of the Subscribers.  If the Subscriber is an entity, such Subscriber is a corporation, partnership or other entity duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has the requisite corporate power to own its assets and to carry on its business.

 

 (b)               Authorization and Power.  Each Subscriber has the requisite power and authority to enter into and perform this Agreement and to purchase the Notes and Warrants being sold to it hereunder.  The execution, delivery and performance of this Agreement by such Subscriber and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate or partnership action, and no further consent or authorization of such Subscriber or its Board of Directors, stockholders, partners, members, as the case may be, is required.  This Agreement has been duly authorized, executed and delivered by such Subscriber and constitutes, or shall constitute when executed and delivered, a valid and binding
obligation of the Subscriber enforceable against the Subscriber in accordance with the term hereof.

 

 (c)               No Conflicts.  The execution, delivery and performance of this Agreement and the consummation by such Subscriber of the transactions contemplated hereby or relating hereto do not and will not (i) result in a violation of such Subscriber’s charter documents or bylaws or other organizational documents or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement, indenture or instrument or obligation to which such Subscriber is a party or by which its properties or assets are bound, or result in a violation of any law, rule, or regulation, or any order,
judgment or decree of any court or governmental agency applicable to such Subscriber or its properties (except for such conflicts, defaults and violations as would not, individually or in the aggregate, have a material adverse effect on such Subscriber).  Such Subscriber is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or to purchase the Notes or acquire the Warrants in accordance with the terms hereof, provided that for purposes of the representation made in this sentence, such Subscriber is assuming and relying upon the accuracy of the relevant representations and agreements of the Company herein.

 

(d)  Information on Company.   The Subscriber has been furnished with or has had access at the EDGAR Website of the Commission to the Company's Form 10-KSB for the year ended December 31, 2005 and all periodic and current reports filed with the Commission thereafter not later than five days before the Closing Date (hereinafter referred to as the "Reports").  In addition, the Subscriber has received in writing from the Company such other information concerning its operations, financial condition and other matters as the Subscriber has requested in writing (such other information is collectively, the "Other Written Information"), and considered all factors the Subscriber deems material in deciding on the advisability of
investing in the Securities. 

 

 

 

(e)  Information on Subscriber.  The Subscriber is, and will be at the time of the conversion of the Notes and exercise of the Warrants, an "accredited investor", as such term is defined in Regulation D promulgated by the Commission under the 1933 Act, is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities of United States publicly-owned companies in private placements in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable the Subscriber to utilize the information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment.  The Subscriber
has the authority and is duly and legally qualified to purchase and own the Securities.  The Subscriber is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof.  The information set forth on the signature page hereto regarding the Subscriber is accurate.

 

(f)  Purchase of Notes and Warrants.  On the Closing Date, the Subscriber will purchase the Notes and Warrants as principal for its own account for investment only and not with a view toward, or for resale in connection with, the public sale or any distribution thereof, but Subscriber does not agree to hold the Notes and Warrants for any minimum amount of time.

 

(g)  Compliance with Securities Act.  The Subscriber understands and agrees that the Securities have not been registered under the 1933 Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require registration under the 1933 Act (based in part on the accuracy of the representations and warranties of Subscriber contained herein), and that such Securities must be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or is exempt from such registration.  Notwithstanding anything to the contrary contained in this Agreement, such Subscriber may transfer (without restriction and without the need for an opinion of counsel) the Securities to its Affiliates (as defined below) provided that each such
Affiliate is an “accredited investor” under Regulation D and such Affiliate agrees to be bound by the terms and conditions of this Agreement. For the purposes of this Agreement, an “Affiliate” of any person or entity means any other person or entity directly or indirectly controlling, controlled by or under direct or indirect common control with such person or entity.  Affiliate when employed in connection with the Company includes each Subsidiary [as defined in Section 5(a)] of the Company.  For purposes of this definition, “control” means the power to direct the management and policies of such person or firm, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

(h)  Shares Legend.  The Shares and the Warrant Shares shall bear the following or similar legend:

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SECURAC CORP. THAT SUCH REGISTRATION IS NOT REQUIRED."

	
            (i)
 	
            Warrants Legend.  The Warrants shall bear the following
 

or similar legend:

"THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE 

 

OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SECURAC CORP. THAT SUCH REGISTRATION IS NOT REQUIRED."

 

	
            (j)
 	
            Note Legend.  The Note shall bear the following legend:
 

"THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SECURAC CORP. THAT SUCH REGISTRATION IS NOT REQUIRED."

(k)  Communication of Offer.  The offer to sell the Securities was directly communicated to the Subscriber by the Company.  At no time was the Subscriber presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.

(l)   Authority; Enforceability.  This Agreement and other agreements delivered together with this Agreement or in connection herewith have been duly authorized, executed and delivered by the Subscriber and are valid and binding agreements enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally and to general principles of equity; and Subscriber has full corporate power and authority necessary to enter into this Agreement and such other agreements and to perform its obligations hereunder and under all other agreements entered into by the Subscriber relating hereto.

 

(m)                No Governmental Review.  Each Subscriber understands that no United States federal or state agency or any other governmental or state agency has passed on or made recommendations or endorsement of the Securities or the suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

 

(n)  Correctness of Representations.  Each Subscriber represents as to such Subscriber that the foregoing representations and warranties are true and correct as of the date hereof and, unless a Subscriber otherwise notifies the Company prior to the Closing Date shall be true and correct as of the Closing Date.

 

(o)  Survival.  The foregoing representations and warranties shall survive the Closing Date until three years after the Closing Date.

5.    Company Representations and Warranties.  The Company represents and warrants to and agrees with each Subscriber that except as set forth in the Reports or the Other Written Information and as otherwise qualified in the Transaction Documents:

(a)  Due Incorporation.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the requisite 

 

corporate power to own its properties and to carry on its business is disclosed in the Reports.  The Company is duly qualified as a foreign corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such qualification necessary, other than those jurisdictions in which the failure to so qualify would not have a Material Adverse Effect.  For purpose of this Agreement, a “Material Adverse Effect” shall mean a material adverse effect on the financial condition, results of operations, properties or business of the Company taken individually, or in the aggregate, as a whole.  For purposes of this Agreement, “Subsidiary” means, with respect to any entity at any date, any corporation, limited or general partnership,
limited liability company, trust, estate, association, joint venture or other business entity) of which more than 50% of (i) the outstanding capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such entity.  All the Company’s Subsidiaries as of the Closing Date are set forth on Schedule 5(a) hereto. 

(b)  Outstanding Stock.  All issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable.

(c)  Authority; Enforceability.  This Agreement, the Note, the Warrants, the Escrow Agreement, Security Agreement, Guaranty, and Collateral Agent Agreement, and any other agreements delivered together with this Agreement or in connection herewith (collectively “Transaction Documents”) have been duly authorized, executed and delivered by the Company and are valid and binding agreements enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity.  The Company has full corporate power and authority necessary to enter into and deliver the Transaction Documents and to
perform its obligations thereunder.

(d)  Additional Issuances.   There are no outstanding agreements or preemptive or similar rights affecting the Company's or any of its Subsidiaries’ Common Stock or other equity and no outstanding rights, warrants or options to acquire, or instruments convertible into or exchangeable for, or agreements or understandings with respect to the sale or issuance of any Common Stock or equity of the Company except as described on Schedule 5(d).  The Common Stock and all other equity of the Company and its Subsidiaries on a fully diluted basis outstanding as of the last trading day preceding the Closing Date is set forth on Schedule 5(d).

(e)  Consents.  No consent, approval, authorization or order of any court, governmental agency or body or arbitrator having jurisdiction over the Company, or any of its Affiliates, any Principal Market (as defined in Section 9(b) of this Agreement), nor the Company's shareholders is required for the execution by the Company of the Transaction Documents and compliance and performance by the Company of its obligations under the Transaction Documents, including, without limitation, the issuance and sale of the Securities.

(f)  No Violation or Conflict.  Assuming the representations and warranties of the Subscribers in Section 4 are true and correct, neither the issuance and sale of the Securities nor the performance of the Company’s obligations under this Agreement and all other agreements entered into by the Company relating thereto by the Company will:

(i)   violate, conflict with, result in a breach of, or constitute a default (or an event which with the giving of notice or the lapse of time or both would be reasonably likely to constitute a default in any  material respect) under (A) the articles or certificate of incorporation, charter or bylaws of the Company, (B) to the Company's knowledge, any decree, judgment, order, law, treaty, rule, regulation or determination applicable to the Company of any court, governmental agency or body, or 

 

arbitrator having jurisdiction over the Company or over the properties or assets of the Company or any of its Affiliates, (C) the terms of any bond, debenture, note or any other evidence of indebtedness, or any agreement, stock option or other similar plan, indenture, lease, mortgage, deed of trust or other instrument to which the Company or any of its Affiliates, by which the Company or any of its Affiliates is bound, or to which any of the properties of the Company or any of its Affiliates is subject, or (D) the terms of any "lock-up" or similar provision of any underwriting or similar agreement to which the Company, or any of its Affiliates is a party except the violation, conflict, breach, or default of which would not have a Material Adverse Effect; or

(ii)  result in the creation or imposition of any lien, charge or encumbrance upon the Securities or any of the assets of the Company or any of its Affiliates; or

(iii) result in the activation of any anti-dilution rights or a reset or repricing of any debt or security instrument of any other creditor or equity holder of the Company, nor result in the acceleration of the due date of any obligation of the Company; or

 (iv)              except as disclosed on Schedule 5(f)(iv), result in the activation of any piggy-back registration rights of any person or entity holding securities or debt of the Company or having the right to receive securities of the Company.

