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;
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 the terms specified 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/ Ann M. Kelly
--------------------------------------------
Name: Ann M. Kelly
Title: Assistant Vice President
MSDW STRUCTURED ASSET CORP.
By: /s/ John Kehoe
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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. 2002-13
Date of Trust Agreement: October 29, 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: $25,000,000
Initial Notional Amount
of the Class B Units: $25,000,000
Issue Price of Units: Class A Units: 100%
Class B Units: $1,781,000
Number of Units: Class A Units:
1,000,000 (Unit Principal Balance of $25
each)
Class B Units:
Initially, 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 to the Class A Units. Each $25 of
Unit Principal Balance is a Unit.
Class B Units:
$100,000 and $1,000 increments in excess
thereof.
Cut-off Date: October 29, 2002
Closing Date: October 29, 2002
Specified Currency: United States dollars
Business Day: New York, New York and Chicago, Illinois
Interest Rate: Class A Units:
6.25% per annum on the basis of a 360 day
year consisting of twelve 30 day months.
Class B Unit Units:
0.705% per annum on the basis of a 360 day
year consisting of twelve 30 day months.
The right of the Class A Units to accrued
interest is pari passu with the right of the
Class B Units to accrued interest from
accrued interest on the securities.
Interest Reset Period: Not Applicable
Rating: Class A Units and Class B Units:
Aa1 on watch for possible downgrade by
Moody's
AA- credit watch negative by S&P
Both Moody's and S&P have indicated in their
initial rating of the Units that the Units
are on watch for a possible downgrade. Any
such downgrade will result in a downgrade of
the respective agency's rating with respect
to the Units.
Rating Agencies: Moody's and S&P
Scheduled Final Distribution Date: February 15, 2026. The Units will have the
same final maturity as the Securities.
Prepayment/Redemption: The Trust Property is subject to call in
accordance with Schedule III. Any such call
will result in the redemption of a
proportional amount of the Class A Units and
a proportional reduction in the Notional
Amount of the Class B Units.
If the call rights under the Swap Agreement
are partially exercised, (i) the Trustee
will randomly select Class A Units to be
redeemed in full from the proceeds of such
partial exercise of the Swap Agreement and
(ii) the Trustee will allocate distributions
with respect to the Class B Units and the
corresponding reduction in the Notional
Amount of the Class B Units (A) (1) if one
Swap Counterparty exercises call rights in
connection therewith, first to such Swap
Counterparty unless such Swap Counterparty
waives this right in whole or in part, (2)
if more than one Swap Counterparty exercises
call rights in connection therewith, first
to each such Swap Counterparty pro rata up
to an amount equal to the Class B Unit
Corresponding Portion (based upon the Class
B Unit Corresponding Portion allocable to
each such Swap Counterparty) then to each
such Swap Counterparty pro rata up to an
amount equal to the remaining amount
exercised (expressed by principal amount of
Securities) by such Swap Counterparties
(based upon the proportional amount of such
remaining amount allocable to each such Swap
Counterparty) and any such Swap Counterparty
may waive this right in whole or in part
(and its related exercise shall be excluded
for all purposes of this Clause (A) to the
extent of such waiver) and then (B) the
Trustee shall randomly select Class B Units
or portions thereof (including Class B Units
for which a Swap Counterparty waived its
rights under clause (A)) for any remaining
amount to be distributed and the
corresponding reduction in Notional Amount
of such Class B Units.
Additional Distribution: If the Security Issuer gives notice of a
self-tender as to Securities held by the
Trust and the Swap Counterparty exercises
its call rights under the Swap Agreement
prior to October 29, 2007, each redeemed
Unitholder will receive an additional
distribution of $1.50 per Class A Unit.
The Class B Units are also entitled to the
Class B Unit Payment Obligation of the Swap
Counterparty specified in Schedule III.
Distribution of the Class B Unit Payment
Obligation with respect to the Class B Units
shall result in a reduction of the Notional
Amount of the Class B Units equal to the
Class B Unit Corresponding Portion. Amounts
received by the Trust from the Swap
Counterparty in respect of the Class B Unit
Payment Obligation may only be distributed
with respect to the Class B Units.
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 Master Agreement referred to in
Schedule III and any assignment thereof. 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.
