EXHIBIT 1-c
UNDERWRITING AGREEMENT
(Capital Securities)
___________, 200_
Morgan Stanley
1585 Broadway
New York, New York 10036
Dear Sirs:
We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or
underwriters being herein called the "Underwriters"), and we understand that
Morgan Stanley Capital Trust [ ] (the "Issuer Trust"), a statutory trust
created under the Delaware Statutory Trust Act, proposes to issue and sell
[number and title of capital securities] of the Issuer Trust's Capital
Securities (the "Firm Capital Securities"). [The Issuer Trust also proposes to
issue and sell to the several Underwriters not more than an additional
[____________] Capital Securities (the "Additional Capital Securities") if and
to the extent that we, as Manager of the offering, shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such Additional
Capital Securities granted to the Underwriters herein.] The Firm Capital
Securities [and the Additional Capital Securities] are hereinafter collectively
referred to as the "Offered Capital Securities."
It is understood that substantially contemporaneously with the closing
of the sale of the Firm Capital Securities to the Underwriters contemplated
hereby, (i) the Issuer Trust, its trustees (the "Issuer Trustees"), its
administrators (the "Administrators") and Morgan Stanley (the "Company") shall
enter into an Amended and Restated Trust Agreement in substantially the form of
the Form of the Amended and Restated Trust Agreement attached as Exhibit 4-rr
to the Registration Statement referred to below (the "Trust Agreement"),
pursuant to which the Issuer Trust shall (x) issue and sell the Firm Capital
Securities to the Underwriters pursuant hereto and (y) issue [____________]
shares of its Common Securities (the "Common Securities" and, together with the
Firm Capital Securities, the "Trust Securities") to the Company, in each case
with such rights and obligations as shall be set forth in such Trust Agreement,
(ii) the Company and The Bank of New York, as Trustee, acting pursuant to a
Junior Subordinated Debt Indenture dated as of March 1, 1998, shall provide for
the issuance of $[_________] principal amount of the Company's [____]% Junior
Subordinated Deferrable Interest Debentures due [____] (the "Junior
Subordinated Debentures"), (iii) the Company shall sell such Junior
Subordinated Debentures to the Issuer Trust and the Issuer Trust shall purchase
such Junior Subordinated Debentures with proceeds of the sale of the Firm
Capital Securities to the Underwriters contemplated hereby and of the Common
Securities to the Company and (iv) the Company and The Bank of New York, as
Guarantee Trustee, shall enter into a
Guarantee Agreement in substantially the form of the Form of Capital Securities
Guarantee Agreement attached as Exhibit 4-vv of the Registration Statement
referred to below (the "Guarantee") for the benefit of holders from time to
time of the Firm Capital Securities.
Subject to the terms and conditions set forth or incorporated by
reference herein, the Issuer Trust hereby agrees to sell and the Underwriters
agree to purchase, severally and not jointly, the aggregate number of Firm
Capital Securities set forth below opposite their names at a purchase price of
$[______] per Firm Capital Security (the "Purchase Price") plus accumulated
distributions, if any, from and including _____________, 200_ to the date of
payment and delivery; provided that the Company shall pay to the Underwriters
compensation equal to $[______] per Firm Capital Security[; and provided
further that for sales of [____________] or more Firm Capital Securities to a
single purchaser, such compensation will be $[ ] per Firm Capital Security].
Number of
Offered Securities
Underwriter To Be Purchased
- ----------- ------------------
[Morgan Stanley DW Inc.]................................
[Morgan Stanley & Co. Incorporated].....................
[Insert syndicate list].................................
------------------
Total...................................................
==================
[Subject to the terms and conditions set forth or incorporated by
reference herein, the Issuer Trust hereby agrees to sell to the Underwriters
the Additional Capital Securities and the Underwriters shall have a one-time
right to purchase, severally and not jointly, up to [_______] Additional
Capital Securities at the Purchase Price plus accumulated distributions, if
any, from and including _____________, 200_ to the date of payment and
delivery; provided that the Company shall pay to the Underwriters compensation
equal to $[_______] per Additional Capital Security; and provided further that
for sales of [_______] or more Capital Securities to a single purchaser, such
compensation will be $[_______] per Additional Capital Security]. Additional
Capital Securities may be purchased as provided herein solely for the purpose
of covering over-allotments made in connection with the offering of the Firm
Capital Securities. If any Additional Capital Shares are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Capital Securities (subject to such adjustments to eliminate
fractional Additional Capital Securities as you may determine) that bears the
same proportion to the total number of Additional Capital Securities to be
purchased as the number of Firm Capital Securities set
2
forth above opposite the name of such Underwriter bears to the total number of
Firm Capital Securities.]
The Underwriters will pay for the Firm Capital Securities upon
delivery thereof at the offices of Davis Polk & Wardwell, 450 Lexington Avenue,
New York, New York at 10:00 a.m. (New York time) on _____________, 200_, or at
such other time, not later than 5:00 p.m. (New York time) on _____________,
200_, as shall be designated by us. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.
[Payment for any Additional Capital Securities shall be made to the
Issuer Trust in immediately available funds at the offices referred to above on
such date (which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor later than ten business days after the giving
of the notice hereinafter referred to) as shall be designated in a written
notice from us to the Company of our determination, on behalf of the
Underwriters, to purchase a number, specified in said notice, of Additional
Capital Securities, or on such other date as shall be designated in writing by
us. In any event, such payment date shall be not later than ___________, 200_.
