TRUST AGREEMENT
TRUST AGREEMENT, between MSDW Structured Asset Corp. (the "Depositor")
and LaSalle Bank National Association (the "Trustee"), made as of the date set
forth in Schedule I attached hereto, which Schedule together with Schedules II
and III attached hereto, are made a part hereof and are hereinafter referred to
collectively as the "Terms Schedule". The terms of the Standard Terms for Trust
Agreements, dated July 7, 1999 (the "Standard Terms") are, except to the extent
otherwise expressly stated, hereby incorporated by reference herein in their
entirety with the same force and effect as though set forth herein. Capitalized
terms used herein and not defined shall have the meanings defined in the
Standard Terms. References to "herein", "hereunder", "this Trust Agreement" and
the like shall include the Terms Schedule attached hereto and the Standard Terms
so incorporated by reference.
WHEREAS, the Depositor and the Trustee desire to establish the Trust
identified in Schedule I attached hereto (the "Trust") for the primary
purposes of (i) holding the Securities, (ii) entering into any Swap Agreement
with the Swap Counterparty and (iii) issuing the Units;
WHEREAS, the Depositor desires that the respective beneficial
interests in the Trust be divided into transferable fractional shares, such
shares to be represented by the Units; and
WHEREAS, the Depositor desires to appoint the Trustee as trustee of
the Trust and the Trustee desires to accept such appointment;
WHEREAS, the Depositor shall transfer, convey and assign to the Trust
without recourse, and the Trust shall acquire, all of the Depositor's right,
title and interest in and under the Securities and other property identified in
Schedule II to the Trust Agreement (the "Trust Property"); and
WHEREAS, the Trust agrees to acquire the Trust Property specified
herein in consideration for Units having an initial Unit Principal Balance
identified in Schedule I attached hereto, subject to the terms and conditions
specified in the Trust Agreement;
NOW THEREFORE, the Depositor hereby appoints the Trustee as trustee
hereunder and hereby requests the Trustee to receive the Securities from the
Depositor and to issue in accordance with the instructions of the Depositor
Units having an initial Unit Principal Balance identified in Schedule I attached
hereto, and the Trustee accepts such appointment and, for itself and its
successors and assigns, hereby declares that it shall hold all the estate,
right, title and interest in any property contributed to the trust account
established hereunder (except property to be applied to the payment or
reimbursement of or by the Trustee for any fees or expenses which under the
terms hereof is to be so applied) in trust for the benefit of all present and
future Holders of the fractional shares of beneficial interest issued hereunder,
namely, the Unitholders, and subject to the terms and provisions hereof and of
the Standard Terms.
IN WITNESS WHEREOF, each of the undersigned has executed this
instrument as of the date set forth in the Terms Schedule attached hereto.
LASALLE BANK NATIONAL ASSOCIATION
as Trustee on behalf of the Trust identified in
Schedule I hereto, and not in its individual capacity
By: /s/ Brian D. Ames
-------------------------------
Name: Brian D. Ames
Title: Vice President
MSDW STRUCTURED ASSET CORP.
By: /s/ Michael Harpe
-------------------------------
Name: Michael Harpe
Title: President
Attachments: Terms Schedule (consisting of Schedules I, II and III)
Schedule I
(Terms of Trust and Units)
Trust: SATURNS Trust No. 2001-2
Date of Trust Agreement: May 11, 2001
Trustee: LaSalle Bank National Association.
References to Chase Bank of Texas, National
Association in the Standard Terms shall be
inapplicable.
Initial Unit Principal Balance: $26,112,000
Issue Price: 100%
Number of Units: 1,044,480 (Unit Principal Balance of $25
each)
Minimum Denomination: $25 and $25 increments in excess thereof.
The minimum denomination specified in
Section 5.01(a) of the Standard Terms shall
not apply. Each $25 of Unit Principal
Balance is a Unit.
Cut-off Date: May 11, 2001
Closing Date: May 11, 2001
Specified Currency: United States dollars
Business Day: New York, New York and Chicago, Illinois
Interest Rate: 8.625%
Interest Reset Period: Not Applicable
Rating: Baa2 by Moody's
(On watch for possible downgrade)
BBB by S&P (with a negative outlook)
Rating Agencies: Moody's and S&P
Scheduled Final Distribution Date: October 1, 2046. The Units will have
the same final maturity as the Securities.
