Securities Purchase Agreement

1. 

Authorization and Sale of Securities . Upon the terms and subject to the conditions of this 

Agreement, on the Closing Date the Company shall issue, sell and deliver to the Investor 

(which it may do through a registered broker-dealer that is an affiliate of the Company), 

and the Investor shall purchase from the Company (i) 117,000,000 shares of Common 

Stock at a purchase price of $25.25 per share, and (ii) 6,045,750 shares of Preferred Stock 

at a purchase price of $1,000.00 per share, in each case free and clear of all liens, 

encumbrances, equities or claims for an aggregate purchase price of nine billion dollars 

($9,000,000,000.00) in cash (the “Purchase Price”) to be paid in full to the Company. 

2. 

Closing and Delivery of Securities and Funds . 

2.1. 

The consummation of the transactions contemplated hereby (the “Closing”) shall 

take place, subject to the satisfaction or waiver of all conditions to the Closing set 

forth in Section 3 hereof, at the offices of Wachtell, Lipton, Rosen & Katz, 51 

West 52nd Street, New York City, at 8:00 a.m. New York City time, as promptly 

as practicable (but no more than two (2) Business Days) following the first date 

on which all conditions set forth in Section 3 have been satisfied or waived (other 

than those conditions that by their nature are to be satisfied by actions taken at the 

Closing). The date on which the Closing occurs is the “Closing Date.” 

2.2. 

At the Closing, the Investor shall deliver to the Company: 

a. 

an amount equal to the Purchase Price, such amount to be 

delivered in immediately available funds by wire transfer to the 

account set forth in Schedule 3.3 hereto (or such other account as 

is designated in writing to the Investor not less than two Business 

Days prior to the Closing), and 

b. 

all other documents to be delivered to the Company by the Investor 

pursuant to Section 3.2 hereof. 

2.3. 

At the Closing, the Company shall deliver to the Investor: 

a. 

an aggregate of 117,000,000 shares of Common Stock, registered 

in the name of the Investor; 

b. 

an aggregate of 6,045,750 shares of Preferred Stock, registered in 

the name of the Investor; and 

c. 

all other documents and certificates to be delivered to the Investor 

by the Company pursuant to Section 3.1 hereof. 

3.

Closing Conditions . The obligation of the parties to complete the transactions contemplated by Section 2 hereof (the “Stock Purchase”)

shall be conditioned on the satisfaction or waiver of the following conditions:

3.1. 

The obligation of the Investor to complete the Stock Purchase shall be 

conditioned on the satisfaction or waiver by the Investor of the following 

conditions: 

a. 

The Investor shall have received an opinion, dated the Closing Date, from 

Wachtell, Lipton, Rosen & Katz, and/or another nationally recognized law 

firm, as counsel to the Company, as to the validity of the Securities being 

sold in the Stock Purchase, substantially in the form set forth in 

Schedule 3.1(a) to this Agreement. 

b. 

The representations and warranties of the Company contained in this 

Agreement shall be true and correct on and as of the date hereof and on 

and as of the Closing Date as if made on and as of the Closing Date 

(except for any such representations or warranties made as of the date 

hereof or as of another date, which shall be true and correct as of such 

date), and the Investor shall have received a certificate of the chief 

executive officer and chief financial officer of the Company, dated as of 

the Closing Date, substantially in the form set forth in Schedule 3.1(b) to 

this Agreement, certifying to that fact. 

c. 

The Company shall have performed in all material respects all of its 

covenants and obligations in this Agreement that are to be performed at or 

prior to the Closing, and the Investor shall have received a certificate of a 

senior officer of the Company, dated as of the Closing Date, certifying to 

that fact. 

d. 

On the Closing Date, the Company shall have duly executed and delivered 

to the Investor an Investor Agreement in substantially the form set forth as 

Exhibit B hereto (the “Investor Agreement”) and a Registration Rights 

Agreement in substantially the form set forth as Exhibit C hereto (the 

“Registration Rights Agreement”). 

3.2. 

The obligation of the Company to complete the Stock Purchase shall be 

conditioned on the satisfaction or waiver by the Company of the following 

conditions: 

a. 

The representations and warranties of the Investor contained in this 

Agreement shall be true and correct on and as of the date hereof and on 

and as of the Closing Date as if made on and as of the Closing Date 

(except for any such representations or warranties made as of the date 

hereof or as of another date, which shall be true and correct as of such 

date). 

b. 

The Investor shall have performed in all material respects all of its 

covenants and obligations in this Agreement that are to be performed at or 

prior to the Closing. 

c. 

On the Closing Date, the Investors shall have duly executed and delivered 

to the Company each of the Registration Rights Agreement and the 

Investor Agreement. 

3.3. 

The obligation of the parties to complete the Stock Purchase shall also be 

conditioned on the satisfaction or waiver by both the Company and the Investor of 

the following conditions. 

a. 

The Company shall have duly filed with the Secretary of State of the State 

of Delaware the Preferred Stock CoD. 

b. 

The shares of Common Stock issuable at the Closing or upon conversion 

of the Preferred Stock shall have been duly authorized for listing, subject 

to official notice of issuance, on the New York Stock Exchange. 

c. 

The Board of Directors of the Federal Deposit Insurance Corporation shall 

have granted a written “cross guarantee waiver” pursuant to Section 

5(e)(5) of the U.S. Federal Deposit Insurance Act in form and substance 

reasonably acceptable to the Company and the Investor. 

d. 

The Board of Governors of the Federal Reserve System shall have issued a 

written determination that Investor does not and will not “control” the 

Company or any of its subsidiaries for purposes of the U.S. Bank Holding 

Company Act of 1956, as amended, without the imposition of any term, 

condition or consequence the acceptance of which would constitute a 

Substantial Detriment. 

e. 

