Exhibit 4.1
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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/ John Kehoe
----------------------------
Name: John Kehoe
Title: Vice President
Attachments: Terms Schedule (consisting of Schedules I, II and III)
Schedule I
(Terms of Trust and Units)
Trust: SATURNS Trust No. 2002-1
Date of Trust Agreement: February 27, 2002
Trustee: LaSalle Bank National Association.
References to Chase Bank of Texas,
National Association in the Standard
Terms shall be inapplicable.
Units: The Trust will issue two classes of
Units: the Class A Units and the
Class B Units. Only the Class A
Units will be publicly offered.
Initial Unit Principal Balance
of the Class A Units: $35,620,000
Initial Notional Amount
of the Class B Units: $35,620,000
Issue Price of Units: Class A Units: 100%
Class B Units: $2,248,000
Number of Units: Class A Units:
1,424,800 (Unit Principal Balance of
$25 each)
Class B Units:
One (1) Unit representing 100% of
the Notional Amount of the Class B
Units
Minimum Denomination: Class A Units:
$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.
Class B Units:
The entire Notional Amount of such
class.
Cut-off Date: February 27, 2002
Closing Date: February 27, 2002
Specified Currency: United States dollars
Business Day: New York, New York and Chicago,
Illinois
Interest Rate: Class A Units:
7.50% per annum on the basis of a
360 day year consisting of twelve 30
day months. During an extension
period with respect to the
securities, while interest will
continue to accrue on the Unit
Principal Balance at 7.50% per annum
and interest will accrue on any
deferred interest at 7.50% per
annum.
Class B Unit Units:
0.6660% per annum on the basis of a
360 day year consisting of twelve 30
day months. During an extension
period with respect to the
securities, interest will continue
to accrue on the Unit Notional
Amount at 0.6660% per annum and
interest will accrue on any deferred
interest at a rate equal to 8.205%
per annum.
The right of the Class A Units to
interest is pari passu with the
right of the Class B Units to
interest.
In the event of an exercise of the
call rights of the Swap Counterparty
under the Swap Agreement, the Class
B Units will be entitled to the
payment of the amounts specified in
Schedule III as being payments by
the Swap Counterparty in respect of
the Class B Units.
Interest Reset Period: Not Applicable
Rating: Class A Units Only:
Baa1 by Moody's
BBB+ by S&P
Rating Agencies: Moody's and S&P
Scheduled Final Distribution Date: January 1, 2027. The Units will have
the same final maturity as the
Securities.
Prepayment/Redemption: The Trust Property is subject to
redemption as specified in Schedule
II and is subject to call in
accordance with Schedule III. Any
such call or redemption will cause a
redemption of a corresponding
portion of the Units.
If the rights under the Swap
Agreement are partially exercised or
if there is a partial redemption of
the Securities, the Trustee will
randomly select Units to be redeemed
in full from the proceeds of such
partial exercise of the Swap
Agreement or partial redemption of
the Securities.
Additional Distribution: If any of the Securities are
redeemed by the Security Issuer
prior to February 27, 2007, each of
the Class A Units being redeemed in
connection with such redemption of
Securities (or related exercise of
the rights under the Swap Agreement)
will receive a pro rata distribution
from the proceeds of the redemption
of the Securities remaining after
payment of principal and interest on
the Class A Units up to a maximum of
$2.50 per Class A Unit. The Class A
Units will also receive any
additional amounts available at
maturity or upon a redemption by the
Security Issuer if all or a portion
of the Swap Agreement has expired
unexercised.
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 redemption of the
Securities occurs, the Trustee shall
randomly select which options under
the Swap Agreements shall be
selected for exercise or termination
(and receipt of a Swap Termination
Payment).
Guaranty: 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: Not Applicable
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 January 1 and July 1,
commencing July 1, 2002.
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: Each December 15 and June 15,
regardless of whether such day is a
Business Day.