The time and date of such payment are hereinafter referred to as the "Option
Closing Date." The notice of the determination to exercise the option to
purchase Additional Capital Securities and of the Option Closing Date may be
given at any time within 30 days after the date of this Agreement.
The several obligations of the Underwriters to purchase Additional
Capital Securities hereunder are subject to the delivery to us on the Option
Closing Date of such documents as we may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Capital Securities and other matters related to the issuance of the
Additional Capital Securities.
It is understood that substantially contemporaneously with the closing
of the sale of any Additional Capital Securities to the Underwriters, (i) the
Issuer Trust shall issue additional Common Securities to the Company (the
"Additional Common Securities"), (ii) the Company and The Bank of New York, as
Trustee, acting pursuant to a Junior Subordinated Debt Indenture dated as of
March 1, 1998, shall provide for the issuance of Junior Subordinated Debentures
having a principal amount equal to the aggregate liquidation amount of such
Additional Capital Securities and Additional Common Securities and (iii) the
Company shall sell such Junior Subordinated Debentures to the Issuer Trust and
the Issuer Trust shall purchase such Junior Subordinated Debentures with
proceeds of the sale of such Additional Capital Securities to the Underwriters
and of such Additional Common Securities to the Company.]
3
The Offered Capital Securities shall have the terms set forth in the
Prospectus dated _____________, 200_, and the Prospectus Supplement dated
_____________, 200_, including the following:
Terms of Offered Capital Securities
Designation of the Series
of Capital Securities: [___________________________]
Issuer of Offered
Capital Securities: Morgan Stanley Capital Trust [ ]
Aggregate Number of
Capital Securities: [_________________________]
[([_______________], if the
Underwriter's over-allotment
option is exercised in full)]
Price to Public: $[_______]
Purchase Price: $[_______]
Underwriters' Compensation
per Capital Security: $[_______] [(or $_______] for
sales of [_______] or more
Offered Capital Securities to
a single purchaser)]
Selling Concession: $[_______]
Reallowance: $[_______]
Closing Date: ____________, 200_
Form:
Other Terms:
Maturity Date:
[Distribution Payment Dates]
[Redemption:]
Capitalized terms used above and not defined herein shall have the
meanings set forth in the Prospectus and Prospectus Supplement referred to
above.
Except as set forth below, all provisions contained in the document
entitled Underwriting Agreement Standard Provisions dated ____________, 2003
relating
4
to the Capital Securities of Morgan Stanley Capital Trust VI and Morgan Stanley
Capital Trust VII (fully and unconditionally guaranteed to the extent described
therein by the Company) (the "Standard Provisions"), a copy of which is
attached hereto, are herein incorporated by reference in their entirety and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein, except that (i) if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control, (ii) all references in such document to a type of
security that is not an Offered Capital Security or a related Junior
Subordinated Debenture shall not be deemed to be a part of this Agreement and
(iii) all references in such document to a type of agreement that has not been
entered into in connection with the transactions contemplated hereby shall not
be deemed to be a part of this Agreement.
5
Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below.
Very truly yours,
[MORGAN STANLEY & CO. INCORPORATED]
[MORGAN STANLEY DW INC.]
[Name of other Lead Managers]
On behalf of themselves and the other
Underwriters named herein
By: MORGAN STANLEY & CO. INCORPORATED
By: ___________________________________
Name:
Title:
Accepted as of the date hereof:
MORGAN STANLEY
By: ___________________________________
Name:
Title:
MORGAN STANLEY CAPITAL TRUST [ ]
By: Morgan Stanley, as Depositor
By: ___________________________________
Name:
Title:
6
STANLEY CAPITAL TRUST VI
MORGAN STANLEY CAPITAL TRUST VII
CAPITAL SECURITIES
(Fully and unconditionally guaranteed, to the extent described herein,
by Morgan Stanley)
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
, 2003
From time to time, Morgan Stanley, a Delaware corporation (the
"Company"), may, together with Morgan Stanley Capital Trust VI or Morgan
Stanley Capital Trust VII (each an "Issuer Trust," and collectively the "Issuer
Trusts"), enter into one or more underwriting agreements that provide for the
sale of designated securities to the several underwriters named therein. The
standard provisions set forth herein may be incorporated by reference in any
such underwriting agreement (an "Underwriting Agreement"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is
herein referred to as this Agreement. Terms defined in the Underwriting
Agreement are used herein as therein defined.
The Company proposes from time to time to cause one or more of the
Issuer Trusts to issue its capital securities ("Capital Securities") guaranteed
by the Company to the extent described in the Prospectus (as defined below)
with respect to distributions and amounts payable upon liquidation or
redemption pursuant to a Capital Securities Guarantee Agreement to be dated as
of a date specified in the Underwriting Agreement executed and delivered by the
Company and The Bank of New York, as trustee (the "Guarantee Trustee"), for the
benefit of the holders from time to time of the Capital Securities (the
"Guarantee").