The Staff of the Committee on Foreign Investment in the United States 

shall have issued a “clearance letter” with respect to the transactions 

contemplated by this Agreement, without the imposition of any term, 

condition or consequence the acceptance of which would constitute a 

Substantial Detriment. 

f. 

The approvals or authorizations of, filings and registrations with, and 

notifications to, all governmental or regulatory authorities (collectively, 

“Governmental Entities”) required for the Investor’s acquisition of the 

Securities (but not for the conversion of the Preferred Stock into Common 

Stock) (collectively, with those set forth in 3.3(c), (d), and (e), the 

“Required Approvals”) shall have been obtained or made and shall be in 

full force and effect and all waiting periods under the Required Approvals 

shall have expired or been terminated, in each case without the imposition 

of any term, condition or consequence the acceptance of which would 

constitute a Substantial Detriment, and no provision of any applicable law 

or regulation, judgment, injunction, order or decree shall be in effect that 

would prohibit the Closing, and no Governmental Entity shall have 

instituted an investigation or proceeding that could result in such a 

judgment, injunction, order or decree. 

4. 

Representations, Warranties and Covenants of the Company . The Company hereby 

represents and warrants to, and covenants with, the Investor, that, except as otherwise 

disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended 

November 30, 2007 or its other reports and forms filed with or furnished to the Securities 

and Exchange Commission (the “Commission”) under Sections 12, 13, 14 or 15(d) of the 

Securities Exchange Act of 1934 (the “Exchange Act”) after November 30, 2007 

(excluding disclosures of risks included in any forward-looking statement disclaimers or 

other statements that are similarly nonspecific and are predictive and forward-looking in 

nature) (the “SEC Reports”) and before the date of this Agreement, and subject to the 

disclosure letter (the “Disclosure Letter”) delivered by the Company to the Investor 

concurrently with the execution of this Agreement: 

4.1. 

Organization, Authority and Significant Subsidiaries . The Company has been 

duly incorporated and is validly existing as a corporation in good standing under 

the laws of the State of Delaware, with corporate power and authority to own its 

properties and conduct its business as currently conducted, and, except as would 

not be reasonably likely to have a Material Adverse Effect, has been duly 

qualified as a foreign corporation for the transaction of business and is in good 

standing under the laws of each other jurisdiction in which it owns or leases 

properties, or conducts any business so as to require such qualification; each 

subsidiary of the Company that is a “significant subsidiary” within the meaning of 

Rule 1-01(w) of Regulation S-X under the Securities Act (individually a 

“Significant Subsidiary” and collectively the “Significant Subsidiaries”) has been 

duly organized and is validly existing in good standing under the laws of its 

jurisdiction of organization. 

4.2. 

Capitalization . The authorized capital stock of Company consists of 

3,500,000,000 shares of Company Common Stock, and 30,000,000 shares of 

preferred stock (“Company Preferred Stock”), par value $0.01 per share, of 

which, as of September 26, 2008, (1) 1,061,212,996 shares of Common Stock 

were issued and outstanding, (2) 218,635,270 shares of Common Stock were 

reserved for issuance in respect of outstanding options, warrants, convertible 

securities and the purchase contracts underlying the PEPS Units issued by the 

Company in December 2007, and (3) 46,000 shares of Company Preferred Stock 

are designated as Floating Rate Non-Cumulative Preferred Stock, Series A, 

44,000 of which were outstanding (the “Series A Preferred Stock”), which shares 

of Series A Preferred Stock are represented by 44,000,000 depositary receipts, 

each representing 1/1,000 of a share of Series A Preferred Stock. As of such date, 

the Company held 150,488,556 shares of Company Common Stock in its treasury. 

The Company will reserve that number of shares of Common Stock sufficient for 

issuance upon conversion of Preferred Stock being issued and sold pursuant to 

this Agreement. The sum of (i) the number of shares of Common Stock that 

Investor will purchase at the Closing and (ii) the total number of shares of 

Common Stock Investor will receive upon conversion of all shares of 

the Preferred Stock that Investor will purchase at the Closing will not exceed 

24.99% of the sum of (x) the total number of Shares of Common Stock

outstanding upon consummation of the Stock Purchase (including the shares

of Common Stock that Investor will purchase at the Closing) and (y) 

the total number of shares of Common Stock Investor will receive upon 

conversion of all shares of the Preferred Stock that Investor will purchase at 

the Closing. 

4.3. 

Authorization, Enforceability of Transaction Documents . The Company has the 

power and authority to enter into the Transaction Documents (as defined below) 

and to carry out its obligations hereunder and thereunder. The execution, delivery 

and performance of the Transaction Documents by the Company and the 

consummation of the transactions contemplated hereby and thereby have been 

duly authorized by all necessary corporate action on the part of the Company 

other than the filing of the Preferred Stock CoD with the Secretary of State of the 

State of Delaware pursuant to Section 6.5, which will be made prior to the 

Closing. 

