TRUST AGREEMENT
TRUST AGREEMENT, between MSDW Structured Asset Corp. (the
"Depositor") and LaSalle Bank National Association (the "Trustee"), made as of
the date set forth in Schedule I attached hereto, which Schedule together with
Schedules II and III attached hereto, are made a part hereof and are hereinafter
referred to collectively as the "Terms Schedule". The terms of the Standard
Terms for Trust Agreements, dated July 7, 1999 (the "Standard Terms") are,
except to the extent otherwise expressly stated, hereby incorporated by
reference herein in their entirety with the same force and effect as though set
forth herein. Capitalized terms used herein and not defined shall have the
meanings defined in the Standard Terms. References to "herein", "hereunder",
"this Trust Agreement" and the like shall include the Terms Schedule attached
hereto and the Standard Terms so incorporated by reference.
WHEREAS, the Depositor and the Trustee desire to establish the
Trust identified in Schedule I attached hereto (the "Trust") for the primary
purposes of (i) holding the Securities, (ii) entering into any Swap Agreement
with the Swap Counterparty and (iii) issuing the Units;
WHEREAS, the Depositor desires that the respective beneficial
interests in the Trust be divided into transferable fractional shares, such
shares to be represented by the Units; and
WHEREAS, the Depositor desires to appoint the Trustee as
trustee of the Trust and the Trustee desires to accept such appointment;
WHEREAS, the Depositor shall transfer, convey and assign to
the Trust without recourse, and the Trust shall acquire, all of the Depositor's
right, title and interest in and under the Securities and other property
identified in Schedule II to the Trust Agreement (the "Trust Property"); and
WHEREAS, the Trust agrees to acquire the Trust Property
specified herein in consideration for Units having an initial Unit Principal
Balance identified in Schedule I attached hereto, subject to the terms and
conditions specified in the Trust Agreement;
NOW THEREFORE, the Depositor hereby appoints the Trustee as
trustee hereunder and hereby requests the Trustee to receive the Securities from
the Depositor and to issue in accordance with the instructions of the Depositor
Units having 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/ Xxxxx X. Xxxx
--------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
MSDW STRUCTURED ASSET CORP.
By: /s/ Xxxx Xxxxx
--------------------------
Name: Xxxx Xxxxx
Title: Vice President
Attachments: Terms Schedule (consisting of Schedules I, II and III)
Schedule I
(Terms of Trust and Units)
Trust: SATURNS Trust No. 2002-7
Date of Trust Agreement: July 9, 2002
Trustee: LaSalle Bank National Association.
References to Chase Bank of Texas, National
Association in the Standard Terms shall be
inapplicable.
Units: The Trust will issue two classes of Units:
the Class A Units and the Class B Units.
Only the Class A Units will be publicly
offered.
Initial Unit Principal Balance
of the Class A Units: $25,000,000
Initial Notional Amount
of the Class B Units: $25,000,000
Issue Price of Units: Class A Units: 100%
Class B Units: $463,000
Number of Units: Class A Units:
1,000,000 (Unit Principal Balance of $25
each)
Class B Units:
Initially, one (1) Unit representing 100%
of the Notional Amount of the Class B Units
Minimum Denomination: Class A Units:
$25 and $25 increments in excess thereof.
The minimum denomination specified in
Section 5.01(a) of the Standard Terms shall
not apply. Each $25 of Unit Principal
Balance is a Unit.
Class B Units:
The entire Notional Amount of such class;
provided, that, the Class B Units may be
held in lesser Notional Amounts if acquired
in connection with a purchase of less than
100% of the call rights under the Swap
Agreement if the percentage of Class B
Units (as a percentage of all Class B
Units) acquired is equal to the percentage
of call rights (as a percentage of all call
rights) acquired. Such Class B Unit
representing such percentage may be
transferred (and subsequently transferred)
in whole only unless transferred in
connection with a transfer of a lesser
amount of call rights under the Swap
Agreement. The minimum denomination
specified in Section 5.01(a) of the
Standard Terms shall not apply.
