TRUST AGREEMENT
TRUST AGREEMENT, between MS 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
MS 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. 2003-2
Date of Trust Agreement: February 19, 2003
Depositor On November 8, 2002, the Depositor changed
its name from MSDW Structured Asset Corp.
to MS Structured Asset Corp.
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: $30,000,000
Initial Notional Amount
of the Class B Units: $30,000,000
Issue Price of Units: Class A Units: 100%
Class B Units: $218,000
Number of Units: Class A Units:
1,200,000 (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: February 19, 2003
Closing Date: February 19, 2003
Specified Currency: United States dollars
Business Day: New York, New York and Chicago, Illinois
Interest Rate: Class A Units:
8.650% per annum on the basis of a 360 day
year consisting of twelve 30 day months.
Class B Units:
0.0816% 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:
Baa3 by Moody's, negative outlook
BBB- by S&P
Rating Agencies: Moody's and S&P
Scheduled Final Distribution Date: March 15, 2032. 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 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 or if there is a
partial redemption of the Securities, (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 or partial redemption of the
Securities and (ii) the Trustee will first
redeem, up to a Notional Amount equal to
the principal amount of Securities subject
to such exercised or terminated call, Class
B Units held by any Swap Counterparty who
(a) has exercised its call rights under the
Swap Agreement or who will be selected for
termination of call rights and (b) notifies
the Trustee of its election for
preferential redemption of Class B Units
held by it, and then by random selection.
If sufficient funds are not available to
redeem each such redeemed Unit in full, one
Unit may be fractionally redeemed as a
result of each such partial redemption or
exercise.
Additional Distribution: Class A Units:
If any of the Securities are redeemed by
the Security Issuer prior to February 19,
2008, each of the Class A Units being
redeemed in connection with such redemption
of Securities or related exercise of the
call rights under the Swap Agreement shall
receive a pro rata distribution from the
proceeds of such redemption or exercise in
respect of principal, price or premium with
respect to the Securities in excess of the
corresponding Unit Principal Balance of the
Class A Units to be redeemed, up to a
maximum of $2.50 per Class A Unit being
redeemed.
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 in
connection with such self-tender prior to
February 19, 2008, each redeemed Class A
Unitholder shall receive an additional
distribution of $1.50 per Class A Unit from
the proceeds of such exercise in respect of
principal, price or premium with respect to
the Securities in excess of the
corresponding Unit Principal Balance of the
Class A Units to be redeemed.
Class B Units:
If the Securities are redeemed by the
Security Issuer or if the Swap Counterparty
exercises its call rights under the Swap
Agreement, then the Class B Units
designated for a reduction in Notional
Amount in connection with such redemption
or exercise shall receive an amount up to
the Class B Present Value Amount as of the
date of such reduction in Notional Amount
as an additional distribution from (i) the
proceeds of such redemption or exercise
remaining after required distributions to
the Class A Units and (ii) any Class B Unit
Payment Obligation as payable under the
Swap Agreement in connection with such
exercise.
"Class B Present Value Amount" means, with
respect to a date, an amount equal to the
present value of the Future Class B Unit
Interest for such date in respect of the
corresponding portion of Notional Amount of
the Class B Units being reduced discounted
at a rate of 8.750% per annum on the basis
of a 360 day year consisting of twelve 30
day months.
"Future Class B Unit Interest" means with
respect to any date of reduction in the
Notional Amount of the Class B Units
resulting from a redemption of the
Securities or exercise of call rights under
the Swap Agreement, the interest on the
corresponding portion of the Notional
Amount of the Class B Units, other than
interest paid or accrued through such date,
that would accrue at the rate and in the
manner specified hereunder and would be
payable at the times specified hereunder on
such corresponding portion of the Notional
Amount of the Class B Units to the
Scheduled Final Distribution Date had such
reduction of the Notional Amount of the
Class B Units not occurred.
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.
In the event of a partial redemption or
self-tender for the Securities:
(i) in the case of a partial redemption, to
the extent options corresponding to more
Securities than are subject to such partial
redemption are exercised, a number of
options exercised by each Swap Counterparty
shall be deemed rescinded (and each Swap
Counterparty shall be entitled to exercise
such rescinded options in the future) such
that (a) the total amount of options
exercised corresponds to the number of
Securities redeemed and (b) each Swap
Counterparty's exercise is reduced
proportionately to the number of options
such Swap Counterparty initially exercised.