	
            (g)
 	
            The Securities.  The Securities upon issuance:
 

(i)   are, or will be, free and clear of any security interests, liens, claims or other encumbrances, subject to restrictions upon transfer under the 1933 Act and any applicable state securities laws;

 

(ii)  have been, or will be, duly and validly authorized and on the date of issuance of the Shares and upon exercise of the Warrants, the Shares and Warrant Shares will be duly and validly issued, fully paid and nonassessable and, if registered pursuant to the 1933 Act and resold pursuant to an effective registration statement, will be free trading and unrestricted, subject to any restrictions created by Subscribers;

(iii) will not have been issued or sold in violation of any preemptive or other similar rights of the holders of any securities of the Company;

(iv) will not subject the holders thereof to personal liability by reason of being such holders provided Subscriber’s representations herein are true and accurate and Subscribers take no actions or fail to take any actions required for their purchase of the Securities to be in compliance with all applicable laws and regulations; and

 (v)               will have been issued in reliance upon an exemption from the registration requirements of and will not result in a violation of Section 5 under the 1933 Act, subject to the accuracy of the representations of the Subscribers set forth herein.

(h)  Litigation.  There is no pending or, to the best knowledge of the Company, threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its Affiliates that would affect the execution by the Company or the performance by the Company of its obligations under the Transaction Documents.  There is no pending or, to the best knowledge of the Company, basis for or threatened action, suit, proceeding or investigation before any court, governmental agency or body, or arbitrator having jurisdiction over the Company, or any of its Affiliates which litigation if adversely determined would have a Material Adverse Effect.

 

 

(i)   Reporting Company.  The Company is a publicly-held company subject to reporting obligations pursuant to Section 13 of the Securities Exchange Act of 1934 (the “1934 Act”) pursuant to Section 15(d) thereof.  The Company is current in its filings of all Reports required to be filed under the 1934 Act with the Commission during the preceding twelve months.

(j)   No Market Manipulation.  The Company and its Affiliates have not taken, and will not take, directly or indirectly, any action designed to, or that might reasonably be expected to, cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Securities or affect the price at which the Securities may be issued or resold, provided, however, that this provision shall not prevent the Company from engaging in investor relations/public relations activities consistent with past practices.

(k)  Information Concerning Company.  The Reports contain all material information relating to the Company and its operations and financial condition as of their respective dates and all the information required to be disclosed therein, except for such omissions as have subsequently been corrected through filing of amended Reports prior to five days preceding the Closing Date.   Since the last day of the fiscal year of the most recent audited financial statements included in the Reports (“Latest Financial Date”), and except as modified in the Other Written Information or in the Schedules hereto, there has been no Material Adverse Event relating to the Company's business, financial condition or affairs not disclosed in the Reports, except that the
Company’s net loss and working capital deficit have increased as described on Schedule 5(q). The Reports including the financial statements therein do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances when made.

(l)   Stop Transfer.  The Company will not issue any stop transfer order or other order impeding the sale, resale or delivery of any of the Securities, except as may be required by any applicable federal or state securities laws and unless contemporaneous notice of such instruction is given to the Subscriber.

(m)                Defaults.   The Company is not in violation of its articles of incorporation or bylaws.  Except as disclosed on Schedule 5(m), the Company is (i) not in default under or in violation of any other material agreement or instrument to which it is a party or by which it or any of its properties are bound or affected, which default or violation would have a Material Adverse Effect, (ii) not in default with respect to any order of any court, arbitrator or governmental body or subject to or party to any order of any court or governmental authority arising out of any action, suit or proceeding under any statute or other law respecting antitrust, monopoly, restraint of trade, unfair
competition or similar matters, or (iii) to the Company’s knowledge not in violation of any statute, rule or regulation of any governmental authority which violation would have a Material Adverse Effect.

(n)  Not an Integrated Offering.  Neither the Company, nor any of its Affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the offer of the Securities pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the 1933 Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of the OTC Bulletin Board (“Bulletin Board”) which would impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder.  Nor will the Company or any of its Affiliates take
any action or steps that would cause the offer or issuance of the Securities to be integrated with other offerings which would impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder.  The Company will not conduct any offering other than the transactions contemplated hereby that will be integrated with the offer or issuance of the Securities, which would impair the exemptions relied upon in this Offering or the Company’s ability to timely comply with its obligations hereunder.

 

 

(o)  No General Solicitation.  Neither the Company, nor any of its Affiliates, nor to its knowledge, any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the 1933 Act) in connection with the offer or sale of the Securities.

(p)  Listing.  The Company's common stock is quoted on the Bulletin Board under the symbol SECU.OB.  The Company has not received any oral or written notice that its common stock is not eligible nor will become ineligible for quotation on the Bulletin Board nor that its common stock does not meet all requirements for the continuation of such quotation.  The Company satisfies all the requirements for the continued quotation of its common stock on the Bulletin Board.

(q)  No Undisclosed Liabilities.  The Company has no liabilities or obligations which are material, individually or in the aggregate, which are not disclosed in the Reports and Other Written Information, other than those incurred in the ordinary course of the Company’s businesses since the Latest Financial Date and which, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, except as disclosed on Schedule 5(q).

(r)  No Undisclosed Events or Circumstances.  Since the Latest Financial Date, no event or circumstance has occurred or exists with respect to the Company or its businesses, properties, operations or financial condition, that, under applicable law, rule or regulation, requires public disclosure or announcement prior to the date hereof by the Company but which has not been so publicly announced or disclosed in the Reports.

(s)  Capitalization.  The authorized and outstanding capital stock of the Company as of the date of this Agreement and the Closing Date (not including the Securities) are set forth on Schedule 5(d).  Except as set forth on Schedule 5(d), there are no options, warrants, or rights to subscribe to, securities, rights or obligations convertible into or exchangeable for or giving any right to subscribe for any shares of capital stock of the Company or any of its Subsidiaries.  All of the outstanding shares of Common Stock of the Company have been duly and validly authorized and issued and are fully paid and nonassessable.

(t)   Dilution.   The Company's executive officers and directors understand the nature of the Securities being sold hereby and recognize that the issuance of the Securities will have a potential dilutive effect on the equity holdings of other holders of the Company’s equity or rights to receive equity of the Company.  The board of directors of the Company has concluded, in its good faith business judgment that the issuance of the Securities is in the best interests of the Company.  The Company specifically acknowledges that its obligation to issue the Shares upon conversion of the Notes, and the Warrant Shares upon exercise of the Warrants is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company or parties
entitled to receive equity of the Company.

(u)  No Disagreements with Accountants and Lawyers.  Except as disclosed on Schedule 5(u), there are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company, including but not limited to disputes or conflicts over payment owed to such accountants and lawyers, nor have there been any such disagreements during the two years prior to the Closing Date.

 

(v)  Transfer Agent/DTC Status.   The Company’s transfer agent is a participant in and the Common Stock will be eligible for transfer pursuant to the Depository Trust Company Automated Securities Transfer Program prior to the Effective Date (as defined in Section 11.1(iv)). The name, address, telephone number, fax number, contact person and email address of the Company transfer agent is set forth on Schedule 5(v) hereto.

 

 

 

(w)                Investment Company.   Neither the Company nor any Affiliate is an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

(x)  Subsidiary Representations.   The Company makes each of the representations contained in Sections 5(a), (b), (d), (e), (f), (h), (k), (m), (q), (r), (u) and (w) of this Agreement, as same relate to each Subsidiary of the Company.

 

(y)  Company Predecessor.   All representations made by or relating to the Company of a historical or prospective nature and all undertakings described in Sections 9(g) through 9(l) shall relate, apply and refer to the Company and its predecessors.

 

(z)  Correctness of Representations.  The Company represents that the foregoing representations and warranties are true and correct as of the date hereof in all material respects, and, unless the Company otherwise notifies the Subscribers prior to the Closing Date, shall be true and correct in all material respects as of the Closing Date.

(AA)              Survival.  The foregoing representations and warranties shall survive until three years after the Closing Date.

6.    Regulation D Offering.  The offer and issuance of the Securities to the Subscribers is being made pursuant to the exemption from the registration provisions of the 1933 Act afforded by Section 4(2) or Section 4(6) of the 1933 Act and/or Rule 506 of Regulation D promulgated thereunder.  On the Closing Date, the Company will provide an opinion reasonably acceptable to Subscriber from the Company's legal counsel opining on the availability of an exemption from registration under the 1933 Act as it relates to the offer and issuance of the Securities and other matters reasonably requested by Subscribers.  A form of the legal opinion is annexed hereto as Exhibit G.  The Company will provide, at the Company's expense, such other legal opinions in the future as
are reasonably necessary for the issuance and resale of the Common Stock issuable upon conversion of the Notes and exercise of the Warrants pursuant to an effective registration statement, Rule 144 under the 1933 Act or an exemption from registration.

