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. 2002-3
Date of Trust Agreement: March 19, 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: $54,550,000
Initial Notional Amount
of the Class B Units: $54,550,000
Issue Price of Units: Class A Units: 100%
Class B Units: $1,142,000
Number of Units: Class A Units:
2,182,000 (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: March 19, 2002
Closing Date: March 19, 2002
Specified Currency: United States dollars
Business Day: New York, New York and Chicago, Illinois
Interest Rate: Class A Units:
7.875% 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 7.875% per
annum and interest will accrue on
any deferred interest at 7.875% per
annum.
Class B Unit Units: 0.222% 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 0.222% per annum and interest
will accrue on any deferred interest at a rate
equal to 8.125% per annum.
The right of the Class A Units to
interest is pari passu with the
right of the Class B Units to
interest.
The Class B Units are also entitled
to the Class B Unit Payment
Obligation of the Swap Counterparty
specified in Schedule III. Payment
of the Class B Unit Payment
Obligation shall result in a
reduction of the Notional Amount of
the Class B Units equal to the Class
B Unit Corresponding Portion.
Interest Reset Period: Not Applicable
Rating: Class A Units Only:
Baa2 by Moody's
BBB- by S&P
Rating Agencies: Moody's and S&P
Scheduled Final
Distribution Date: September 1, 2031. The Units will have the same
final maturity as the Securities.
Prepayment/Redemption: The Trust Property is subject to redemption in
accordance with the terms of the Securities and as
described 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 Class A Units and a
reduction in the Notional Amount of the Class B
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 March 19, 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 March 1 and September 1, commencing
September 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 February 15 and August 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 0.035% 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 8.125%
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 March 19, 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
(other than the Class B Unit Payment Obligation of
the Swap Counterparty) will be paid to the Swap
Counterparty as a Swap Termination Payment under
the Swap Agreement. Amounts in respect of the Class
B Unit Payment Obligation of the Swap Counterparty
(as described in Schedule III) shall be paid to the
Class B Units.
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 8.125% (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 $220,846.
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 an exercise of the
call rights under the Swap Agreement and any other
notices with respect to the Securities. Any such
notice with respect to an exercise of call rights
or redemption by the Security Issuer shall be sent
at least 20 calendar days prior to the exercise
date or redemption date, as applicable.
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: DPL Capital Trust II 8.125% trust preferred capital
securities due September 1, 2031
Security Issuer: DPL Capital Trust II
Security Guarantor: DPL Inc.
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 8.125% junior subordinated
debentures due 2031. 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: $54,550,000
Security Rate: 8.125%
Credit Ratings: Baa2 by Moody's
BBB- by S&P
Listing: Not applicable
Security Agreement: As to the Securities, the Amended and Restated
Trust Agreement, dated as of August 31, 2001, among
the Security Guarantor as depositor, The Bank of
New York, as property trustee (referred to herein
as the property trustee and also as the "Security
Trustee"), The Bank of New York (Delaware) as
Delaware trustee, and two individual administrative
trustees who are employees or officers affiliated
with the Security Guarantor, as amended and
supplemented from time to time. As to the Guarantor
Debentures, the indenture dated as of August 31,
2001, between the Security Guarantor and The Bank
of New York, as trustee, as supplemented by the
First Supplemental Indenture dated August 31, 2001,
and as may be further supplemented or amended from
time to time.
Form: Global
Currency of
Denomination: United States dollars
Acquisition Price by Trust: $54,110,050
Security Payment Date: Each March 1 and September 1
Original Issue Date: 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: September 1, 2031
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. 23330AAA8
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: March 19, 2002
To: SATURNS Trust No. 2002-3 From: Morgan Stanley & Co.
International Limited
Attn: Asset-Backed Securities Group Contact: Chris Boas
SATURNS Trust No. 2002-3
Fax: 312-904-2084 Fax: 212-761-0406
Tel: 312-904-7807 Tel: 212-761-1395
- --------------------------------------------------------------------------------
Re: Bond Option Transaction. MS Reference Number SQ18U
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: March 5, 2002
Option Style: American
Option Type: Call
Buyer: MSIL ("Party A")
Seller: SATURNS Trust No. 2002-3 ("Party B")
Bonds: The obligation identified as follows:
Bond Issuer: DPL Capital Trust II
Issue: 8.125% Debentures due 2031
CUSIP: 23330AAA8
Coupon: 8.125%
Maturity Date: September 1, 2031
Face Amount Purchased: USD 54,550,000
Premium: USD $136,375
Premium Payment Date: March 19, 2002
Number of Options: 54,550
Option Entitlement: USD 1,000 of face amount of the Bonds per Option.
Strike Price: (i) For any Exercise Date prior to March 19, 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 March 19, 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 March 19, 2007, to, and
including, the Expiration Time on the Expiration
Date; provided, however, the Exercise Period shall
also include any Business Day prior to March 19,
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 25 calendar days prior to the
Exercise Date.
Limited Right to
Confirm Exercise: Inapplicable
Expiration Date: September 1, 2028
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: To the Expense Administrator (the "Expense
Administrator Payment Obligation"):
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
$7,550 payable on each payment date for the Bonds
until the maturity of the Bonds discounted at a
rate of 6.0% per annum on the basis of a 360 day
year consisting of twelve 30 day months 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 $54,550,000.
To Party B for Payment on the Class B Units (the
"Class B Unit Payment Obligation")
Upon any exercise hereunder or upon any redemption
of Bonds held by Party B by the Bond Issuer, Party
A shall pay to Party B, for payment to the
registered holder of the Class B Units, 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 Unit
Corresponding Portion and (ii) the present value of
the remaining scheduled payments (other than any
accrued interest) in respect of the Class B Unit
Corresponding Portion discounted at a rate of
8.125% per annum on the basis of a 360 day year
consisting of twelve 30 day months.
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 Corresponding Portion" means the portion of the Class B
Unit to be redeemed or corresponding notional amount reduction under the Trust
Agreement in connection with an exercise hereunder or a redemption by the Bond
Issuer.
"Class B Unit Interest" means at any time and from time to time, the
interest on the Class B Unit Corresponding Portion 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 (i) the rights to
purchase the Bonds hereunder not been exercised and (ii) had no redemption by
the Bond Issuer occurred. 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 or a redemption by the
Bond Issuer and the 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 March 19, 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), excluding accrued interest, in excess of the Strike Price (expressed as
a dollar amount).
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 2002-3
Unit Account / AC-2090067/
Account No.: 67-8953-506
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 SQ18U 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. 2002-3
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