Prepayment/Redemption: The Trust Property is subject to call in
accordance with Schedule III.
If the rights under the Swap Agreement are
partially exercised, the Trustee will
randomly select Units to be redeemed in full
from the proceeds of such partial exercise.
Additional Distribution: On the Final Scheduled Distribution Date
each Unit will receive a pro rata share of
any amounts remaining after payment of
principal of and interest on the Units and
any other amounts due and payable by the
Trust.
Corporate Trust Office: The definition of "Corporate Trust Office"
in the Standard Terms shall not apply.
The Corporate Trust Office shall be the
Trustee's Asset-Backed Securities Trust
Services Group having an office at 135 S.
LaSalle Street, Suite 1625, Chicago,
Illinois 60603 or such other addresses as
the Trustee may designate from time to time
by notice to the Unitholders, the Depositor,
the Swap Counterparty and the Guarantor.
Swap Agreement: The ISDA Agreement referred to in Schedule
III. In addition, in connection with an
additional issuance of Units, any additional
Swap Agreement entered into in connection
therewith.
Swap Counterparty: Party A to the Swap Agreement referred to in
Schedule III or any assignee thereof. In
addition, in connection with an additional
issuance of Units, Party A to any additional
Swap Agreement or any assignee thereof.
In the event that there is more than one
Swap Counterparty at any time when a partial
termination or a deemed exercise is to occur
under only part of the options outstanding
under all Swap Agreements, the Trustee shall
randomly select which options under the Swap
Agreements shall be selected for such
partial termination or deemed exercise.
Guarantee: Morgan Stanley Dean Witter & Co. (the
"Guarantor") shall guarantee the obligations
of Morgan Stanley & Co. International
Limited ("MSIL") for so long as MSIL is
Party A to any Swap Agreement with the
Trust.
Swap Notional Amount: The Notional Amount specified in Schedule
III.
Swap Payment Date: Any date upon which the rights under the
Swap Agreement may be exercised.
Swap Rate: Not Applicable
Additional Swap Agreements: In connection with an additional issuance of
Units, the Depositor may arrange for the
Trust to enter into an additional Swap
Agreement with identical terms as the Swap
Agreement entered into as of the Closing
Date with an additional Swap Counterparty,
except that such Swap Agreement may have a
different Swap Counterparty and premium
amount than the Swap Agreement entered into
on the Closing Date. The Rating Agency
Condition must be satisfied in connection
with respect to the Swap Counterparty.
Distribution Date: Each April 1 and October 1, commencing
October 1, 2001. However, if payment of
interest on the Securities held by the Trust
is not received by the Trustee by 12 noon
(New York City time) on a Distribution Date,
interest will be distributed on the next
Business Day that the Trust is in receipt of
such interest payment prior to 12 noon, with
no adjustment to the amount distributed.
Record Date: With respect to Distribution Dates, each
March 15 and September 15, regardless of
whether such day is a Business Day. With
respect to any other day on which funds are
distributed, 15 calendar days before such
distribution.
Form: Global
Depositary: DTC
Trustee Fees and Expenses: As compensation for and in payment of trust
expenses related to its services hereunder
other than Extraordinary Trust Expenses, the
Trustee will receive Trustee Fees on each
Distribution Date in the amount equal to
$3,750. The Trustee Fee shall cease to
accrue after termination of the Trust. The
"Trigger Amount" with respect to
Extraordinary Trust Expenses for the Trust
is $25,000 and the Maximum Reimbursable
Amount is $100,000. The Trustee Fee will be
paid by the Expense Administrator. Expenses
will be reimbursed by the Expense
Administrator in accordance with the Expense
Administration Agreement.
Expense Administrator: The Depositor will act as Expense
Administrator on behalf of the Trust
pursuant to an Expense Administration
Agreement, dated as of May 11, 2001 (the
"Expense Administration Agreement"), between
the Depositor as Expense Administrator (the
"Expense Administrator") and the Trust.
The Expense Administrator will receive a fee
equal to 0.025% per annum of the principal
amount of the Securities held by the Trust
as its fee, payable on the basis of a 360
day year consisting of twelve 30 day months.