Cut-off Date: July 9, 2002
Closing Date: July 9, 0000
Xxxxxxxxx Xxxxxxxx: Xxxxxx Xxxxxx dollars
Business Day: New York, New York and Chicago, Illinois
Interest Rate: Class A Units:
7.875% per annum on the basis of a 360 day
year consisting of twelve 30 day months.
During an extension period with respect to
the securities, while interest will
continue to accrue on the Unit Principal
Balance at 7.875% per annum and interest
will accrue on any deferred interest at
7.875% per annum.
Class B Unit Units: 0.197% per annum on the basis of a 360 day
year consisting of twelve 30 day months.
During an extension period with respect to
the securities, interest will continue to
accrue on the Unit Notional Amount at
0.197% per annum and interest will accrue
on any deferred interest at a rate equal to
8.125% per annum.
The right of the Class A Units to interest
is pari passu with the right of the Class B
Units to interest.
The Class B Units are also entitled to the
Class B Unit Payment Obligation of the Swap
Counterparty specified in Schedule III.
Payment of the Class B Unit Payment
Obligation shall result in a reduction of
the Notional Amount of the Class B Units
equal to the Class B Unit Corresponding
Portion.
Interest Reset Period: Not Applicable
Rating: Class A Units and Class B Units:
Baa2 by Moody's
BBB- by S&P
Rating Agencies: Moody's and S&P
Scheduled Final Distribution Date: September 1, 2031. The Units will have the
same final maturity as the Securities.
Prepayment/Redemption: The Trust Property is subject to redemption
in accordance with the terms of the
Securities and as described in Schedule II
and is subject to call in accordance with
Schedule III. Any such call or redemption
will cause a redemption of a corresponding
portion of the Class A Units and a
reduction in the Notional Amount of the
Class B Units.
If the rights under the Swap Agreement are
partially exercised or if there is a
partial redemption of the Securities, the
Trustee will randomly select Units to be
redeemed in full from the proceeds of such
partial exercise of the Swap Agreement or
partial redemption of the Securities.
Additional Distribution: If any of the Securities are redeemed by
the Security Issuer prior to July 9, 2007,
each of the Class A Units being redeemed in
connection with such redemption of
Securities (or related exercise of the
rights under the Swap Agreement) will
receive a pro rata distribution from the
proceeds of the redemption of the
Securities remaining after payment of
principal and interest on the Class A Units
up to a maximum of $2.50 per Class A Unit.
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 000 X.
XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000 or such other addresses as
the Trustee may designate from time to time
by notice to the Unitholders, the
Depositor, the Swap Counterparty and the
Guarantor.
Swap Agreement: The ISDA Agreement referred to in Schedule
III. In addition, in connection with an
additional issuance of Units, any
additional Swap Agreement entered into in
connection therewith.
Swap Counterparty: Party A to the Swap Agreement referred to
in Schedule III or any assignee thereof. In
addition, in connection with an additional
issuance of Units, Party A to any
additional Swap Agreement or any assignee
thereof.
In the event that there is more than one
Swap Counterparty at any time when a
partial redemption of the Securities
occurs, the Trustee shall randomly select
which options under the Swap Agreements
shall be selected for exercise or
termination (and receipt of a Swap
Termination Payment).
Guaranty: Xxxxxx Xxxxxxx (the "Guarantor") shall
guarantee the obligations of Xxxxxx Xxxxxxx
& 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 with an additional Swap
Counterparty, 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
with respect to such additional Swap
Agreement.
Distribution Date: Each March 1 and September 1, commencing
September 1, 2002.
If any payment with respect to the
Securities held by the Trust is not
received by the Trustee by 12 noon (New
York City time) on a Distribution Date, the
corresponding distribution on the Units
will not occur until the next Business Day
that the Trust is in receipt of proceeds of
such payment prior to 12 noon, with no
adjustment to the amount distributed.
Record Date: Each February 15 and August 15, regardless
of whether such day is a Business Day.