Guaranty: Morgan Stanley (formerly known as 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 to those of
the Swap Agreement entered into as of the
Closing Date, except that such Swap
Agreement may have a different Swap
Counterparty, number of options, and premium
amount than the Swap Agreement entered into
on the Closing Date. The Rating Agency
Condition must be satisfied prior to the
effectiveness of such additional Swap
Agreement. Each Swap Counterparty must
consent to any additional issuance.
Distribution Date: Each February 15 and August 15, or the next
succeeding Business Day if such day is not a
Business Day, commencing February 15, 2003.
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 1 and August 1, 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 $5,575 payable on each Distribution
Date (the "Expense Administrator's Fee").
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.
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 event also shall constitute
Trust Wind-Up Events: exercise of the call
rights under the Swap Agreement as to all
Securities held by the Trust.
If (i) cash settlement applies under the
Swap Agreement, (ii) a Trust Wind-Up Event
has occurred in connection with the exercise
of any Option under the Swap Agreement and
(iii) the Selling Agent cannot obtain a bid
for the Securities in excess of the amount
specified in the Swap Agreement, 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 (pursuant to the terms of the
Swap Agreement in the event of an exercise
of the Swap Agreement or otherwise by sale
thereof).
If the related Trust Wind-Up Event occurs
due to an 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, and (iii) if prior to
October 29, 2007, in connection with a
self-tender, an additional amount of $1.50
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.
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 7.000% (on the basis of
a 360 day consisting of twelve 30 day
months) and adding (y) accrued interest. If
the proceeds of the liquidation are 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. However, the Swap Counterparty
may exercise its call rights in connection
with any self-tender in accordance with the
Swap Agreement.
Exchangeable Series Terms: The Exchangeable Series provisions only
apply to the Depositor as a Unitholder (or
beneficial owner of Units). No Unitholder
(or beneficial owner of a Unit) other than
the Depositor may exchange Units for
Securities.
The Depositor may exchange Units for a pro
rata portion of the Trust Property (less any
amount sold to pay any swap termination
payment or other fee or payment required by
the Swap Counterparty); provided that: (i)
the exchange is made with respect to a
minimum Unit Principal Balance of $250,000
and in $25 integral multiples in excess
thereof; (ii) such exchange is to be
effected on any January 1, April 1, July 1
or October 1 (or the succeeding Business Day
if such date is not a Business Day) with 45
days notice; (iii) the Swap Counterparty
consents to the exchange and (iv) the
Expense Administrator consents to the
exchange.
Terms of Retained Interest: Notwithstanding any other provision herein
or in the Standard Terms, 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 (or redemption date
if earlier) 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
$357,410.
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 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;
(iii) the initiation by the Security Issuer
of any proceedings seeking a judgment of
insolvency or bankruptcy or seeking relief
under bankruptcy or insolvency laws or
similar laws affecting creditor's rights; or
(iv) if not otherwise addressed in (iii),
the passage of thirty (30) calendar days
since the day upon which any person or
entity initiates any proceedings against the
Security Issuer seeking a judgment of
insolvency or bankruptcy or seeking relief
under bankruptcy or insolvency laws or
similar laws affecting creditor's rights and
such proceeding has not been dismissed prior
to such thirtieth day.
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 must solicit at least three
bids for all of the Securities held by the
Trust. The Selling Agent must solicit at
least three of such bids from registered
broker-dealers of national reputation, but
additional bids may be solicited from one or
more financial institutions or other
counterparties with credit worthiness
acceptable to the Selling Agent in its
discretion. The Selling Agent will, on
behalf of the Trust, sell the Securities at
the highest bid price received. None of the
Selling Agent, its affiliates or its agents,
may bid for the Securities. If the Swap
Counterparty is not an affiliate of the
Selling Agent, the Selling Agent will extend
a right of first refusal to the Swap
Counterparty to purchase the Securities at
the highest bid received by the Selling
Agent.