The Expense Administrator's fee is payable
only from available interest receipts
received with respect to the Securities
after application of such receipts to
payment of accrued interest on the Units and
any Swap Termination Payments currently
owing.
In addition the Expense Administrator shall
own that portion of the Securities which
represent the interest of a fractional
Unitholder that would remain after a partial
exercise of the Swap Agreement had the Swap
Counterparty not been obligated to pay the
Fractional Unit Make Whole Amount (pursuant
to and as defined in the Swap Agreement).
The Expense Administrator shall receive all
interest and principal with respect to such
portion of the Securities.
The Expense Administrator will be
responsible for paying the Trustee Fee and
reimbursing certain other expenses of the
Trust in accordance with the Expense
Administration Agreement.
Listing: The Depositor has applied to list the Units
on the New York Stock Exchange
ERISA Restrictions: None of the restrictions in the Standard
Terms relating to the Employee Retirement
Income Security Act of 1974, as amended, and
related matters shall apply.
Deemed Representations: Not Applicable
QIB Restriction Not Applicable
Trust Wind-Up Event: The Trust Wind-Up Events specified in
Sections 9.01(a), 9.01(c), 9.01(d), 9.01(f)
and 9.01(h) shall not apply. The Trust Wind
Events specified in Sections 9.01(b)
(Security Default), 9.01(c) (Early
Termination Date designated due to
"illegality" or "tax event" under the Swap
Agreement), 9.01(g) (Disqualified
Securities), 9.01(i) (Excess Expense Event)
shall apply. Pursuant to Section 9.01(j),
the following events also shall constitute
Trust Wind-Up Events: (i) completion of a
self-tender by the Security Issuer of all
Securities held by the Trust and (ii)
exercise of the right to purchase Securities
under the Swap Agreement as to all
Securities held by the Trust.
Termination: If a Trust Wind-Up Event occurs (other than
due to exercise of the right to purchase
Securities under the Swap Agreement as to
all Securities held by the Trust), any
Securities held by the Trust will be
liquidated (in the case of a Trust Wind-Up
Event resulting from a self-tender offer, by
tender to the Security Issuer) and the
proceeds will be applied first to redeem the
Units at 100% of their principal balance
plus accrued interest and then to apply any
remaining amounts to the payment of any
amounts owed to the Swap Counterparty as a
Swap Termination Payment under the Swap
Agreement.
In the event the Security Issuer makes a
self-tender offer for the Securities, 100%
of the Unitholders may direct the Trustee to
tender all of the Securities held by the
Trust. The Trustee will only accept an
instruction to tender the Securities if all
of the Securities held by the Trust are to
be tendered. The Units will receive the
proceeds after payment of a Swap Termination
Payment determined on the basis of "Market
Quotation" under the Swap Agreement (with
the Trust as sole Affected Party) as advised
by the Swap Counterparty.
Exchangeable Series Terms: Not Applicable.
Terms of Retained Interest: The Depositor retains the right to receive
any and all interest that accrues on the
Securities prior to the Closing Date. The
Depositor will receive such accrued interest
on the first Distribution Date for the Units
and such amount shall be paid from the
interest payment made with respect to the
Securities on October 1, 2001.
The amount of the Retained Interest is
$250,239.
If a Security Default occurs on or prior to
October 1, 2001 and the Depositor does not
receive such Retained Interest amount in
connection with such Distribution Date, the
Depositor will have a claim for such
Retained Interest, and will share pro rata
with holders of the Units to the extent of
such claim in the proceeds from the recovery
on the Securities.
Call Option Terms: Not applicable.
Security Default: The definition of Security Default in the
Standard Terms shall not apply. A "Security
Default" shall mean one of the following
events: (i) the acceleration of the
outstanding Securities under the terms of
the Securities and/or the applicable
Security Agreement, (ii) the failure of the
Security Issuer to pay an installment of
principal of, or any amount of interest due
on, the Securities after the due date
thereof and after the expiration of any
applicable grace period; or (iii) the
occurrence of certain events of default
under such Securities and/or Security
Agreement relating to the insolvency or
bankruptcy of the Security Issuer.