 

	
            7.1.
 	
            Conversion of Note.
 

 

(a)  Upon the conversion of a Note or part thereof, the Company shall, at its own cost and expense, take all necessary action, including obtaining and delivering, an opinion of counsel to assure that the Company's transfer agent shall issue stock certificates in the name of Subscriber (or its permitted nominee) or such other persons as designated by Subscriber and in such denominations to be specified at conversion representing the number of shares of Common Stock issuable upon such conversion.  The Company warrants that no instructions other than these instructions have been or will be given to the transfer agent of the Company's Common Stock and that the certificates representing such shares shall contain no legend other than the usual 1933 Act restriction from transfer legend.  If and when the Subscriber sells the Shares and Warrant
Shares, assuming (i) the Registration Statement (as defined below) is effective and the prospectus, as supplemented or amended, contained therein is current and (ii) the Subscriber confirms in writing to the transfer agent that the Subscriber has complied with the prospectus delivery requirements, the restrictive legend can be removed and the Shares and Warrant Shares will be free-trading, and freely transferable.  In the event that the Shares and Warrant Shares are sold in compliance with Rule 144 in a manner that complies with an exemption from registration, the Company will promptly instruct its counsel to issue to the transfer agent an opinion permitting removal of the legend (indefinitely, if pursuant to Rule 144(k) of the 1933 Act, or for 90 days if pursuant to the other provisions of Rule 144 of the 1933 Act).  

 

(b)  Subscriber will give notice of its decision to exercise its right to convert the Note and interest or part thereof by telecopying an executed and completed Notice of Conversion (a form of which is annexed as Exhibit A to the Note) to the Company via confirmed telecopier transmission or 

 

otherwise pursuant to Section 13(a) of this Agreement.  The Subscriber will not be required to surrender the Note until the Note has been fully converted or satisfied.  Each date on which a Notice of Conversion is telecopied to the Company in accordance with the provisions hereof shall be deemed a Conversion Date.  The Company will itself or cause the Company’s transfer agent to transmit the Company's Common Stock certificates representing the Shares issuable upon conversion of the Note to the Subscriber via express courier for receipt by such Subscriber within three (3) business days after receipt by the Company of the Notice of Conversion (such third day being the "Delivery Date").  In the event the Shares are electronically transferable, then delivery of the Shares must be made by electronic transfer provided request for such electronic transfer has been made by the Subscriber and the Subscriber has complied with all applicable securities laws in connection with the sale of the Common Stock, including, without limitation, the prospectus delivery requirements.   A Note representing the balance of the Note not so converted will be provided by the Company to the Subscriber if requested by Subscriber, provided the Subscriber delivers the original Note to the Company. In the event that a Subscriber elects not to surrender a Note for reissuance upon partial payment or conversion, the Subscriber hereby indemnifies the Company against any and all loss or damage attributable to a third-party claim in an amount in excess of the actual amount then due under the Note.  “Business day” and “trading day” as employed in the Transaction Documents
is a day that the New York Stock Exchange is open for trading for three or more hours.

 

 (c)               The Company understands that a delay in the delivery of the Shares in the form required pursuant to Section 7.1 hereof, or the Mandatory Redemption Amount described in Section 7.2 hereof, respectively after the Delivery Date or the Mandatory Redemption Payment Date (as hereinafter defined) could result in economic loss to the Subscriber.  As compensation to the Subscriber for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Subscriber for late issuance of Shares in the form required pursuant to Section 7.1 hereof upon Conversion of the Note in the amount of $100 per business day after the Delivery Date for each $10,000 of Note principal amount being converted of the corresponding Shares which are not timely delivered.
The Company shall pay any payments incurred under this Section in immediately available funds upon demand.  Furthermore, in addition to any other remedies which may be available to the Subscriber, in the event that the Company fails for any reason to effect delivery of the Shares by the Delivery Date or make payment by the Mandatory Redemption Payment Date, the Subscriber may revoke all or part of the relevant Notice of Conversion or rescind all or part of the notice of Mandatory Redemption by delivery of a notice to such effect to the Company whereupon the Company and the Subscriber shall each be restored to their respective positions immediately prior to the delivery of such notice, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

 

(d)  Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law.  In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall, to the extent permitted by law, be credited against amounts owed by the Company to the Subscriber and thus refunded to the Company.

 

7.2.                Mandatory Redemption at Subscriber’s Election.  In the event (i) the Company is prohibited from issuing Shares, (ii) the Company fails to timely deliver Shares on a Delivery Date, (iii) upon the occurrence of any other Event of Default (as defined in the Note or in this Agreement), any of the foregoing that continues for more than twenty (20) business days, (iv) a Change in Control (as defined below), or (v) of the liquidation, dissolution or winding up of the Company, then at the Subscriber's election, the Company must pay to the Subscriber ten (10) business days after request by the Subscriber (“Calculation Period”), a sum of money determined by multiplying up to the
outstanding principal amount of the Note designated by the Subscriber by 120%, together with accrued but unpaid interest thereon ("Mandatory Redemption Payment"). The Mandatory Redemption Payment must be received by the Subscriber on the same date as the Shares otherwise deliverable or within ten (10) business days after request, whichever is sooner ("Mandatory Redemption Payment Date"). Upon receipt of the Mandatory 

 

Redemption Payment, the corresponding Note principal and interest will be deemed paid and no longer outstanding.  Liquidated damages calculated pursuant to Section 7.1(c) hereof, that have been paid or accrued for the ten day period prior to the actual receipt of the Mandatory Redemption Payment by the Subscriber shall be credited against the Mandatory Redemption Payment.  For purposes of this Section 7.2, “Change in Control” shall mean (i) the Company no longer having a class of shares publicly traded or listed on a Principal Market, (ii) the Company  becoming a Subsidiary of another entity (other than a corporation formed by the Company for purposes of reincorporation in another U.S. jurisdiction), (iii) a majority of the board of directors of the Company as of the Closing Date no longer serving as directors of the Company except due to natural causes
or the appointment of independent directors or (iv) the sale, lease or transfer of substantially all the assets of the Company and Subsidiaries on a consolidated basis, except if such Change in Control is a result of a strategic merger, acquisition, consolidation or purchase of substantially all of the securities or assets of the Company. 

 

7.3.                Maximum Conversion.  The Subscriber shall not be entitled to convert on a Conversion Date that amount of the Note in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of common stock beneficially owned by the Subscriber and its Affiliates on a Conversion Date, and (ii) the number of shares of Common Stock issuable upon the conversion of the Note with respect to which the determination of this provision is being made on a Conversion Date, which would result in beneficial ownership by the Subscriber and its Affiliates of more than 4.99% of the outstanding shares of common stock of the Company on such Conversion Date.  Beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.  Subject to the foregoing, the Subscriber shall not be limited to aggregate conversions of only 4.99% and aggregate conversions by the Subscriber may exceed 4.99%.  The Subscriber may decide whether to convert a Note or exercise Warrants to achieve an actual 4.99% ownership position as described above.

 

7.4.                Injunction Posting of Bond.  In the event a Subscriber shall elect to convert a Note or part thereof or exercise the Warrant in whole or in part, the Company may not refuse conversion or exercise based on any claim that such Subscriber or any one associated or affiliated with such Subscriber has been engaged in any violation of law, or for any other reason, unless, an injunction from a court, on notice, restraining and or enjoining conversion of all or part of such Note or exercise of all or part of such Warrant shall have been sought and obtained by the Company or at the Company’s request or with the Company’s assistance, and the Company has posted a surety bond for the benefit of such Subscriber in the amount of 120%
of the outstanding principal and interest of the Note, or aggregate purchase price of the Shares and Warrant Shares which are sought to be subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Subscriber to the extent Subscriber obtains judgment in Subscriber’s favor.

 

7.5.                Buy-In.  In addition to any other rights available to the Subscriber, if the Company fails to deliver to the Subscriber such shares issuable upon conversion of a Note by the Delivery Date and if after seven (7) business days after the Delivery Date the Subscriber or a broker on the Subscriber’s behalf, purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Subscriber of the Common Stock which the Subscriber was entitled to receive upon such conversion (a "Buy-In"), then the Company shall pay in cash to the Subscriber (in addition to any remedies available to or elected by the Subscriber) the amount by which (A)
the Subscriber's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate principal and/or interest amount of the Note for which such conversion was not timely honored, together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty).  For example, if the Subscriber purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of $10,000 of note principal and/or interest, the Company shall be required to pay the Subscriber $1,000, plus interest. The Subscriber shall provide the Company written notice indicating the amounts payable to the Subscriber in respect of the Buy-In.

 

 

7.6.                Adjustments.   The Conversion Price, Warrant exercise price and amount of Shares issuable upon conversion of the Notes and exercise of the Warrants shall be adjusted as described in this Agreement, the Notes and Warrants.