Form: Global Security
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 the date of the Trust Agreement
(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 0.06% 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
will be entitled to interest on any
deferred fee amounts that would have
been payable but for deferral of
interest on the Securities at the
rate of 8.205% per annum and any
additional amounts available as
interest on deferred interest with
respect to the Securities after
application of such amounts to the
deferred interest payable on the
Units. 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. The
Expense Administrator will be
entitled to its fee in connection
with an exercise of the Options or a
redemption of the Securities. The
Expense Administrator will not be
entitled to receive its fee from the
proceeds of a termination other than
in connection with an exercise of
Options or a redemption of
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 Class A 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 to the Class A
Units.
The restrictions shall apply to the
Class B Units and no ERISA Benefit
Plan may acquire an interest in the
Class B Units.
Alternative ERISA Restrictions: Not applicable
Deemed Representations: Not applicable
QIB Restriction: Applicable to the Class B Units.
Not applicable to the Class A Units.
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 call rights
under the Swap Agreement as to all
Securities held by the Trust.
If a Trust Wind-Up Event has
occurred in connection with the
exercise of any Option under the
Swap Agreement and if the Selling
Agent cannot obtain a bid for the
Securities in excess of 100% of the
aggregate Unit Principal Balance of
the Class A Units and accrued
interest on the Securities, then the
Securities will not be sold, the
Swap Counterparty's exercise of the
call option will be rescinded (and
the Swap Counterparty shall be
entitled to exercise such options in
the future) and any related Trust
Wind-Up Event will be deemed not to
have occurred.
Termination: If a Trust Wind-Up Event occurs, any
Securities held by the Trust will be
liquidated (by delivery to the
Security Issuer in the event of a
redemption).
If a Trust Wind-Up Event occurs due
to a redemption of the Securities by
the Security Issuer or exercise of
the call rights under the Swap
Agreement as to all Securities held
by the Trust, (i) amounts received
as accrued interest on the
Securities will be applied to the
Class A Units and the Class B Units
pro rata in proportion to the amount
of accrued interest outstanding on
each such Class, (ii) amounts
received as principal or par on the
Securities will be applied to the
Unit Principal Balance of the Class
A Units up to 100% of the Unit
Principal Balance of each Class A
Unit, (iii) if prior to February 27,
2007, any amount received as a
make-whole premium or redemption
premium on the Securities will be
applied to the Class A Units up to
$2.50 per Class A Unit. Remaining
accrued interest will be applied to
the Expense Administrator's fee. Any
remaining amounts will be paid to
the Swap Counterparty as a Swap
Termination Payment under the Swap
Agreement.
If the Trust is terminated for any
other reason, the proceeds of
liquidation will be applied to
redeem the Class A Units and the
Class B Units. The Class A Units
will have a claim on the proceeds of
the liquidation equal to their
aggregate Unit Principal Balance
plus accrued interest. The Class B
Units will have a claim on the
proceeds of liquidation equal to the
value calculated (x) by discounting
each remaining scheduled payment at
a rate of 7.20% (on the basis of a
360 day consisting of twelve 30 day
months) and adding (y) accrued
interest. If the proceeds of the
liquidation is less than the
combined claim amounts of the Class
A Units and the Class B Units, the
proceeds will be distributed in
proportion to the claim amounts of
the Class A Units and the Class B
Units in full satisfaction of the
claims of the Units. If the proceeds
of liquidation exceed the claims of
the Class A Units and the Class B
Units, the excess will be paid to
the Swap Counterparty as a Swap
Termination Payment under the Swap
Agreement.
Self-Tenders by Security Issuer: The Trust will not participate in
any self-tender by the Security
Issuer for the Securities and the
Trustee will not accept any
instructions to the contrary from
the Unitholders.
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 the
first Distribution Date.
The amount of the Retained Interest
is $452,469.
If a Security Default occurs on or
prior to the first Distribution Date
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 (or the Security Guarantor on
its behalf or under the Security
Guaranty) 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 any of the events of
default under such Securities and/or
Security Agreement relating to the
insolvency or bankruptcy of the
Security Issuer or the Security
Guarantor.
