Exhibit 4.1
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TRUST AGREEMENT
TRUST AGREEMENT, between MSDW Structured Asset Corp. (the
"Depositor") and LaSalle Bank National Association (the "Trustee"), made as of
the date set forth in Schedule I attached hereto, which Schedule together with
Schedules II and III attached hereto, are made a part hereof and are hereinafter
referred to collectively as the "Terms Schedule". The terms of the Standard
Terms for Trust Agreements, dated July 7, 1999 (the "Standard Terms") are,
except to the extent otherwise expressly stated, hereby incorporated by
reference herein in their entirety with the same force and effect as though set
forth herein. Capitalized terms used herein and not defined shall have the
meanings defined in the Standard Terms. References to "herein", "hereunder",
"this Trust Agreement" and the like shall include the Terms Schedule attached
hereto and the Standard Terms so incorporated by reference.
WHEREAS, the Depositor and the Trustee desire to establish the
Trust identified in Schedule I attached hereto (the "Trust") for the primary
purposes of (i) holding the Securities, (ii) entering into any Swap Agreement
with the Swap Counterparty and (iii) issuing the Units;
WHEREAS, the Depositor desires that the respective beneficial
interests in the Trust be divided into transferable fractional shares, such
shares to be represented by the Units; 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 an initial Unit Principal Balance identified 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
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Name: Xxxxx X. Xxxx
Title: Vice President
MSDW STRUCTURED ASSET CORP.
By: /s/ Xxxx Xxxxx
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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. 2001-8
Date of Trust Agreement: December 20, 2001
Trustee: LaSalle Bank National Association. References
to Chase Bank of Texas, National Association
in the Standard Terms shall be inapplicable.
Initial Unit Principal Balance: $44,338,650
Issue Price: 100%
Number of Units: 1,773,546 (Unit Principal Balance of $25
each)
Minimum Denomination: $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.
Cut-off Date: December 20, 2001
Closing Date: December 20, 0000
Xxxxxxxxx Xxxxxxxx: Xxxxxx Xxxxxx dollars
Business Day: New York, New York and Chicago, Illinois
Interest Rate: 7.40%
Interest Reset Period: Not Applicable
Rating: A3 on watch for possible downgrade
by Moody's
A- watch negative by S&P
Rating Agencies: Moody's and S&P
Scheduled Final Distribution Date: March 15, 2029. The Units will have the same
final maturity as the Securities.
Prepayment/Redemption: The Trust Property is subject to redemption
at any time and is subject to call in
accordance with Schedule III.
If the rights under the Swap Agreement is
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 December 20, 2006
each of the Units which are redeemed in
connection with such redemption of Securities
(or a related exercise or deemed exercise
pursuant to Schedule III) will receive a pro
rata distribution from the proceeds of the
redemption of the Securities remaining after
payment of principal and interest on such
Units up to a maximum of $2.50 per 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
termination or a deemed exercise is to occur
under only part of the options outstanding
under all Swap Agreements, the Trustee shall
randomly select which options under the Swap
Agreements shall be selected for such partial
termination or deemed exercise.
Guaranty: Xxxxxx Xxxxxxx Xxxx Xxxxxx & Co. (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: Any date upon which the rights under the Swap
Agreement may be exercised.
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 as 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 and premium amount than the
Swap Agreement entered into on the Closing
Date. The Rating Agency Condition must be
satisfied in connection with respect to the
Swap Counterparty.
Distribution Date: Each March 15 and September 15, commencing
March 15, 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 March 1 and September 1, regardless of
whether such day is a Business Day.
Form: Global
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 December 20, 2001 (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 0.025% 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'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.
In addition the Expense Administrator shall
own that portion of the Securities which
represent the interest of a fractional
Unitholder that would remain after a partial
exercise or deemed exercise of the Swap
Agreement had the Swap Counterparty not been
obligated to pay the Fractional Unit Make
Whole Amount (pursuant to and as defined in
the Swap Agreement). The Expense
Administrator shall receive all interest and
principal with respect to such portion of the
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 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.
Deemed Representations: Not Applicable
QIB Restriction Not Applicable
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 (or completion
of a self-tender) by the Security Issuer of
all Securities held by the Trust and (ii)
exercise of the right to purchase Securities
under the Swap Agreement as to all Securities
held by the Trust.