7.7.                Redemption.    The Note and Warrants shall not be redeemable or mandatorily convertible except as described in the Note and Warrants.  

 

	
            8.
 	
            Finder Fee/Due Diligence Fee/Legal Fees.
 

 

 (a)               Finder’s Fee/Due Diligence Fee.   The Company on the one hand, and each Subscriber (for himself only) on the other hand, agrees to indemnify the other against and hold the other harmless from any and all liabilities to any persons claiming Finder’s Fee/Due Diligence Fee other than the one or more entities identified on Schedule 8 hereto, (each a “Finder”) on account of services purported to have been rendered on behalf of the indemnifying party in connection with this Agreement or the transactions contemplated hereby and arising out of such party’s actions.  Anything in this Agreement to the contrary
notwithstanding, each Subscriber is providing indemnification only for such Subscriber’s own actions and not for any action of any other Subscriber.  Each Subscriber’s liability hereunder is several and not joint.  The Company agrees that it will pay the Finder the fees set forth on Schedule 8 hereto (“Finder/Due Diligence Fees”).   The Company represents that there are no other parties entitled to receive fees, commissions, or similar payments in connection with the offering described in this Agreement except the Finder.

 

 (b)               Legal Fees.   The Company shall pay to Grushko & Mittman, P.C., a cash fee of $25,000 (“Legal Fees”) (of which $5,000 has been paid) as reimbursement for services rendered to the Subscribers in connection with this Agreement and the purchase and sale of the Notes and Warrants (the “Offering”).  The Legal Fees and reimbursement for estimated UCC searches and filing fees (less any amounts paid prior to a Closing Date), and estimated printing and shipping costs for the closing statements to be delivered to Subscribers, will be payable on the Closing Date out of funds held pursuant to the Escrow Agreement.

9.    Covenants of the Company.  The Company covenants and agrees with the Subscribers as follows:

(a)  Stop Orders.  The Company will advise the Subscribers, within four hours after the Company receives notice of issuance by the Commission, any state securities commission or any other regulatory authority of any stop order or of any order preventing or suspending any offering of any securities of the Company, or of the suspension of the qualification of the Common Stock of the Company for offering or sale in any jurisdiction, or the initiation of any proceeding for any such purpose.

(b)  Listing.  The Company shall promptly secure the listing of the shares of Common Stock and the Warrant Shares upon each national securities exchange, or electronic or automated quotation system upon which they are or become eligible for listing and shall maintain such listing so long as any Notes or Warrants are outstanding, but not longer than three years after the Closing Date.  The Company will maintain the listing or quotation of its Common Stock on the American Stock Exchange, Nasdaq Capital Market, Nasdaq National Market System, Bulletin Board, or New York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock (the “Principal Market”)), and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of the Principal Market, as applicable. The Company will provide the Subscribers copies of all notices it receives notifying the Company of the threatened and actual delisting of the Common Stock from any Principal Market.  As of the date of this Agreement, the Bulletin Board is the Principal Market.

(c)  Market Regulations.  The Company shall notify the Commission, the Principal Market and applicable state authorities, in accordance with their requirements, of the transactions 

 

contemplated by this Agreement, and shall take all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Securities to the Subscribers and promptly provide copies thereof to Subscriber.

(d)  Filing Requirements.  From the date of this Agreement and until the sooner of (i) two (2) years after the Closing Date, or (ii) until all the Shares and Warrant Shares have been resold or transferred by all the Subscribers pursuant to the Registration Statement or pursuant to Rule 144, without regard to volume limitations, the Company will (A) voluntary comply in all respects with its reporting and filing obligations under the 1934 Act, and (B) comply with all requirements related to any registration statement filed pursuant to this Agreement.  The Company will use its best efforts not to take any action or file any document (whether or not permitted by the 1933 Act or the 1934 Act or the rules thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations
under said acts until two (2) years after the Closing Date.  Until the earlier of the resale of the Shares and the Warrant Shares by each Subscriber or two (2) years after the Closing Date, the Company will use its best efforts to continue the listing or quotation of the Common Stock on a Principal Market and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the Principal Market.  The Company agrees to timely file a Form D with respect to the Securities if required under Regulation D and to provide a copy thereof to each Subscriber promptly after such filing.

(e)  Use of Proceeds.  The proceeds of the Offering will be employed by the Company for the purposes set forth on Schedule 9(e) hereto.  Except as set forth on Schedule 9(e), the Purchase Price may not and will not be used for accrued and unpaid officer and director salaries, payment of financing related debt, redemption of outstanding notes or equity instruments of the Company, litigation related expenses or settlements, brokerage fees, nor non-trade obligations outstanding on a Closing Date.

(f)  Reservation.   Prior to the Closing Date, the Company undertakes to reserve, pro rata, on behalf of the Subscribers from its authorized but unissued common stock, a number of common shares equal to 150% of the amount of Common Stock necessary to allow each Subscriber to be able to convert all Notes issuable pursuant to this Agreement and interest thereon and reserve 100% of the amount of Warrant Shares issuable upon exercise of the Warrants.  Failure to have sufficient shares reserved pursuant to this Section 9(f) for a period of more than three days shall be a material default of the Company’s obligations under this Agreement and an Event of Default under the Note.

(g)  Taxes.  From the date of this Agreement and until the conversion or satisfaction of the Note, in its entirety, the Company will promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Company; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company shall have set aside on its books adequate reserves with respect thereto, and provided, further, that the Company will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefore.

(h)  Insurance.  From the date of this Agreement and until the conversion or satisfaction of the Note, in its entirety, the Company will keep its assets which are of an insurable character insured by financially sound and reputable insurers against loss or damage by fire, explosion and other risks customarily insured against by companies in the Company’s line of business, in amounts sufficient to prevent the Company from becoming a co-insurer and not in any event less than one hundred percent (100%) of the insurable value of the property insured less reasonable deductible amounts; and the Company will maintain, with financially sound and reputable insurers, insurance against other hazards and risks and liability to persons and property to the extent and in the manner customary for companies in similar
businesses similarly situated and to the extent available on commercially reasonable terms.

 

 

(i)   Books and Records.  From the date of this Agreement and until the conversion or satisfaction of the Note, in its entirety, the Company will keep true records and books of account in which full, true and correct entries will be made of all dealings or transactions in relation to its business and affairs in accordance with generally accepted accounting principles applied on a consistent basis.

(j)   Governmental Authorities.   From the date of this Agreement and until the conversion or satisfaction of the Note, in its entirety, the Company shall use reasonable commercial efforts to duly observe and conform in all material respects to all valid requirements of governmental authorities relating to the conduct of its business or to its properties or assets.

(k)  Intellectual Property.  From the date of this Agreement and until the conversion or satisfaction of the Note, in its entirety, the Company shall use reasonable commercial efforts to maintain in full force and effect its corporate existence, rights and franchises and all licenses and other rights to use intellectual property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business, unless it is sold for value.

(l)   Properties.  From the date of this Agreement and until the conversion or satisfaction of the Note, in its entirety, and exercise of the Warrants, the Company will keep its properties in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all necessary and proper repairs, renewals, replacements, additions and improvements thereto; and the Company will at all times comply with each provision of all leases to which it is a party or under which it occupies property if the breach of such provision could reasonably be expected to have a Material Adverse Effect.

(m)                Confidentiality/Public Announcement.  From the date of this Agreement and until the sooner of (i) two (2) years after the Closing Date, or (ii) until all the Shares and Warrant Shares have been resold or transferred by all the Subscribers pursuant to the Registration Statement or pursuant to Rule 144, without regard to volume limitations, the Company agrees that except in connection with a Form 8-K or the Registration Statement or as otherwise required in any other Commission filing, it will not disclose publicly or privately the identity of the Subscribers unless expressly agreed to in writing by a Subscriber, only to the extent required by law and then only upon five days prior notice to Subscriber.  In any event and subject
to the foregoing, the Company shall file a Form 8-K or make a public announcement describing the Offering not later than the fourth business day after the Closing Date.  In the Form 8-K or public announcement, the Company will specifically disclose the amount of common stock outstanding immediately after the Closing.  A form of the proposed Form 8-K or public announcement to be employed in connection with the Closing is annexed hereto as Exhibit H.

 (n)               Further Registration Statements.   Except for a registration statement filed on behalf of the Subscribers pursuant to Section 11 of this Agreement, or in connection with the Qualified Acquisition as defined in Section 11.1(iv) of this Agreement, the Company will not file with the Commission or with state regulatory authorities, any registration statements including but  not limited to Forms S-8, or amend any already filed registration statement to increase the amount of Common Stock registered therein, or reduce the price of which such Common Stock is registered therein without the consent of the Subscriber until the expiration of the “Exclusion Period”, which shall be
defined as the first to occur of (i) the Registration Statement having been current and available for use in connection with the resale of all of the Registrable Securities (as defined in Section 11.1(i) for a period of 180 days, (ii) until all the Shares and Warrant Shares have been resold or transferred by the Subscribers pursuant to the Registration Statement or Rule 144 or are eligible for sale pursuant to Rule 144(k) without regard to volume limitations, or (iii) the satisfaction of the Notes.  The Exclusion Period will be tolled during the pendency of an Event of Default as defined in the Note.

