EXHIBIT 1-c
FORM OF
UNDERWRITING AGREEMENT
MORGAN STANLEY CAPITAL TRUST [ ]
CAPITAL SECURITIES
(Fully and unconditionally guaranteed, to the extent described herein,
by Morgan Stanley)
_____________, 200_
To the Managers named in Schedule I hereto
for the Underwriters named in Schedule II hereto
Ladies and Gentlemen:
Morgan Stanley Capital Trust [ ], a statutory trust created under the
Delaware Statutory Trust Act (the "Issuer Trust"), proposes to issue and sell to
the underwriters named in Schedule II hereto (the "Underwriters"), for whom you
are acting as managers (the "Managers"), the number of its capital securities
identified in Schedule I hereto (the "Firm Capital Securities"). The Issuer
Trust also proposes to issue and sell to the Underwriters not more than any
additional number of Capital Securities identified in Schedule I hereto (the
"Additional Capital Securities") if and to the extent that you 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 "Capital Securities." If the firm or firms
listed in Schedule II hereto include only the Managers listed in Schedule I
hereto, then the terms "Underwriters" and "Managers" as used herein shall each
be deemed to refer to such firm or firms.
The Capital Securities will be guaranteed by Morgan Stanley, a Delaware
corporation (the "Company"), to the extent described in the Time of Sale
Prospectus (as defined below) with respect to distributions and amounts payable
upon liquidation or redemption pursuant to a Capital Securities Guarantee
Agreement, dated as of ____, 200_, and 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 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.
The Junior Subordinated Debentures will be issued under a Junior Subordinated
Indenture dated as of October 1, 2004 between the Company and The Bank of New
York, as trustee (the "Debt Securities Trustee") (as amended and supplemented to
the date hereof, the
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"Junior Subordinated Debt Indenture"). The Company will be the holder of one
hundred percent of the common securities representing undivided beneficial
interests in the assets of the Issuer Trust (the "Common Securities" and,
together with the Capital Securities, the "Trust Securities"). The Issuer Trust
has been created under Delaware law pursuant to the filing of a Certificate of
Trust (the "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 (the "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 the Administrators (as
defined below) and the holders from time to time of the Trust Securities. The
Company, as holder of the Common Securities of the 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 Trust have filed with the Securities and
Exchange Commission (the "Commission") a registration statement including a
prospectus (the file number of which is set forth in Schedule I hereto) on Form
S-3, relating to, among other securities, 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 this Agreement file with or transmit for filing to, the Commission a
prospectus supplement (in the form first used to confirm sales of the Securities
(or in the form first made available to the Underwriters by the Company and the
Issuer Trust to meet requests of purchasers pursuant to Rule 173 under the
Securities Act), 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 term "Registration
Statement" means the registration statement as amended to the date of this
Agreement, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A or
Rule 430B under the Securities Act. The term "Basic Prospectus" means the
prospectus, dated ____, 200_, relating to the Securities included in the
Registration Statement, in the form first used to confirm sales of the
Securities (or in the form first made available to the Underwriters by the
Company and the Issuer Trust to meet requests of purchasers pursuant to Rule 173
under the Securities Act). The term "Prospectus" means the Basic Prospectus as
supplemented by the Prospectus Supplement. The term "preliminary prospectus"
means any preliminary form of the Prospectus. For purposes of this Agreement,
the term "free writing prospectus" has the meaning set forth in Rule 405 under
the Securities Act. The term "Time of Sale Prospectus" means the Basic
Prospectus and the preliminary prospectus together with the free writing
prospectuses, if any, and the other documents or information identified in
Schedule I hereto. The term "broadly available road show" means a "bona fide
electronic road show" as defined in Rule 433(h)(5) under the Securities Act that
has been made available without restriction to any person. As used herein, the
terms "Registration Statement," "Basic Prospectus," "preliminary prospectus,"
"Time of Sale Prospectus" and "Prospectus" shall include the documents, if any,
incorporated by reference therein. The terms "supplement," "amendment" and
"amend" as used herein with respect to the Registration Statement, the Basic
Prospectus, the Time of Sale Prospectus or any preliminary prospectus or free
writing prospectus shall include all documents subsequently filed by the
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Company with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), that are deemed to be incorporated by reference
therein.