If a Trust Wind-Up Event occurs because the
Swap Counterparty exercises its rights to
purchase all of the Securities held by the
Trust and the Swap Counterparty specifies
cash settlement in connection with such
exercise and if the Selling Agent cannot
obtain a bid for the Securities in excess of
100% of the aggregate Unit Principal Balance,
then the Securities will not be sold, the
Swap Counterparty's exercise of the call
option will be deemed rescinded and the Trust
Wind-Up Event will be deemed not to have
occurred.
Termination: If a Trust Wind-Up Event occurs (other than
due to exercise of the right to purchase
Securities under the Swap Agreement as to all
Securities held by the Trust), any Securities
held by the Trust will be liquidated (in the
case of a Trust Wind-Up Event resulting from
a self-tender offer, by tender to the
Security Issuer) and the proceeds will be
applied first to redeem the Units at 100% of
their principal balance plus accrued interest
and then to apply any remaining amounts to
the payment of any amounts owed to the Swap
Counterparty as a Swap Termination Payment
under the Swap Agreement.
In the event the Security Issuer makes a
self-tender offer for the Securities, 100% of
the Unitholders may direct the Trustee to
tender all of the Securities held by the
Trust. The Trustee will only accept an
instruction to tender the Securities if all
of the Securities held by the Trust are to be
tendered. The Units will receive the proceeds
after payment of a Swap Termination Payment
determined on the basis of "Market Quotation"
under the Swap Agreement (with the Trust as
sole Affected Party) as advised by the Swap
Counterparty.
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 March 15, 2002.
The amount of the Retained Interest is
$865,835.
If a Security Default occurs on or prior to
March 15, 2002 and the Depositor does not
receive such Retained Interest amount in
connection with such Distribution Date, the
Depositor will have a claim for such Retained
Interest, and will share pro rata with
holders of the Units to the extent of such
claim in the proceeds from the recovery on
the Securities.
Call Option Terms: Not applicable.
Security Default: The definition of Security Default in the
Standard Terms shall not apply. A "Security
Default" shall mean one of the following
events: (i) the acceleration of the
outstanding Securities under the terms of the
Securities and/or the applicable Security
Agreement and failure to pay the accelerated
amount on the acceleration date; (ii) the
failure of the Security Issuer to pay an
installment of principal of, or any amount of
interest due on, the Securities after the due
date thereof and after the expiration of any
applicable grace period; or (iii) the
occurrence of certain events of default under
such Securities and/or Security Agreement
relating to the insolvency or bankruptcy of
the Security Issuer.
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 will solicit bids for all of
the Securities held by the Trust from at
least three registered broker-dealers of
national reputation. The Selling Agent will,
on behalf of the Trust, sell the Securities
at the highest bid price received.
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 and, if in excess of such
amount, in a $25 integral multiple in excess
thereof. The principal amount of Securities
deposited must be in the same ratio to the
Unit Principal Balance 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 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 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).
Non-U.S. Persons Notwithstanding anything to the contrary
herein or in the Standard Terms, any
beneficial owner of any Units which is a
non-U.S. person shall not be entitled to
exercise any rights of the Unitholders to
instruct or direct the Trustee.
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
a call of the Securities under the Swap
Agreement and any other notices with respect
to the Securities.
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 7.02 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.
Section 9.03(a) of the Standard Terms shall
be incorporated herein by striking "or oral"
after the "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: AT&T 6.50% Debentures due March 15, 2029
Security Issuer: AT&T Corp.
Principal Amount: $50,700,000
Security Rate: 6.50%
Credit Ratings: A3 on watch for possible downgrade
by Xxxxx'x
A- watch negative by S&P
Listing: New York Stock Exchange
Luxembourg Stock Exchange
Security Agreement: An indenture dated as of September 7, 1990,
between the Security Issuer and The Bank of
New York, as trustee, as amended by a
supplemental indenture dated as of October
30, 1992 and as further supplemented from
time to time by supplemental indentures.
Form: Global
Currency of United States dollars
Denomination:
Acquisition Price 84.9482%
by Trust:
Security Payment Date: Each March 15 and September 15, commencing
September 15, 1999.