 (o)               Blackout.    The Company undertakes and covenants that until the end of the Exclusion Period, the Company will not enter into any acquisition, merger, exchange or sale or other transaction other than the Qualified Acquisition that could have the effect of delaying the effectiveness of any 

 

pending Registration Statement or causing an already effective Registration Statement to no longer be effective or current for a period of twenty (20) or more days in the aggregate.

 (p)               Non-Public Information.  The Company covenants and agrees that neither it nor any other person acting on its behalf will provide any Subscriber or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Subscriber shall have agreed in writing to receive such information.  The Company understands and confirms that each Subscriber shall be relying on the foregoing representations in effecting transactions in securities of the Company.  The Company will offer to the Subscriber an opportunity to review and comment on the Registration Statement thereto between three and five business days prior to the proposed filing date thereof.

 (q)               Offering Restrictions.   Until the expiration of the Exclusion Period and during the pendency of an Event of Default, except for the Excepted Issuances [as defined in Section 12(a)], the Company will not enter into an agreement to nor issue any equity, convertible debt or other securities convertible into common stock or equity of the Company nor modify any of the foregoing which may be outstanding at anytime, without the prior written consent of the Subscriber, which consent may be withheld for any reason.   For so long as the Notes are outstanding, except for the Excepted Issuances, the Company will not enter into any equity line of credit or similar agreement, nor issue nor agree to issue any floating or variable priced equity
linked instruments nor any of the foregoing or equity with price reset rights.  The only officer, director, employee and consultant stock option or stock incentive plan currently in effect or contemplated by the Company has been filed with the Reports prior to five days before the Closing Date.  Other than Excepted Issuances, no other plan will be adopted nor may any options or equity not included in such plan be issued to such persons for so long as any sum is outstanding under the Note.

 

(r)  Additional Negative Covenants.   So long as the Notes are outstanding and during the pendency of an Event of Default (as defined in the Note), without the consent of the Subscribers, the Company will not and will not permit any of its Subsidiaries to directly or indirectly:

 

(i)   create, incur, assume or suffer to exist any pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest, security title, mortgage, security deed or deed of trust, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the Uniform Commercial Code or comparable law of any jurisdiction) (each, a “Lien”) upon any of its property, whether now owned or hereafter acquired except for (i) the Excepted Issuances, (ii) (a) Liens
imposed by law for taxes that are not yet due or are being contested in good faith and for which adequate reserves have been established in accordance with generally accepted accounting principles; (b) carriers’, warehousemen’s, mechanics’, material men’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or that are being contested in good faith and by appropriate proceedings; (c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations; (d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (e) Liens created with respect to the financing of the purchase of new
property in the ordinary course of the Company’s business up to the amount of the purchase price of such property, (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property, or (g) Liens securing indebtedness for borrowed money which is not senior or pari passu in right of priority to the Lien securing the Notes (each of (a) through (g), a “Permitted Lien”);

 (ii)               amend its certificate of incorporation, bylaws or its charter documents so as to adversely affect any rights of the Subscriber;

 

 

(iii) repay, repurchase or offer to repay, repurchase or otherwise acquire or make any dividend or distribution in respect of any of its Common Stock, preferred stock, or other equity securities other than to the extent permitted or required under the Transaction Documents or in connection with a settlement with existing or former employees, vendors, partners or consultants;

(iv)              prepay any financing related or other outstanding debt obligations; or

 (v)               except as set forth in Schedule 9(r)(v), engage in any transactions with any officer, director, employee or any Affiliate of the Company, including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $25,000 in any 12-month period other than (i) for payment of compensation for services rendered, (ii) reimbursement for expenses incurred on behalf of
the Company and (iii) for other employee benefits, including stock option agreements under any stock option plan of the Company.

 (s)               Lock Up Agreement.   The Company will deliver to the Subscribers on or before the Closing Date and enforce the provisions of irrevocable Lock Up Agreements (“Lock Up Agreements”) in the form annexed hereto as Exhibit I, with the parties identified on Schedule 9(s) hereto.

	
            10.
 	
            Covenants of the Company and Subscriber Regarding Indemnification.
 

(a)  The Company agrees to indemnify, hold harmless, reimburse and defend the Subscribers, the Subscribers' officers, directors, agents, Affiliates, control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Subscriber or any such person which results, arises out of or is based upon (i) any material misrepresentation by Company or material breach of any warranty by Company in this Agreement or in any Exhibits or Schedules attached hereto, or other agreement delivered pursuant hereto; or (ii) after any applicable notice and/or cure periods, any material breach or default in performance by the Company of any covenant or undertaking to be performed by the Company hereunder, or any other agreement entered
into by the Company and Subscriber relating hereto.

(b)  Each Subscriber agrees to indemnify, hold harmless, reimburse and defend the Company and each of the Company’s officers, directors, agents, Affiliates, control persons against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Company or any such person which results, arises out of or is based upon (i) any material misrepresentation by such Subscriber in this Agreement or in any Exhibits or Schedules attached hereto, or other agreement delivered pursuant hereto; or (ii) after any applicable notice and/or cure periods, any material breach or default in performance by such Subscriber of any  covenant or undertaking to be performed by such Subscriber hereunder, or any other agreement entered into by the Company and Subscribers, relating hereto.

(c)  In no event shall the liability of any Subscriber or permitted successor hereunder or under any Transaction Document or other agreement delivered in connection herewith be greater in amount than the dollar amount of the net proceeds actually received by such Subscriber upon the sale of Registrable Securities (as defined herein).

(d)  The procedures set forth in Section 11.6 shall apply to the indemnification set forth in Sections 10(a) and 10(b) above.

 

 

11.1.             Registration Rights.  The Company hereby grants the following registration rights to holders of the Securities.

(i)   On one occasion, for a period commencing one hundred and fifty-one (151) days after the Closing Date, but not later than two (2) years after the Closing Date, upon a written request therefor from any record holder or holders of more than 50% of the Shares issued and issuable upon conversion of the outstanding Notes and outstanding Warrant Shares, the Company shall prepare and file with the Commission a registration statement under the 1933 Act registering the Registrable Securities, as defined in Section 11.1(iv) hereof, which are the subject of such request for unrestricted public resale by the holder thereof.  For purposes of Sections 11.1(i) and 11.1(ii), Registrable Securities shall not include Securities which are (A) registered for resale in an effective registration statement, (B) included for registration in a pending
registration statement, or  (C) which have been issued without further transfer restrictions after a sale or transfer pursuant to Rule 144 under the 1933 Act or are otherwise eligible for sale under Rule 144(k).  Upon the receipt of such request, the Company shall promptly give written notice to all other record holders of the Registrable Securities that such registration statement is to be filed and shall include in such registration statement Registrable Securities for which it has received written requests within ten (10) days after the Company gives such written notice.  Such other requesting record holders shall be deemed to have exercised their demand registration right under this Section 11.1(i).

(ii)  If the Company at any time proposes to register any of its securities under the 1933 Act for sale to the public, whether for its own account or for the account of other security holders or both, except with respect to registration statements on Forms S-4, S-8 or another form not available for registering the Registrable Securities for sale to the public, provided the Registrable Securities are not otherwise registered for resale by the Subscribers or Holder pursuant to an effective registration statement, each such time it will give at least fifteen (15) days' prior written notice to the record holder of the Registrable Securities of its intention so to do. Upon the written request of the holder, received by the Company within ten (10) days after the giving of any such notice by the Company, to register any of the Registrable
Securities not previously registered, the Company will cause such Registrable Securities as to which registration shall have been so requested to be included with the securities to be covered by the registration statement proposed to be filed by the Company, all to the extent required to permit the sale or other disposition of the Registrable Securities so registered by the holder of such Registrable Securities (the “Seller” or “Sellers”). In the event that any registration pursuant to this Section 11.1(i) shall be, in whole or in part, an underwritten public offering of common stock of the Company, the number of shares of Registrable Securities to be included in such an underwriting may be reduced by the managing underwriter if and to the extent that the Company and the underwriter shall reasonably be of the opinion that such inclusion would adversely affect the marketing
of the securities to be sold by the Company therein; provided, however, that the Company shall notify the Seller in writing of any such reduction. Notwithstanding the foregoing provisions, or Section 11.4 hereof, the Company may withdraw or delay or suffer a delay of any registration statement referred to in this Section 11.1(i) without thereby incurring any liability to the Seller.

(iii) If, at the time any written request for registration is received by the Company pursuant to Section 11.1(i), the Company has determined to proceed with the actual preparation and filing of a registration statement under the 1933 Act in connection with the proposed offer and sale for cash of any of its securities for the Company's own account and the Company actually does file such other registration statement, such written request shall be deemed to have been given pursuant to Section 11.1(ii) rather than Section 11.1(i), and the rights of the holders of Registrable Securities covered by such written request shall be governed by Section 11.1(ii).

