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/ Susan Portelli ---------------------------- Name: Susan Portelli Title: Attorney in fact Attachments: Terms Schedule (consisting of Schedules I, II and III) Schedule I (Terms of Trust and Units) Trust: SATURNS Trust No. 2001-5 Date of Trust Agreement: July 10, 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: $26,022,625 Issue Price: 100% Number of Units: 1,040,905 (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: July 10, 2001 Closing Date: July 10, 2001 Specified Currency: United States dollars Business Day: New York, New York and Chicago, Illinois Interest Rate: 7.875% Interest Reset Period: Not Applicable Rating: A3 by Moody's BBB+ by S&P Rating Agencies: Moody's and S&P Scheduled Final Distribution Date: May 15, 2031 Prepayment/Redemption: The Trust Property is subject to redemption at any time and is subject to call in accordance with Schedule III. If there is a partial redemption of the Securities or a related partial exercise of the Call Option Swap Agreement, the Trustee will randomly select Units to be redeemed in full from the proceeds of such partial exercise of the Call Option Swap Agreement or partial redemption of the Securities. The proceeds of any such call or redemption shall be distributed upon the Distribution Date corresponding to such call or redemption. If any exercise of less than all Call Option Swap Agreements occurs while multiple Call Option Swap Agreements are outstanding, the Trustee will randomly select Units to be redeemed from the proceeds of such exercise. If any partial redemption of the Securities held by the Trust occurs while multiple Interest Rate Swap Agreements are outstanding, the Trustee will randomly assign the portion of such partial redemption that shall be deemed to occur under each of such Interest Rate Swap Agreements. Additional Distribution: If any of the Securities are redeemed by the Security Issuer prior to July 10, 2006, each of the Units which are redeemed in connection with such redemption of Securities will receive a pro rata distribution from the proceeds of the redemption of the Securities remaining after payment of principal and interest on such Units up to a maximum of $2.50 per Unit. 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 Agreements: The ISDA Agreements referred to in Schedule III. In addition, in connection with an additional issuance of Units, any additional Swap Agreements entered into in connection therewith. The Swap Agreements shall consist of (i) agreement(s) evidencing the right to purchase the Securities (the "Call Option Swap Agreements") and (ii) agreement(s) evidencing the obligation of the counterparty to pay a sum certain on the Final Scheduled Distribution Date or as otherwise specified therein (the "Interest Rate Swap Agreement"). Swap Counterparties: Party A to the Interest Rate Swap Agreement is the "Interest Rate Swap Counterparty". Party A to the Call Option Swap Agreement is the "Call Option Swap Counterparty". In connection with an additional issuance of Units, Party A to each respective additional Swap Agreement or any assignee thereof. In the event that there is more than one Call Option Swap Counterparty or Interest Rate Swap Counterparty at any time when any adjustment to the notional balance or other rights and obligations thereof must be made due to a partial redemption of the Securities, the Trustee shall randomly allocate such adjustment among the applicable Swap Counterparties. Guaranty: Morgan Stanley Dean Witter & Co. (the "Guarantor") shall guarantee the obligations of Morgan Stanley Capital Services Inc. ("MSCS") for so long as MSCS is Party A to any Interest Rate Swap Agreement with the Trust. 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 Call Option Swap Agreement with the Trust. Swap Notional Amount: With respect to the Call Option Swap Agreement, the Notional Amount specified in such Swap Agreement. With respect to the Interest Rate Swap Agreement, the Notional Amount specified in such Swap Agreement. Swap Payment Date: With respect to the Interest Rate Swap Agreement, the Final Scheduled Maturity Date or such other date as specified therein. With respect to the Call Option Swap Agreement, any date upon which the rights under the Call Option 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 additional Call Option Swap Agreements and additional Interest Rate Swap Agreements with identical terms as the respective Swap Agreement entered into as of the Closing Date with additional Swap Counterparties, except that each such additional Swap Agreement may have a different Swap Counterparty and premium amount, in the case of any Call Option Swap Agreement, or initial payment amount in the case of any Interest Rate Swap Agreement. The Rating Agency Condition must be satisfied with respect to each such Swap Counterparty. Distribution Date: Each May 15 and November 15, commencing November 15, 2001. A Distribution Date shall also occur upon any date on which a redemption by the Security Issuer occurs or as of which an exercise of the rights under