If cash settlement applies and if the Swap
Counterparty exercises any of its call
rights other than in connection with a
self-tender for the Securities by the
Security Issuer, a number of Securities
corresponding to the number of call rights
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 the
amount specified in the Swap Agreement, 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 call rights 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,
with a notional amount equal to the
principal amount of the additional
Securities deposited, to be entered into
between the Trust and an additional Swap
Counterparty (or a combination of an
additional Swap Agreement and a notional
balance increase of the existing Swap
Agreement(s), with the combined effect of
such proportional increase in the notional
amount of the Swap Agreements). The
Depositor must also arrange the issuance of
Class B Units with a Notional Amount equal
to the Unit Principal Balance of the Class A
Units being issued in connection with an
additional issuance. Any accrued interest
will be reflected in the price of additional
Units and the Securities. The Rating Agency
Condition must be satisfied in connection
with any such additional issuance. Each Swap
Counterparty must consent to any 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).
Amendment of Trust Agreement: Section 12.01(a) of the Standard Terms shall
be replaced with the following:
(a) The Trust Agreement may be amended from
time to time by the Depositor and the
Trustee without the consent of any of the
Unitholders, upon delivery by the Depositor
of an Opinion of Counsel acceptable to the
Trustee to the effect that such amendment
will not materially and adversely affect the
interests of any holder of a Class of Units
that is not voting with respect to such
amendment pursuant to Section 12.01(b), for
any of the following purposes: (i) to cure
any ambiguity or defect or to correct or
supplement any provision in the Trust
Agreement which may be defective or
inconsistent with any other provision in the
Trust Agreement; (ii) to provide for any
other terms or modify any other terms with
respect to matters or questions arising
under the Trust Agreement; (iii) to amend
the definitions of Trigger Amount and
Maximum Reimbursable Amount so as to
increase, but not decrease, the respective
amounts contained in such definitions or to
otherwise amend or waive the terms of
Section 10.05(b) in any manner which shall
not adversely affect the Unitholders in any
material respect; (iv) to amend or correct
or to cure any defect with respect to the
Trustee Fee or Expense Administrator's fee;
(v) to evidence and provide for the
acceptance of appointment under the Trust
Agreement by a successor Trustee; or (vi) to
add or change any of the terms of the Trust
Agreement as shall be necessary to provide
for or facilitate the administration of the
Trust, including any amendment necessary to
ensure the classification of the Trust as a
grantor trust for United States federal
income tax purposes; provided, however, that
in the case of any amendment pursuant to any
of clauses (i) through (vi) above, the
Rating Agency Condition shall be satisfied
with respect to such amendment. If more than
one Class of Units has been issued under the
Trust Agreement, the provisions of this
Section 12.01(a) shall apply to each Class
of Units that is not materially and
adversely affected by such amendment.
Section 12.01(c) shall be re-designated
Section 12.01(d).
Section 12.01(b) shall be re-designated
Section 12.01(c).
The following shall constitute Section
12.01(b):
(b) The Trust Agreement may be amended from
time to time by the Depositor and the
Trustee with the consent of a 100% of the
outstanding Unit Principal Balance of each
Class of Units materially and adversely
affected thereby. The Rating Agency
Condition shall be satisfied with respect to
such amendment unless Units representing
100% of the Unit Principal Balance of all
affected Units vote in favor of such
amendment with notice that the Rating Agency
Condition will not be satisfied.
The following shall constitute Section
12.01(e):
(e) For purposes of this Section 12.01,
Schedule III to any Trust Agreement and any
Swap Agreements entered into in connection
with any related Trust shall not be
considered part of the Trust Agreement.
Section 7.02 shall govern action taken under
the Trust Agreement with respect to any
amendments to such Swap Agreements.
Securities Intermediary: LaSalle Bank National Association acting in
the capacity of securities intermediary.
Additional Representations
Of Trustee and Securities
Intermediary: The Unit Account is a "securities account"
within the meaning of Section 8-501 of the
UCC and is held only in the name of the
Trust. The Securities Intermediary is acting
with respect to the Unit Account in the
capacity of a "securities intermediary"
within the meaning of Section 8-102(a)(l4)
of the UCC.
All Securities have been (i) delivered to
the Securities Intermediary pursuant to the
Trust Agreements; (ii) credited to the Unit
Account; and (iii) registered in the name of
the Securities Intermediary or its nominee,
indorsed to the Securities Intermediary or
in blank or credited to another securities
account maintained in the name of the
Securities Intermediary. In no case will any
Securities or other financial asset credited
to a Unit Account be registered in the name
of the Depositor, payable to the order of
the Depositor or specially indorsed to the
Depositor except to the extent the foregoing
have been specially indorsed to the
Securities Intermediary or in blank.