1. Representations and Warranties. Each of the Company and the Issuer Trust
jointly and severally represents and warrants to, and agrees with, each of the
Underwriters 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. If the Registration Statement is an automatic shelf
registration statement as defined in Rule 405 under the Securities Act, the
Company is a well-known seasoned issuer (as defined in Rule 405 under the
Securities Act) and the Company and the Issuer Trust are eligible to use
the Registration Statement as an automatic shelf registration statement,
and neither the Company nor the Issuer Trust has received notice that the
Commission objects to the use of the Registration Statement as an automatic
shelf registration statement.
(b) Any 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 Time of Sale Prospectus
or 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 as of the date hereof does 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, (iv) 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, (v) the Time of Sale Prospectus
does not, and at the time of each sale of the Securities in connection with
the offering when the Prospectus is not yet available to prospective
purchasers and at the Closing Date or the Option Closing Date (each as
defined in Section 4), as the case may be, the Time of Sale Prospectus, as
then amended or supplemented by the Company and the Issuer Trust, 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,
(vi) each broadly available road show, if any, when considered together
with the Time of Sale Prospectus, does 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 and (vii) 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
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the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
do not apply to (A) statements or omissions in the Registration Statement,
the Time of Sale Prospectus or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Managers expressly for use therein or (B) those
parts of the Registration Statement that constitute the Statements of
Eligibility (Forms T-1) under the Trust Indenture Act of the trustees
referred to in the Registration Statement.
(d) Neither the Company nor the Issuer Trust is an "ineligible issuer"
in connection with the offering of the Securities pursuant to Rules 164,
405 and 433 under the Securities Act. Any free writing prospectus that the
Company or the Issuer Trust is required to file pursuant to Rule 433(d)
under the Securities Act has been, or will be, filed with the Commission in
accordance with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder. Each free writing
prospectus that the Company or the Issuer Trust has filed, or is required
to file, pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company or the
Issuer Trust complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and regulations
of the Commission thereunder. Except for the free writing prospectuses, if
any, identified in Schedule I hereto, and electronic road shows, if any,
each furnished to you before first use, each of the Company and the Issuer
Trust has not prepared, used or referred to, and will not, without your
prior consent, prepare, use or refer to, any free writing prospectus.
(e) 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 Time of Sale 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) 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 Time of
Sale 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; all of the issued shares of capital stock
of each consolidated subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
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(g) The 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 Federal income tax purposes, has the power and
authority to conduct its business as presently conducted and as described
in the Time of Sale Prospectus and is not required to be authorized to do
business in any other jurisdiction.
(h) This Agreement has been duly authorized, executed and delivered by
each of the Issuer Trust and the Company.
(i) 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, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and equitable principles of general applicability.
(j) 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 and paid
for as described in the Time of Sale 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, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and equitable principles of general
applicability.
(k) The 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 or the
Option Closing Date (each as defined in Section 4), as the case may be, be
a valid and binding agreement of the Company, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and equitable principles of
general applicability.
(l) 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 or the Option Closing Date (each as defined in
Section 4), as the case may be, be a valid and binding agreement of the
Company, the Issuer Trustees and the Administrators, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and equitable principles
of general applicability and except as rights to indemnification may be
limited under applicable law.
(m) The 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
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the Issuer Trust, and the issuance of such Capital Securities will not be
subject to any preemptive or similar rights. Holders of the 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 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 Time of Sale Prospectus, will be validly
issued undivided beneficial interests in the assets of the Issuer Trust,
and the issuance of such Common Securities will not be subject to any
preemptive rights.
(n) 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 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 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
Securities; provided, however, that no representation is made as to whether
the purchase of the 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.
(o) The execution and delivery by the Issuer Trust of, and the
performance by the 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 Issuer Trust, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the 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 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
Securities; provided however, that no representation is made as to whether
the purchase of the 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.
(p) 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 of the Issuer Trust or the Company and its subsidiaries, taken
as a whole, from that set forth in the Time of Sale Prospectus.
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(q) There are no legal or governmental proceedings pending or
threatened to which the Issuer Trust or the Company or any of its
consolidated subsidiaries is a party or to which any of the properties of
the Issuer Trust or the Company or any of its consolidated subsidiaries is
subject (i) other than proceedings accurately described in all material
respects in the Time of Sale Prospectus and proceedings that would not have
a material adverse effect on the Issuer Trust or the Company and its
consolidated subsidiaries, taken as a whole, or on the power or ability of
the Issuer Trust or the Company to perform its obligations under this
Agreement, the Indenture or the Securities or to consummate the
transactions contemplated by the Prospectus or (ii) that are required to be
described in the Registration Statement or the Prospectus and are not so
described; and there are no 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.
(r) 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 applicable rules of
the Commission thereunder.