Original Issue Date: The Securities were issued March 26, 1999.
Maturity Date: March 15, 2029.
Sinking Fund Terms: Not Applicable
Redemption Terms: The Securities are redeemable in whole or in
part at any time and from time to time,
subject to payment of a make-whole amount, if
applicable.
CUSIP No.:/ISIN No. 001957 AW9
Security Trustee: The Bank of New York
Available Information The Security Issuer is subject to the
Regarding the Security informational requirements of the Securities
Issuer (if other than U.S. Exchange Act of 1934, as amended, and in
Treasury obligations): 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: Xxxxxxxxx Xxxxxxxx, 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, X.X. 00000 at prescribed rates.
Schedule III
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Date: December 20, 2001
To: SATURNS Trust No. 2001-8 From: Xxxxxx Xxxxxxx & Co.
International Limited
Attn: Asset-Backed Securities Group Contact: Xxxxx Xxxx
SATURNS Trust No. 2001-8
Fax: 000-000-0000 Fax: 000-000-0000
Tel: 000-000-0000 Tel: 000-000-0000
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Re: Bond Option Transaction. MS Reference Number S7525
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 December 20, 2001, 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: December 20, 2001
Option Style: American
Option Type: Call
Buyer: MSIL ("Party A")
Seller: SATURNS Trust No. 2001-8 ("Party B")
Bonds: The obligation identified as follows:
Bond Issuer: AT&T Corp.
Issue: 6.50% Debentures
due 2029
CUSIP: 001957 AW9
Coupon: 6.50%
Maturity Date: March 15, 2029
Face Amount Purchased: USD 50,700,000
Premium: USD $126,750
Premium Payment Date: December 20, 2001
Number of Options: 50,700
Option Entitlement: USD 1,000 of face amount of the Bonds per
Option.
Strike Price: (i) For any Exercise Date prior to December
20, 2006, the redemption price of the Bonds
including any make-whole amount (expressed as
a percentage) subject to a maximum of 110% of
the aggregate Unit Principal Balance or (ii)
for any Exercise Date on or after December
20, 2006, 87.453% of the face amount of the
Bonds.
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 December 20, 2006 to,
and including, the Expiration Time on the
Expiration Date; provided, however, the
Exercise Period shall also include any
Business Day prior to December 20, 2006 with
respect to any such Bonds as to which notice
of redemption has been delivered by the
Issuer (including if necessary, additional
Bonds to allow for the exercise of whole
Options).
Exercise Date: For each Option exercised or deemed
exercised, the day during the Exercise Period
on which that Option is or is deemed to be
exercised, subject to the Deemed Exercise and
Alternative Settlement provision set forth
below.
Multiple Exercise: Applicable
Minimum Number of Options: The lesser of 50,700 or the number of Options
remaining unexercised; provided, that, if
such exercise occurs contemporaneously with a
redemption of the Bonds by the Bond Issuer, a
number of Options corresponding to the number
of Securities held by Party B that are being
redeemed may be exercised instead.
Maximum Number of Options: 50,700
Integral Multiple: 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.
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. For the avoidance of doubt, any
delegation of rights pursuant to this
paragraph does not release Buyer from any
payment or other obligations to the Seller
hereunder and no Third Party shall have any
obligations to the Seller for the payment of
amounts hereunder.
If Party A specifies Cash Settlement in its
notice of exercise and if Party B cannot
obtain a bid for the Bonds held by it in
excess of the Strike Price, then Party A's
notice of exercise will be deemed rescinded.
Notification Date: Any date at least 25 calendar days but not
more than 60 calendar days prior to the
Exercise Date, provided that any date which
is 30 calendar days after the Bond Issuer
provides notice of redemption is also a
Notification Date.
Limited Right to Confirm Exercise: Inapplicable
Expiration Date: March 15, 2026
Expiration Time: 4:00 p.m. New York time
Business Days: New York and Chicago
III. Settlements:
Settlement: Physical Settlement (subject to
the Deemed Exercise and Alternative
Settlement provision below), unless Party A
specifies Cash Settlement, in which case Cash
Settlement shall apply. Party A will notify
Party B separately regarding the clearance
system details.