The Unit Account is an account to which
financial assets are or may be credited, and
the Securities Intermediary shall treat the
Trustee as entitled to exercise the rights
that comprise any financial asset credited
to the account.
The Securities Intermediary hereby agrees
that the Securities credited to the Unit
Account shall be treated as a "financial
asset" within the meaning of Section
8-102(a)(9) of the UCC.
If at any time the Securities Intermediary
shall receive any order from the Trustee
directing the transfer of any Securities on
deposit in any Unit Account, the Securities
Intermediary shall comply with such
entitlement order without further consent by
the Depositor or any other Person. The
Securities Intermediary shall take all
instructions (including without limitation
all notifications and entitlement orders)
with respect to each Unit Account solely
from the Trustee.
The Securities Intermediary hereby confirms
and agrees that:
(a) There are no other agreements entered
into between the Securities Intermediary and
the Depositor with respect to any Unit
Account;
(b) It has not entered into, and until the
termination of this Agreement will not enter
into, any agreement with any other Person
relating to any Unit Account and/or any
financial assets credited thereto pursuant
to which it has agreed to comply with
entitlement orders (as defined in Section
8-102(a)(8) of the UCC) of such other
Person; and
(c) It has not entered into, and until the
termination of the Trust Agreements will not
enter into, any agreement with the Depositor
or the Trustee purporting to limit or
condition the obligation of the Securities
Intermediary to comply with entitlement
orders as set forth above
The Trustee hereby represents and warrants
as follows:
(a) The Trustee maintains its books and
records with respect to its securities
accounts in the State of Illinois; and
(b) The Trustee has not granted any lien on
the Securities nor are the Securities
subject to any lien on properties of the
Trustee in its individual capacity; the
Trustee has no actual knowledge and has not
received actual notice of any lien on the
Securities (other than any liens of the
Trustee in favor of the beneficiaries of the
Trust Agreements); other than the interests
of the Unitholders and the potential
interests of the Call Option holders, the
books and records of the Trustee do not
identify any Person as having an interest in
the Securities.
The Trustee makes no representation as to
(i) the validity, legality, sufficiency or
enforceability of any of the Securities or
(ii) the collectability, insurability,
effectiveness or suitability of any of the
Securities.
Additional Depositor
Representations: The Depositor hereby represents and warrants
to the Trustee as follows (with respect to
the Closing Date and any additional
issuance):
(a) Immediately prior to the transfer of the
Securities to the applicable Trust, the
Depositor owned and had good and marketable
title to the Securities free and clear of
any lien, claim or encumbrance of any
Person.
(b) The Depositor has received all consents
and approvals required by the terms of the
Securities to the transfer to the Trustee of
its interest and rights in the Securities as
contemplated by the Trust Agreements.
(c) The Depositor has not assigned, pledged,
sold, granted a security interest in or
otherwise conveyed any interest in the
Securities (or, if any such interest has
been assigned, pledged or otherwise
encumbered, it has been released), except
such interests granted pursuant to the Trust
Agreements. The Depositor has not authorized
the filing of and is not aware of any
financing statements against the Depositor
that includes a description of the
Securities, other than any such filings
pursuant to the Trust Agreements. The
Depositor is not aware of any judgment or
tax lien filings against Depositor.
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
and the Swap Counterparties copies of any
notices it receives with respect to a
self-tender offer for the Securities or an
exercise of the call rights under the Swap
Agreement and any other notices with respect
to the Securities. The Trustee shall provide
to the Swap Counterparty any notice from the
Securities Issuer regarding a self-tender
offer for the Securities within two (2)
Business Days of receipt of such notice.
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 7.01(c) of the Standard Terms shall
be incorporated herein by inserting "(i)"
between "Securities" and "would" in the
clause that begins "and provided, further,"
and adding at the end of the same sentence
"and (ii) will not alter the classification
of the Trust for Federal income tax
purposes."
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.
For the avoidance of doubt, Section 9.03(c)
of the Standard Terms shall not be
incorporated herein. For the avoidance of
doubt, the Securities may not be distributed
to Unitholders under any circumstances,
other than to the Depositor exercising
exchangeable series rights.