The specified Issuer Trust will use the proceeds from the sale of the
Capital Securities and the sale of Common Securities (as defined below) to
purchase from the Company an aggregate principal amount of its Junior
Subordinated Deferrable Interest Debentures (the "Junior Subordinated
Debentures") equal to the aggregate liquidation amount of the Capital
Securities and Common Securities issued by such Issuer Trust. The Junior
Subordinated Debentures will be issued under a Junior Subordinated Indenture
dated as of March 1, 1998 between the Company and The Bank of New York, as
trustee (the "Debt Securities Trustee") (as amended and supplemented from time
to time, the "Junior Subordinated Debt Indenture"). With respect to any
issuance of Capital Securities by an Issuer Trust, the Company will also be the
holder of one hundred percent of the common securities representing undivided
beneficial interests in the assets of the specified Issuer Trust (the "Common
Securities"
and, together with the Capital Securities, the "Trust Securities"). Each Issuer
Trust will have been created under Delaware law pursuant to the filing of a
Certificate of Trust (each, a "Certificate of Trust") with the Secretary of
State of the State of Delaware and, at the time of issuance of Trust
Securities, will be governed by an Amended and Restated Trust Agreement (each,
a "Trust Agreement") among the Company, as depositor, The Bank of New York, as
Property Trustee (the "Property Trustee"), The Bank of New York (Delaware), as
Delaware Trustee (the "Delaware Trustee") (collectively, the "Issuer
Trustees"), and two individuals (who will be selected by the holders of the
Common Securities) and the holders from time to time of the Trust Securities.
The Company, as holder of the Common Securities of each Issuer Trust, has
appointed the Issuer Trustees and two individuals who are employees or officers
of or affiliated with the Company to act as administrators with respect to the
Issuer Trust (the "Administrators"). The Bank of New York, as Property Trustee,
will act as Indenture Trustee for the purposes of the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act").
The Company and the Issuer Trusts have filed with the Securities and
Exchange Commission (the "Commission") a registration statement including a
prospectus relating to the Capital Securities, the Junior Subordinated
Debentures and the Guarantee (collectively, the "Securities") and has filed
with, or transmitted for filing to, or shall promptly after the date of the
Underwriting Agreement file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") pursuant to Rule 424 under
the Securities Act of 1933, as amended (the "Securities Act"), specifically
relating to the Securities offered pursuant to this Agreement (the "Offered
Capital Securities," the "Offered Junior Subordinated Debentures" and the
"Offered Guarantee" and, together, the "Offered Securities"). The term
"Registration Statement" means the registration statement as amended to the
date of the Underwriting Agreement. The term "Basic Prospectus" means the
prospectus relating to the Securities included in the Registration Statement.
The term "Prospectus" means the Basic Prospectus together with the Prospectus
Supplement. The term "preliminary prospectus" means a preliminary prospectus
supplement specifically relating to the Offered Securities together with the
Basic Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus"
and "preliminary prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement," "amendment" and
"amend" as used herein shall include all documents deemed to be incorporated by
reference in the Prospectus that are filed subsequent to the date of the Basic
Prospectus by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
1. Representations and Warranties. Each of the Company and the Issuer
Trust specified in the Underwriting Agreement (the "Specified Issuer
2
Trust") jointly and severally represents and warrants to each of the
Underwriters as of the date of the Underwriting Agreement that:
(a) The Registration Statement has become effective, no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities
Act and the rules and regulations of the Commission thereunder.
(c) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the
Commission thereunder, (ii) each part of the Registration Statement,
when such part became effective, did not contain and each such part,
as amended or supplemented, if applicable, will 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, (iii) the Registration Statement and the Prospectus
comply, and, as amended or supplemented, if applicable, will comply,
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (iv) the
Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties set
forth in this Section 1(b) do not apply (A) to statements or omissions
in the Registration Statement or the Prospectus based upon information
concerning any Underwriter furnished to the Company in writing by such
Underwriter through the Manager expressly for use therein or (B) to
those parts of the Registration Statement that constitute the
Statements of Eligibility (Form T-1) under the Trust Indenture Act of
the trustees referred to in the Registration Statement.
(d) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires
3
such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its consolidated subsidiaries, taken as a
whole.
(e) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its consolidated subsidiaries, taken as a
whole.
(f) The Specified Issuer Trust has been duly created and is
validly existing in good standing as a statutory trust under the
Delaware Statutory Trust Act, is a "grantor trust" for U.S. federal
income tax purposes, has the power and authority to conduct its
business as presently conducted and as described in the Prospectus and
is not required to be authorized to do business in any other
jurisdiction.
(g) This Agreement has been duly authorized, executed and
delivered by each of the Specified Issuer Trust and the Company.
(h) The Junior Subordinated Debt Indenture has been duly
qualified under the Trust Indenture Act, has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms
except as the enforceability thereof (i) may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar
laws affecting creditors' rights generally and (ii) is subject to
general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(i) The Offered Junior Subordinated Debentures have been duly
authorized by the Company and, when executed and authenticated in
accordance with the provisions of the Junior Subordinated Debt
Indenture and delivered and paid for as described in the Prospectus,
will be entitled to the benefits of the Junior Subordinated Debt
Indenture, and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as the
enforceability thereof (i) may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (ii) is subject to
4
general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(j) The Offered Guarantee has been qualified under the Trust
Indenture Act and has been duly authorized by the Company and, upon
execution and delivery thereof by the Company (and assuming due
authorization, execution and delivery by the Guarantee Trustee), will,
as of the Closing Date, be a valid and binding agreement of the
Company, enforceable in accordance with its terms except as the
enforceability thereof (i) may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (ii) is subject to general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(k) The Trust Agreement has been qualified under the Trust
Indenture Act and has been duly authorized by the Company and, upon
execution and delivery thereof by the Company (and assuming due
authorization, execution and delivery thereof by each party thereto
other than the Company), will, as of the Closing Date, be a valid and
binding agreement of the Company, the Issuer Trustees and the
Administrators, enforceable in accordance with its terms except as the
enforceability thereof (i) may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (ii) is subject to general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law and except as rights to
indemnification may be limited under applicable law.