Sale of Securities If the Trust must sell the Securities it
holds, the Trust will sell the Securities
through the Selling Agent in accordance with
Section 9.03(b) and the following terms. The
Selling Agent will solicit bids for all of
the Securities held by the Trust from at
least three registered broker-dealers of
national reputation, one of which shall be
the Selling Agent. The Selling Agent will,
on behalf of the Trust, sell the Securities
at the highest bid price received. If the
Selling Agent did not put forward such
highest bid, it may purchase the Securities
at such highest bid rather than selling the
Securities to the highest bidder.
Voting and other Actions: In the event that the Security Issuer
solicits any vote, consent, waiver,
modification or other action under the
Security Agreement or the terms of the
Securities, the Trustee will act with
respect to all of the Securities in
conformity with the direction of a majority
(by outstanding Unit Principal Balance) of
the Units.
Additional Issuance of Units: Upon no less than 5 days' notice to the
Trustee, the Depositor may deposit
additional Securities at any time in
exchange for additional Units in a minimum
aggregate amount of $250,000 and, if in
excess of such amount, in a $25 integral
multiple in excess thereof. The principal
amount of Securities deposited must be in
the same ratio to the Unit Principal Balance
of the Units received as the ratio of the
aggregate Unit Principal Balance on the
Closing Date to the aggregate principal
balance of the Securities on the Closing
Date. The Depositor must either arrange for
the Swap Counterparty and the Trust to
increase proportionally the notional amount
under the Swap Agreement or arrange for an
additional Swap Agreement to be entered into
between the Trust and an additional Swap
Counterparty. Any Securities deposited will
be deposited with accrued interest and the
corresponding Units issued by the Trust will
be issued with accrued interest. The Rating
Agency Condition must be satisfied in
connection with such additional issuance,
and satisfaction of the Rating Agency
Condition for this purpose shall require an
opinion of counsel that following the
issuance of the additional Units, the Trust
will still constitute a grantor trust for US
federal income tax purposes.
Selling Agent: Morgan Stanley & Co. Incorporated.
Notwithstanding any provision of the
Standard Terms to the contrary, any sale of
the Securities shall be conducted by and
through the Selling Agent and not the
Trustee.
Rating Agency Condition: The definition of Rating Agencies Condition
in the Standard Terms shall not apply.
"Rating Agency Condition": With respect to any specified action or
determination, means receipt of (i) oral or
written confirmation by Moody's (for so long
as the Units are outstanding and rated by
Moody's) and (ii) written confirmation by
S&P (for so long as the Units are
outstanding and rated by S&P), that such
specified action or determination will not
result in the reduction or withdrawal of
their then-current ratings on the Units;
provided, however, that if satisfaction of
the Rating Agency Condition is required
hereunder only Moody's or S&P, only clause
(i) or clause (ii) shall be applicable. Such
satisfaction may relate either to a
specified transaction or may be a
confirmation with respect to any future
transactions which comply with generally
applicable conditions published by the
applicable rating agency.
Eligible Account: The definition of "Eligible Account" in the
Standard Terms shall not apply.
"Eligible Account": A non-interest bearing account, held in the
United States, in the name of the Trustee
for the benefit of the Trust that is either
(i) a segregated account or segregated
accounts maintained with a Federal or State
chartered depository institution or trust
company the short-term and long-term
unsecured debt obligations of which (or, in
the case of a depository institution or
trust company that is the principal
subsidiary of a holding company, the
short-term and long-term unsecured debt
obligations of such holding company) are
rated P-1 and Aa2 by Moody's, A-1+ and AA by
S&P, and, if rated by Fitch, F1 and AA by
Fitch at the time any amounts are held on
deposit therein including when such amounts
are initially deposited and all times
subsequent or (ii) a segregated trust
account or segregated accounts maintained as
a segregated account or as segregated
accounts and held by the Trustee in its
Corporate Trust Office in trust for the
benefit of the Unitholders.
Permitted Investments: The following shall be a Permitted
Investment in addition to the investments
specified in the Standard
Terms: Units of the Dreyfus Cash Management Fund
Investor Shares or any other money market
funds which are rated in the highest
applicable rating category by each Rating
Agency (or such lower rating if the Rating
Agency Condition is satisfied).