(s) Neither the Issuer Trust nor the Company is, and after giving
effect to the offering and sale of the Capital Securities and the
application of the proceeds thereof as described in the Prospectus neither
will be, required to register as an "investment company" as such term is
defined under the Investment Company Act of 1940, as amended.
(t) Each of the 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 Time of Sale 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.
(u) 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.
(v) 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.
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(w) Each of the Company and the Issuer Trust has complied with all
provisions of Section 517.075, Florida Statutes relating to doing business
with the Government of Cuba or with any person or affiliate located in
Cuba.
2. Agreements to Sell and Purchase. The Issuer Trust hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Issuer Trust the respective number of Firm Capital Securities set forth in
Schedule II hereto opposite its name at the purchase price set forth in Schedule
I hereto; provided, that the Company shall pay to the Underwriters compensation
equal to $_____ per Firm Capital Security.
In addition, upon the basis of the representations and warranties herein
contained, but subject to the terms and conditions set forth 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 the respective number of Additional Capital
Securities identified in Schedule I hereto at the purchase price set forth in
Schedule I hereto; provided, that the Company shall pay to the Underwriters
compensation equal to $_____ 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 Securities are to be purchased,
each Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, 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 forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Capital Securities.
3. Public Offering. The Issuer Trust and the Company are advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Capital Securities as soon after this Agreement has become
effective as in your judgment is advisable. The Issuer Trust and the Company are
further advised by you that the Capital Securities are to be offered to the
public upon the terms set forth in the Prospectus.
4. Purchase and Delivery. Payment for the Firm Capital Securities shall be
made to the Issuer Trust in Federal or other funds immediately available in New
York City at the closing time and place set forth in Schedule I hereto, or at
such other time on the same or such other date, not later than the fifth
business day thereafter, as may be designated by you in writing. The time and
date of such payment are hereinafter referred to as the "Closing Date."
Payment for any Additional Capital Securities shall be made to the Issuer
Trust in Federal or other funds immediately available in New York City at the
closing place referred to above on such date of your determination (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 you to the Company,
on behalf of the Underwriters, to purchase a number, specified in said notice,
of
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Additional Capital Securities, or on such other date as shall be designated in
writing by you. In any event, such payment date shall be not later than
__________, 20__. 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.
Payment for the Firm Capital Securities or any Additional Capital
Securities shall be made against delivery to you on the Closing Date or the
Option Closing Date, as the case may be, for the respective accounts of the
several Underwriters, of the Firm Capital Securities or any Additional Capital
Securities, as the case may be, registered in such names and in such
denominations as you 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 Firm
Capital Securities or any Additional Capital Securities, as the case may be, to
the Underwriters duly paid.
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 Indenture dated as of October
1, 2004, 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.
5. Conditions to the Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of this 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 the Company or any of the
securities of the Company 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 Issuer Trust or the
Company and its consolidated subsidiaries, taken as a whole, from that set
forth in the Time of Sale Prospectus that, in your judgment, is material
and adverse and that makes it, in your judgment, impracticable to market
the Securities on the terms and in the manner contemplated in the Time of
Sale Prospectus.
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(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, and a certificate, dated the Closing Date and signed by an
Administrator of the 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 Issuer Trust (in the case of the certificate signed by
an Administrator of the Issuer Trust) contained in this Agreement are true
and correct as of the Closing Date and that each of the Company and the
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 Underwriters shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, counsel to the Company, or of other
counsel satisfactory to you 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 Time of Sale 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 Holdings Inc. (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 Time of Sale 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;
(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
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described in the Time of Sale 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, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and equitable principles of general applicability;
(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 Underwriters in accordance with the terms of this
Agreement, 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, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and equitable principles of general applicability;
(vi) this Agreement has been duly authorized, executed and delivered
by the Company;
(vii) the 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, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and equitable principles of