As of the date of execution of the Transaction Documents, neither the execution, 

delivery and performance by the Company hereof and thereof, nor the 

consummation of the transactions contemplated hereby and thereby, nor 

compliance by the Company with any of the provisions thereof, will violate, 

conflict with, or result in a breach of any provision of, or constitute a default (or 

an event which, with notice or lapse of time or both, would constitute a default) 

under, or result in the termination of, or accelerate the performance required by, 

or result in a right of termination or acceleration of or result in the creation of, any 

lien, security interest, charge or encumbrance upon any of the properties or assets 

of the Company or any Significant Subsidiary under any of the terms, conditions 

or provisions of (A) its certificate of incorporation or bylaws or (B) any note, 

bond, mortgage, indenture, deed of trust, license, lease, agreement or other 

instrument or obligation to which the Company or any Significant Subsidiary is a 

party or by which it may be bound, or to which the Company or any Significant 

Subsidiary or any of the properties or assets of the Company or any Significant 

Subsidiary may be subject, or (C) subject to compliance with the statutes and 

regulations referred to in the next paragraph, any statute, rule or regulation or any 

judgment, ruling, order, writ, injunction or decree applicable to the Company or 

any Significant Subsidiary or any of their respective properties or assets except, in 

the case of clauses (B) and (C), for those occurrences that, individually or in the 

aggregate, could not reasonably be expected to result in a Material Adverse 

Effect. 

Other than in connection or in compliance with the provisions of the Securities 

Act and the securities or blue sky laws of the various states, and other than the 

Required Approvals, to the best knowledge of the Company, no notice to, filing 

with, exemption or review by, or authorization, consent or approval of, any 

Governmental Entity is necessary for Investor’s acquisition of the Securities as 

contemplated by the Transaction Documents, other than such authorizations, 

consents and approvals as may be necessary in connection with the issuance to 

Investor of shares of Common Stock upon conversion of the Preferred Stock. 

As used herein, the term “Transaction Documents” refers collectively to this 

Agreement, the Investor Agreement and the Registration Rights Agreement. 

4.4. 

Company Financial Statements . The consolidated financial statements of the 

Company and its consolidated subsidiaries included or incorporated by reference 

in the SEC Reports present fairly in all material respects the consolidated 

financial position of the Company and its consolidated subsidiaries as of the dates 

indicated therein and the consolidated results of their operations for the periods 

specified therein; and except as stated therein, such financial statements were 

prepared in conformity with GAAP applied on a consistent basis (except as may 

be noted therein). 

Deloitte & Touche LLP, who have certified certain financial statements of the 

Company and its subsidiaries, are independent public accountants as required by 

the Act and the rules and regulations of the Commission. 

The Company and its subsidiaries do not have any liabilities or obligations 

(accrued, absolute, contingent or otherwise), other than liabilities or obligations 

(i) reflected on, reserved against, or disclosed in the notes to, the Company’s 

consolidated balance sheet included in the Company’s Quarterly Report on Form 

10-Q for the fiscal quarter ended May 31, 2008, (ii) disclosed in the Company’s 

Current Reports on Form 8-K filed on August 12, 2008, September 15, 2008, 

September 16, 2008 and September 22, 2008 or (iii) that could not, individually or 

in the aggregate, reasonably be expected to have a Material Adverse Effect. 

4.5. 

No Material Adverse Effect . Since August 31, 2008 and except as described in 

the SEC Reports, no event or circumstance has occurred that, individually or in 

the aggregate, has had or could reasonably be expected to have a Material 

Adverse Effect. 

4.6. 

Proceedings . Except as disclosed in the SEC Reports, there are no litigation or 

similar proceedings pending or, to the Company’s knowledge, threatened to 

which the Company or any of its subsidiaries is a party or of which any property 

of the Company or any of its subsidiaries is the subject which, individually or in 

the aggregate, could reasonably be expected to have a Material Adverse Effect. 

4.7. 

Compliance with Laws; Permits . The Company and each of its Significant 

Subsidiaries have conducted their businesses in compliance with all applicable 

federal, state and foreign laws, regulations and applicable stock exchange 

requirements, except where (i) the failure to be in compliance could not 

reasonably be expected to have, individually or in the aggregate, a Material 

Adverse Effect or (ii) the necessity of compliance, or the failure to comply, 

therewith is being contested in good faith by appropriate proceedings. 

The Company and each of its Significant Subsidiaries have all permits, licenses, 

authorizations, orders and approvals of, and have made all filings, applications 

and registrations with, any Governmental Entities that are required in order to 

carry on their business as presently conducted, except where the failure to have 

such permits, licenses, authorizations, orders and approvals or the failure to make 

such filings, applications and registrations, individually or in the aggregate, could 

not reasonably be expected to have a Material Adverse Effect; and all such 

permits, licenses, certificates of authority, orders and approvals are in full force 

and effect and, to the knowledge of the Company, no suspension or cancellation 

of any of them is threatened, and all such filings, applications and registrations are 

current, except where such absence, suspension or cancellation, individually or in 

the aggregate, could not reasonably be expected to have a Material Adverse 

Effect. 

4.8. 

Authorization of Common Stock, Preferred Stock . The issuance of the shares of 

Common Stock and Preferred Stock to be issued pursuant to this Agreement, and 

the issuance of Common Stock upon conversion of the Preferred Stock, have been 

duly authorized by all necessary corporate action on the part of the Company, and 

no approval of the Company’s stockholders is required under any law or under the 

regulations and policies of any securities exchange in connection therewith. Upon 

the issuance and sale of the shares of Common Stock and Preferred Stock to be 

issued pursuant to this Agreement, such shares of Common Stock and Preferred 

Stock will (A) be duly authorized by all necessary corporate action on the part of 

the Company, (B) be validly issued, fully paid and nonassessable, (C) not have 

been issued in violation of any preemptive or other similar right, and (D) if such 

shares are treasury shares, be free of any adverse claim. 

4.9. 

Authorization of the Registration Rights Agreement . As of the Closing Date, the 

Registration Rights Agreement will have been duly authorized by the Company, 

and will be validly executed and delivered by the Company and assuming due 

authorization, execution and delivery of such agreement by each other party 

thereto, will constitute a valid and binding obligation of the Company, 

enforceable against the Company in accordance with its terms, except to the 

extent that the enforcement thereof may be limited by applicable bankruptcy, 

insolvency, reorganization, moratorium or similar laws affecting the enforcement 

of creditors’ rights generally and general equitable principles, regardless of 

whether such enforceability is considered in a proceeding at law or in equity 

(“Bankruptcy Exceptions”) and except as rights to indemnification and 

contribution under the Registration Rights Agreement may be limited under 

applicable law or public policy. 