Section 9.03(i) of the Standard Terms shall
be incorporated herein by striking "or oral"
after the phrase "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: General Electric Global Insurance Holding
Corporation 7.000% debentures due February
15, 2026
Security Issuer: General Electric Global Insurance Holding
Corporation
The Security Issuer will be treated as an
Eligible Issuer if (i) it is an Eligible
Issuer or (ii) it is a Reporting Issuer and
a wholly owned subsidiary (direct or
indirect) of an Eligible Issuer.
Principal Amount: $25,000,000
Security Rate: 7.000%
Credit Ratings: Aa1 on watch for possible downgrade by
Moody's
AA- credit watch negative by S&P
Listing: Luxembourg Stock Exchange
Security Agreement: An indenture dated as of February 1, 1996
between the Security Issuer and the Security
Trustee as supplemented and amended from
time to time.
Form: Global
Currency of
Denomination: United States dollars
Acquisition Price by Trust: $26,056,000
Security Payment Date: Each February 15 and August 15
Original Issue Date: The Securities were originally issued in a
public offering on or about February 26,
1996 in a principal amount of $600,000,000.
Maturity Date: February 15, 2026
Sinking Fund Terms: Not Applicable
Redemption Terms: Not Applicable.
CUSIP No.:/ISIN No. 36158FAA8
Security Trustee: JPMorgan Chase Bank
Available Information
Regarding the Security Issuer
(if other than U.S.
Treasury obligations): The Security Issuer is subject to the
informational requirements of the Securities
Exchange Act of 1934, as amended, and in
accordance therewith files reports and other
information with the Securities and Exchange
Commission (the "Commission"). Such reports
and other information can be inspected and
copied at the public reference facilities
maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at
the following Regional Offices of the
Commission: 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,
District of Columbia 20549 at prescribed
rates.
Schedule III
(Call Option Confirm)
- --------------------------------------------------------------------------------
Date: October 29, 2002
To: SATURNS Trust No. 2002-13 From: Morgan Stanley & Co.
International Limited
Attn: Asset-Backed Securities Group Contact: Chris Boas
SATURNS Trust No. 2002-13
Fax: 312-904-2084 Fax: 212-761-0406
Tel: 312-904-9387 Tel: 212-761-1395
- --------------------------------------------------------------------------------
Re: Bond Option Transaction. MS Reference Number SQ1U1
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: October 11, 2002
Option Style: American
Option Type: Call
Buyer: MSIL ("Party A")
Seller: SATURNS Trust No. 2002-13 ("Party B")
Bonds: The obligation identified as follows:
Bond Issuer: General Electric Global
Insurance Holding Corporation
Issue: 7.000% debentures due 2026
CUSIP: 36158FAA8
Coupon: 7.000%
Maturity Date: February 15, 2026
Face Amount Purchased: USD 25,000,000
Premium: USD 62,500
Premium Payment Date: October 29, 2002
Number of Options: 25,000
Option Entitlement: USD 1,000 of face amount of the Bonds per
Option.
Strike Price: (i) For any Exercise Date prior to October
29, 2007, in the case of an exercise related
to a self-tender by the Bond Issuer for
Bonds held by the Trust, 106% of the face
amount of the Bonds exclusive of accrued
interest or (ii) for any Exercise Date on or
after October 29, 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 October 29, 2007,
to, and including, the Expiration Time on
the Expiration Date; provided, however, the
Exercise Period shall also include any
Business Day prior to October 29, 2007, if
notice of self-tender has been delivered by
the Bond Issuer as to Bonds held by the
Trust.
Exercise Date: For each Option exercised, the day during
the Exercise Period on which that Option is
exercised.
Rescission of Exercise: Party A may rescind its notice of exercise
at any time prior to the Settlement Date by
providing notice of rescission to Party B.
If Cash Settlement applies and 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. If Cash Settlement applies and
Party A exercises its Options in
connection with a self-tender for
settlement prior to October 29, 2007,
Party A's notice of exercise shall be
automatically rescinded if the price
offered by the Bond Issuer does not exceed
the Strike Price together with accrued
interest on the Bonds.