(l) The Offered Capital Securities have been duly authorized by
the Trust Agreement and, when executed and authenticated in accordance
with the provisions of the Trust Agreement and delivered to and paid
for by the Underwriters in accordance with the terms of this
Agreement, will be validly issued and (subject to the terms of the
Trust Agreement) fully paid and non-assessable undivided beneficial
interests in the assets of the Specified Issuer Trust, and the
issuance of such Offered Capital Securities will not be subject to any
preemptive or similar rights. Holders of the Offered Capital
Securities will be entitled to the same limitation of personal
liability as that extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of
Delaware. The Common Securities of the Specified Issuer Trust have
been duly authorized by the Trust Agreement and, when issued and
delivered to the Company against payment therefor as described in the
Prospectus, will be validly issued undivided beneficial interests in
the
5
assets of the Specified Issuer Trust, and the issuance of such Common
Securities will not be subject to any preemptive rights.
(m) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Junior Subordinated Debt Indenture, the Trust Agreement, the
Offered Guarantee and the Junior Subordinated Debentures will not
contravene any provision of applicable law, the Trust Agreement or the
certificate of incorporation or by-laws of the Company or any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its consolidated
subsidiaries, taken as a whole, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Company or any of its consolidated subsidiaries, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, the Junior
Subordinated Debt Indenture, the Trust Agreement, the Offered
Guarantee and the Junior Subordinated Debentures, except such as may
be required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Offered Securities;
provided, however, that no representation is made as to whether the
purchase of the Offered Securities constitutes a "prohibited
transaction" under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975 of the Internal
Revenue Code of 1986, as amended.
(n) The execution and delivery by the Specified Issuer Trust of,
and the performance by the Specified Issuer Trust of its obligations
under, this Agreement will not contravene any provision of applicable
law or the Trust Agreement or any agreement or other instrument
binding upon the Specified Issuer Trust, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over the Specified Issuer Trust, and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Specified Issuer
Trust of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Offered Securities;
provided, however, that no representation is made as to whether the
purchase of the Offered Capital Securities constitutes a "prohibited
transaction" under 406 of the Employment Retirement Income Security
Act of 1974, as amended, or Section 4975 of the Internal Revenue Code
of 1986, as amended.
(o) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations
6
of the Specified Issuer Trust or the Company and its subsidiaries,
taken as a whole, from that set forth in the Prospectus (exclusive of
any amendments or supplements thereto effected subsequent to the date
of the Underwriting Agreement).
(p) There are no legal or governmental proceedings pending or
threatened to which the Specified Issuer Trust or the Company or any
of its consolidated subsidiaries is a party or to which any of the
properties of the Specified Issuer Trust or the Company or any of its
consolidated subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement that are not described, filed or
incorporated as required.
(q) The Specified Issuer Trust is not, and after giving effect
to the offering and sale of the Offered Capital Securities and the
application of the proceeds thereof as described in the Prospectus
will not be required to register as, an "investment company" as such
term is defined under the Investment Company Act of 1940, as amended.
(r) Each of the Specified Issuer Trust and the Company and its
consolidated subsidiaries has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made
all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure to
obtain or file would not have a material adverse effect on the Company
and its consolidated subsidiaries, taken as a whole.
(s) Morgan Stanley DW Inc. is registered as a broker-dealer and
investment adviser with the Commission, is registered with the
Commodity Futures Trading Commission as a futures commission merchant
and is a member of the New York Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc.
(t) Morgan Stanley & Co. Incorporated is registered as a
broker-dealer and investment adviser with the Commission, is
registered with the Commodity Futures Trading Commission as a futures
commission merchant and is a member of the New York Stock Exchange,
Inc. and the National Association of Securities Dealers, Inc.
7
2. Public Offering. The Specified Issuer Trust and the Company are
advised by the Manager that the Underwriters propose to make a public offering
of their respective portions of the Offered Capital Securities as soon after
this Agreement has been entered into as in the Manager's judgment is advisable.
The terms of the public offering of the Offered Capital Securities are set
forth in the Prospectus.
3. Purchase and Delivery. Payment for the Offered Capital Securities
shall be made to the Specified Issuer Trust in immediately available funds at
the time and place set forth in the Underwriting Agreement, upon delivery to
the Manager for the respective accounts of the several Underwriters of the
Offered Capital Securities, registered in such names and in such denominations
or amounts, as the case may be, as the Manager shall request in writing not
less than one full business day prior to the Closing Date or the Option Closing
Date, as the case may be, with any transfer taxes payable in connection with
the transfer of the Offered Capital Securities to the Underwriters duly paid.
4. Conditions to Closing. The several obligations of the Underwriters
hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Specified Issuer Trust or the Company and its
consolidated subsidiaries, taken as a whole, from that set forth
in the Prospectus (exclusive of any amendments or supplements
thereto effected subsequent to the execution and delivery of the
Underwriting Agreement), that, in the judgment of the Manager,
is material and adverse and that makes it, in the judgment of
the Manager, impracticable to market the Offered Securities on
the terms and in the manner contemplated in the Prospectus.