Non-U.S. Persons: Notwithstanding anything to the contrary
herein or in the Standard Terms, any
beneficial owner of any Units which is a
non-U.S. person shall not be entitled to
exercise any rights of the Unitholders to
instruct or direct Trustee.
Other Terms: The Trust shall not merge or consolidate
with any other trust, entity or person and
the Trust shall not acquire the assets of,
or an interest in, any other trust, entity
or person except as specifically
contemplated herein.
The Trustee shall provide to the Unitholders
copies of any notices it receives with
respect to a redemption of the Securities or
a call of the Securities under the Swap
Agreement and any other notices with respect
to the Securities.
The reference to "B2" in the definition of
Certificate in the Standard Terms shall be
replaced with "Exhibit B2".
The reference to "Section 10.02(ix)" in the
definition of Available Funds in the
Standard Terms shall be replaced with
"Section 10.02(a)(ix)".
The reference to "Section 3.04" in the
definition of Unit Account in the Standard
Terms shall be replaced with "Section 3.05".
The transfer by the Depositor to the Trustee
specified in Section 2.01(a) of the Standard
Terms shall be in trust.
Section 2.06 of the Standard Terms shall be
incorporated herein by inserting "cash in an
amount equal to the premium under the Swap
Agreement and" after the phrase
"constituting the Trust Property," therein.
The reference to "calendar day" in the last
sentence of Section 3.06 of the Standard
Terms shall be replaced with "Business Day".
Section 4.02(d) of the Standard Terms shall
be incorporated herein by striking "and the
Trustee on behalf of the Unitholders" from
the first sentence of the second paragraph
thereof.
Section 5.03(c) of the Standard Terms shall
be incorporated herein by striking "(if so
required by the Trustee or the Unit
Registrar)" from the first sentence thereof.
Section 7.01(c)(i) of the Standard Terms
shall be incorporated herein by replacing
the first word thereof ("after") with
"alter".
Section 7.02 of the Standard Terms shall be
incorporated herein by striking "(i) the
Trustee determines that such amendment will
not adversely affect the interests of the
Unitholders and (ii)" from the first
sentence thereof, inserting "on which it may
conclusively rely" after "Opinion of
Counsel" in such sentence, and striking
"clause (ii)" from the second sentence of
such Section.
Section 9.03(a) of the Standard Terms shall
be incorporated herein by striking "or oral"
after the "at any time by" in the third
sentence thereof.
Clause (ix) of Section 10.02(a) shall not
apply.
Section 10.02(a)(x) of the Standard Terms
shall be replaced with the following:
(x) the Trustee shall have the power to sell
the Securities and other Trust Property, in
accordance with Article IX and XI, through
the Selling Agent or, if the Selling Agent
shall have resigned or declined to sell some
or all of the Securities, any broker
selected by the Trustee (at the direction of
the Depositor) with reasonable care, in an
amount sufficient to pay any amount due to
the Swap Counterparty under the Swap
Agreement (including Termination Payments)
or reimbursable to itself in respect of
unpaid Extraordinary Trust Expenses and to
use the proceeds thereof to make such
payments after the distribution of funds or
Trust Property to Unitholders. Any such
broker shall be instructed by the Trustee to
sell such Trust Property in a reasonable
manner designed to maximize the sale
proceeds.
Section 10.05(b) of the Standard Terms shall
be incorporated herein by replacing ",
pursuant to the first sentence of this
paragraph" with "the Trustee shall be
indemnified by the Trust, however," in the
last sentence thereof.
Section 10.06(a) of the Standard Terms shall
be incorporated herein by inserting "or
association" after the word "corporation" in
the second sentence thereof.
Section 10.07(a) of the Standard Terms shall
be incorporated herein by replacing "notice
or resignation" with "notice of resignation"
in the second sentence thereof and striking
the last two sentences thereof.
Section 10.10(b) of the Standard Terms shall
be incorporated herein by inserting "The
Trustee shall not be liable for the acts or
omissions of any co-trustee." after the last
sentence thereof.