Form: Global Security
Depositary: DTC
Trustee Fees and Expenses: As compensation for and in payment of trust
expenses related to its services hereunder
other than Extraordinary Trust Expenses,
the Trustee will receive Trustee Fees on
each Distribution Date in the amount equal
to $3,750. The Trustee Fee shall cease to
accrue after termination of the Trust. The
"Trigger Amount" with respect to
Extraordinary Trust Expenses for the Trust
is $25,000 and the Maximum Reimbursable
Amount is $100,000. The Trustee Fee will be
paid by the Expense Administrator. Expenses
will be reimbursed by the Expense
Administrator in accordance with the
Expense Administration Agreement.
Expense Administrator: The Depositor will act as Expense
Administrator on behalf of the Trust
pursuant to an Expense Administration
Agreement, dated as of the date of the
Trust Agreement (the "Expense
Administration Agreement"), between the
Depositor as Expense Administrator (the
"Expense Administrator") and the Trust.
The Expense Administrator will receive a
fee equal to 0.06% per annum of the
principal amount of the Securities held by
the Trust as its fee, payable on the basis
of a 360 day year consisting of twelve 30
day months. The Expense Administrator will
be entitled to interest on any deferred fee
amounts that would have been payable but
for deferral of interest on the Securities
at the rate of 8.125% per annum and any
additional amounts available as interest on
deferred interest with respect to the
Securities after application of such
amounts to the deferred interest payable on
the Units. The Expense Administrator's fee
is payable only from available interest
receipts received with respect to the
Securities after application of such
receipts to payment of accrued interest on
the Units and any Swap Termination Payments
currently owing. The Expense Administrator
will be entitled to its fee in connection
with an exercise of the Options or a
redemption of the Securities. The Expense
Administrator will not be entitled to
receive its fee from the proceeds of a
termination other than in connection with
an exercise of Options or a redemption of
Securities.
The Expense Administrator will be
responsible for paying the Trustee Fee and
reimbursing certain other expenses of the
Trust in accordance with the Expense
Administration Agreement.
Listing: The Depositor has applied to list the Class
A Units on the New York Stock Exchange
ERISA Restrictions: None of the restrictions in the Standard
Terms relating to the Employee Retirement
Income Security Act of 1974, as amended,
and related matters shall apply to the
Class A Units.
The restrictions shall apply to the Class B
Units and no ERISA Benefit Plan may acquire
an interest in the Class B Units.
Alternative ERISA Restrictions: Not Applicable
Deemed Representations: Not Applicable
QIB Restriction: Applicable to the Class B Units. Not
applicable to the Class A Units.
Trust Wind-Up Event: The Trust Wind-Up Events specified in
Sections 9.01(a), 9.01(c), 9.01(d), 9.01(f)
and 9.01(h) shall not apply. The Trust Wind
Events specified in Sections 9.01(b)
(Security Default), 9.01(e) (Early
Termination Date designated due to
"illegality" or "tax event" under the Swap
Agreement), 9.01(g) (Disqualified
Securities), 9.01(i) (Excess Expense Event)
shall apply. Pursuant to Section 9.01(j),
the following events also shall constitute
Trust Wind-Up Events: (i) redemption by the
Security Issuer of all Securities held by
the Trust and (ii) exercise of the call
rights under the Swap Agreement as to all
Securities held by the Trust.
If (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 100% of the aggregate Unit
Principal Balance of the Class A Units and
accrued interest on the Securities, then
the Securities will not be sold, the Swap
Counterparty's exercise of the call option
will be rescinded (and the Swap
Counterparty shall be entitled to exercise
such options in the future) and any related
Trust Wind-Up Event will be deemed not to
have occurred.
Termination: If a Trust Wind-Up Event occurs, any
Securities held by the Trust will be
liquidated (by delivery to the Security
Issuer in the event of a redemption).