the Call Option Swap Agreement occurs as to less than all of the Securities held by the Trust. If any payment with respect to the Securities held by the Trust is not received by the Trustee by 12 noon (New York City time) on a Distribution Date, the corresponding distribution on the Units will not occur until the next Business Day that the Trust is in receipt of proceeds of such payment prior to 12 noon, with no adjustment to the amount distributed. Record Date: May 1 with respect to Distribution Dates scheduled to occur each May 15 and November 1 with respect to Distribution Dates scheduled to occur each November 15, regardless of whether such day is a Business Day and notwithstanding any adjustment to the related Distribution Date due to such Distribution Date falling on a day other than a Business Day. With respect to any Distribution Date that does not occur upon the Business Day corresponding to the applicable May 15 or November 15, the fourteenth day prior to such date, regardless of whether such day is a Business Day. 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 July 10, 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 redemption had the Expense Administrator not been obligated to pay an amount equal to the fractional Unit remaining together with any fraction accrued interest and fractional Additional Distribution. 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(e) (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) redemption by the Security Issuer of all Securities held by the Trust and (ii) exercise of the right to purchase Securities under the Call Option Swap Agreement as to all Securities held by the Trust. Termination: If a Trust Wind-Up Event occurs other than due to a redemption of all of the Securities held by the Trust by the Security Issuer or exercise of the right to purchase Securities under the Call Option Swap Agreement as to all Securities held by the Trust, any Securities held by the Trust will be liquidated 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 Call Option Swap Counterparty as a Swap Termination Payment under the Call Option Swap Agreement. Self-Tenders: The Trustee shall not accept an instruction to tender the Securities in connection with any tender offer for the Securities. 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 November 15, 2001. The amount of the Retained Interest is $313,085. If a Security Default occurs on or prior to November 15, 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 and failure to pay the accelerated amount on the acceleration date, (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 (other than a self-tender), 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. The Rating Agency Condition must be satisfied in connection with any such additional issuance. 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 the Rating Agency Condition specified herein is to be satisfied only with respect to 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, institute any proceeding, join in any action or proceeding or otherwise cause any action or 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: WorldCom, Inc. 8.25% Debentures due 2031 Security Issuer: WorldCom, Inc. Principal Amount: $25,000,000 Security Rate: 8.25% Credit Ratings: A3by Moody's BBB+ S&P Listing: Not applicable Security Agreement: An indenture dated as of May 9, 2001 between the Security Issuer and Chase Manhattan Trust Company, National Association, as trustee, as supplemented from time to time by supplemental indentures. Form: Global Currency of United States dollars Denomination: Acquisition Price 100.95165% by Trust: Security Payment Date: Each May 15 and November 15, commencing November 15, 2001. Original Issue Date: The Securities were issued on or about May 16, 2001. Maturity Date: May 15, 2031 Sinking Fund Terms: Not Applicable Redemption Terms: The Securities are redeemable in whole or in part at any time and from time to time, subject to payment of a make-whole amount, if applicable. CUSIP No.:/ISIN No. 98157 DAK 2 Security Trustee: Chase Manhattan Trust Company, National Association Available Information The Security Issuer is subject to the Regarding the Security Issuer informational requirements of the (if other than U.S. Securities Exchange Act of 1934, as Treasury obligations): 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 (Call Option Swap Agreement) ------------------------------------------------------------------------------- Date: July 10, 2001 To: SATURNS Trust No. 2001-5 From: Morgan Stanley & Co. International Limited Attn: Asset-Backed Securities Group Contact:Madhu Philips SATURNS Trust No. 2001-5 Fax: 312-904-2084 Fax: 212-761-0406 Tel: 312-904-7807 Tel: 212-761-2583 - -------------------------------------------------------------------------------- Re: Bond Option Transaction. MS Reference Number S7098 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 the 1997 ISDA Government Bond Option Definitions (the "Bond Option Definitions") (as published by the International Swaps and Derivatives Association, Inc. ("ISDA")) 