(b) The Manager shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of
8
the Company, and a certificate, dated the Closing Date and signed by
an Administrator of the Specified Issuer Trust:
(i) to the effect set forth in clause (a)(i) above (in the
case of the certificate signed by an executive officer of the
Company); and
(ii) to the effect that the representations and warranties
of the Company (in the case of the certificate signed by an
executive officer of the Company) and the Specified Issuer Trust
(in the case of the certificate signed by an Administrator of
the Specified Issuer Trust) contained in this Agreement are true
and correct as of the Closing Date and that each of the Company
and the Specified Issuer Trust, as applicable, has complied with
all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied on or before the Closing Date.
The executive officer or Administrator signing and delivering such
certificate may rely upon the best of his or her knowledge as to proceedings
threatened.
(c) The Manager shall have received on the Closing Date an
opinion of Sidley Austin Brown & Wood LLP, counsel to the Company, or
of other counsel satisfactory to the Manager and who may be an officer
of the Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Delaware, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on the Company and its consolidated subsidiaries,
taken as a whole;
(ii) each of Morgan Stanley DW Inc., Discover Bank, Morgan
Stanley & Co. Incorporated and Morgan Stanley International
Incorporated (the "Material Subsidiaries") has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in
good standing in each
9
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company and its consolidated subsidiaries, taken as a
whole;
(iii) each of the Company and its Material Subsidiaries
has all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and
other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, except to
the extent that the failure to obtain or file would not have a
material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole;
(iv) the Junior Subordinated Debt Indenture has been duly
qualified under the Trust Indenture Act, has been duly
authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable in accordance
with its terms except as the enforceability thereof (A) may be
limited by bankruptcy, insolvency, reorganization, liquidation,
moratorium and other similar laws affecting creditors' rights
generally and (B) is subject to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(v) the Junior Subordinated Debentures have been duly
authorized by the Company and, when executed and authenticated
in accordance with the provisions of the Junior Subordinated
Debt Indenture and delivered to and paid for by the Issuer
Trust, will be entitled to the benefits of the Junior
Subordinated Debt Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their
terms except as the enforceability thereof (A) may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium
and other similar laws affecting creditors' rights generally and
(B) is subject to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in
equity or at law;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
10
(vii) the Offered Guarantee has been duly qualified under
the Trust Indenture Act and has been duly authorized, executed
and delivered by the Company and is a valid and binding
obligation of the Company enforceable in accordance with its
terms except as the enforceability thereof (A) may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium
and other similar laws affecting creditors' rights generally and
(B) is subject to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in
equity or at law;
(viii) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement, the Junior Subordinated Debt Indenture, the Trust
Agreement, the Offered Guarantee and the Offered Junior
Subordinated Debentures will not contravene any provisions of
applicable law or the certificate of incorporation or by-laws of
the Company or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its
consolidated subsidiaries, taken as a whole, or, to the best of
such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company or any of its consolidated subsidiaries, and no consent,
approval or authorization or order of or qualification with any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, the Junior
Subordinated Debt Indenture, the Trust Agreement, the Offered
Guarantee and the Junior Subordinated Debentures, except as may
be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Offered
Securities; provided, however, that such counsel need not
express an opinion as to whether the purchase of the Offered
Securities constitutes a "prohibited transaction" under Section
406 of the Employee Retirement Income Security Act of 1974, as
amended, or Section 4975 of the Internal Revenue Code of 1986,
as amended;
(ix) the statements (1) in the Basic Prospectus under the
captions "The Morgan Stanley Capital Trusts," "Description of
Capital Securities," "Description of Junior Subordinated
Debentures," "Description of Guarantees" and "Plan of
Distribution," (2) in the Prospectus Supplement under
"Description of Capital Securities," "Description of Junior
Subordinated Debentures," "Description of Guarantee,"
"Relationship Among the Capital Securities, the Junior
11
Subordinated Debentures and the Guarantee" and "Underwriters,"
(3) in the Registration Statement under Item 15, (4) in "Item 3.
Legal Proceedings" of the most recent annual report on Form 10-K
incorporated by reference in the Prospectus and (5) in "Item 1.
Legal Proceedings" of Part II of the quarterly reports on Form
10-Q, if any, filed since such annual report and incorporated by
reference in the Prospectus, in each case insofar as such
statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(x) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which
the Company or any of its consolidated subsidiaries or the
Specified Issuer Trust is a party or to which any of the
properties of the Company or any of its consolidated
subsidiaries or the Specified Issuer Trust is subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes,
regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus or
to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or
incorporated by reference as required;
(xi) the Specified Issuer Trust is not and, after giving
effect to the offering and sale of the Offered Capital
Securities and the application of the proceeds thereof as
described in the Prospectus, will not be required to register as
an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(xii) such counsel is of the opinion ascribed to it under
the caption "United States Federal Income Tax Consequences" in
the Prospectus Supplement; and
(xiii) such counsel (1) believes that each document, if
any, filed pursuant to the Exchange Act and incorporated by
reference in the Registration Statement and the Prospectus
(except as to financial statements and schedules and other
financial and statistical data included therein, as to which
such counsel need not express any belief) complied when so filed
as to form in all material respects with the Exchange Act and
the applicable rules and regulations of the Commission
thereunder, (2) has no reason to believe that any part of the
Registration Statement (except as to
12
financial statements and schedules and other financial and
statistical data included therein, as to which such counsel
need not express any belief, and except for that part of the
Registration Statement that constitutes Forms T-1) on the date
such part became effective contained, and the Registration
Statement (except as to financial statements and schedules and
other financial and statistical data included therein, as to
which such counsel need not express any belief, and except for
the part of the Registration Statement that constitutes Forms
T-1) as of the date such opinion is delivered contains, any
untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (3)
believes that the Registration Statement and Prospectus (except
as to financial statements and schedules and other financial
and statistical data included therein, as to which such counsel
need not express any belief) comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (4) has no reason
to believe that the Prospectus (except as to financial
statements and schedules and other financial and statistical
data included therein, as to which such counsel need not
express any belief) as of the date such opinion is delivered
contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
(d) The Manager shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, special counsel for the
Underwriters, dated the Closing Date, covering the matters referred to
in subparagraphs (iv), (v), (vi), (vii), (ix) (but only as to
statements in the Basic Prospectus under "Description of Capital
Securities," "Description of Junior Subordinated Debentures,"
"Description of Guarantees" and "Plan of Distribution" and in the
Prospectus Supplement under "Description of Capital Securities,"
"Description of Junior Subordinated Debentures," "Description of the
Guarantee," "Relationship Among the Capital Securities, the Junior
Subordinated Debentures and the Guarantee" and "Underwriters"), and
clauses (2), (3) and (4) of subparagraph (xiii) of paragraph (c)
above.