4.10. 

Authorization of the Investor Agreement . As of the Closing Date, the Investor 

Agreement will have been duly authorized by the Company, and will be validly 

executed and delivered by the Company and assuming due authorization, 

execution and delivery of such agreement by each other party thereto, will 

constitute a valid and binding obligation of the Company, enforceable against the 

Company in accordance with its terms, except to the extent that the enforcement 

thereof may be limited by the Bankruptcy Exceptions. 

4.11. 

Authorization of this Agreement . This Agreement has been duly authorized, 

validly executed and delivered by the Company, and assuming due authorization, 

execution and delivery of this Agreement by each other party hereto, constitutes a 

valid and binding obligation of the Company, enforceable against the Company in 

accordance with its terms, except to the extent that the enforcement thereof may 

be limited by the Bankruptcy Exceptions. 

4.12. 

Reports . Since November 30, 2006, the Company has timely filed all documents 

required to be filed with the Commission pursuant to Sections 13(a), 14(a) or 

15(d) of the Exchange Act, except where the failure to so file could not 

reasonably be expected to have a Material Adverse Effect. 

The SEC Reports, when they became effective or were filed with the 

Commission, as the case may be, conformed in all material respects to the 

requirements of the Securities Act or the Exchange Act, as applicable, and the 

rules and regulations of the Commission thereunder, and none of such documents 

contained an untrue statement of a material fact or omitted to state a material fact 

required to be stated therein or necessary to make such statements, in the light of 

the circumstances in which they were made, not misleading. 

Since November 30, 2006, the Company and each subsidiary have filed all 

material reports, registrations and statements, together with any required 

amendments thereto, that it was required to file with any applicable federal or 

state securities or banking authorities, except where the failure to file any such 

report, registration or statement, individually or in the aggregate, could not 

reasonably be expected to have a Material Adverse Effect. As of their respective 

dates, each of the foregoing reports complied with all applicable rules and 

regulations promulgated by applicable foreign, federal or state securities or 

banking authorities, as the case may be, except for any failure that, individually or 

in the aggregate, could not reasonably be expected to have a Material Adverse 

Effect. 

The records, systems, controls, data and information of the Company and its 

subsidiaries are recorded, stored, maintained and operated under means (including 

any electronic, mechanical or photographic process, whether computerized or not) 

that are under the exclusive ownership and direct control of the Company or the 

subsidiaries or their accountants (including all means of access thereto and 

therefrom). The Company (i) has implemented and maintains disclosure controls 

and procedures (as defined in Rule 13a-15(e) under the Exchange Act) to ensure 

that material information relating to the Company, including its subsidiaries, is 

made known to the chief executive officer and the chief financial officer of the 

Company by others within those entities, and (ii) has disclosed, based on its most 

recent evaluation prior to the date hereof, to the Company’s outside auditors and 

the audit committee of the Company’s board of directors (A) any significant 

deficiencies and material weaknesses in the design or operation of internal 

controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange 

Act) that, individually or in the aggregate, could reasonably be expected to 

adversely affect the Company’s ability to record, process, summarize and report 

financial information and (B) any fraud, whether or not material, that involves 

management or other employees who have a significant role in the Company’s 

internal controls over financial reporting. As of the date hereof, to the knowledge 

of the Company, there is no reason that its outside auditors and its chief executive 

officer and chief financial officer will not be able to give the certifications and 

attestations required pursuant to the rules and regulations adopted pursuant to 

Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when next 

due. 

4.13. 

Taxes . As of the Closing, the Company is not, nor has been, a U.S. real property 

holding corporation (as defined in Section 897(c)(2) of the Code) during the 

applicable period specified in Section 897(c)(1)(A)(ii) of the Code. 

4.14. 

Subprime Exposure . As of August 31, 2008, the aggregate total U.S. ABS 

CDO/Subprime Net Exposure of the Company and its subsidiaries was $0.0 

billion. As used in this paragraph, “Net Exposure” means the potential loss to the 

Company in the event of a 100% default, assuming zero recovery, over a period 

of time. 

4.15. 

As used in this Agreement, the term “ Material Adverse Effect ” means any fact,  

circumstance, event, change, effect or occurrence that, individually or in the 

aggregate with all other facts, circumstances, events, changes, effects or 

occurrences, has a material adverse effect on (i) the business, assets, liabilities, 

results of operation or financial condition of the Company and its subsidiaries 

taken as a whole or (ii) the ability of the Company to consummate the transactions 

contemplated by this Agreement, other than, in each case, any adverse effect 

resulting from the announcement of the transactions contemplated by this 

Agreement. 

5. 

Representations, Warranties and Covenants of the Investor . The Investor hereby 

represents and warrants to, and covenants with, the Company that: 

5.1. 

(1) 

It is (a) a QIB and is an “accredited investor” within the meaning of Rule 

501 of Regulation D promulgated under the Securities Act, (b) aware that 

the sale of Common Stock and Preferred Stock (collectively, including the 

Common Stock issuable upon conversion of the Preferred Stock, the 

“Securities”) to it is being made in reliance on a private placement 

exemption from registration under the Securities Act and (c) acquiring the 

Securities for its own account or for the account of a QIB. 