If a Trust Wind-Up Event occurs due to a
redemption of the Securities by the
Security Issuer or exercise of the call
rights under the Swap Agreement as to all
Securities held by the Trust, (i) amounts
received as accrued interest on the
Securities will be applied to the Class A
Units and the Class B Units pro rata in
proportion to the amount of accrued
interest outstanding on each such Class,
(ii) amounts received as principal or par
on the Securities will be applied to the
Unit Principal Balance of the Class A Units
up to 100% of the Unit Principal Balance of
each Class A Unit, and (iii) if prior to
July 9, 2007, any amount received as a
make-whole premium or redemption premium on
the Securities will be applied to the Class
A Units up to $2.50 per Class A Unit.
Remaining accrued interest will be applied
to the Expense Administrator's fee. Any
remaining amounts (other than the Class B
Unit Payment Obligation of the Swap
Counterparty) will be paid to the Swap
Counterparty as a Swap Termination Payment
under the Swap Agreement. Amounts in
respect of the Class B Unit Payment
Obligation of the Swap Counterparty (as
described in Schedule III) shall be paid to
the Class B Units.
If the Trust is terminated for any other
reason, the proceeds of liquidation will be
applied to redeem the Class A Units and the
Class B Units. The Class A Units will have
a claim on the proceeds of the liquidation
equal to their aggregate Unit Principal
Balance plus accrued interest. The Class B
Units will have a claim on the proceeds of
liquidation equal to the value calculated
(x) by discounting each remaining scheduled
payment at a rate of 8.125% (on the basis
of a 360 day consisting of twelve 30 day
months) and adding (y) accrued interest. If
the proceeds of the liquidation is less
than the combined claim amounts of the
Class A Units and the Class B Units, the
proceeds will be distributed in proportion
to the claim amounts of the Class A Units
and the Class B Units in full satisfaction
of the claims of the Units. If the proceeds
of liquidation exceed the claims of the
Class A Units and the Class B Units, the
excess will be paid to the Swap
Counterparty as a Swap Termination Payment
under the Swap Agreement.
Self-Tenders by Security Issuer: The Trust will not participate in any
self-tender by the Security Issuer for the
Securities and the Trustee will not accept
any instructions to the contrary from the
Unitholders.
Terms of Retained Interest: The Depositor retains the right to receive
any and all interest that accrues on the
Securities prior to the Closing Date. The
Depositor will receive such accrued
interest on the first Distribution Date for
the Units and such amount shall be paid
from the interest payment made with respect
to the Securities on the first Distribution
Date.
The amount of the Retained Interest is
$717,511.
If a Security Default occurs on or prior to
the first Distribution Date and the
Depositor does not receive such Retained
Interest amount in connection with such
Distribution Date, the Depositor will have
a claim for such Retained Interest, and
will share pro rata with holders of the
Units to the extent of such claim in the
proceeds from the recovery on the
Securities.
Call Option Terms: Not Applicable.
Security Default: The definition of Security Default in the
Standard Terms shall not apply. A "Security
Default" shall mean one of the following
events: (i) the acceleration of the
outstanding Securities under the terms of
the Securities and/or the applicable
Security Agreement and failure to pay the
accelerated amount on the acceleration
date; (ii) the failure of the Security
Issuer (or the Security Guarantor on its
behalf or under the Security Guaranty) to
pay an installment of principal of, or any
amount of interest due on, the Securities
after the due date thereof and after the
expiration of any applicable grace period;
or (iii) the occurrence of any of the
events of default under such Securities
and/or Security Agreement relating to the
insolvency or bankruptcy of the Security
Issuer or the Security Guarantor.
Sale of Securities: If the Trust must sell the Securities it
holds, the Trust will sell the Securities
through the Selling Agent in accordance
with Section 9.03(b) and the following
terms. The Selling Agent 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. The Selling Agent may not bid for
the Securities.
If cash settlement applies and if the Swap
Counterparty exercises any of its Options
other than in connection with a redemption
of the Securities by the Security Issuer, a
number of Securities corresponding to the
number of Options exercised by the Swap
Counterparty will be sold by the Selling
Agent on behalf of the Trust.