With respect to subparagraph (xiii) of paragraph (c) above, if
such opinion is given by counsel who is also an officer of the
Company, such counsel may state that his or her opinion and belief are
based upon his or her participation, or the participation of someone
under his or her supervision, in the preparation of the Registration
Statement and Prospectus and documents incorporated therein by
reference and review
13
and discussion of the contents thereof, but are without independent
check or verification, except as specified. With respect to
subparagraph (xiii) of paragraph (c) above, Davis Polk & Wardwell and,
if Sidley Austin Brown & Wood LLP is giving such opinion, Sidley
Austin Brown & Wood LLP may state that their opinion and belief are
based upon their participation in the preparation of the Registration
Statement and Prospectus (but not including documents incorporated
therein by reference) and review and discussion of the contents
thereof (including documents incorporated therein by reference), but
are without independent check or verification, except as specified.
(e) The Manager shall have received on the Closing Date an
opinion dated the Closing Date of Richards, Layton & Finger, P.A.,
special Delaware counsel for the Specified Issuer Trust and the
Company, or of other counsel satisfactory to the Manager, to the
effect that:
(i) the Specified Issuer Trust has been duly created and
is validly existing in good standing as a statutory trust under
the Delaware Statutory Trust Act, and, under the Trust Agreement
and the Delaware Statutory Trust Act, has the trust power and
authority to conduct its business, all as described in the
Registration Statement and Prospectus;
(ii) assuming due authorization, execution and delivery of
the Trust Agreement by the Company, the Administrators and the
Issuer Trustees, the Trust Agreement is a legal, valid and
binding agreement of the Company, the Administrators and the
Issuer Trustees and is enforceable against the Company, the
Administrators and the Issuer Trustees, in accordance with its
terms, subject, as to enforcement, to the effect upon the Trust
Agreement of (A) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent conveyance
and transfer, and other similar laws relating to or affecting
the rights and remedies of creditors generally, (B) principles
of equity, including applicable law relating to fiduciary duties
(regardless of whether considered and applied in a proceeding in
equity or at law), and (C) the effect of applicable public
policy on the enforceability of provisions relating to
indemnification or contribution;
(iii) under the Trust Agreement and the Delaware Statutory
Trust Act, the execution and delivery of this Agreement by the
Specified Issuer Trust, and the performance by the Specified
Issuer Trust of its obligations thereunder, have been
14
duly authorized by all necessary trust action on the part of
the Specified Issuer Trust;
(iv) the Offered Capital Securities have been duly
authorized by the Trust Agreement and are duly and validly
issued and, subject to the qualifications set forth in such
opinion, will be fully paid and nonassessable undivided
beneficial interests in the assets of the Specified Issuer
Trust; the holders of Capital Securities, as beneficial owners
of the Specified Issuer Trust, will 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;
(v) the Common Securities have been duly authorized by the
Trust Agreement and are duly and validly issued undivided
beneficial interests in the assets of the Specified Issuer
Trust;
(vi) under the Trust Agreement and the Delaware Statutory
Trust Act, the issuance of the Trust Securities is not subject
to preemptive rights;
(vii) the statements in the Basic Prospectus under the
caption "The Morgan Stanley Capital Trusts" and "Description of
Capital Securities" and the statements in the Prospectus
Supplement under the captions "Morgan Stanley Capital Trust [
]," "Description of Capital Securities" and "Relationship Among
the Capital Securities, the Junior Subordinated Debentures and
the Guarantee," insofar as such statements constitute statements
of Delaware law, are fairly presented;
(viii) the issuance and the sale of the Trust Securities
by the Specified Issuer Trust, the execution, delivery and
performance by the Specified Issuer Trust of the Underwriting
Agreement, the consummation by the Specified Issuer Trust of the
transactions contemplated by the Underwriting Agreement and
compliance by the Specified Issuer Trust with its obligations
under this Agreement do not violate (A) the Certificate of Trust
of the Specified Issuer Trust or the Trust Agreement, or (B) any
applicable Delaware law or Delaware administrative regulation;
(ix) after due inquiry, limited to, and solely to the
extent disclosed on the second business day prior to the Closing
Date, the court dockets for active cases of the Court of
Chancery of the State of Delaware in and for New Castle County,
Delaware, of the Superior Court of the State of Delaware in and
for New
15
Castle County, Delaware, and of the United States Federal
District Court sitting in the State of Delaware, such counsel
does not know of any legal or governmental proceeding pending
against the Specified Issuer Trust;
(x) no authorization, approval, consent or order of any
Delaware court or any Delaware governmental authority or
Delaware agency is required to be obtained by the Specified
Issuer Trust solely in connection with the issuance and sale of
the Trust Securities; and
(xi) the Capital Security holders (other than those
Capital Security holders who reside or are domiciled in the
State of Delaware) will have no liability for income taxes
imposed by the State of Delaware solely as a result of their
participation in the Specified Issuer Trust, and the Specified
Issuer Trust will not be liable for any income tax imposed by
the State of Delaware.