Section 10.14 of the Standard Terms shall be
replaced with the following:
SECTION 10.14. Non-Petition . Prior to the
date that is one year and one day after all
distributions in respect of the Units have
been made, none of the Trustee, the Trust or
the Depositor shall take any action or
institute any proceeding against any of the
others under the United States Bankruptcy
Code or any other liquidation, insolvency,
bankruptcy, moratorium, reorganization or
similar law ("Insolvency Law") applicable to
any of them, now or hereafter in effect, or
which would be reasonably likely to cause
any of the others to be subject to, or seek
the protection of, any such Insolvency Law.
Section 12.01(a) of the Standard Terms shall
be incorporated herein by replacing "(v)"
with "(vi)" in the last proviso thereof.
Section 12.01(c) of the Standard Terms shall
be incorporated herein by inserting
",provided at the expense of the party
requesting such amendment," after "Opinion
of Counsel".
Section 12.05 of the Standard Terms shall be
incorporated herein by striking "the Trustee
and" in the last sentence of the second
paragraph thereof.
The reference to "its President, its
Treasurer, or one of its Vice Presidents,
Assistant Vice Presidents or Trust Officers"
in the first sentence of Section 5.02(a) of
the Standard Terms shall be replaced with "a
Responsible Officer".
The reference to "the proper officers" in
the second sentence of Section 5.02(a) of
the Standard Terms shall be replaced with "a
Responsible Officer".
The reference to "one of its authorized
signatories" in the first sentence of
Section 5.02(d) of the Standard Terms shall
be replaced with "a Responsible Officer".
The reference to the "Trust" in the first
sentence of Section 5.08(b) of the Standard
Terms shall be replaced with the "Trustee".
References to D&P in the Standard Terms
shall be incorporated as references to Fitch
Inc. ("Fitch").
Schedule II
(Terms of Trust Property)
Securities: Citizens Communications Company 7.05%
Debentures due 2046
Security Issuer: Citizens Communications Company (formerly
Citizens Utilities Company)
Principal Amount: $32,110,000
Security Rate: 7.05%
Credit Ratings: Baa2 by Moody's (on watch for a possible
downgrade) BBB by S&P (with a negative
outlook)
Listing: Not Applicable
Security Agreement: An indenture dated as of August 15, 1991,
between the Security Issuer and The Chase
Manhattan Bank, as trustee, as supplemented
as of December 1, 1996 and as supplemented
from time to time by supplemental
indentures.
Form: Global
Currency of Denomination: United States dollars
Acquisition Price by Trust: 81.320%
Security Payment Date: Each April 1 and October 1
Original Issue Date: The Securities were issued on or about
December 3, 1996.
Maturity Date: October 1, 2046.
Sinking Fund Terms: Not Applicable
Redemption Terms: Not Applicable
CUSIP No./ISIN No.: 177342 AP 7
Security Trustee: The Chase Manhattan Bank
Available Information
Regarding the Security Issuer
(if other than U.S.
Treasury obligations): The Security Issuer is subject to the
informational requirements of the Securities
Exchange Act of 1934, as amended, and in
accordance therewith files reports and other
information with the Securities and Exchange
Commission (the "Commission"). Such reports
and other information can be inspected and
copied at the public reference facilities
maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at
the following Regional Offices of the
Commission: 7 World Trade Center, 13th
Floor, New York, New York 10048 and
Northwest Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of
such materials can be obtained from the
Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates.
Schedule III
- -------------------------------------------------------------------------------
Date: May 11, 2001
To: SATURNS Trust No. 2001-2 From: Morgan Stanley & Co.
International Limited
Attn: Asset-Backed Securities Group Contact: Madhu Philips
SATURNS Trust No. 2001-2
Fax: 312-904-2084 Fax: 212-761-0406
Tel: 312-904-7807 Tel: 212-761-2583
- -------------------------------------------------------------------------------
Re: Bond Option Transaction. MS Reference Number S6822
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between you and Morgan Stanley & Co.
International Limited ("MSIL"), with Morgan Stanley & Co. Incorporated
("MS&Co."), as agent, on the Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" as referred to in the
Agreement below.