If the Selling Agent cannot obtain a bid
for the Securities in excess of 100% of the
aggregate Unit Principal Balance of the
Class A Units to be redeemed and accrued
interest on the Securities to be sold, then
the Securities will not be sold, the Swap
Counterparty's exercise will be rescinded
(and the Swap Counterparty shall be
entitled to exercise such Option(s) in the
future) and any related Trust Wind-Up Event
will be deemed not to have occurred.
Additional Issuance of Units: Upon no less than 5 days' notice to the
Trustee, the Depositor may deposit
additional Securities at any time in
exchange for additional Units in a minimum
aggregate amount of $250,000 (with respect
to the Class A Units issued ) and, if in
excess of such amount, in a $25 integral
multiple in excess thereof (with respect to
the Class A Units issued). The principal
amount of Securities deposited must be in
the same ratio to the Unit Principal
Balance (and Notional Amount with respect
to the Class B Units) of the Units received
for such deposit as the ratio of the
aggregate principal amount of the
Securities deposited on the Closing Date to
the aggregate Unit Principal Balance (and
aggregate Notional Amount with respect to
the Class B Units) on the Closing Date. The
Depositor must either arrange for the Swap
Counterparty and the Trust to increase
proportionally the notional amount under
the Swap Agreement or arrange for an
additional Swap Agreement to be entered
into between the Trust and an additional
Swap Counterparty. The Depositor must also
arrange the issuance of Class B Units with
a Notional Amount equal to the Unit
Principal Balance being issued in
connection with an additional issuance. Any
accrued interest will be reflected in the
price of the Securities and the Units. The
Rating Agency Condition must be satisfied
in connection with any such additional
issuance.
Selling Agent: Xxxxxx Xxxxxxx & 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.
Other Terms: The Trust shall not merge or consolidate
with any other trust, entity or person and
the Trust shall not acquire the assets of,
or an interest in, any other trust, entity
or person except as specifically
contemplated herein.
The Trustee shall provide to the
Unitholders copies of any notices it
receives with respect to a redemption of
the Securities or an exercise of the call
rights under the Swap Agreement and any
other notices with respect to the
Securities. Any such notice with respect to
an exercise of call rights or redemption by
the Security Issuer shall be sent at least
20 calendar days prior to the exercise date
or redemption date, as applicable.
The reference to "B2" in the definition of
Certificate in the Standard Terms shall be
replaced with "Exhibit B2".
The reference to "Section 10.02(ix)" in the
definition of Available Funds in the
Standard Terms shall be replaced with
"Section 10.02(a)(ix)".
The reference to "Section 3.04" in the
definition of Unit Account in the Standard
Terms shall be replaced with "Section
3.05".
The transfer by the Depositor to the
Trustee specified in Section 2.01(a) of the
Standard Terms shall be in trust.
Section 2.06 of the Standard Terms shall be
incorporated herein by inserting "cash in
an amount equal to the premium under the
Swap Agreement and" after the phrase
"constituting the Trust Property," therein.
The reference to "calendar day" in the last
sentence of Section 3.06 of the Standard
Terms shall be replaced with "Business
Day".
Section 4.02(d) of the Standard Terms shall
be incorporated herein by striking "and the
Trustee on behalf of the Unitholders" from
the first sentence of the second paragraph
thereof.
Section 5.03(c) of the Standard Terms shall
be incorporated herein by striking "(if so
required by the Trustee or the Unit
Registrar)" from the first sentence
thereof.
Section 7.01(c)(i) of the Standard Terms
shall be incorporated herein by replacing
the first word thereof ("after") with
"alter".
Section 7.01(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.
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: DPL Capital Trust II 8.125% trust preferred
capital securities due September 1, 2031
Security Issuer: DPL Capital Trust II
Security Guarantor: DPL Inc.
The Security Guarantor will be considered
the "Security Issuer" for purposes of
determining whether the Security Issuer is
an Eligible Issuer and whether the
Securities are Disqualified Securities.
Guarantor Debentures: The Security Guarantor's 8.125% junior
subordinated debentures due September 1,
2031. Such debentures are the only assets
of the Security Issuer.
