EXHIBIT 4.1
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 and an initial
Notional Amount, as applicable, 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. 2003-6
Date of Trust Agreement: April 3, 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: $80,000,000
Initial Notional Amount
of the Class B Units: $80,000,000
Issue Price of Units: Class A Units: 100%
Class B Units:
As specified by the Depositor
Number of Units: Class A Units:
3,200,000 (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: April 3, 2003
Closing Date: April 3, 2003
Specified Currency: United States dollars
Business Day: New York, New York and Chicago,
Illinois
Interest Rate: Class A Units:
6.000% per annum on the basis of a
360 day year consisting of twelve 30
day months.
Class B Units:
0.10875% 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:
Aa3 by Moody's
A+ by S&P
Rating Agencies: Moody's and S&P
Scheduled Final Distribution Date: February 15, 2033. The Units will
have the same final maturity as the
Underlying Securities.
Prepayment/Redemption: The Trust Property is subject to
redemption in accordance with the
terms of the Underlying Securities
and as described in Schedule II and
is subject to call in accordance
with Schedule III. Any such call or
redemption will cause a redemption
of a corresponding portion of the
Class A Units and a 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 if there is a partial
redemption of the Securities and
(ii) the Trustee will first redeem,
up to a Notional Amount equal to the
principal amount of Underlying
Securities subject to such exercised
or terminated call, Class B Units
held by any Swap Counterparty who
has exercised its call rights under
the Swap Agreement or who will be
selected for termination of call
rights 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 April 3, 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 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 for settlement
prior to April 3, 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 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 (i) 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 the
proceeds of such redemption
remaining after required
distributions to the Class A Units
or (ii) 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 6.125% 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 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 partial redemption
or self-tender for the Underlying
Securities:
i) in the case of a partial
redemption, to the extent options
corresponding to more Underlying
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
Underlying 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
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 or redemption proceeds of
the Underlying Securities, as
applicable, 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
or redemption and (z) any additional
distribution on the Class A 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").
Swap Notional Amount: The notional amount specified in
Schedule III.
Swap Payment Date: Not Applicable
Swap Rate: Not Applicable
Distribution Date: Each February 15 and August 15, or
the next succeeding Business Day if
such day is not a Business Day,
commencing August 15, 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 $6,500
payable on each Distribution Date.
Amounts in respect of an additional
payment obligation of any 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 or
redemption 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 amount
specified in the Swap Agreement,
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 (by
delivery to the Underlying Security
Issuer in the event of a redemption,
pursuant to the terms of the
applicable Swap Agreement in the
event of an exercise of options
under a Swap Agreement or otherwise
by sale thereof).
If the related Trust Wind-Up Event
occurs due to a redemption of the
Underlying Securities by the
Underlying Securities Issuer or 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 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 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 $678,822.
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 a
Swap Counterparty exercises any of
its call rights other than in
connection with a redemption of or a
self-tender for the Underlying
Securities by the Underlying
Security Issuer, a number of
Underlying Securities corresponding
to the number of call rights
exercised by the Swap Counterparty
(or in the event of an exercise of
call rights in excess of the amount
to be redeemed, the number of call
rights equal to such excess) 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, other
than with respect to Securities
being redeemed, 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.
Voting: With respect to any voting or other
rights of any Unitholder or Class of
Units based on the Unit Principal
Balance of the applicable Units,
each Class B Unitholder shall be
treated as holding Units with a Unit
Principal Balance equal to the
Notional Amount of the Units held by
such Class B Unitholder.
Schedule II
(Terms of Trust Property)
Underlying Securities: Goldman Sachs Group, Inc. 6.125%
debentures due February 15, 2033
Underlying Security Issuer: Goldman Sachs Group, Inc.
Principal Amount: $80,000,000
Underlying Security Rate: 6.125%
Credit Ratings: Aa3 by Moody's
A+ by S&P
Listing: None
Underlying Security
Issuance Agreement: An indenture dated as of May 19,
1999 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: $78,739,000
Underlying Security
Payment Date: Each February 15 and August 15
Original Issue Date: The Underlying Securities were
issued on or about February 13,
2003.
Maturity Date: February 15, 2033
Sinking Fund Terms: Not Applicable
Redemption Terms: The Underlying Securities are
redeemable at any time, subject to a
make-whole payment, if any,
calculated at the time of
redemption. Upon a "tax event", the
Underlying Security Issuer may
redeem the Underlying Securities for
a redemption price equal to the
principal amount plus accrued
interest, if any.
CUSIP No.:/ISIN No. 38141GCU6
Underlying Security Trustee: The Bank of New York
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)
MORGAN STANLEY
- --------------------------------------------------------------------------------
Date: April 3, 2003
To: SATURNS Trust No. 2003-6 From: Morgan Stanley & Co.
International Limited
Attn: Asset-Backed Securities Group Contact: John Kehoe
SATURNS Trust No. 2003-6
Fax: 312-904-2084 Fax: 212-761-0406
Tel: 312-904-9387 Tel: 212-761-1395
- --------------------------------------------------------------------------------
Re: Bond Option Transaction. MS Reference Number SQ2AR
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: April 3, 2003
Option Style: American
Option Type: Call
Buyer: MSIL ("Party A")
Seller: SATURNS Trust No. 2003-6 ("Party B")
Bonds: The obligation identified as follows:
Bond Issuer: Goldman Sachs Group, Inc.
Issue: 6.125% debentures due 2033
CUSIP: 38141GCU6
Coupon: 6.125%
Maturity Date: February 15, 2033
Face Amount Purchased: USD 80,000,000
Premium: USD $200,000
Premium Payment Date: April 3, 2003
Number of Options: 80,000
Option Entitlement: USD 1,000 of face amount of the
Bonds per Option.
Strike Price: (i) For any Exercise Date prior to
April 3, 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 April 3, 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 April 3, 2008, to, and including,
the Expiration Time on the
Expiration Date; provided, however,
the Exercise Period shall also
include any Business Day prior to
April 3, 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 plus the Additional
Payment Obligation of Party A
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
April 3, 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 plus the Additional
Payment Obligation of Party A
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: February 15, 2030
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 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
Settlement Only): adjusted to reflect the Additional
Payment Obligation of Party A.
Bond Payment (Physical Settlement The Bond Payment shall also include
Only): the Additional Payment Obligation of
Party A.
Deposit of Bond Payment (Physical Party A must deposit the Bond
Settlement Only): Payment with the Trustee on the
Business Day prior to the Exercise
Date. The Bonds are to be delivered
"free" to Party A.
Additional Payment Obligation of To the Expense Administrator (the
Party A: "Expense Administrator Payment
Obligation"):
If the Bond Issuer has not given
notice of redemption in connection
with any 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 $6,500
payable on each payment date for the
Bonds until the maturity of the
Bonds discounted at a rate of 5.0%
per annum on the basis of a 360 day
year consisting of twelve 30 day
months from the date of such
exercise until the Scheduled Final
Distribution Date (as defined in the
Trust Agreement), assuming for this
purpose that the Trust (as defined
in the Trust Agreement) is not
terminated prior to the Scheduled
Final Distribution Date, multiplied
by the Option Entitlement multiplied
by the number of Options exercised
and divided by $80,000,000.
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 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. Tax Undertaking. Party A agrees to treat each option hereunder as a call
option for United States Federal Income Tax purposes.
9. 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 2003-6
Unit Account / AC-2090067/
Account No.: 67-9191-908
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 SQ2AR by executing this Confirmation and returning
it to us.
Best Regards,
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. 2003-6
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