general applicability;
(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 Guarantee and
the 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, 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 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 Securities;
provided, however, that such counsel need not express an opinion as to
whether the purchase of the 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;
11
(ix) the statements relating to legal matters, documents or
proceedings included in (A) 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," (B) the Time of Sale Prospectus, if
applicable, and the Prospectus Supplement under "Description of Capital
Securities," "Description of Junior Subordinated Debentures," "Description
of Guarantee," "Relationship Among the Capital Securities, the Junior
Subordinated Debentures and the Guarantee" and "Underwriters," (C) the
Registration Statement under Item 15, (D) "Item 3. Legal Proceedings" of
the most recent annual report on Form 10-K incorporated by reference in the
Time of Sale Prospectus and the Prospectus and (E) "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 Time of
Sale Prospectus and the Prospectus, in each case fairly summarize in all
material respects such matters, documents or proceedings;
(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 Issuer Trust is a party or to which
any of the properties of the Company or any of its consolidated
subsidiaries or the 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) neither the Company nor the Issuer Trust is, and after giving
effect to the offering and sale of the Capital Securities and the
application of the proceeds thereof as described in the Prospectus neither
will 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 Time of Sale
Prospectus, if applicable, and the Prospectus Supplement; and
(xiii) (A) in the opinion of such counsel (1) each document filed
pursuant to the Exchange Act and incorporated by reference in the
Registration Statement and the Prospectus (except for the financial
statements and financial schedules and other financial and statistical data
included therein, as to which such counsel need not express any opinion)
appeared on its face to be appropriately responsive as of its filing date
in all material respects to the requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder and (2) the
Registration Statement and the Prospectus (except for the financial
statements and financial schedules and other financial and statistical data
included therein and except for those parts of the Registration Statement
that constitute the Forms T-1, as to which such counsel need not express
any opinion) appear on their face to be appropriately responsive in all
material respects to the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder, and (B)
nothing has come to the attention of such counsel that
12
causes such counsel to believe that (1) any part of the Registration
Statement, when such part became effective (except for the financial
statements and financial schedules and other financial and statistical data
included therein and except for those parts of the Registration Statement
that constitute Forms T-1, as to which such counsel need not express any
belief) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, (2) the Registration Statement or
the Prospectus (except for the financial statements and financial schedules
and other financial and statistical data included therein and except for
those parts of the Registration Statement that constitute Forms T-1, as to
which such counsel need not express any belief) on the date of this
Agreement, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, (3) the Time of Sale Prospectus
(except for the financial statements and financial schedules and other
financial and statistical data included therein, as to which such counsel
need not express any belief), as of the date of this Agreement or as
amended or supplemented, if applicable, as of the Closing Date contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made not misleading or (4) the
Prospectus (except for the financial statements and financial schedules and
other financial and statistical data included therein, as to which such
counsel need not express any belief), as amended or supplemented, if
applicable, as of the Closing Date 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 Underwriters shall have received on the Closing Date an
opinion of Sidley Austin LLP, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 5(c)(iv),
5(c)(v), 5(c)(vi), 5(c)(vii) and 5(c)(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 Time of Sale Prospectus (if applicable) and the
Prospectus Supplement under "Description of Capital Securities,"
"Description of Junior Subordinated Debentures," "Description of
Guarantee," "Relationship Among the Capital Securities, the Junior
Subordinated Debentures and the Guarantee" and "Underwriters"), and
Sections 5(c)(xiii)(A)(2), 5(c)(xiii)(B)(2), 5(c)(xiii)(B)(3) and
5(c)(xiii)(B)(4) above.
With respect to Section 5(c)(xiii) 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, the Time of Sale Prospectus and the Prospectus and any
amendments or supplements thereto and review and discussion of the contents
thereof, but are without independent check or verification, except as specified.
With respect to Section 5(c)(xiii) above, Sidley Austin LLP and, if Davis Polk &
Wardwell is giving such opinion, Davis Polk & Wardwell (i) may state that their
opinions and beliefs are based upon their participation in the preparation of
the Registration Statement, the Time of Sale Prospectus, the Prospectus, the
preliminary prospectus supplement, if any, any free writing prospectuses
identified as part of the Time of Sale Prospectus in Schedule I hereto, the
Prospectus Supplement and any amendments
13
or supplements thereto (but not including documents incorporated therein by
reference) and upon review and discussion of the contents of the Registration
Statement, the Time of Sale Prospectus and the Prospectus (including documents
incorporated therein by reference), but are without independent check or
verification, except as specified, and (ii) need express no opinion or belief as
to the conveyance of the Time of Sale Prospectus or the information contained
therein to investors.