In the event that the Guarantor Debentures
are exchanged for the Securities or
distributed in liquidation of the Security
Issuer, the Guarantor Debentures shall be
treated as the Securities for all purposes
and the Security Guarantor shall be treated
as the Security Issuer for all purposes.
Such exchange or liquidation shall not be
considered a redemption.
Principal Amount: $25,000,000
Security Rate: 8.125%
Credit Ratings: Baa2 by Moody's
BBB- by S&P
Listing: Not applicable
Security Agreement: As to the Securities, the Amended and
Restated Trust Agreement, dated as of
August 31, 2001, among the Security
Guarantor as depositor, The Bank of New
York, as property trustee (referred to
herein as the property trustee and also as
the "Security Trustee"), The Bank of New
York (Delaware) as Delaware trustee, and
two individual administrative trustees who
are employees or officers affiliated with
the Security Guarantor, as amended and
supplemented from time to time. As to the
Guarantor Debentures, the indenture dated
as of August 31, 2001, between the Security
Guarantor and The Bank of New York, as
trustee, as supplemented by the First
Supplemental Indenture dated August 31,
2001, and as may be further supplemented or
amended from time to time.
Form: Global
Currency of
Denomination: United States dollars
Acquisition Price by Trust: $24,738,000
Security Payment Date: Each March 1 and September 1
Original Issue Date: On or about August 31, 2001
The Security Issuer offered to exchange the
securities then issued for publicly
registered securities and such offering
closed on or about February 4, 2002.
Maturity Date: September 1, 2031
Sinking Fund Terms: Not Applicable
Redemption Terms: The Guarantor Debentures and the Securities
may be redeemed at any time with the
payment of a make-whole amount with at
least 30 days notice and within 90 days of
the occurrence of a "special event" with
the payment of a "special event redemption
make-whole amount" (as more fully described
in the underlying indenture and trust
agreement). The Guarantor Debentures may
also be distributed in exchange for the
Securities or in liquidation of the Issuer.
In such event the Guarantor Debentures
would become the Securities under the Trust
Agreement.
CUSIP No.:/ISIN No. 00000XXX0
Security Trustee: The Bank of New York
Guarantor Debenture Trustee: The Bank of New York
Available Information
Regarding the Security Issuer
(if other than U.S.
Treasury obligations): The Security Guarantor is subject to the
informational requirements of the
Securities Exchange Act of 1934, as
amended, and in accordance therewith files
reports and other information with the
Securities and Exchange Commission (the
"Commission"). Such reports and other
information can be inspected and copied at
the public reference facilities maintained
by the Commission at 000 Xxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000 and at the
following Regional Offices of the
Commission: Woolworth Building, 000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and
Northwest Atrium Center, 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000. Copies of
such materials can be obtained from the
Public Reference Section of the Commission
at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx,
Xxxxxxxx xx Xxxxxxxx 00000 at prescribed
rates.
Schedule III
(Call Option Confirm)
Date: July 9, 2002
To: SATURNS Trust No. 2002-7 From: Xxxxxx Xxxxxxx & Co.
International Limited
Attn: Asset-Backed Securities Group Contact: Xxxxx Xxxx
SATURNS Trust No. 2002-7
Fax: 000-000-0000 Fax: 000-000-0000
Tel: 000-000-0000 Tel: 000-000-0000
Re: Bond Option Transaction. MS Reference Number SQ1GE
The purpose of this letter agreement is to confirm the terms and
conditions of the Transaction entered into between you and Xxxxxx Xxxxxxx & Co.
International Limited ("MSIL"), with Xxxxxx Xxxxxxx & 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: June 20, 2002
Option Style: American
Option Type: Call
Buyer: MSIL ("Party A")
Seller: SATURNS Trust No. 2002-7 ("Party B")
Bonds: The obligation identified as follows:
Bond Issuer: DPL Capital Trust II
Issue: 8.125% trust preferred capital
securities due 2031
CUSIP: 00000XXX0
Coupon: 8.125%
Maturity Date: September 1, 2031
Face Amount Purchased: USD $25,000,000
If the junior subordinated debentures
underlying the Bonds are distributed to
Party B as described in the prospectus for
the Bonds, such underlying junior
subordinated debentures shall be deemed to
be the Bonds.