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. The Selling Agent will,
on behalf of the Trust, sell the
Securities at the highest bid price
received. The Selling Agent may not
bid for the Securities.
If the Swap Counterparty exercises
any of its Options other than in
connection with a redemption of the
Securities by the Security Issuer, a
number of Securities corresponding
to the number of Options exercised
by the Swap Counterparty will be
sold by the Selling Agent on behalf
of the Trust.
If the Selling Agent cannot obtain a
bid for the Securities in excess of
100% of the aggregate Unit Principal
Balance of the Class A Units to be
redeemed and accrued interest on the
Securities to be sold, then the
Securities will not be sold, the
Swap Counterparty's exercise will be
rescinded (and the Swap Counterparty
shall be entitled to exercise such
Option(s) in the future) and any
related Trust Wind-Up Event will be
deemed not to have occurred.
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 (with respect to the
Class A Units issued ) and, if in
excess of such amount, in a $25
integral multiple in excess thereof
(with respect to the Class A Units
issued). The principal amount of
Securities deposited must be in the
same ratio to the Unit Principal
Balance (and Notional Amount with
respect to the Class B Units) of the
Units received for such deposit as
the ratio of the aggregate principal
amount of the Securities deposited
on the Closing Date to the aggregate
Unit Principal Balance (and
aggregate Notional Amount with
respect to the Class B Units) 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 Depositor must
also arrange the issuance of Class B
Units with a Notional Amount equal
to the Unit Principal Balance being
issued in connection with an
additional issuance. Any accrued
interest will be reflected in the
price of the Securities and Class A
Units. 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 the 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: Aon Capital A 8.205% trust preferred
capital securities due January
1, 2027
Security Issuer: Aon Capital A
Security Guarantor: Aon Corporation
The Security Guarantor will be
considered the "Security Issuer" for
purposes of determining whether the
Security Issuer is an Eligible
Issuer and whether the Securities
are Disqualified Securities.
Guarantor Debentures: The Security Guarantor's 8.205%
junior subordinated debentures due
2027. Such debentures are the only
assets of the Security Issuer.
In the event that the Guarantor
Debentures are exchanged for the
Securities or distributed in
liquidation of the Security Issuer,
the Guarantor Debentures shall be
treated as the Securities for all
purposes and the Security Guarantor
shall be treated as the Security
Issuer for all purposes. Such
exchange or liquidation shall not be
considered a redemption.
Principal Amount: $35,620,000
Security Rate: 8.205%
Credit Ratings: Baa1 by Moody's
BBB+ by S&P
Listing: Not applicable
Security Agreement: As to the Securities, the amended
and restated declaration of trust
dated as of January 13, 1997
relating to the Security Issuer. As
to the Guarantor Debentures, the
indenture, dated as of January 13,
1997, between the Security Guarantor
and The Bank of New York.
Form: Global
Currency of
Denomination: United States dollars
Acquisition Price by Trust: $36,835,020
Security Payment Date: Each January 1 and July 1,
commencing July 1, 1997.
Original Issue Date: The Securities were issued on or
about January 13, 1997. The Security
Issuer offered to exchange the
securities then issued for publicly
registered securities and such
offering closed on or about May 5,
1997.
Maturity Date: January 1, 2027.
Sinking Fund Terms: Not Applicable
Redemption Terms: The Guarantor Debentures and the
Securities may be redeemed upon a
"tax event" or an "investment
company event" (as defined in the
underlying indenture and trust
agreement). The Guarantor Debentures
may also be distributed in exchange
for the Securities or in liquidation
of the Issuer. In such event the
Guarantor Debentures would become
the Securities under the Trust
Agreement.