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 July 10, 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: June 25, 2001 Commencement Date: July 10, 2001 Option Style: American Option Type: Call Buyer: MSIL ("Party A") Seller: SATURNS Trust No. 2001-5 ("Party B") Bonds: The obligation identified as follows: Bond Issuer: WorldCom, Inc. Issue: 8.25% Debentures due 2031 CUSIP: 98157 DAK 2 Coupon: 8.25% Maturity Date: May 15, 2031 Face Amount Purchased: USD 25,000,000 Premium: USD 187,500 Number of Options: 25,000 Bond Entitlement: USD 1,000 of nominal amount of the Bonds per Option. Strike Price: 104.091% of the nominal amount of the Bonds. Partial Exercise: Inapplicable. All Options available for exercise under this Confirmation must be exercised simultaneously, except in connection with a partial redemption of the Bonds held by Party B under the Trust Agreement. In connection with such a partial redemption, Party A may exercise all Options available for exercise or a number of Options corresponding to the nominal amount of such Bonds to be redeemed in such partial redemption. 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 July 10, 2006 to, and including, the Expiration Time on the Expiration Date. Exercise Date: For each Option exercised, the day during the Exercise Period on which that Option is exercised. 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 25 calendar days but not more than 60 calendar days prior to the Exercise Date. Limited Right to Confirm Exercise: Inapplicable Expiration Date: May 15, 2028 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, and (ii) The accrued interest, if applicable. 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 July 10, 2001 between Party B and the Expense Administrator. "Expense Administrator" means MSDW Structured Asset Corp. acting pursuant to the Expense Administration Agreement. "Security Default" has the meaning set forth in the Trust Agreement. "Security Agreement" means the indenture dated as of May 15, 2001, between the Bond Issuer and Chase Manhattan Trust Company, National Association, as successor trustee, as supplemented from time to time by supplemental indentures, all as relating to the Bonds. "Trust Agreement" means the trust agreement dated as of July 10, 2001, between the MSDW Structured Asset Corp. and LaSalle Bank National Association. 4. 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. 5. Swap Termination Payments. In the event an Early Termination Date is designated with respect to which this Transaction is an Affected Transaction), 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 of the Securities (as defined in the Trust Agreement) in excess of the principal of, interest on and any applicable additional distribution with respect to the Units. 6. 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) with respect to such assignment and any transfer. 7. 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 2001-5 Unit Account / AC-2090067/ Account No.: 67-8820-507 Operations Contact: Brian Ames Tel: 312-904-7807 Fax: 312-904-2084 8. 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 26 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 S7098 by executing this Confirmation and returning it to us. Best Regards, MORGAN STANLEY & CO. INTERNATIONAL LIMITED BY:/s/ Susan Portelli ------------------------ Name: Susan Portelli Title: Attorney in fact Acknowledged and agreed as of the date first written above: SATURNS TRUST NO. 2001-5 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/ Susan Portelli ------------------------ Name: Susan Portelli Title: Attorney in fact (Interest Rate Swap Agreement) - -------------------------------------------------------------------------------- Date: July 10, 2001 To: SATURNS Trust No. 2001-5 From: Morgan Stanley Capital Services Inc. Attn: Asset-Backed Securities Group Contact:Madhu Philips SATURNS Trust No. 2001-5 Fax: 312-904-2084 Fax: 212-761-0406 Tel: 312-904-7807 Tel: 212-761-2583 - -------------------------------------------------------------------------------- Re: Interest Rate Swap Transaction. MS Reference Number AR12N The purpose of this letter agreement is to confirm the terms and conditions of the Transaction entered into between you and Morgan Stanley Capital Services Inc. ("MSCS") 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 the 1991 ISDA Definitions (as published by the International Swaps and Derivatives Association, Inc. ("ISDA")) 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 July 10, 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: Fixed Rate Payer A: Morgan Stanley Capital Services Inc. ("MSCS" or "Party A") Fixed Rate Payer B: SATURNS Trust No. 2001-5 (the "Trust" or "Party B") Trade Date: June 25, 2001 Effective Date: July 10, 2001 Swap Termination Date: May 15, 2031 or any date upon which the Trust under which Party B is created is terminated pursuant to the Trust Agreement. Swap Notional Amount: USD 1,022,625 Business Days: New York and Chicago Calculation Agent: MSCS I. Party B Amounts: ---------------- Party B Fixed Amount: USD 152,500 Party