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. The terms of the
Standard Terms for Trust Agreements, dated March 5, 2003 (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 Schedule I 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 Underlying 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 Underlying 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 Underlying
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.
IN WITNESS WHEREOF, each of the undersigned has executed this
instrument as of the date set forth in the Schedule I 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: Schedules I, II and III
Schedule I
(Terms of Trust and Units)
Trust: SATURNS Trust No. 2003-4
Date of Trust Agreement: March 20, 2003
Trustee: LaSalle Bank National Association
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: $25,975,000
Initial Notional Amount
of the Class B Units: $25,975,000
Issue Price of Units: Class A Units: 100%
Class B Units: $2,216,000
Number of Units: Class A Units:
1,039,000 (Unit Principal Balance
of $25 each)
Class B Units:
As specified by the Depositor
Minimum Denomination: Class A Units:
$25 and $25 increments in excess
thereof. Each $25 of Unit Principal
Balance is a Unit.
Class B Units:
$100,000 and $1,000 increments in
excess thereof.
Cut-off Date: March 20, 2003
Closing Date: March 20, 2003
Specified Currency: United States dollars
Business Day: New York, New York and Chicago,
Illinois
Interest Rate: Class A Units:
6.375% per annum on the basis of a
360 day year consisting of twelve
30 day months.
Class B Units:
0.9499% 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:
A3 by Moody's
A- by S&P
Rating Agencies: Moody's and S&P
Scheduled Final Distribution Date: November 1, 2029. The Units will
have the same final maturity as the
Underlying Securities.
Prepayment/Redemption: The Trust Property is subject to
call in accordance with Schedule
III. Any such call will cause a
redemption of a corresponding
portion 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 first redeem,
up to a Notional Amount equal to the
principal amount of Underlying
Securities subject to such exercised
call, Class B Units held by any Swap
Counterparty who has exercised its
call rights under the Swap Agreement
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 exercise.
Additional Distribution: Class A Units:
If the Underlying Security Issuer
gives notice of a self-tender as to
Underlying Securities held by the
Trust and a Swap Counterparty
exercises its call rights under a
Swap Agreement in connection with
such self-tender prior to March 20,
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 Underlying Securities
in excess of the corresponding Unit
Principal Balance of the Class A
Units to be redeemed.
Class B Units:
If a 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 exercise shall receive an
amount equal to the Class B Present
Value Amount as of the date of such
reduction in Notional Amount as an
additional distribution from any
Class B Unit Payment Obligation as
payable under the Swap Agreement in
connection with such exercise, as
applicable. In no event will amounts
payable on the Class B Units under
this provision exceed the Class B
Present Value Amount.
"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 the
Notional Amount of the Class B Units
being reduced discounted at a rate
of 7.375% 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 an
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.
Swap Agreement: The ISDA Master Agreement referred
to in Schedule III and any
assignment thereof.
Swap Counterparty: Party A to the Swap Agreement
referred to in Schedule III or any
assignee thereof.
In the event of a self-tender for
the Underlying Securities the
Trustee shall tender to the
Underlying Security Issuer an amount
of the Underlying 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 Underlying
Securities tendered is not accepted
by the Underlying Security Issuer
and paid for in accordance with the
terms of the tender offer, such
options relating to the Underlying
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 Underlying Securities and
each corresponding option under the
Swap Agreement, an amount equal to
the excess (if any) of the sale
proceeds of the Underlying
Securities, reduced by (x) accrued
interest on the Underlying
Securities, (y) the $1,000 of Unit
Principal Balance of the Class A
Units and the Class B Present Value
Amount with respect to $1,000 of the
Notional Amount of Class B Units to
be redeemed in relation to such sale
and (z) any additional distribution
on the Class A Units to be redeemed
in relation to such sale or
distribution.
Swap Notional Amount: The notional amount specified in
Schedule III.
Swap Payment Date: Not Applicable
Swap Rate: Not Applicable
Distribution Date: Each May 1 and November 1, or
the next succeeding Business Day if
such day is not a Business Day,
commencing May 1, 2003, and any
other date upon which funds are
available for distribution in
accordance with the terms hereof.
If any payment with respect to the
Underlying 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 or the Record
Date.
Record Date: The record date for each
Distribution Date shall be the third
Business Day prior to such
Distribution Date, without
adjustment for any change in the
Distribution Date due to the receipt
of funds for distribution after 12
noon.