(2) 

It understands and agrees on behalf of itself and on behalf of any investor 

account for which it is purchasing Securities, and each subsequent holder 

of shares of Securities by its acceptance thereof will be deemed to agree, 

that such Securities are being offered in a transaction not involving any 

public offering within the meaning of the Securities Act, that such 

Securities have not been and, except as contemplated by the Registration 

Rights Agreement, will not be registered under the Securities Act and that 

such Securities may be offered, resold, pledged or otherwise transferred 

only in accordance with the applicable provisions of the Investor 

Agreement (i) in a transaction not involving a public offering, (ii) pursuant 

to an exemption from registration under the Securities Act provided by 

Rule 144 thereunder (if available), (iii) pursuant to an effective 

registration statement under the Securities Act, or (iv) to the Company or 

one of its subsidiaries, in each of cases (i) through (iv) in accordance with 

any applicable securities laws of any State of the United States, and that it 

will, and each subsequent holder is required to, notify any subsequent 

purchaser of Securities from it of the resale restrictions referred to above, 

as applicable, and will provide the Company and the transfer agent such 

certificates and other information as they may reasonably require to 

confirm that the transfer by it complies with the foregoing restrictions, if 

applicable. 

(3) 

It understands that, unless sold pursuant to a registration statement that has 

been declared effective under the Securities Act or in compliance with 

Rule 144, the Company may require that the Securities will bear a legend 

or other restriction substantially to the following effect (it being agreed 

that if the Securities are not certificated, other appropriate restrictions shall 

be implemented to give effect to the following): 

THIS SECURITY WAS ORIGINALLY ISSUED IN A TRANSACTION 

EXEMPT FROM REGISTRATION UNDER THE UNITED STATES 

SECURITIES ACT OF 1933, AS AMENDED, (THE “SECURITIES ACT”), 

AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE 

TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN 

APPLICABLE EXEMPTION THEREFROM.

THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE 

COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, 

PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN A 

TRANSACTION NOT INVOLVING A PUBLIC OFFERING, (II) PURSUANT 

TO ANY OTHER EXEMPTION FROM THE REGISTRATION 

REQUIREMENTS OF THE SECURITIES ACT, INCLUDING RULE 144 

UNDER THE SECURITIES ACT (IF AVAILABLE) SUBJECT TO THE 

ISSUER’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER 

PURSUANT TO CLAUSE (II) TO REQUIRE THE DELIVERY OF AN 

OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER 

INFORMATION SATISFACTORY TO IT, (III) PURSUANT TO AN 

EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES 

ACT OR (IV) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, IN 

EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY 

APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED 

STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT 

HOLDER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER 

OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS 

REFERRED TO IN (A) ABOVE. 

(4) 

In addition, for so long as the holder of the relevant Securities is subject to 

transfer restrictions contained in the Investor Agreement, the Company 

may require that the Securities bear a legend or other restriction 

substantially to the following effect: “THIS SECURITY IS SUBJECT TO 

RESTRICTIONS ON TRANSFER SET FORTH IN AN INVESTOR 

AGREEMENT, DATED [ ], AMONG THE COMPANY AND 

CERTAIN OTHER PARTIES THERETO.” Such legend shall be 

removed at the request of any holder thereof that is not subject to the 

transfer restrictions contained in the Investor Agreement. 

(5) 

It: 

(a) 

is able to fend for itself in the transactions contemplated hereby; 

(b) 

has such knowledge and experience in financial and business 

matters as to be capable of evaluating the merits and risks of its 

prospective investment in the Securities; and 

(c) 

has the ability to bear the economic risks of its prospective 

investment and can afford the complete loss of such investment. 

(6) 

It acknowledges that (a) it has conducted its own investigation of the 

Company and the terms of the Securities, (b) it has had access to the 

Company’s public filings with the Securities and Exchange Commission 

and to such financial and other information as it deems necessary to make 

its decision to purchase the Securities, and (c) has been offered the 

opportunity to ask questions of the Company and received answers 

thereto, as it deemed necessary in connection with the decision to purchase 

the Securities. 

(7) 

It understands that the Company will rely upon the truth and accuracy of 

the foregoing representations, acknowledgements and agreements and 

agrees that if any of the representations and acknowledgements deemed to 

have been made by it by its purchase of the Securities is no longer 

accurate, it shall promptly notify the Company. If it is acquiring 

Securities as a fiduciary or agent for one or more investor accounts, it 

represents that it has sole investment discretion with respect to each such 

account and it has full power to make the foregoing representations, 

acknowledgements and agreements on behalf of such account. 

5.2. 

The Investor acknowledges that the Common Stock is listed on the New York 

Stock Exchange and the Company is required to file reports containing certain 

business and financial information with the Securities and Exchange Commission 

pursuant to the reporting requirements of the Securities Exchange Act of 1934, as 

amended, and that it is able to obtain copies of such reports. 

5.3. 

The Investor acknowledges that no action has been or will be taken in any 

jurisdiction outside the United States by the Company that would permit an 

offering of the Securities, or possession or distribution of offering materials in 

connection with such issue of Securities, in any jurisdiction outside the United 

States where action for that purpose is required. Each such person outside the 

United States will comply with all applicable laws and regulations in each foreign 

jurisdiction in which it purchases, offers, sells or delivers Securities or has in its 

possession or distributes any offering material, in all cases at its own expense. 

5.4. 

The Investor has full right, power, authority and capacity to enter into the 

Transaction Documents and to consummate the transactions contemplated thereby 

and has taken all necessary action to authorize the execution, delivery and 

performance of the Transaction Documents. 

5.5. 