(iv) The Company shall file with the Commission a Form SB-2 registration statement (the “Registration Statement”) (or such other form that it is eligible to use) in order to register the Registrable Securities for resale and distribution under the 1933 Act within thirty (30) calendar days after the Closing Date  (the “Filing Date”), and cause the Registration Statement to be declared effective not later than one hundred and fifty (150) calendar days after the Closing Date (the “Effective Date”); provided, 

 

however, that the “Filing Date” shall be extended by an additional thirty (30) days in the event that the Company would be required under SEC rules to include in the Registration Statement, if filed in the initial 30-day period, financial or other information regarding any then pending acquisition of a business that would constitute a “significant subsidiary” of the Company with reported revenue for the most recently completed fiscal year of not less than $100 million (“Qualified Acquisition”); and further provided that the “Filing Date” shall be extended by an additional period of fifteen (15) days if a definitive acquisition agreement has been executed and additional time is needed to prepare necessary financial information for inclusion in the Registration Statement.  The Company will register not less than a number of
shares of common stock in the aforedescribed registration statement that is equal to 150% of the Shares issuable upon conversion of all of the Notes issuable to the Subscribers, and 100% of the Warrant Shares issuable pursuant to this Agreement upon exercise of the Warrants (collectively the “Registrable Securities”). The Registrable Securities shall be reserved and set aside exclusively for the benefit of each Subscriber and Warrant holder, pro rata, and not issued, employed or reserved for anyone other than each such Subscriber and Warrant holder.  The Registration Statement will immediately be amended or additional registration statements will be immediately filed by the Company as necessary to register additional shares of Common Stock to allow the public resale of all Common Stock included in and issuable by virtue of the
Registrable Securities.  Except with the written consent of the Subscriber or as set forth on Schedule 11.1, no securities of the Company other than the Registrable Securities will be included in the Registration Statement.  It shall be deemed a Non-Registration Event if at any time after the date the Registration Statement is declared effective by the Commission (“Actual Effective Date”) the Company has registered for unrestricted resale on behalf of the Subscribers fewer than 125% of the amount of Common Shares issuable upon full conversion of all sums due under the Notes and 100% of the Warrant Shares issuable upon exercise of the Warrants.

11.2.             Registration Procedures. If and whenever the Company is required by the provisions of Section 11.1(i), 11.1(ii) or 11.1(iv) to effect the registration of any Registrable Securities under the 1933 Act, the Company will, as expeditiously as possible: 

(a)  subject to the timelines provided in this Agreement, prepare and file with the Commission a registration statement required by Section 11, with respect to such securities and use its best efforts to cause such registration statement to become and remain effective for the period of the distribution contemplated thereby (determined as herein provided), promptly provide to the holders of the Registrable Securities copies of all filings and Commission letters of comment and notify Subscribers (by telecopier and by e-mail addresses provided by Subscribers) and Grushko & Mittman, P.C. (by telecopier and by email to Counslers@aol.com) on or before 6:00 PM EST on the next business day that the Company receives notice that (i) the Commission has no comments or no further comments on the
Registration Statement, and (ii) the registration statement has been declared effective (failure to timely provide notice as required by this Section 11.2(a) shall be a material breach of the Company’s obligation and an Event of Default as defined in the Notes and a Non-Registration Event as defined in Section 11.4 of this Agreement); 

(b)  prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective until such registration statement has been effective for a period of two (2) years, and comply with the provisions of the 1933 Act with respect to the disposition of all of the Registrable Securities covered by such registration statement in accordance with the Sellers’ intended method of disposition set forth in such registration statement for such period; 

(c)  furnish to the Sellers, at the Company’s expense, such number of copies of the registration statement and the prospectus included therein (including each preliminary prospectus) as such persons reasonably may request in order to facilitate the public sale or their disposition of the securities covered by such registration statement or make them electronically available; 

(d)  use its commercially reasonable best efforts to register or qualify the Registrable Securities covered by such registration statement under the securities or “blue sky” laws of New 

 

York and such jurisdictions as the Sellers shall request in writing, provided, however, that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction; 

(e)  if applicable, list the Registrable Securities covered by such registration statement with any securities exchange on which the Common Stock of the Company is then listed; 

(f)  notify the Subscribers within four hours of the Company’s becoming aware that a prospectus relating thereto is required to be delivered under the 1933 Act, of the happening of any event of which the Company has knowledge as a result of which the prospectus contained in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing or which becomes subject to a Commission, state or other governmental order suspending the effectiveness of the registration statement covering any of the Shares;

(g)  provided same would not be in violation of the provision of Regulation FD under the 1934 Act, make available for inspection by the Sellers,  and any attorney, accountant or other agent retained by the Seller or underwriter, all publicly available, non-confidential financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors and employees to supply all publicly available, non-confidential information reasonably requested by the seller, attorney, accountant or agent in connection with such registration statement; and

 (h)               provide to the Sellers copies of the Registration Statement and amendments thereto three business days prior to the filing thereof with the Commission.

11.3.             Provision of Documents.  In connection with each registration described in this Section 11, each Seller will furnish to the Company in writing such information and representation letters with respect to itself and the proposed distribution by it as reasonably shall be necessary in order to assure compliance with federal and applicable state securities laws. 

11.4.             Non-Registration Events.  The Company and the Subscribers agree that the Sellers will suffer damages if the Registration Statement is not filed by the Filing Date and not declared effective by the Commission by the Effective Date, and any registration statement required under Section 11.1(i) or 11.1(ii) is not filed within 60 days after written request and declared effective by the Commission within 120 days after such request, and maintained in the manner and within the time periods contemplated by Section 11 hereof, and it would not be feasible to ascertain the extent of such damages with precision.  Accordingly, if (A) the Registration Statement is not filed on or before the Filing Date, (B) is not declared effective on or before the
Effective Date, (C) due to the action or inaction of the Company the Registration Statement is not declared effective within three (3) business days after receipt by the Company or its attorneys of a written or oral communication from the Commission that the Registration Statement will not be reviewed or that the Commission has no further comments, (D) if the registration statement described in Sections 11.1(i) or 11.1(ii) is not filed within 60 days after such written request, or is not declared effective within 120 days after such written request, or (E) any registration statement described in Sections 11.1(i), 11.1(ii) or 11.1(iv) is filed and declared effective but shall thereafter cease to be effective without being succeeded within fifteen (15) business days by an effective replacement or amended registration statement or for a period of time which shall exceed thirty (30) days in the aggregate per year (defined as a period of 365 days commencing on the Actual Effective Date
(each such event referred to in clauses A through E of this Section 11.4 is referred to herein as a "Non-Registration Event"), then the Company shall deliver to the holder of Registrable Securities, as Liquidated Damages, an amount equal to two percent (2%) for each thirty (30) days (on a prorated basis for partial periods) of the Aggregate Principal Amount of the Notes remaining unconverted and purchase price of Shares issued upon conversion of the Notes and exercise of the Warrants owned of record by such holder which are subject to such Non-Registration Event.  The Company must pay the Liquidated Damages in cash.  The Liquidated Damages must be paid within ten (10) days after the end of each thirty 

 

(30) day period or shorter part thereof for which Liquidated Damages are payable.  In the event a Registration Statement is filed by the Filing Date but is withdrawn prior to being declared effective by the Commission, then such Registration Statement will be deemed to have not been filed.  All oral or written comments received from the Commission relating to the Registration Statement must be satisfactorily responded to within ten (10) business days after receipt of comments from the Commission.  Failure to timely respond to Commission comments is a Non-Registration Event for which Liquidated Damages shall accrue and be payable by the Company to the holders of Registrable Securities at the same rate set forth above.  Notwithstanding the foregoing, the Company shall not be liable to the Subscriber under this Section 11.4 for any events or delays occurring as a consequence of the acts or omissions of the
Subscribers contrary to the obligations undertaken by Subscribers in this Agreement.  Liquidated Damages will not accrue nor be payable pursuant to this Section 11.4 nor will a Non-Registration Event be deemed to have occurred for times during which Registrable Securities are transferable by the holder of Registrable Securities pursuant to Rule 144(k) under the 1933 Act, or such amounts as are then salable within the volume limitations of Rule 144.  Notwithstanding anything to the contrary contained in this Agreement, penalties for Non-Registration Events shall not be compounded for the existence of multiple Non-Registration Events on any given date.

11.5.             Expenses.  All expenses incurred by the Company in complying with Section 11, including, without limitation, all registration and filing fees, printing expenses (if required), fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or “blue sky” laws, fees of the National Association of Securities Dealers, Inc., transfer taxes, and fees of transfer agents and registrars, are called “Registration Expenses.” All underwriting discounts and selling commissions applicable to the sale of Registrable Securities are called "Selling Expenses."  The Company will pay all Registration Expenses in connection with the registration statement under Section 11.  Selling Expenses in connection with each registration statement under Section 11 shall be borne by the Seller and may be apportioned among the Sellers in proportion to the number of shares sold by the Seller relative to the number of shares sold under such registration statement or as all Sellers thereunder may agree.

 

	
            11.6.
 	
            Indemnification and Contribution.
 