(ii) in the case of a self-tender, the
Trustee shall tender to the Security Issuer
an amount of the Securities equal to the
total number of options exercised, and
shall apply the proceeds of such tender in
cash settlement of such options as provided
in the Swap Agreement; provided, however,
that to the extent any amount of Securities
tendered is not accepted by the Security
Issuer and paid for in accordance with the
terms of the tender, such options relating
to the securities so tendered and not
accepted shall be deemed rescinded and no
settlement thereof shall be deemed to have
occurred, with the number of such rescinded
options to be allocated among the Swap
Counterparties in proportion to the number
of options initially exercised (and each
Swap Counterparty shall be entitled to
exercise such rescinded options in the
future).
Swap Termination Payment: With respect to each $1,000 face amount of
Securities and each corresponding option
under the Swap Agreement, an amount equal
to the excess (if any) of the sale proceeds
or redemption proceeds of the Securities,
as applicable, reduced by (x) accrued
interest on the Securities, (y) the $1,000
of Unit Principal Balance of the Class A
Units to be redeemed in relation to such
sale or redemption and (z) any additional
distribution on the Class A Units and the
Class B Units to be redeemed in relation to
such sale or distribution.
In connection with a partial redemption,
such Swap Termination Payment shall be
allocated among multiple Swap
Counterparties in proportion to the number
of options held by each Swap Counterparty
(after giving effect to any exercise of
options in connection with such partial
redemption as set forth above under "Swap
Counterparty").
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 March 15 and September 15, or the next
succeeding Business Day if such day is not
a Business Day, commencing March 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: The record date for each Distribution Date
shall be 15 days prior to such Distribution
Date 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 $2,000. 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 Trustee 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
Trustee as Expense Administrator (the
"Expense Administrator") and the Trust.
The Expense Administrator will receive a
fee equal to $6,510 payable on each
Distribution Date. Amounts in respect of an
additional payment obligation of the Swap
Counterparty in respect of the Expense
Administrator's fee shall also be
considered part of the Expense
Administrator's fee hereunder and under the
Expense Administration Agreement. 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 Amounts
specified in the paragraph are also
referred to as the "Expense Administrator's
Fee".
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: Not applicable to the Class A Units.
Applicable to the Class B 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 (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 (by delivery to the Security
Issuer in the event of a redemption,
pursuant to the terms of the Swap Agreement
in the event of an exercise of options
under the Swap Agreement or otherwise by
sale thereof).
If the related Trust Wind-Up Event occurs
due to a redemption of the Securities by
the Security Issuer or 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 pro rata as to
amounts treated as accrued interest
outstanding on the Class A Units and the
Class B Units, (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) any additional amounts received in
respect of principal, price or premium will
be applied to the Class A Units as an
additional distribution, but only up to the
amount specified under "Additional
Distribution" in this Trust Agreement.
Remaining accrued interest will be applied
to the Expense Administrator's fee. Amounts
in respect of an additional payment
obligation of the Swap Counterparty in
respect of the Expense Administrator's Fee
will be paid to the Expense Administrator.
Remaining amounts will be allocated to any
applicable additional distribution on the
Class B Units and then to the Swap
Termination Payment.
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 accrued interest plus
the Class B Present Value Amount, in each
case as of such date of termination. 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 aggregate Unit Principal
Balance of the Class A and B Units and the
accrued interest on the Securities, the
excess will be paid to the Swap
Counterparty as a Swap Termination Payment
under the Swap Agreement, other than
amounts payable to the Expense
Administrator in respect of the Expense
Administrator's Fee.
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.
Depositor Optional Exchange: Depositor Optional Exchange applies to this
Series of Units.
The Depositor may exchange Units for a pro
rata portion of the Trust Property subject
only to the following conditions: (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
Distribution Date or any date that is 90
days before or after a Distribution Date
(or the succeeding Business Day if such
date is not a Business Day) with 45 days
notice; (iii) each 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
$1,117,347.