The definitions and provisions contained in (i) the 1991 ISDA
Definitions and the 1997 ISDA Government Bond Option Definitions (the "Bond
Option Definitions") (each as published by the International Swaps and
Derivatives Association, Inc. ("ISDA")) and (ii) to the extent of terms not
defined herein or in the Bond Option Definitions the 1996 ISDA Equity
Derivatives Definitions (as published by ISDA) (the "Equity Definitions"), are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and this Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms a part of, and is subject to,
the ISDA Master Agreement dated as of May 11, 2001, as amended and supplemented
from time to time (the "Agreement"), between you and us. All provisions
contained in the Agreement govern this Confirmation except as expressly modified
below.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
I. General Terms
- ----------------
Trade Date: May 4, 2001
Commencement Date: May 11, 2001
Option Style: American
Option Type: Call
Buyer: MSIL ("Party A")
Seller: SATURNS Trust No. 2001-2 ("Party B")
Bonds: The obligation identified as follows:
Bond Issuer: Citizens Communications
Company
Issue: 7.05% Debentures
due 2046
CUSIP: 177342 AP 7
Coupon: 7.05%
Maturity Date: October 1, 2046
Face Amount
Purchased: USD 32,110,000
Premium: USD 80,275
Number of Options: 32,110
Option Entitlement: USD 1,000 of face amount of the Bonds
per Option.
Strike Price: 81.320% of the face amount of the Bonds.
Calculation Agent: Party A
II. Exercise Terms
Automatic Exercise: Inapplicable
Exercise Period: Any Business Day from, and including, 9:00
a.m. (New York time) on May 11, 2006 to, and
including, the Expiration Time on the
Expiration Date; provided, however, the
Exercise Period shall also include any
Business Day prior to May 11, 2006 if a
Security Default has occurred and is
continuing.
Exercise Date: For each Option exercised, the day during
the Exercise Period on which that Option is
exercised.
Multiple Exercise: Applicable
Minimum Number of Options: 1
Maximum Number of Options: 32,110
Integral Multiple: 1
Written Confirmation of Exercise: Applicable. Buyer shall give irrevocable
exercise notice which may be given orally
(including by telephone) during the Exercise
Period but no later than the Notification
Date. Buyer will execute and deliver a
written exercise notice confirming the
substance of such oral notice, however,
failure to provide such written notice will
not affect the validity of the oral notice.
Notification Date: Any date at least 35 calendar days but
not more than 60 calendar days prior to the
Exercise Date, provided that any date when a
Security Default has occurred and is
continuing is also a Notification Date.
Limited Right to Confirm Exercise: Inapplicable
Expiration Date: October 1, 2043
Expiration Time: 4:00 p.m. New York time
Business Days: New York and Chicago
III. Settlements:
Settlement: Physical Settlement. Party A will notify
Party B separately regarding the clearance
system details.
Bond Payment: An amount equal to the sum of:
(i) The product of the Strike Price and the
Exercised Call Notional Amount,
(ii) The accrued interest, if applicable,
and
(iii) Any Fractional Unit Make Whole Amount.
In addition, in connection with any partial
exercise, Party A shall pay to the Expense
Administrator an amount equal to the present
value of the Trustee Fee that will accrue
from the date of such exercise until the
Scheduled Final Distribution Date (as
defined in the Trust Agreement), assuming
for this purpose that the Trust (as defined
in the Trust Agreement) is not terminated
prior to the Scheduled Final Distribution
Date, multiplied by the Exercised Call
Notional Amount and divided by $32,110,000.
Exercised Call Notional Amount: The product of the Option Entitlement and
the number of Options exercised on the
relevant Exercise Date.
Settlement Date: Exercise Date
Deposit of Bond Payment: Party A must deposit the Bond Payment with
the Trustee on the Business Day prior to the
Exercise Date. The Bonds are to be delivered
"free" to Party A.
3. Additional Definitions:
"Expense Administration Agreement" means the expense administration agreement
dated as of May 11, 2001 between Party B and the Expense Administrator.
"Expense Administrator" means MSDW Structured Asset Corp. acting pursuant to the
Expense Administration Agreement.
"Fractional Unit Make Whole Amount" means the amount specified in paragraph 9.
"Security Default" has the meaning set forth in the Trust Agreement.
"Security Agreement" means the indenture dated as of August 15, 1991, between
the Bond Issuer and The Chase Manhattan Bank, as trustee, as supplemented as of
December 1, 1996 and as supplemented from time to time by supplemental
indentures, all as relating to the Bonds.