Authorization of the Registration Rights Agreement . As of the Closing Date, the 

Registration Rights Agreement will have been duly authorized by the Investor, 

and will be validly executed and delivered by the Investor and assuming due 

authorization, execution and delivery of such agreement by the Company, will 

constitute a valid and binding obligation of, enforceable against the Investor in 

accordance with its terms, except to the extent that the enforcement thereof may 

be limited by the Bankruptcy Exceptions and except as rights to indemnification 

and contribution under the Registration Rights Agreement may be limited under 

applicable law or policy. 

5.6. 

Authorization of the Investor Agreement . As of the Closing Date, the Investor 

Agreement will have been duly authorized by the Investor, and will be validly 

executed and delivered by the Investor and assuming due authorization, execution 

and delivery of such agreement by the Company, will constitute a valid and 

binding obligation of the Investor, enforceable against it in accordance with its 

terms, except to the extent that the enforcement thereof may be limited by the 

Bankruptcy Exceptions. 

5.7. 

Authorization of this Agreement . This Agreement has been duly authorized, 

validly executed and delivered by the Investor, and assuming due authorization, 

execution and delivery of this Agreement by the Company, constitutes a valid and 

binding obligation of the Investor, enforceable against it in accordance with its 

terms, except to the extent that the enforcement thereof may be limited by the 

Bankruptcy Exceptions. 

5.8. 

No Reliance on Advice . The Investor understands that nothing in this Agreement, 

the Company’s public filings with the Securities and Exchange Commission or 

any other materials presented to the Investor in connection with the purchase and 

sale of the Securities constitutes legal, tax or investment advice. The Investor has 

consulted such legal, tax and investment advisors as it, in its sole discretion, has 

deemed necessary or appropriate in connection with its purchase of the Securities 

and has made its own assessment and has satisfied itself concerning the relevant 

tax and other economic considerations relevant to its investment in the Securities. 

5.9. 

As of the date hereof, and at all times from the date hereof to the Closing Date, 

neither the Investor nor any of its Controlled Affiliates, directly or indirectly 

owns, controls or has the power to vote or, during the period between the date 

hereof and the Closing Date, will own, control or have the power to vote, any 

voting securities of the Company or any securities convertible into or exercisable 

or exchangeable for voting securities of the Company (except for securities held 

in accounts of third-party customers as to which Investor would disclaim 

beneficial ownership in any filing made by it under U.S. federal securities laws). 

The term “Controlled Affiliate” means, when used with reference to a specified 

Person, any Person directly or indirectly controlling or controlled by or under 

direct or indirect common control with the Person specified or with the power, 

directly or indirectly, to direct the management or policies of such Person or to 

vote 25 percent or more of any class of voting securities of such Person, as 

interpreted by the Federal Deposit Insurance Corporation for purposes of the 

Change in Bank Control Act, 12 U.S.C. §1817(j), or 12 C.F.R. Part 303, Subpart 

E. 

6. 

Certain Additional Agreements of the Parties . 

6.1. 

Strategic Alliance . The Company and the Investor shall discuss and negotiate in 

good faith in order to enter into definitive documentation relating to their 

establishment of a global strategic alliance having substantially the same scope 

and addressing substantially the same commercial opportunities described in 

Schedule 6.1 (the “Strategic Alliance”), it being agreed that the Strategic Alliance 

shall not become effective until after the Closing. The Company and the Investor 

will use reasonable efforts to execute such definitive documentation on or prior to 

June 30, 2009. 

6.2. 

Regulatory Matters . 

(i) 

The parties shall cooperate with each other and use their respective 

reasonable best efforts to promptly prepare and file all necessary 

documentation, to effect all applications, notices, petitions and filings, to 

obtain as promptly as practicable all permits, consents, approvals and 

authorizations of all third parties (including any unions, works councils or 

other labor organizations) and Governmental Entities that are necessary or 

advisable to consummate the transactions contemplated by this 

Agreement, and to otherwise consummate the transactions contemplated 

by the Transaction Documents as promptly as practicable. Each of the 

Company and the Investor shall have the right to review in advance, and, 

to the extent practicable, each will consult the other on, in each case 

subject to applicable laws relating to the confidentiality of information, the 

information that appears in any filing made with, or written materials 

submitted to, any third party or any Governmental Entity in connection 

with the transactions contemplated by this Agreement. In exercising the 

foregoing right, each of the parties shall act reasonably and as promptly as 

practicable. The parties shall consult with each other with respect to the 

obtaining of all permits, consents, approvals and authorizations of all third 

parties and Governmental Entities necessary or advisable to consummate 

the transactions contemplated by this Agreement and each party will keep 

the other apprised of the status of matters relating to completion of the 

transactions contemplated by this Agreement. 

(ii) 

Each of the parties shall, upon request, furnish to the other all information 

concerning itself, its subsidiaries, directors, officers and stockholders, and 

such other matters as may be reasonably necessary or advisable in 

connection with any statement, filing, notice or application made by or on 

behalf of any of them or any of their respective subsidiaries to any 

Governmental Entity in connection with the transactions contemplated by 

this Agreement. 

(iii) 

Each of the parties shall promptly advise the others upon receiving any 

communication from any Governmental Entity the consent or approval of 

which is required for consummation of the transactions contemplated by 

this Agreement that causes such party to believe that there is a reasonable 

likelihood that any required regulatory approval will not be obtained or 

that the receipt of any such approval may be materially delayed. 