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) 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
or Security Guarantor 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 or Security Guarantor
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 each Swap Counterparty to
purchase the Securities at the highest bid
received by the Selling Agent.
If each Swap Counterparty exercises such
right of first refusal, Securities will be
sold to each Swap Counterparty in
proportion to the number of options held by
such Swap Counterparty; provided, that if
only one Swap Counterparty exercises such
right of first refusal, such Swap
Counterparty shall be entitled to purchase
all of the Securities to be sold 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
redemption of or a self-tender for the
Securities by the Security Issuer (or
extent thereof in the event of an exercise
of call rights in excess of the amount to
be redeemed), 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 the
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 or redemption 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 redemption of or 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 an early
redemption of or 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: Sprint Capital Corporation 8.750%
debentures due March 15, 2032
Security Issuer: Sprint Capital Corporation
For so long as the Security Issuer
qualifies as a "finance subsidiary" under
Rule 3-10(b)(7) under Regulation S-X, the
Security Issuer will be treated as an
Eligible Issuer if (i) it is an Eligible
Issuer or (ii) it is a wholly owned
subsidiary (direct or indirect) of an
Eligible Issuer who fully and
unconditionally guarantees the Securities.
If the Security Issuer ceases at any time
to qualify as a finance subsidiary, the
Security Issuer will be treated as an
Eligible Issuer only if (i) it is an
Eligible Issuer, or (ii) (A) it is a wholly
owned subsidiary (direct or indirect) of an
Eligible Issuer who fully and
unconditionally guarantees the Securities
and (B) the Security Guarantor provides the
information required by Rule 3-10(c) under
Regulation S-X.
Security Guarantor: Sprint Corporation
The Securities are guaranteed by the
Security Guarantor under the Security
Agreement.
Principal Amount: $30,000,000
Security Rate: 8.750%
Credit Ratings: Baa3 by Moody's, negative outlook
BBB- by S&P
Moody's has indicated that it has a
negative outlook for the rating of the
Security Issuer. A negative outlook means
that Moody's has indicated that its rating
of the Security Issuer may be lowered over
the intermediate to longer term.
Listing: None
Security Agreement: An indenture dated as of October 1, 1998
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: $29,348,000
Security Payment Date: Each March 15 and September 15
Original Issue Date: The Securities were originally issued in a
private placement transaction on or about
March 14, 2002, in a principal amount of
$2,000,000,000. The Security Issuer offered
to exchange the entire $2,000,000,000 of
Securities in an exchange offer for
publicly registered securities that closed
on or about June 11, 2002.
Maturity Date: March 15, 2032
Sinking Fund Terms: Not Applicable
Redemption Terms: The Securities are redeemable at any time,
subject to a make-whole payment, if any,
calculated at the time of redemption.
CUSIP No.:/ISIN No. 852060AT9
Security Trustee: Bank One, N.A.
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,
District of Columbia 20549 at prescribed
rates.
Schedule III
(Call Option Confirm)
MORGAN STANLEY
- --------------------------------------------------------------------------------
Date: February 19, 2003
To: SATURNS Trust No. 2003-2 From: Morgan Stanley & Co.
International Limited
Attn: Asset-Backed Securities Group Contact: Chris Boas
SATURNS Trust No. 2003-2
Fax: 312-904-2084 Fax: 212-761-0406
Tel: 312-904-9387 Tel: 212-761-1395
- --------------------------------------------------------------------------------
Re: Bond Option Transaction. MS Reference Number SQ249
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between you and Morgan Stanley & Co.
International Limited ("MSIL"), with Morgan Stanley & Co. Incorporated
("MS&Co."), as agent, on the Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" as referred to in the
Agreement below.