Bond Payment: An amount equal to the sum of:
(i) The product of the Strike Price and the
Exercised Call Notional Amount,
(ii) The accrued interest, if applicable, and
(iii) Any Fractional Unit Make Whole Amount.
In addition, in connection with any partial
exercise, Party A shall pay to the Expense
Administrator an amount equal to the present
value of the Trustee Fee (as defined in the
Trust Agreement) that will accrue 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 Exercised Call Notional Amount and
divided by $50,700,000.
Cash Settlement Amount: If Cash Settlement is specified, then (i)
Party B shall pay to Party A, against the
payment by Party A set forth in clause (ii),
the cash proceeds delivered in connection
with sale of the Bonds by Party B (including
any cash paid or delivered in respect of
accrued interest on the Bonds) and (ii) Party
A shall pay to Party B, against the payment
and/or delivery set forth in clause (i), the
Bond Payment.
Exercised Call Notional Amount: The product of the Option Entitlement and the
number of Options exercised on the relevant
Exercise Date.
Settlement Date: Exercise Date
Deposit of Bond Payment: With respect to Physical Settlement only,
Party A must deposit the Bond Payment with
the Trustee on the Business Day prior to the
Exercise Date. The Bonds are to be delivered
"free" to Party A.
Deemed Exercise and Alternative Settlement:
In the event that any of the Bonds held by
Party B are redeemed by the Bond Issuer and
paid in full in accordance with their terms,
an equivalent number of Options with respect
to any remaining Bonds held by Party B shall
be deemed to have been exercised (and the
requirements of notice of exercise and
written confirmation of exercise deemed
satisfied), in the same proportion as the
portion of the Bonds held by Party B that are
redeemed. The effective date of deemed
exercise shall be 25 calendar days prior to
the date on which Party B receives the cash
proceeds delivered in connection with the
redemption. As a result of such deemed
exercise, (i) Party B shall pay to Party A,
against the payment by Party A set forth in
clause (ii), the cash proceeds delivered in
connection with such redemption (including
any cash paid or delivered in respect of
accrued interest on the Bonds) and (ii) Party
A shall pay to Party B, against the payment
and/or delivery set forth in clause (i),
the Bond Payment.
3. Additional Definitions.
"Expense Administration Agreement" means the expense administration
agreement dated as of December 20, 2001 between Party B and the Expense
Administrator.
"Expense Administrator" means MSDW Structured Asset Corp. acting
pursuant to the Expense Administration Agreement.
"Fractional Unit Make Whole Amount" means the amount specified in
paragraph 9.
"Trust Agreement" means the trust agreement dated as of December 20,
2001, 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
(other than as a result of a self-tender), 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 in excess of the principal of and interest on the
Units. If an early termination occurs due to a tender of the Bonds to the Bond
Issuer, the Swap Termination Payment shall be determined under Section 6(e)
determined on the basis of "Market Quotation" under the Swap Agreement (with
Party B as sole Affected Party). If an early termination occurs due to a tender
of the Bonds to the Bond Issuer, the Swap Termination Payment shall be paid
prior to any payment on the Units.
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.
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 2001-8
Unit Account / AC-0000000/
Account No.: 00-0000-00-0
Operations Contact: Xxxxx Xxxx
Tel: 000-000-0000
Fax: 000-000-0000
9. Fractional Unit Make-Whole Amount. In the event any exercise or
deemed exercise hereunder would result in a fractional Unit (as defined in the
Trust Agreement) remaining after such exercise, Party A shall, in addition to
amounts payable hereunder, pay to Party B the remaining fractional Unit
Principal Balance (as defined in the Trust Agreement) together with accrued
interest on such Unit and, if applicable, any Additional Distribution (as
defined in the Trust Agreement). Party A shall be entitled to reimbursement from
the Expense Administrator to the extent provided in the Expense Administration
Agreement.
Please confirm that the foregoing correctly sets forth the terms of our
agreement MS Reference Number S7525 by executing this Confirmation and returning
it to us.
Best Regards,
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
BY: /s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title: Attorney in fact
Acknowledged and agreed as of the date first written above:
SATURNS TRUST NO. 2001-8
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/ Xxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Attorney in fact