(e) The opinion of Davis Polk & Wardwell, or any other outside counsel
for the Company, described in Section 5(c) above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(f) The Underwriters shall have received on the Closing Date an
opinion dated the Closing Date of Richards, Layton & Finger, PA, special
Delaware counsel for the Issuer Trust and the Company, or of other counsel
satisfactory to the Manager, to the effect that:
(i) the 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 Time of Sale Prospectus;
(ii) assuming due authorization, execution and delivery of the Trust
Agreement by the Company, the Administrators and the Issuer Trustee, the
Trust Agreement is a legal, valid and binding agreement of the Company, the
Administrators and the Issuer Trustee and is enforceable against the
Company, the Administrators and the Issuer Trustee, in accordance with its
terms, subject, as to enforcement, to the effect upon the Trust Agreement
of (i) 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,
(ii) 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 (iii) 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 Issuer Trust, and the
performance by the Issuer Trust of its obligations thereunder, have been
duly authorized by all necessary trust action on the part of the Issuer
Trust;
(iv) the 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 Issuer
Trust; the holders of Capital Securities, as beneficial owners of the
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;
14
(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 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 and, if applicable, the Time of
Sale Prospectus 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 Issuer
Trust, the execution, delivery and performance by the Issuer Trust of this
Agreement, the consummation by the Issuer Trust of the transactions
contemplated by this Agreement and compliance by the Issuer Trust with its
obligations under this Agreement do not violate (A) the Certificate of
Trust of the 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
reflected on the second business day prior to the Closing Date, the
results of computer searches of 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
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 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 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 Issuer Trust, and the 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
15
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.
(g) The Underwriters shall have received on the Closing Date a letter,
dated the Closing Date, in form and substance satisfactory to the Managers,
from the Company's independent public accountants, 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 Registration Statement, the Time of Sale Prospectus and 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.
The several obligations of the Underwriters to purchase Additional Capital
Securities hereunder are subject to the delivery to you on the Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Issuer Trust and the Company, the due authorization and issuance
of the Additional Capital Securities and other matters related to the issuance
of the Additional Capital Securities.
6. Covenants of the Company and the Issuer Trust. Each of the Company and
the Issuer Trust covenants with each Underwriter as follows:
(a) To furnish to you without charge, a signed copy of the
Registration Statement (including exhibits thereto and documents
incorporated by reference) and to deliver to each of the Underwriters
during the period mentioned in Section 6(e) or 6(f) below, as many copies
of the Time of Sale Prospectus, the Prospectus, any documents incorporated
by reference therein and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement, the
Time of Sale Prospectus or the Prospectus, to furnish to you a copy of each
such proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object.
(c) To furnish to you a copy of each proposed free writing prospectus
to be prepared by or on behalf of, used by, or referred to by the Company
or the Issuer Trust and not to use or refer to any proposed free writing
prospectus to which you reasonably object.
(d) Not to take any action that would result in an Underwriter or the
Company or the Issuer Trust being required to file with the Commission
pursuant to Rule 433(d) under the Securities Act a free writing prospectus
prepared by or on behalf of the Underwriter that the Underwriter otherwise
would not have been required to file thereunder.
(e) If the Time of Sale Prospectus is being used to solicit offers to
buy the Capital Securities at a time when the Prospectus is not yet
available to prospective purchasers and any event shall occur or condition
shall exist as a result of which it is necessary to amend or supplement the
Time of Sale Prospectus in order to make the
16
statements therein, in the light of the circumstances, not misleading, or
if any event shall occur or condition shall exist as a result of which the
Time of Sale Prospectus conflicts with the information contained in the
Registration Statement then on file, or if, in the opinion of counsel for
the Underwriters, it is necessary to amend or supplement the Time of Sale
Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at the Company's expense, to the Underwriters
and to any dealer upon request, either amendments or supplements to the
Time of Sale Prospectus so that the statements in the Time of Sale
Prospectus as so amended or supplemented will not, in the light of the
circumstances when delivered to a prospective purchaser, be misleading or
so that the Time of Sale Prospectus, as amended or supplemented, will no
longer conflict with the Registration Statement, or so that the Time of
Sale Prospectus, as amended or supplemented, will comply with applicable
law.
(f) If, during such period after the first date of the public offering
of the Securities as in the opinion of counsel for the Underwriters the
Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under
the Securities Act) is required by law to be delivered in connection with
sales by an Underwriter or dealer, any event shall occur or condition shall
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 (or in lieu thereof the notice
referred to in Rule 173(a) under the Securities Act) 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 applicable law, forthwith to prepare, file with the Commission,
and furnish, at the Company's own expense, to the Underwriters and to the
dealers (whose names and addresses you will furnish to the Company) to
which Securities may have been sold by you on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements to
the Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under
the Securities Act) is delivered to a purchaser, be misleading or so that
the Prospectus, as amended or supplemented, will comply with applicable
law.