The definitions and provisions contained in the 1997 ISDA Government
Bond Option Definitions as published by the International Swaps and Derivatives
Association, Inc. ("ISDA") are incorporated into this Confirmation and this
transaction shall be deemed a "Government Bond Option Transaction" for purposes
of such definitions. In the event of any inconsistency between those definitions
and this Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms a part of, and is subject to,
the ISDA Master Agreement dated as of the date hereof, as amended and
supplemented from time to time (the "Agreement"), between you and us. All
provisions contained in the Agreement govern this Confirmation except as
expressly modified below.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
I. General Terms
Trade Date: February 19, 2003
Option Style: American
Option Type: Call
Buyer: MSIL ("Party A")
Seller: SATURNS Trust No. 2003-2 ("Party B")
Bonds: The obligation identified as follows:
Bond Issuer: Sprint Capital Corporation
Issue: 8.750% debentures due 2032
CUSIP: 852060AT9
Coupon: 8.750%
Maturity Date: March 15, 2032
Face Amount
Purchased: USD 30,000,000
Premium: USD $75,000
Premium Payment Date: February 19, 2003
Number of Options: 30,000
Option Entitlement: USD 1,000 of face amount of the Bonds per
Option.
Strike Price: (i) For any Exercise Date prior to February
19, 2008, the redemption price of the Bonds
including any make-whole amount (expressed
as a percentage) subject to a maximum of
110%, in the case of an exercise related to
a redemption, or 106%, in the case of an
exercise related to a self-tender by the
Bond Issuer for Bonds held by the Trust, in
each case of the corresponding portion of
the face amount of the Bonds but exclusive
of accrued interest on the Bonds or (ii) for
any Exercise Date on or after February 19,
2008, 100% of the face amount of the Bonds
exclusive of accrued interest.
Calculation Agent: Party A
II. Exercise Terms
Automatic Exercise: Inapplicable
Exercise Period: Any Business Day from, and including, 9:00
a.m. (New York time) on February 19, 2008,
to, and including, the Expiration Time on
the Expiration Date; provided, however, the
Exercise Period shall also include any
Business Day prior to February 19, 2008, if
notice of redemption or 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;
provided that this provision shall not apply
in connection with a redemption. If Cash
Settlement applies and Party A exercises its
Options in connection with a self-tender for
settlement prior to February 19, 2008, 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.
Any Options exercised under this Transaction
may be deemed rescinded to the extent so
provided under Schedule I to the Trust
Agreement.
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 the redemption or self-tender.
Limited Right to Confirm Exercise: Inapplicable
Expiration Date: March 15, 2029
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 or if the
Options are exercised in connection with a
redemption or self-tender; 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
redemption or self-tender by the Bond
Issuer, the redemption price or self tender
price, as applicable, paid by the Bond
Issuer, excluding accrued interest.
Cash Settlement Amount (Cash The Cash Settlement Amount shall be adjusted
Settlement Only): to reflect the Additional Payment Obligation
of Party A.
Bond Payment (Physical The Bond Payment shall also include the
Settlement Only): Additional Payment Obligation of Party A.
Deposit of Bond Payment Party A must deposit the Bond Payment with
(Physical Settlement Only): the Trustee on the Business Day prior to the
Exercise Date. The Bonds are to be delivered
"free" to Party A.
Additional Payment Obligation To the Expense Administrator (the "Expense
of Party A: 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
$6,510 payable on each payment date for the
Bonds until the maturity of the Bonds
discounted at a rate of 5% 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
$30,000,000.
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 outstanding
under the Trust Agreement, the Class B
Present Value Amount (as defined in the
Trust Agreement).
Settlement Date: For Cash Settlement, 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. For Physical Settlement, the
Exercise Date.
3. Additional Definitions.
"Expense Administrator" means LaSalle Bank National Association acting
pursuant to the "Expense Administration Agreement".
"Trust Agreement" means the trust agreement dated as of the date hereof
between the MS 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. A redemption by the Bond Issuer of a portion
of the Bonds held by Party B will result in a partial Additional Termination
Event to the extent of the Bonds being so redeemed (or, to the extent there are
multiple Swap Counterparties, to such portion of the Bonds being redeemed
allocable to the options held by Party A) if Party A does not exercise Options
hereunder corresponding to such Bonds.
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 for each option so
terminated in lieu of the termination payment determined in accordance with
Section 6(e) of the Agreement, the amount specified as the Swap Termination
Payment 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 2003-2
Unit Account / AC-2090067/
Account No.: 67-9163-709
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 SQ249 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. 2003-2
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