Premium: USD $62,500
Premium Payment Date: July 9, 2002
Number of Options: 25,000
Option Entitlement: USD 1,000 of face amount of the Bonds per Option.
Strike Price: (i) For any Exercise Date prior to July 9,
2007, the redemption price of the Bonds
including any make-whole amount (expressed
as a percentage) subject to a maximum of
110% of the face amount of the Bonds but
exclusive of accrued interest or (ii) for
any Exercise Date on or after July 9, 2007,
100% of the face amount of the Bonds
exclusive of accrued interest.
Calculation Agent: Party A
II. Exercise Terms
Automatic Exercise: Inapplicable
Exercise Period: Any Business Day from, and including, 9:00
a.m. (New York time) on July 9, 2007, to,
and including, the Expiration Time on the
Expiration Date; provided, however, the
Exercise Period shall also include any
Business Day prior to July 9, 2007, if
notice of redemption has been delivered by
the Bond Issuer.
Exercise Date: For each Option exercised, the day during
the Exercise Period on which that Option is
exercised.
Rescission of Exercise (Cash If Party B cannot obtain a bid for the
Settlement Only): Bonds held by it in excess of the Strike
Price together with accrued interest on the
Bonds, then Party A's notice of exercise
shall be rescinded and the Options for
which notice of exercise was given shall
continue in full force and effect without
regard to such provision of notice.
Multiple Exercise: Applicable
Minimum Number of Options: 1
Written Confirmation of Exercise: Applicable. Buyer shall give irrevocable
exercise notice which may be given orally
(including by telephone) during the
Exercise Period but no later than the
Notification Date. Buyer will execute and
deliver a written exercise notice
confirming the substance of such oral
notice, however, failure to provide such
written notice will not affect the validity
of the oral notice.
Limitation on Rights of MSIL: Buyer may, by written notice thereof to
Seller, delegate its rights to provide a
notice of exercise hereunder to a third
party (the "Third Party"). Any such
delegation will be irrevocable by Buyer
without the written consent of the Third
Party. Any such Third Party will have the
same rights and obligations regarding
providing notice of exercise hereunder as
the Buyer had prior to such delegation.
While any such delegation is effective,
Seller will only recognize a notice of
exercise that is provided by the Third
Party.
Notification Date: (i) Any date at least 25 calendar days but
not more than 60 calendar days prior to the
Exercise Date, (ii) any date that is at
least 10 calendar days prior to the
Exercise Date if the Bond Issuer has
provided notice of redemption or (iii) any
date that is on or prior to the Exercise
Date if the Bond Issuer provides less than
15 calendar days' notice of its intention
to redeem the Bonds.
Limited Right to Confirm Exercise: Inapplicable
Expiration Date: September 1, 2028
Expiration Time: 4:00 p.m. New York time
Business Days: New York and Chicago
III. Settlements:
Settlement: Cash Settlement if MSIL is Party A;
otherwise Physical Settlement. Party A will
notify Party B separately regarding the
clearance system details for Physical
Settlement.
Spot Price (Cash Settlement Only): The cash proceeds received by Party B in
connection with sale of the Bonds by Party
B, excluding any amounts in respect of
accrued interest. In the event of a
redemption by the Bond Issuer, the
redemption price paid by the Bond Issuer,
excluding accrued interest.
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 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 $6,575 payable on each payment date for
the Bonds until the maturity of the Bonds
discounted at a rate of 6.0% per annum on
the basis of a 360 day year consisting of
twelve 30 day months from the date of such
exercise until the Scheduled Final
Distribution Date (as defined in the Trust
Agreement), assuming for this purpose that
the Trust (as defined in the Trust
Agreement) is not terminated prior to the
Scheduled Final Distribution Date,
multiplied by the Option Entitlement
multiplied by the number of Options
exercised and divided by $25,000,000.