(g) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(h) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering a period of at
least twelve months beginning with the first fiscal quarter of the Company
occurring after the date of this 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.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Company's and the Issuer
Trust's obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's and the Issuer Trust's counsel
and the Company's and the Issuer Trust's accountants in connection with the
registration and delivery of the Securities under the Securities Act
17
and all other fees or expenses in connection with the preparation and
filing of the Registration Statement, any preliminary prospectus, the Time
of Sale Prospectus, the Prospectus, any free writing prospectus prepared by
or on behalf of, used by, or referred to by the Company or the Issuer Trust
and amendments and supplements to any of the foregoing, including the
filing fees payable to the Commission relating to the Securities (within
the time required by Rule 456 (b)(1), if applicable), all printing costs
associated therewith, and the mailing and delivering of copies thereof to
the Underwriters and dealers, in the quantities hereinabove specified, (ii)
all costs and expenses related to the transfer and delivery of the
Securities to the Underwriters, including any transfer or other taxes
payable thereon, (iii) the cost of printing or producing any Blue Sky or
legal investment memorandum in connection with the offer and sale of the
Securities under state securities laws and all expenses in connection with
the qualification of the Securities for offer and sale under state
securities laws as provided in Section 6(g) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters
in connection with such qualification and in connection with the Blue Sky
or legal investment memorandum, (iv) all filing fees and the reasonable
fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the
Securities by the National Association of Securities Dealers, Inc., (v) any
fees charged by the rating agencies for the rating of the Securities, [(vi)
all fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Securities and all costs
and expenses incident to listing the Securities on the New York Stock
Exchange,] (vii) the cost of the preparation, issuance and delivery of the
Securities, (viii) the costs and charges of any trustee, transfer agent,
registrar or depositary, (ix) the costs and expenses of the Company or the
Issuer Trust relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Securities, including, without limitation, expenses associated with the
preparation or dissemination of any electronic road show, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company or the Issuer Trust,
travel and lodging expenses of the representatives and officers of the
Company and the Issuer Trust and any such consultants, and the cost of any
aircraft chartered in connection with the road show, (x) the document
production charges and expenses associated with printing this Agreement and
(xi) all other costs and expenses incident to the performance of the
obligations of the Company and the Issuer Trust hereunder for which
provision is not otherwise made in this Section. It is understood, however,
that except as provided in this Section, Section 8 entitled "Indemnity and
Contribution," and the last paragraph of Section 10 below, the Underwriters
will pay all of their costs and expenses, including fees and disbursements
of their counsel, transfer taxes payable on resale of any of the Securities
by them and any advertising expenses connected with any offers they may
make.
(j) If the third anniversary of the initial effective date of the
Registration Statement occurs before all the Capital Securities have been
sold by the Underwriters, prior to the third anniversary to file a new
shelf registration statement and to take any other action necessary to
permit the public offering of the Capital Securities to continue without
interruption; references herein to the Registration Statement shall include
the new registration statement declared effective by the Commission.
18
(k) During the period beginning on the date hereof and continuing to
and including the Closing Date, and without the prior written consent of
the Manager identified in Schedule I with the authorization to release this
lock-up on behalf of the Underwriters, not to (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend or otherwise transfer or dispose of, directly or indirectly, any
securities of the Company or the Issuer Trust that are substantially
similar to the Capital Securities (other than (x) the Securities, (y)
commercial paper issued in the ordinary course of business or (z)
securities or warrants permitted with the prior written consent of the
Manager identified in Schedule I with the authorization to release this
lock-up on behalf of the Underwriters) or (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Securities, whether any
transactions described above are to be settled by securities, in cash or
otherwise, except in the offering.
(l) To prepare, if the Managers so request, a final term sheet
relating to the offering of the Securities, containing only information
that describes the final terms of the Securities or the offering in a form
consented to by you, and to file such final term sheet within the period
required by Rule 433(d)(5)(ii) under the Securities Act following the date
the final terms have been established for the offering of the Capital
Securities.
7. Covenants of the Underwriters. Each Underwriter severally covenants with
the Company and the Issuer Trust not to take any action that would result in the
Company or the Issuer Trust being required to file with the Commission under
Rule 433(d) a free writing prospectus prepared by or on behalf of such
Underwriter that otherwise would not be required to be filed by the Company or
the Issuer Trust thereunder, but for the action of the Underwriter.
8. Indemnification and Contribution. (a) Each of the Company and the 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 405 under
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 alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing
prospectus as defined in Rule 433(h) under the Securities Act, any Company or
Issuer Trust information that the Company or the Issuer Trust has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act, or the
Prospectus or any amendment or supplement 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 alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company or the Issuer
Trust in writing by such Underwriter through you expressly for use therein.