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 $6,507
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 Underlying 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: With respect to the Class A Units,
no ERISA Restrictions apply. With
respect to the Class B Units, the No
Plan Restriction applies.
QIB Restriction: Not applicable to the Class A Units.
Applicable to the Class B Units.
Trust Wind-Up Event: If (i) cash settlement applies under
the Swap Agreement (other than in
connection with a self-tender by the
Underlying Security Issuer for the
Underlying Securities), (ii) a Trust
Wind-Up Event has occurred in
connection with the exercise of any
call rights under the Swap Agreement
and (iii) the Selling Agent cannot
obtain a bid for the Underlying
Securities in excess of 100% of the
aggregate Unit Principal Balance of
the Units and accrued interest on
the Underlying Securities, then the
Underlying Securities will not be
sold, the Swap Counterparty's
exercise of the call rights 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
Underlying Securities held by the
Trust will be liquidated (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 an exercise of the
call rights under the Swap Agreement
as to all Underlying Securities held
by the Trust, (i) amounts received
as accrued interest on the
Underlying Securities will be
applied 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 Underlying Securities
(including any portion of the Strike
Price (as defined in the Swap
Agreement) 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 (or any
portion of the Strike Price in
excess of the amount in (ii)) will
be in each case applied first to the
Class A Units as an additional
distribution and second to the Class
B Units as an additional
distribution in the event of any
payment in connection with any
redemption, but only up to the
amount specified under "Additional
Distributions" in this Trust
Agreement. Notwithstanding the
foregoing, any Class B Unit Payment
Obligation made by the Swap
Counterparty under the Swap
Agreement will be distributed to the
Class B Units as set forth under
"Additional Distributions".
Remaining accrued interest will be
applied to the Expense
Administrator's fee. Amounts in
respect of an additional payment
obligation of each 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, up to
their stated principal balance, 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 the stated
principal balance of the Class A and
the Class B Present Value of the
Class B Units and the accrued
interest on the Underlying
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
Underlying Security Issuer: The Trust will not participate in
any self-tender by the Underlying
Security Issuer for the Underlying
Securities and the Trustee will not
accept any instructions to the
contrary from the Unitholders,
except in connection with an
exercise by a Swap Counterparty of
its call rights. Any Swap
Counterparty may exercise its call
rights in connection with any
self-tender in accordance with the
Swap Agreement and the Trustee may
participate in the self tender by
the Underlying Security Issuer on
behalf of an exercising Swap
Counterparty.
Depositor Optional Exchange: Depositor Optional Exchange applies
to this Series of Units.
Section 5.12(c)(ii) of the Standard
Terms shall be incorporated herein
by replacing 5.12 (c)(ii) with the
following: "(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".
Pursuant to 5.12(c)(iii) each Swap
Counterparty and the Expense
Administrator must consent to such
an 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 Underlying 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 Underlying
Securities on the first Distribution
Date.
The amount of the Retained Interest
is $724,632.
If an Underlying 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
Underlying Securities.
Call Option Terms: Not Applicable.
Sale of Underlying 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
Underlying Securities at the highest
bid received by the Selling Agent.
If more than one Swap Counterparty
exercises such right of first
refusal, Underlying Securities will
be sold to each exercising 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 Underlying
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 self-tender for
the Underlying Securities by the
Underlying 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 Underlying 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 Underlying
Securities in excess of the amount
specified in the Swap Agreement,
then the Underlying 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.
Selling Agent: Morgan Stanley & Co. Incorporated.
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)
written confirmation by Moody's (if
the Units are rated by Moody's, for
so long as the Units are outstanding
and rated by Moody's) and (ii)
written confirmation by S&P (if the
Units are rated 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. 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.
Schedule II
(Terms of Trust Property)
Underlying Securities: Dow Chemical Company 7.375%
debentures due November 1, 2029
Underlying Security Issuer: Dow Chemical Company
Principal Amount: $25,975,000
Underlying Security Rate: 7.375%
Credit Ratings: A3 by Moody's
A- by S&P
Listing: None
Underlying Security
Issuance Agreement: An indenture dated as of April 1,
1992 between the Underlying Security
Issuer and the Underlying Security
Trustee as supplemented and amended
from time to time.