(iv) 

Notwithstanding anything to the contrary contained in this Agreement, the 

parties hereby agree and acknowledge that neither this Section 6.1 nor the 

“reasonable best efforts” standard shall require, or be construed to require, 

Investor or any of its respective subsidiaries or other affiliates, in order to 

obtain any permits, consents, approvals or authorizations, or any 

terminations or waivers of any applicable waiting periods, to propose, 

negotiate or offer to effect, or consent or commit to, any terms, condition 

or restrictions that are reasonably likely to materially and adversely impact 

(i) Investor's or any of its subsidiaries' ability to own or operate any of 

their respective businesses or operations or ability to conduct any such 

businesses or operations substantially as conducted as of the date of this 

Agreement, (ii) the Company's or any of its subsidiaries' ability to own or 

operate any of their respective businesses or operations or ability to 

conduct any such businesses or operations substantially as conducted as of 

the date of this Agreement, or (iii) Investor's ability to acquire, hold and 

dispose of the Securities (or vote the Common Stock) and realize the 

economic incidents of ownership of such Securities (any such effect 

described in clause (i), (ii) or (iii), a “Substantial Detriment”). 

6.3. 

NYSE Listing . The Company shall use its reasonable best efforts to cause the 

shares of Common Stock to be issued at the Closing or upon conversion of the 

Preferred Stock to be approved for listing on the NYSE, subject to official notice 

of issuance, prior to the Closing 

6.4. 

Other Transaction Agreements . Each of the Company and the Investor shall duly 

execute and deliver at the Closing the Investor Agreement and the Registration 

Rights Agreement. 

6.5. 

Preferred Stock Certificate of Designations . Prior to the Closing, the Company 

shall duly file with the Secretary of State of the State of Delaware the Preferred 

Stock CoD. 

7. 

Survival of Representations, Warranties and Agreements . Notwithstanding any 

investigation made by any party to this Agreement, all covenants, agreements, 

representations and warranties made by the Company and the Investor herein shall 

survive the execution of this Agreement, the delivery to the Investor of the Common 

Stock being purchased and the payment therefor. 

8. 

Notices . Except as otherwise provided in this Agreement, all notices, requests, claims, 

demands, waivers and other communications hereunder shall be in writing and shall be 

deemed to have been duly given when delivered by hand or overnight courier service, or 

when received by facsimile transmission if promptly confirmed, as follows: 

(a) 

if to the Company, to: 

Morgan Stanley 

Attention: Chief Financial Officer 

1585 Broadway 

New York, NY 10036 

Fax: +1 212 761-9575 

with a copy to: 

Wachtell, Lipton, Rosen & Katz 

Attention: Edward D. Herlihy 

               Steven A. Rosenblum 

               Mark Gordon 

51 West 52nd Street 

New York, New York 10019 

Fax: +1 212 403-2000 

(b) 

if to the Investor, to: 

Mitsubishi UFJ Financial Group, Inc. 

Attention: Nobuyuki Hirano 

7-1, Marunouchi 2-chome 

Chiyoda-ku, Tokyo 100-8388 Japan 

Fax: +813-3240-2498 

with a copy to: 

Sullivan & Cromwell LLP 

125 Broad Street 

New York, NY 10004 

Attention: Stanley F. Farrar and Donald J. Toumey 

Fax: (212) 558-3588 

or to such other address, facsimile number or telephone as either party may, from 

time to time, designate in a written notice given in a like manner. 

9. 

Changes . Except as contemplated herein, this Agreement may not be modified or 

amended except pursuant to an instrument in writing signed by the Company and the 

Investor. 

10. 

Headings . The headings of the various sections of this Agreement have been inserted for 

convenience or reference only and shall not be deemed to be part of this Agreement. 

11. 

Severability . In case any provision contained in this Agreement should be invalid, illegal 

or unenforceable in any respect, the validity, legality and enforceability of the remaining 

provisions contained herein shall not in any way be affected or impaired thereby. 

12. 

Integration . This Agreement and the other Transaction Documents supersede all prior 

agreements and understandings (whether written or oral) between the Company, on the 

one hand, and the Investor, on the other hand, or either of them, with respect to the 

subject matter hereof. 

13. 

Applicable Law and Submission to Jurisdiction . 

(a) 

This Agreement will be governed by and construed in accordance with the laws of 

the State of Delaware applicable to contracts made and to be performed within the 

State of Delaware. 

(b) 

The Investor irrevocably submits to the nonexclusive jurisdiction of any Delaware 

State or United States Federal court sitting in the County of New Castle, Delaware 

over any suit, action or proceeding arising out of or relating to this Agreement or 

the transactions contemplated thereby. The Investor irrevocably waives, to the 

fullest extent permitted by law, any objection which it may now or hereafter have 

to the laying of venue of any such suit, action or proceeding brought in such a 

court and any claim that any such suit, action or proceeding brought in such a 

court has been brought in an inconvenient forum.        EACH PARTY 

ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH 

MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE 

COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH 

SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY 

WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY 

IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING 

OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS 

CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES 

AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR 

ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY 

OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE 

EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, 

(ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE 

IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS 

WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED 

TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE 

MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13(b). 

14. 

Counterparts . This Agreement may be signed in one or more counterparts, each of which 

shall constitute an original and all of which together shall constitute one and the same 

agreement. 

15. 

Information . The Company agrees to cooperate in good faith with any request by the 

Investor to furnish the Investor with all information concerning itself, its subsidiaries, 

directors, officers and stockholders and such other matters as may be reasonably 

necessary in connection with any statement, filing, notice or application made by or on 

behalf of the Investor or any of its subsidiaries to any Governmental Entity in connection 

with the Stock Purchase. 

16. 

Publicity . On the date hereof, the Company shall issue a press release substantially in the 

form of Schedule 16 hereto. No other written public release or written announcement 

concerning the Stock Purchase contemplated hereby shall be issued by any party without 

the prior written consent of the other party (which consent shall not be unreasonably 

withheld), except as such release or announcement may be required by law or the rules or 

regulations of any securities exchange, in which case the party required to make the 

release or announcement shall, to the extent reasonably practicable, allow the other party 

reasonable time to comment on such release or announcement in advance of such 

issuance. The provisions of this Section shall not restrict the ability of a party to 

summarize or describe the transactions contemplated by this Agreement in any 

prospectus or similar offering document so long as the other party is provided a 

reasonable opportunity to review such disclosure in advance. 