(a)  In the event of a registration of any Registrable Securities under the 1933 Act pursuant to Section 11, the Company will, to the extent permitted by law, indemnify and hold harmless the Seller, each officer of the Seller, each director of the Seller, each underwriter of such Registrable Securities thereunder and each other person, if any, who controls such Seller or underwriter within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which the Seller, or such underwriter or controlling person may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such
Registrable Securities was registered under the 1933 Act pursuant to Section 11, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances when made, and will subject to the provisions of Section 11.6(c) reimburse the Seller, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable to the Seller to the extent that any such damages arise out of or are based upon an untrue statement or omission made in any preliminary prospectus if (i) the Seller failed to send or deliver a copy of the final prospectus delivered by
the Company to the Seller with or prior to the delivery of written confirmation of the sale by the Seller to the person asserting the claim from which such damages arise, (ii) the final prospectus would have corrected such untrue statement or alleged untrue statement or such omission or alleged omission, or (iii) to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity 

 

with information furnished by any such Seller, or any such controlling person in writing specifically for use in such registration statement or prospectus. 

(b)  In the event of a registration of any of the Registrable Securities under the 1933 Act pursuant to Section 11, each Seller severally but not jointly will, to the extent permitted by law, indemnify and hold harmless the Company, and each person, if any, who controls the Company within the meaning of the 1933 Act, each officer of the Company who signs the registration statement, each director of the Company, each underwriter and each person who controls any underwriter within the meaning of the 1933 Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such officer, director, underwriter or controlling person may become subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the registration statement under which such Registrable Securities were registered under the 1933 Act pursuant to Section 11, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that the Seller will be liable hereunder in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with information pertaining to such Seller, as such, furnished in writing to the Company by such Seller specifically for use in such registration statement or prospectus, and provided, further, however, that the liability of the Seller hereunder shall be limited to the net proceeds actually received by the Seller from the sale of Registrable Securities covered by such registration statement.

(c)  Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to such indemnified party other than under this Section 11.6(c) and shall only relieve it from any liability which it may have to such indemnified party under this Section 11.6(c), except and only if and to the extent the indemnifying party is prejudiced by such omission. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 11.6(c) for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected, provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of
the indemnifying party, the indemnified parties, as a group, shall have the right to select one separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred.

(d)  In order to provide for just and equitable contribution in the event of joint liability under the 1933 Act in any case in which either (i) a Seller, or any controlling person of a Seller, makes a claim for indemnification pursuant to this Section 11.6 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact 

 

that this Section 11.6 provides for indemnification in such case, or (ii) contribution under the 1933 Act may be required on the part of the Seller or controlling person of the Seller in circumstances for which indemnification is not provided under this Section 11.6; then, and in each such case, the Company and the Seller will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that the Seller is responsible only for the portion represented by the percentage that the public offering price of its securities offered by the registration statement bears to the public offering price of all securities offered by such registration statement, provided, however, that, in any such case, (y) the Seller will not be required to contribute any amount in excess of the public offering price of all such securities sold by it
pursuant to such registration statement; and (z) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

 

	
            11.7.
 	
            Delivery of Unlegended Shares.
 

(a)  Within three (3) business days (such third business day being the “Unlegended Shares Delivery Date”) after the business day on which the Company has received (i) a notice that Shares or Warrant Shares or any other Common Stock held by a Subscriber have been sold pursuant to the Registration Statement or Rule 144 under the 1933 Act, (ii) a representation that the prospectus delivery requirements, or the requirements of Rule 144, as applicable and if required, have been satisfied, and (iii) the original share certificates representing the shares of Common Stock that have been sold, and (iv) in the case of sales under Rule 144, customary representation letters of the Subscriber and/or Subscriber’s broker regarding compliance with the requirements of Rule 144, the Company at its
expense, (y) shall deliver, and shall cause legal counsel selected by the Company to deliver to its transfer agent (with copies to Subscriber) an appropriate instruction and opinion of such counsel, directing the delivery of shares of Common Stock without any legends including the legend set forth in Section 4(i) above (the “Unlegended Shares”); and (z) cause the transmission of the certificates representing the Unlegended Shares together with a legended certificate representing the balance of the submitted Shares certificate, if any, to the Subscriber at the address specified in the notice of sale, via express courier, by electronic transfer or otherwise on or before the Unlegended Shares Delivery Date.  

(b)  In lieu of delivering physical certificates representing the Unlegended Shares, if the Company’s transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program, upon request of a Subscriber, so long as the certificates therefor do not bear a legend and the Subscriber is not obligated to return such certificate for the placement of a legend thereon, the Company shall cause its transfer agent to electronically transmit the Unlegended Shares by crediting the account of Subscriber’s prime Broker with DTC through its Deposit Withdrawal Agent Commission system.  Such delivery must be made on or before the Unlegended Shares Delivery Date.

 

(c)  The Company understands that a delay in the delivery of the Unlegended Shares pursuant to Section 11 hereof later than two business days after the Unlegended Shares Delivery Date could result in economic loss to a Subscriber.  As compensation to a Subscriber for such loss, the Company agrees to pay late payment fees (as liquidated damages and not as a penalty) to the Subscriber for late delivery of Unlegended Shares in the amount of $100 per business day after the Delivery Date for each $10,000 of purchase price of the Unlegended Shares subject to the delivery default.  If during any 360 day period, the Company fails to deliver Unlegended Shares as required by this Section 11.7 for an aggregate of thirty (30) days, then each Subscriber or assignee holding Securities subject to such default may, at its option, require the Company to
redeem all or any portion of the Shares and Warrant Shares subject to such default at a price per share equal to 120% of the Purchase Price of such Common Stock and Warrant Shares (“Unlegended Redemption Amount”).  The amount of the aforedescribed liquidated damages that have accrued or been paid for the twenty day period prior to the receipt by the Subscriber of the Unlegended Redemption Amount shall be credited against the Unlegended Redemption Amount.  The Company shall pay any payments incurred under this Section in immediately available funds upon demand.

 

 

(d)  In addition to any other rights available to a Subscriber, if the Company fails to deliver to a Subscriber Unlegended Shares as required pursuant to this Agreement, within seven (7) business days after the Unlegended Shares Delivery Date and the Subscriber or a broker on the Subscriber’s behalf, purchases (in an open market transaction or otherwise) shares of common stock to deliver in satisfaction of a sale by such Subscriber of the shares of Common Stock which the Subscriber was entitled to receive from the Company (a "Buy-In"), then the Company shall pay in cash to the Subscriber (in addition to any remedies available to or elected by the Subscriber) the amount by which (A) the Subscriber's total purchase price (including brokerage commissions, if any) for the shares of common stock
so purchased exceeds (B) the aggregate purchase price of the shares of Common Stock delivered to the Company for reissuance as Unlegended Shares  together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty).  For example, if a Subscriber purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to $10,000 of purchase price of shares of Common Stock delivered to the Company for reissuance as Unlegended Shares, the Company shall be required to pay the Subscriber $1,000, plus interest. The Subscriber shall provide the Company written notice indicating the amounts payable to the Subscriber in respect of the Buy-In.

 

(e)  In the event a Subscriber shall request delivery of Unlegended Shares as described in Section 11.7 and the Company is required to deliver such Unlegended Shares pursuant to Section 11.7, the Company may not refuse to deliver Unlegended Shares based on any claim that such Subscriber or any one associated or affiliated with such Subscriber has been engaged in any violation of law, or for any other reason, unless, an injunction or temporary restraining order from a court, on notice, restraining and or enjoining delivery of such Unlegended Shares or exercise of all or part of said Warrant shall have been sought and obtained and the Company has posted a surety bond for the benefit of such Subscriber in the amount of 120% of the amount of the aggregate purchase price of the Common Stock and Warrant Shares which are subject to the injunction or
temporary restraining order, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Subscriber to the extent Subscriber obtains judgment in Subscriber’s favor.

 

12. (a)Right of First Refusal.   Until the earlier of (i) one year after the Actual Effective Date, or (ii) the date on which the Notes are satisfied in full, the Subscribers shall be given not less than ten (10) business days prior written notice of any proposed sale by the Company of its common stock or other securities or debt obligations, except in connection with (i) full or partial consideration in connection with a strategic merger, acquisition, consolidation or purchase of substantially all of the securities or assets of corporation or other entity which holders of such securities or debt are not at any time granted registration rights (ii) the Company’s issuance of securities in connection with strategic license agreements and other partnering arrangements so long as such issuances are not
for the purpose of raising capital and which holders of such securities or debt are not at any time granted registration rights, (iii) the Company’s issuance of Common Stock or the issuances or grants of options to purchase Common Stock pursuant to stock option plans and employee stock purchase plans described on Schedule 5(d) hereto at prices equal to or higher than the closing price of the Common Stock on the issue date of any of the foregoing, (iv) as a result of the exercise of Warrants or conversion of Notes which are granted or issued pursuant to this Agreement or that have been issued prior to the Closing Date, the issuance of which has been disclosed in a Report filed not less than five (5) days prior to the Closing Date or on Schedule 5(d), (v) the payment of any interest on the Notes and Liquidated Damages pursuant to the Transaction Documents, and (vi) the Qualified
Acquisition (collectively the foregoing are “Excepted Issuances”).  The Subscribers who exercise their rights pursuant to this Section 12(a) shall have the right during the ten (10) business days following receipt of the notice to purchase such offered common stock, debt or other securities in accordance with the terms and conditions set forth in the notice of sale in the same proportion to each other as their purchase of Notes in the Offering.  In the event such terms and conditions are modified during the notice period, the Subscribers shall be given prompt notice of such modification and shall have the right during the ten (10) business days following the notice of modification to exercise such right.  