Form: Global
Currency of
Denomination: United States dollars
Acquisition Price by Trust: $27,837,725
Underlying Security
Payment Date: Each May 1 and November 1
Original Issue Date: The Underlying Securities were
issued on or about November 9, 1999.
Maturity Date: November 1, 2029
Sinking Fund Terms: Not Applicable
Redemption Terms: Not Applicable
CUSIP No.:/ISIN No. 260543BJ1
Underlying Security Trustee: The First National Bank of Chicago
Available Information
Regarding the Underlying Security Issuer
(if other than U.S.
Treasury obligations): The Underlying 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: March 20, 2003
To: SATURNS Trust No. 2003-4 From: Morgan Stanley & Co.
International Limited
Attn: Asset-Backed Securities Group Contact: Chris Boas
SATURNS Trust No. 2003-4
Fax: 312-904-2084 Fax: 212-761-0406
Tel: 312-904-9387 Tel: 212-761-1395
- --------------------------------------------------------------------------------
Re: Bond Option Transaction. MS Reference Number SQ28D
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between you and Morgan Stanley & Co.
International Limited ("MSIL"), with Morgan Stanley & Co. Incorporated
("MS&Co."), as agent, on the Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" as referred to in the
Agreement below.
The definitions and provisions contained in the 1997 ISDA Government
Bond Option Definitions as published by the International Swaps and Derivatives
Association, Inc. ("ISDA") are incorporated into this Confirmation and this
transaction shall be deemed a "Government Bond Option Transaction" for purposes
of such definitions. In the event of any inconsistency between those definitions
and this Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms a part of, and is subject to,
the ISDA Master Agreement dated as of the date hereof, as amended and
supplemented from time to time (the "Agreement"), between you and us. All
provisions contained in the Agreement govern this Confirmation except as
expressly modified below.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
I. General Terms
Trade Date: March 20, 2003
Option Style: American
Option Type: Call
Buyer: MSIL ("Party A")
Seller: SATURNS Trust No. 2003-4 ("Party B")
Bonds: The obligation identified as follows:
Bond Issuer: Dow Chemical Company
Issue: 7.375% debentures
due 2029
CUSIP: 260543BJ1
Coupon: 7.375%
Maturity Date: November 1, 2029
Face Amount Purchased: USD 25,975,000
Premium: USD $64,938
Premium Payment Date: March 20, 2003
Number of Options: 25,975
Option Entitlement: USD 1,000 of face amount of the Bonds per
Option.
Strike Price: (i) For any Exercise Date prior to March 20,
2008, 106%, in the case of an exercise
related to a self-tender by the Bond Issuer
for Bonds held by the Trust, 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 March 20, 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 March 20, 2008, to,
and including, the Expiration Time on the
Expiration Date; provided, however, the
Exercise Period shall also include any
Business Day prior to March 20, 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.
If Cash Settlement applies and Party A
exercises its Options in connection with a
self-tender for settlement prior to March
20, 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 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 self-tender.
Limited Right to Confirm Exercise: Inapplicable
Expiration Date: November 1, 2026
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
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
self-tender by the Bond Issuer, the self
tender price, as applicable, paid by the
Bond Issuer, excluding accrued interest.
Cash Settlement Amount (Cash The Cash Settlement Amount shall be
Settlement Only): adjusted to reflect the Additional Payment
Obligation of Party A.
Bond Payment (Physical Settlement The Bond Payment shall also include the
Only): Additional Payment Obligation of Party A.
Deposit of Bond Payment (Physical Party A must deposit the Bond Payment with
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 of To the Expense Administrator(the "Expense
Party A: 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 $6,507 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 $25,975,000.
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 self tender. For Physical
Settlement, the Exercise Date.
3. Additional Definitions.
"Expense Administration Agreement" means the expense administration
agreement dated as of the date hereof between Party B and the Expense
Administrator.
"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 2003-4
Unit Account / AC-2090067/
Account No.: 67-9180-505
Operations Contact: Andy Streepey
Tel: 312-904-9387
Fax: 312-904-2084
Please confirm that the foregoing correctly sets forth the terms of our
agreement MS Reference Number SQ28D by executing this Confirmation and returning
it to us.
Best Regards,
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
BY: /s/ John Kehoe
-------------------------
Name: John Kehoe
Title: Attorney in fact
Acknowledged and agreed as of the date first written above:
SATURNS TRUST NO. 2003-4
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