17. 

Termination . This Agreement may be terminated at any time prior to the Closing: 

(a) 

by either the Investor or the Company if the Closing shall not have occurred by 

the 90 ^th calendar day following the date of this Agreement; provided, however, 

that the right to terminate this Agreement under this Section shall not be available 

to any party whose failure to fulfill any obligation under this Agreement shall 

have been the cause of, or shall have resulted in, the failure of the Closing to 

occur on or prior to such date; 

(b) 

by either the Investor or the Company in the event that any Governmental Entity 

shall have issued an order, decree or ruling or taken any other action restraining, 

enjoining or otherwise prohibiting the transactions contemplated by this 

Agreement and such order, decree, ruling or other action shall have become final 

and nonappealable; or 

(c) 

by the mutual written consent of the Investor and the Company. 

In the event of termination of this Agreement as provided in this Section, this Agreement 

shall forthwith become void and there shall be no liability on the part of either party 

hereto except that nothing herein shall relieve either party from liability for any breach of 

any covenant of this Agreement. 

18. 

Process Agent . The Investor irrevocably appoints MUFG North America, 1251 Avenue 

of the Americas, New York, NY 10020-1104, to act as its agent for service of process 

and any other documents in proceedings in the State of New York or any other 

Proceedings in connection with this Agreement. 

19. 

Other . The parties acknowledge that the transactions contemplated hereby may give rise 

to preemptive rights pursuant to the Securities Purchase Agreement, made as of 

December 19, 2007, between the Company and Best Investment Corporation. Nothing in 

this Agreement, the other Transaction Documents or the Preferred Stock CoD shall be 

deemed to prevent the Company from complying with its obligations thereunder. 

AGREED AND ACCEPTED:

MORGAN STANLEY 

MITSUBISHI UFJ FINANCIAL GROUP, INC. 

By:   /s/ John J. Mack                                                

By:   /s/ Nobuo Kuroyanagi                       

Name: John J. Mack

Name: Nobuo Kuroyanagi

Title: Chairman and Chief Executive Officer

Title: President & CEO

1.     

Defined Terms . Capitalized terms used but not defined in this Amendment shall have the respective meanings ascribed to them in the Purchase Agreement.

2.     

Amendments . The Purchase Agreement is hereby amended ab initio, effective as of the date thereof, as follows:

2.1.     

The form of the Preferred Stock CoD attached as Exhibit A to the Purchase Agreement is amended and restated in the form set forth as Exhibit AA to this Amendment.

2.2.     

The form of the Investor Agreement attached as Exhibit B to the Purchase Agreement is amended and restated in the form set forth as Exhibit BB to this Amendment.

2.3.     

Subsection c. of Section 3.3. of the Purchase Agreement is amended and restated as follows: “The General Counsel of the Federal Deposit Insurance Corporation (the “FDIC”) shall have issued a written legal opinion, in form and substance reasonably acceptable to the Company and the Investor, to the effect that the Investor will not be deemed to “control” the Company for purposes of Section 5(e)(5) of the U.S. Federal Deposit Insurance Act, as amended, as result of the transactions contemplated by the Purchase Agreement.”

3.     

No Other Amendments . Except as expressly set forth herein, the Purchase Agreement remains in full force and effect in accordance with its terms and nothing contained herein shall be deemed to be a waiver, amendment, modification or other change of any term, condition or provision of the Purchase Agreement (or a consent to any such waiver, amendment, modification or other change). All references in the Purchase Agreement to

the Purchase Agreement shall be deemed to be references to the Purchase Agreement after giving effect to this Amendment.

4.     

Changes . This Amendment may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Investor.

5.     

Headings . The headings of the various sections of this Amendment have been inserted for convenience or reference only and shall not be deemed to be part of this Amendment.

6.     

Severability . In case any provision contained in this Amendment should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

7.     

Applicable Law and Submission to Jurisdiction . This Amendment will be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and to be performed within the State of Delaware. The provisions of Sections 13(b) and 18 of the Purchase Agreement shall apply to this Amendment as if each such provision were set forth herein in their entirety.

8.     

Counterparts . This Amendment may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement.

AGREED AND ACCEPTED:

MORGAN STANLEY

MITSUBISHI UFJ FINANCIAL GROUP, INC.

By:   /s/ John J. Mack                                   

By:   /s/ Nobuo Kuroyanagi                          

Name: John J. Mack

Name: Nobuo Kuroyanagi

Title: Chairman and Chief Executive Officer

Title: President & CEO

                                       MORGAN STANLEY, a Delaware corporation (the “ Corporation ”), DOES 

HEREBY CERTIFY that, pursuant to resolutions of the Preferred Stock Financing Committee of 

the Board of Directors of the Corporation adopted on September 28, 2008, the creation of Series 

B Non-Cumulative Non-Voting Perpetual Convertible Preferred Stock, par value $0.01 per share, 

liquidation preference $1,000 per share (“ Series B ”) of the Corporation was authorized and the  

designation, preferences, privileges, voting rights, and other special rights and qualifications, 

limitations and restrictions of the Series B, in addition to those set forth in the Certificate of 

Incorporation and Bylaws of the Corporation, are fixed as follows: 

                                       1. 

Designation . The distinctive serial designation of such series of preferred 

stock is “Series B Non-Cumulative Non-Voting Perpetual Convertible Preferred Stock.” Each