 

 

(b)  Favored Nations Provision.   Other than in connection with the Excepted Issuances, if at any time while Notes or Warrants are outstanding the Company shall offer, issue or agree to issue any common stock or securities convertible into or exercisable for shares of common stock (or modify any of the foregoing which may be outstanding) to any person or entity at a price per share or conversion or exercise price per share which shall be less than the Conversion Price in respect of the Shares, or if less than the Warrant exercise price in respect of the Warrant Shares, without the consent of each Subscriber holding Notes, Shares, Warrants, or Warrant Shares, then the Company shall issue, for each such occasion, additional shares of Common Stock to each Subscriber so that the average per share purchase price of the
shares of Common Stock issued to the Subscriber (of only the Common Stock or Warrant Shares still owned by the Subscriber) is equal to such other lower price per share and the maximum Conversion Price and maximum Warrant exercise price shall automatically be adjusted to such other lower price per share.  The average Purchase Price of the Shares and average exercise price in relation to the Warrant Shares shall be calculated separately for the Shares and Warrant Shares.  The foregoing calculation and issuance shall be made separately for Shares received upon conversion and separately for Warrant Shares.  The delivery to the Subscriber of the additional shares of Common Stock shall be not later than two (2) business days after the closing date of the transaction giving rise to the requirement to issue additional shares of Common Stock.  The Subscriber is granted the registration rights described in Section 11 hereof in relation to such additional shares of Common Stock except that the
Filing Date and Effective Date vis-à-vis such additional common shares shall be, respectively, the thirtieth (30th) and sixtieth (60th) date after the closing date giving rise to the requirement to issue the additional shares of Common Stock.  For purposes of the issuance and adjustment described in this paragraph, the issuance of any security of the Company carrying the right to convert such security into shares of Common Stock or of any warrant, right or option to purchase Common Stock shall result in the issuance of the additional shares of Common Stock upon the sooner of the agreement to or actual issuance of such convertible security, warrant, right or option and again at any time upon any subsequent issuances of shares of Common Stock upon exercise of such conversion or purchase rights if such issuance is at a price lower than the Conversion Price or Warrant exercise price
in effect upon such issuance.  The rights of the Subscriber set forth in this Section 12 are in addition to any other rights the Subscriber has pursuant to this Agreement, the Note, any Transaction Document, and any other agreement referred to or entered into in connection herewith. 

(c)  Maximum Exercise of Rights.   In the event the exercise of the rights described in Sections 12(a) and 12(b) would result in the issuance of an amount of common stock of the Company that would exceed the maximum amount that may be issued to a Subscriber calculated in the manner described in Section 7.3 of this Agreement, then the issuance of such additional shares of common stock of the Company to such Subscriber will be deferred in whole or in part until such time as such Subscriber is able to beneficially own such common stock without exceeding the maximum amount set forth calculated in the manner described in Section 7.3 of this Agreement.  The determination of when such common stock may be issued shall be made by each Subscriber as to only such Subscriber.

	
            13.
 	
            Miscellaneous.
 

(a)  Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number
designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of 

 

such mailing, whichever shall first occur.  The addresses for such communications shall be: (i) if to the Company, to: Securac Corp., 301-14th Street, N.W., Suite 100, Calgary, Alberta, Canada T2N 2A1, Attn: Paul Hookham, CFO, telecopier: (403) 234-0301, with a copy by telecopier only to: Keith Moskowitz, Esq., Eilenberg & Krause LLP, 11 East 44th Street, New York, NY 10017, telecoier: (212) 986-2399, and (ii) if to the Subscriber, to: the one or more addresses and telecopier numbers indicated on the signature pages hereto, with an additional copy by telecopier only to: Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176, telecopier number: (212) 697-3575, and (iii) if to the Finder, to: the address and telecopier number set forth on Schedule
8 hereto.

(b)  Entire Agreement; Assignment.  This Agreement and other documents delivered in connection herewith represent the entire agreement between the parties hereto with respect to the subject matter hereof and may be amended only by a writing executed by both parties.  Neither the Company nor the Subscribers have relied on any representations not contained or referred to in this Agreement and the documents delivered herewith.   No right or obligation of the Company shall be assigned without prior notice to and the written consent of the Subscribers. 

(c)   Counterparts/Execution.  This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.  This Agreement may be executed by facsimile signature and delivered by facsimile transmission.

(d)  Law Governing this Agreement.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles that would result in the application of the substantive laws of another jurisdiction.  Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the civil or state courts of New York or in the federal courts located in New York County.  The parties and the individuals executing this Agreement and other agreements referred to herein or delivered in connection herewith on behalf of the Company agree to submit to the jurisdiction of such courts and waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.

(e)  Specific Enforcement, Consent to Jurisdiction.  To the extent permitted by law, the Company and Subscriber acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to one or more preliminary and final injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which any of them may be entitled by law or equity.  Subject to Section 13(d) hereof, each of the Company, Subscriber and any signator hereto in his personal capacity hereby waives, and agrees not to assert in any such suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction in New York of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper.  Nothing in this Section shall affect or limit any right to serve process in any other manner permitted by law.

(f)  Damages.   In the event the Subscriber is entitled to receive any liquidated damages pursuant to the Transactions, the Subscriber may elect to receive the greater of actual damages or such liquidated damages.

 

 

(g)  Independent Nature of Subscribers.     The Company acknowledges that the obligations of each Subscriber under the Transaction Documents are several and not joint with the obligations of any other Subscriber, and no Subscriber shall be responsible in any way for the performance of the obligations of any other Subscriber under the Transaction Documents. The Company acknowledges that each Subscriber has represented that the decision of each Subscriber to purchase Securities has been made by such Subscriber independently of any other Subscriber and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company which may have been
made or given by any other Subscriber or by any agent or employee of any other Subscriber, and no Subscriber or any of its agents or employees shall have any liability to any Subscriber (or any other person) relating to or arising from any such information, materials, statements or opinions.  The Company acknowledges that nothing contained in any Transaction Document, and no action taken by any Subscriber pursuant hereto or thereto (including, but not limited to, the (i) inclusion of a Subscriber in the Registration Statement and (ii) review by, and consent to, such Registration Statement by a Subscriber) shall be deemed to constitute the Subscribers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Subscribers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  The Company acknowledges that each Subscriber shall be
entitled to independently protect and enforce its rights, including without limitation, the rights arising out of the Transaction Documents, and it shall not be necessary for any other Subscriber to be joined as an additional party in any proceeding for such purpose.  The Company acknowledges that it has elected to provide all Subscribers with the same terms and Transaction Documents for the convenience of the Company and not because Company was required or requested to do so by the Subscribers.  The Company acknowledges that such procedure with respect to the Transaction Documents in no way creates a presumption that the Subscribers are in any way acting in concert or as a group with respect to the Transaction Documents or the transactions contemplated thereby.

(h)  Consent.   As used in the Agreement, “consent of the Subscribers” or similar language means the consent of holders of not less than 75% of the total of the Shares issued and issuable upon conversion of outstanding Notes, in either case owned by Subscribers on the date consent is requested (“SuperMajority Consent”).  This Agreement shall not be amended, changed or otherwise modified except pursuant to a writing signed by the party to be charged; provided however that the consent of the Subscriber under this Agreement shall be deemed irrevocably given with respect to any such modification obtained by SuperMajority Consent but only with respect to the following Sections of this Agreement: 7.2, 9, and 11.1 through 11.4; and any modification so made
that affects a similar provision in the Transaction Documents shall be deemed to automatically modify the Transaction Documents as and to the minimum extent necessary to reflect such modification.

(i)   Equal Treatment.   No consideration shall be offered or paid to any person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered and paid to all the parties to the Transaction Documents.

 

[THIS SPACE INTENTIONALLY LEFT BLANK]

 

 

 

SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

 

Please acknowledge your acceptance of the foregoing Subscription Agreement by signing and returning a copy to the undersigned whereupon it shall become a binding agreement between us.

 

SECURAC CORP.

a Nevada corporation

 

 

By:_________________________________

Name:  

Title:  

 

Dated: October _____, 2006

 

 

	
            SUBSCRIBER
 	
            NOTE PRINCIPAL AMOUNT
 	
            CLASS A WARRANTS
 	
            CLASS B WARRANTS
 
	
             

Name of Subscriber: ________________________

_________________________________________

 

Address: _________________________________

 

_________________________________________

 

Fax No.: _________________________________

 

 

 

 

________________________________________

(Signature)

By: 

 
 	
             
 	
             
 	
             
 

 

 

[Schedules omitted]

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