In rendering such opinion, such counsel may note that holders of Trust
Securities may be obligated, pursuant to the Trust Agreement, to (i)
provide indemnity and security in connection with and pay taxes or
other governmental charges arising from transfers of certificates for
Trust Securities and the issuance of replacement certificates for
Trust Securities, (ii) provide security and indemnity in connection
with requests of or directions to the Property Trustee to exercise its
rights and remedies under the Trust Agreement and (iii) undertake to
pay costs as a party litigant in any suit for the enforcement of any
right or remedy under the Trust Agreement or against the Property
Trustee, to the extent provided in the Trust Agreement.
(f) The Manager shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to
the Manager, from the Company's independent auditors, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in
or incorporated by reference into the Prospectus; provided that each
letter so furnished shall use a "cut-off date" no more than three
business days prior to the date of such letter.
5. Covenants of the Company and the Specified Issuer Trust. In further
consideration of the agreements of the Underwriters contained herein, each of
the Company and the Specified Issuer Trust covenants as follows:
(a) To furnish the Manager, without charge, a conformed copy of
the Registration Statement (including exhibits and all amendments
16
thereto) and for delivery to each other Underwriter a conformed copy
of the Registration Statement (without exhibits thereto) and, during
the period mentioned in paragraph (c) below, as many copies of the
Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto or to the Registration Statement as
the Manager may reasonably request.
(b) Before amending or supplementing the Registration Statement
or the Prospectus with respect to the Offered Securities, to furnish
to the Manager a copy of each such proposed amendment or supplement
and not to file any such proposed amendment or supplement to which the
Manager reasonably objects.
(c) If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of counsel for
the Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances existing when the Prospectus is
delivered to a purchaser, not misleading, or if in the opinion of
counsel for the Underwriters it is necessary to amend or supplement
the Prospectus to comply with law, forthwith to prepare and furnish,
at its own expense, to the Underwriters and to the dealers (whose
names and addresses the Manager will furnish to the Company) to which
Offered Securities may have been sold by the Manager on behalf of the
Underwriters and to any other dealers upon request, either amendments
or supplements to the Prospectus, satisfactory in all respects to the
Manager, so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances existing when
the Prospectus is delivered to a purchaser, be misleading or so that
the Prospectus, as so amended or supplemented, will comply with law
and to cause such amendments or supplements to be filed promptly with
the Commission.
(d) To endeavor to qualify the Offered Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as
the Manager shall reasonably request and to maintain such
qualifications for as long as the Manager shall reasonably request.
(e) To make generally available to the Company's security
holders and to the Manager as soon as practicable an earning statement
covering a twelve month period beginning on the first day of the first
full fiscal quarter after the date of the Underwriting Agreement,
which earning statement shall satisfy the provisions of Section 11(a)
of the Securities Act and the rules and regulations of the Commission
thereunder. If such fiscal
17
quarter is the first fiscal quarter of the Company's fiscal year, such
earning statement shall be made available not later than 90 days after
the close of the period covered thereby and in all other cases shall
be made available not later than 45 days after the close of the period
covered thereby.
(f) During the period beginning on the date of the Underwriting
Agreement and continuing to and including the Closing Date, not to
offer, sell, contract to sell or otherwise dispose of any securities
with characteristics similar to those of the Offered Capital
Securities (other than (i) the Offered Securities and (ii) commercial
paper issued in the ordinary course of business), without the prior
written consent of the Manager.
(g) Whether or not any sale of Offered Securities is
consummated, to pay all expenses incident to the performance of the
Company's and the Specified Issuer Trust's obligations under this
Agreement, including: (i) the preparation and filing of the
Registration Statement and the Prospectus and all amendments and
supplements thereto, (ii) the preparation, issuance and delivery of
the Offered Securities, (iii) the fees and disbursements of the
Company's counsel and accountants, of the Specified Issuer Trust's
counsel and of the Issuer Trustees and the Debt Securities Trustee and
their counsel, (iv) the qualification of the Offered Securities under
securities or Blue Sky laws in accordance with the provisions of
Section 5(d), including filing fees and the fees and disbursements of
counsel for the Underwriters in connection therewith and in connection
with the preparation of any Blue Sky or Legal Investment Memoranda,
(v) the printing and delivery to the Underwriters in quantities as
hereinabove stated of copies of the Registration Statement and all
amendments thereto and of the Prospectus and any amendments or
supplements thereto, (vi) the printing and delivery to the
Underwriters of copies of any Blue Sky or Legal Investment Memoranda,
(vii) any fees charged by rating agencies for the rating of the
Offered Securities, (viii) any expenses incurred by the Company or the
Specified Issuer Trust in connection with a "road show" presentation
to potential investors, (ix) all document production charges of
counsel to the Underwriters (but not including their fees for
professional services in connection with the preparation of this
Agreement) and (x) any filing fees in connection with any review of
the offering of the Offered Securities by the National Association of
Securities Dealers, Inc.