"Trust Agreement" means the trust agreement dated as of May 11, 2001, between
the MSDW Structured Asset Corp. and LaSalle Bank National Association.
4. Representations:
Morgan Stanley & Co. Incorporated is acting as agent for both parties but does
not guarantee the performance of Party A.
5. Additional Termination Event:
As set forth in the Agreement, a Trust Wind-Up Event will result in an
Additional Termination Event under the Agreement with respect to which Party B
shall be the Affected Party and this Transaction shall be an Affected
Transaction.
6. Swap Termination Payments. In the event an Early Termination Date is
designated with respect to which this Transaction is an Affected Transaction
(other than as a result of a self-tender), there shall be payable to Party A as
a termination payment in lieu of the termination payment determined in
accordance with Section 6(e) of the Agreement an amount equal to the excess (if
any) of the sale proceeds in excess of the principal of and interest on the
Units. If an early termination occurs due to a tender of the Bonds to the Bond
Issuer, the Swap Termination Payment shall be determined under Section 6(e)
determined on the basis of "Market Quotation" under the Swap Agreement (with
Party B as sole Affected Party). If an early termination occurs due to a tender
of the Bonds to the Bond Issuer, the Swap Termination Payment shall be paid
prior to any payment on the Units.
7. Assignment. The rights under this Confirmation and the Agreement may
be assigned at any time and from time to time in whole or in part; provided that
any such assignment shall be an assignment of whole Options and provided further
that Rating Agency Condition is satisfied (as provided in the Trust Agreement).
8. Account Details:
Payments to Party A: Citibank, New York
ABA No. 021 000 089
For: Morgan Stanley & Co.
International Limited
Account No. 4072 4601
Operations Contact: Barbara Kent
Tel: 212-761-4662
Fax: 212-761-0581
Payments to Party B: LaSalle Bank, Chicago, Illinois
ABA No. 071 000 505
Reference: SATURNS 2001-2
Unit Account / AC-2090067/
Account No.: 67-8779-208
Operations Contact: Brian Ames
Tel: 312-904-7807
Fax: 312-904-2084
9. Fractional Unit Make-Whole Amount: In the event any exercise
hereunder would result in a fractional Unit (as defined in the Trust Agreement)
remaining after such exercise, Party A shall, in addition to amounts payable
hereunder, pay to Party B the remaining fractional Unit Principal Balance (as
defined in the Trust Agreement) together with accrued interest on such Unit and,
if applicable, any Additional Distribution (as defined in the Trust Agreement).
Party A shall be entitled to reimbursement from the Expense Administrator to the
extent provided in the Expense Administration Agreement.
10. Representations: Morgan Stanley & Co. Incorporated is acting as
agent for both parties but does not guarantee the performance of Party A. Party
B represents and warrants to Party A, which representation and warranty will be
deemed to be repeated by Party B on each date on which a Transaction is entered
into, that it owns or controls (or, in the case of an investment advisor
(whether or not registered under the United States Investment Advisors Act of
1940), has under management) in excess of USD 32 million in Aggregate Financial
Assets (as defined below).
For purposes hereof, Aggregate Financial Assets of an entity means the total, on
a gross basis, without deduction for liabilities of the entity, of all cash,
money-market instruments, securities of unaffiliated issuers, futures and
options.
Please confirm that the foregoing correctly sets forth the terms of our
agreement MS Reference Number S6822 by executing this Confirmation and returning
it to us.
Best Regards,
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
BY: /s/ Chris Boas
---------------------------
Name: Chris Boas
Title: Attorney-In-Fact
Acknowledged and agreed as of the date first written above:
SATURNS TRUST NO. 2001-2
BY: LaSalle Bank National Association,
solely as Trustee and not in its individual capacity.
BY: /s/ Brian D. Ames
---------------------------
Name: Brian D. Ames
Title: Vice President
MORGAN STANLEY & CO. INCORPORATED hereby agrees to and
acknowledges its role as agent for both parties in accordance with
the Schedule to the Agreement.
BY: /s/ Michael Harpe
---------------------------
Name: Michael Harpe
Title: Managing Director