Upon any rescission of exercise (whether
pursuant to the foregoing sentence or
otherwise) the Options for which notice of
exercise was given and for which exercise
was rescinded shall continue in full force
and effect without regard to such
provision of notice.
Multiple Exercise: Applicable
Minimum Number of Options: 1
Written Confirmation of Exercise: Applicable. Buyer shall give 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: The Swap Counterparty may give notice of its
intention to exercise the call rights under
the Swap Agreement on not less than 15 or
more than 60-calendar days' notice. The Swap
Counterparty may give notice of its
intention to exercise its call rights under
the Swap Agreement with respect to Bonds
held by the Trust as to which the Bond
Issuer has given notice of its intention to
redeem or notice of a self-tender with two
business days notice prior to the settlement
of exercise but no later than 4:00 p.m. New
York time on the second Business Day
immediately preceding the scheduled
settlement of such redemption or
self-tender.
Limited Right to Confirm Inapplicable
Exercise:
Expiration Date: February 15, 2023
Expiration Time: 4:00 p.m. New York time
Business Days: New York and Chicago
III. Settlements:
Settlement: Cash Settlement if MSIL is Party A;
otherwise Physical Settlement. Party A will
notify Party B separately regarding the
clearance system details for Physical
Settlement.
Spot Price (Cash Settlement Only): 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
self-tender by the Bond Issuer, the self
tender price, as applicable, paid by the
Bond Issuer, excluding accrued interest.
Deposit of Bond Payment
(Physical Settlement Only): 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.
Additional Payment Obligation
of Party A: To the Expense Administrator (the "Expense
Administrator Payment Obligation"):
If any exercise of Options hereunder 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 $5,575 payable
on each payment date for the Bonds until
the maturity of the Bonds discounted at a
rate of 5.0% 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
$25,000,000.
To Party B for Payment on the Class B
Units (the "Class B Unit Payment
Obligation"):
Upon any exercise hereunder, Party A shall
pay to Party B, for distribution with
respect to the Class B Units, the present
value of the Future Class B Unit Interest
in respect of the Class B Unit
Corresponding Portion discounted at a rate
of 7.000% per annum on the basis of a 360
day year consisting of twelve 30 day
months.
Settlement Date: For Cash Settlement, as applicable, the
Business Day of settlement of the sale of
the Bonds by Party B. For Physical
Settlement, the Exercise Date.
3. Additional Definitions.
"Class B Unit" means the Class B Unit issued under the Trust Agreement.
"Class B Unit Corresponding Portion" means, at any time, a notional
amount of the Class B Units equal to the number of Options exercised at such
time multiplied by the Option Entitlement.
"Expense Administration Agreement" means the expense administration
agreement dated as of the date hereof between Party B and the Expense
Administrator.
"Expense Administrator" means MSDW Structured Asset Corp. acting
pursuant to the Expense Administration Agreement.
"Future Class B Unit Interest" means at any time and from time to time,
the interest on the Class B Unit Corresponding Portion, other than interest
accrued through the Settlement Date, 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.
"Trust Agreement" means the trust agreement dated as of the date hereof
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, excluding accrued
interest, of the Bonds in excess of the aggregate outstanding Unit Principal
Balance (as defined in the Trust Agreement).
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. The transferee in any such
assignment or transfer must be a qualified institutional buyer as defined in
Rule 144A under the Securities Act of 1933, as amended.
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 2002-13
Unit Account / AC-2090067/
Account No.: 67-9102-301
Operations Contact: Andy Streepey
Tel: 312-904-9387
Fax: 312-904-2084
MORGAN STANLEY
Please confirm that the foregoing correctly sets forth the terms of our
agreement MS Reference Number SQ1U1 by executing this Confirmation and returning
it to us.
Best Regards,
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
BBY: /s/ Chris Boas
-------------------------------------------------
Name: Chris Boas
Title: Attorney in fact
Acknowledged and agreed as of the date first written above:
SATURNS TRUST NO. 2002-13
BY: LaSalle Bank National Association,
solely as Trustee and not in its individual capacity.
BY: /s/ Ann M. Kelly
--------------------------------------------------
Name: Ann M. Kelly
Title: Assistant 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/ John Kehoe
-------------------------------------------------
Name: John Kehoe
Title: Attorney in fact