19
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the 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 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 Issuer Trust
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company or the Issuer Trust in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Time of Sale Prospectus, any issuer free writing
prospectus or the Prospectus or any amendment or supplement thereto.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b), 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
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 authorized to appoint counsel under this
Section 8 as set forth in Schedule I hereto, in the case of parties indemnified
pursuant to Section 8(a), and by the Company and the Issuer Trust, in the case
of parties indemnified pursuant to Section 8(b). 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 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 second and third
sentences 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
20
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or 8(b)
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 Company and the
Issuer Trust on the one hand and the Underwriters on the other hand from the
offering of the Securities or (ii) if the allocation provided by clause 8(d)(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 8(d)(i) above
but also the relative fault of the Company and the 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 Issuer Trust on the one hand and the Underwriters on the
other hand in connection with the offering of the Securities shall be deemed to
be in the same respective proportions as the net proceeds from the offering of
the Junior Subordinated Debentures (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received by the
Underwriters bear to the aggregate initial public offering price of the Capital
Securities as set forth in the Prospectus. The relative fault of the Company and
the 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 alleged
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 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 Underwriters' respective obligations to contribute pursuant to this Section
8 are several in proportion to the respective principal amounts of Capital
Securities they have purchased hereunder, and not joint.
(e) The Company, the Issuer Trust and the Underwriters agree that it would
not be just or equitable if contribution pursuant to this Section 8 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 Section 8(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in Section 8(d) 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 8, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Capital 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 alleged 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 remedies provided for in this Section 8 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.
21
(f) The indemnity and contribution provisions contained in this Section 8
and the representations, warranties and other statements of the Company and the
Issuer Trust contained in this Agreement shall remain operative and in full
force and effect, regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter, any person controlling
any Underwriter or any affiliate of any Underwriter or by or on behalf of the
Company or the Issuer Trust, the officers or directors of the Company or the
Issuer Trust or any person controlling the Company or the Issuer Trust and (iii)
acceptance of and payment for any of the Capital Securities.
9. Termination. The Underwriters may terminate this Agreement by notice
given by you to the Company if, after the execution and delivery of this
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 other relevant
jurisdiction] shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State [or relevant
foreign country(1)] authorities or (v) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets (or, if the
Securities are denominated in a currency other than U.S. dollars, any change in
currency exchange rates or controls) or any calamity or crisis that, in your
judgment, is material and adverse and which, singly or together with any other
event specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Capital
Securities on the terms and in the manner contemplated in the Time of Sale
Prospectus or the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
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 Capital
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate number of 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 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 Schedule II hereto 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 you may specify, to purchase the
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 Capital Securities that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 10 by an amount
in excess of one-ninth of such number of 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
- --------------------
(1) Include if transaction involves offshore settlement.
22
Securities with respect to which such default occurs is more than one-tenth of
the aggregate number of Firm Capital Securities to be purchased, and
arrangements satisfactory to you and the Company and the Issuer Trust 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 Issuer Trust. In any such case
either you or the Company or the Issuer Trust 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, in the Time of Sale
Prospectus, 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 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 Issuer Trust shall be unable to perform
its obligations under this Agreement, the Company and the 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 contemplated hereunder.
11. Entire Agreement. (a) This Agreement, together with any contemporaneous
written agreements and any prior written agreements (to the extent not
superseded by this Agreement) that relate to the offering of the Securities,
represents the entire agreement between the Company and the Issuer Trust and the
Underwriters with respect to the preparation of any preliminary prospectus, the
Time of Sale Prospectus, the Prospectus, the conduct of the offering, and the
purchase and sale of the Securities.
(b) Each of the Issuer Trust and the Company acknowledges that in
connection with the offering of the Securities: (i) the Underwriters have acted
at arms length, are not agents of, and owe no fiduciary duties to, the Company,
the Issuer Trust or any other person, (ii) the Underwriters owe the Company and
the Issuer Trust only those duties and obligations set forth in this Agreement
and prior written agreements (to the extent not superseded by this Agreement),
if any, and (iii) the Underwriters may have interests that differ from those of
the Company and the Issuer Trust. Each of the Company and the Issuer Trust
waives to the full extent permitted by applicable law any claims it may have
against the Underwriters arising from an alleged breach of fiduciary duty in
connection with the offering of the Securities.
12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
23
13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
14. 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.