6. Indemnification and Contribution. Each of the Company and the
Specified Issuer Trust jointly and severally, agrees to indemnify and hold
harmless each Underwriter, each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act and each affiliate of any Underwriter within the meaning of
Rule
18
405 of the Securities Act from and against any and all losses, claims, damages
and liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or allegedly untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or allegedly
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company or the Specified Issuer Trust in writing by such
Underwriter through the Manager expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Offered Securities, any person controlling such Underwriter or any affiliate of
such Underwriter, if a copy of the Prospectus (as then amended or supplemented
if the Company or the Specified Issuer Trust shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Offered Securities
to such person, and if the Prospectus (as so amended or supplemented) would
have cured the defect giving rise to such losses, claims, damages or
liabilities.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Specified Issuer Trust, the Issuer Trustees, the
Administrators, the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Specified
Issuer Trust or Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company and the Specified Issuer Trust to each
Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company or the Specified Issuer Trust by such
Underwriter in writing through the Manager expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the
19
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Manager, in the case
of parties indemnified pursuant to the second preceding paragraph, and by the
Company and the Specified Issuer Trust, in the case of parties indemnified
pursuant to the first preceding paragraph. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there were to be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by the
third sentence of this paragraph, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
To the extent the indemnification provided for in the first or second
paragraph in this Section 6 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the
20
Company and the Specified Issuer Trust on the one hand and the Underwriters on
the other hand from the offering of the Offered Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Specified Issuer Trust on the one hand and the Underwriters on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Specified
Issuer Trust on the one hand and the Underwriters on the other hand in
connection with the offering of the Offered Securities shall be deemed to be in
the same respective proportions as the net proceeds from the offering of such
Offered Securities (before deducting expenses) received by the Company and the
Specified Issuer Trust and the total underwriting discounts and commissions
received by the Underwriters in respect thereof, in each case as set forth in
the table on the cover of the Prospectus Supplement, bear to the aggregate
public offering price of the Offered Securities. The relative fault of the
Company and the Specified Issuer Trust on the one hand and of the Underwriters
on the other hand shall be determined by reference to, among other things,
whether the untrue or allegedly untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Specified Issuer Trust or by the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Specified Issuer Trust and the Underwriters agree
that it would not be just or equitable if contribution pursuant to this Section
6 were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or allegedly untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
respective obligations to contribute pursuant to this Section 6 are several in
proportion to the respective amounts of
21
Offered Securities purchased by each of such Underwriters and not joint. The
remedies provided for in this Section 6 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified
party at law or in equity.
7. Termination. This Agreement shall be subject to termination by
notice given by the Manager to the Company if, after the execution and delivery
of the Underwriting Agreement and prior to the Closing Date, (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market, the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company or any Issuer Trust shall have been suspended on any
exchange or in any over-the-counter market, (iii) a material disruption in
securities settlement, payment or clearance services in the United States or,
in the event of a global offering, in any relevant foreign jurisdiction shall
have occurred, (iv) any moratorium on commercial banking activities shall have
been declared by Federal or New York State authorities or (v) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Manager, is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in the judgment of the Manager,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Offered Securities on the terms and in the manner contemplated in the
Prospectus.
8. Defaulting Underwriters. If, on the Closing Date or the Option
Closing Date, as the case may be, any one or more of the Underwriters shall
fail or refuse to purchase Offered Capital Securities that it has or they have
agreed to purchase under the Underwriting Agreement on such date, and the
aggregate number of Offered Capital Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate number of the Offered Capital Securities
to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Firm Capital Securities set
forth opposite their respective names in the Underwriting Agreement bears to
the aggregate number of Firm Capital Securities set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as the
Manager may specify, to purchase the Offered Capital Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the number of Offered Capital
Securities that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 8 by an amount in excess of
one-ninth of such number of Offered Capital Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Capital Securities and the
aggregate number of Firm Capital Securities with respect to which such default
22
occurs is more than one-tenth of the aggregate number of Firm Capital
Securities to be purchased, and arrangements satisfactory to the Manager and
the Company for the purchase of such Firm Capital Securities are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Specified Issuer Trust. In any such case either the Manager or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter
or Underwriters shall fail or refuse to purchase Additional Capital Securities
and the aggregate number of Additional Capital Securities with respect to which
such default occurs is more than one-tenth of the aggregate number of
Additional Capital Securities to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation to purchase Additional
Capital Securities or (ii) purchase not less than the number of Additional
Capital Securities that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company or the
Specified Issuer Trust to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company or the Specified
Issuer Trust shall be unable to perform its obligations under this Agreement,
the Company and the Specified Issuer Trust jointly and severally agree to
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering of the
Offered Securities.
9. Representations and Indemnities to Survive. The respective
indemnity and contribution agreements and the representations, warranties and
other statements of the Specified Issuer Trust, the Administrators, the
Company, its officers and the Underwriters set forth in this Agreement will
remain in full force and effect, regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter or by or on behalf of the Company, its
officers or directors or any person controlling the Company or on behalf of the
Specified Issuer Trust, the Issuer Trustees, the Administrators or any person
controlling the Specified Issuer Trust and (iii) acceptance of and payment for
any of the Offered Securities.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers,
23
directors, Administrators and Issuer Trustees and controlling persons referred
to in Section 6, and no other person will have any right or obligation
hereunder.
11. Counterparts. The Underwriting Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
24