B Payment Date: July 10, 2001. II. Party A Amounts: ---------------- Party A Fixed Amount: Either the Swap Notional Amount or if any Underlying Call or Redemption has occurred, the Alternative Notional Amount after giving effect to any Alternative Settlements. In addition, the amount specified under Alternative Settlement in connection with any Underlying Call or Redemption. Party A Payment Date: May 15, 2031 or any date upon which the Alternative Settlement Provisions apply. III. Alternative Settlement: ----------------------- Underlying Call or Redemption: If the Security Issuer redeems the Securities or an exercise of the Call Option Swap Agreement occurs, Party A will pay to Party B the Alternative Payment Amount no later than 12 noon (New York City time) on the date of such redemption or call. In the event of an exercise of the Call Option Swap Agreement as to all of the Securities held by the Trust or a redemption of all of the Securities held by the Trust, this Agreement shall be terminated with no additional payments owed by or to Party A or Party B. Alternative Payment Amount: The maximum of (i) the Applicable Swap Notional Amount less the maximum of (x) zero and (y) the make whole premium, if any, paid by the Security Issuer in the case of a redemption and (ii) zero. The "make whole premium" will be deemed equal to the Applicable Swap Notional Amount in the event of a partial exercise of the rights under the Call Option Swap Agreement. Applicable Swap Notional Amount: In the event of a redemption of all of the Securities by the Security Issuer or an exercise of all of the options under the Call Option Swap Agreement, the Swap Notional Amount. In the event of a partial redemption by the Security Issuer or a partial exercise of the Call Option Swap Agreement, an amount equal to the Swap Notional Amount multiplied by (x) the par amount of Securities held by the Trust that are being redeemed or called and divided by (y) $25,000,000. Alternative Notional Amount: The Swap Notional Amount as reduced by the Applicable Swap Notional Amount with respect to each Underlying Call or Redemption. 3. Additional Definitions. "Call Option Swap Agreement" means the Call Option Swap Agreement as defined in the Trust Agreement. "Expense Administration Agreement" means the expense administration agreement dated as of July 10, 2001 between Party B and the Expense Administrator. "Expense Administrator" means MSDW Structured Asset Corp. acting pursuant to the Expense Administration Agreement. "Security Agreement" means the indenture dated as of May 15, 2001, between the Bond Issuer and Chase Manhattan Trust Company, National Association, as successor trustee, as supplemented from time to time by supplemental indentures, all as relating to the Bonds. "Security Default" has the meaning set forth in the Trust Agreement. "Security Issuer" has the meaning set forth in the Trust Agreement. "Securities" has the meaning set forth in the Trust Agreement. "Trust Agreement" means the trust agreement dated as of July 10, 2001, between the MSDW Structured Asset Corp. and LaSalle Bank National Association. 4. 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. 5. Swap Termination Payments. Other than in connection with an Underlying Call or Redemption, if an early termination occurs, 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 the related Termination Event is also a Trust Wind-Up Event (as defined in the Trust Agreement), Party A shall pay the lesser of (i) the amount so determined or (ii) the difference between the aggregate Unit Principal Balance (as defined in the Trust Agreement) of the Units (as defined in the Trust Agreement) and the proceeds of the sale or liquidation of the Securities (as defined in the Trust Agreement). No Swap Termination Payment shall be payable in connection with an Underlying Call or Redemption with respect to the portion of the Swap Notional Amount affected by such Underlying Call or Redemption. This Paragraph does not limit or affect the Alternative Settlement Provisions hereof. 6. Assignment. The rights and duties under this Confirmation and the Agreement may be assigned and/or delegated at any time and from time to time in whole or in part; provided that Rating Agency Condition is satisfied (as provided in the Trust Agreement) with respect to any assignment, delegation or transfer. 7. Account Details. Payments to Party A: Citibank, New York ABA No. 021 000 089 For: Morgan Stanley Capital Services 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 2001-5 Unit Account / AC-2090067/ Account No.: 67-8820-507 Operations Contact: Brian Ames Tel: 312-904-7807 Fax: 312-904-2084 Please confirm that the foregoing correctly sets forth the terms of our agreement MS Reference Number AR12N by executing this Confirmation and returning it to us. Best Regards, MORGAN STANLEY CAPITAL SERVICES INC. BY:/s/ Susan Portelli ------------------------ Name: Susan Portelli Title: Attorney in fact Acknowledged and agreed as of the date first written above: SATURNS TRUST NO. 2001-5 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