CUSIP No./ISIN No.: 037388 AE 5
Security Trustee: The Bank of New York
Guarantor Debenture Trustee: The Bank of New York
Available Information Regarding
the Security Issuer (if other
than U.S. Treasury obligations): The Security Guarantor 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: Woolworth Building,
233 Broadway, New York, New York
10279, 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 Confirm)
MORGAN STANLEY
- --------------------------------------------------------------------------------
Date: February 27, 2002
To: SATURNS Trust No. 2002-1 From: Morgan Stanley & Co.
International Limited
Attn: Asset-Backed Securities Group Contact: Chris Boas
SATURNS Trust No. 2002-1
Fax: 312-904-2084 Fax: 212-761-0406
Tel: 312-904-7807 Tel: 212-761-1395
- --------------------------------------------------------------------------------
Re: Bond Option Transaction. MS Reference Number SQ16N
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 as published by the International Swaps and Derivatives
Association, Inc. ("ISDA") are incorporated into this Confirmation and this
transaction shall be deemed a "Government Bond Option Transaction" for purposes
of such definitions. 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 the date hereof, 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: February 11, 2002
Option Style: American
Option Type: Call
Buyer: MSIL ("Party A")
Seller: SATURNS Trust No. 2002-1 ("Party B")
Bonds: The obligation identified as follows:
Bond Issuer: Aon Capital A
Issue: 8.205% Debentures
due 2027
CUSIP: 037388 AE 5
Coupon: 8.205%
Maturity Date: January 1, 2027
Face Amount
Purchased: USD 35,620,000
Premium: USD $89,050
Premium Payment Date: February 27, 2002
Number of Options: 35,620
Option Entitlement: USD 1,000 of face amount of the Bonds
per Option.
Strike Price: (i) For any Exercise Date prior to
February 27, 2007, the redemption price
of the Bonds including any make-whole
amount (expressed as a percentage)
subject to a maximum of 110% of the
face amount of the Bonds but exclusive
of accrued interest or (ii) for any
Exercise Date on or after February 27,
2007, 100% of the face amount of the
Bonds exclusive of accrued interest.
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 February
27, 2007, to, and including, the
Expiration Time on the Expiration Date;
provided, however, the Exercise Period
shall also include any Business Day
prior to February 27, 2007, if notice
of redemption has been delivered by the
Bond Issuer.
Exercise Date: For each Option exercised, the day
during the Exercise Period on which
that Option is exercised.
Rescission of Exercise: If Party B cannot obtain a bid for the
Bonds held by it in excess of the
Strike Price together with accrued
interest on the Bonds, then Party A's
notice of exercise shall be rescinded
and the Options for which notice of
exercise was given shall continue in
full force and effect without regard to
such provision of notice.
Multiple Exercise: Inapplicable
Partial Exercise: Inapplicable
Minimum Number of Options: 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.
Limitation on Rights of MSIL: Buyer may, by written notice thereof to
Seller, delegate its rights to provide
a notice of exercise hereunder to a
third party (the "Third Party"). Any
such delegation will be irrevocable by
Buyer without the written consent of
the Third Party. Any such Third Party
will have the same rights and
obligations regarding providing notice
of exercise hereunder as the Buyer had
prior to such delegation. While any
such delegation is effective, Seller
will only recognize a notice of
exercise that is provided by the Third
Party.
Notification Date: Any date at least 30 calendar days
prior to the Exercise Date or, if in
conjunction with a redemption by the
Bond Issuer, 10 calendar days prior to
the Exercise Date, provided that any
date which is 10 calendar days after
the Bond Issuer provides notice of
redemption is also a Notification Date.
Limited Right to Confirm Exercise: Inapplicable
Expiration Date: January 1, 2024
Expiration Time: 4:00 p.m. New York time
Business Days: New York and Chicago
III. Settlements:
Settlement: Cash Settlement
Spot Price: The cash proceeds received by
Party B in connection with sale of
the Bonds by Party B, excluding
any amounts in respect of accrued
interest. In the event of a
redemption by the Bond Issuer, the
redemption price paid by the Bond
Issuer, excluding accrued
interest.