To Party B for Payment on the Class B Units
(the "Class B Unit Payment Obligation")
Upon any exercise hereunder or upon any
redemption of Bonds held by Party B by the
Bond Issuer, Party A shall pay to Party B,
for payment to the registered holder of the
Class B Units, the present value of the
Class B Unit Interest, calculated as the
sum of (i) the amount of outstanding
accrued interest in respect of the Class B
Unit Corresponding Portion and (ii) the
present value of the remaining scheduled
payments (other than any accrued interest)
in respect of the Class B Unit
Corresponding Portion discounted at a rate
of 8.125% per annum on the basis of a 360
day year consisting of twelve 30 day
months.
Settlement Date: 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.
"Class B Unit" means the Class B Unit issued under the Trust Agreement.
"Class B Unit Corresponding Portion" means the portion of the Class B
Unit to be redeemed or corresponding notional amount reduction under the Trust
Agreement in connection with an exercise hereunder or a redemption by the Bond
Issuer.
"Class B Unit Interest" means at any time and from time to time, the
interest on the Class B Unit Corresponding Portion that would have accrued at
the rate and in the manner specified in the Trust Agreement and would have been
payable at the times specified in the Trust Agreement had (i) the rights to
purchase the Bonds hereunder not been exercised and (ii) had no redemption by
the Bond Issuer occurred. For the avoidance of doubt, Class B Unit Interest
shall not include amounts actually paid on the Class B Units in connection with
the exercise of the right to purchase the Bonds hereunder or a redemption by the
Bond Issuer and the Class B Unit Interest shall not be construed to entitle the
Class B Unit to any "double" payment of interest.
"Trust Agreement" means the trust agreement dated as of the date hereof
between the MSDW Structured Asset Corp. and LaSalle Bank National Association.
4. Representations. Xxxxxx Xxxxxxx & Co. Incorporated is acting as
agent for both parties but does not guarantee the performance of Party A.
5. Additional Termination Event. As set forth in the Agreement, a Trust
Wind-Up Event will result in an Additional Termination Event under the Agreement
with respect to which Party B shall be the Affected Party and this Transaction
shall be an Affected Transaction.
6. Swap Termination Payments. In the event an Early Termination Date is
designated with respect to which this Transaction is an Affected Transaction,
there shall be payable to Party A as a termination payment in lieu of the
termination payment determined in accordance with Section 6(e) of the Agreement
an amount equal to the excess (if any) of the sale proceeds (or redemption
proceeds), excluding accrued interest, of the Bonds in excess of the Strike
Price.
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.
8. Account Details.
Payments to Party A: Citibank, N.A., New York
SWIFT BIC Code: XXXXXX00
ABA No. 021 000 089
FAO: Xxxxxx Xxxxxxx & Co. International
Limited
Account No. 0000-0000
Operations Contact: Xxxxxxx Xxxx
Tel 000-000-0000
Fax 000-000-0000
Payments to Party B: LaSalle Bank, Chicago, Illinois
ABA No. 071 000 505
Reference: SATURNS 2002-7
Unit Account / AC-0000000/
Account No.: 00-0000-000
Operations Contact: Xxxx Xxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
Please confirm that the foregoing correctly sets forth the terms of our
agreement MS Reference Number SQ1GE by executing this Confirmation and returning
it to us.
Best Regards,
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
BY: /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Attorney in fact
Acknowledged and agreed as of the date first written above:
SATURNS TRUST NO. 2002-7
BY: LaSalle Bank National Association,
solely as Trustee and not in its individual capacity.
BY: /s/ Xxxxx X. Xxxx
--------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
XXXXXX XXXXXXX & CO. INCORPORATED hereby agrees to and
acknowledges its role as agent for both parties in
accordance with the Schedule to the Agreement.
BY: /s/ Xxxx Xxxxx
--------------------------------
Name: Xxxx Xxxxx
Title: Attorney in fact