15. Notices. All communications hereunder shall be in writing and effective
only upon receipt and if to the Underwriters shall be delivered, mailed or sent
to you at the address set forth in Schedule I hereto; and if to the Company or
the Issuer Trust shall be delivered, mailed or sent to the address set forth in
Schedule I hereto.
24
Very truly yours,
MORGAN STANLEY CAPITAL TRUST [ ]
By: Morgan Stanley, as Depositor
By:
-------------------------------
Name:
Title:
MORGAN STANLEY
By:
-------------------------------
Name:
Title:
Accepted as of the date hereof
[NAME[S] OF [CO-]MANAGER[S]]
Acting severally on behalf of [itself][themselves] and
the several Underwriters named in Schedule II hereto
By: [Name[s] of [Co-]Manager[s]]
By:
------------------------------------
Name:
Title:
25
SCHEDULE I
Managers: [Morgan Stanley & Co. Incorporated/
Morgan Stanley & Co. International
Limited]
[additional Managers]
Manager authorized to release lock-up under
Section 6(k): [Morgan Stanley & Co.
Incorporated/Morgan Stanley & Co.
International Limited]
Manager authorized to appoint counsel under
Section 8(c): [Morgan Stanley & Co.
Incorporated/Morgan Stanley & Co.
International Limited]
Registration Statement File No.: 333-_______
Time of Sale Prospectus: A. Basic Prospectus dated _______,
20__
B. preliminary prospectus dated
__________, 20__ relating to
the Securities
C. [free writing prospectus
containing a description of
terms that does not reflect
final terms, if the Time of
Sale Prospectus does not
include a final term sheet]
D. [Identify all free writing
prospectuses filed by the
Company or the Issuer Trust
under Rule 433(d) of the
Securities Act]
E. [orally communicated pricing
information to be included on
Schedule I if a final term
sheet is not used]
Designation of the Series of Capital
Securities: _____% Capital Securities
CUSIP/ISIN/Common Code:
I-1
Aggregate Number of Firm Capital
Securities:
Aggregate Number of Additional Capital Up to _____
Securities:
Aggregate Number of Capital Securities
(if the Underwriters' over-allotment
option is exercised in full):
Purchase Price: $_____ per Capital Security, plus
accumulated distributions, if any,
from __________, 20__ to the date
of payment and delivery
Price to Public: $_____
Underwriters' Compensation per Capital $_____
Security:
Selling Concession per Capital Security: $_____
Reallowance per Capital Security: $_____
Form: Book-entry
Other Terms:
Maturity Date:
Original Issue Date:
Distribution Rate: ____% per annum, accruing from
________, 20__
Distribution Payment Dates:
Minimum Denominations:
Redemption Provisions:
Book-Entry Form: The Capital Securities will be
issued in the form of one or more
fully registered global securities
certificates which will be
deposited with, or on behalf of,
The Depository Trust Company, New
York, New York (the "Depositary")
and registered in the name of Cede
& Co., the Depositary's nominee.
Beneficial interests
I-2
in the capital securities will be
represented through book-entry
accounts of financial institutions
acting on behalf of beneficial
owners as direct and indirect
participants in the Depositary.
Investors may elect to hold
interests in the capital securities
represented by the registered
global securities held by the
Depositary through Clearstream
Banking, societe anonyme
("Clearstream"), or Euroclear Bank
S.A./N.V. as operator of the
Euroclear System (the "Euroclear
operator") if they are participants
of such systems, or indirectly
through organizations which are
participants in such systems.
Clearstream and the Euroclear
operator will hold interests on
behalf of their participants
through customers' securities
accounts in Clearstream's and the
Euroclear operator's names on the
books of their respective
depositaries, which in turn will
hold such interests in customers'
securities accounts in the
depositaries' names on the books of
the Depositary. The capital
securities may be transferred, in
whole and not in part, only to
another nominee of the Depositary
or to a successor to the Depositary
or its nominee. The Capital
Securities will not be issued in
definitive form except in very
limited circumstances described in
the Time of Sale Prospectus and
Prospectus Supplement.
Closing Date and Time: __________________, 20__ __:__ a.m.
Closing Location: Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
Address for Notices to Underwriters:
Address for Notices to the Company or
the Issuer Trust:
I-3
SCHEDULE II
Number of Firm
Capital Securities
Underwriter To Be Purchased
----------- ------------------
[NAMES OF MANAGERS]......................................
[NAMES OF OTHER UNDERWRITERS]............................
----------------
Total...........................................
================
II-1