Payment Obligation of Party A: If the Bond Issuer has not given notice
of redemption in connection with the
exercise of Options hereunder and if
any such exercise is an exercise of
less than all Options remaining
unexercised hereunder, Party A shall
pay to the Expense Administrator an
amount equal to the present value of a
stream of payments equal to $6946
payable on each payment date for the
Bonds until the maturity of the Bonds
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 Option Entitlement
multiplied by the number of Options
exercised and divided by $35,620,000.
Upon any exercise hereunder, Party
A shall pay to Party B, for
payment to the registered holder
of the Class B Units (as defined
in the Trust Agreement), the
present value of the Class B Unit
Interest, calculated as the sum of
(i) the amount of outstanding
accrued interest in respect of the
Class B Units and (ii) the present
value of the remaining scheduled
payments (other than any accrued
interest) in respect of the Class
B Units determined by using a
discount factor of 7.20%. Party A
shall give notice to such
registered holder of the Class B
Units and the Rating Agencies (as
defined in the Trust Agreement) in
the form of Annex A hereto.
Settlement Date: As applicable, the Business Day of
settlement of the sale of the Bonds by
Party B or the Business Day of
settlement of a redemption of Bonds by
the Bond Issuer.
3. Additional Definitions.
"Class B Unit" means the Class B Unit issued under the Trust Agreement.
"Class B Unit Interest" means the interest on the Class B Units that
would have accrued at the rate and in the manner specified in the Trust
Agreement and would have been payable at the times specified in the Trust
Agreement had the rights to purchase the Bonds hereunder not been exercised. For
the avoidance of doubt, Class B Unit Interest shall not include amounts actually
paid on the Class B Units in connection with the exercise of the right to
purchase the Bonds hereunder and Class B Unit Interest shall not be construed to
entitle the Class B Unit to any "double" payment of interest.
"Trust Agreement" means the trust agreement dated as of February 27,
2002, 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, 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 (or
redemption amount) in excess of the Strike Price (expressed as a dollar amount)
plus accrued interest on the Bonds.
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 the Rating Agency Condition (as defined in the Trust Agreement) is
satisfied with respect to such assignment and any transfer.
8. Account Details.
Payments to Party A: Citibank, N.A., New York
SWIFT BIC Code: CITIUS33
ABA No. 021 000 089
FAO: Morgan Stanley & Co.
International Limited
Account No. 3042-1519
Operations Contact: Barbara Kent
Tel 212-537-1449
Fax 212-537-1868
Payments to Party B: LaSalle Bank, Chicago, Illinois
ABA No. 071 000 505
Reference: SATURNS 2002-1
Unit Account / AC-2090067/
Account No.: 67-8952-40-9
Operations Contact: Brian Ames
Tel: 312-904-7807
Fax: 312-904-2084
MORGAN STANLEY
Please confirm that the foregoing correctly sets forth the terms of our
agreement MS Reference Number SQ16N 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. 2002-1
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
ANNEX A
Form of Notice of Exercise To Be Given
To the Rating Agencies and the Registered Holder
of the Class B Units
--------------------
[Address of Registered Holder of Class B Units]
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Standard & Poor's Ratings Services,
A Division of The McGraw-Hill Companies, Inc.
55 Water Street, 40th Floor
New York, NY 10041-0003
RE: SATURNS Trust No. 2002-1
Exercise of Call Rights Under Swap Agreement
--------------------------------------------
Notice is hereby given that the Swap Counterparty will exercise its
call rights under the Swap Agreement [in whole] [in part] and that the Swap
Counterparty will pay the present value [of the corresponding portion] of the
Class B Unit Interest] to the Trust for payment to the registered holder of the
Class B Units.
The Class B Units will receive a payment of $[_______][which
corresponds to a reduction in the notional amount of Class B Units outstanding
of $[_________]].
[SWAP COUNTERPARTY]
BY:
--------------------------
Name:
Title: