-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, El5A4rtRpfroeyqDZgw2WlrqFIJd/C9ST0ghvuVMqqsmhIGsGiK80eW1U+xn0HhV B/5fJNItibshA2nHBP6rZg== 0000903423-99-000178.txt : 19990429 0000903423-99-000178.hdr.sgml : 19990429 ACCESSION NUMBER: 0000903423-99-000178 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19990428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MSDW STRUCTURED ASSET CORP CENTRAL INDEX KEY: 0001071246 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-64879 FILM NUMBER: 99603416 BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2127611715 S-3/A 1 FORM S-3/A As filed with the Securities and Exchange Commission on April 28, 1999 Registration No. 333-64879 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ Amendment No. 2 to Form S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------ STRUCTURED ASSET TRUST UNIT REPACKAGINGS MSDW STRUCTURED ASSET CORP. (Exact name of registrant as specified in governing instruments) Delaware 13-4026700 (State or other jurisdiction (I.R.S. employer of incorporation or organization) identification number) 1585 Broadway New York, NY 10036 (212) 761-1715 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) --------- Michael Harpe MSDW Structured Asset Corp. 1585 Broadway New York, NY 10036 (212) 761-2520 (Name, address, including zip code, and telephone number, including area code, of agent for service) --------- Copies to: Mitchell S. Dupler, Esq. Cleary, Gottlieb, Steen & Hamilton 2000 Pennsylvania Avenue, N.W. Washington, D.C. 20006 Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective in light of market conditions. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered pursuant to delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ------------------ CALCULATION OF REGISTRATION FEE Amount Proposed Proposed maximum
Title of securities being maximum offering aggregate offering Amount of being registered registered price per unit price(2) registration fee ---------------- ---------- -------------- -------- ---------------- (1) (2) Trust Units $500,000,000 100% $500,000,000 $147,500.00
(1) This registration statement also relates to offers and sales of securities in connection with market-making transactions by and through affiliates of the Registrant (subject, with respect to any securities listed on a stock exchange or quoted on an automatic quotation system, to any required approval of such stock exchange or quotation system in connection with market-making transactions by and through Morgan Stanley & Co. Incorporated). (2) Estimated solely for purposes of calculating the registration fee on the basis of the proposed maximum aggregate offering price. ------------------------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------- XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX X Information contained herein is subject to completion X X or amendment. A registration statement relating to these X X securities has been filed with the Securities and Exchange X X Commission. These securities may not be sold nor may offers to X X buy be accepted prior to the time the registration statement X X becomes effective. This prospectus shall not constitute an offer X X to sell or the solicitation of an offer to buy nor shall there be X X any sale of these securities in any State in which such offer, X X solicitation or sale would be unlawful prior to registration or X X qualification under the securities laws of any such State. X XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX PROSPECTUS SUPPLEMENT (To Prospectus dated ___________, 1999) Structured Asset Trust Unit Repackagings (SATURNS)SM Series 1999-__ [Amount], Class * [Callable] Units, [ * %] [Variable] Rate [Amount], Class * [Callable] Units, [ * %] [Variable] Rate MSDW Structured Asset Corp. Depositor Consider carefully the risk factors beginning on page i in this Prospectus Supplement and on page 3 in the Prospectus. The Units represent obligations of the Trust only and do not represent an interest in or obligation of any other entity. This Prospectus Supplement may be used to offer and sell the Units only if accompanied by the Prospectus. The Structured Asset Trust Unit Repackagings (SATURNS) Trust Series 1999- * will issue [a single class][ * classes] of Units. These Units are being offered by this Prospectus Supplement and the accompanying Prospectus. o The Units will represent a beneficial interest in the securities described on pages * of this Supplement. The securities will be held by the Trust. * The securities have a different [interest rate][currency][maturity][credit risk] than do the Units. o [Interest will accrue on the Units at rate equal to * ][The Class * Units will receive all scheduled interest payments received by the Trust on or before * on the securities held by the Trust. The Class * Units will receive a distribution of the securities in kind on * .] o [The Trust will enter into a derivative transaction with * as its counterparty. The Trust will pay to the counterparty the [interest] [principal] [other] amounts the Trust receives on the securities. In exchange, the counterparty will pay to the Trust the scheduled distributions on the Units.] [Describe for each derivative] o [If the securities default, or if the Trust is terminated or fails to perform its obligations, the derivative transaction will terminate early. Early termination of the derivative transaction may result in losses to the purchaser of the Units, which may be as much as the entire investment. * See "Risk Factors."] o [Payments of [interest] [principal] will vary based on performance of an index.][A [decline][increase] in the value of the index will result in losses to the purchaser of the Units, which may be as much as the entire investment.] See "Risk Factors."] o [The Class * Units are not entitled to distributions of principal. If the Securities are prepaid or redeemed early, returns on the Class * Units will be adversely affected and holders of the Class * Units may not recover the initial investment. See "Risk Factors".] Neither the Securities and Exchange Commission nor any state securities commission has approved these Units or determined that this Prospectus Supplement or the Prospectus is accurate or complete. Any representation to the contrary is a criminal offense. [The Units may only be purchased by "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933]. [The Units [may not be] [may be] purchased by pension plan investors subject to the requirements of the Employee Retirement Income Security Act of 1974 [only through special arrangements]. See "ERISA Considerations" in the Prospectus.] [The Depositor will apply to list the Units on the New York Stock Exchange.] Both the Prospectus and the Prospectus Supplement provide information about the Units. The Prospectus provides general information. This Prospectus Supplement describes the specific terms of the Units. The specific terms of the Units described in this Prospectus Supplement qualify any related general discussion in the accompanying Prospectus. The Underwriter will purchase the Units from the Trust. The Underwriter will then sell the Units in negotiated transactions at varying prices at the time of sale. Proceeds from the Units are expected to total * . The Units will be delivered in [book entry form through The Depository Trust Company and its participating members][definitive form] on or about * . MORGAN STANLEY DEAN WITTER April __, 1999 Table of Contents Page SUMMARY............................................................1 RISK FACTORS.......................................................5 DESCRIPTION OF UNITS..............................................12 Interest Distributions.........................................12 Principal Distribution.........................................13 [[Amortizing Distributions]]...................................13 [[Call Rights]]................................................14 [[Optional Exchange]]..........................................14 DESCRIPTION OF TRUST PROPERTY.....................................15 The Securities.................................................15 The Security Issuer............................................17 [[Credit Support]].............................................24 [[DESCRIPTION OF SWAP AGREEMENT]].................................28 Guarantee of MSDW..............................................33 DESCRIPTION OF TRUST AGREEMENT....................................34 Trustee Compensation...........................................34 [[Retained Interest]]..........................................35 \U.S. FEDERAL INCOME TAX CONSEQUENCES..............................35 ERISA CONSIDERATIONS..............................................37 [[BEARER UNITS]]..................................................39 PLAN OF DISTRIBUTION..............................................40 RATINGS...........................................................41 LEGAL OPINIONS....................................................42 INDEX OF DEFINED TERMS............................................42 SUMMARY Below is a concise summary of the principal terms of the Units. As a summary, it does not contain all of the information that may be important to you. A detailed description of the Units follows this summary. Units .............................There will be * class(es) of Units, Class(es) * [and * ]. The Units will be denominated in [specified currency] (the "Specified Currency"). The total principal amount of Units being issued is * (the "Initial Unit Principal Balance"). The Units will be issued in [book-entry records of the Depository Trust Company] [definitive form] in minimum denominations of * . Depositor .........................MSDW Structured Asset Corp. The Trustee [Chase Bank of Texas, National Association] The Trust .........................The Trust will be formed under a Trust Agreement between the Depositor and the Trustee. Securities ........................The Depositor will deposit into the Trust [the following fixed income securities (the "Securities"):{identify}] [a pool of Securities consisting primarily of {identify}]. The Securities [have been purchased by the Depositor or its affiliates in the secondary market][are being deposited into the Trust in connection with the initial issuance of the Securities by * , an affiliate of the Depositor]. See pages * - * for a description of the terms of the Securities. Security Issuer ...................The issuer of the Securities deposited into the Trust is [identify] [repeat for each] (the "Security Issuer"). [Security Issuer] is not participating in this offering and has no obligations under the Units. Information about [Security Issuer] is available in [Security Issuer]'s filings with the Commission. Closing Date ......................On or about * Interest and Principal Distributions .....................[Interest will be distributed each * (each a "Distribution Date"""). The interest rate for the Units is [ * % per annum][variable] (the "Interest Rate"). The Trust will pass through interest to the holders of the Units ("Unitholders") based on payments [received by the Trust under the Securities] [to the Trust by the Swap Counterparty under the Swap Agreement.] [Distributions of interest for a given [period] will be based on the value of [specify index] determined [as of the * day prior to the first day] [on the last day] (the "Interest Reset Date") [other basis of determination] of that [period] [by the Calculation Agent under the Swap Agreement] [under the terms of the Securities].]] [Principal will be distributed [on a final Distribution Date occurring on * (the "Final Scheduled Distribution Date") {or as the Trust receives distributions of principal on the Securities it holds}]]. [Describe any other distributions]. [Distributions of principal on the Class * Units may be less than the full principal amount of the Units [depending on the value of {describe index and valuation period}] [if the Trust is required to make a termination payment {or payment under the credit swap transaction} under the Swap Agreement]]. [The Class * Units have an amortizing principal balance. The Class * Units will receive all scheduled payments on interest that the Trust receives on or before * on the Securities it holds. Each payment will reflect partial amortization of the principal balance of the Class * Units and a distribution of interest at a rate of * % per annum.] [The Class * Units will not receive scheduled distributions of interest or principal, but will receive a distribution of the Securities on * .] [If the Securities are in default or are redeemed early, the Trust will terminate and the Securities or proceeds of redemption will be divided between the Class * and Class * Units. The percentage share of the Securities received by each Class will vary based on when the Trust terminates. See "Description of Units".] [[Call Rights .....................The Units are subject to a call option in favor of [identify] on * at a price of * ]] [[Depositor] Optional Exchange ....[Holders of the Units have a limited right] [The Depositor and its affiliates, but not any other Holder of the Units, will have a limited right] to exchange Units for corresponding portions of the Securities. The [Depositor's] right to make such an exchange is subject to restrictions on advance notice, frequency, and minimum amount of the exchange. [In addition, an exchanging Unitholder will be responsible for a partial termination payment under the Swap Agreement.]]] [[Swap Counterparty ...............[identify]]] [[Swap Agreement ..................[Swap Counterparty] will enter into [an interest rate swap] [a cross-currency swap] [a total return swap][a {call}{put}option transaction] [a credit swap] [other] transaction with the Trust. The Trust [will pay to the Swap Counterparty the {interest} {principal} amounts the Trust receives on the Securities] [{will}{may be required to} deliver to the Swap Counterparty the Securities on {dates} at a price of * . [In exchange for periodic payments made by the Swap Counterparty, the Trust will deliver the Securities to the Swap Counterparty if a specified credit-related occurs with respect to [specify entity].] The Trust will receive payments under the Swap Agreement on the same dates the Trust makes distributions on the Units. [The Trust will apply the payments it receives under the Swap Agreement to make distributions of interest [and principal] on the Units.]]] [[Swap Agreement Guarantee ........Morgan Stanley Dean Witter will guarantee the obligations of [Swap Counterparty] under the Swap Agreement. [[Calculation Agent ...............[Entity] will act as Calculation Agent under the Swap Agreement and will calculate the value of [index] from time to time.]] [[Exchange Rate Agent .............[Entity] will act as Exchange Rate Agent and will calculate applicable rates of exchange between U.S. dollars and [specified currency] for investors purchasing the Units with U.S. dollars.]] [[Credit Enhancement ..............The credit enhancements include [a financial guaranty insurance policy] [letter of credit] [guarantee] [subordination features]. [Describe]]] [[Retained Interest ...............[Describe any retained interest of the Depositor]]] Tax Status ........................The Depositor will receive an opinion that the Trust [{should}{will} be characterized as a grantor trust and][will not be characterized as an association taxable as a corporation.] Rating ............................The Units must be assigned a rating of * by * in order to be issued. [[Offering Restrictions ...........The Units are being offered only to "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933.]] ERISA Considerations ..............A plan subject to the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 or the Internal Revenue Code [may not purchase the Units] [must make special arrangements with the Depositor and the Trustee in order to purchase the Units] * [should consult with its counsel before making an investment in the Units]. * See "ERISA Considerations." RISK FACTORS In addition to the risk factors discussed in the Prospectus, prospective purchasers of the Units should carefully consider the following risk factors: [[[Describe any special risk factors from Securities]]] [[ Prepayments Will Affect Yield [and Recovery of Investment] The Securities [can be redeemed early at the option of the Security Issuer {specify dates or conditions}] [may amortize early as a result of {describe amortization features of underlying security}]. If the Securities are redeemed early, the Trust will be terminated and [Unitholders will receive a return of principal before the scheduled maturity of the Units] [proceeds of the redemption will be divided between the Class * and Class * Units based on the outstanding Class * Unit Principal Balance determined on the termination date. See "Description of Units -- Amortizing Distributions"] See "Risk Factors" in the Prospectus. If the Securities are redeemed early, the Trust [and the Swap Agreement] will terminate [, and the Trust may be required to pay a termination payment. See "--Liability for Swap Termination Payments" in this section and "Risk Factors -- Swap Agreements have special risks" in the Prospectus."]]] [[The Class * Units are not entitled to distributions of principal but receive interest cash flows from the Securities for so long as the Securities are outstanding. If the Securities are prepaid or redeemed early or the Trust is wound up early, returns on the Class * Units will be adversely affected. Such prepayment, redemption or wind up may occur before holders of the Class * Units have recovered the initial investment. See "Risk Factors".]] [[Sensitivity to Interest Rates]] [[The Class * Units do not receive allocations of either interest or principal until the Final Scheduled Distribution Date. The market value of the Class * Units from time to time will be sensitive to changes in interest rates, more so than the Securities.]] [[[Interest] and [Principal] Linked to Value of [Specify Index] The Units are "Index-Linked Units" as described in the Prospectus. Distributions of [interest] [and principal] with respect to the Units will depend on the value of the [specify index]. The [specify index] indexes the appreciation or depreciation in the price of a designated group of [securities commodities, currencies, intangibles, goods or articles or other objective price, economic or other measure] over a given period of time. Depending on the performance of the [specify index] over a given interest period, Unitholders may receive lesser amounts of interest on these Units than they would otherwise have received had they held the Securities. Depending on [the performance of the index over the time the Units are outstanding] [the value of the index on the scheduled final distribution date for the Units], Unitholders may receive a lesser return of principal on the Units than they would have received had they held the Securities. The value of the index is determined by changes in the prices of the [securities commodities, currencies, intangibles, goods or articles or other objective price, economic or other measure] making up the index. Such changes generally depend on factors -- such as economic and political events and the supply of and demand for [indexed assets] -- that the Depositor[, the Swap Counterparty] and the Trustee and their affiliates do not control and cannot foresee. [The value of the index is not determined by a nationally published source]. [The index is published solely by third parties are not subject to regulation under the laws of the United States.] [The Depositor and the Swap Counterparty cannot ensure that [publisher] will determine the value of the index accurately.] The risk of [decreased interest payments] [and loss of principal] as a result of the linkage of payments on Index-Linked Units to the index and to the Indexed Assets is substantial. Prospective purchasers should consult their own financial and legal advisors as to the risks entailed by an investment in Index-Linked Units.]] [[Currency Risks The Units are not denominated in U.S. dollars. Depreciation of [the specified currency] against the U.S. dollar will result in a decrease in the effective yield of such Unit for an investor who pays dollars to purchase the Units. * The value of the U.S. dollar in comparison to the [specified currency] depends on economic and political factors, the supply and demand for such currencies, and government interventions, and can be highly unpredictable. [In recent years, rates of exchange between the U.S. dollar and [specified currency] have been volatile.] The [specified currency] may become unavailable, due to exchange controls or other events beyond the control of the Depositor or the Trust. In such circumstances, the Exchange Rate Agent will determine in its sold discretion when and how to make distributions on the Units. This may include a delay until the [specified currency] is again available or a distribution in another currency at rates determined by the Exchange Rate Agent. Courts in the United States customarily have not rendered judgments for money damages denominated in any currency other than U.S. dollars. In the New York courts, an action based upon an obligation denominated in a currency other than U.S. dollars will be rendered in the foreign currency of the underlying obligation and converted into U.S. dollars at the exchange rate prevailing on the date of judgment. Prospective purchasers of such Units should consult their own financial and legal advisors about risks related to investments in currencies other than U.S. dollars.]] [[Liability for Swap Termination Payments [The Swap Agreement] [Each swap transaction] may be terminated early if o the [related] Securities default [or are redeemed early]; o the Trust or the Swap Counterparty fails to make the required payments under the agreement; o MSDW fails to perform under its guarantee of the Swap Agreement; o the Swap Agreement becomes illegal or invalid; o the Trust or the Swap Counterparty becomes bankrupt; o withholding taxes are imposed on payments made by the Trust or Swap Counterparty under the Swap Counterparty; o the Swap Counterparty or MSDW is involved in a merger and disaffirms the Swap Agreement; or o [other] At any time of early termination [the Swap Agreement] [each swap transaction] may have value to either the Trust or the Swap Counterparty; if so, the other party will be required to pay that value as a termination payment. The termination payment corresponds to the estimated cost to the Trust or the Swap Counterparty of entering into a replacement [Swap Agreement] [swap transaction]. Such cost depends on the comparative value of the remaining [specify] payments to be made by the Trust and the remaining [specify] payments to be made by the Swap Counterparty. The holders of the Units will effectively pay any termination payment payable by the Trust, in proportion to the amount of their investment, up to the limit of the Trust's assets. The value of [the Swap Agreement] [each swap transaction] may be highly volatile, and it is not possible to estimate the maximum amount of the termination payment. Please carefully review "Risk Factors -- Swap Agreements have special risks" in the Prospectus. ]] [[High Yield Securities -- Greater Default Risk The Securities [are] [include] high yield corporate debt obligations of U.S. [and other] issuers rated below investment grade. [The Securities are not secured by any collateral.] [High yield debt obligations are generally unsecured.] They [are] [may also be] subordinated to other obligations of the Security Issuer and have greater credit and liquidity risk than is typically associated with investment grade corporate obligations. High yield obligations are often issued in connection with leveraged acquisitions or recapitalizations. In such transactions, security issuers incur a substantially higher amount of indebtedness than the level at which they had previously operated. High yield debt obligations have historically experienced greater default rates than has been the case for investment grade securities. Although studies have been made of historical default rates in the high yield market, future default rates may differ.]] [[Alternative Tax Characterization]] The Depositor will receive an opinion of counsel that the Trust should be treated as a grantor trust for federal income tax purposes, but the Internal Revenue Service might disagree with this characterization. See "U.S. Federal Income Tax Consequences" in this Prospectus Supplement for a discussion of the consequences of any alternative characterization of the Trust that might be asserted by the I.R.S. [[Emerging Market Securities -- Special Risks The Securities [include] [are] emerging market securities, and are subject to special risks. Special Credit Risks Investing in the debt of emerging markets issuers involves special credit risks not associated with investing in more established capital markets such as the United States and Western Europe. The risks may include: o risks attributable to fluctuations in foreign exchange rates; o political, economic and diplomatic instability; o hyperinflation; o expropriation; o different legal systems; o exchange controls; o confiscatory taxation; o nationalization of private businesses; or o other governmental restrictions Tax Risks Foreign investments may also be subject to foreign withholding taxes or other taxes or changes in the rates or methods of taxation applicable to the Trust or to the Security Issuer. Price and Liquidity Risks The Securities are also subject to special price volatility and liquidity risks. [Specify market] [and other] emerging markets have smaller capital markets with substantially less volume than capital markets of non-emerging markets. As a result, the securities traded there are generally less liquid and prices are generally more volatile. A limited number of issuers often represent a disproportionately large percentage of market capitalization and trading value in [specify market] [and other] emerging markets. In addition, large investors trading significant blocks of securities, or dealers making large dispositions of securities resulting from failure to meet margin calls, may significantly affect price and liquidity in emerging markets. Should the Unitholders receive a distribution of the Securities in kind, as a result of early termination of the Swap Agreement or the Trust, such factors may affect the price at which the Unitholders' can dispose of the Securities and their ability to do so quickly. Available Information Disclosure and regulatory standards in emerging markets are often less stringent than those in other international securities markets. Many emerging market countries have a low level of monitoring and regulation of the market and market participants, and limited and uneven enforcement of existing regulations. An investor may be able to obtain little publicly available information about an issuer in an emerging market country. The security issuer may not be subject to accounting, auditing and financial reporting standards comparable to those of companies in non-emerging markets. As a result, traditional investment measurements, such as price/earnings ratios, may not be useful in emerging markets.]] DESCRIPTION OF UNITS The Trust will be formed under a Trust Agreement between the Depositor and the Trustee dated * . The Trust Agreement incorporates the provisions of the Standard Terms of Trust Agreements between the Depositor and the Trustee dated * and described in the Prospectus. When the Trust Agreement is executed, the Depositor will deposit the Securities into the Trust. The Trustee, on behalf of the Trust, will accept the Securities [, enter into the Swap Agreement] and deliver the Units to or upon the order of the Depositor. The Units will consist of * Class[es] of Units, designated as [specify classes]. Each Class is denominated in [Specified Currency] (the "Specified Currency"). The [Class * ] Units have in the aggregate an Initial Unit Principal Balance of * . [The Class * Units do not have a Unit Principal Balance but are entitled to distributions of interest based on a Notional Amount of * .][The Unit Principal Balance of the Class * Units amortize, in accordance with the schedule described under "Amortizing Distributions" below.][The Trust will also issue Class * Units, which are not being offered by this Prospectus Supplement. The Class * Units will be transferred by the Depositor to an affiliate on the Closing Date, and may be sold at any time by the Depositor in accordance with the terms of the Trust Agreement.] [[[For Global Registered Units]: The Units [(other than the Class * Units)] will be issued, maintained and transferred on the book-entry records of DTC and its Participants in minimum denominations of * and multiples of * in excess thereof.]] [[[For Definitive Units]: The Class * Units will be offered in registered, certificated form, in minimum percentage interests corresponding to the [initial Notional Amount] [Initial Unit Principal Balance], of * and integral multiples thereof. The Trustee will maintain a register of the Unitholders of record and distributions in respect of the Units will be made on each Distribution Date to holders of record on a record date ("Record Date") occurring on the * day prior to each Distribution Date.]] Interest Distributions Distribution Dates for the Units will occur on [the payment dates under the Securities falling on] [the payment dates under the Swap Agreement falling on] each [specify dates]. Exact Distribution Dates are subject to the provisions of the Trust Agreement and [the Swap Agreement] [the Securities] as to shifting of payment dates where Distribution Dates would otherwise fall on a date which is not a business day. Specifically, if a Distribution Date would otherwise fall on a day which is not a Business Day, the payment will instead be made on the next following Business Day [other]. For purposes of the Units [and the Swap Agreement], "Business Days" will include [specify]. The Interest Rate applicable to the Units is a [fixed rate of * % per annum][variable rate]. Each [specify interval] period from (and including) a Distribution Date to (but excluding) the following Distribution Date will be an Interest Period. [The Trust will pass through to the Unitholders interest it receives on the Securities. See "Description of Trust Property."] [Distributions of interest for a given [period] will be based on the value of [specify index] as determined [on the first day] [on the last day] [other basis of determination] of that [period] by the Calculation Agent under the Swap Agreement. The Trust will pass through interest at this rate to the holders of the Units based on payments to the Trust by the Swap Counterparty under the Swap Agreement.] [The Units will accrue interest for each Interest Period based on the value of [specify index] [determined as of the ___ day prior to the first day] [determined on the ___ day prior to the last day] of such Interest Period by the Calculation Agent under the Swap Agreement.] Principal Distributions Principal will be distributed on the Final Scheduled Distribution Date occurring on * [or as the Trust receives distributions of principal on the Securities it holds]. The Trust will also pass through to the Unitholders payments of principal received on the Securities due to any early amortization or partial redemption of the Securities. [Describe any other distributions]. [Distributions of principal on the Class * Units may be less than the full principal amount of the Units [depending on the value of {describe index and valuation period}] [if the Trust is required to make a termination payment {or payment under the credit swap transaction}under the Swap Agreement].] [[Amortizing Distributions On each Distribution Date, commencing on * and ending on the Final Scheduled Distribution Date, the holders of the Class * Units will receive a distribution equal to the interest payment, if any, received on the Securities, minus fees and expense reimbursements paid to the Trustee. * The amount distributed will be * % of the principal amount of the Securities held by the Trust. The amount will be allocated between payment of interest on the outstanding Unit Principal Balance of the Class * * at an Interest Rate of * % per annum. and a partial return of principal on the Class * Units in accordance with the amortization schedule set forth below (the "Amortization Schedule"). The Class * Principal Balance will be decreased on each Distribution Date by the amount*allocated to return of principal on the Class * Unit on that date. [Amortization Schedule] [set out schedule] Although distributions on the Class * Units are labeled as principal and interest, the Class * Units generally will not be entitled to any allocation of any principal payments received on the Securities and will be paid solely from interest payments on the Securities. Except upon early termination of the Trust, no cash distributions will be made on the Class * Units until the Class * Unit Principal Balance has been reduced to zero. On the Final Scheduled Distribution Date, the holders of Class * Units will be entitled to a distribution of all of the Securities held by the Trust as of such date. If a Securities Default (as defined under "Description of the Trust Agreement") occurs or the Securities are redeemed early, the Trust will terminate and the Securities or proceeds of redemption will be divided between the Class * and Class * . * The percentage shares of the Securities received by the Class * and Class * Units will vary, as specified in the Amortization Schedule, based on the outstanding Unit Principal Balance of the Class * on the date Trust terminates. * The Class * Units will receive a percentage amount of the Securities equal to the ratio between the Class * Unit Principal Balance on the date of termination and the principal amount of the Securities [amount]. * If the date of termination is not Distribution Date, the Class * Unit Principal Balance will be determined by the Calculation Agent by linear interpolation (as described below) between the Class * Unit Principal Balance on the Distribution Date immediately preceding and immediately succeeding such date. * The Class * Units will receive the remaining portion of the Securities.]] [[Call Rights The Units are a Callable Series. [Specify call holder] has the right to purchase all or a portion of the Units at a price of * %, provided that such right must be exercised with respect to a minimum Unit Principal Balance of * and integral multiples thereof. [Specify any time restriction]. Each Unitholder will be entitled to receive a distribution of a pro rata share of the price paid in connection with exercise of the call option.]] [[Optional Exchange The Units are [an "Exchangeable Series."] [subject to "Depositor Optional Exchange"] [A holder][The Depositor and its affiliates, but not any other Holder of the Units] may exchange Units for a pro rata portion of the Trust Property; provided that: (i) the exchanging holder tenders to the Trustee Units of each Class; (ii) the exchange is made with respect to a minimum Unit Principal Balance or Notional Amount of * or an integral multiple thereof; (iii) exchange may only be affected on the following dates ("Optional Exchange Dates"): [specify] [(iv) an exchanging holder is required to {obtain the consent of the Swap Counterparty to such exchange and} tender to the Swap Counterparty a termination payment in respect of termination of any portion of the Swap Agreement corresponding to the portion of the Securities to be distributed to such holder by the Trustee;] [describe other limitations or provisions].]] DESCRIPTION OF TRUST PROPERTY The Securities [[[Include for each Concentrated Security:] [A significant portion of] [Virtually all of] [All of] the Trust Property of the Trust will consist of the [amount] [ * %] [floating rate] [specify publicly issued security] due * of [specify issuer][, exclusive of the Retained Interest of {the Depositor} as described below]. The Securities were issued under an [indenture][other agreement] dated as of * (the "Security Agreement") between [Security Issuer] and [Security Trustee][Fiscal Agent][other counterparty]. The Securities were part of a series of securities totaling * . [The Securities have an amortizing principal and the Securities to be held by the Trust had as of * (the "Cut-off Date") an aggregate principal amount of approximately * .] [[The Securities [have been] [will be] purchased by the Depositor in the secondary market (either directly or through an affiliate of the Depositor) and will be deposited into the Trust. The Securities will not be acquired either from [Security Issuer] or pursuant to any distribution by or agreement with [Security Issuer]. All information contained in this Prospectus Supplement regarding the Securities has been derived solely from [the Security Prospectus [{and Security Registration Statement]} {other periodic filing} relating to such Securities as filed with [{stock exchange or other agency} {the Commission} on *] [{describe FNMA, FHLMC or other GSE offering circular} relating to such Securities issued on * and periodic reports with respect thereto filed {describe GSE periodic reporting}]. [Describe other publicly available documents.] [Securities issued by a Security Issuer which is not an Eligible Issuer will be described below and in periodic reporting.] Prospective purchasers of Units are urged to read this Prospectus Supplement in conjunction with the Security Prospectus and the Security Registration Statement. The Depositor, Morgan Stanley and the Trustee, as well as their respective affiliates, did not participate in the preparation of the Security Prospectus or Security Registration Statement or other public information relating to the Securities, and they take no responsibility for the accuracy or completeness of the information provided in such Security Prospectus or Security Registration Statement.]] [[The Securities [were issued][will on the Closing Date be issued] by * , an affiliate of the Depositor and Morgan Stanley. In depositing the Securities into the Trust, the Depositor is acting as an underwriter of the Securities. The Security Prospectus was filed with the Securities and Exchange Commission on * and is included as an annex to this Prospectus Supplement. Prospective purchasers of Units are urged to read this Prospectus Supplement in conjunction with the Security Prospectus and the Security Registration Statement.]] The following is a summary of all material terms of the Securities: Title and Original Issue Date: Security Issuer: Principal Amount Held By Trust: Interest Rate: Scheduled Payment Dates: Scheduled Maturity: Ranking: Rating at Issuance: Security Agreement: Terms of Pledge, Lien or other Security Interest: Guarantee or other Credit Support: Currency of Denomination: Redemption or Sinking Fund Terms: Optional Redemption Terms: Trustee or Other Agent for Security Holders Listing: Form: CUSIP: Security Prospectus: Security Registration Statement: Other Terms: [Describe any put, call or other conversion or redemption options applicable to the Securities]. [Describe material covenants and events of default under Security Agreement relating to each Concentrated Security]. As of the Cut-off Date, the Securities were rated [specify investment grade rating] [investment grade] by [specify nationally recognized rating agency or agencies], and the obligor thereon was not in default in the payment of any installments of principal, interest or premium (if any) with respect thereto. Any such rating of such Securities is not a recommendation to purchase, hold or sell such Securities or the Units, and there can be no assurance that a rating will remain for any given period of time or that a rating will not be lowered or withdrawn entirely by a rating agency if in its judgment circumstances in the future so warrant. See "Ratings" in this Prospectus*Supplement regarding certain considerations applicable to the ratings of the Units. The Security Issuer [[ According to [Security Issuer]'s publicly available documents, [Security Issuer] is a [identify form of entity, banking organization, insurance company, or describe foreign sovereign or agency or instrumentality] whose principal executive offices are located at [specify address]. The Depositor is not an affiliate of [Security Issuer]. [Security Issuer] is subject to the informational requirements of the Exchange Act and as required by the Exchange Act files reports and other information (including financial information) with the Commission [and makes available to the public upon request certain annual reports containing financial and other information]. Copies of such reports and other information may be inspected and copied at the Commission locations listed under "Available Information" in the accompanying Prospectus and may be obtained from the Public Reference Section of the Commission at Washington, D.C. 20549, at prescribed rates. In addition, such reports and other information [can be inspected at the offices of the [New York Stock Exchange at 20 Broad Street, New York, New York 10005] [may be obtained from {Security Issuer}, according to its most recent annual report, upon written or oral request to { Security Issuer }].]] [[This Prospectus Supplement does not provide information with respect to the Security Issuer and no investigation of the financial condition or creditworthiness of any of the Security Issuer or any of its subsidiaries or other affiliates, has been made by the Depositor, Morgan Stanley or the Trustee, or any of their affiliates, in connection with the issuance of the Units. Prospective purchasers of Units should consider carefully the Security Issuer's financial condition and its ability to make payments in respect of the Securities. All information contained in this Prospectus Supplement regarding the Security Issuer has been derived from [the related Security Prospectus and reports filed by the Security Issuer pursuant to the Exchange Act] [describe GSE public information]. It is possible that events affecting the Securities or the Security Issuer have occurred, which have not yet been publicly disclosed, which would affect the accuracy or completeness of the publicly available documents described above.]] [[In the event that [Security Issuer] [ceases to be a reporting company under the Exchange Act][ceases to publish {describe GSE information}], the Trust will [terminate] [partially terminate] and distribute the related Securities to the Unitholders in kind [subject to payment of any termination payment owed to the Swap Counterparty for the termination of the related swap transaction]. See "Risk Factors -- Swap Agreements have special risks" in the Prospectus. [[[Use the following where Units are backed principally by Treasury/FNMA/FHLMC securities]: [[[The Securities are [issued] [guaranteed] by [the United States of America] [agency].][Payment of the Securities is guaranteed by the full faith and credit of the United States of America.]]] [[The Securities are obligations of the Federal National Mortgage Association ("Fannie Mae"). Fannie Mae is a federally chartered and stockholder-owned corporation organized and existing under the Federal National Mortgage Association Charter Act, 12 U.S.C. ss. 1716 et seq. It is the largest investor in home mortgage loans in the United States. Fannie Mae originally was established in 1938, as a United States government agency to provide supplemental liquidity to the mortgage market and was transformed into a stockholder-owned and privately managed corporation by legislation enacted in 1968. Fannie Mae provides funds to the mortgage market by purchasing mortgage loans from lenders, thereby replenishing their funds for additional lending. Fannie Mae acquires funds to purchase loans from many capital market investors that ordinarily may not invest in mortgage loans, thereby expanding the total amount of funds available for housing. Operating nationwide, Fannie Mae helps to redistribute mortgage funds from capital-surplus to capital-short areas. Fannie Mae also issues mortgaged-backed securities. Fannie Mae receives guaranty fees for its guaranty of timely payment of principal of and interest on mortgaged-backed securities. Fannie Mae issues mortgage-backed securities primarily in exchange for pools of mortgage loans from lenders. The issuance of mortgaged-backed securities enables Fannie Mae to further its statutory purpose of increasing the liquidity of residential mortgage loans. Fannie Mae prepares an Information Statement annually which describes Fannie Mae, its business and operations and contains Fannie Mae's audited financial statements. From time to time Fannie Mae prepares supplements to its Information Statement which include certain unaudited financial data and other information concerning the business and operations of Fannie Mae. These documents can be obtained without charge from Paul Paquin, Senior Vice President - -- Investor Relations, Fannie Mae, 3900 Wisconsin Avenue, N.W., Washington, D.C. 20016 (telephone: (202) 752-7115). Fannie Mae is not subject to the periodic reporting requirements of the Securities Exchange Act of 1934.]] [[The Securities are obligations of the Federal Home Loan Mortgage Association ("Freddie Mac"). Freddie Mac is a publicly held government-sponsored enterprise created on July 24, 1970 pursuant to the Federal Home Loan Mortgage Corporation Act, Title III of the Emergency Home Finance Act of 1970, as amended (the "FHLMC Act"). Freddie Mac's statutory mission is to provide stability in the secondary market for home mortgages, to respond appropriately to the private capital market and to provide ongoing assistance to the secondary market for home mortgages (including mortgages secured by housing for low-and moderate-income families involving a reasonable economic return to Freddie Mac) by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for home mortgage financing. The principal activity of Freddie Mac consists of the purchase of first lien, conventional, residential mortgages and participation interests in such mortgages from mortgage lending institutions and the resale of the mortgages so purchased in the form of guaranteed mortgage securities. Freddie Mac generally matches and finances its purchases or mortgages with sales of guaranteed securities. Mortgages retained by Freddie Mac are financed with short-and long-term debt, cash temporarily held pending disbursement to security holders, and equity capital. Freddie Mac prepares an Information Statement annually which describes Freddie Mac, its business and operations and contains Freddie Mac's audited financial statements. From time to time Freddie Mac prepares supplements to its Information Statement which include certain unaudited financial data and other information concerning the business and operations of Freddie Mac. These documents can be obtained from Freddie Mac by writing or calling Freddie Mac's Investor Inquiry Department at 8200 Jones Branch Drive, McLean, Virginia 22102 (outside Washington, D.C. metropolitan area, telephone (800) 336-3672; within Washington, D.C. metropolitan area, telephone (703) 759-8160). Freddie Mac is not subject to the periodic reporting requirements of the Securities Exchange Act of 1934.]]]] [[Set forth similar summary statement for other GSE Eligible Issuer.]]]] [[[Use the following where the Concentrated Security is issued by a foreign sovereign agency or instrumentality] The Securities are [obligations of][guaranteed by] [identify foreign government, foreign political subdivision, or agency and instrumentality]. In the absence of a waiver of immunity by [Security Issuer], it would not be possible to obtain a United States judgment against such [Security Issuer], unless a court were to determine that such issuer is not entitled under the Foreign Sovereign Immunities Act of 1976 to sovereign immunity with respect to such action. Even if [Security Issuer], is amenable to suit in the United States, the enforceability of any judgment obtained may be limited by a lack of substantial assets which can be levied upon in the United States or the inability to obtain recognition and enforcement of the judgment in the issuer's country. Because the Securities represent direct or indirect obligations of [Security Issuer], Unitholders should consider the political, economic and other risks attendant on holding the obligations of a foreign government which are not typically associated with an investment in securities of a domestic issuer. Such risks include future political and economic developments, governmental repudiation, moratorium on payment or rescheduling of external debts, confiscatory taxation, imposition of any withholding tax, exchange rate fluctuations, political or social instability or diplomatic developments and the imposition of additional governmental laws or restrictions. While [Security Issuer] makes certain information available by filing periodic reports and other information with the Commission, such information (including financial information) may differ in timing, form and substance from that normally available with respect to domestic issuers. The Securities of [Security Issuer] have been issued under a fiscal agency agreement with provision for a fiscal agent, rather than a Trustee. A fiscal agent does not have the same responsibilities or duties to act on behalf of the holders of [Security Issuer]'s as would a trustee. [The due and punctual payment of the Securities and the due and timely performance of all obligations with respect thereto [are backed by the full faith and credit of the sovereign entity] [unconditionally guaranteed by {identify}].]]]]] [[[Use the following where the Securities consist of a pool of obligations of multiple obligors.] The Securities Pool [The Securities consist of Securities of [specify all types of issuers -- domestic, foreign, corporate, government]. The Securities [will be] [have been] purchased by the Depositor in the secondary market (either directly or through an affiliate of the Depositor) and will be deposited into the Trust. The Securities will not be acquired either from the respective obligors on the Securities or pursuant to any distribution by or agreement with such obligors. The composition of the Securities pool and the distribution by ratings, remaining term to maturity and interest rate of the Securities as of the Cut-off Date are as set forth in Tables 1 through 5 below: Composition Of The Securities Pool As Of The Cut-Off Date ---------------------- Number of Securities: Aggregate Principal Balance: Average Principal Balance: Largest Balance: Weighted Average Interest Rate: % Weighted Average Original Term to Maturity: years Weighted Average Remaining Term to Maturity: years Longest Remaining Term to Maturity: years Distribution By Industry Classification Of The Securities Pool As Of The Cut-Off Date Industry Aggregate Principal Percent of Aggregate Classification Number Balance Principal Balance - -------------- ------ ------- ----------------- Total Distribution By Remaining Term To Maturity Of The Securities Pool As Of The Cut-Off Date --------------------------------------------- Remaining Term Aggregate Principal Percent of Aggregate to Maturity Number Balance Principal Balance - ----------- ------ ------- ----------------- Total Distribution By Interest Rate Of The Securities Pool As Of The Cut-Off Date --------------------------------------------- Interest Aggregate Principal Percent of Aggregate Rate Change Number Balance Principal Balance - ----------- ------ ------- ----------------- Distribution By Ratings Of The Securities Pool As Of The Cut-Off Date -------------------------------------- Aggregate Principal Percent of Aggregate Rating Number Balance Principal Balance - ------ ------ ------- ----------------- Total: [[As of the Cut-off Date, [all of] [approximately % of] such Securities were rated [investment grade] [specify particular rating] by at least one nationally recognized rating agency, and no obligor of any Security was in default in the payment of any installments of principal, interest or premium (if any) with respect thereto. Any such rating of any of the Securities is not a recommendation to purchase, hold or sell such Security or the Units, and it is possible that a rating will not remain for any given period of time or that a rating will be lowered or withdrawn entirely by a rating agency if in its judgment circumstances in the future so warrant. See "Ratings" in this Prospectus Supplement regarding certain considerations applicable to the ratings of the Units.]] [[Add the following where pool includes Foreign Government Issuers: [The Securities will include obligations of, or guaranteed by, the following foreign governments, foreign political subdivisions, or agencies and instrumentalities (collectively referred to as "Foreign Governments"): [list] In the absence of a waiver of immunity by a Foreign Government, it would not be possible to obtain a United States judgment against such Foreign Government unless a court were to determine that such issuer is not entitled under the Sovereign Immunities Act of 1976 to sovereign immunity with respect to such action. Even if such an issuer is amenable to suit in the United States, the enforceability of any judgment obtained may be limited by a lack of substantial assets which can be levied upon in the United States or the inability to obtain recognition and enforcement of the judgment in the issuer's country. Because the Securities represent direct or indirect obligations of foreign governments, Unitholders should consider the political, economic and other risks attendant on holding the obligations of a foreign government which are not typically associated with an investment in securities of a domestic issuer. Such risks include future political and economic developments, governmental repudiation, moratorium on payment or rescheduling of external debts, confiscatory taxation, imposition of any withholding tax, exchange rate fluctuations, political or social instability or diplomatic developments and the imposition of additional governmental laws or restrictions. While a Foreign Government Security Issuer may make certain information available by filing periodic reports and other information with the Commission, such information (including financial information) may differ in timing, form and substance from that normally available with respect to domestic issuers. The Securities generally have been issued pursuant to a fiscal agency agreement with provision for a fiscal agent, rather than a Trustee. A fiscal agent does not have the same responsibilities or duties to act on behalf of the holders of a Foreign Government's Securities as would a trustee. The due and punctual payment of each Security and the due and timely performance of all obligations with respect thereto [are backed by the full faith and credit of the sovereign entity] [or] [unconditionally guaranteed by the sovereign entity]. There are few contractual restrictions on the Foreign Governments in respect of the Securities. The Securities by their terms and provisions may, however, restrict certain actions of the related Foreign Governments and may also require, among other things, the creation or maintenance of reserves or a sinking fund or contain an undertaking or pledge of the Foreign Government not to encumber its assets to secure any other external indebtedness without providing like security for the related Securities. Certain actions in respect of the Securities of Foreign Governments may also be subject to proper executive, legislative or administrative approval.]] Security Agreements Each of the Security Agreement[s] limits the [respective] Security Issuer's ability to engage in certain activities and transactions and requires that the Security Issuer perform certain obligations with respect to the Securities. [Describe common restrictive, financial and other covenants on the Security Issuer contained in the Security Agreement.] The following is a summary of the typical events of default for each series of Securities: (a) failure to make payments of principal (and premium, if any) and interest to holders of the Securities in the time periods given in the Security Agreement; (b) material breaches of certain representations, warranties or covenants or failure to observe or perform in any material respect any covenant or agreement under a Security Agreement continuing for a specified period of time after notice thereof is given to the Security Issuer by the trustee or the holders of not less than a specified percentage of the Securities; (c) failure by the Security Issuer to make any required payment of principal (and premium, if any) or interest with respect to certain of the other outstanding debt obligations of the Security Issuer or the acceleration by or on behalf of the holders thereof of such securities; [and] (d) certain events of bankruptcy or insolvency relating to the Security Issuer; and [(e) describe any additional common events of default with respect to the pool of Securities]. As of the Cut-off Date, [approximately __% of] the Securities were [subject to [describe any put, call or other conversion or redemption options applicable to the Securities as well as the nature of the obligation represented by such Securities (i.e., senior, subordinate, secured) and describe commonalities with respect to any subordination or security provisions or collateral].]] (including guarantees thereof) [Each of the] [The] Securities [was] [were] registered under the Securities Act of 1933 other than [specify], which was issued in reliance on the exemption from registration provided by [specify]. [[Credit Support -- [Letter of Credit][Insurance Policy][Reserve Account][Subordination Feature] For the benefit [solely] of the [Class * ] Units, Credit Support will be obtained [and will constitute part of the Trust to the extent provided below], in the form of [a letter of credit] [insurance policy] [reserve account] [subordination feature] as described below. [[Simultaneously with the Depositor's assignment of the Trust Property to the Trust, the Depositor will obtain a letter of credit (the "Letter of Credit") from [LOC Issuer] in favor of the Trustee on behalf of the Unitholders. The Letter of Credit will be irrevocable and will support the [timely][ultimate] remittance of amounts due with respect to the Trust Property]. [The maximum amount that the Trustee may draw under the Letter of Credit will initially be equal to * .] [The initial amount of the Letter of Credit will be * . Thereafter, the amount of the Letter of Credit with respect to any Distribution Date will equal [the lesser of (i) * % of the aggregate Unit Principal Balance outstanding on the preceding Distribution Date (after giving effect to any payment of principal made on such preceding Distribution Date) but in any event not less than * , and (ii)] the amount of the Letter of Credit on the preceding Distribution Date, plus [(a) reimbursement of certain advances under the Letter of Credit and (b) recoveries on defaulted Trust Property] [describe other methods]]. The Letter of Credit expires on * . The Trustee will be obligated, in the event of a drawing on the Letter of Credit, to pursue appropriate remedies against the Trust Property and other collateral, and any realization thereon shall be paid to [LOC Issuer] to the extent of any amounts owing, in the manner and priority applicable to the Units that have been paid with proceeds of the Letter of Credit. [Add description of the LOC Issuer with respect to its debt ratings, activities it engages in, regulatory authorities having jurisdiction over it and the nature of such regulation, a narrative description of its assets, liabilities (including deposits) and equity, and include an address for further information concerning the LOC Issuer. In addition, to the extent that the Letter of Credit will cover payment of 20% or more of the aggregate principal amount of the Units covered thereby, provide or incorporate by reference financial statements and other information with respect to the LOC Issuer.]]] [[Simultaneously with the Depositor's assignment of the Trust Property to the Trust, the Depositor will obtain the financial guaranty insurance policy (the "Policy") from [identify] (the "Insurer") in favor of the Trustee on behalf of the Unitholders. The Policy will guaranty scheduled payments of principal, premium (if any) and interest with respect to the [Class * ] Units. The Policy expires on * . The Trustee will be obligated, in the event of a drawing on the Policy, to pursue appropriate remedies against the Trust Property and other collateral, and any realization thereon shall be paid to the Insurer to the extent of any amounts owing, in the manner and priority applicable to the Units that have been paid with proceeds of the Policy. [Add language regarding the issuer of the Policy with respect to its insurance strength ratings, activities it engages in, regulatory authorities having jurisdiction over it and the nature of such regulation, a narrative description of its assets, liabilities (including deposits) and equity, and include an address for further information concerning the Insurer. In addition, to the extent that the Policy will cover payment of 20% or more of the aggregate principal amount of the Units covered thereby, provide or incorporate by reference financial statements and other information with respect to the issuer of the Policy.]]] [[In the event that [Credit Support provider] ceases to be a reporting company under the Exchange Act, [the Trust will terminate and distribute the related Securities to the Unitholders in kind {subject to payment of any termination payment owed to the Swap Counterparty for the termination of the related swap transaction}] [describe any provisions for replacement of Credit Support provider]. See "Risk Factors -- Swap Agreements have special risks" and "Description of Trust Agreements - Trust Wind-Up Events in the Prospectus. [[The Depositor will establish for the benefit of the Trustee on the Closing Date a Reserve Account containing cash, letters of credit and short-term investments acceptable to the rating agency initially rating the Units in the amount of * . [Collections with respect to the Trust Property not distributed with respect to the Units shall be deposited in the Reserve Account.] Amounts so deposited in such Reserve Account will be used by the Trustee to make payments of principal of and premium (if any) and interest on the Units to the extent that funds are not otherwise available. Immediately after any Distribution Date, amounts in the Reserve Account in excess of [indicate formula] [may be paid to the Depositor].]] [[The subordination described herein provided by the Class * Units is designed to protect holders of the remaining Classes of Units from certain losses and other shortfalls with respect to the Trust Property. As a result, losses and other shortfalls with respect to the Trust Property will be borne by the remaining Classes of Units, to the extent described below, only if such losses and other shortfalls are not so covered, or the coverage in respect thereof has been exhausted. Realized Losses will be allocated on any Distribution Date as follows: [describe allocation among the various Classes].]]]] [Describe any other Trust Property] [[DESCRIPTION OF SWAP AGREEMENT As described in the Prospectus, the Trust will enter into a Swap Agreement with [Morgan Stanley Capital Services, Inc.] [other Swap Counterparty] in the form of a 1992 Master Agreement (as governed by the ISDA Definitions), [subject to a Schedule to the Master Agreement in the form attached as an exhibit to the Registration Statement]. [[The Swap Agreement will document an interest rate swap transaction between the Trust and the Swap Counterparty under which the Trust will pay to the Swap Counterparty the [fixed rate][floating rate] coupon payments received in respect of the Securities and receive from the Swap Counterparty [floating rate][fixed rate] payments. The swap transaction will have the effect, subject to performance by the Swap Counterparty of its obligations under the Swap Agreement, of converting the coupon otherwise applicable to the Securities into the effective coupon the Trust will distribute with respect to the Units.]] [[The Swap Agreement will document a cross-currency swap transaction between the Trust and the Swap Counterparty under which the Trust will pay to the Swap Counterparty the [fixed rate][floating rate] [foreign currency][dollar] coupon and principal payments received in respect of [specified] Securities, and will receive from the Swap Counterparty [floating rate][fixed rate] [dollar][foreign currency] payments. The transaction will have the effect, subject to performance by the Swap Counterparty of its obligations under the Swap Agreement, of converting the interest rate and currency otherwise applicable to payment of interest and principal under the Securities into the interest rate and currency in which the Trust will make distributions with respect to the Units.]] [[The Swap Agreement will document a total rate of return swap transaction between the Trust and the Swap Counterparty under which the Trust [will pay to the Swap Counterparty coupon and principal payments received in respect of the Securities during the relevant period, and] will receive from the Swap Counterparty [interest][principal] payments based on the increase in value of the [index] during the relevant period or make payments to the Swap Counterparty based on the decrease in value of the [index] during the relevant period. [The Trust will not be required to make payments under the total rate of return swap transaction if such payments would cause a loss of principal to the Units.] The transaction will have the effect, subject to performance by the Swap Counterparty of its obligations under the Swap Agreement, of converting the return on the Securities to the return based on the performance of the [index] that the Trust will distribute on the Units.]] [[The Swap Agreement will document an option transaction between the Trust and the Swap Counterparty under which the Trust will [purchase a put option from] [grant a call option to] the Swap Counterparty with respect to the Securities or other Trust Property[, and the Trust will make a payment to the Swap Counterparty of * ] [, and the Swap Counterparty will make a payment to the Trust of * ]. [The call option will effectively reserve to the Swap Counterparty the right to realize all or a portion of the gain from an increase in the market value of the specified Trust Property at or prior to the maturity of the Units or to effect a conversion of the Securities into the right to receive another security.] [The put option will entitle the Trust to put to the Swap Counterparty the Securities at par, thereby protecting the Trust from a decline in the market value of the related Securities in circumstances where the Securities may be outstanding on the Final Scheduled Distribution Date with respect to the Units.] [The Trust Agreement will provide that the Trust will automatically exercise the put option, unless otherwise instructed by the Unitholders, if the market value of the Securities on the exercise date for the put option is less than the par value of such Securities.]]] [[The Swap Agreement documents a credit swap transaction, under which the Trust will receive payments from the Swap Counterparty of * % per annum on payments dates which occur on each Interest Payment Date for the Units. In exchange, the Trust will agree to exchange the Securities for [specify Deliverable Obligations] of [specify entity] (the "Reference Entity") upon the occurrence of one or more defined Credit Events (as described below) with respect to [specify entity]. Effectively, the credit swap transaction will expose the Trust to the credit risks associated with holding the [Deliverable Obligation] directly. A purchaser of the Units should therefore carefully review the following information regarding the terms of the [Deliverable Obligation]: [set forth information comparable to disclosure for Concentrated Debt Security].]] The notional amount of the [interest rate] [currency] [total rate of return] [credit] swap transaction will be equivalent to the principal amount of Securities held by the Trust. Payment dates and payment accrual periods under the Swap Agreement will match the Distribution Dates and Interest Periods on the Units. The [floating rate] [index value] applicable to payments during each period under the Swap Agreement will be established by the Calculation Agent on each payment date based on the value of [the [floating rate] as of the * day prior to the first day of the Interest Period] [the [index] as of the ___ day prior to the last day of the Interest Period]. The value of [floating rate] [index] will be determined by reference to the [screen] or in the event such screen [rate][value] is unavailable by reference to quotations from market makers obtained by the Calculation Agent. The principal economic terms of the swap transaction will set forth in a confirmation under the Master Agreement (the "Confirmation") dated * . A Current Report on Form 8-K relating to the Units containing a copy of the Confirmation as executed will be filed by the Depositor with the Commission following the issuance and sale of the Units. The material terms of the Confirmation are described below: Effective Date: Termination Date: Fixed Amounts: Fixed Rate Payer [Notional][Currency] [Calculation] Amount: Fixed Rate Payer: Fixed Rate Payer Payment Dates: Fixed Rate: Floating Amounts: Floating Rate Payer [Notional][Currency] [Calculation] Amount: Floating Rate Payer: Floating Rate: Floating Rate Payer Payment Dates: Floating Rate Option: Designated Maturity: Floating Rate Day Count Fraction: Reset Dates: [Method of Averaging:] [Compounding:] Calculation Agent: Business Days: [Reference Entity] [Deliverable Obligations] [Credit Events] [Materiality Terms] [Conditions to Payment] [Settlement Terms] [[Credit Events are defined to include the following: Bankruptcy means [the Reference Entity]: (i) is dissolved (other than pursuant to a consolidation, amalgamation or merger; (ii) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (iii) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (iv) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (v) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (vi) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (vii) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (viii) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (i) to (vii) (inclusive); or (ix) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in foregoing acts. [Credit Event Upon Merger means [Reference Entity] consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of the [Reference Entity] immediately prior to such action.] [Cross Acceleration means the occurrence of a default, event of default or other similar condition or event (however described), other than a failure to make any required payment, in respect of [Reference Entity] under one or more obligations [in an aggregate amount of not less than * ] which has resulted in such obligations becoming due and payable before they would otherwise have been due and payable.] [Cross Default means the occurrence of a default, event of default or other similar condition or event (however described), other than a failure to make any required payment, in respect of the Reference Entity under one or more obligations [in an aggregate amount of not less than * ] which has resulted in such obligations becoming capable at such time of being declared due and payable before they would otherwise have been due and payable.] [Downgrade means the credit rating of [Reference Entity] is lower than * or the obligation is no longer rated by any Rating Agency.] Failure to Pay means, after giving effect to any applicable grace period (under any terms in effect at the Trade Date), the failure by the Reference Entity to make, when due, any payments equal to or exceeding the Payment Requirement (if any) under [the Reference Obligation] [any obligations]. [Repudiation means [the Reference Entity] disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, [the Reference Obligation] [any obligations] in any material respect.] [Restructuring means a waiver, deferral, restructuring, rescheduling, exchange or other adjustment occurs with respect to [the Reference Obligation] [any obligations] of the Reference Entity and the effect of such is that the terms of [the Reference Obligation] [such Obligation] are, overall, materially less favorable from an economic, credit or risk perspective to any holder of the Reference Obligation] [such Obligation].] The Confirmation sets forth terms for the Trust to make a cash payment to the Swap Counterparty in the event that it becomes illegal or impossible for the Trust. The Confirmation also provides for notice of the occurrence of a Credit Event to be based on publicly available sources of information and for resolution by a third party of any dispute as to whether a Credit Event has occurred.]] As set forth in the Prospectus, early termination of the Swap Agreement upon the occurrence of a Security Default, Trust Wind-Up Event or other early termination event may result in the Trust becoming liable for a Swap Termination Payment, and the Trust may be required to sell Securities in order to pay such Swap Termination Payment. Investors should consider carefully the Risk Factors applicable to Swap Agreements as set forth in the Prospectus. ]] In the event that the Swap Counterparty ceases to be a reporting company under the Exchange Act, [the Trust will {terminate} {partially terminate} and distribute the related Secrities to the Unitholders in kind {subject to payment of any termination payment owed to the Swap Counterparty for the termination of the related swap transaction}][described any provisions for Swap Counterparty\replacement]. See "Risk Factors -- Swap Agreements have special risks" in the Prospectus.]] [[Guarantee of MSDW MSDW will unconditionally and irrevocably guarantee the due and punctual payment of all amounts payable by the Swap Counterparty under such Swap Agreement. Pursuant to such Guarantee, MSDW will agree to pay or cause to be paid all such amounts upon the failure of the Swap Counterparty punctually to pay any such amount and written demand by the Trustee to MSDW to pay such amount.]] DESCRIPTION OF TRUST AGREEMENT The following summarizes the material terms of the Trust Agreement to the extent they are not set forth in the Prospectus. The Units will be issued pursuant to a Trust Agreement incorporating the provisions of the Standard Terms of Trust Agreements, a form of which is filed as an exhibit to the Registration Statement. A Current Report on Form 8-K relating to the Units containing a copy of the Trust Agreement as executed will be filed by the Depositor with the Commission following the issuance and sale of the Units. The Trust created under the Trust Agreement will consist of (i) the Trust Property [(exclusive of any Retained Interest, which is not part of the Trust)], (ii) all payments on or collections in respect of the Trust Property due after the Cut-off Date, together with any proceeds thereof[,] [and] [(iii) any Credit Support in respect of any class or classes of Units] [and (iv) the rights of the Depositor under the Purchase Agreement between the Depositor and the Seller]. Reference is made to the Prospectus for important information in addition to that set forth herein regarding the Trust, the terms and conditions of the Trust Agreement and the Units. [[In the event the Trustee is required to vote the Securities on the basis of instructions from the Unitholders, voting rights will be allocated between the Class * Unitholders and the Class * Unitholders based on the percentages set forth in the table appearing under "Description of the Units -- Amortizing Distributions". If the date on which the relative voting rights are to be determined is not a Distribution Date, the percentage will be established by the Calculation Agent based on linear interpolation between the values on the immediately preceding and immediately following Distribution Dates.]] [[Under the rules, regulations and procedures creating and affecting DTC and its operations, DTC will take action permitted to be taken by a Unitholder under the Trust Agreement only at the direction of one or more Participants to whose DTC account such Units are credited. Additionally, DTC will take such actions with respect to specified Voting Rights only at the direction and on behalf of Participants whose holdings of such Units evidence such specified Voting Rights. DTC may take conflicting actions with respect to Voting Rights, to the extent that Participants whose holdings of Units evidence such Voting Rights, authorize divergent action. See "Description of Units--Form" in the Prospectus.]] Trustee Compensation As compensation for and in payment of trust expenses related to its services under the Trust Agreement other than Extraordinary Trust Expenses, the Trustee will receive Trustee Fees in the amount of * , payable [from Trust Property][by the Depositor][other]. The "Trigger Amount" with respect to Extraordinary Trust Expenses for the Trust is * and the Maximum Reimbursable Amount is * . Trust Wind-Up Events The following events of default with respect to the Securities will constitute a "Securities Default" which will cause an early winding up of the Trust [and an early termination of the swap transaction related to such Securities] [list]. Retained Interest [Description of any Retained Interest of Depositor] U.S. FEDERAL INCOME TAX CONSEQUENCES The following discussion, insofar as it states conclusions of law, represents the opinion of Cleary, Gottlieb, Steen & Hamilton, special counsel to the Depositor. [Discuss any special tax features not discussed in Base Prospectus, including, if applicable, FASIT election, partnership classification of Trust] [[The Trust is a Stripped Bond Trust and the discussion pertaining to Stripped Bond Trusts in the Prospectus is applicable. The Security Prospectus indicates that the Securities underlying the Units were sold based on the Security Issuer's belief that they should constitute indebtedness of the Security Issuer for U.S. federal income tax purposes. As stated in the Prospectus, the discussion under "U.S. Federal Income Tax Consequences" in the Prospectus and herein is based on the assumption that the Securities will constitute debt instruments in their entirety. The Trust Agreement provides for fees of the Trustee to be paid from the Trust Property. A holder may deduct its pro rata share of the fees and other deductible expenses paid by the Trust, at the same time and to the same extent as such items would be deducted by the holder if the holder paid directly a pro rata portion of the amounts paid by the Trust. As described under "Description of the Trust Property," the Securities may become subject in certain circumstances to an optional redemption. It is not clear how the possibility of an optional redemption, and the resulting distribution to Class * Unitholders of a portion of the payment received by the Trust on the optional redemption date should be taken into account for purposes of determining the taxation of holders at, and prior to, the optional redemption date (including, but not limited to, the amount of OID required to be included by holders in ordinary gross income). The Trustee intends to take the position that the possibility of an optional redemption should not affect the U.S. federal income tax consequences to holders prior to the optional redemption date. Under this treatment, if the maturity of the Securities were shortened as a result of an optional redemption, a holder would be treated as disposing of the Securities in whole, in the case of an optional redemption of all of the Securities, or in part, in the case of an optional redemption of less than all of the Securities, on the optional redemption date with the consequences described in the Prospectus under "Stripped Bond Trusts -- Sale or Exchange of Units or Debt Securities." There can be no assurance, however, that the IRS will not take a different position on the effect of a potential optional redemption, which position may have less favorable tax consequences. See "Stripped Bond Trusts- Alternative Characterizations" in the Prospectus and the discussion below. Prospective purchasers should consult their tax advisers with respect to the effect of a potential optional redemption. In addition to the consequences discussed in the Prospectus under "Stripped Bond Trusts- Alternative Characterizations" adverse tax consequences might also result if the IRS takes a different position than the position described in the Prospectus under "Stripped Bond Trusts --Purchase and Holding of Units" with respect to the effect on holders of a potential distribution to Class * Unit holders of a portion of the payment received by the Trust on an optional redemption date. For example, the IRS might treat the Unit as a right to payments on the Securities coupled with a separate agreement, in the nature of an option, between Class * Unit holders, on the one hand, and Class * Unit holders, on the other hand. The existence of a deemed option might trigger the Code's "straddle" rules, in which case, among other matters, gain or loss on the sale of a Unit would be short-term capital gain or loss regardless of the period during which the holder held the Unit.]] [[Similar discussion if Risk Factor of alternative tax characterization is included for other reasons.]] ERISA CONSIDERATIONS [[The Units are Book-Entry Units and interests in the Units may not be transferred to any person unless that person is not a Plan subject to the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974 ("ERISA") or Section 4975 of the Code and is not acquiring the Units with the assets of any such Plan or any government or other plan subject to substantially similar requirements. The Trust Agreement provides that any purported transfer in violation of this restriction shall be void. Each person who acquires any Book-Entry Unit, and each fiduciary which causes any such person to so acquire a Book-Entry Unit, in its individual as well as its fiduciary capacity, will be deemed to have represented upon the acquisition of such Book-Entry Unit that such purchaser or transferee is not a Plan subject to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code or any government or other plan subject to substantially similar requirements and is not using the assets of any such Plan to purchase the Book-Entry Units. THE TRUST AGREEMENT PROVIDES THAT EACH HOLDER OF A BOOK-ENTRY UNIT SHALL INDEMNIFY THE TRUSTEE, THE DEPOSITOR, MORGAN STANLEY AND THEIR AFFILIATES AGAINST ANY COSTS, EXPENSES, DAMAGES OR LOSSES INCURRED BY THEM AS A RESULT OF THE FAILURE OF THE FOREGOING REPRESENTATION TO BE TRUE.]] [[The "Alternative ERISA Restrictions" are applicable to the Units, and Units will be issued only as Definitive Units in registered form and only upon execution and delivery of a definitive Purchase Agreement, which will contain additional representations regarding whether such purchaser or proposed transferee is a benefit plan investor (within the meaning of the Plan Asset Regulations) or is acquiring the Units with assets of a benefit plan investor. A definitive Purchase Agreement will similarly be required to be obtained from any proposed transferee of a Unit to which the "Alternative ERISA Restrictions" apply. As set forth in the Prospectus, no such purchase or proposed transfer shall be permitted to the extent that it would cause the ownership by benefit plan investors to be "significant" within the meaning of the Plan Asset Regulations immediately after such purchase or proposed transfer. In addition, the Depositor and the Trustee will agree that, after the initial distribution of a particular Series of Units subject to the Alternative ERISA Restrictions, neither they nor their affiliates will acquire any Units of such Series, unless such acquisition would not cause the ownership by benefit plan investors immediately following such acquisition to be "significant."]] [[The "Deemed Representations" are applicable to the Units. Units will be issued in reliance on certain exemptions from the prohibited transaction provisions of Section 406 of ERISA and Section 4975 of the Code which may be applicable, depending in part on the type of Plan fiduciary making the decision to acquire a Unit and the circumstances under which such decision is made. Included among these exemptions are Prohibited Transaction Class Exemption ("PTCE") 91-38 (relating to investments by bank collective investment funds), PTCE 84-14 (relating to transactions effected by a "qualified professional asset manager"), PTCE 90-1 (relating to investments by insurance company pooled separate accounts) and PTCE 96-23 (relating to transactions determined by in-house asset managers). There can be no assurance that any of these class exemptions or any other exemption will be available with respect to any particular transaction involving the Units. BY ITS PURCHASE OF ANY UNIT, THE PURCHASER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED EITHER THAT (A) IT IS NOT AN ERISA PLAN OR OTHER PLAN, AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH ERISA PLAN OR OTHER PLAN, OR A GOVERNMENTAL PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR (B) ITS PURCHASE, HOLDING AND DISPOSITION OF A UNIT WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL PLAN, ANY SUBSTANTIALLY SIMILAR FEDERAL, STATE OR LOCAL LAW) FOR WHICH AN EXEMPTION IS NOT AVAILABLE. THE TRUST AGREEMENT PROVIDES THAT EACH HOLDER OF A BOOK-ENTRY UNIT SHALL INDEMNIFY THE TRUSTEE, THE DEPOSITOR, MORGAN STANLEY AND THEIR AFFILIATES AGAINST ANY COSTS, EXPENSES, DAMAGES OR LOSSES INCURRED BY THEM AS A RESULT OF THE FAILURE OF THE FOREGOING REPRESENTATION TO BE TRUE.]] [[BEARER UNITS The [Class * ] Units will be issued in bearer form ("Bearer Units"). In compliance with United States Federal income tax laws and regulations, the Depositor and any underwriter, agent or dealer participating in the offering of the Bearer Units will agree that, in connection with the original issuance of such Bearer Unit and during the period ending 40 days after the issue of such Bearer Unit, they will not offer, sell or deliver such Bearer Unit, directly or indirectly, to a U.S. Person or to any person within the United States, except to the extent permitted under U.S. Treasury regulations. The [Class * ] Units will bear a legend to the following effect: "Any United States Person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code." Pending the availability of a permanent Global Security or definitive Bearer Units, as the case may be, the [Class * ] Units will initially be represented by a single temporary Global Security, without interest coupons, to be deposited with a common depositary in London for Euroclear and CEDEL for credit to the accounts designated by or on behalf of the purchasers thereof. Following the availability of a permanent Global Security in bearer form, without coupons attached, or definitive Bearer Units and subject to any further limitations described in the applicable Prospectus Supplement, the temporary Global Security will be exchangeable for interests in such permanent Global Security or for such definitive Bearer Units, respectively, only upon receipt of a Certificate of Non-U.S. Beneficial Ownership" as described in the Prospectus. Interest on a temporary Global Security will be distributed to each of Euroclear and CEDEL with respect to that portion of such temporary Global Security held for its account, but only upon receipt as of the relevant Distribution Date of a Certificate of Non-U.S. Beneficial Ownership.]]] PLAN OF DISTRIBUTION Subject to the terms and conditions set forth in the Underwriting Agreement, dated as of * (the "Underwriting Agreement"), the Depositor has agreed to sell and [Morgan Stanley (an affiliate of the Depositor)] [each of the Underwriters named below, including Morgan Stanley (an affiliate of the Depositor)] (the "Underwriter[s]") has [severally] agreed to purchase, the [Units] [the principal amount of each class of Units set forth below opposite its name]. [Morgan Stanley has] [The several Underwriters have] agreed, subject to the terms and conditions set forth in the Underwriting Agreement, to purchase all Units offered hereby if any of such Units are purchased. [In the event of default by any Underwriter, the Underwriting Agreement provides that, in certain circumstances, the purchase commitments of non-defaulting Underwriters may be increased or the Underwriting Agreement may be terminated.] The Depositor has been advised by the Underwriter[s] that [it][they] propose[s] to acquire such Units for their own account and to resell the Units from time to time in one or more transactions including negotiated transactions, at fixed public offering prices or at varying prices to be determined at the time of sale or at the time of commitment therefor. The Underwriter[s] may effect such transactions by selling Units to or through dealers and such dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the Underwriter[s] and any purchasers of Units for whom they may act as agents. The Underwriter[s] and any dealers that participate with the Underwriter[s] in the distribution of Units may be deemed to be underwriters, and any profit on the resale of Units by them may be deemed to be underwriting discounts, or commissions under the Securities Act. The Underwriting Agreement provides that the Depositor will indemnify the Underwriter[s] against certain civil liabilities, including liabilities under the Securities Act, or will contribute to payments the Underwriter[s] may be required to make in respect thereof. Morgan Stanley is an affiliate of the Depositor, and the participation by Morgan Stanley in the offering of the Units complies with Section 2720 of the Conduct Rules of the National Association of Securities Dealers, Inc. regarding underwriting securities of an affiliate. RATINGS It is a condition to the issuance of the Units that the Units be rated not lower than [specify ratings applicable to each class] by [Standard & Poor's Ratings Group ("Standard & Poor's")][Moody's Investors Service, Inc. ("Moody's")][Fitch IBCA, Inc. ("Fitch IBCA")] [and] [Duff & Phelps Credit Rating Company ("Duff & Phelps")](the "Rating[Agency][Agencies]"). The ratings address the likelihood of the receipt by the Unitholders of payments required under the Trust Agreement, and are based primarily on the credit quality of the Securities and other Trust Property[, as well as the Swap Counterparty and MSDW as guarantor of the Swap Counterparty][and providers of Credit Support][, and on the relative priorities of the Unitholders of each class of the Units with respect to collections and losses with respect to the Trust Property]. The rating on the Units does not, however, constitute a statement regarding the occurrence or frequency of redemptions or prepayments on, or extensions of the maturity of, the Trust Property, the corresponding effect on yield to investors, or whether investors in the Class * Units [specify class with Notional Amount] may fail to recover fully their initial investment. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning Rating Agency. Each security rating should be evaluated independently of any other security rating. The Depositor has not requested a rating on the Units by any rating agency other than the Rating [Agency] [Agencies]. However, there can be no assurance as to whether any other rating agency will rate the Units, or, if it does, what rating would be assigned by any such other rating agency. A rating on the Units by another rating agency, if assigned at all, may be lower than the ratings assigned to the Units by the Rating [Agency] [Agencies]. LEGAL OPINIONS Certain legal matters relating to the Units will be passed upon for the Depositor and the Underwriter[s] by [Cleary, Gottlieb, Steen & Hamilton, Washington, D.C.]. INDEX OF DEFINED TERMS Page ---- Amortization Schedule...................................S-14 Bearer Units............................................S-38 Business Day............................................S-14 Confirmation............................................S-28 Cut-off Date............................................S-16 Distribution Date........................................S-2 Duff & Phelps...........................................S-40 ERISA...................................................S-36 Fannie Mae..............................................S-19 FHLMC Act...............................................S-20 Final Scheduled Distribution Date........................S-2 Fitch IBCA..............................................S-40 Foreign Governments.....................................S-23 Freddie Mac.............................................S-19 Index-Linked Units.......................................S-7 Initial Unit Principal Balance...........................S-1 Insurer.................................................S-26 Interest Rate............................................S-2 Interest Reset Date......................................S-2 Letter of Credit........................................S-25 Moody's.................................................S-40 Optional Exchange Dates.................................S-15 Policy..................................................S-26 PTCE....................................................S-36 qualified institutional buyers...........................S-1 Rating[Agency][Agencies]................................S-40 Record Date.............................................S-13 Reference Entity........................................S-28 Securities...............................................S-1 Securities Default......................................S-34 Security Agreement......................................S-16 Security Issuer..........................................S-1 Specified Currency.......................................S-1 Standard & Poor's.......................................S-40 Trigger Amount..........................................S-33 Underwriter[s]..........................................S-39 Underwriting Agreement..................................S-39 Unitholders..............................................S-2 No dealer, salesperson or any other person has been authorized to give any information or to make any representations other than those contained in the Prospectus (including the accompanying Prospectus Supplement) in connection with the offer contained herein and, if given or made, such information or representations must not be relied upon as having been authorized by the company or an agent. Neither the delivery of this Prospectus (including the accompanying Prospectus Supplement) nor any sale made hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of the company since the dates as of which information is given in this Prospectus (including the accompanying Prospectus Supplement). This Prospectus (including the accompanying Prospectus Supplement) do not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. - ------------------------------------------------------------ TABLE OF CONTENTS $ Page
PROSPECTUS SUPPLEMENT SUMMARY.............................................. AVAILABLE INFORMATION................................ MSDW STRUCTURED ASSET CORP. RISK FACTORS......................................... DESCRIPTION OF UNITS................................. DESCRIPTION OF TRUST PROPERTY........................ STRUCTURED ASSET TRUST UNIT REPACKAGINGS [DESCRIPTION OF SWAP AGREEMENT......................] DESCRIPTION OF TRUST AGREEMENT....................... U.S. FEDERAL INCOME TAX CONSEQUENCES................................ ERISA CONSIDERATIONS................................. PROSPECTUS [BEARER UNITS.......................................] SUPPLEMENT PLAN OF DISTRIBUTION................................. LEGAL MATTERS........................................ INDEX OF DEFINED TERMS............................... PROSPECTUS PROSPECTUS SUPPLEMENTS............................... AVAILABLE INFORMATION................................ INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.......................... IMPORTANT CURRENCY INFORMATION....................... Dated , 199__ RISK FACTORS......................................... THE DEPOSITOR........................................ USE OF PROCEEDS...................................... FORMATION OF TRUSTS.................................. DESCRIPTION OF TRUST PROPERTY........................ DESCRIPTION OF SWAP AGREEMENTS....................... MSDW................................................. DESCRIPTION OF UNITS................................. DESCRIPTION OF TRUST AGREEMENTS...................... U.S. FEDERAL INCOME TAX CONSEQUENCES.................................. ERISA CONSIDERATIONS................................. CURRENCY RISKS....................................... LIMITATIONS ON ISSUANCE OF BEARER UNITS...................................... PLAN OF DISTRIBUTION................................. LEGAL MATTERS........................................ INDEX OF DEFINED TERMS...............................
- ------------------------------------------------------------ Until [date], all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX X Information contained herein is subject to completion X X or amendment. A registration statement relating to these X X securities has been filed with the Securities and Exchange X X Commission. These securities may not be sold nor may offers to X X buy be accepted prior to the time the registration statement X X becomes effective. This prospectus shall not constitute an offer X X to sell or the solicitation of an offer to buy nor shall there be X X any sale of these securities in any State in which such offer, X X solicitation or sale would be unlawful prior to registration or X X qualification under the securities laws of any such State. X XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX [GRAPHIC OMITTED] Subject to Completion, Dated __________, 199___. PROSPECTUS Structured Asset Trust Unit Repackagings (SATURNSSM) Issuable in Series MSDW Structured Asset Corp. Depositor The Structured Asset Trust Unit Repackagings (the "Units") offered hereby and by Prospectus Supplements (each a "Prospectus Supplement") to this Prospectus will be offered from time to time in one or more series (each a "Series") and in one or more classes within each such Series (each a "Class"), denominated in dollars or in one or more foreign currencies. Units of each respective Series and Class will be offered on terms to be determined at the time of sale as described in the related Prospectus Supplement accompanying the delivery of this Prospectus. Units may be sold for United States dollars or for one or more foreign currencies, and the principal of, premium on, if any, and any interest to be distributed in respect of Units may be payable in United States dollars or in one or more foreign currencies. Each Series and Class of Units may be issued in fully registered form without interest coupons ("Registered Units") or in bearer form with or without coupons attached ("Bearer Units"), as one or more global securities in registered or bearer form (each a "Global Security") or as individual securities in definitive form with or without coupons ("Definitive Units"). Each Series of Units will represent in the aggregate the entire beneficial ownership interest in one or more debt, asset-backed or other fixed income securities or loans (the "Securities"), together with, if specified in the Prospectus Supplement, rights under certain swap or other derivative agreements or certain other assets described herein and in the related Prospectus Supplement (such assets, together with the Securities and any Credit Support as defined below, the "Trust Property"), to be deposited in a trust (the "Trust") formed pursuant to a trust agreement (the "Trust Agreement") to be entered into between MSDW Structured Asset Corp., as depositor (the "Depositor"), and Chase Bank of Texas, National Association (the "Trustee") or another Trustee specified in the Prospectus Supplement. Unless the Prospectus Supplement sets forth the material financial and other information with respect to the issuer of the underlying Securities (the "Security Issuer"), each Security which represents on the date of formation of the Trust 10% or more by principal amount of the Securities held by such Trust (a "Concentrated Security") will constitute or be serviced fully by cash flow from (i) obligations of or guaranteed by the United States government, (ii)obligations of one or more corporations, limited partnerships, trusts, limited liability companies or other organizations, banking organizations or insurance companies, in each case which meet the market capitalization and other requirements for a primary issuance of common stock on Form S-3 under the Securities Act of 1933, as amended, and are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and which, in accordance therewith, file reports and other information with the Securities and Exchange Commission (or another applicable agency pursuant to Section 12(i)of the Exchange Act), (iii) obligations of the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation or other government sponsored enterprises that have a comparable market capitalization and which make information publicly available comparable to that of Exchange Act reporting companies or (iv) obligations of Eligible Foreign Issuers (as defined herein). If so specified in the related Prospectus Supplement, the Trust Property for a Series of Units may also include, or the Unitholders of such Units may have the benefit of, any combination of insurance policies, letters of credit, reserve accounts and other types of rights or assets designed to support or ensure the servicing and distribution of amounts due in respect of the Trust Property (collectively, "Credit Support"). See "Description of Units" and "Description of Trust Property." Each Class of Units of any Series will represent the right, which may be senior to those of one or more of the other Classes of such Series, to receive specified portions of payments of principal, interest and certain other amounts on the Trust Property in the manner described herein and in the related Prospectus Supplement. A Series may include two or more Classes differing as to entitlement to distributions of principal, interest or premium and one or more Classes within such Series may be subordinated in certain respects to other Classes of such Series. If specified in the Prospectus Supplement, application will be made to list the related Series of Units on the New York Stock Exchange. There will be no market for any Series of Units prior to the issuance thereof, and there can be no assurance that a secondary market will develop or, if it does develop, that it will provide Unitholders with liquidity of investment or will continue for the life of the Units. Bearer Units are subject to U.S. tax law requirements and may not be offered, sold or delivered within the United States or its possessions or to U.S. persons, except in certain transactions permitted by U.S. tax regulations. The Units represent interests in the Trust only and do not represent obligations of or interests in the Depositor, Morgan Stanley & Co. Incorporated ("Morgan Stanley") or any of their respective affiliates. The Units do not represent a direct obligation of any Security Issuer or any of its affiliates. At the time of issue, the Units of any given Series (or each Class of such Series that is offered hereby) will be rated in one of the investment grade categories recognized by one or more nationally recognized rating agencies (each a "Rating Agency"). ------------------ PURCHASERS OF UNITS SHOULD CAREFULLY CONSIDER ALL INFORMATION CONTAINED IN THIS PROSPECTUS AND THE APPLICABLE PROSPECTUS SUPPLEMENT, PARTICULARLY THE INFORMATION SET FORTH UNDER "RISK FACTORS" IN THIS PROSPECTUS AND ANY ANALOGOUS DISCUSSION IN SUCH PROSPECTUS SUPPLEMENT. ------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ The Units may be offered and sold to or through Morgan Stanley as underwriter, dealer or agent, or through one or more other underwriters, dealers or agents, or directly to purchasers, as more fully described under "Plan of Distribution" and in the related Prospectus Supplement. This Prospectus may not be used to consummate sales of Units offered hereby unless accompanied by a Prospectus Supplement. ------------ MORGAN STANLEY DEAN WITTER April __, 1999 SM SATURNS is being registered as a service mark of Morgan Stanley Dean Witter & Co. i TABLE OF CONTENTS Page ---- PROSPECTUS SUPPLEMENTS...............................1 AVAILABLE INFORMATION................................1 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE......2 RISK FACTORS.........................................2 REPORTS TO UNITHOLDERS...............................8 IMPORTANT CURRENCY INFORMATION.......................8 THE DEPOSITOR........................................8 USE OF PROCEEDS......................................9 FORMATION OF TRUSTS..................................9 MATURITY AND YIELD CONSIDERATIONS...................10 DESCRIPTION OF TRUST PROPERTY.......................11 DESCRIPTION OF SWAP AGREEMENTS......................18 MSDW................................................24 DESCRIPTION OF UNITS................................25 DESCRIPTION OF TRUST AGREEMENTS.....................44 U.S. FEDERAL INCOME TAX CONSEQUENCES................53 ERISA CONSIDERATIONS................................66 LIMITATIONS ON ISSUANCE OF BEARER UNITS.............68 PLAN OF DISTRIBUTION................................69 LEGAL MATTERS.......................................71 INDEX OF DEFINED TERMS..............................72 PROSPECTUS SUPPLEMENTS A Prospectus Supplement which describes the specific matters described below will be provided with this Prospectus. The Prospectus provides information regarding terms generally applicable to the Units, and must be read in conjunction with the related Prospectus Supplement which describes the specific terms applicable to the Units of a specific Series and may modify general terms described in the Prospectus. The specific terms of the Units described in the Prospectus Supplement qualify any related general discussion in the accompanying Prospectus. Each Prospectus Supplement will set forth, among other things, the following with respect to the related Series of Units: (i) the title, aggregate principal amount and authorized denominations (or, if applicable, notional amount); (ii) the currency or currencies in which the principal, premium, if any, and any interest are distributable on such Units (the "Specified Currency"), if other than U.S. dollars; (iii) the interest rate on such Units or the method of calculation thereof (the "Interest Rate"); (iv) the terms of one or more swap or other derivative transactions (each a "Transaction") under a master agreement in the form described herein (the master agreement together with each specific Transaction thereunder, the "Swap Agreement") to be entered into by the Trust; (v) the number of Classes of such Series and, with respect to each Class of such Series, its designation, aggregate principal amount and authorized denominations, the stated principal amount (or, if applicable, notional amount), if fixed or whether the principal amount or notional amount will be variable based upon one or more Transactions under a Swap Agreement; (vi) the time and place of distribution (each such date, a "Distribution Date") of any interest, premium and/or principal; (vii) the original date of issue and the scheduled final Distribution Date for such Units; (viii) if the Units are offered at a fixed price, such price; (ix) certain information concerning the type, characteristics and specifications of the Trust Property for such Series or Class; (x) the relative rights and priorities of each such Class (including the method for allocating collections from the Trust Property to the Unitholders of each Class and the relative ranking of the claims of the Unitholders of each Class to such Trust Property); (xi) the identity of any entity or entities identified in the related Prospectus Supplement as entering into one or more Transactions with the Trust under any Swap Agreement (each a "Swap Counterparty"); (xii) a description of the specific provisions of any related Swap Agreement to the extent not described under "Description of Swap Agreements" or inconsistent with such description; (xiii) if the Swap Counterparty is not an affiliate of Morgan Stanley Dean Witter & Co. ("MSDW"), a description of any guarantee (the "Guarantee") or other type of support, if any, of such Swap Counterparty's obligations under the Swap Agreement; (xiv) any Call Rights (as defined herein) exercisable by the Depositor or any third party, or any other any mandatory or optional exchange or redemption terms; and (xv) any other specific terms of such Units not described in this Prospectus. See "Description of Units - General" for a listing of other items that may be specified in the applicable Prospectus Supplement. AVAILABLE INFORMATION Each Trust is subject to the informational requirements of the Exchange Act and in accordance therewith the Depositor files on behalf of each Trust reports and other information with the Securities and Exchange Commission (the "Commission"). Reports with respect to each Trust and other information concerning each Trust can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices located at Seven World Trade Center, Suite 1300, New York, New York 10048, and Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661. Copies of such material can be obtained upon written request addressed to the Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission also maintains a site on the World Wide Web (the "Web") at "http://www.sec.gov" at which users can view and download copies of reports, proxy, information statements and other information filed electronically through the Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system. The Depositor does not intend to send any financial reports to Unitholders. If the Prospectus Supplement for the Units of a given series specifies that the Units are to be listed on the New York Stock Exchange, reports and other information concerning the related Trust can also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. The Depositor has filed with the Commission a registration statement on Form S-3 (together with all amendments and exhibits, the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), relating to the Units. This Prospectus does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE All documents filed by the Depositor pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to and subsequent to the date of this Prospectus and prior to the later of (i) the termination of the offering of the Units and (ii) the date on which Morgan Stanley, Morgan Stanley & Co. International Limited and other affiliates of the Depositor cease offering and selling previously issued Units shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Depositor will provide without charge to each person to whom a copy of this Prospectus is delivered, on the written or oral request of any such person, a copy of any or all of the documents incorporated herein by reference, except the exhibits to such documents (unless such exhibits are specifically incorporated by reference in such documents). Written requests for such copies should be directed to MSDW Structured Asset Corp., 1585 Broadway, New York, New York 10036, Attention: Assistant Secretary, Tel. 212-761-1715. RISK FACTORS The following is a discussion of the most significant factors to be considered as risks associated with an investment in the Units: There is no recourse to the Depositor or Morgan Stanley for payments on the Units. The Units will be obligations of the applicable Trust and distributions of interest, premium (if any) and principal thereon will only be made out of the applicable Trust Property. Such Units will not represent obligations of or interests in the Depositor, Morgan Stanley, MSDW, any Swap Counterparty, the Trustee or any of their affiliates, except to the limited extent described herein and in the applicable Prospectus Supplement. None of the Depositor, Morgan Stanley, MSDW, any Swap Counterparty, the Trustee or any of their affiliates or any other person or entity, will be obligated to make payments on such Units in the event that the applicable Trust Property is insufficient to provide for such distributions and purchasers of such Units will have no recourse against any of them or their respective assets in respect of payments not made on such Units. An investment in the units is not liquid and there is limited potential for resale. There will be no market for any Series of Units prior to the issuance of the Units. Furthermore, there can be no assurance that a secondary market will develop or, if it does develop, that it will provide Unitholders with liquidity of investment or that it will continue for the life of such Units. In addition, Morgan Stanley is not obligated to make a market for the Units, and may or may not do so. Limited liquidity may adversely affect the timing of an investor's resale of Units or the price obtainable upon resale. Early payments may leave an investor unable to reinvest in comparable investments. The timing of distributions of interest, premium (if any) and principal of Units will be affected by any early redemption, amortization or prepayment of the related Securities. The applicable Prospectus Supplement will describe any puts, calls or other mandatory or optional redemption or early amortization features, any extension of maturity provisions applicable to such Securities. The timing of distributions on Units will also be affected by any exchange of the related Securities pursuant to a tender offer or otherwise. Early payment or amortization may adversely affect an investor by returning principal to the investor when prevailing interest rates have declined and reinvestment of such funds at the rate applicable to the Units is not possible. Extension of maturity may cause illiquidity and loss of more favorable investment opportunities. The timing of distributions of interest, premium (if any) and principal of Units will also be affected by any extension of maturity of the related Securities. The applicable Prospectus Supplement will describe any extension of maturity provisions applicable to the Securities. Extension of maturity prevents an investor from obtaining principal funds at the originally scheduled maturity date and may prevent an investor from obtaining favorable reinvestment at a time when prevailing interest rates have risen. Swap Agreements have special risks. In general, a Swap Agreement will alter the amounts and timing and, if applicable, currency, of distributions of principal and/or interest on the related Units from that which a holder would be entitled to receive from the related Securities directly. Where the Securities or all of the cash flows on the Securities are subject to the Swap Agreement, the holders of the related Units will effectively be exchanging the right to receive interest payments on the related Securities for the right to receive payments on such Units in accordance with the terms of such Swap Agreement for so long as it is in effect. The Swap Agreement is not a guarantee of the Securities in whole or in part, and no assurance can be given that the Trustee will receive either the payments due to be received on such Securities or any payment due to be received under such Swap Agreement, or that the Trustee will recover moneys under a related Guarantee, if any, upon a payment default by the Swap Counterparty under such Swap Agreement. Moreover, unless expressly entered into for such purpose and so described in the Prospectus Supplement, a Swap Agreement does not protect an investor against risks associated with prepayment or early redemption or amortization, or extension of the maturity, of the Securities. To the extent that the aggregate principal amount of the related Securities is reduced through any such redemption, payment or exchange, the corresponding notional amount for any swap or amount of any option or other reference amount for any derivative obligation subject to the Swap Agreement, and accordingly, the amounts payable by the Swap Counterparty, may be ratably reduced. See "Description of Swap Agreements - Payments Under Swap Agreements". Alternatively, if so described in the Prospectus Supplement, such events may be treated as "Termination Events" and create potential liability for Swap Termination Payments as described below. Changes in the value of a Swap Transaction may cause losses if a Swap Transaction terminates early. Upon an early termination of a Swap Agreement or one or more Transactions thereunder, as described more fully in "Description of Swap Agreements - Early Termination of Swap Agreements" and in any analogous discussion in the applicable Prospectus Supplement, a payment (a "Swap Termination Payment") may be payable by the applicable Trust to the Swap Counterparty or by the Swap Counterparty to such Trust, unless the Prospectus Supplement provides that Swap Termination Payments will not be payable in connection with early termination of the related Swap Agreement or Transaction. The amount of any Swap Termination Payment for any Transaction will be based on the estimated cost, at prevailing market values, that would be incurred by the Trust or by the Swap Counterparty to enter into a transaction having economic terms similar to that of the terminated Transaction (or, if such market value cannot be determined or does not produce a commercially reasonable result, the losses suffered by the Trust or the Swap Counterparty as a result of the termination of the Swap Agreement or specific Transaction(s)). The Swap Termination Payment for the Swap Agreement as a whole is the net amount payable after offsetting individual termination payments applicable to each Transaction. The Swap Counterparty will have the sole right to determine in good faith the amount of the Swap Termination Payment. The amount incurred by the Trust as a Swap Termination Payment and the resulting loss to Unitholders could be quite substantial in relation to the total value of the Securities if interest rates, currency rates and/or swap spreads have changed significantly since the Closing Date. Any Swap Termination Payment payable by the Trust will be limited (i) in the case of an early termination other than as a result of a Security Default, to a claim against the Trust Property pro rata with that of the Unitholders based on the aggregate Unit Principal Balance and (ii) in the case of an early termination as a result of a Security Default, to the Trust Property. See "Description of Units -- Early Distribution of Securities" and "Description of Trust Agreements -- Trust Wind-Up Events". Unitholders will not be liable to the Swap Counterparty for Swap Termination Payments to the extent, if any, that the amount of any such termination payments exceeds the assets of the Trust. The price obtained upon liquidation of Trust assets to pay a Swap Termination Payment may be unfavorable. Upon an early termination of a Transaction under the Swap Agreement, the applicable Trust will terminate (unless one or more Transactions under the Swap Agreement are not affected by the related Termination Event (as defined herein)), and any applicable Swap Termination Payment will be paid by or to the Trust. If the Trust is liable for a Swap Termination Payment, Securities may be sold by the Trustee through the Selling Agent, unless and until the Selling Agent receives notice from the Trustee of an exercise by the Unitholders of their right to tender the amount of any related Swap Termination Payment as set forth below. Unless the Prospectus Supplement designates a different Selling Agent, the Selling Agent may be Morgan Stanley or an affiliate of Morgan Stanley (including the Swap Counterparty) designated by it. The timing, price and other terms of any sale conducted by the Selling Agent shall be determined by the Selling Agent in its sole discretion, but all such sales shall be completed within 30 days or such longer period of time as may be reasonable with respect to particular Securities. The Selling Agent shall be permitted to sell Securities to affiliates of the Selling Agent. In connection with any Swap Termination Payment payable by the Trust, the Unitholders may, acting unanimously, deliver to the Trustee the amount of such outstanding Swap Termination Payment (and any fees payable to the Trustee from Trust Property) and a written instruction to discontinue sale of the Securities. It is possible that Securities may be sold by the Selling Agent in the time necessary for the Unitholders to be notified of and act upon their rights under the foregoing provision. Unitholders could be materially adversely affected if the Trust is required to sell Securities in order to pay Swap Termination Payments at a time when prices for the Securities in the secondary market are depressed as a result of a default on the Securities or for any other reason. See "Description of Swap Agreements -- Early Termination of Swap Agreements" and "-- Swap Termination Payments" and "Description of Trust Agreements -- Sale of Securities; Secured Party Rights". Early swap termination may leave the Trust with Securities that have unexpected or unfavorable investment characteristics. During its term, the Swap Agreement may enable the Trust to make scheduled distributions of principal and interest in the currency, on the interest rate basis and at the maturity specified under the Swap Agreement, notwithstanding that the Securities may have a different currency, interest rate basis or maturity, or other features different from those of the Units. Upon early termination of the Swap Agreement, after giving effect to any sales of the Securities and payment or receipt of any Swap Termination Payment as set forth above, the remaining Securities, if any, and any Swap Termination Payment received by the Trust, will be distributed pro rata to the Unitholders. With respect to each such Unitholder, such distribution will constitute full satisfaction of such holder's fractional undivided interest in such Trust. After such distribution of the related Securities, the holders thereof will only be entitled to distributions of principal and interest in accordance with the terms of such Securities, and not in accordance with the terms of the terminated Transaction(s) under the Swap Agreement, which may result in such holders receiving less than they would have if the related Transaction(s) had not terminated. The obligations of each Trust to any related Swap Counterparty will be secured by a security interest in the Trust Property granted by the Trust in favor of the Swap Counterparty. Certain events can require the Trust to wind up early on terms that may result in losses to investors. Unless the Prospectus Supplement sets forth specific provisions for the continuation of the Trust after a Trust Wind-up Event the related Trust will terminate prior to the final scheduled distribution on the Units issued thereby upon the occurrence of a Trust Wind-Up Event, as described under "Description of Trust Agreements - Trust Wind-Up Events". Upon the occurrence of a Trust-Wind Up Event, any related Swap Agreement, including each Transaction thereunder, will terminate and any applicable Swap Termination Payment will be incurred or received by the Trust. A partial Trust Wind-Up may occur as a result of events affecting only specific Securities or Transactions, in which case the affected Transaction will terminate and any applicable Swap Termination Payment will be incurred or received by the Trust, but the Trust may continue as to other unaffected assets. The Trust will be required to sell Securities as necessary to pay any Swap Termination Payment. Trust Wind-Up Events include: Swap Agreement default or termination. The Trust will be wound up if certain standard events of default or termination events have occurred under any related Swap Agreement, including a Security Default (as defined herein) that results in termination of all affected Transactions under the Swap Agreement. A Security Default may be specified in the Prospectus Supplement to affect only specific Transactions under the Swap Agreement, in which case only the affected Transaction will terminate. Unexpected Trust expenses. The Trust will be wound up if the Trustee incurs certain losses, liabilities or expenses in excess of a specified "Trigger Amount" set forth in the Prospectus Supplement (the "Trigger Amount"), which are to be indemnified by the Depositor in an aggregate amount up to a Maximum Reimbursable Amount set forth in the Prospectus Supplement (the "Maximum Reimbursable Amount"), unless the Unitholders unanimously undertake (or any Swap Counterparty undertakes) to indemnify the Trustee as described under "Description of Trust Agreements - Trust Wind-Up Events". A change in the available public information about the Trust's assets. If any Security Issuer, Swap Counterparty or Credit Support Provider ceases to be an Eligible Issuer and no additional means of replacing or providing current information regarding such party is described in the Prospectus Supplement; or if, whether or not the related Security Issuer, Swap Counterparty or Credit Support Provider was initially an Eligible Issuer, it becomes impossible or impractical for the Depositor to satisfy its reporting obligations under the Exchange Act with respect to the related Security, Transaction or Credit Support, a Trust Wind-Up Event will occur in whole or in part. Unless the Prospectus Supplement specifies that the Trust will be wound up only as a whole, if the Trust holds assets other than the affected Securities, Transactions or Credit Support, a Trust Wind-Up Event will be limited to a partial termination of the Trust with respect to the Security, Transaction or Credit Support as to which the Depositor's reporting obligations can no longer be satisfied. See "Description of Trust Agreements - Trust Wind-Up Events". The Prospectus Supplement may also specify other Trust Wind-Up Events. Claims of the Trustee and the Swap Counterparty may adversely affect distributions on the Units. No final distribution will be made to Unitholders of a Trust until (i) all amounts due to the Swap Counterparty under any related Swap Agreement, including any Swap Termination Payment (as limited, if so specified in the Prospectus Supplement, to a claim pro rata with that of the Unitholders for the aggregate Unit Principal Balance other than in connection with a Security Default), and (ii) all amounts due to the Trustee with respect to Extraordinary Trust Expenses (as defined under "Description of Trust Agreements -- Certain Matters Regarding the Trustee and the Depositor") have been paid. Securities may be sold by the Trustee to fund such payments. It is possible that all or a substantial part of such Trust Property may be required to be paid to the Swap Counterparty and/or the Trustee prior to the final distribution to Unitholders. The Trust's counterparties may have conflicts of interest. A prospective purchaser should be aware of the possibility for conflicts of interest arising in the responsibilities assumed by Morgan Stanley and its affiliates. The Swap Counterparty has discretion to calculate the amount of its payment obligations and those of the Trust. The Swap Counterparty (or an affiliate thereof) may act as calculation agent (the "Swap Calculation Agent") under any Swap Agreement, and potential conflicts of interest may exist between the Swap Calculation Agent and the Trustee on behalf of the Unitholders, with respect to the Swap Calculation Agent's determination of currency exchange rates applicable to the Swap Agreement, certain calculations with respect to interest on the Units or other calculations or determinations with respect to the Swap Agreement. See "Description of Swap Agreements - Interest on Units" and "Description of Units Interest of Units." The Swap Calculation Agent is obligated to carry out its duties and functions as Swap Calculation Agent in good faith. All determinations by the Swap Calculation Agent under the Swap Agreement shall, in the absence of manifest error, be conclusive for all purposes and binding on the Trust and the Unitholders. The Swap Counterparty may be responsible for liquidating the Trust's assets to pay the Swap Counterparty's own claims. The Swap Counterparty, Morgan Stanley or another affiliate of Morgan Stanley may act as Selling Agent and will have the right to sell Securities upon such terms as it may determine it its sole discretion (unless and until instructed to the contrary by the Unitholders as provided under "Description of Trust Agreement -- Sale of Securities; Secured Party Rights") where such sale is required to enable the Trust to make payment of a Swap Termination Payment under any Swap Agreement. The Selling Agent will be permitted to sell Securities to affiliates of the Selling Agent. Moreover, where a Swap Termination Payment is owed to the Swap Counterparty, the interests of the Swap Counterparty and the Unitholders with respect to the liquidation of the Securities may conflict. The Selling Agent is an agent of the Trustee only and will have no fiduciary or other duties to the Unitholders, nor will the Selling Agent have any liability to the Trust in the absence of the Selling Agent's bad faith or wilful default. The Trustee does not actively manage the Trust for investors. The Trustee with respect to any Series of Units will hold the Trust Property for the benefit of the Unitholders. Each Trust will generally hold the related Trust Property to maturity and not dispose of it, regardless of adverse events, financial or otherwise, which may affect any Security Issuer or the value of the Trust Property. Under certain circumstances the holders of the Units may direct the Trustee to dispose of the Securities or take certain other actions in respect of the Trust Property. The restrictions on the Trustee's powers and obligations may mean that the Trust will not take actions with respect to the Securities -- in particular, to sell such Securities or enforce remedies under such Securities -- that an investor would take if it held the Securities directly. The Prospectus Supplement for the Units may set forth additional information regarding special considerations applicable to such Units. REPORTS TO UNITHOLDERS On each Distribution Date (or in accordance with another period specified in the Prospectus Supplement), unaudited reports containing information concerning the related Trust will be prepared by the Trustee and sent on behalf of each Trust to registered holders of the Units. Where the Units are represented by a Global Security in registered form, unless and until Definitive Units are issued, reports will be sent only to the Depositary (as defined herein) or its nominee, as registered holder of the Units. See "Description of Units--Form" and "Description of the Trust Agreement--Reports to Unitholders; Notices." Such reports will not constitute financial statements prepared in accordance with generally accepted accounting principles. The Depositor, on behalf of each Trust, will cause to be filed with the Commission such periodic reports as are required under the Exchange Act. IMPORTANT CURRENCY INFORMATION Unless the Prospectus Supplement sets forth terms for the payment by purchasers in a currency other than the Specified Currency, purchasers will be required to pay for each Unit in the Specified Currency for such Unit. Currently, there are limited facilities in the United States for conversion of U.S. dollars into foreign currencies and vice versa, and banks do not currently offer non-U.S. dollar checking or savings account facilities in the United States. However, if requested by a prospective purchaser of a Unit having a Specified Currency other than U.S. dollars, Morgan Stanley or an affiliate or its agent, as exchange rate agent (the "Exchange Rate Agent"), in its sole discretion, may arrange for the exchange of U.S. dollars into such Specified Currency to enable the purchaser to pay for such Unit. Each such exchange will be made by the Exchange Rate Agent on such terms and subject to such conditions, limitations and charges as it may from time to time establish in accordance with its regular foreign exchange practice. All costs of exchange will be borne by the purchaser. THE DEPOSITOR The Depositor was incorporated in the State of Delaware on September 21, 1998, as an indirect, wholly-owned, limited-purpose subsidiary of MSDW. The address of the Depositor is at 1585 Broadway, New York, New York 10036, Attention: Secretary. The Certificate of Incorporation of the Depositor provides generally that the business to be conducted by the Depositor is limited to acquiring, holding and disposing of Securities, arranging for Credit Support, acting as Depositor of Trusts in connection with Series of Units, registering the Units with the Commission and complying on behalf of each Trust with the related reporting and filing requirements under the Exchange Act, holding and transferring interests in the Units and Retained Interests (as defined herein) in the Trust Property, and engaging in other related activities and transactions. The Depositor is required at all times to have at least one director which is not affiliated with MSDW. USE OF PROCEEDS The net proceeds to be received from the sale of each Series or Class of Units (whether or not offered hereby) will be used by the Depositor to purchase (or repay any financing by the Depositor in respect of) the related Trust Property, including, if specified in the related Prospectus Supplement, arranging Credit Support, (including by making required deposits into any Reserve Account (as defined below) or another account of the Trustee for the benefit of the Unitholders of such Series or Class). Any remaining net proceeds will be used by the Depositor for general corporate purposes or for other purposes as may be described in the Prospectus Supplement. FORMATION OF TRUSTS The Units of any Series will be issued by a Trust. Each Trust will be established under the laws of New York pursuant to a Trust Agreement to be entered into between the Depositor and the Trustee. Concurrently with the execution and delivery of such Trust Agreement, (i) the Depositor will transfer the related Securities and other Trust Property to the Trustee, in its capacity as Trustee, for the benefit of the Unitholders and deposit such Securities in the related Trust, (ii) the Trustee will enter into any Swap Agreement with the applicable Swap Counterparty and accept the related Guarantee, if any. The Trustee, on behalf of such Trust, will accept such Securities and other Trust Property and deliver the Units to or upon the order of the Depositor. The Depositor's transfer of such Securities to the Trustee will be without recourse. The Trust Property with respect to a Trust will consist of: (i) the related Securities and all payments on or collections in respect of such Securities due after a specified cut-off date (the "Cut-off Date") set forth in the applicable Prospectus Supplement; (ii) all the Trustee's right, title and interest under any Swap Agreement and any related Guarantee; (iii) all the Trustee's right, title and interest in any related Credit Support; (iv) all funds from time to time deposited in certain segregated accounts held by the Trustee in trust and for the benefit of the holders of the Units representing interests in such Trust; and (v) any other asset described in the applicable Prospectus Supplement as constituting a portion of such Trust Property, in each case as more fully described in this Prospectus or in such Prospectus Supplement, and in each case exclusive of any interest retained by the Depositor or a third party ("Retained Interest") in any of the Securities, the Swap Agreement or other assets constituting Trust Property. The Units to be issued by a Trust will represent fractional undivided interests in the related Trust Property and claims of the holders of such Units on such Trust Property will be subject to (i) if applicable, the security interest of the Swap Counterparty with respect to amounts due to it under the Swap Agreement, including, without limitation, any Swap Termination Payments (as limited in the case of a termination other than for a Security Default to a claim pro rata with that of the Unitholders), and (ii) the prior claims of the Trustee with respect to any Extraordinary Trust Expense. See "Risk Factors". The Trustee will administer the Trust Property pursuant to the related Trust Agreement and will perform such tasks with respect to the related Units as are specified in such Trust Agreement. The Trustee will receive customary fees (the "Trustee Fees") as compensation and in payment of all its regular and ordinary expenses, which will be paid by the Depositor or another entity (other than any Trust). Unless the Prospectus Supplement specifies terms for payment of Trustee Fees from the Trust Property, the Trustee will not have any claim to or lien upon the related Trust or any of its property in order to secure payment of the Trustee Fees. See "Description of Trust Agreements - Trustee Compensation". MATURITY AND YIELD CONSIDERATIONS Each Prospectus Supplement will, to the extent applicable, contain information with respect to the type and maturities of the related Securities and the terms, if any, upon which such Securities may be subject to early redemption (either by the applicable obligor or pursuant to a third-party call option), amortization, repayment (at the option of the holders thereof) or extension of maturity. The provisions of the Securities with respect to the foregoing will affect the weighted average life of the related Series of Units. The effective yield to holders of the Units of any Series (and Class within such Series) may be affected by certain aspects of the Trust Property or the manner and priorities of allocations of collections with respect to such Trust Property between the Classes of a given Series. With respect to any Series of Units where the related Trust holds Securities that consist of one or more redeemable securities, extendible securities or securities subject to a third-party call option or early amortization, the yield to maturity of such Series (or Class within such Series) may be affected by any optional or mandatory redemption or early amortization or repayment or extension of the related Securities prior to the stated maturity thereof. A variety of tax,\accounting, economic, and other factors will influence whether a corporate issuer exercises any right of redemption in respect of its securities. All else remaining equal, if prevailing interest rates fall significantly below the interest rates on the related Securities, the likelihood of redemption would be expected to increase. There can be no certainty as to whether any Security redeemable at the option of the related Security Issuer will be repaid prior to its stated maturity. Unless the related Prospectus Supplement describes other remedies applicable to the Securities, each of the Securities will be subject to acceleration upon the occurrence of certain Covenant Defaults (as defined below). The maturity and yield on the Units will be affected by any early repayment of the Securities as a result of any acceleration of the Outstanding Securities (as hereinafter defined) by the holders thereof. See "Description of Trust Property -- Security Agreement." If a Security Issuer becomes subject to a bankruptcy proceeding, the timing and amount of payments with respect to both interest and principal may be materially and adversely affected. A variety of factors influence the performance of security issuers and correspondingly may affect a Security Issuer's ability to satisfy its obligations under the Securities, including the company's operating and financial condition, leverage, and social, geographic, legal and economic factors. The extent to which the yield to maturity of such Units may vary from the anticipated yield due to the rate and timing of payments on the Trust Property will depend upon the degree to which they are purchased at a discount or premium and the degree to which the timing of payments thereon is sensitive to the rate and timing of payments on the Trust Property. The yield to maturity of any Series (or Class) of Units will also be affected by variations in the interest rates applicable to, and the corresponding payments in respect of, such Units, to the extent that the Interest Rate (as defined below) for such Series (or Class) is based on variable or adjustable interest rates. With respect to any Series of Units representing an interest in two or more Securities, disproportionate principal payments (whether resulting from differences in amortization schedules, payments due on scheduled maturity or upon early redemption) on the related Securities having interest rates higher or lower than the then applicable Interest Rates applicable to such Units may affect the yield thereon. The Prospectus Supplement for each Series of Units will set forth additional information regarding yield and maturity considerations applicable to such Series (and each Class within such Series) and the related Trust Property, including the applicable Securities. DESCRIPTION OF TRUST PROPERTY The Securities will have been purchased by the Depositor (or an affiliate thereof) in the secondary market or, if so described in the Prospectus Supplement, in connection with an initial distribution of the Securities as to which additional information will be provided in or concurrently with the Prospectus Supplement. Unless the Prospectus Supplement sets forth the material financial and other information with respect to the Security Issuer, each Security which represents on the date of formation of the Trust 10% or more by principal amount of the Securities held by such Trust (a "Concentrated Security") will constitute or be serviced fully by cash flow from (i) obligations of or guaranteed by the United States government, (ii) obligations of one or more corporations, limited partnerships, trusts, limited liability companies or other organizations, banking organizations or insurance companies, in each case which meet the market capitalization and other requirements for a primary issuance of common stock on Form S-3 under the Securities Act and are subject to the informational requirements of the Exchange Act, and which, in accordance therewith, file reports and other information with the Securities and Exchange Commission (or another applicable agency pursuant to Section 12(i)of the Exchange Act), (iii) obligations of the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation or other government sponsored enterprises that have a comparable market capitalization and which make information publicly available comparable to that of Exchange Act reporting companies or (iv) obligations of or guaranteed by a foreign sovereign or political subdivision or instrumentality thereof which has offered debt securities in the United States pursuant to a registration statement filed with the Commission containing information required by Schedule B of the Securities Act ("Schedule B"), that qualifies as a "seasoned" issuer under Commission practice and which issuer or guarantor the Depositor reasonably believes (based on publicly available information) is eligible to use Schedule B as of the time of the offering of the related Units (an "Eligible Foreign Issuer") (each of the entities referred to in (i), (ii), (iii) and (iv) an "Eligible Issuer"). If so specified in the related Prospectus Supplement, the Trust for a Series of Units may also include, or the Unitholders of such Units may have the benefit of, any combination of insurance policies, letters of credit, reserve accounts and other types of rights or assets designed to support or ensure the servicing and distribution of amounts due in respect of the Trust Property (collectively, "Credit Support"). Unless the Prospectus Supplement sets forth the material information with respect to a Security Issuer as described in the following sentence, each Security Issuer will on the date of issuance of the Units be an Eligible Issuer, and the Prospectus Supplement will refer investors to the related Security Prospectus, reports filed by the Security Issuer pursuant to the Exchange Act, or publicly available information issued by GSEs for the material information regarding the Security Issuer, and any information contained in a Prospectus Supplement regarding such Security Issuer will be derived from such publicly available information. For any Security Issuer which at the time the Units are issued is not an Eligible Security Issuer, (i) the Prospectus Supplement will separately set forth or incorporate by reference the material information for such Security Issuer with respect to the Units, which in the case of a Concentrated Security that represents on the date of formation of the Trust 20% or more by principal amount of the Securities held by such Trust, includes audited financial statements of such Security Issuer, and (ii) the Depositor will file with Commission periodic reporting information with respect to such Security Issuer in connection with the periodic filings on behalf of the Trust in respect of the Units. All information set forth in a Prospectus Supplement with respect to a Concentrated Security or any other Security will be derived solely from the description of such Security contained in a publicly available prospectus or offering document relating to such Security ("Security Prospectus"), other periodic filings with the Commission, or publicly available information issued by GSEs. For any Securities issued by a Security Issuer which does not file reports with the Commission or which is not a GSE, the Prospectus Supplement or periodic reporting will provide financial and other information on the Securities. The related Prospectus Supplement will state whether the Security Prospectus with respect to any Concentrated Security was filed with the Commission in connection with the issuance of the related Security or otherwise in public filings by the related Security Issuer. Prospective purchasers of Units are urged to read this Prospectus and the applicable Prospectus Supplement in conjunction with (i) each related Security Prospectus and (ii) each registration statement of which any Security Prospectus is a part (a "Security Registration Statement"). No representation is made by the Trust, the Trustee or the Depositor or any of their respective affiliates as to the accuracy or completeness of the information contained in any Security Prospectus or Security Registration Statement. Unless the related Prospectus Supplement describes diligence undertaken by the Depositor or Morgan Stanley or the Trustee or any of their affiliates with respect to the Security Issuer, no investigation of the financial condition or creditworthiness of any Security Issuer or any of its subsidiaries or other affiliates, or of the ratings, if any, on the related Securities, will be made by the Depositor, Morgan Stanley or the Trustee or any of their affiliates in connection with the issuance of the related Units. Prospective purchasers of Units should consider carefully each Security Issuer's financial condition and its ability to make payments in respect of the related Securities. Unless the related Prospectus describes diligence undertaken by the Depositor, Morgan Stanley or the Trustee or any of their affiliates with respect to the Security Prospectus, none of the Depositor, Morgan Stanley or the Trustee or any of their respective affiliates has participated in the preparation of any Security Prospectus or Security Registration Statement or other public information relating to the Securities or takes any responsibility for the accuracy or completeness of the information provided therein. Reference is made to the applicable Prospectus Supplement with respect to each Series of Units for a description of the material terms, as applicable, of any Concentrated Security: (i) the title and series of such Concentrated Securities, the aggregate principal amount, denomination and form thereof; (ii) whether such securities are senior or subordinated to any other obligations of the related Security Issuer; (iii) whether any of the obligations are secured or unsecured and the nature of any collateral; (iv) the limit, if any, upon the aggregate principal amount of such securities; (v) the dates on which, or the range of dates within which, the principal of (and premium, if any, on) such securities will be payable; (vi) the rate or rates or the method of determination thereof, at which such Concentrated Securities will bear interest, if any; the date or dates from which such interest will accrue; and the dates on which such interest will be payable; (vii) the obligation, if any, of the Security Issuer to redeem the Outstanding Securities pursuant to any sinking fund or analogous provisions, or at the option of a holder thereof, and the periods within which or the dates on which, the prices at which and the terms and conditions upon which such securities may be redeemed or repurchased, in whole or in part, pursuant to such obligation; (viii) the periods within which or the dates on which, the prices at which and the terms and conditions upon which such securities may be redeemed, if any, in whole or in part, at the option of the Security Issuer; (ix) whether the Securities were issued at a price lower than the principal amount thereof; (x) if other than United States dollars, the foreign currency in which such Securities are denominated, or in which payment of the principal of (and premium, if any) or any interest on such Securities will be made, and the circumstances, if any, when such currency of payment may be changed; (xi) material events of default or restrictive covenants provided for with respect to such Securities; (xii) the rating thereof, if any; (xiii) the Retained Interest, if any, with respect thereto; and (xiv) all other material terms of such Securities. With respect to any portion of the Trust Property comprised of Securities other than Concentrated Securities, the related Prospectus Supplement will describe the composition of such portion as of the Cut-off Date, certain material events of default or restrictive covenants common to the Securities, and, on an aggregate, percentage or weighted average basis, as applicable, the characteristics of such portion with respect to the terms set forth in (ii), (iii), (v), (vi), (vii), (viii), (ix) and (x) of the preceding paragraph and all other material terms regarding such portion of the Trust Property. In addition to the foregoing, with respect to each Concentrated Security the applicable Prospectus Supplement will disclose the identity of the applicable obligor and any trustee under the applicable Security Agreement (as defined below), and will describe the existence and type of certain information that is made publicly available by each obligor regarding such Concentrated Security or Concentrated Securities and will disclose where and how prospective purchasers of the Units may obtain such publicly available information with respect to each such obligor. Such publicly available information will typically consist of the quarterly and annual reports filed under the Exchange Act by such issuer with, and which are available from, the Commission. Where the Security Issuer with respect to a Concentrated Security is not an Eligible Issuer and the Depositor has provided the material information with respect to such Security Issuer in the Prospectus Supplement, periodic information with respect to such Security Issuer will be directly set forth in the periodic filings with respect to the Units. Security Agreement General. Each Security will have been issued pursuant to an indenture, trust agreement or other agreement (each, a "Security Agreement"). Except as specifically described in any Prospectus Supplement, all information set forth therein with respect to the provisions of any Security Agreement pertaining to a Concentrated Security will be based solely on the version of the Security Agreement filed with the Commission in connection with the registration of such Concentrated Security. Certain Covenants. A Security Agreement will generally contain covenants intended to protect security holders against the occurrence or effects of certain specified events, including restrictions limiting the issuer's, and in some cases any of its subsidiaries' ability to: (i) consolidate, merge, or transfer or lease assets; (ii) incur or suffer to exist any lien, charge, or encumbrance upon any of its property or assets, or to incur, assume, guarantee or suffer to exist any indebtedness for borrowed money if the payment of such indebtedness is secured by the grant of such a lien; (iii) declare or pay any cash dividends, or make any distributions on or in respect of, or purchase, redeem, exchange or otherwise acquire or retire for value any capital stock or subordinated indebtedness of the issuer or its subsidiaries, if any. A Security Agreement may also contain financial covenants which, among other things, require the maintenance of certain financial ratios or the creation or maintenance of reserves. Subject to certain exceptions, a Security Agreement typically may be amended or supplemented and past defaults may be waived with the consent of the trustee (if any), the consent of the holders of not less than a specified percentage of the outstanding securities or both. The Security Agreement related to one or more Securities included in a Trust may include some, all or none of the foregoing provisions or variations thereof or additional covenants not discussed herein. To the extent that the Securities are investment grade debt they are unlikely to contain significant restrictive covenants although certain non-investment grade debt may not be subject to restrictive covenants either. There can be no assurance that any such provision will protect the Trust as a holder of the Securities against losses. The Prospectus Supplement used to offer any Series of Units will describe material covenants in relation to any Concentrated Security (as defined below) and, as applicable, will describe material covenants which are common to other Securities included in the Trust Property. Events of Default. A Security Agreement may provide that any one of a number of specified events will constitute an event of default with respect to the securities issued thereunder. Such events of default typically include the following or variations thereof: (i) failure by the issuer to pay an installment of interest or principal on the securities at the time required (subject to any specified grace period) or to redeem any of the securities when required (subject to any specified grace period); (ii) failure by the issuer to observe or perform any covenant, agreement or condition contained in the securities or the Security Agreement which failure is materially adverse to security holders and continues for a specified period after notice thereof is given to the issuer; (iii) failure by the issuer to make any required payment of principal (and premium, if any) or interest with respect to certain of the other outstanding debt obligations of the issuer or the acceleration by or on behalf of the holders thereof of such securities; and (iv) certain events of insolvency or bankruptcy with respect to the Security Issuer. Each Security Agreement may or may not be in the form of an indenture and may include some, all or none of the foregoing provisions or variations thereof or additional events of default not discussed herein. The Prospectus Supplement with respect to any Series of Units will describe the material terms of the events of default under the Security Agreement with respect to any Concentrated Security (each a "Covenant Default") and applicable remedies with respect thereto. With respect to any portion of the Trust Property comprised of Securities other than Concentrated Securities, the applicable Prospectus Supplement will describe certain common Covenant Defaults with respect to such portion. There can be no assurance that any such provision will protect the Trust, as a holder of the Securities, against losses. If a Covenant Default occurs and the Trust as a holder of the Securities is entitled to vote or take such other action to declare the principal amount of a Security and any accrued and unpaid interest thereon to be due and payable, the Unitholders' objectives may differ from those of holders of other securities of the same series and class as any Security ("Outstanding Securities") in determining whether to declare the acceleration of the Securities. Limitations on Remedies. A Security Agreement will generally provide that upon the occurrence of an event of default, the trustee (if any) may, and upon the written request of the holders of not less than a specified percentage of the outstanding securities must, take such action as it may deem appropriate to protect and enforce the rights of the security holders. In certain cases, the indenture trustee (if any) or a specified percentage of the holders of the outstanding securities will have the right to declare all or a portion of the principal and accrued interest on the outstanding securities immediately due and payable upon the occurrence of certain events of default, subject to the issuer's right to cure, if applicable. Generally, an indenture will contain a provision entitling the trustee thereunder to be indemnified by the security holders prior to proceeding to exercise any right or power under such indenture with respect to such securities at the request of such security holders. An indenture is also likely to limit a security holder's right to institute certain actions or proceedings to pursue any remedy under the indenture unless certain conditions are satisfied, including consent of the indenture trustee, that the proceeding be brought for the ratable benefit of all holders of the security, and/or the indenture trustee, after being requested to institute a proceeding by the owners of at least a specified minimum percentage of the securities, shall have refused or neglected to comply with such request within a reasonable time. Subordination. As set forth in the applicable Prospectus Supplement, certain of the Securities with respect to any Trust may be either senior ("Senior Securities") or subordinated ("Subordinated Securities") in right to payment to other existing or future obligations of the Security Issuer. With respect to Subordinated Securities, to the extent of the subordination provisions of such securities, and after the occurrence of certain events, security holders and direct creditors whose claims are senior to Subordinated Securities, if any, may be entitled to receive payment of the full amount due thereon before the holders of any Subordinated Securities are entitled to receive payment on account of the principal (and premium, if any) or any interest on such securities. Consequently, the Trust as a holder of subordinated debt may suffer a greater loss than if it held unsubordinated debt of the Security Issuer. There can be no assurance, however, that in the event of a bankruptcy or similar proceeding the Trust as a holder of Senior Securities would receive all payments in respect of such securities even if holders of Subordinated Securities receive amounts in respect of such securities. Reference is made to the Prospectus Supplement used to offer any Series of Units for a description of any subordination provisions with respect to any Concentrated Securities and the percentage of Senior Securities and Subordinated Securities, if any, in the portion of a Trust comprised of other than Concentrated Securities. Secured Obligations. Certain of the Securities with respect to any Trust may represent secured obligations of the Security Issuer ("Secured Securities"). Generally, unless an event of default shall have occurred and is continuing, or with respect to certain collateral or as otherwise set forth in the agreement pursuant to which such securities were offered and sold, an issuer of secured obligations generally has the right to remain in possession and retain exclusive control of the collateral securing a security and to collect, invest and dispose of any income related to the collateral. The agreement pursuant to which any secured indebtedness is issued may also contain certain provisions for release, substitution or disposition of collateral under certain circumstances with or without the consent of the trustee or upon the direction of not less than a specified percentage of the security holders. The agreement pursuant to which any secured indebtedness is issued will also provide for the disposition of the collateral upon the occurrence of certain events of default with respect thereto. In the event of a default in respect of any secured obligation, security holders may experience a delay in payments on account of principal (and premium, if any) or any interest on such securities pending the sale of any collateral and prior to or during such period the related collateral may decline in value. If proceeds of the sale of collateral following an event of default are insufficient to repay all amounts due in respect of any secured obligations, the holders of such securities (to the extent not repaid from the proceeds of the sale of the collateral) would have only an unsecured claim ranking pari passu with the claims of all other general unsecured creditors. The Security Agreement with respect to any Secured Security may include, some, all or none of the foregoing provisions or variations thereof. The Prospectus Supplement used to offer any Series of Units which includes Concentrated Securities which are Secured Securities, will describe the security provisions of such Securities and the related collateral. With respect to any portion of the Trust Property comprised of Secured Securities other than Concentrated Securities, the applicable Prospectus Supplement will disclose certain general information with respect to such security provisions and the collateral. Other Trust Property The Trust Property for a given Series of Units and the related Trust will not constitute Trust Property for any other Series of Units and the related Trust and the Units of each Class of a given Series possess an equal and ratable undivided ownership interest in such Trust Property. The applicable Prospectus Supplement may specify that certain assets constituting a part of the Trust Property relating to any given Series can be beneficially owned solely by or deposited solely for the benefit of one Class or a group of Classes within such Series. In such event, the other Classes of such Series will not possess any beneficial ownership interest in those specified assets constituting a part of the Trust Property. Credit Support As specified in the applicable Prospectus Supplement for a given Series of Units, the Trust for any Series of Units may include, or the Unitholders of such Series (or any Class or group of Classes within such Series) may have the benefit of, Credit Support for any Class or group of Classes within such Series. Such Credit Support may be provided by any combination of the following means described below or any other means described in the applicable Prospectus Supplement. The applicable Prospectus Supplement will set forth whether the Trust for any Class or group of Classes of Units contains, or the Unitholders of such Units have the benefit of, Credit Support and, if so, the amount, type and other relevant terms of each element of Credit Support with respect to any such Class or Classes and certain information with respect to the obligors of each such element, including audited financial information with respect to any such Credit Support Provider (as defined below) providing Credit Support for 20% or more of the aggregate principal amount of such Class or Classes (which may be incorporated by reference where such obligor is subject to the informational requirements of the Exchange Act). Any Credit Support which takes the form of a guaranty of the Units, rather than a guaranty of payment on the underlying Trust Property will be issued by an insurance company or another entity eligible to issue guaranties exempt from registration under Section 3(a) of the Securities Act. Subordination. As discussed below under "--Collections," the rights of the Unitholders of any given Class within a Series of Units to receive collections from the Trust for such Series and any Credit Support obtained for the benefit of the Unitholders of such Series (or Classes within such Series) may be subordinated to the rights of the Unitholders of one or more other Classes of such Series to the extent described in the related Prospectus Supplement. Such subordination accordingly provides some additional credit support to those Unitholders of those other Classes. If losses are realized during a given period on the Trust Property relating to a Series of Units such that the collections received thereon are insufficient to make all distributions on the Units of such Series, those realized losses would be allocated to the Unitholders of any Class of any such Series that is subordinated to another Class, to the extent and in the manner provided in the related Prospectus Supplement. In addition, if so provided in the applicable Prospectus Supplement, certain amounts otherwise payable to Unitholders of any Class that is subordinated to another Class may be required to be deposited into a reserve account. Amounts held in any reserve account may be applied as described below under "--Reserve Accounts" and in the related Prospectus Supplement. If so provided in the related Prospectus Supplement, the Credit Support for any Series or Class of Units may include, in addition to the subordination of certain Classes of such Series and the establishment of a reserve account, any of the other forms of Credit Support described below. Any such other forms of Credit Support that are solely for the benefit of a given Class will be limited to the extent necessary to make required distributions to the Unitholders of such Class. In addition, if so provided in the applicable Prospectus Supplement, the obligor of any other forms of Credit Support may be reimbursed for amounts paid pursuant to such Credit Support out of amounts otherwise payable to one or more of the Classes of the Units of such Series. Letter of Credit; Guaranty. The Unitholders of any Series (or Class or group of Classes of Units within such Series) may, if specified in the applicable Prospectus Supplement, have the benefit of a letter or letters of credit (a "Letter of Credit") issued by a bank (a "Letter of Credit Bank") or a financial guaranty or surety bond (a "Guaranty") issued by a financial guarantor or surety company (a "Guarantor") (either of a Letter of Credit Bank or Guarantor a "Credit Support Provider"). In either case, the Trustee or such other person specified in the applicable Prospectus Supplement will use its reasonable efforts to cause the Letter of Credit or the Guaranty, as the case may be, to be obtained, to be kept in full force and effect (unless coverage thereunder has been exhausted through payment of claims) and to pay timely the fees or premiums therefor unless, as described in the related Prospectus Supplement, the payment of such fees or premiums is otherwise provided for. The Trustee or such other person specified in the applicable Prospectus Supplement will make or cause to be made draws or claims under the Letter of Credit or the Guaranty, as the case may be, under the circumstances and to cover the amounts specified in the applicable Prospectus Supplement. The applicable Prospectus Supplement will provide the manner, priority and source of funds by which any such draws are to be repaid. The applicable Prospectus Supplement will specify whether the Letter of Credit Bank or the Guarantor, as applicable, will be required to satisfy any ongoing credit rating or other applicable requirements. In the event any such requirements cease to be satisfied, the Trustee or such other person specified in the applicable Prospectus Supplement will use its reasonable efforts to obtain or cause to be obtained a substitute Letter of Credit or Guaranty, as applicable, or other form of credit enhancement providing similar protection, that meets such requirements and provides the same coverage to the extent available for the same cost. There can be no assurance that any Letter of Credit Bank or any Guarantor, as applicable, will continue to satisfy such requirements or that any such substitute Letter of Credit, Guaranty or similar credit enhancement will be available providing equivalent coverage for the same cost. To the extent not so available, the credit support otherwise provided by the Letter of Credit or the Guaranty (or similar credit enhancement) may be reduced to the level otherwise available for the same cost as the original Letter of Credit or Guaranty. Reserve Accounts. If so provided in the related Prospectus Supplement, the Trustee or such other person specified in the Prospectus Supplement will deposit or cause to be deposited into an account maintained with an eligible institution (which may be the Trustee) (a "Reserve Account") any combination of cash or permitted investments in specified amounts, which will be applied and maintained in the manner and under the conditions specified in such Prospectus Supplement. In the alternative or in addition to such deposit, a Reserve Account may be funded through application of a portion of collections received on the Trust Property for a given Series of Units, in the manner and priority specified in the applicable Prospectus Supplement. The Trust Property will be identified in a schedule appearing as an exhibit to the Trust Agreement. DESCRIPTION OF SWAP AGREEMENTS Concurrently with the formation of a Trust, the Trust may enter into a related Swap Agreement. The following summary of certain terms and provisions of the Swap Agreement, which, together with the information set forth in the Prospectus Supplement, describes all material terms thereof, is subject to the detailed provisions of the form of Swap Agreement filed as an exhibit to the Registration Statement. The specific terms of each Transaction under the Swap Agreement, particularly the method of calculation of payments by the Swap Counterparty thereunder and the timing of such payments, will be set forth in the applicable Prospectus Supplement. The Trust may enter into Swap Agreements with more than one Swap Counterparty, in which case the following discussion will apply to each Swap Agreement with each Swap Counterparty severally. General As particularly described in the applicable Prospectus Supplement, for any Trust, the Transaction or Transactions under a related Swap Agreement may be one or more of the following: (i) a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, index swap, index option, bond option, total rate of return swap, credit default swap, credit spread put, credit spread call, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions); (ii) any combination of these transactions; or (iii) any other transaction identified in such Swap Agreement or the relevant confirmation and described in such Prospectus Supplement. The Swap Agreement will be in the form of the 1992 ISDA Master Agreement (Multicurrency - Cross Border) (the "1992 Master Agreement") published by the International Swaps and Derivatives Association, Inc. ("ISDA") and will incorporate the 1991 ISDA Definitions (as published by ISDA, the "ISDA Definitions"), as modified and supplemented by a schedule thereto (the "Schedule") except as modified to reflect the terms of the related Units and Trust Agreement and any specific terms of the Transaction or Transactions under such Swap Agreement. The Swap Agreement will be governed in all relevant respects by the provisions set forth in the 1992 Master Agreement and the ISDA Definitions, without regard to any amendments or modifications to the 1992 Master Agreement or the ISDA Definitions published by ISDA subsequent to the date of such Swap Agreement. Payments under Swap Agreements In general, under a Swap Agreement, the related Trust and the Swap Counterparty will each agree to exchange certain payments on each payment date (each, a "Swap Payment Date") under such Swap Agreement. The amounts to be exchanged by the parties on a Swap Payment Date may both be floating amounts, calculated with reference to one or more interest rate bases (which may be one or more of the interest rate Base Rates described under "Description of Units Interest on Units") or other types of bases, in each case as set forth in the applicable Prospectus Supplement, or one such amount may be floating and the other fixed. In addition, such amounts will also be calculated with reference to the notional principal amount of the Transaction or Transactions under such Swap Agreement, which, unless otherwise specified in the applicable Prospectus Supplement, as of any date of determination will be equal to the then aggregate principal amount of the related Securities (as such amount may have been reduced through any redemption, prepayment or exchange). The obligations of the Trust to the Swap Counterparty will be secured by a security interest in the Trust Property granted by the Trust in favor of the Swap Counterparty. A Swap Agreement may provide for either periodic exchanges of payment amounts or, in the case of Index-Linked Units, a single exchange or series of exchanges upon one or more interest payment dates or the maturity or prospective maturities of the related Securities, or both. If specified in the applicable Prospectus Supplement, a Swap Agreement may also document a call option granted by the Trust, or a put option in favor of the Trust with respect to all or a portion of the Securities or other Trust Property. A call option written by the Trust will effectively reserve to the Swap Counterparty the right to realize all or a portion of the gain from an increase in the market value of the specified Trust Property at or prior to the maturity of the Units or to effect a conversion of the Securities into the right to receive another security, rights which the Trust ordinarily will not be entitled to exercise. Conversely, a put option in favor of the Trust will generally be intended to protect the Trust in whole or in part from a decline in the market value of the related Securities in circumstances where the Securities may be outstanding on the Scheduled Final Distribution Date with respect to the Units. The applicable Prospectus Supplement may specify that a put option written in favor of the Trust will be automatically exercised by the Trustee upon the occurrence of specified events. The Swap Agreement may also document a credit swap transaction, under which the Trust will receive periodic payments from the Swap Counterparty in return for the Trust's agreement to exchange the Securities for securities ("Deliverable Obligations") of a different security issuer (the "Reference Entity") upon the occurrence of certain credit-related events ("Credit Events") with respect to the Reference Entity. Where a credit swap transaction relates to more than 10% by principal amount of the Securities held by the Trust, the Prospectus Supplement and periodic filings with respect to the Trust will set forth information regarding the Deliverable Obligations and the Reference Entity similar to that provided for Concentrated Securities and the issuer of Concentrated Securities. The Swap Agreement pertaining to a Series of Units for which the Trust has entered into a credit swap transaction will include supplemental terms particular to credit swaps, including the specified Credit Events, which will be based on standard forms promulgated by ISDA and described in the Prospectus Supplement. On any given Swap Payment Date (including a Swap Payment Date occurring upon the maturity of the related Securities or a portion thereof), each exchange of payments in the same currency and in respect of the same Transaction will be settled on a "net payments" basis, which means that only a single net payment will be due from one of the parties under the Swap Agreement to the other. The Prospectus Supplement may also provide for such netting among more than one Transaction. On each Distribution Date with respect to Units in connection with which the Trust has entered into a Swap Agreement, the Trustee will have available for distribution to Unitholders funds equal to (i) the amount of any payments received on the Swap Agreement and other related Trust Property less (ii) all payments made by such Trustee to the Swap Counterparty, in each case since the immediately preceding Distribution Date. The effect of such Swap Agreement, therefore, will be that holders of such Units will be entitled to distributions of interest (and, in the case of Index-Linked Units, of principal) thereon in accordance with the terms of the Swap Agreement rather than the terms of the related Securities. No assurance can be given that the Trustee will receive either any payment due to be received on such Securities or any net payment, if any, due to be received under such Swap Agreement, in each case when due, or that the Trustee will recover moneys under a related Guarantee, if any, upon a payment default by the Swap Counterparty under such Swap Agreement. Modification and Amendment of Swap Agreements The related Trust Agreement will contain provisions permitting the Trustee to enter into any amendment of a related Swap Agreement requested by the Swap Counterparty to cure any ambiguity in, or to correct or supplement any provision of, such Swap Agreement, so long as (i) the Trustee determines that such amendment will not materially and adversely affect the interests of the holders of the Units and (ii) the Trustee has received an opinion of counsel to the effect that such amendment will not alter the classification of the related Trust for United States Federal income tax purposes. The Prospectus Supplement will describe any other circumstances in which the Swap Agreement may be amended. Defaults Under Swap Agreements "Events of Default" under the Swap Agreement (each, a "Swap Default") include: (i) the failure of the applicable Trust to pay any amount when due under the Swap Agreement after giving effect to the applicable grace period, if any; (ii) the failure of the applicable Swap Counterparty or the Guarantor, if any, to pay any amount when due under such Swap Agreement after giving effect to the applicable grace period, if any; and (iii) certain other standard events of default under the 1992 Master Agreement including "Credit Support Default", "Bankruptcy" and "Merger without Assumption", as described in Sections 5(a)(iii), 5(a)(vii) and 5(a)(viii) of the 1992 Master Agreement as modified by the Schedule. Several of the standard events of default of the 1992 Master Agreement are not Events of Default under the Swap Agreement. The standard events of default excluded are "Breach of Agreement", "Misrepresentation", "Default Under Specified Transaction" and "Cross Default" as described in Sections 5(a)(ii), 5(a)(iv), 5(a)(v) and 5(a)(vi), respectively, of the 1992 Master Agreement. The Prospectus Supplement will describe any additional Events of Default applicable to the Swap Agreement. Termination Events The "Termination Events" under the related Swap Agreement will consist of the following: (i) a Security Default (as defined below) occurs with respect to the related Security or the related Security becomes a Disqualified Security (which Termination Event shall apply only to the specific Transaction under the Swap Agreement relating to such Security); (ii) the occurrence of an Excess Expense Event (as defined under "Description of Trust Agreements - Trust Wind-Up Events"); (iii) any Transaction becomes a Disqualified Transaction (as defined under "Description of Trust Agreements - Trust Wind-Up Events") (which Termination Event shall apply only to the specific Disqualified Transaction); or, (iv) other Trust Wind-Up Events; or (v) the occurrence of an "Illegality" or "Tax Event" as described in Sections 5(b)(i) and 5(b)(ii) of the 1992 Master Agreement. With respect to each of (i), (ii), (iii) and (iv), both the Trust and the Swap Counterparty will be deemed to be a party affected by the relevant event ("Affected Party") and will be entitled to terminate the Swap Agreement or the particular affected Transaction. However, for purposes of the calculation of any Swap Termination Payment, the Trust will be deemed the sole Affected Party and as a result the Swap Counterparty will have the sole right to determine in good faith the amount of any Swap Termination Payment. The "Tax Event Upon Merger" and "Credit Event Upon Merger" Termination Event contained in Section 5(b)(iii) and 5(b)(iv) of the 1992 Master Agreement will not apply. The Prospectus Supplement will describe any additional Termination Events that will apply or any of the above Termination Events that are inapplicable to a specific Series of Units. Early Termination of Swap Agreements Unless the applicable Prospectus Supplement sets forth terms for the assignment or continuation of the Swap Agreement, or automatic termination, upon specified Termination Events or Events of Default, upon the occurrence of a Termination Event of the types referred to in clauses (i), (ii), (iii) and (iv) above under "-- Termination Events" or upon the occurrence of any Swap Default arising from any action taken, or failure to act, by the Swap Counterparty, the Trustee will by notice to the Swap Counterparty terminate the Swap Agreement or the particular affected Transaction thereunder (the date of such termination being an "Early Termination Date"). With respect to other Termination Events, the date on which the Swap Agreement will terminate (also, an "Early Termination Date") must be designated by one of the parties, as specified in each case in the Swap Agreement, and will occur only upon notice and, in certain cases, after any Affected Party (other than a Trust) has (or Affected Parties have, if applicable) used reasonable efforts to transfer their rights and obligations under such Swap Agreement to a related entity within a limited time period after notice has been given of the Termination Event, all as set forth in such Swap Agreement. In the event that the Trustee becomes aware that a Termination Event has occurred with respect to which the Swap Counterparty is the sole Affected Party, the Trustee will under the terms of the Trust Agreement, designate a Termination Event for each "Affected Transaction" (as defined in the Swap Agreement); provided, however, that if the Trust would thereby owe the Swap Counterparty a Swap Termination Payment, it will not designate a Termination Event. The Swap Counterparty will have no obligation to the Trust to exercise any right the Swap Counterparty may have to terminate the Swap Agreement or any Transaction, and will not act on behalf of the Trust to exercise any right of the Trust to terminate the Swap Agreement or any Transaction. If a Termination Event occurs and, when applicable, an Early Termination Date is designated, such Swap Agreement (or the particular affected Transaction) will terminate and Swap Termination Payments may be payable by the applicable Trust to the applicable Swap Counterparty or by the applicable Swap Counterparty to such Trust. If the Trust is liable for a Swap Termination Payment, Securities may be sold by the Trustee through the Selling Agent, unless and until the Selling Agent receives notice from the Trustee of an exercise by the Unitholders of their right to tender the amount of any related Swap Termination Payment as set forth below. See "Description of Trust Agreements -- Trust Wind Up Events". Unless the Prospectus Supplement sets forth terms for replacing the Swap Counterparty after early termination or for the Trust's continued holding of a Security after a related Transaction has terminated, in the event the Trust terminates one or more Transactions and a Trust Wind Up Event has not occurred, the Securities related to such Transactions will be distributed in kind to the Unitholders. Unless the Prospectus Supplement specifies that such events will not constitute a Termination Event, to the extent that the aggregate principal amount of the Securities held by the Trust is reduced through redemption, prepayment or exchange, the corresponding Swap Amount subject to the Swap Agreement will be subject to a partial termination and the Trust or the Swap Counterparty may incur liability for a Swap Termination Payment. In general, not all events of default under the applicable Security Agreement will trigger a Security Default for purposes of the Swap Agreement. Rather, 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, (ii) the failure of the applicable Security Issuer to pay an installment of principal of, or any amount of interest due on, the related Securities after the due date thereof specified in such Prospectus Supplement and after the expiration of any applicable grace period; (iii) the occurrence of certain events of default under such Securities and/or Security Agreement relating to the insolvency or bankruptcy of the applicable Security Issuer; or (iv) the occurrence of a waiver, deferral, restructuring, rescheduling, exchange or other adjustment with respect to the Security such that the Swap Counterparty reasonably determines that the economic terms of the Security are materially different or the Security represents materially greater credit or other risks. In each case, the Trust will be the Affected Party (as defined below) for purposes of the calculation of any Swap Termination Payment. Notwithstanding the existence of a grace period with respect to a Security, the failure of a Security Issuer to make timely payment of an amount required in order for the Trust to make a related payment under the Swap Agreement may result in a default by the Trust under the Swap Agreement prior to the occurrence of a Security Default. The Prospectus Supplement will specify any additional circumstances constituting a "Security Default." Swap Termination Payments If the Swap Agreement is terminated prior to maturity thereof, the market value of each Transaction under the Swap Agreement will be established by one or both parties as specified in the Swap Agreement either (a) on the basis of the market quotations of the cost of entering into a replacement transaction or (b) if such market quotations are unavailable or do not produce a commercially reasonable result, based on losses suffered by either party as a result of the termination of the affected Transaction(s), in each case in accordance with the procedures set forth in detail in the Swap Agreement. If the market value of a Transaction is positive for the Trust, or the termination would result in a loss to the Trust, a Swap Termination Payment will be due from the Swap Counterparty to the Trust in respect of that Transaction; if such market value is positive for or termination of such Transaction would result in a loss to the Swap Counterparty, a Swap Termination Payment will be due from the Trust. The Swap Termination Payment for the Swap Agreement as a whole is the net amount payable after offsetting individual termination payments applicable to each Transaction. The resulting loss to Unitholders could, if interest rates, currency rates and/or swap spreads have changed significantly since the Closing Date, be quite substantial in relation to the total value of the Securities. The Trust may be required to sell Securities through the Selling Agent in order to pay any Swap Termination Payments owed to the Swap Counterparty. In connection with any Swap Termination Payment payable by the Trust, the Unitholders may, acting unanimously, deliver to the Trustee the amount of such outstanding Swap Termination Payment (and any fees payable to the Trustee from Trust Property) and a written instruction to discontinue sale of the Securities. It is possible that Securities may be sold by the Selling Agent in the time necessary for the Unitholders to be notified of and act upon their rights under the foregoing provision. The Swap Termination Payments payable by the Trust will be limited to the assets of the Trust, and Unitholders will not be liable to the Swap Counterparty for Swap Termination Payments to the extent, if any, that the amount of such termination payments exceeds the assets of the Trust. If the Swap Agreement is terminated, any further distributions in respect of the Securities would be made pursuant to the Securities without the benefit of the Swap Agreement. Unitholders could also be materially adversely affected if the Trust is required to sell Securities in order to pay Swap Termination Payments at a time when prices for the Securities in the secondary market are depressed as a result of a default on the Securities or for any other reason. See "Risk Factors." If a Swap Agreement is terminated for reasons other than a Security Default, any Swap Termination Payment payable to the Swap Counterparty will be limited to a claim against the Trust Property pro rata with that of the Unitholders. Guarantees of MSDW; Other Guarantees or Support Unless the applicable Prospectus Supplement specifies arrangements for securing the obligations of the Swap Counterparty, the payment obligations of the Swap Counterparty under the related Swap Agreement will be general, unsecured obligations of such Swap Counterparty. With respect to any Swap Agreement in which the Swap Counterparty is an affiliate of MSDW or if set forth in the Prospectus Supplement, pursuant to the related Guarantee to be delivered with respect to any such Swap Agreement, MSDW will unconditionally and irrevocably guarantee the due and punctual payment of all amounts payable by the Swap Counterparty under such Swap Agreement. Pursuant to such Guarantee, MSDW will agree to pay or cause to be paid all such amounts upon the failure of the Swap Counterparty punctually to pay any such amount and written demand by the Trustee to MSDW to pay such amount. With respect to any Swap Agreement in which the obligations of the Swap Counterparty are not guaranteed by MSDW, the applicable Prospectus Supplement will describe the material provisions of any Guarantee or other type of support, if any, of the obligations of such Swap Counterparty. MSDW MSDW is a global financial services corporation organized under the laws of the State of Delaware. MSDW's principal executive offices are at 1585 Broadway, New York, New York 10036, United States of America and its telephone number is (212) 761-4000. The long term debt of MSDW is currently rated "Aa3" by Moody's and "A+" by S&P. At prescribed rates, Unitholders may obtain copies of all reports, proxy statements and other publicly available information filed by MSDW with the Commission from the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, United States of America. Unitholders may inspect and copy such materials at the Commission's Regional Offices located at Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661 and at Seven World Trade Center, 13th Floor, New York, New York 10048. In addition, the Commission maintains a website that contains reports, proxy and other information regarding registrants that file electronically, such as MSDW. The address of the Commission's website is http://www.sec.gov. DESCRIPTION OF UNITS The Units of any Series to be offered pursuant to this Prospectus and the applicable Prospectus Supplement will be subject to the terms of a Trust Agreement to be entered into between the Depositor and the Trustee. The Trust Agreement for each Series of Units will be in the form filed as an exhibit to the Registration Statement, together with specific terms applicable to the Trust and the Units for such Series depending upon the related Securities and any Swap Agreement. The following summary of the terms of the Units, which, together with the information set forth in the Prospectus Supplement, describes all material terms thereof, is subject to the summary of the Trust Agreement set forth herein under "Description of the Trust Agreement" and any related discussion in the Prospectus Supplement, and to the detailed provisions of the form of Standard Terms of Trust Agreement filed as an exhibit to the Registration Statement. The specific terms of each Series of Units, to the extent they materially differ from or are in addition to the summaries below, will be set forth in the applicable Prospectus Supplement. General The Units of a particular Series to be issued under a Trust Agreement will represent the entire beneficial ownership interest in the Trust created pursuant to such Trust Agreement. The Units issued under a Trust Agreement may be limited to a single Class, or, if so specified in the applicable Prospectus Supplement, a Series of Units may include two or more Classes differing as to entitlement to distributions of principal, interest or premium, and one or more Classes may be subordinated in certain respects to other Classes of such Series. Reference is made to the applicable Prospectus Supplement for a description of the following terms of the Series (and, if applicable, Classes within such Series) of Units in respect of which this Prospectus and such Prospectus Supplement are being delivered: (i) the title of such Units; (ii) the Series of such Units and, if applicable, the number and designation of Classes of such Series; (iii) certain information concerning the type, characteristics and specifications of the Trust Property being deposited into the related Trust by the Depositor (and, with respect to any Concentrated Security, the identity of the issuer thereof and where publicly available information regarding such issuer may be obtained); (iv) the limit, if any, upon the aggregate principal amount or notional amount, as applicable, of each Class thereof; (v) the dates on which or periods during which such Series or Classes within such Series may be issued, the offering price thereof and the applicable Distribution Dates on which the principal, if any, of (and premium, if any, on) such Series or Classes within such Series will be distributable; (vi) if applicable, the relative rights and priorities of each such Class (including the method for allocating collections from and defaults or losses on the Trust Property to the Unitholders of each such Class); (vii) whether the Units of such Series or each Class within such Series are Fixed Rate Units or Floating Rate Units (each as defined below) and the applicable Interest Rate for each such Class including the applicable rate, if fixed, or the terms relating to the particular method of calculation thereof applicable to such Series or each Class within such Series, if variable, the date or dates from which such interest will accrue, the applicable Distribution Dates on which interest, principal and premium, in each case as applicable, on such Series or Class will be distributable and the related Record Dates (as defined in the related Prospectus Supplement), if any; (viii) the option, if any, of any Unitholder of such Series or Class to withdraw a portion of the assets of the Trust in exchange for surrendering such Unitholder's Unit or of the Depositor, or another third party to purchase or repurchase any Trust Property (in each case to the extent not inconsistent with the Depositor's continued satisfaction of the applicable requirements for exemption under Rule 3a-7 under the Investment Company Act of 1940 and all applicable rules, regulations and interpretations thereunder ("Rule 3a-7"), as relevant) and the periods within which or the dates on which, and the terms and conditions upon which any such option may be exercised, in whole or in part (see "--Optional Exchange"); (ix) the rating of each Series or each Class within such Series offered hereby (provided, however, that one or more Classes within such Series not offered hereunder may be unrated or may be rated below investment grade); (x) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which such Series or Class within such Series will be issuable and transferable; (xi) whether the Units of any Class within a given Series are to be entitled to (1) principal distributions, with disproportionate, nominal or no interest distributions, or (2) interest distributions, with disproportionate, nominal or no principal distributions ("Strip Units") and the applicable terms thereof; (xii) whether the Units of such Series or of any Class within such Series are to be issued as Registered Units or Bearer Units or both and, if Bearer Units are to be issued, whether coupons will be attached thereto; whether Bearer Units of such Series or Class may be exchanged for Registered Units of such Series or Class and the circumstances under which and the place or places at which any such exchanges, if permitted, may be made; (xiii) whether the Units of such Series or of any Class within such Series are to be issued in the form of one or more Global Securities and, if so, the identity of the Depositary (as defined below), if other than the Depository Trust Company ("DTC"), for such Global Security or Securities; (xiv) if a temporary Unit is to be issued with respect to such Series or any Class within such Series, whether any interest thereon distributable on a Distribution Date prior to the issuance of a Definitive Unit of such Series or Class will be credited to the account of the persons entitled thereto on such Distribution Date; (xv) if a temporary Global Security is to be issued with respect to such Series or Class, the terms upon which beneficial interests in such temporary Global Security may be exchanged in whole or in part for beneficial interests in a definitive Global Security or for individual Definitive Units of such Series or Class and the terms upon which beneficial interests in a definitive Global Security, if any, may be exchanged for individual Definitive Units of such Series or Class; (xvi) if other than U.S. dollars, the Specified Currency applicable to the Units of such Series or Class for purposes of denominations and distributions on such Series or each Class within such Series and the circumstances and conditions, if any, when such Specified Currency may be changed, at the election of the Depositor or a Unitholder, and the currency or currencies in which any principal of or any premium or any interest on such Series or Class are to be distributed pursuant to such election; (xvii) all applicable Required Percentages and Voting Rights (each as defined below) relating to the manner and percentage of votes of Unitholders of such Series and each Class within such Series required with respect to certain actions by the Depositor, if any, or Trustee under the Trust Agreement or with respect to the applicable Trust; and (xviii) any other terms of such Series or Class within such Series of Units not inconsistent with the provisions of the Trust Agreement relating to such Series. Unless otherwise indicated in the applicable Prospectus Supplement, the Units of each Series (including any Class of Units not offered hereby) will be issued only as Registered Units in denominations of $1,000 and any integral multiple thereof and will be payable only in U.S. dollars. The authorized denominations of Registered Units of a given Series or Class within such Series having a Specified Currency other than U.S. dollars will be set forth in the applicable Prospectus Supplement. The applicable Prospectus Supplement may provide that, where the purchaser of such Units has elected to pay in U.S. dollars, the U.S. dollar equivalent of the purchase price of Units having a Specified Currency other than U.S. dollars may be determined by the Exchange Rate Agent in its sole discretion. Registered Units may be transferred or exchanged for a like face amount of Units at the corporate trust office or agency of the Trustee in the City and State of New York, subject to the limitations provided in the applicable Trust Agreement, without the payment of any service charge, other than any tax or governmental charge payable in connection therewith. Bearer Units will be transferable by delivery. Provisions with respect to the exchange of Bearer Units will be described in the applicable Prospectus Supplement. Unless otherwise specified in the Prospectus Supplement, Registered Units may not be exchanged for Bearer Units. Morgan Stanley or an affiliate may at any time purchase Units at any price in the open market or otherwise. Any Units so purchased by Morgan Stanley or such affiliate may, at the discretion of Morgan Stanley, be held or resold. Distributions In general, distributions allocable to principal, premium (if any) and interest on any Units will be made in the Specified Currency for such Units by or on behalf of the Trustee on each Distribution Date as specified in the related Prospectus Supplement. If the Specified Currency for Units is other than U.S. dollars, the Exchange Rate Agent may, at its discretion and upon request by the Unitholder in the manner set forth in the Prospectus Supplement, arrange to convert all payments in respect of any such Unit into U.S. dollars as described in the following paragraph. Any Unitholder which will receive payments in a Specified Currency other than U.S. dollars must provide appropriate wire transfer instructions to the Trustee for such Registered Units, and all such payments will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located outside the United States. Unless the Prospectus Supplement sets forth additional terms as to the conversion of currencies, in the case of a Unit having a Specified Currency other than U.S. dollars, the amount of any U.S. dollar distribution in respect of such Unit will be determined by the Exchange Rate Agent in its sole discretion; provided, that the Exchange Rate Agent is not required to provide any such exchange rate. All currency exchange costs will be borne by the holders of such Units by deductions from such distributions. If no such bid quotations are available or if the Exchange Rate Agent elects not to provide any such quotations at any time in its sole discretion, such distributions will be made in such Specified Currency, except in the circumstances described under "Currency Risks". U.S. dollar distributions on Registered Units will be made by wire transfer of immediately available funds to the holder of record on the relevant Record Date (as specified in the applicable Prospectus Supplement) for such distribution, but only if appropriate wire transfer instructions have been received in writing by the Trustee for such Units not later than 15 calendar days prior to the applicable Distribution Date. The Prospectus Supplement may also provide for distributions to be made by check or against presentation of the Unit. In the case of Registered Units issued between a Record Date and the related Distribution Date, interest for the period beginning on the issue date for such Units and ending on the last day of the interest accrual period immediately prior to such Distribution Date will, unless otherwise specified in the Prospectus Supplement, be distributed on the next succeeding Distribution Date to the holders of the Registered Units on the related Record Date. Subject to the provisions described under "Limitations on Issuance of Bearer Units," and to applicable laws and regulations, payments in respect of interest or principal or premium on Bearer Units will be payable only upon surrender of applicable coupons, if any, or Units, respectively, and at such offices or agencies outside the United States as the Trustee may from time to time designate. Unless otherwise specified in the applicable Prospectus Supplement, "Business Day" with respect to any Unit means any day, other than a Saturday or Sunday, that is (i) not a day on which banking institutions are authorized or required by law or regulation to be closed in (a) The City of New York and in the city where the corporate trust office of the Trustee is located or (b) if the Specified Currency for such Unit is other than U.S. Dollars, the financial center of the country issuing such currency and (ii) if the Interest Rate for such Unit is based on LIBOR, a London Banking Day. "London Banking Day" with respect to any Unit means any day on which dealings in deposits in the Specified Currency of such Unit are transacted in the London interbank market. Interest on Units General. Each Class of Units (other than certain Classes of Strip Units) of a given Series may have a different Interest Rate as described below. In the case of Strip Units with no or, in certain cases, a nominal Unit Principal Balance, distributions of interest will be in an amount described in the related Prospectus Supplement. For purposes hereof, "Notional Amount" means the notional principal amount specified in the applicable Prospectus Supplement on which interest on Strip Units with no or, in certain cases, a nominal Unit Principal Balance will be made on each Distribution Date. Reference to the Notional Amount of a Class of Strip Units herein or in a Prospectus Supplement does not indicate that such Units represent the right to receive any distribution in respect of principal in such amount, but rather the term "Notional Amount" is used solely as a basis for calculating the amount of required distributions and determining certain relative voting rights, all as specified in the related Prospectus Supplement. Fixed Rate Units. Each Unit having a fixed Interest Rate (a "Fixed Rate Unit") will bear interest, on the outstanding Unit Principal Balance (or Notional Amount, if applicable) (as described below under "Principal of Units General") thereof, from its original issue date, or from the last Distribution Date to which interest has been paid, at the fixed Interest Rate stated on the face thereof and in the applicable Prospectus Supplement until the principal amount thereof is distributed or made available for payment, (or in the case of Fixed Rate Units with no or a nominal principal amount, until the Notional Amount thereof is reduced to zero), except that, if so provided under the terms of a related Swap Agreement or the terms of the Securities, the Interest Rate for such Series or any such Class or Classes may be subject to adjustment from time to time in response to designated changes in the rating assigned to such Units by one or more rating agencies, in accordance with a schedule or otherwise, all as described in such Prospectus Supplement. Unless otherwise specified in the applicable Prospectus Supplement, interest will be distributable in arrears on each Distribution Date with respect to such Fixed Rate Units. Floating Rate Units. As specified in the applicable Prospectus Supplement, each Unit having a variable Interest Rate (a "Floating Rate Unit") will bear interest, on the outstanding Unit Principal Balance (or Notional Amount, if applicable) thereof from its original issue date to the first Interest Reset Date (as defined below) at the initial Interest Rate set forth in the applicable Prospectus Supplement. Thereafter, the Interest Rate on such Series or Class for each Interest Period (as defined below) will be determined by reference to an interest rate basis (the "Base Rate"), plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if any. The "Spread" is the number of basis points (one basis point equals one one-hundredth of a percentage point) that may be specified in the applicable Prospectus Supplement as being applicable to such Series or Class, and the "Spread Multiplier" is the percentage that may be specified in the applicable Prospectus Supplement as being applicable to such Series or Class, except that if so provided under the terms of a related Swap Agreement or the terms of the Securities, the Spread or Spread Multiplier on such Series or any such Class or Classes of Floating Rate Units may be subject to adjustment from time to time in response to designated changes in the rating assigned to such Units by one or more rating agencies, in accordance with a schedule or otherwise, all as described in such Prospectus Supplement. The applicable Prospectus Supplement may designate one or more of the following Base Rates as a reference for the calculation of payments under the related Swap Agreement, which will determine the interest rate to be payable on the Floating Rate Units: (i) LIBOR; (ii) the Commercial Paper Rate; (iii) the Treasury Rate; (iv) the Federal Funds Rate; (v) the CD Rate; or (vi) such other Base Rate (which may be based on, among other things, one or more market indices or the interest and/or other payments (whether scheduled or otherwise) made with respect to a designated asset or pool of assets) as is set forth in such Prospectus Supplement and in such Floating Rate Unit. The "Index Maturity" for any Floating Rate Unit is the period of maturity of the instrument or obligation from which the Base Rate is calculated. "H. 15(519)" means the publication entitled "Statistical Release H.15(519), Selected Interest Rates", or any successor publication, published by the Board of Governors of the Federal Reserve System. "Composite Quotations" means the daily statistical release entitled "Composite 3:30 p.m. Quotations for U.S. Government Securities" published by the Federal Reserve Bank of New York. If specified in the applicable Prospectus Supplement, a Series of Floating Rate Units may also have either or both of the following (in each case expressed as a rate per annum on a simple interest basis): (i) a maximum limitation, or ceiling, on the rate at which interest may accrue during any interest accrual period specified in the applicable Prospectus Supplement (a "Maximum Interest Rate") and (ii) a minimum limitation, or floor, on the rate at which interest may accrue during any such interest accrual period (a "Minimum Interest Rate"). In addition to any Maximum Interest Rate that may be applicable to any Floating Rate Units, the Interest Rate applicable to any Floating Rate Units will in no event be higher than the maximum rate permitted by applicable law, as the same may be modified by United States law of general application. If the Swap Agreement provides for all interest payments on the Securities to be paid to the Swap Counterparty, the Interest Rate applicable to the Units will be the equivalent floating rate applicable to payments received by the Trust under any related Swap Agreement (as determined by the Swap Calculation Agent). If the Prospectus Supplement specifies a Calculation Agent, the Calculation Agent shall calculate the Interest Rate applicable to the Units from time to time as specified in the Prospectus Supplement. All determinations of interest by the Calculation Agent shall, in the absence of manifest error, be conclusive for all purposes and binding on the holders of Floating Rate Units. The applicable Prospectus Supplement will state whether the Interest Rate on each Series of Floating Rate Units will be reset daily, weekly, monthly, quarterly, semiannually or annually or on another periodic basis (such period being the "Interest Period" for such issuance, and the first day of each Interest Period being an "Interest Reset Date"). The Interest Reset Dates with respect to a given Series of Floating Rate Units will be specified in the applicable Prospectus Supplement. If an Interest Reset Date for any Floating Rate Units would otherwise be a day that is not a Business Day, such Interest Reset Date will occur on a prior or succeeding Business Day as specified in the applicable Prospectus Supplement. Unless otherwise specified in the applicable Prospectus Supplement, interest payable in respect of Floating Rate Units will be the accrued interest from and including the original issue date thereof or the last Interest Reset Date to which interest has accrued and been distributed, as the case may be, to but excluding the immediately following Interest Reset Date. With respect to a Floating Rate Unit, accrued interest shall be calculated by multiplying its Unit Principal Balance (or Notional Amount, if applicable) by the accrued interest factor of such Floating Rate Unit. Such accrued interest factor will be computed by adding the interest factors calculated for each day, in the period for which accrued interest is being calculated. Unless the Prospectus Supplement specifies a different period, the interest factor (expressed as a decimal calculated to seven decimal places without rounding) for each such day is computed by dividing the Interest Rate in effect on such day by 360, in the case of Floating Rate Units bearing interest on a Base Rate of LIBOR, the Commercial Paper Rate, the Federal Funds Rate or the CD Rate or by the actual number of days in the year, in the case of the Treasury Rate. For purposes of making the foregoing calculation, the Interest Rate in effect on any Interest Reset Date will be the applicable rate as reset on such date. Unless otherwise specified in the applicable Prospectus Supplement, all percentages resulting from any calculation of the Interest Rate on a Floating Rate Unit will be rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a percentage point rounded upward, and all currency amounts used in or resulting from such calculation on Floating Rate Units will be rounded to the nearest one-hundredth of a unit (with .005 of a unit being rounded upward). Interest on any Series of Floating Rate Units will be distributable on the Distribution Dates and for the interest accrual periods as and to the extent set forth in the applicable Prospectus Supplement. LIBOR. For each Floating Rate Unit for which LIBOR is the Base Rate and LIBOR is indexed to the offered rates for U.S. dollar deposits, "LIBOR" for each Interest Period will be determined by the Calculation Agent for any LIBOR Unit as follows: (i) On the second London Banking Day prior to the Interest Reset Date for such Interest Period (a "LIBOR Determination Date"), the Calculation Agent for such Unit will determine (a) if "Reuters" is specified in the applicable Prospectus Supplement, the arithmetic mean of the offered rates for deposits in U.S. dollars for the period of the Index Maturity which appear on the Reuters Screen LIBOR Page at approximately 11:00 a.m., London time, on such LIBOR Determination Date if at least two such offered rates appear on the Reuters Screen LIBOR Page ("LIBOR Reuters"), or (b) if "Telerate" is specified in the applicable Prospectus Supplement, the rate for deposits in U.S. dollars for the period of the Index Maturity that appears on the Telerate Page 3750 at approximately 11:00 a.m., London time, on such LIBOR Determination Date ("LIBOR Telerate"). "Reuters Screen LIBO Page" means the display designated as Page "LIBO" on the Reuters Monitor Money Rates Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks). "Telerate Page 3750" means the display designated as page "3750" on the Telerate Service (or such other page as may replace the 3750 page on that service or such other service or services as may be nominated by the British Bankers' Association for the purpose of displaying London interbank offered rates for U.S. dollar deposits). If neither LIBOR Reuters nor LIBOR Telerate is specified in the applicable Prospectus Supplement, LIBOR will be determined as if LIBOR Telerate had been specified. If fewer than two offered rates appear on the Reuters Screen LIBO Page, or if no rate appears on the Telerate Page 3750, as applicable, LIBOR in respect of that LIBOR Determination Date will be determined as described in (ii) below. (ii) If fewer than two offered rates appear on the Reuters Screen LIBO Page on such LIBOR Determination Date or no rate appears on Telerate Page 3750, the Calculation Agent for such Unit will request the principal London offices of each of four major banks in the London interbank market selected by such Calculation Agent to provide such Calculation Agent with its offered quotations for deposits in U.S. dollars for the period of the specified Index Maturity, commencing on such Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 a.m., London time, on such LIBOR Determination Date and in a principal amount equal to an amount of not less than $1 million that is representative of a single transaction in such market at such time. If at least two such quotations are provided, "LIBOR" for such Interest Period will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, "LIBOR" for such Interest Period will be the arithmetic mean of rates quoted by three major banks in The City of New York selected by the Calculation Agent for such Unit at approximately 11:00 a.m., New York City time, on such LIBOR Determination Date for loans in U.S. dollars to leading European banks, for the period of the specified Index Maturity, commencing on such Interest Reset Date, and in a principal amount equal to an amount of not less than $1 million that is representative of a single transaction in such market at such time; provided, however, that if fewer than three banks selected as aforesaid by such Calculation Agent are quoting rates as mentioned in this sentence, "LIBOR" for such Interest Period will be the same as LIBOR for the immediately preceding Interest Period (or, if there was no such Interest Period, the Initial Interest Rate). If LIBOR with respect to any Unit is indexed to the offered rates for deposits in a currency other than U.S. dollars, or the method for determining dollar LIBOR varies from that described above, the applicable Prospectus Supplement will set forth the method for determining such rate. Commercial Paper Rate. For each Floating Rate Unit bearing interest on a Base Rate equal to the Commercial Paper Rate the "Commercial Paper Rate" for each Interest Period will be determined by the Calculation Agent for such Unit as of the second Business Day prior to the Interest Reset Date for such Interest Period (a "Commercial Paper Rate Determination Date") and shall be the Money Market Yield (as defined below) on such Commercial Paper Rate Determination Date of the rate for commercial paper having the Index Maturity specified in the applicable Prospectus Supplement, as such rate shall be published in H.15(519) under the heading "Commercial Paper". In the event that such rate is not published prior to 9:00 a.m., New York City time, on the Calculation Date (as defined below) pertaining to such Commercial Paper Rate Determination Date, then the "Commercial Paper Rate" for such Interest Period shall be the Money Market Yield on such Commercial Paper Rate Determination Date of the rate for commercial paper of the specified Index Maturity as published in Composite Quotations under the heading "Commercial Paper". If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or Composite Quotations, then the "Commercial Paper Rate" for such Interest Period shall be the Money Market Yield of the arithmetic mean of the offered rates, as of 11:00 a.m., New York City time, on such Commercial Paper Rate Determination Date of three leading dealers of commercial paper in The City of New York selected by the Calculation Agent for such Unit for commercial paper of the specified Index Maturity placed for an industrial issuer whose bonds are rated "AA" or the equivalent by a nationally recognized rating agency; provided, however, that if the dealers selected as aforesaid by such Calculation Agent are not quoting offered rates as mentioned in this sentence, the "Commercial Paper Rate" for such Interest Period will be the same as the Commercial Paper Rate for the immediately preceding Interest Period (or, if there was no such Interest Period, the Initial Interest Rate). "Money Market Yield" shall be a yield calculated in accordance with the following formula: Money Market Yield D X 360 X 100 -------------------------- 360 - (D X M) where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the specified Index Maturity. The "Calculation Date" pertaining to any Commercial Paper Rate Determination Date shall be the first to occur of (a) the tenth calendar day after such Commercial Paper Rate Determination Date or, if such day is not a Business Day, the next succeeding Business Day or (b) the second Business Day preceding the date any distribution of interest is required to be made following the applicable interest Reset Date. Treasury Rate. For each Floating Rate Unit bearing interest on a Base Rate equal to the Treasury Rate, the "Treasury Rate" for each Interest Period will be the rate for the auction held on the Treasury Rate Determination Date (as defined below) for such Interest Period of direct obligations of the United States ("Treasury bills") having the Index Maturity specified in the applicable Prospectus Supplement, as such rate shall be published in H.15(519) under the heading "U.S. Government Units-Treasury bills-auction average (investment)" or, in the event that such rate is not published prior to 9:00 a.m., New York City time, on the Calculation Date (as defined below) pertaining to such Treasury Rate Determination Date, the auction average rate (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) on such Treasury Rate Determination Date as otherwise announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury bills having the specified Index Maturity are not published or reported as provided above by 3:00 p.m., New York City time, on such Calculation Date, or if no such auction is held on such Treasury Rate Determination Date, then the "Treasury Rate" for such Interest Period shall be calculated by the Calculation Agent for such Unit and shall be a yield to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 p.m., New York City time, on such Treasury Rate Determination Date, of three leading primary United States government securities dealers selected by such Calculation Agent for the issue of Treasury bills with a remaining maturity closest to the specified Index Maturity; provided, however, that if the dealers selected as aforesaid by such Calculation Agent are not quoting bid rates as mentioned in this sentence, then the "Treasury Rate" for such Interest Period will be the same as the Treasury Rate for the immediately preceding Interest Period (or, if there was no such Interest Period, the Initial Interest Rate). The "Treasury Rate Determination Date" for each Interest Period will be the day of the week in which the Interest Reset Date for such Interest Period falls on which Treasury bills would normally be auctioned. Treasury bills are normally sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is so held on the preceding Friday, such Friday will be the Treasury Rate Determination Date pertaining to the Interest Period commencing in the next succeeding week. Unless otherwise provided in the Prospectus Supplement, if an auction date will fall on any day that would otherwise be an Interest Reset Date, then such Interest Reset Date shall instead be the Business Day immediately following such auction date. The "Calculation Date" pertaining to any Treasury Rate Determination Date shall be the first to occur of (a) the tenth calendar day after such Treasury Rate Determination Date or, if such a day is not a Business Day, the next succeeding Business Day or (b) the second Business Day preceding the date any distribution of interest is required to be made following the applicable Interest Reset Date. Federal Funds Rate. For each Floating Rate Unit bearing interest on a Base Rate equal to the Federal Funds Rate, the "Federal Funds Rate" for each Interest Period shall be the effective rate on the Interest Reset Date for such Interest Period (a "Federal Funds Rate Determination Date") for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)". In the event that such rate is not published prior to 9:00 a.m., New York City time, on the Calculation Date (as defined below) pertaining to such Federal Funds Rate Determination Date, the "Federal Funds Rate" for such Interest Period shall be the rate on such Federal Funds Rate Determination Date as published in Composite Quotations under the heading "Federal Funds/Effective Rate". If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or Composite Quotations, then the "Federal Funds Rate" for such Interest Period shall be the rate on such Federal Funds Rate Determination Date made publicly available by the Federal Reserve Bank of New York which is equivalent to the rate which appears in H.15(519) under the heading "Federal Funds (Effective)"; provided, however, that if such rate is not made publicly available by the Federal Reserve Bank of New York by 3:00 p.m., New York City time, on such Calculation Date, the "Federal Funds Rate" for such Interest Period will be the same as the Federal Funds Rate in effect for the immediately preceding Interest Period (or, if there was no such Interest Period, the initial Interest Rate). Unless otherwise specified in the applicable Prospectus Supplement, in the case of a Unit for which the applicable Federal Funds Rate resets daily, the Interest Rate on such Unit for the period from and including a Monday to but excluding the succeeding Monday will be reset by the Calculation Agent for such Unit on such second Monday (or, if not a Business Day, on the next succeeding Business Day) to a rate equal to the average of the Federal Funds Rates in effect with respect to each such day in such week. The "Calculation Date" pertaining to any Federal Funds Rate Determination Date shall be the next succeeding Business Day. CD Rate. For each Floating Rate Unit that bears interest on a Base Rate equal to the CD Rate, the "CD Rate" for each Interest Period will be the rate as of the second Business Day prior to the Interest Reset Date for such Interest Period (a "CD Rate Determination Date") for negotiable certificates of deposit having the Index Maturity designated in the applicable Prospectus Supplement as published in H.15(519) under the heading "CDs (Secondary Market)". In the event that such rate is not published prior to 9:00 a.m., New York City time, on the Calculation Date (as defined below) pertaining to such CD Rate Determination Date, then the "CD Rate" for such Interest Period will be the rate on such CD Rate Determination Date for negotiable certificates of deposit of the Index Maturity designated in the applicable Prospectus Supplement as published in Composite Quotations under the heading "Certificates of Deposit". If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or Composite Quotations, then the "CD Rate" for such Interest Period will be calculated by the Calculation Agent for such Unit and will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on such CD Rate Determination Date, of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for such CD Rate Unit for negotiable certificates of deposit of major United States money center banks of the highest credit standing (in the market for negotiable certificates of deposit) with a remaining maturity closest to the Index Maturity designated in the related Prospectus Supplement in a denomination specified in the related Prospectus Supplement which shall in no event be less than $100,000; provided, however, that if the dealers selected as aforesaid by such Calculation Agent are not quoting offered rates as mentioned in this sentence, the "CD Rate" for such Interest Period will be the same as the CD Rate for the immediately preceding Interest Period (or, if there was no such Interest Period, the initial Interest Rate). The "Calculation Date" pertaining to any CD Rate Determination Date shall be the first to occur of (a) the tenth calendar day after such CD Rate Determination Date or, if such day is not a Business Day, the next succeeding Business Day or (b) the second Business Day preceding the date any distribution of interest is required to be made following the Applicable Interest Reset Date. If any of the Commercial Paper Rate, Treasury Rate, Fed Funds Rate or CD Rate is the applicable Base Rate and is not to be determined as set forth above, the Prospectus Supplement will describe the method for determining such rate. Principal of Units General. Unless the Prospectus Supplement specifies a Notional Amount or other reference amount for a Unit, each Unit will have a "Unit Principal Balance" which, at any time, will equal the maximum amount that the holder thereof will be entitled to receive in respect of principal from the related Securities. The outstanding Unit Principal Balance of a Unit will be reduced to the extent of distributions of principal thereon, and, if applicable pursuant to the terms of the related Series, by the amount of any net losses realized on the Trust Property allocated thereto. Unless the related Prospectus Supplement provides otherwise, the initial aggregate Unit Principal Balance of all Classes of Units of a Series will equal the outstanding aggregate principal balance of the related Trust Property as of the applicable Cut-off Date. The initial aggregate Unit Principal Balance of a Series and each Class thereof will be specified in the related Prospectus Supplement. Distributions of principal of any Class of Units will be made on a pro rata basis among all the Units of such Class. Strip Units with no Unit Principal Balance will not receive distributions of principal. Index-Linked Units. From time to time, the Trust may offer a Series of Units ("Index-Linked Units"), the principal amount payable at the stated maturity date of which (the "Indexed Principal Amount") and/or interest amounts with respect to which are determined by reference to (i) the rate of exchange between the Specified Currency for such Unit and the other currency (the "Indexed Currency") specified therein on specified dates; (ii) the difference in the price of a specified commodity (the "Indexed Commodity") on specified dates; (iii) the difference in the level of a specified stock index (the "Stock Index"), which may be based on U.S. or foreign stocks, on specified dates; or (iv) such other objective price or economic measure as is described in the related Prospectus Supplement. The manner of determining the Indexed Principal Amount of a Index-Linked Unit, and historical and other information concerning the Indexed Currency, Indexed Commodity, Stock Index or other price or economic measure used in such determination, will generally be set forth under a related Swap Agreement and will be specified in the related Prospectus Supplement. Index-Linked Units will be issued only to the extent consistent with qualification of the Trust under Rule 3a-7, as applicable. Except as otherwise specified in the related Prospectus Supplement, interest on a Index-Linked Unit will be payable based on the amount designated in the related Prospectus Supplement as the "Face Amount" of such Index-Linked Unit. The related Prospectus Supplement will specify whether the principal amount of the related Index-Linked Unit that would be payable upon redemption or repayment prior to the stated maturity date will be the Face Amount of such Index-Linked Unit, the Indexed Principal Amount of such Index-Linked Unit at the time of redemption or repayment, or another amount described in such Prospectus Supplement. Foreign Currency Units If the Specified Currency of any Unit is not U.S. dollars (a "Foreign Currency Unit"), certain provisions with respect thereto will be set forth in the related Prospectus Supplement which will specify the denominations, the currency or currencies in which the principal and interest with respect to such Unit are to be paid and any other terms and conditions relating to the non-U.S. dollar denominations or otherwise applicable to the Units. Dual Currency Units Units may be issued as dual currency units ("Dual Currency Units"), in which case payments of principal and/or interest in respect of Dual Currency Units will be made in such currencies as specified in the related Prospectus Supplement. The exchange rates will be calculated upon such bases, as indicated in the Units and described in the related Prospectus Supplement. Other material terms and conditions relating to Dual Currency Units will be set forth in the Units and the related Prospectus Supplement. Call Rights If one or more specified persons has the right to purchase all or a portion of the Units of any given Series when the outstanding Unit Principal Balance is greater than 25% of the initial Unit Principal Balance, the applicable Prospectus Supplement will designate such Series as a "Callable Series". The terms upon which any such specified person or entity may exercise its right to purchase all or a portion of the Units of a Series will be specified in the related Prospectus Supplement. Such terms may relate to, but are not limited to, the following: (a) a minimum Unit Principal Balance with respect to each Unit being purchased; (b) a requirement that the Unit Principal Balance of each Unit being purchased be an integral multiple of an amount specified in the Prospectus Supplement; (c) specified dates during which such a purchase may be effected (each, a "Call Date"); and (d) the price at which such a purchase may be effected (the "Call Price"). The Call Price will be at least 100% of the then outstanding Unit Principal Balance. After receiving notice of the exercise of such a call right, the Trustee will provide notice thereof as specified in the applicable Prospectus Supplement. Upon the satisfaction of any applicable conditions to the exercise of such right to purchase of the Units described in such Prospectus Supplement, each Unitholder of a Unit that has been called will be entitled to receive a distribution of a pro rata share of the Call Price paid in connection with such exercise, in the manner and to the extent described in such Prospectus Supplement. Optional Exchange If a holder may exchange Units of any given Series for a pro rata portion of the Trust Property (an "Exchangeable Series") the terms upon which a holder may exchange Units of any Exchangeable Series for a pro rata portion of the Trust Property of the related Trust will be specified in the related Prospectus Supplement; provided that any right of exchange shall be exercisable only to the extent that such exchange would not be inconsistent with the Depositor's and such Trust's continued satisfaction of the applicable requirements for exemption under Rule 3a-7, as applicable. Such terms may relate to, but are not limited to, the following: (i) a requirement that the exchanging holder tender to the Trustee Units of each Class within such Exchangeable Series; (ii) a minimum Unit Principal Balance or Notional Amount, as applicable, with respect to each Unit being tendered for exchange; (iii) a requirement that the Unit Principal Balance or Notional Amount, as applicable, of each Unit tendered for exchange be an integral multiple of an amount specified in the Prospectus Supplement; (iv) specified dates during which a holder may effect such an exchange (each, an "Optional Exchange Date"); (v) limitations on the right of an exchanging holder to receive any benefit upon exchange from any Credit Support or other non-Securities deposited in the applicable Trust; (vi) adjustments to the value of the proceeds of any exchange based upon the required prepayment of future expense allocations and the establishment of a reserve for any anticipated Extraordinary Trust Expenses as set forth in the applicable Prospectus Supplement; and (vii) a requirement that the exchanging holder obtain the consent of any Swap Counterparty to such exchange and tender to the Swap Counterparty a termination payment in respect of termination of any portion of the Swap Agreement corresponding to the portion of the Securities to be distributed by the Trustee. If the Prospectus Supplement states that "Depositor Optional Exchange" is applicable to the Units of a given Series, any Units held by the Depositor or its affiliates from time to time will be subject to optional exchange by the Depositor or such affiliates, but not by other Unitholders, for a pro rata portion of the Trust Property of the related Trust, subject to one or more of the conditions set forth above as described in the Prospectus Supplement, to the above limitations under Rule 3a-7 and to such other conditions as may be specified in the Prospectus Supplement. Unless the Securities distributable to the holders of the Units upon an Optional Exchange have been registered concurrently with the Units and the exchange otherwise satisfies the registration requirements of the Securities Act, no Optional Exchange will be provided for except where such Optional Exchange is eligible for the exemption from registration set forth in Section 4(1) of the Securities Act. Unless additional or different terms for an Optional Exchange are set forth in the related Prospectus Supplement, in order for a Unit of a given Exchangeable Series (or Class within such Exchangeable Series) to be exchanged by the applicable Unitholder, the Trustee for such Unit must receive, at least 30 (or such shorter period acceptable to the Trustee) but not more than 45 days prior to an Optional Exchange Date (i) such Unit with the form entitled "Option to Elect Exchange" on the reverse thereof duly completed or (ii) in the case of Registered Units, a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., the Depositary (in accordance with its normal procedures) or a commercial bank or trust company in the United States setting forth the name of the holder of such Registered Unit, the Unit Principal Balance or Notional Amount of such Registered Unit to be exchanged, the certificate number or a description of the tenor and terms of such Registration Unit, a statement that the option to elect exchange is being exercised thereby and a guarantee that the Registered Unit to be exchanged with the form entitled "Option to Elect Exchange" on the reverse of the Registered Unit duly completed will be received by such Trustee not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter. If the procedure described in clause (ii) of the preceding sentence is followed, then such Registered Unit and form duly completed must be received by such Trustee by such fifth Business Day. Any tender of a Unit by the holder for exchange shall be irrevocable. The exchange option may be exercised by the holder of a Unit for less than the entire Unit Principal Balance of such Unit provided that the Unit Principal Balance or Notional Amount, as applicable, of such Unit remaining outstanding after redemption is an authorized denomination and all other exchange requirements set forth in the related Prospectus Supplement are satisfied. Upon such partial exchange, such Unit shall be canceled and a new Unit or Units for the remaining Unit Principal Balance thereof shall be issued (which, in the case of any Registered Unit, shall be in the name of the holder of such exchanged Unit). Upon the satisfaction of the foregoing conditions and any applicable conditions with respect to the related Trust Property, as described in such Prospectus Supplement, the applicable Unitholder will be entitled to receive a distribution of a pro rata share of the Trust Property related to the Exchangeable Series (and Class within such Exchangeable Series) of the Unit being exchanged, in the manner and to the extent described in such Prospectus Supplement. Alternatively, to the extent so specified in the applicable Prospectus Supplement, the applicable Unitholder, upon satisfaction of such conditions, may direct the related Trustee to sell, on behalf of such Unitholder, such pro rata share of the Trust Property, in which event the Unitholder shall be entitled to receive the net proceeds of such sale, less any costs and expenses incurred by such Trustee in facilitating such sale, subject to any additional adjustments set forth in the Prospectus Supplement. Prior to any optional exchange, only the Trustee is a holder of the Securities and only the Trustee will have the ability to enforce the obligations of the Security Issuer under the Securities. After an optional exchange, the Unitholders will be holders of the Securities and can enforce such obligations directly. Ratings of Units At the time of issue, the Units of any given Series (or each Class of such Series that is offered hereby) will be rated in one of the investment grade categories recognized by one or more nationally recognized rating agencies (a "Rating Agency"). Unless an additional basis for such rating is described in the Prospectus Supplement, the rating of any Series or Class of Units will be based primarily on the related Trust Property and the relative priorities of the Unitholders of such Series or Class to receive collections from, and to assert claims against, the Trust with respect to such Trust Property. There can be no assurance that the rating will remain for any given period of time or that the rating will not be lowered or withdrawn entirely by the Rating Agency if in its judgment circumstances in the future so warrant. Any Class or Classes of a given Series of Units may not be offered pursuant to this Prospectus, in which case such Class or Classes will not necessarily be rated in an investment grade category by a Rating Agency. In general, a credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning Rating Agency. The rating also does not comment as to market price or suitability for a particular investor. In addition, any credit rating will be limited in scope to its terms. Prospective purchasers of Units are urged to review in its entirety any disclosure relating to any rating of such Units that is contained in the applicable Prospectus Supplement, including the text of any such rating letter or letters, if provided. Form Subject to the "Limitations on Issuance of Bearer Units" set forth herein, each Series and Class of Units may be issued in fully registered form without interest coupons ("Registered Units") or, in bearer form with or without coupons attached ("Bearer Units"), as one or more global securities in registered or bearer form (each a "Global Security") or as individual securities in definitive form with or without coupons ("Definitive Units"). Registered Units will be transferable on the records of the Unit Register (as defined below) maintained by the Trustee. All Units of a given Series (or, if more than one Class exists, any given Class within that Series) other than Definitive Units will, upon issuance, be represented by one or more Global Securities that will be deposited with, or on behalf of, DTC (only for Registered Units denominated and payable in U.S. dollars), Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear System ("Euroclear"), Cedelbank, S.A. ("CEDEL"), or another entity specified in the Prospectus Supplement (any of the foregoing a "Depositary"). Global Securities may be issued in either registered or bearer form and in either temporary or permanent form. Global Securities representing Registered Units will be registered in the name of a nominee of the Depositary, and will clear and settle in book-entry form ("Book-Entry Units") only through the facilities of one or more Depositaries. Unless and until it is exchanged in whole or in part for the individual Units represented thereby, a Global Security may not be transferred except as a whole by the Depositary for such Global Security to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor of such Depositary or a nominee of such successor. With respect to each Series of Registered Units, the Trustee will maintain a register (the "Unit Register") in which, subject to such reasonable regulations as it may prescribe, the Trustee will provide for the registration of Units of each Series and the registration of transfers of such Units. No service charge will be payable with respect to any transfer of Units, but the Trustee may require payment of a sum sufficient to cover any tax or government charge that may be imposed in connection with any such transfer. During such time as the Units are represented by a Global Security, the Depositary's nominee will be the Unitholder of such Unit and therefore will be the only entity that can exercise a right of exchange. In order to ensure that the Depositary's nominee will timely exercise a right of exchange with respect to a particular Unit, the beneficial owner of such Unit must instruct the broker or other direct or indirect participant through which it holds an interest in such Unit to notify the Depositary of its desire to exercise a right of exchange. Different firms have different cut-off times for accepting instructions from their customers and, accordingly, each beneficial owner should consult the broker or other direct or indirect participant through which it holds an interest in a Unit in order to ascertain the cut-off time by which such an instruction must be given in order for timely notice to be delivered to the Depositary. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Participants in DTC include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations ("Direct Participants"). DTC is owned by a number of its Direct Participants and by the New York Stock Exchange Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others, such as securities brokers and dealers, banks and trust companies that clear transactions through or maintain a direct or indirect custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Commission. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to beneficial owners of the Units will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Upon the issuance of a Global Security, the Depositary for such Global Security will credit, on its book-entry registration and transfer system, the respective principal amounts or notional amounts, if applicable, of the individual Units represented by such Global Security to the accounts of its participants. The accounts to be accredited shall be designated by the underwriters of such Units, or, if such Units are offered and sold directly through one or more agents, by the Depositor or such agent or agents. Ownership of beneficial interests in a Global Security will be limited to participants or persons that may hold beneficial interests through participants. Ownership of beneficial interests in a Global Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depositary for such Global Security or by participants or persons that hold through participants. The laws of some states require that certain purchasers of securities take physical delivery of such securities. Such limits and such laws may limit the market for beneficial interests in a Global Security. So long as the Depositary for a Global Security, or its nominee, is the owner of such Global Security, such Depositary or such nominee, as the case may be, will be considered the sole Unitholder of the individual Units represented by such Global Security for all purposes under the Trust Agreement governing such Units. Except as set forth below, owners of beneficial interests in a Global Security will not be entitled to have any of the individual Units represented by such Global Security registered in their names, will not receive or be entitled to receive physical delivery of any such Units and will not be considered the Unitholder thereof under the Trust Agreement governing such Units. Because the Depositary can only act on behalf of its participants, the ability of a holder of any Unit to pledge that Unit to persons or entities that do not participate in the Depositary's system, or to otherwise act with respect to such Unit, may be limited due to the lack of a physical certificate for such Unit. Subject to the restrictions discussed under "Limitations on Issuance of Bearer Units" below, distributions of principal of (and premium, if any) and any interest on individual Units represented by a Global Security will be made to the Depositary or its nominee, as the case may be, as the Unitholder of such Global Security. None of the Depositor, the Trustee for such Units, any paying agent or the Unit registrar for such Units will have responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests in such Global Security or for maintaining, supervising or reviewing any records relating to such beneficial interests. The Depositor expects that the Depositary for Units of a given Class and Series, upon receipt of any distribution of principal, premium or interest in respect of a definitive Global Security representing any of such Units, will credit immediately participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Security as shown on the records of such Depositary. The Depositor also expects that payments by participants to owners of beneficial interests in such Global Security held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such participants. Receipt by owners of beneficial interests in a temporary Global Security of payments of principal, premium or interest in respect thereof will be subject to the restrictions discussed below under "Limitations on Issuance of Bearer Units". If the Depositary for Units of a given Class of any Series is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by the Depositor within thirty days, the Trust will issue individual Definitive Units in exchange for the Global Security or Securities representing such Units. In addition, the Depositor may at any time and in its sole discretion determine not to have any Units of a given Class represented by one or more Global Securities and, in such event, will issue individual Definitive Units of such Class in exchange for the Global Security or Securities representing such Units. Further, if the Prospectus Supplement so specifies with respect to the Units of a given Class, an owner of a beneficial interest in a Global Security representing Units of such Class may, on terms acceptable to the Depositor and the Depositary of such Global Security, receive individual Definitive Units in exchange for such beneficial interest. In any such instance, an owner of a beneficial interest in a Global Security will be entitled to physical delivery of individual Definitive Units of the Class represented by such Global Security equal in principal amount or notional amount, if applicable, to such beneficial interest and to have such Definitive Units registered in its name (if the Units of such Class are issuable as Registered Units). Individual Definitive Units of such Class so issued will be issued (a) as Registered Units in denominations, unless otherwise specified by the Depositor or in the related Prospectus Supplement, of $1,000 and integral multiples thereof if the Units of such Class are issuable as Registered Units, (b) as Bearer Units in the denomination or denominations specified by the Depositor or as specified in the related Prospectus Supplement if the Units of such Class are issuable as Bearer Units or (c) as either Registered or Bearer Units, if the Units of such Class are issuable in either form. See "Limitations on Issuance of Bearer Units" below for a description of certain restrictions on the issuance of individual Bearer Units in exchange for beneficial interests in a Global Security. The applicable Prospectus Supplement will set forth any specific terms of the depositary arrangement with respect to any Class or Series of Units being offered thereby to the extent not set forth or different from the description set forth above. Voting of Securities; Modification of Security Agreements Within five Business Days after receipt of notice of any meeting of, or other occasion for the exercise of voting rights or the giving of consents by, owners of any of the Securities, the Trustee will give notice to the Unitholders, setting forth (i) such information as is contained in such notice to owners of Securities, (ii) a statement that the Unitholders will be entitled, subject to any applicable provision of law and any applicable provisions of such Securities, to instruct the Trustee as to the exercise of voting rights, if any, pertaining to such Securities and (iii) a statement as to the manner in which instructions may be given to the Trustee to give a discretionary proxy to a person designated in the notice received by the Trustee. The Trustee will give such notice to the Unitholders of record on the relevant record date. Unless a different allocation of voting rights is described in the Prospectus Supplement, the voting rights allocable to the owners of the Securities pursuant to the terms thereof will be allocated among the Unitholders pro rata, in the proportion that the denomination of each Unit bears to the aggregate denomination of all Units; and upon the written request of the applicable Unitholder, received on or before the date established by the Trustee for such purpose, the Trustee will endeavor, insofar as practicable and permitted under any applicable provision of law and any applicable provision of or governing the Securities, to vote in accordance with any nondiscretionary instruction set forth in such written request, provided that the Trustee will not vote except as specifically authorized and directed in written instructions from the applicable Unitholder entitled to give such instructions. Notwithstanding the foregoing, the Trustee must reject any vote to (i) alter the currency, amount or timing of payment of, or the method or rate of accruing, principal or interest on the Securities underlying the Units held by such Unitholder or (ii) consent to any redemption or prepayment of the Securities underlying the Units held by such Unitholder or (iii) consent to the issuance of new obligations in exchange or substitution for any Securities pursuant to a plan or refunding of the Securities or any other offer for the Securities; in each case unless the Trustee is directed by the affirmative vote of all Unitholders to accept such amendment or offer as the case may be; and provided, further, that the Trustee receives advice of nationally recognized independent tax counsel, designated by the Depositor, that such exercise of voting rights with respect to any Securities would not result in a "sale or other disposition" of such Securities within the meaning of Section 1001(a) of the Internal Revenue Code of 1986, as amended (the "Code"). The Trustee will not grant any consent (other than a unanimous consent) solicited from the owners of the Securities underlying the Units with respect to the foregoing matters in (i), (ii) and (iii) above nor will it accept or take any action in respect of any consent, proxy or instructions received from any Unitholder in contravention of such provisions. Early Distribution of Securities Unless specific terms for the continuation of the Trust Agreement are described in the applicable Prospectus Supplement, upon the occurrence of a Trust Wind-Up Event (as defined under "Description of Trust Agreements-Trust Wind-Up Events"), the applicable Trust Agreement and any related Swap Agreement will terminate, subject to payment of Swap Termination Payments, if any, and the Trustee shall deliver notice to each of the Unitholders of the occurrence of a Trust Wind-Up Event, the termination of such Swap Agreement (and payment of Swap Termination Payments, if any) and the termination of such Trust Agreement and related Trust, and such notice shall state that holders should surrender their Units to the Trustee or give, to the Trustee's reasonable satisfaction, appropriate indemnity or security in exchange for a portion of the Securities or cash if the Trust is liquidated, as specified in the applicable Trust Agreement. Such notice to the Unitholders shall also specify: (i) the cause of the Trust Wind-Up Event; (ii) the location and hours of the office or agency of the Trustee at which Units should be presented and surrendered; (iii) that each holder must supply transfer instructions in writing with respect to the related Securities; and (iv) any other information required to be set forth by such Trust Agreement, as set forth in the applicable Prospectus Supplement. Upon receipt by the Trustee of (i) appropriate transfer instructions in writing from a holder with respect to such Securities and (ii) such holder's Units, or appropriate and satisfactory indemnity or security, the Trustee shall promptly deliver to such holder its pro rata share of such Securities or cash in accordance with such transfer instructions by physical delivery or, if applicable, by causing the book-entry depositary for such Securities to credit such Securities to an account of such holder with such depositary or an account of a designated participant in such depositary. Unless the Prospectus Supplement describes specific terms for the continuation or assignment of the Swap Agreement in whole or in part upon the occurrence of the Trust Wind- Up Event, upon the occurrence of a Trust Wind-Up Event, any related Swap Agreement will terminate. Thereafter, the only distributions (other than the early distribution of the related Securities themselves) from the related Trust to which the holders of Units issued thereby will be entitled will be any payments on the Securities, if any, minus any Swap Termination Payment payable by the Trust to the Swap Counterparty or plus Swap Termination Payment payable by the Swap Counterparty, that are in each case received by the Trustee after the occurrence of the Trust Wind-Up Event, which the Trustee shall distribute to the Unitholders upon satisfaction of the conditions for transfer of Securities referred to above. No interest will accrue on, and no investments will be made with, any such funds awaiting distribution to Unitholders. Except for certain duties and reporting requirements set forth in the applicable Trust Agreement, the obligations of the Trustee thereunder will terminate upon the distribution to Unitholders of all amounts required to be so distributed pursuant to such Trust Agreement and the disposition of all related Securities held by such Trustee. DESCRIPTION OF TRUST AGREEMENTS General Each Trust Agreement will be entered into by the Depositor and the Trustee, and will incorporate the Standard Terms of Trust Agreements agreed between the Depositor and the Trustee and filed as an exhibit to the Registration Statement, as they may be amended from time to time. The Trust Agreement for each Series of Units will also set forth specific terms of the Trust for such Series depending upon the terms of the Units to be issued thereunder, the related Securities and any Swap Agreement. The following summary of certain terms and provisions of the Trust Agreement, which, together with the information set forth in the Prospectus Supplement, describes all material terms thereof, is subject to the detailed provisions of the form of Standard Terms of Trust Agreement filed as an exhibit to the Registration Statement. The specific provisions of each Trust Agreement, to the extent they materially differ from or are in addition to the summaries below, will be set forth in the applicable Prospectus Supplement. Collections on Securities With respect to any Series of Units, the Trustee shall make reasonable efforts to collect all scheduled payments on the related Securities and other Trust Property provided that such procedures are consistent with the applicable Trust Agreement and that, except as otherwise expressly set forth in such Trust Agreement and in the applicable Prospectus Supplement, it shall not be required to expend or risk its own funds or otherwise incur personal financial liability. Trustee Compensation As compensation for and in payment of trust expenses related to its services under the Trust Agreement other than Extraordinary Trust Expenses, the Trustee will receive the Trustee Fees. The Prospectus Supplement will set forth the amount, source, manner and priority of payment with respect to such Trustee Fees. Certain Matters Regarding the Trustee and the Depositor The Trust Agreement will provide that neither the Depositor nor any of its directors, officers, employees or agents will incur any liability to the related Trust or Unitholders for any action taken, or for refraining from taking any action, in good faith pursuant to such Trust Agreement or for errors in judgment; however, neither the Depositor nor any such person will be protected against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of their duties under such Trust Agreement or by reason of reckless disregard of obligations and duties thereunder. In addition, such Trust Agreement will provide that the Depositor will not be under any obligation to appear in, prosecute or defend any legal action related to its responsibilities under such Trust Agreement which in its opinion may involve it in any expense or liability. The Depositor may, however, in its discretion undertake any such action which it deems necessary or desirable with respect to such Trust Agreement and the rights and duties of the parties thereto and the interests of the Unitholders thereunder. The Trustee will undertake to perform only such duties as are specifically set forth in the related Trust Agreement. Unless the Trust Agreement specifies terms for payment of Trustee Fees from the Trust Property, the Depositor or one or more third parties will be responsible for payment of the Trustee Fees related to each Trust. The Depositor will also indemnify the Trustee for any other loss, liability or expense, other than Trustee Fees, incurred by the Trustee ("Extraordinary Trust Expenses") relating to the applicable Trust Agreement, Swap Agreement or Securities (other than any such loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of the Trustee's duties under such Trust Agreement) up to the Maximum Reimbursable Amount in the aggregate. Unless the Prospectus Supplement specifies another source of payment, Extraordinary Trust Expenses not paid by the Depositor will be payable to the Trustee from Trust Property. The Trust Agreement provides that the Trustee may elect to perform some or all of its duties through a custodian or other administrative agent. Any particular provisions with respect to entities acting as a custodian or administrative agent of the Trustee will be described in a Prospectus Supplement. Prior to the date that is one year and one day after all distributions in respect of the Units have been made, neither the Trustee nor the Depositor will take any action or institute any proceeding against the other under the United States Bankruptcy Code or any other liquidation, insolvency, bankruptcy, moratorium, reorganization or similar law ("Insolvency Law") applicable to either of them, now or hereafter in effect, or any action which would likely cause the other to be subject to, or seek the protection of, any such Insolvency Law. Retained Interest The Prospectus Supplement for a Series of Units will specify whether there will be any Retained Interest in the Trust Property, and, if so, the owner thereof. If so provided, the Retained Interest will be established on an asset-by-asset basis and will be specified in an exhibit to the applicable Trust Agreement. A Retained Interest in the Trust Property represents a specified interest therein. Payments in respect of the Retained Interest will be deducted from payments on the Trust Property as received and, in general, will not become a part of the related Trust. Unless a different allocation is described in the Prospectus Supplement, any partial recovery of interest on the Trust Property, after deduction of all applicable administration fees, will be allocated between the Retained Interest (if any) and interest distributions to Unitholders on a pari passu basis. Modification and Waiver The Trust Agreement for each Series of Units may be amended by the Depositor and the Trustee with respect to such Series, without notice to or consent of the Unitholders, for certain purposes including (i) to cure any ambiguity; (ii) to correct or supplement any provision therein which may be inconsistent with any other provision therein or in the Prospectus Supplement; (iii) to add or supplement any Credit Support for the benefit of any Unitholders (provided that if any such addition affects any Series or Class of Unitholders differently than any other Series or Class of Unitholders, then such addition will not, as evidenced by an opinion of counsel, have a material adverse effect on the interests of any affected Series or Class of Unitholders); (iv) to add to the covenants, restrictions or obligations of the Depositor, or the Trustee for the benefit of the Unitholders; (v) to add, change or eliminate any other provisions with respect to matters or questions arising under such Trust Agreement so long as (x) any such addition, change or elimination will not, as evidenced by an opinion of counsel, affect the tax status of the Trust or result in a sale or exchange of any Unit for tax purposes and (y) the Trustee has received written confirmation from each Rating Agency rating such Units that such amendment will not cause such Rating Agency to qualify, reduce or withdraw the then current rating thereof; or (vi) to comply with any requirements imposed by the Code. Without limiting the generality of the foregoing, the Trust Agreement may also be modified or amended from time to time by the Depositor, and the Trustee, with the consent of the holders of Units evidencing not less than the "Required Percentage--Amendment" (as defined in the Prospectus Supplement) of the Voting Rights of those Units that are materially adversely affected by such modification or amendment for the purpose of adding any provision to or changing in any manner or eliminating any provision of the Trust Agreement or of modifying in any manner the rights of such Unitholders; provided, however, that in the event such modification or amendment would materially adversely affect the rating of any Series or Class by each Rating Agency, the "Required Percentage--Amendment" specified in the related series supplement to the Trust Agreement shall include an additional specified percentage of the Units of such Series or Class. The applicable Prospectus Supplement will set forth the extent to which any modification or amendment may, however, (i) reduce in any manner the amount of or alter the timing, currency or amounts of distributions or payments which are required to be made on any Unit without the consent of the holder of such Unit or (ii) reduce the aforesaid Required Percentage of Voting Rights required for the consent to any such amendment without the consent of the holders of all Units covered by the Trust Agreement then outstanding. Holders of Units evidencing not less than the "Required Percentage--Waiver" (as defined in the Prospectus Supplement) of the Voting Rights of a given Series may, on behalf of all Unitholders of that Series, (i) waive, insofar as that Series is concerned, compliance by the Depositor or the Trustee, with certain restrictive provisions, if any, of the Trust Agreement before the time for such compliance and (ii) waive any past default under the Trust Agreement with respect to Units of that Series, except a default in the failure to distribute amounts received as principal of (and premium, if any) or any interest on any such Unit and except a default in respect of a covenant or provision the modification or amendment of which would require the consent of the holder of each outstanding Unit affected thereby. Any terms relating to modification or waiver of the Trust Agreement for a particular Series in addition to or that differ from the foregoing will be set forth in the applicable Prospectus Supplement. Reports to Unitholders Reports to Unitholders. On each Distribution Date the Trustee will forward or cause to be forwarded to each such Unitholder, to the Depositor and to such other parties as may be specified in the Trust Agreement, a statement setting forth: (i) the amount of such distribution to Unitholders allocable to principal of or interest or premium, if any, on the Units; (ii) the Interest Rate applicable to such Distribution Date, as calculated in accordance with the method specified herein and in the related Prospectus Supplement; (iii) the aggregate stated principal amount of the related Securities as of the Distribution Date and the interest rate applicable to such Securities for the accrual period therefor next beginning; (iv) the amount received by the Trustee on the related Securities for the accrual period therefor last ended; (v) the amounts of and recipients of any payments under any Swap Agreement for the accrual period for the Swap Agreement last ended; (vi) if feasible, the new Swap Rate applicable to the accrual period for any Swap Agreement next beginning; (vii) the aggregate Unit Principal Balance (or Notional Amount, if applicable) at the close of business on such Distribution Date; (viii) with respect to any Trust having Trust Property which includes Credit Support, the available amount of each element of Credit Support; and (ix) any additional information relevant to the Unitholders as specified in the applicable Prospectus Supplement or in the applicable Trust Agreement. The Prospectus Supplement may specify that certain of the information set forth above will not be furnished with respect to a particular Series. In the case of information furnished pursuant to clause (i) above, the amounts shall be expressed as a U.S. dollar amount (or equivalent thereof in any other Specified Currency) per minimum denomination of Units or for such other specified portion thereof. Within a reasonable period of time after the end of each calendar year, the Trustee, as provided in the related Prospectus Supplement, will furnish to each person who at any time during the calendar year was a Unitholder, a statement containing the information set forth in clause (i) above, aggregated for such calendar year or the applicable portion thereof during which such person was a Unitholder and containing such information as is sufficient to enable Unitholders to calculate their United States federal income tax liability with respect to Units. Such obligation of the Trustee shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Trustee pursuant to any requirements of the Code as are from time to time in effect. Evidence as to Compliance If so specified in the applicable Prospectus Supplement, the Trust Agreement will provide that commencing on a certain date and on or before a specified date in each year thereafter, a firm of independent public accountants will furnish a statement to the Trustee to the effect that such firm has examined certain documents and records relating to the administration of the Trust Property during the related 12-month period (or, in the case of the first such report, the period ending on or before the date specified in the Prospectus Supplement, which date shall not be more than one year after the related original issue date with respect to such Units) and that, on the basis of certain agreed upon procedures considered appropriate under the circumstances, such firm is of the opinion that such administration was conducted in compliance with the terms of the Trust Agreement, except for such exceptions as such firm shall believe to be immaterial and such other exceptions and qualifications as shall be set forth in such report. The Trust Agreement may also provide for delivery to the Depositor and the Trustee on behalf of the Unitholders, on or before a specified date in each year, of an annual statement signed by two officers of the Trustee to the effect that the Trustee has fulfilled its obligations under the Trust Agreement throughout the preceding year with respect to any Series of Units. Copies of the annual accountants' statement, if any, and the statement of officers of the Trustee may be obtained by Unitholders without charge upon written request to the Trustee at the address set forth in the related Prospectus Supplement. Notices The Trustee will notify the Unitholders of all notices and communications it receives from the Security Issuer, including notice of any call of the Securities by the Security Issuer. The Trustee will also notify the Unitholders of any call of the Securities by a Swap Counterparty under the terms of a Swap Agreement. Unless otherwise provided in the applicable Prospectus Supplement, any notice required to be given to a holder of a Registered Unit will be given by facsimile to such number as may be provided to the Trustee or be mailed to the last address of such holder set forth in the applicable Unit Register. Any notice so mailed within the time prescribed in the Trust Agreement shall be conclusively presumed to have been given when mailed, whether or not the Unitholder receives such notice. Notices given by facsimile will be effective upon confirmation (including electronic confirmation) of effective transmission. In the case of Registered Units in global form, the Depositary will be the sole direct recipient of notices. See "Description of the Units -- Form". Notice shall be sufficiently given to holders of Bearer Units if (i) published in an Authorized Newspaper (defined in the Trust Agreement to mean a leading daily newspaper of general circulation) in such city or cities as may be specified in such Units on a Business Day and (ii) in the case of a Global Security, if also delivered to Euroclear or CEDEL, as applicable for communication by them to the persons shown in their respective records as having interests therein. In case by reason of suspension of publication of any Authorized Newspaper or Authorized Newspapers or by reason of any other cause it shall be impracticable to publish any notice to Holders of Bearer Units as provided above, then such notification to Holders of Bearer Units shall be published as provided above in an Authorized Newspaper of general circulation in Europe or, if such publication shall also be impracticable, such notification shall be given in such manner as shall be approved by the Trustee and the Depositor. Replacement Units In the event a Unit is mutilated, destroyed, lost or stolen, it may be replaced at the corporate trust office or agency of the Trustee in the City and State of New York upon payment by the holder of such expenses as may be incurred by the Trustee in connection therewith and the furnishing of such evidence and indemnity as the Trustee may require. Mutilated Units must be surrendered before new Units will be issued unless the Depositor and the Trustee receive, to their satisfaction, such security or indemnity as they may require to save each of them harmless. Trust Wind-Up Events A Trust Wind-Up Event under the related Trust Agreement is defined as the occurrence of (i) any Swap Default arising from any action taken or failure to act, by the Swap Counterparty, if applicable; (ii) one or more Security Defaults where either (a) a Security Default has occurred with respect to all Securities held by the Trust or (b) a Termination Event results under the Swap Agreement with respect to which all Transactions are "Affected Transactions" (as defined in the Swap Agreement); (iii) any Termination Event under the Swap Agreement with respect to which the Swap Counterparty shall be the sole "Affected Party" (as defined in the Swap Agreement) and all Transactions are Affected Transactions; provided that at the time of such occurrence no Swap Termination Payment would be payable by the Trust to the Swap Counterparty upon designation of an Early Termination Date by the Trust; (iv) the designation of an Early Termination Date by the Swap Counterparty under a related Swap Agreement (other than with respect to the termination of fewer than all Transactions entered into under the Swap Agreement); (v) the designation by the Depositor, if the Depositor owns 100% of the Unit Principal Balance, of a "Special Depositor Wind-Up Event"; (vi) in the circumstances described in the following paragraph; (vii) any Excess Expense Event (as defined below); or (viii) any other Trust Wind-Up Event set forth in the Prospectus Supplement. See "Description of Swap Agreements - Defaults Under Swap Agreements" and "- Termination Events". The Prospectus Supplement will specify whether any of the foregoing will not apply to the Trust Agreement for a particular Series. Unless the Prospectus Supplement sets forth terms for the continuation of the Trust Agreement in whole or in part following a Trust Wind-Up Event, upon the occurrence of a Trust Wind-Up Event, such Trust Agreement and the related Swap Agreement will terminate, and the Trustee, through the Selling Agent, will sell some or all of the Securities to fund the payment of applicable Swap Termination Payments, if any, and hold all related Securities and any proceeds thereof until the satisfaction of certain conditions, at which time the Trustee will distribute such Securities to the Unitholders. See "Description of Units - Early Distribution of Securities". If the issuer of any Security ceases to be an Eligible Issuer and no additional means of providing current information regarding the related Security Issuer is described in the Prospectus Supplement; or if, whether or not the related Security Issuer was initially an Eligible Issuer, it becomes impossible or impractical for the Depositor to satisfy its reporting obligations under the Exchange Act with respect to such Security (whether or not it is a Concentrated Security), such Security will be considered a "Disqualified Security." If with respect to any Transaction (i) the Swap Counterparty ceases to be an Eligible Issuer and no means of replacing such Swap Counterparty or otherwise satisfying the Depositor's reporting obligations under the Exchange Act regarding such Transaction is described in the Prospectus Supplement; (ii) whether or not the related Swap Counterparty was initially an Eligible Issuer, it becomes impossible or impractical for the Depositor to satisfy its reporting obligations under the Exchange Act regarding such Transaction; or (iii) such Transaction is a credit swap transaction with respect to which the Deliverable Obligation has become a Disqualified Security; such Transaction will be considered a "Disqualified Transaction" ." Upon any Security becoming a Disqualified Security, (i) a Termination Event shall occur with respect to any Transaction related to such Disqualified Security under any related Swap Agreement and the Trust shall be required to sell Securities to the extent necessary to pay any related Swap Termination Payment; (ii) the remaining Disqualified Securities shall be distributed pro rata to the Unitholders; and (iii) a Trust Wind-Up Event shall occur if (A) the Trust holds only Disqualified Securities and no other Trust Property or (B) if so provided in the Prospectus Supplement. Upon any Transaction becoming a Disqualified Transaction, (i) a Termination Event will occur with respect to such Disqualified Transaction and the Trust shall terminate the Disqualified Transaction and sell the related Securities (and if necessary other Securities) to the extent necessary to pay any related Swap Termination Payment; (ii) any remaining Securities related to such Disqualified Transaction shall be distributed pro rata to the Unitholders; and (iii) a Trust Wind-Up Event shall occur if (A) the Trust holds no Trust Property other than Securities having related Transactions which are Disqualified Transactions or (B) if so provided in the Prospectus Supplement. If any Credit Support Provider ceases to be an Eligible Issuer and no means of replacing such Credit Support Provider or otherwise satisfying the Depositor's reporting obligations under the Exchange Act regarding the related Credit Support is described in the Prospectus Supplement; or if, whether or not the Credit Support Provider was initially an Eligible Issuer, it becomes impossible or impractical for the Depositor to satisfy its reporting obligations under the Exchange Act regarding the related Credit Support, such Credit Support will be considered "Disqualified Credit Support" ". Upon any Credit Support becoming Disqualified Credit Support, (i) the Trust shall terminate such Credit Support; (ii) any proceeds of such termination shall be distributed pro rata to the Unitholders; and (iii) a Trust Wind-Up Event shall occur if so provided in the Prospectus Supplement. For purposes of the foregoing, a Security Issuer, Swap Counterparty or Credit Support Provider which is fully guaranteed by a guarantor who is an Eligible Issuer will be considered an Eligible Issuer. The Trustee will give notice as promptly as possible to the Unitholders, in accordance with the terms of the Trust Agreement, of any Trust Wind-Up Event or Termination Event. However, the Trustee will not be responsible for giving notice of a Trust Wind-Up Event unless and until (i) the Trustee fails to receive amounts due on the Securities or under a Swap Agreement when due and such payment is not received within any applicable grace period, (ii) receipt by the Trustee of notice from a Swap Counterparty of the occurrence of a Swap Default or Termination Event or upon actual knowledge of a Swap Default or Termination Event by an officer of the Trustee assigned to its Corporate Trust Department or (iii) receipt of notice of an event constituting a Security Default. Under each Trust Agreement, an "Excess Expense Event" will occur if the Trustee has incurred Extraordinary Trust Expenses in an aggregate amount exceeding the Trigger Amount specified in the applicable Prospectus Supplement, and either any Swap Counterparty has not agreed, or the holders of Units issued under such Trust Agreement have not unanimously agreed, to provide adequate assurance of indemnity to the Trustee within seven calendar days after notice, as described in the next sentence. Under the terms of such Trust Agreement, the Trustee will be required to provide notice to any Swap Counterparty and each Unitholder promptly upon the incurrence by the Trustee of Extraordinary Trust Expenses in an aggregate amount in excess of the Trigger Amount, stating that an Excess Expense Event will occur on the seventh calendar day following the provision of such notice unless prior to such day the Unitholders unanimously agree (or any Swap Counterparty agrees) to indemnify the Trustee for future Extraordinary Trust Expenses (and Extraordinary Trust Expenses that have already been incurred at the time of the agreement to indemnify) that exceed the Maximum Reimbursable Amount specified in the applicable Prospectus Supplement, to the reasonable satisfaction of the Trustee. Following such an agreement to indemnify, upon the incurrence by the Trustee of aggregate Extraordinary Trust Expense greater than the Maximum Reimbursable Amount, an Excess Expense Event will occur unless either (i) any Swap Counterparty agrees or (ii) the holders of the Units unanimously agree, to provide further adequate assurance of indemnity to the Trustee within seven calendar days after notice, as described in the preceding sentence. If so specified in the Prospectus Supplement, in connection with early termination of a Swap Agreement or one or more Transactions thereunder, other than as a result of Security Default, the claim of the Swap Counterparty against the Securities (or proceeds thereof arising from sale thereof) and any other Trust Property will be limited to a claim pro rata with that of the Unitholders according to the amount of the Swap Termination Payment otherwise payable to the Swap Counterparty and the Unitholders' aggregate Unit Principal Balance plus accrued interest. Termination Unless a Trust is terminated early upon the occurrence of a Trust Wind-Up Event, the obligations created by the related Trust Agreement (other than the obligations of the Trustee to provide reports and certain other information under such Trust Agreement) will terminate (after payment of Extraordinary Trust Expenses, if any, and any amount due under the Swap Agreement and upon distribution of Securities and the payment to the holders of Units issued thereunder of all amounts required to be paid under the terms of such Trust Agreement and such Units) following the final scheduled Distribution Date. Written notice of such termination will be provided as set forth above under "Reports to Unitholders; Notices", and the final distribution on such Units will be made only upon surrender and cancellation of such Units at an office or agency of the Trustee. Sale of Securities; Secured Party Rights Immediately upon receipt of notice from the Swap Counterparty that the Trust will be obligated to pay a Swap Termination Payment or upon other notice from the Trustee that the Trust is required to sell Securities, the Selling Agent (unless it declines to act as Selling Agent as described below) will undertake to sell Securities on behalf of the Trust, unless and until the Selling Agent receives notice from the Trustee of an exercise by the Unitholders of their rights to tender the amount of any related Swap Termination Payment as set forth below. The timing, price and other terms of any sale conducted by the Selling Agent shall be determined by the Selling Agent in its sole discretion, but all such sales shall be completed within 30 days or such longer period of time as may be reasonable with respect to particular Securities. Where a Security Default has occurred or a Security has become a Disqualified Security and such event does not result in termination of the Trust, sales shall be limited to the Securities affected by such event, except where the proceeds from the affected Securities are insufficient to make payment of the Swap Termination Payment. In connection with any Swap Termination Payment payable by the Trust, the Unitholders may, acting unanimously, deliver to the Trustee the amount of such outstanding Swap Termination Payment (together with, in the case of a Trust Wind-Up Event, any Extraordinary Trust Expenses in excess of the Maximum Reimbursable Amount payable to the Trustee) and a written instruction to discontinue sale of the Securities. If the Selling Agent receives notice from the Trustee of the exercise by the Unitholders of their rights under the foregoing provision, the Selling Agent shall promptly discontinue sales of the related Securities (but the Selling Agent and the Trustee shall complete the settlement of any sale already agreed). The Selling Agent is an agent of the Trustee only and shall have no fiduciary or other duties to the Unitholders, nor shall the Selling Agent have any liability to the Trust in the absence of the Selling Agent's bad faith or wilful default. The Selling Agent shall be permitted to sell Securities to Affiliates of the Selling Agent. The Selling Agent may elect not to act as Selling Agent with respect to some or all of the Securities by oral or written notice to that effect to the Trustee, and may resign at any time. In addition to the provisions of the Trust Agreement with respect to the Selling Agent, upon any failure of the Trust to make any payment when due under the Swap Agreement, the Swap Counterparty shall have the right to take all action and to pursue all remedies with respect to such property that a secured party is permitted to take with respect to collateral under the UCC, including the right to require the Trustee promptly to sell all or any portion of the Securities in the open market or, if the Swap Counterparty elects, to sell the Securities to the Swap Counterparty for its fair value as determined in good faith by the Swap Counterparty. In either case, the proceeds of sale shall be applied to any amounts owed to the Swap Counterparty. The Trust Agreement will provide that the Unitholders will have no liability as sellers of the Trust Property in connection with any sale of Trust Property by the Trustee or the Selling Agent. Trustee The Trustee shall at all times be a corporation which is not an affiliate of the Depositor (but may have normal banking relationships with the Depositor or any obligor with respect to the Securities with respect to any Series of Units and their respective affiliates) organized and doing business under the laws of any State or the United States, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or State authority, the long-term debt obligations of which are rated in one of the four highest categories assigned to long-term debt obligations by each of the Rating Agencies, and shall at all times satisfy the requirements of Section 310(a) of the Trust Indenture Act of 1939, as amended (the "TIA") and Section (a)(4)(i) of Rule 3a-7 (any such Trustee, an "Eligible Trustee"). Unless another Trustee is identified in the Prospectus Supplement, the Trustee for each Trust initially will be Chase Bank of Texas, National Association. The Trustee may at any time resign and be discharged from the Trust by giving written notice thereof to the Depositor, the Swap Counterparty, and the Unitholders, subject to a successor trustee which is an Eligible Trustee having been appointed by the Depositor and accepted such appointment. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee for the Units. The Trust Agreement and the provisions of the TIA incorporated by reference therein, contain limitations on the rights of the Trustee thereunder, should it become a creditor of the Trust, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise. The Trustee is permitted to engage in other transactions with the Trust; provided, however, that if it acquires any "conflicting interest" (as defined in the TIA) it must eliminate such conflict or resign. Governing Law The Units, the Trust Agreement and any Swap Agreement will be governed by the laws of the State of New York. The Trust Agreement will be subject to the provisions of the TIA that are required to be part of the Trust Agreement and will, to the extent applicable, be governed by such provisions. The federal and state courts in the Borough of Manhattan in the City of New York shall have non-exclusive jurisdiction in respect of any action arising out of or relating to the Units, the Trust Agreement or any Swap Agreement. U.S. FEDERAL INCOME TAX CONSEQUENCES The discussion under the heading "U.S. Federal Income Tax Consequences" herein and in the applicable Prospectus Supplement discusses and represents the opinion of Cleary, Gottlieb, Steen & Hamilton pertaining to the material federal income tax consequences of the purchase, ownership and disposition of Units by a Unitholder who acquires its Units on the date on which the net proceeds of an offering of the Units of a particular Series are received by the Depositor (the "Closing Date"). The discussion is based on interpretations of law, regulations, rulings and decisions currently in effect, all of which are subject to change. Any such change may be applied retroactively, and may adversely affect the federal income tax consequences described herein. Except where otherwise noted, the discussion below is addressed to Unitholders that are domestic corporations or are otherwise subject to federal income taxation on a net income basis, and that hold Units as capital assets. It does not discuss state, local, or foreign tax consequences, nor does it discuss the tax consequences that may be relevant to a Unitholder subject to special rules, including dealers in stocks, securities or notional principal contracts, traders in securities electing to mark to market, banks, savings and loan associations and similar financial institutions, taxpayers that hold Units as part of a "straddle" or "conversion transaction" for federal income tax purposes, or taxpayers whose functional currency is other than the U.S. dollar. It also does not discuss tax consequences for individuals or entities taxed like individuals. Units of a particular Series may have special features that produce tax consequences different from those described below. In cases where the related Prospectus Supplement contains additional tax information, prospective Unitholders should review such information together with this tax discussion. Prospective Unitholders should consult their tax advisors as to the federal tax consequences to them of acquiring, holding and disposing of Units, including, in particular, the application in their particular circumstances of the tax considerations discussed below, as well as the application of state, local, foreign or other tax laws. Classification of the Trust Upon the issuance of each Series of Units, Cleary, Gottlieb, Steen & Hamilton, counsel to the Depositor, will provide to the Depositor on the Closing Date for such Series its opinion that, under current law and assuming compliance by the Depositor and the Trustee for such Series with all of the provisions of the related Trust Agreement (and such other agreements and representations as may be referred to in such opinion), the Trust will not be classified as a corporation or as an association taxable as a corporation for U.S. federal income tax purposes and will not be subject to federal income taxation, and either (i) the Trust will be classified as a grantor trust for federal income tax purposes, (ii) the Trust will be classified as a partnership or FASIT (as defined below) for federal income tax purposes, in which case the Prospectus Supplement will describe the additional federal income tax consequences associated with classification of the Trust as a partnership or a FASIT or (iii) the Trust should be classified as a grantor trust for federal income tax purposes, in which case the potential alternative characterization of the Trust and the material consequences thereof will be described under "Risk Factors" and "U.S. Federal Income Tax Consequences" in the applicable Prospectus Supplement. With respect to each Trust that will be characterized as a grantor trust, the Trustee intends to report income, gain, loss and deductions to the Internal Revenue Service ("IRS") accordingly. Under the federal income tax rules applicable to grantor trusts, a Unitholder will be treated as the owner of an undivided interest in the assets and income of the Trust and as having entered into any Swap Agreement, both to the extent of such Unitholder's proportionate interest in the Trust. The sale of a Unit will be considered a sale of a Unitholder's interest in the assets and income of the Trust and a termination of any Swap Agreement with respect to that Unitholder. In the case of an Exchangeable Series, a Unitholder's withdrawal of Securities representing the Unitholder's proportionate share of such assets of the Trust will not constitute a taxable event, but any termination of a Swap Agreement will be taxable. A Unitholder may deduct its pro rata share of the fees and other deductible expenses paid by the Trust, at the same time and to the same extent as such items could be deducted by the Unitholder if the Unitholder paid directly a pro rata portion of the amounts paid by the Trust. If so indicated in the applicable Prospectus Supplement, a Trust in a particular Series may be characterized as a partnership rather than a grantor trust. Although a partnership is not subject to federal income taxation at the entity level, partnership classification may result in differences in the timing and character of income reported by Unitholders, as well as different requirements for reporting tax information, making tax elections, and conducting contests with the IRS. An election may be made to treat a Trust in a particular Series as a financial asset securitization investment trust ("FASIT"), as defined in section 860L of the Code. If a Trust makes a FASIT election, the Prospectus Supplement relating to any Class or Series of Units representing interests in such FASIT will state that the Trust is a FASIT for federal income tax purposes and will describe the federal income tax consequences of the ownership of such Units. The remainder of this discussion assumes that the Trust will be a grantor trust for U.S. federal income tax purposes. Treatment of the Securities and Swap Agreement as Integrated or Separate Transactions The tax treatment of the Securities and any Swap Agreement will depend on whether they are integrated into a single synthetic debt instrument or treated as separate financial instruments. If the Securities and Swap Agreement qualify for integration under Treasury regulations section 1.1275-6 (the "Integration Regulations") or section 1.988-5 (the "Foreign Currency Integration Regulations"), the Unitholder may elect, or the IRS may require, integrated treatment. If the transaction is integrated, the Unitholder will be required to take into account its pro rata share of the income from the synthetic debt instrument resulting from such integration. See "Tax Consequences of Integration," below. If integrated treatment is not available, a Unitholder will be required to take into account its pro rata share of the income from the Securities and any Swap Agreement as determined under the separate federal income tax rules applicable to those items. See "Tax Consequences of Separate Treatment," below. Integrated treatment will not be available for a Swap Agreement and related Securities underlying Dual Currency Units. The discussion in the two preceding paragraphs assumes that the Securities are considered to be owned by the Trust for federal income tax purposes. In some circumstances, the Securities and Swap Agreement may be treated together as a loan to the Swap Counterparty. See "Tax Consequences of Separate Treatment--Taxation of the Swap Agreement--Other Characterizations." Tax Consequences of Integration Integration of Securities and Swap Agreements that Do Not Hedge Currency Risk In general, under the Integration Regulations, a Security and a Swap Agreement that does not hedge currency risk may be integrated and treated as a single synthetic debt instrument if the combined cash flows are substantially equivalent to the cash flows on a fixed rate debt instrument or on a variable rate debt instrument that pays interest at a qualified rate or rates (as such terms are defined in applicable sections of the Code and Treasury regulations) and certain other requirements are satisfied, including the identification of the integrated economic transaction in the Unitholder's books and records on the date of purchase of the Units. The synthetic debt instrument may be denominated in U.S. dollars or another single currency. Certain Securities, such as pay-through bonds that are subject to prepayment out of principal received on other debt instruments or tax-exempt obligations, will not qualify for integration. The IRS generally may require integration where a Unitholder could have but did not make the appropriate identification and in certain other cases. The synthetic debt instrument created through integration generally will be subject to the tax rules that apply to conventional debt instruments, except that all stated interest on the instrument will be treated as original issue discount ("OID"), which a Unitholder must include in income as it accrues. See the discussion of OID and other income from a debt instrument under "Tax Consequences of Separate Treatment -- Taxation of Securities," below. The issue date of the synthetic debt instrument will be the date of purchase, and the term of the instrument will be the period from the issue date to the maturity date of the Securities. The issue price will be the adjusted issue price of the Securities as of the issue date of the synthetic debt instrument, decreased or increased by any payments of Swap Premium (as defined below under "Tax Consequences of Separate Treatment - Allocation of Basis and Sales Proceeds") by or to the Unitholder. The source and character of interest income from the synthetic debt instrument will be determined by reference to the source and character of income on the Securities. Income from the Securities and Swap Agreement underlying a synthetic debt instrument will be treated separately for purposes of the withholding tax rules. See "Foreign Unitholders," below. Integration of Securities and Swap Agreements that Hedge Currency Risk If a Swap Agreement hedges currency risk, then integration of the Swap Agreement and Security may be available under the Foreign Currency Integration Regulations. The rules for such integration and for the treatment of the resulting synthetic debt instrument generally are similar to the rules described above for integration of Securities and Swap Agreements not hedging currency risk. One difference is that to qualify for integration, the combined cash flows on the Security and Swap Agreement must be substantially equivalent to the cash flows on a fixed-rate debt instrument. In addition, different types of debt instruments may qualify for integration under the Foreign Currency Integration Regulations. Other differences between the two sets of rules may be relevant for particular Securities and Swap Agreements. The issue price of the synthetic debt instrument is determined by translating the adjusted issue price of the Securities into the currency in which the synthetic debt instrument is denominated at the spot rate on the issue date. If the synthetic debt instrument is payable in U.S. dollars, Unitholders will not recognize any foreign exchange gain or loss (as defined below under "Foreign Currency Rules") with respect to the instrument. Tax Consequences of Separate Treatment The discussion under this heading assumes that the integration rules described above do not apply, so that a Unitholder must take into account its pro rata share of the income from the Securities and the Swap Agreement, as determined under the separate tax rules applicable to those items. Allocation of Basis and Sales Proceeds A Unitholder should be considered to have purchased its interest in the Securities for an amount equal to the cost of its Unit multiplied by a fraction, the numerator of which is the fair market value of the Securities and the denominator of which is the sum of the fair market value of the Securities and the fair market value of any Swap Agreement (which may be negative, zero or positive), in each case at the time of purchase. The Unitholder's initial tax basis in the Securities will equal such allocated purchase price. The Unitholder's tax basis in the Securities generally will be increased by any amounts included in income with respect thereto, and reduced by any payments thereon and any amortized premium with respect thereto. If the fair market value to the Trust of the Swap Agreement is not zero at the time of purchase of a Unit by a Unitholder, the Unitholder should be treated as having received or paid a premium with respect to the Swap Agreement ("Swap Premium"). If such fair market value is negative, a Swap Premium will be treated as paid to such Unitholder in an amount equal to the excess of the amount allocated to the Securities (determined as described above) over the cost of the Unit. If such fair market value is positive, a Swap Premium will be treated as paid by such Unitholder equal to the excess of the cost of the Unit over the amount allocated to the Securities. Upon a sale of a Unit, the same method would apply in allocating the amount realized by the selling Unitholder between the Securities and the Swap Agreement using fair market values at the time of sale. The amount allocated to the Swap Agreement would be considered a termination payment made to or by the Unitholder, depending on whether the amount is positive or negative as to the Trust. If the Trust holds, at the time of purchase of a Unit, cash or cash equivalents, then the cost of the Unit would first be reduced by the amount of such cash or cash equivalents allocated to the Unit before making the above allocation. Taxation of Securities It is assumed for purposes of the following discussion that the Securities underlying the Units of each Series will constitute debt instruments in their entirety and that such Securities are not acquired by the Trust at their original issuance. If the Securities are denominated in a foreign currency, the rules for calculation of foreign exchange gains and losses discussed below under "Foreign Currency Rules" will also apply. Interest, Discount and Premium Stated Interest. A Unitholder will be required to include stated interest on Securities in gross income as ordinary interest income, in accordance with such Unitholder's method of accounting, to the extent such stated interest is qualified stated interest. Stated interest on a Security will be qualified stated interest, in very general terms, if such stated interest is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually during the entire term of the Security at a single fixed rate of interest or, subject to certain conditions, under a single formula based on one or more interest indices. If stated interest is not qualified stated interest, it will be included in OID and a Unitholder will be required to take such discount into account in accordance with the rules described below. General OID Rules. OID is the amount by which a debt instrument's stated redemption price at maturity (as defined below) exceeds its issue price. Holders of debt instruments generally are required to include OID in ordinary gross income using a constant yield method, whether the holder uses the cash or accrual method of accounting. The amount of OID allocable to each accrual period is determined by multiplying the adjusted issue price (as defined below) of the debt instrument at the beginning of the accrual period by the yield to maturity of such debt instrument (appropriately adjusted to reflect the length of the accrual period). The yield to maturity of a debt instrument is the discount rate that causes the present value of all payments on the debt instrument as of its issue date to equal the issue price of such debt instrument. The adjusted issue price of a debt instrument equals its issue price plus prior accruals of OID, adjusted for prior payments of amounts included in the stated redemption price at maturity. The stated redemption price at maturity of a debt instrument equals the sum of all payments to be made thereunder other than payments of qualified stated interest. An accrual period is a period not longer than one year that generally ends on dates that are or correspond to payment dates. Securities Issued With OID. If a Security was initially issued with OID, a Unitholder will be required to treat as interest income its share of such discount, adjusted to reflect the Unitholder's actual purchase price allocated to such Security, as such discount accrues, without regard to the timing of receipt of the cash attributable to such income. In very general terms, if the purchase price allocated to such a Security exceeds its adjusted issue price but is less than the stated redemption price at maturity of such Security, a Unitholder will have acquired such Security with acquisition premium and such premium will offset and reduce a Unitholder's share of OID. If the purchase price allocated to such Security exceeds its stated redemption price at maturity, a Unitholder will not be required to include OID in income. The excess of the purchase price over the amount payable on maturity of the Security (exclusive of any portion of such excess attributable to a conversion feature) generally will be amortizable bond premium which, at the election of a Unitholder, may be offset against stated interest payments on such Security or in some cases deducted. If the purchase price allocated to such a Security is less than its adjusted issue price by more than a de minimis amount, a Unitholder will have acquired such Security with market discount (as defined in the Code), which the Unitholder will be required to accrue and include in income in accordance with special market discount rules, in addition to OID amounts. Those market discount rules generally require accrued market discount to be treated as interest income (1) as principal payments on a debt instrument are received (up to the amount of such payments), or (2) when a debt instrument is sold, up to the amount of gain recognized in the sale. Any de minimis discount generally is taken into income ratably as principal payments are received or the debt instrument is sold. Securities Issued Without OID. If a Security was initially issued without OID, a Unitholder will be required to take into account only stated interest payments on such Security, unless the purchase price allocated to such Security differs from the stated redemption price at maturity of such Security. If the purchase price allocated to a Security exceeds its amount payable on maturity, that excess amount (exclusive of any portion thereof attributable to a conversion feature) generally will be amortizable bond premium, which at the Unitholder's election, may be offset against stated interest payments on such Security or in some cases deducted. In general, if the purchase price allocated to a Security is less than its stated redemption price at maturity by more than a de minimis amount, a Unitholder will have acquired such Security with market discount. The tax treatment of market discount and de minimis discount are described in the immediately preceding paragraph. Special Election to Apply OID Rules. In lieu of the rules described above with respect to discount and premium, a Unitholder may elect to report all income on a Security under the principles of the OID rules, as if such Security were newly issued on the date of purchase of the Units by the Unitholder, the issue price of such Security equaled the purchase price allocated thereto, and none of the interest thereon was qualified stated interest. An election made by a taxpayer with respect to one obligation can affect other obligations it holds. Unitholders should consult with their tax advisors regarding the merits of making this election. Sale, Exchange and Retirement of Securities Upon the sale, exchange or retirement of Securities (including a sale resulting from a sale of Units), a Unitholder generally will recognize gain or loss equal to the difference between the amount realized on the sale, exchange or retirement and the Unitholder's tax basis in the Securities. Except as discussed above with respect to market discount and below under "-- Securities Providing for Contingent Payments," "Straddle Rules," and "Foreign Currency Rules," gain or loss recognized by a Unitholder on the sale, exchange or retirement of Securities generally will be capital gain or loss, and will be long-term capital gain or loss if the Unitholder is considered to have held the Securities for more than one year at the time of the disposition. Securities Providing for Contingent Payments Securities in a Trust may provide for contingent payments ("contingent debt obligations"). Regulations issued in 1996 (the "Contingent Payment Regulations") govern the treatment of contingent debt obligations issued on or after August 13, 1996. Under the Contingent Payment Regulations, contingent debt obligations generally will be subject to the noncontingent bond method. In general, under this method the issuer of a contingent debt obligation creates a schedule of projected fixed payments on the instrument (the "Tax Projected Payment Schedule"). The Tax Projected Payment Schedule is calculated by replacing each contingent payment with a projected payment and then setting the level of those projected payments so that the obligation has a yield equal to the issuer's comparable yield. The comparable yield is the rate of interest the issuer would pay on a comparable debt instrument that did not provide for contingent payments. The Tax Projected Payment Schedule is calculated based on the rules in the Contingent Payment Regulations and does not necessarily represent the issuer's prediction of how a contingent debt obligation will perform. The Tax Projected Payment Schedule in respect of contingent debt will be binding on the Unitholders as long as it is reasonable. A Unitholder of a Trust holding a contingent debt obligation generally must include in income interest on such contingent debt obligation as it accrues, calculated as if the contingent debt obligation provided only for fixed payments according to the Tax Projected Payment Schedule. The Tax Projected Payment Schedule generally is not revised to account for changes in circumstances that occur while the contingent debt obligation is outstanding. Any difference between a projected payment and an actual payment is taken into account as an adjustment to the Unitholder's interest income when the payment is made. (This treatment assumes that any contingency affecting a payment is resolved, so that the payment becomes fixed, no earlier than six months prior to the date of payment.) Upward and downward adjustments are netted for each taxable year with respect to each contingent debt obligation. Any net upward adjustment for the taxable year is treated as additional interest income. Any net downward adjustment reduces the interest income on the obligation for the taxable year that would otherwise accrue. If any downward adjustment exceeds the interest income otherwise reported in respect of a contingent debt obligation for the taxable year, the adjustment would be allowed as an ordinary deduction, to the extent it does not exceed the net amount of interest income of the Unitholder from the contingent debt obligation in prior years. If a Unitholder is treated as purchasing a contingent debt obligation for an amount different from its adjusted issue price, the Unitholder will be required to accrue interest income on the obligation in accordance with the original Tax Projected Payment Schedule. Any difference between the purchase price and the obligation's adjusted issue price on the date of purchase will be allocated among the remaining payments in the Tax Projected Payment Schedule. If the Unitholder's basis is greater than the adjusted issue price of the obligation, the excess is a downward adjustment; and if the Unitholder's basis is less than the adjusted issue price, the difference is an upward adjustment. These adjustments are taken into account at the time the corresponding interest payment is accrued or made. Any downward or upward adjustment in respect of a difference between the Unitholder's purchase price and a contingent debt obligation's adjusted issue price at the date of purchase will decrease or increase the Unitholder's basis in the obligation. Gain or loss recognized on a sale or exchange of a contingent debt obligation generally would be treated as interest income or ordinary loss. However, any loss in excess of the net amount of interest income on the contingent debt obligation previously included in income by the Unitholder will be a capital loss. Furthermore, any gain or loss will be long-term capital gain or loss if the Unitholder has held the contingent debt obligation for the long-term holding period and there are no remaining contingent payments on the obligation at the time of the disposition. Taxation of the Swap Agreement It is assumed for purposes of the following discussion that a Swap Agreement is a "notional principal contract" in its entirety. Alternative characterizations of a Swap Agreement are discussed below under "-- Other Characterizations." If payments under a Swap Agreement are denominated in, or determined by reference to, a foreign currency, the rules relating to foreign exchange gains and losses discussed below under "Foreign Currency Rules" will also apply. Periodic Payments and Nonperiodic Payments (Including Swap Premium) Income or deductions with respect to a Swap Agreement may be attributable to periodic payments, nonperiodic payments (including Swap Premium) or Swap Termination Payments. Periodic payments under a Swap Agreement are payments made or received by the Trust that are payable at intervals of one year or less during the entire term of the contract (including any extension periods), that are based on a specified index and are based on a single notional principal amount or a notional principal amount that varies over the term of the contract in the same proportion as the notional principal amount that measures the other party's payments. However, payments to buy or sell an interest rate cap or floor are never periodic payments. All taxpayers must account for periodic payments under an accrual method of accounting. In a case where periodic payments to be made under a Swap Agreement are set in arrears, and the payment relating to a period during a taxable year of a Unitholder cannot be determined by the end of the year, then accruals for that year will be based on a reasonable estimate of the payment, and the difference between the estimated amount and actual amount will be taken into account in the year in which the payment is fixed. Payments under a Swap Agreement that are not periodic payments or Swap Termination Payments are "nonperiodic payments". (Accordingly, any Swap Premium paid or received generally would be a nonperiodic payment.) Nonperiodic payments generally must be recognized over the term of the Swap Agreement in a manner that reflects the economic substance of the contract. The amount of any nonperiodic payment that is amortized in any taxable year will be treated in the same manner as a periodic payment that accrues in that year. Under an alternative rule, nonperiodic payments under a notional principal contract may be amortized under a level payment method. Under that method, nonperiodic payments are allocated as if they represented principal payments on a level payment loan that extends over the life of the contract and bears interest at a rate equal to the rate (or rates) used by the parties to determine the nonperiodic payments (or if such rate is not readily ascertainable, a rate that is reasonable under the circumstances). The level payment method cannot be used by a taxpayer with respect to a notional principal contract if the taxpayer reduces risk with respect to the contract by purchasing, selling or otherwise entering into other financial contracts (other than debt instruments). Periodic and nonperiodic payments attributed to any taxable year would be netted. The net amount received or paid should generally be ordinary income or an ordinary deduction, respectively, for that year. Although not certain, income or loss attributable to changes in the value of property may be treated as gain or loss from the termination of a right or obligation with respect to such property, and accordingly may be treated as capital gains or losses under section 1234A of the Code (except as discussed below under "Straddle Rules" and "Foreign Currency Rules"). As an exception to the treatment of nonperiodic payments outlined above, a notional principal contract that provides for a "significant" nonperiodic payment is divided into two parts for federal income tax purposes: a notional principal contract with periodic payments and a loan. Where relevant, for purposes of tax information reporting, the Trustee intends (i) to assume that all of the Units were purchased on the Closing Date, and (ii) to amortize any nonperiodic payments that are fixed in amount (including any initial Swap Premium) under the level payment method described above. Unitholders that purchase a Unit and are deemed either to receive or to pay Swap Premium should consult with their tax advisors regarding the appropriate methods for amortizing such Swap Premium. Swap Termination Payments As described above under "Allocations of Basis and Sales Proceeds," a Unitholder may be considered to pay or receive a Swap Termination Payment under a Swap Agreement in connection with the sale of a Unit. In such a case, a Unitholder would have gain or loss from termination of a Swap Agreement equal to (i) the sum of the unamortized portion of any nonperiodic payments received by the Unitholder and any Swap Termination Payment it receives or is deemed to have received, less (ii) the sum of the unamortized portion of any nonperiodic payments paid by the Unitholder and any Swap Termination Payment it pays or is deemed to have paid. A termination of a Swap Agreement generally will be considered to involve a "sale or exchange" of the Swap Agreement, with the result that any gain or loss generally will be treated as capital gain or loss (subject to the discussion below under "Straddle Rules" and "Foreign Currency Rules"). A Unitholder that recognizes capital loss upon termination of the Swap Agreement generally will be able to offset that loss against any gain recognized with respect to the Securities to the extent such gain is capital gain. Straddle Rules The Securities and the Swap Agreement may be considered offsetting positions in a "straddle" subject to the straddle rules of section 1092 of the Code. Under section 1092(d), a selling Unitholder's capital gain or loss (if any) with respect to Securities that are positions in a straddle will be short-term unless such Securities have been held for the long term capital gain holding period after termination of the Swap Agreement. Similarly, if the Swap Agreement is a position in a straddle, capital gain or loss realized in connection with its termination (or the termination of a right or obligation thereunder) will be short-term. In addition, under section 1092, all or a portion of any loss realized upon such termination may be deferred until disposition of the Securities. Further, if the Securities and the Swap Agreement are positions in a straddle and as a result are considered to be held as part of a "conversion transaction" within the meaning of section 1258 of the Code, all or a portion of any gain that would otherwise be capital gain may be recharacterized as ordinary income. Finally, if the Securities and the Swap Agreement are positions in a straddle, any interest or carrying charges incurred by a Unitholder with respect to its Units may have to be capitalized to the extent they exceed the Unitholder's interest income from the Securities, under section 263(g) of the Code. Other Characterizations of the Securities and Swap Agreement Depending on its terms, a Swap Agreement may be in economic substance an option or forward contract (among other possibilities), instead of or in addition to a notional principal contract. In general, a Swap Agreement will be treated for federal income tax purposes in accordance with its economic substance. Consequently, if a Swap Agreement is an option, a Unitholder will be treated as writing or purchasing an option. Any premium paid or received in respect of the option (calculated in the same manner as Swap Premiums in respect of a Swap Agreement, as described under "Tax Consequences of Separate Treatment--Allocation of Basis and Sales Proceeds") generally will be taken into account in determining gain or loss only upon termination of the option or, if the option is physically settled and involves the purchase of property by the Trust, upon the disposition of such property. Any such gain or loss will be capital gain or loss (subject to the discussion below under "Straddle Rules" and "Foreign Currency Rules"). An option generally will not be subject to the mark-to-market rules under section 1256 of the Code, but the inapplicability of those rules is not entirely free from doubt in the case of a purchased option underlying a Unit that is itself listed on a national securities exchange. An option and the Securities may be considered offsetting positions in personal property for purposes of the straddle rules discussed in the preceding paragraph. In some cases, Securities and a related Swap Agreement may represent economically a loan to the Swap Counterparty secured by the Securities. In that case, the Trust may be considered to have made a loan providing for cash flows equal to the cash flows of the Securities and the Swap Agreement combined. Such a loan would be subject to the rules governing debt instruments described above under "Tax Consequences of Separate Treatment -- Taxation of Securities." Other characterizations may be possible, depending on the particular terms of the Swap Agreement. Unitholders should consult their own tax advisors with respect to the federal income tax treatment of the Swap Agreement. Stripped Bond Rules A Unitholder that holds a Strip Unit will be taxed under the "stripped bond" rules of the Code. The Unitholder will be treated as having purchased a newly issued, single debt instrument providing for payments equal to the payments on the Securities allocable to the Unit and having OID equal to the excess of the sum of such payments over the issue price. The issue price is the price at which the Unitholder is considered to have purchased its right to payments on the Securities. In the case of a Trust that holds only Securities and cash or cash equivalents, the issue price would be the cost of the Unit less the Unitholder's allocable share of such cash or cash equivalents. The Unitholder will include OID in income as it accrues in accordance with the constant yield method described above under "Taxation of Securities -- Interest, Discount and Premium -- General OID Rules." Holders of certain Strip Units may not be entitled to receive current distributions on such Units. In that case, OID will be includible in income prior to the receipt of cash attributable to such income and the amount of OID includible in income will increase each year. Unless otherwise specified in the Prospectus Supplement, it is anticipated that a Trust will, for information reporting purposes, account for OID reportable by holders of Strip Units by reference to the first price at which a substantial amount of the Units is sold to purchasers (other than the underwriters), even though the amount of OID will differ for subsequent purchasers. Unitholders should consult their tax advisors regarding the proper calculation of OID. Foreign Currency Rules If the Securities provide for payments denominated in, or determined by reference to, a foreign currency, and the integration rules do not apply, then (under the rules of section 988 of the Code and the regulations promulgated thereunder) foreign exchange gain or loss will be computed separately from interest income and gain or loss from the Securities. Foreign exchange gain or loss is treated as ordinary income or loss that is generally not interest income (or a direct offset to interest income) and is sourced based on the residence of the taxpayer. In general terms, interest income (including OID, and adjusted for any premium amortization) from the Securities will be calculated first in foreign currency units as if the instrument were denominated in U.S. dollars. Interest in foreign currency units will then be translated into U.S. dollars based on an average exchange rate for the period when the interest accrues or, in some cases, based on the exchange rate at the time interest is paid. Foreign exchange gain or loss will be recognized when interest income is actually paid in an amount equal to the difference, if any, between the U.S. dollar value of the interest payment based on the exchange rate or rates used in calculating the interest income attributable to the payment and the rate when it is actually paid. Similarly, foreign exchange gain or loss will be recognized upon the receipt of a principal payment (exclusive of any portion thereof representing original issue discount) in an amount equal to the difference between the U.S. dollar value of the payment based on the exchange rate when the Securities were acquired and the rate when the payment is made. Upon a sale of the Securities, gain or loss will be treated as foreign exchange gain or loss to the extent it does not exceed the gain or loss, respectively, attributable to changes in exchange rates over the period that the Unitholder is considered to have held the Securities. The principles described above would also apply to any synthetic debt instrument created by integrating the Securities and Swap Agreement if that instrument provides for payments in, or determined by reference to, a foreign currency. The rules governing a Swap Agreement whose payments are denominated in, or determined by reference to, foreign currencies and that is not integrated with the Securities will depend on its specific terms. In general, the timing of income and deductions would be determined under the principles described in "Tax Consequences of Separate Treatment--Taxation of the Swap Agreement" and any income, loss or deduction (including any gain or loss from a termination of a Swap Agreement) would be characterized as foreign exchange gain or loss. In the case of a Swap Agreement that exchanges both interest and principal payments, however, the amount and timing of income or loss generally would be determined as though the Trust had made a hypothetical loan denominated in the currency in which payments are received and had incurred a hypothetical debt denominated in the currency in which payments are made. The resulting net income or loss would be characterized as foreign exchange gain or loss. Tax-Exempt Organizations A qualified pension plan or other entity that generally is exempt from federal income taxation pursuant to section 501 of the Code (such an entity, a "Tax-Exempt Investor") nonetheless will be subject to federal income taxation to the extent that its income is unrelated business taxable income within the meaning of section 512 of the Code. Interest on the Securities (or synthetic debt instrument, if the Securities and Swap Agreement are integrated), income from a Swap Agreement that is a notional principal contract and gains from the sale, exchange or other disposition of Units held by a Tax-Exempt Investor generally will not be unrelated business taxable income, unless such Units are "debt-financed property" within the meaning of section 514 of the Code. A portion of any income or gain from the Securities would be unrelated business taxable income if, because of the existence of a significant Swap Premium or other nonperiodic payment under the Swap Agreement, the Swap Counterparty were deemed to have made a loan to a Tax-Exempt Investor that is a Unitholder. See "Tax Consequences of Separate Treatment -- Taxation of Swap Agreement." Foreign Unitholders The following discussion applies to Unitholders that hold Registered Units. The applicable Prospectus Supplement will discuss the rules applicable to non-U.S. holders of Bearer Units. A Unitholder that is not a U.S. person (as defined below) and that is not subject to U.S. federal income tax as a result of any direct or indirect connection to the United States in addition to its ownership of a Unit will not be subject to United States income or withholding tax, except as described below and under "Information Reporting and Backup Withholding," in respect of interest income or gain on the Securities or income from the Swap Agreement if (i) the Securities were issued after July 18, 1984, (ii) the Unitholder is not a "10-percent shareholder" or "related controlled foreign corporation" with respect to the issuer of the Securities (or the Swap Counterparty, if the Swap Agreement is considered to involve a significant nonperiodic payment to the Swap Counterparty that is treated as a loan or is otherwise considered part of a loan to the Swap Counterparty), (iii) interest on the Securities (or, to the extent the Swap Agreement is considered to involve a loan to the Swap Counterparty, interest on such loan) is not contingent on the cash flows of, value of property of, or dividends or other equity payments by, the issuer of the Securities (or, in the case of a loan to the Swap Counterparty, the Swap Counterparty), except that this clause will not apply to Securities that are debt instruments with a fixed term issued on or before April 7, 1993, (iv) the Unitholder provides an appropriate statement (generally on IRS Form W-8), signed under penalties of perjury, identifying the Unitholder and stating, among other things, that the Unitholder is not a U.S. person (or, with respect to payments made after December 31, 1999, satisfies certain documentary evidence requirements for establishing that it is not a U.S. person) and (v) the Unitholder is not considered to be a bank extending credit under a loan entered into in the ordinary course of its trade or business. If the Securities or Swap Agreement provide for payments relating to a "United States real property interest" within the meaning of section 897 of the Code, then gain from the Securities or Swap Agreement, as the case may be, may be treated as income effectively connected with a United States trade or business, and a related withholding tax may apply. A Unitholder that is not a U.S. person may also be subject to U.S. federal income taxation with respect to a Unit if it is a personal holding company, corporation that accumulates earnings to avoid U.S. taxes on shareholders or private foundation under the Code. The term "U.S. person" means a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof, an estate the income of which is subject to United States federal income taxation regardless of its source or a trust if (i) a U.S. court is able to exercise primary supervision over the trust's administration and (ii) one or more U.S. persons have the authority to control all of the trust's substantial decisions. Information Reporting and Backup Withholding The Trustee will furnish or make available, within 90 days after the end of each calendar year, to each party registered during such calendar year as a Unitholder, such information as is required under the Code or regulations under the Code to enable each Unitholder to file its federal income tax returns with respect to its ownership of Registered Units. Such information may also be reported to the IRS. Distributions made on a Unit and proceeds from the sale of a Unit to or through certain brokers may be subject to a "backup" withholding tax of 31% unless, in general, the Unitholder complies with certain procedures or establishes that it is a corporation or otherwise exempt from such withholding. A Unitholder may be required to provide a statement under penalties of perjury (generally on IRS Form W-9 for U.S. persons or W-8 for non-U.S. persons) to establish an exemption. Any amounts so withheld from distributions on the Unit would be allowed as a credit against the Unitholder's federal income tax liability, or upon application by the Unitholder to the IRS, would be refunded by the IRS to the extent it exceeds such liability. ERISA CONSIDERATIONS The Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the Code impose requirements on employee benefit plans (and on certain other retirement plans and arrangements, including individual retirement accounts and annuities, Keogh plans and collective investment funds and insurance company separate accounts in which such plans, accounts or arrangements are invested) subject to ERISA or the Code (collectively, "Plans") and on persons who are fiduciaries with respect to such Plans. Among other things, ERISA requires that the assets of a Plan subject to ERISA be held in trust and imposes general standards of investment prudence and diversification on fiduciaries of Plans. In addition, ERISA and Section 4975 of the Code prohibit a broad range of transactions involving Plan assets and persons ("Parties in Interest") having certain specified relationships to a Plan and impose additional prohibitions where Parties in Interest are fiduciaries with respect to a Plan. Each of Morgan Stanley, any Swap Counterparty, the issuers of the Securities and the Trustee and their affiliates may be Parties in Interest with respect to Plans. The United States Department of Labor (the "DOL") has issued regulations (DOL Reg. ss.ss.2510.3-101) concerning what constitutes the assets of a Plan when a Plan invests in another entity (the "Plan Asset Regulations"). The Units would constitute equity interests in the Trust for purposes of the Plan Asset Regulations. Under the Plan Asset Regulations, the underlying assets and properties of corporations, partnerships and certain other entities in which a Plan makes an "equity" investment could be deemed for purposes of ERISA and Section 4975 of the Code to be assets of the investing Plan in certain circumstances, unless the ownership by "benefit plan investors" of equity interests in the entity is not "significant." In general, ownership by benefit plan investors of equity interests in an entity is "significant" on any date if, immediately after the most recent acquisition of any equity interest in the entity, twenty-five percent or more of the value of any class of equity interests in the entity is held by benefit plan investors. For purposes of the Plan Asset Regulations, the term "benefit plan investor" includes (a) any employee benefit plan (as defined in Section 3(3) of ERISA), whether or not it is subject to the provisions of Title I of ERISA, including governmental and foreign employee benefit plans, (b) any plan described in Section 4975(e)(1) of the Code and (c) any entity whose underlying assets include plan assets by reason of a plan's investment in the entity. Unless the "Alternative ERISA Restrictions" or "Deemed Representations" apply, Units may not be transferred to any person unless that person is not a Plan subject to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code and is not acquiring the Units with the assets of any such Plan or any government or other plan subject to substantially similar requirements. The Trust Agreement provides that any purported transfer in violation of this restriction shall be void ab initio. Each person who acquires any Book-Entry Unit, and each fiduciary which causes any such person to so acquire a Book-Entry Unit, in its individual as well as its fiduciary capacity, will be deemed to have represented upon the acquisition of such Book-Entry Unit that such purchaser or transferee is not a Plan subject to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code or any government or other plan subject to substantially similar requirements and is not using the assets of any such Plan to purchase the Book-Entry Units. THE TRUST AGREEMENT PROVIDES THAT EACH HOLDER OF A BOOK-ENTRY UNIT SHALL INDEMNIFY THE TRUSTEE, THE DEPOSITOR, MORGAN STANLEY AND THEIR AFFILIATES AGAINST ANY COSTS, EXPENSES, DAMAGES OR LOSSES INCURRED BY THEM AS A RESULT OF THE FAILURE OF THE FOREGOING REPRESENTATION TO BE TRUE. Alternatively, if the Prospectus Supplement with respect to a Series of Units elects the "Alternative ERISA Restrictions", the restrictions described in the preceding paragraph will not apply. Units subject to the "Alternative ERISA Restrictions" will be issued only as Definitive Units in registered form and only upon execution and delivery of a definitive Purchase Agreement, which will contain additional representations regarding whether such purchaser or proposed transferee is a benefit plan investor (within the meaning of the Plan Asset Regulations) or is acquiring the Units with assets of a benefit plan investor. A definitive Purchase Agreement will similarly be required to be obtained from any proposed transferee of a Unit to which the "Alternative ERISA Restrictions" apply. No such purchase or proposed transfer shall be permitted to the extent that it would cause the ownership by benefit plan investors to be "significant" within the meaning of the Plan Asset Regulations immediately after such purchase or proposed transfer. In addition, the Depositor and the Trustee will agree that, after the initial distribution of a particular Series of Units subject to the Alternative ERISA Restrictions, neither they nor their affiliates will acquire any Units of such Series, unless such acquisition would not cause the ownership by benefit plan investors immediately following such acquisition to be "significant." Alternatively, if the Prospectus Supplement with respect to a Series of Units elects the "Deemed Representations", the restrictions described in the two preceding paragraphs will not apply. Units will be issued in reliance on certain exemptions from the prohibited transaction provisions of Section 406 of ERISA and Section 4975 of the Code which may be applicable, depending in part on the type of Plan fiduciary making the decision to acquire a Unit and the circumstances under which such decision is made. Included among these exemptions are Prohibited Transaction Class Exemption ("PTCE") 91-38 (relating to investments by bank collective investment funds), PTCE 84-14 (relating to transactions effected by a "qualified professional asset manager"), PTCE 90-1 (relating to investments by insurance company pooled separate accounts) and PTCE 96-23 (relating to transactions determined by in-house asset managers). There can be no assurance that any of these class exemptions or any other exemption will be available with respect to any particular transaction involving the Units. BY ITS PURCHASE OF ANY UNIT, THE PURCHASER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED EITHER THAT (A) IT IS NOT AN ERISA PLAN OR OTHER PLAN, AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH ERISA PLAN OR OTHER PLAN, OR A GOVERNMENTAL PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR (B) ITS PURCHASE, HOLDING AND DISPOSITION OF A UNIT WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL PLAN, ANY SUBSTANTIALLY SIMILAR FEDERAL, STATE OR LOCAL LAW) FOR WHICH AN EXEMPTION IS NOT AVAILABLE. THE TRUST AGREEMENT PROVIDES THAT EACH HOLDER OF A BOOK-ENTRY UNIT SHALL INDEMNIFY THE TRUSTEE, THE DEPOSITOR, MORGAN STANLEY AND THEIR AFFILIATES AGAINST ANY COSTS, EXPENSES, DAMAGES OR LOSSES INCURRED BY THEM AS A RESULT OF THE FAILURE OF THE FOREGOING REPRESENTATION TO BE TRUE. The Prospectus Supplement may also specify restrictions with respect to ERISA investors different from any of the foregoing. Each Plan fiduciary who is responsible for making the investment decisions whether to purchase or commit to purchase and to hold Units should determine whether, under the general fiduciary standards of investment prudence and diversification and under the documents and instruments governing the Plan, an investment in the Units is appropriate for the Plan, taking into account the overall investment policy of the Plan and the composition of the Plan's investment portfolio. Any Plan proposing to invest in Units should consult with its counsel to confirm that such investment will not result in a prohibited transaction and will satisfy the other requirements of ERISA and the Code. The sale of any Units to a Plan or a governmental or other plan is in no respect a representation by the Trust or Morgan Stanley that such an investment meets all relevant legal requirements with respect to investments by Plans generally, any particular Plan or any such other plan, or that such an investment is appropriate for Plans generally, any particular Plan or any such other plan. LIMITATIONS ON ISSUANCE OF BEARER UNITS In compliance with United States Federal income tax laws and regulations, the Depositor and any underwriter, agent or dealer participating in the offering of any Bearer Unit will agree that, in connection with the original issuance of such Bearer Unit and during the period ending 40 days after the issue of such Bearer Unit, they will not offer, sell or deliver such Bearer Unit, directly or indirectly, to a U.S. Person or to any person within the United States, except to the extent permitted under U.S. Treasury regulations. Bearer Units will bear a legend to the following effect: "Any United States Person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code." The sections referred to in the legend provide that, with certain exceptions, a United States taxpayer who holds Bearer Units will not be allowed to deduct any loss with respect to, and will not be eligible for capital gain treatment with respect to any gain realized on a sale, exchange, redemption or other disposition of, such Bearer Units. Pending the availability of a permanent Global Security or definitive Bearer Units, as the case may be, Units that are issuable as Bearer Units may initially be represented by a single temporary Global Security, without interest coupons, to be deposited with a common depositary in London for Euroclear and CEDEL for credit to the accounts designated by or on behalf of the purchasers thereof. Following the availability of a permanent Global Security in bearer form, without coupons attached, or definitive Bearer Units and subject to any further limitations described in the applicable Prospectus Supplement, the temporary Global Security will be exchangeable for interests in such permanent Global Security or for such definitive Bearer Units, respectively, only upon receipt of a "Certificate of Non-U.S. Beneficial Ownership." A "Certificate of Non-U.S. Beneficial Ownership" is a certificate to the effect that a beneficial interest in a temporary Global Security is owned by a person that is not a U.S. Person or is owned by or through a financial institution in compliance with applicable U.S. Treasury regulations. No Bearer Unit will be delivered in or to the United States. If so specified in the applicable Prospectus Supplement, interest on a temporary Global Security will be distributed to each of Euroclear and CEDEL with respect to that portion of such temporary Global Security held for its account, but only upon receipt as of the relevant Distribution Date of a Certificate of Non-U.S. Beneficial Ownership. PLAN OF DISTRIBUTION The Units may be offered and sold to or through Morgan Stanley as underwriter, dealer or agent, or through one or more other underwriters, dealers or agents, or directly to purchasers. The applicable Prospectus Supplement will set forth the terms of the offering of any Series of Units, which may include the names of any underwriters, or initial purchasers, the purchase price of such Units and the proceeds to the Depositor from such sale, any underwriting discounts and other items constituting underwriters' compensation, any initial public offering price, any discounts or concessions allowed or reallowed or paid to dealers, any securities exchanges on which such Units may be listed, any restrictions on the sale and delivery of Units in bearer form and the place and time of delivery of the Units to be offered thereby. If underwriters are used in a sale of any Units, such Units will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions including negotiated transactions, at fixed public offering prices or at varying prices to be determined at the time of sale or at the time of commitment therefor. Such Units may be offered to the public either through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. Such managing underwriters or underwriters in the United States will include Morgan Stanley, an affiliate of the Depositor. Unless otherwise set forth in the applicable Prospectus Supplement, the obligations of the underwriters to purchase such Units will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all such Units, if any, of such Units are purchased. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. In connection with an underwritten offering of Units, certain underwriters and selling group members and their respective affiliates may engage in transactions that stabilize, maintain or otherwise affect the market price of the Units. Such transactions may include stabilization transactions effected in accordance with Rule 104 of Regulation M under the Exchange Act, pursuant to which such persons may bid for or purchase Units for the purposes of stabilizing their market price. Units may also be sold through agents designated by the Depositor from time to time. Any agent involved in the offer or sale of Units will be named, and any commissions payable by the Depositor to such agent will be set forth, in the applicable Prospectus Supplement. Any such agent will act on a best efforts basis for the period of its appointment or be subject to another standard in the Prospectus Supplement. If so indicated in the applicable Prospectus Supplement, the Depositor will authorize agents, underwriters or dealers to solicit offers by certain specified institutions to purchase Units at the public offering price described in such Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on a future date specified in such Prospectus Supplement. Such contracts will be subject only to those conditions set forth in the applicable Prospectus Supplement and such Prospectus Supplement will set forth the commissions payable for solicitation of such contracts. Sales of certain Series of Units may be restricted to "qualified institutional buyers" ("QIB"s) as defined in Rule 144A under the Securities Act, in which case each underwriter will be required to exercise reasonable care to ensure that such Units are sold and will be resold to QIBs. The Prospectus Supplement relating to such Units may provide that a purchaser of the Units is deemed to represent for the benefit of the Depositor, the Trust and the Underwriters that such purchaser is qualified as a QIB. Any underwriters, dealers or agents participating in the distribution of Units may be deemed to be underwriters and any discounts or commissions received by them on the sale or resale of Units may be deemed to be underwriting discounts and commissions under the Securities Act. Agents and underwriters may be entitled under agreements entered into with the Depositor to indemnification by the Depositor against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments that the agents or underwriters may be required to make in respect thereof. Agents and underwriters may be customers of, engage in transactions with, or perform services for, the Depositor or its affiliates in the ordinary course of business. If specified in the Prospectus Supplement, the Securities may be deposited into the Trust in connection with a distribution of the Securities by one or more affiliates of the Depositor pursuant to a registration statement under the Securities Act, in which the Trust will effectively act as an underwriter of the Securities pursuant to Rule 140 under the Securities Act. Morgan Stanley is an affiliate of the Depositor. Morgan Stanley's participation in the offer and sale of Units complies with the requirements of Section 2720 of the Conduct Rules of the National Association of Securities Dealers, Inc. regarding underwriting securities of an affiliate. As to each Series of Units, only those Classes rated in one of the investment grade rating categories by a Rating Agency will be offered hereby. Any unrated Classes or Classes rated below investment grade may be retained by the Depositor or sold at any time to one or more purchasers. The Depositor and Morgan Stanley may be indemnified by the Trust for certain expenses or liabilities incurred in connection with the offer and sale of the Units. From time to time, Morgan Stanley and its affiliates may be engaged by Security Issuers as an underwriter or placement agent, in an advisory capacity or in other business arrangements. In addition, Morgan Stanley and its affiliates may make a market in other outstanding securities of any Security Issuer. Each Unitholder will be deemed to have acknowledged and agreed that Morgan Stanley or its affiliates may engage in any kind of business with, or have an investment in, any Security Issuer or related persons, and in connection therewith, may obtain or be in possession of non-public information regarding the Securities or related persons which may not be made available to Unitholders. Affiliates of other underwriters may also act as agents or underwriters in connection with the sale of the Units. Any affiliate of the underwriters so acting will be named, and its affiliation with the underwriters described, in the related Prospectus Supplement. Also, affiliates of the underwriters may act as principals or agents in connection with market-making transactions relating to the Units. LEGAL MATTERS Certain legal matters with respect to the issuance of Units will be passed upon for the Depositor by Cleary, Gottlieb, Steen & Hamilton. INDEX OF DEFINED TERMS Page ---- Affected Party............................................26 Base Rate.................................................34 Bearer Units..............................................46 Book-Entry Units..........................................46 Business Day..............................................33 Calculation Date..........................................41 Call Date.................................................43 Call Price................................................43 Callable Series...........................................43 CD Rate...................................................40 CD Rate Determination Date................................40 CDs (Secondary Market)....................................40 CEDEL.....................................................46 Certificate of Non-U.S. Beneficial Ownership..............78 Certificates of Deposit...................................40 Class......................................................1 Closing Date..............................................61 Code......................................................50 Commercial Paper..........................................38 Commercial Paper Rate.....................................38 Commercial Paper Rate Determination Date..................38 Commission.................................................4 Composite Quotations......................................35 Concentrated Security......................................1 Contingent Payment Regulations............................68 Covenant Default..........................................18 Credit Events.............................................24 Credit Support............................................15 Credit Support Provider...................................22 Cut-off Date..............................................12 Definitive Units..........................................46 Deliverable Obligations...................................24 Depositary................................................46 Depositor..................................................1 Direct Participants.......................................47 Disqualified Entity.......................................58 Disqualified Security.....................................58 Distribution Date..........................................3 DOL.......................................................76 DTC.......................................................31 Dual Currency Units.......................................42 Early Termination Date....................................27 EDGAR......................................................4 Eligible Foreign Issuer...................................15 Eligible Issuer...........................................15 Eligible Trustee..........................................61 ERISA.....................................................75 Euroclear.................................................46 Exchange Act...............................................1 Exchange Rate Agent.......................................11 Exchangeable Series.......................................43 Extraordinary Trust Expenses..............................52 Face Amount...............................................42 FASIT.....................................................63 Federal Funds (Effective).................................40 Federal Funds Rate........................................40 Federal Funds Rate Determination Date.....................40 Federal Funds/Effective Rate..............................40 Fixed Rate Unit...........................................34 Floating Rate Unit........................................34 Foreign Currency Integration Regulations..................63 Foreign Currency Unit.....................................42 Global Security...........................................46 GSEs...................................................1, 15 Guarantee..................................................3 Guarantor.................................................21 Guaranty..................................................21 H. 15(519)................................................35 Index Maturity............................................35 Indexed Commodity.........................................42 Indexed Currency..........................................42 Indexed Principal Amount..................................42 Index-Linked Units........................................42 Indirect Participants.....................................47 Insolvency Law............................................53 Integration Regulations...................................63 Interest Period...........................................35 Interest Rate..............................................3 Interest Reset Date.......................................35 IRS.......................................................62 ISDA......................................................23 ISDA Definitions..........................................23 Letter of Credit..........................................21 Letter of Credit Bank.....................................21 LIBOR.....................................................36 LIBOR Determination Date..................................36 LIBOR Reuters.............................................36 LIBOR Telerate............................................37 London Banking Day........................................33 Maximum Interest Rate.....................................35 Maximum Reimbursable Amount................................9 Minimum Interest Rate.....................................35 Money Market Yield........................................38 Morgan Stanley.............................................1 MSDW.......................................................3 Notional Amount...........................................34 OID.......................................................64 Option to Elect Exchange..................................45 Optional Exchange Date....................................44 Outstanding Securities....................................19 Participants..............................................47 Parties in Interest.......................................75 Plan Asset Regulations....................................76 Plans.....................................................75 Prospectus Supplement......................................1 PTCE......................................................77 QIB.......................................................80 Rating Agency.............................................45 Reference Entity..........................................24 Registered Units..........................................46 Registration Statement.....................................4 Reserve Account...........................................22 Retained Interest.........................................12 Reuters...................................................36 Reuters Screen LIBO Page..................................37 Rule 3a-7.................................................31 Schedule..................................................23 Secured Securities........................................19 Securities.................................................1 Security Agreement........................................17 Security Default..........................................28 Security Issuer............................................1 Security Prospectus.......................................15 Security Registration Statement...........................16 Security Reporting Event..................................28 Senior Securities.........................................19 Series.....................................................1 Specified Currency.........................................3 Spread....................................................34 Spread Multiplier.........................................34 Stock Index...............................................42 Strip Units...............................................31 Subordinated Securities...................................19 Swap Agreement.............................................3 Swap Calculation Agent....................................10 Swap Counterparty..........................................3 Swap Default..............................................26 Swap Payment Date.........................................24 Swap Premium..............................................65 Swap Termination Payment...................................6 Tax Projected Payment Schedule............................68 Telerate..................................................36 Telerate Page 3750........................................37 Termination Events.........................................6 TIA.......................................................61 Transaction................................................3 Treasury bills............................................39 Treasury Rate.............................................39 Treasury Rate Determination Date..........................39 Trigger Amount.............................................9 Trust......................................................1 Trust Agreement............................................1 Trust Property.............................................1 Trustee....................................................1 Trustee Fees..............................................13 U.S. person...............................................75 Unit Principal Balance....................................41 Unit Register.............................................47 United States real property interest......................74 Units......................................................1
No dealer, salesperson or any other person has been $ authorized to give any information or to make any representations other than those contained in the Prospectus (including the accompanying Prospectus Supplement) in connection with the offer contained herein and, if given or made, such information or representations must not be relied upon as having been authorized by the company or an agent. MSDW STRUCTURED ASSET CORPORATION Neither the delivery of this Prospectus (including the accompanying Prospectus Supplement) nor any sale made hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of the company since the dates as of which information is given in this Prospectus (including the accompanyin Prospectus Supplement). This Prospectus (including the accompanying STRUCTURED ASSET TRUST UNIT REPACKINGS Prospectus Supplement) do not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. TABLE OF CONTENTS Page ---- PROSPECTUS SUPPLEMENTS............................... AVAILABLE INFORMATION................................ PROSPECTUS INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.......................... IMPORTANT CURRENCY INFORMATION....................... RISK FACTORS......................................... THE DEPOSITOR........................................ USE OF PROCEEDS...................................... FORMATION OF TRUSTS.................................. DESCRIPTION OF TRUST PROPERTY........................ DESCRIPTION OF SWAP AGREEMENTS....................... MSDW................................................. DESCRIPTION OF UNITS................................. Dated April __, 1999 DESCRIPTION OF TRUST AGREEMENTS...................... U.S. FEDERAL INCOME TAX CONSEQUENCES................................ ERISA CONSIDERATIONS................................. LIMITATIONS ON ISSUANCE OF BEARER UNITS.................................... PLAN OF DISTRIBUTION................................. LEGAL MATTERS........................................ INDEX OF DEFINED TERMS...............................
PART II INFORMATION NOT REQUIRED IN PROSPECTUS Other Expenses of Issuance and Distribution (Item 14 of Form S-3) The expenses expected to be incurred in connection with the issuance and distribution of the Certificates being registered, other than underwriting compensation, are as set forth below. Filing Fee for Registration Statement...........$147,500 Legal Fees and Expenses......................... * Accounting Fees and Expenses.................... * Trustee's Fees and Expenses (including counsel fees)............... * Blue Sky Fees and Expenses...................... * Printing and Engraving Fees..................... * Rating Agency Fees.............................. * Miscellaneous................................... * ------ Total........................................... ====== --------------- * To be provided by amendment. Indemnification of Directors and Officers (Item 15 of Form S-3). The Company's By-laws provide that the Corporation shall indemnify, to the fullest extent permitted by applicable law, any person who was or is a party or is threatened to be made a party to, or is involved in any manner in, any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that such person (1) is or was a director or officer of the Corporation or a Subsidiary or (2) is or was serving at the request of the Corporation or a Subsidiary as a director, officer, partner, member, employee or agent of another corporation, partnership, joint venture, trust, committee or other enterprise. Section 145 of the Delaware General Corporation Law (the "GCL") provides as follows: "(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. (b) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of such other court shall deem proper. (c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. (d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders. (e) Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys' fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. (f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office. (g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section. (h) For purposes of this section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to any employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this section. (j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. (k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses of indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation's obligation to advance expenses (including attorneys' fees)." The Certificate of Incorporation also limits the personal liability of directors to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty. The Certificate of Incorporation provides as follows: "A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, except for liability (i) for any breach by the director of his duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware or (iv) for any transaction from which the director derived an improper personal benefit." Exhibits (Item 16 of Form-3) 1.1 -- Form of Underwriting Agreement 3.1 -- Certificate of Incorporation 3.2 -- By-Laws 4.1 -- Standard Terms of Trust Agreements 5.1 -- Opinion of Cleary, Gottlieb, Steen & Hamilton with respect to legality* 8.1 -- Opinion of Cleary, Gottlieb, Steen & Hamilton with respect to certain tax matters* 10.1 -- Form of ISDA Master Agreement 23.1 -- Consent of Cleary, Gottlieb, Steen & Hamilton (included in Exhibits 5.1 and 8.1) 26.1 -- Statement of Eligibility of Trustee *Final signed opinions to be filed upon amendment. Undertakings (Item 17 of form S-3). A. Undertakings Pursuant to Rule 415. The undersigned Registrant hereby undertakes: (a) (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement, and (iii) to include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) To provide to the underwriter at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. B. Undertaking in Respect of Indemnification. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3, reasonably believes that the security rating requirement contained in Transaction Requirement B.5. of Form S-3 will be met by the time of the sale of the securities registered hereunder and has duly caused by this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York on the 28th day of April, 1999. MSDW STRUCTURED ASSET CORP. By: /s/ Laya Khadjavi ------------------ Laya Khadjavi Director Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated: SIGNATURE TITLE DATE /s/ Laya Khadjavi Director, President April 28, 1999 - ---------------------------- and Chief Executive Officer /s/ Michael Harpe Director, Treasurer April 28, 1999 - ---------------------------- and Chief Financial Officer /s/ Donald J. Puglisi Assistant Secretary April 28, 1999 - ---------------------------- Registration No. 333-64879 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- EXHIBITS TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- MSDW Structured Asset Corp. (Exact name of registrant as specified in charter) ================================================================================ Index to Exhibits Exhibit Number Exhibit -------------- ------- 1.1 Form of Underwriting Agreement 3.1 Certificate of Incorporation 3.2 By-Laws 4.1 Standard Terms of Trust Agreements 5.1 Opinion of Cleary, Gottlieb, Steen & Hamilton with respect to legality* 8.1 Opinion of Cleary, Gottlieb, Steen & Hamilton with respect to certain tax matters* 10.1 Form of ISDA Master Agreement 23.1 Consent of Cleary, Gottlieb, Steen & Hamilton (included in Exhibits 5.1 and 8.1) 25.1 Statement of Eligibility of Trustee * Final signed opinions to be filed upon amendment. EX-1.1 2 UNDERWRITING AGREEMENT MSDW STRUCTURED ASSET CORP. UNDERWRITING AGREEMENT STANDARD PROVISIONS April __, 1999 From time to time, MSDW Structured Asset Corp., a Delaware corporation (the "Company"), may enter into one or more underwriting agreements that provide for the sale of designated securities to the several underwriters named therein. The standard provisions set forth herein may be incorporated by reference in any such underwriting agreement (an "Underwriting Agreement"). The Underwriting Agreement, including the provisions incorporated therein by reference, is herein sometimes referred to as this Agreement. Terms defined in the Underwriting Agreement are used herein as therein defined. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement, including a prospectus, relating to the Units and has filed with, or transmitted for filing to, or shall promptly hereafter file with or transmit for filing to, the Commission a prospectus supplement (the "Prospectus Supplement") specifically relating to the Units pursuant to Rule 424 under the Securities Act of 1933, as amended (the "Securities Act"). The term "Registration Statement" means the registration statement, including the exhibits thereto, as amended to the date of this Agreement. The term "Basic Prospectus" means the prospectus included in the Registration Statement. The term "Prospectus" means the Basic Prospectus together with the Prospectus Supplement. The term "preliminary prospectus" means a preliminary prospectus supplement specifically relating to the Offered Securities and the Debt Warrant Securities, together with the Basic Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus" and "preliminary prospectus" shall include in each case the documents, if any, incorporated by reference therein. The terms "supplement," "amendment" and "amend" as used herein shall include all documents deemed to be incorporated by reference in the Prospectus that are filed subsequent to the date of the Basic Prospectus by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The term "Contract Securities" means the Offered Securities to be purchased pursuant to the delayed delivery contracts substantially in the form of Schedule I hereto, with such changes therein as the Company may approve (the "Delayed Delivery Contracts"). The term "Underwriters' Securities" means the Offered Securities other than Contract Securities. 1. Representations and Warranties. The Company represents and warrants to and agrees with each of the Underwriters that: (a) The Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (b) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Prospectus complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (ii) each part of the Registration Statement, when such part became effective, did not contain, and each such part, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the Registration Statement and the Prospectus comply, and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (iv) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply (A) to statements or omissions in the Registration Statement or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Manager expressly for use therein or (B) to that part of the Registration Statement that constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the Trustee. (c) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. (d) Each subsidiary of the Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly by the Company, free and clear of all liens, encumbrances, equities or claims. (e) This Agreement has been duly authorized, executed and delivered by the Company. (f) The Trust Agreement has been duly qualified under the Trust Indenture Act and has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally and general principles of equity. (g) The Delayed Delivery Contracts have been duly authorized, executed and delivered by the Company and are valid and binding agreements of the Company, enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally and general principles of equity. (h) The Offered Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Trust Agreement and delivered to and paid for by the Underwriters in accordance with the terms of the Underwriting Agreement, in the case of the Underwriters' Securities, or by institutional investors in accordance with the terms of the Delayed Delivery Contracts in the case of the Contract Securities, will be entitled to the benefits of the Trust Agreement, as the case may be, and will be valid and binding obligations of the Company, in each case enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally and general principles of equity. (i) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement and the Trust Agreement will not contravene any provision of applicable law or the certificate of incorporation or by-laws of the Company or any agreement or other instrument binding upon the Company or any of its subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement and the Trust Agreement, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Offered Securities. (j) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement). (k) There are no legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus and are not so described or any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed or incorporated by reference as exhibits to the Registration Statement that are not described, filed or incorporated as required. (l) Each preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder. (m) The Company is not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Prospectus, will not be an "investment company" as such term is defined in the Investment Company Act of 1940, as amended. (n) The Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole. (o) There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole. (p) The Company has complied with all provisions of Section 517.075, Florida Statutes relating to doing business with the Government of Cuba or with any person or affiliate located in Cuba. 2. Delayed Delivery Contracts. If the Prospectus provides for sales of Offered Securities pursuant to Delayed Delivery Contracts, the Company hereby authorizes the Underwriters to solicit offers to purchase Contract Securities on the terms and subject to the conditions set forth in the Prospectus pursuant to Delayed Delivery Contracts. Delayed Delivery Contracts may be entered into only with institutional investors approved by the Company of the types set forth in the Prospectus. On the Closing Date, the Company will pay to the Manager as compensation for the accounts of the Underwriters the commission set forth in the Underwriting Agreement in respect of the Contract Securities. The Underwriters will not have any responsibility in respect of the validity or the performance of any Delayed Delivery Contracts. If the Company executes and delivers Delayed Delivery Contracts with institutional investors, the aggregate amount of Offered Securities to be purchased by the several Underwriters shall be reduced by the aggregate amount of Contract Securities; such reduction shall be applied to the commitment of each Underwriter pro rata in proportion to the amount of Offered Securities set forth opposite such Underwriter's name in the Underwriting Agreement, except to the extent that the Manager determines that such reduction shall be applied in other proportions and so advises the Company; provided, however, that the total amount of Offered Securities to be purchased by all Underwriters shall be the aggregate amount set forth above, less the aggregate amount of Contract Securities. 3. Terms of Public Offering. The Company is advised by the Manager that the Underwriters propose to make a public offering of their respective portions of the Underwriters' Securities as soon after this Agreement has been entered into as in the Manager's judgment is advisable. The terms of the public offering of the Underwriters' Securities are set forth in the Prospectus. 4. Payment and Delivery. Except as otherwise provided in this Section 4, payment for the Underwriters' Securities shall be made to the Company in Federal or other funds immediately available at the time and place set forth in the Underwriting Agreement, upon delivery to the Manager for the respective accounts of the several Underwriters of the Underwriters' Securities registered in such names and in such denominations as the Manager shall request in writing not less than two full business days prior to the date of delivery, with any transfer taxes payable in connection with the transfer of the Underwriters' Securities to the Underwriters duly paid. Delivery on the Closing Date of any Units that are (i) Units in bearer form shall be effected by delivery of a single temporary Global Security (as defined in the Trust Agreement) to a common depositary for Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear System ("Euroclear"), and for Centrale de Livraison de Valeurs Mobilieres S.A. ("Cedel") for credit to the respective accounts at Euroclear or Cedel of each Underwriter or to such other accounts as such Underwriter may direct. Any Global Security shall be delivered to the Manager not later than the Closing Date, against payment of funds to the Company in the net amount due to the Company for such Global Security by the method and in the form set forth in the Underwriting Agreement. The Company shall cause definitive Units in bearer form to be prepared and delivered in exchange for such Global Security in such manner and at such time as may be provided in or pursuant to the Indenture; provided, however, that the Global Security shall be exchangeable for definitive Units in bearer form only on or after the date specified for such purpose in the Prospectus. 5. Conditions to the Underwriters' Obligations. The several obligations of the Underwriters are subject to the following conditions: (a) Subsequent to the execution and delivery of the Underwriting Agreement and prior to the Closing Date: (i) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the Company's securities by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; and (ii) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement) that, in the judgment of the Manager, is material and adverse and that makes it, in the judgment of the Manager, impracticable to market the Offered Securities on the terms and in the manner contemplated in the Prospectus. (b) The Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of the Company, to the effect set forth in Section 5(a)(i) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date. The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened. (c) An opinion, dated the Closing Date, addressed to MSDW Structured Asset Corp. in substantially the form attached at Exhibit A to this Underwriting Agreement, shall be received by the Underwriters. 6. Covenants of the Company. In further consideration of the agreements of the Underwriters herein contained, the Company covenants with each Underwriter as follows: (a) To furnish the Manager, without charge, ___ signed copies of the Registration Statement (including exhibits thereto) and for delivery to each other Underwriter a conformed copy of the Registration Statement (without exhibits thereto) and to furnish the Manager in New York City, without charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this Agreement and during the period mentioned in Section 6(c) below, as many copies of the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement as the Manager may reasonably request. (b) Before amending or supplementing the Registration Statement or the Prospectus with respect to the Offered Securities, to furnish to the Manager a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which the Manager reasonably objects. (c) If, during such period after the first date of the public offering of the Offered Securities as in the opinion of counsel for the Underwriters the Prospectus is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses the Manager will furnish to the Company) to which Offered Securities may have been sold by the Manager on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with law. (d) To endeavor to qualify the Offered Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Manager shall reasonably request. (e) During the period beginning on the date of the Underwriting Agreement and continuing to and including the Closing Date, not to offer, sell, contract to sell or otherwise dispose of any debt securities of the Company or warrants to purchase debt securities of the Company substantially similar to the Offered Securities (other than (i) the Offered Securities and (ii) commercial paper issued in the ordinary course of business), without the prior written consent of the Manager. (f) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company's counsel and the Company's accountants in connection with the registration and delivery of the Offered Securities under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, any preliminary prospectus, the Prospectus and amendments and supplements to any of the foregoing, including all printing costs associated therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the Offered Securities to the Underwriters, including any transfer or other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or legal investment memorandum in connection with the offer and sale of the Offered Securities under state law and all expenses in connection with the qualification of the Offered Securities for offer and sale under state law as provided in Section 6(d) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky or legal investment memorandum, (iv) the fees and disbursements of the Company's counsel and accountants and of the Trustee and its counsel, (v) all filing fees and the reasonable fees and disbursements of counsel to the Underwriters incurred in connection with the review and qualification of the offering of the Offered Securities by the National Association of Securities Dealers, Inc., (vi) any fees charged by the rating agencies for the rating of the Offered Securities, [(vii) all fees and expenses in connection with the preparation and filing of the registration statement on Form 8-A relating to the Securities and all costs and expenses incident to listing the Offered Securities on [the NYSE/AMEX/the NASDAQ National Market] [and other national securities exchanges and foreign stock exchanges]], (viii) the costs and expenses of the Company relating to investor presentations on any "road show" undertaken in connection with the marketing of the offering of the Offered Securities, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the road show, (ix) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section [and (x) all document production charges and expenses of counsel to the Underwriters incurred in connection with the preparation of the Indenture]. It is understood, however, that except as provided in this Section, Section 8 entitled "Indemnity and Contribution", and the last paragraph of Section 10 below, the Underwriters will pay all of their costs and expenses, including fees and disbursements of their counsel, and any advertising expenses connected with any offers they may make]. 7. Covenants of the Underwriters. Each of the several Underwriters represents and agrees with the Company that: (i) except to the extent permitted under U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D) (the "D Rules"), (A) it has not offered or sold, and during the restricted period will not offer or sell, Debt Securities in bearer form (including any Debt Security in global form that is exchangeable for Debt Securities in bearer form) to a person who is within the United States or its possessions or to a United States person and (B) it has not delivered and will not deliver within the United States or its possessions definitive Debt Securities in bearer form that are sold during the restricted period; (ii) it has, and throughout the restricted period will have, in effect procedures reasonably designed to ensure that its employees or agents who are directly engaged in selling Debt Securities in bearer form are aware that such Debt Securities may not be offered or sold during the restricted period to a person who is within the United States or its possessions or to a United States person, except as permitted by the D Rules; (iii) if it is a United States person, it is acquiring the Debt Securities in bearer form for purposes of resale in connection with their original issuance and if it retains Debt Securities in bearer form for its own account, it will only do so in accordance with the requirements of U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6); (iv) if it transfers to any affiliate Debt Securities in bearer form for the purpose of offering or selling such Debt Securities during the restricted period, it will either (A) obtain from such affiliate for the benefit of the Company the representations and agreements contained in Sections 7(a)(i), 7(a)(ii) and 7(a)(iii) or (B) repeat and confirm the representations and agreements contained in Sections 7(a)(i), 7(a)(ii) and 7(a)(iii) on such affiliate's behalf and obtain from such affiliate the authority to so obligate it; (v) it will obtain for the benefit of the Company the representations and agreements contained in Sections 7(a)(i), 7(a)(ii), 7(a)(iii) and 7(a)(iv) from any person other than its affiliate with whom it enters into a written contract, as defined in U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(4) for the offer or sale during the restricted period of Debt Securities in bearer form; and (vi) it will comply with or observe any other restrictions or limitations set forth in the Prospectus on persons to whom, or the jurisdictions in which, or the manner in which, the Debt Securities may be offered, sold, resold or delivered. All other terms used in the preceding paragraph have the meaning given to them by the U.S. Internal Revenue Code (the "Code") and regulations thereunder, including the D Rules. The restricted period is defined at U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(7). 8. Indemnity and Contribution. (a) The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Manager expressly for use therein. (b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Underwriter, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Manager expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus or any amendments or supplements thereto. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to either Section 8(a) or 8(b), such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by the Manager, in the case of parties indemnified pursuant to Section 8(a) above, and by the Company, in the case of parties indemnified pursuant to Section 8(b) above. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Offered Securities or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Offered Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering of such Offered Securities (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus Supplement, bear to the aggregate Public Offering Price of the Offered Securities. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters' respective obligations to contribute pursuant to this Section 8 are several in proportion to the respective principal amounts of Offered Securities they have purchased hereunder, and not joint. (e) The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 8(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. (f) The indemnity and contribution provisions contained in this Section 8 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter or the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Offered Securities. 9. Termination. This Agreement shall be subject to termination by notice given by the Manager to the Company, if (a) after the execution and delivery of the Underwriting Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in the judgment of the Manager, is material and adverse and (b) in the case of any of the events specified in clauses 9(a)(i) through 9(a)(iv), such event, singly or together with any other such event, makes it, in the judgment of the Manager, impracticable to market the Offered Securities on the terms and in the manner contemplated in the Prospectus. 10. Defaulting Underwriters. If, on the Closing Date, any one or more of the Underwriters shall fail or refuse to purchase Underwriters' Securities that it has or they have agreed to purchase hereunder on such date, and the aggregate amount of Underwriters' Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate amount of the Underwriters' Securities to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the amount of Underwriters' Securities set forth opposite their respective names in the Underwriting Agreement bears to the aggregate amount of Underwriters' Securities set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Manager may specify, to purchase the Underwriters' Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the amount of Underwriters' Securities that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 10 by an amount in excess of one-ninth of such amount of Underwriters' Securities without the written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Underwriters' Securities and the aggregate amount of Underwriters' Securities with respect to which such default occurs is more than one-tenth of the aggregate amount of Underwriters' Securities to be purchased on such date, and arrangements satisfactory to the Manager and the Company for the purchase of such Underwriters' Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either the Manager or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder. 11. Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 12. Applicable Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. 13. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. UNDERWRITING AGREEMENT __________, 199_ MSDW Structured Asset Corp. Delaware Ladies and Gentlemen: We (the "Manager") are acting on behalf of the underwriter or underwriters (including ourselves) named below (such underwriter or underwriters being herein called the "Underwriters"), and we understand that MSDW Structured Asset Corp., a Delaware corporation (the "Company"), proposes to sell [Currency and Principal Amount] aggregate initial offering price of Structured Asset Trust Unit Repackaging ("SATURNS") Units Series _____ ("Offered Securities"). The Offered Securities will be issued pursuant to the provisions of a Trust Agreement between the Company and Chase Bank of Texas, National Association, as Trustee (the "Trustee"). Subject to the terms and conditions set forth or incorporated by reference herein, the Company hereby agrees to sell to the several Underwriters, and each Underwriter agrees, severally and not jointly, to purchase from the Company the respective principal amounts of Offered Securities set forth below opposite their names at a purchase price of ____% of the initial unit principal balance of the Offered Securities, plus accrued interest, if any, from Date of Offered Securities to the date of payment and delivery: Name Aggregate initial unit principal balance of Offered Securities Morgan Stanley & Co. Incorporated Morgan Stanley & Co. International Limited [Insert syndicate list] Total The Underwriters will pay for the Offered Securities upon delivery thereof at [Specify office for Depositary for Global Security] at ______ a.m. (New York City time) on ___________, 199_, or at such other time, not later than 5:00 p.m. (New York City time) on __________, 199_, as shall be designated by the Manager. The time and date of such payment and delivery are hereinafter referred to as the Closing Date. The Offered Securities shall have the terms set forth in the Prospectus dated ___________, 199_, and the Prospectus Supplement dated ____________, 199_, including the following: Terms of Offered Securities [attach Schedule 1 to Trust Agreement] All provisions contained in the document entitled MSDW Structured Asset Corp. Underwriting Agreement Standard Provisions dated April __, 1999, a copy of which is attached hereto, are herein incorporated by reference in their entirety and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein, except that (i) if any term defined in such document is otherwise defined herein, the definition set forth herein shall control, (ii) all references in such document to a type of security that is not an Offered Security shall not be deemed to be a part of this Agreement, and (iii) all references in such document to a type of agreement that has not been entered into in connection with the transactions contemplated hereby shall not be deemed to be a part of this Agreement. [SIGNATURE PAGE WHERE MORGAN STANLEY & CO. INCORPORATED OR MORGAN STANLEY & CO. INTERNATIONAL LIMITED IS A CO-LEAD MANAGER] Please confirm your agreement by having an authorized officer sign a copy of this Agreement in the space set forth below. Very truly yours, [MORGAN STANLEY & CO. INCORPORATED] [MORGAN STANLEY & CO. INTERNATIONAL LIMITED] [Name of Other Lead Managers] Acting severally on behalf of themselves and the several Underwriters named herein By: [MORGAN STANLEY & CO. INCORPORATED] [MORGAN STANLEY & CO. INTERNATIONAL LIMITED] By: Name: Title: Accepted: MSDW STRUCTURED ASSET CORP. By: Name: Title: [SIGNATURE PAGE WHERE MORGAN STANLEY & CO. INCORPORATED OR MORGAN STANLEY & CO. INTERNATIONAL LIMITED IS SOLE MANAGER] Please confirm your agreement by having an authorized officer sign a copy of this Agreement in the space set forth below. Very truly yours, [MORGAN STANLEY & CO. INCORPORATED] [MORGAN STANLEY & CO. INTERNATIONAL LIMITED] [Name of Other Lead Managers] Acting severally on behalf of themselves and the several Underwriters named herein By: Name: Title: Accepted: MSDW STRUCTURED ASSET CORP. By: Name: Title: SCHEDULE I DELAYED DELIVERY CONTRACT ________, 199_ Dear Ladies and Gentlemen: The undersigned hereby agrees to purchase from MSDW Structured Asset Corp., a Delaware corporation (the "Company"), and the Company agrees to sell to the undersigned the Company's securities described in Schedule A annexed hereto (the "Securities"), offered by the Company's Prospectus dated __________________, 19__ and Prospectus Supplement dated ________________, 19__, receipt of copies of which are hereby acknowledged, at a purchase price stated in Schedule A and on the further terms and conditions set forth in this Agreement. The undersigned does not contemplate selling Securities prior to making payment therefor. The undersigned will purchase from the Company Securities in the principal amount and numbers on the delivery dates set forth in Schedule A. Each such date on which Securities are to be purchased hereunder is hereinafter referred to as a "Delivery Date." Payment for the Securities which the undersigned has agreed to purchase on each Delivery Date shall be made to the Company or its order by certified or official bank check in New York Clearing House funds at the office of ______________________________, New York, N.Y., at 10:00 a.m. (New York City time) on the Delivery Date, upon delivery to the undersigned of the Securities to be purchased by the undersigned on the Delivery Date, in such denominations and registered in such names as the undersigned may designate by written or telegraphic communication addressed to the Company not less than five full business days prior to the Delivery Date. The obligation of the undersigned to take delivery of and make payment for\the Securities on the Delivery Date shall be subject to the conditions that (1) the purchase of Securities to be made by the undersigned shall not at the time of delivery be prohibited under the laws of the jurisdiction to which the undersigned is subject and (2) the Company shall have sold, and delivery shall have taken place to the underwriters (the "Underwriters") named in the Prospectus Supplement referred to above of, such part of the Securities as is to be sold to them. Promptly after completion of sale and delivery to the Underwriters, the Company will mail or deliver to the undersigned as its address set forth below notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith. Failure to take delivery of and make payment for Securities by any purchaser under any other Delayed Delivery Contract shall not relieve the undersigned of its obligations under this agreement. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. If this Agreement is acceptable to the Company, it is requested that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding agreement, as of the date first above written, between the Company and the undersigned when such counterpart is so mailed or delivered. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. Very truly yours, (Purchaser) By: (Title) (Address) Accepted: MSDW STRUCTURED ASSET CORP. By: Name: Title: PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING The name and telephone and department of the representative of the Purchaser with whom details of delivery on the Delivery Date may be discussed is as follows: (Please print.) Telephone No. Name (Including Area Code) Department SCHEDULE A Securities: Aggregate Initial Unit Principal Balance: Purchase Price: Delivery: Exhibit A OPINION OF COUNSEL FOR ISSUER Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 MSDW Structured Asset Corp. 1585 Broadway New York, New York 10036 Ladies and Gentlemen: We have acted as special counsel to MSDW Structured Asset Corp., a Delaware corporation (the "Company"), in connection with the Company's offering pursuant to a registration statement on Form S-3 (No. 33-_____) of the Structured Assets Trust Unit Repackaging Units (the "Securities") to be issued under a Trust Agreement dated as of April __, 1999 (the "Trust Agreement") between the Company and Chase Bank of Texas, National Association, as trustee. Such registration statement, as amended when it became effective, but excluding the documents incorporated by reference therein, is herein called the "Registration Statement," and the related prospectus, as supplemented by the prospectus supplement dated ____________, and as first filed with the Securities and Exchange Commission pursuant to Rule 424(b)(2) under the Securities Act, but excluding the documents incorporated by reference therein, is herein called the "Prospectus." This opinion letter is furnished pursuant to Section 5(c) of the Underwriting Agreement dated April __, 1999 (the "Underwriting Agreement") between the Company and the underwriter named in the Agreement (the "Underwriter"). In arriving at the opinions expressed below, we have reviewed the following documents: (a) an executed copy of the Underwriting Agreement; (b) the Registration Statement and the documents incorporated by reference therein; (c) the Prospectus and the documents incorporated by reference therein; (d) a form of the Securities; (e) an executed copy of the Trust Agreement; and (f) the documents delivered to you by the Company at the closing pursuant to the Underwriting Agreement, including copies of the Company's Certificate of Incorporation and By-Laws certified by the Secretary of State of the State of Delaware and the corporate secretary of the Company, respectively. In addition, we have reviewed the originals or copies certified or otherwise identified to our satisfaction of all such corporate records of the Company and such other instruments and other certificates of public officials, officers and representatives of the Company and such other persons, and we have made such investigations of law, as we have deemed appropriate as a basis for the opinions expressed below. In rendering the opinions expressed below, we have assumed the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies. In addition, we have assumed and have not verified the accuracy as to factual matters of each document we have reviewed (including, without limitation, the accuracy of the representations and warranties of the Company in the Underwriting Agreement). Based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion that: [1. The Company is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation.] [2. The Company has corporate power to own its properties and conduct its business as described in the Prospectus, and the Company has corporate power to issue the Securities, to enter into the Underwriting Agreement and the Trust Agreement and to perform its obligations thereunder.] 3. The statements set forth under the headings "Description of Trust Agreements" and "Description of Units" in the Prospectus, insofar as such statements purport to summarize certain provisions of the Securities, and Trust Agreement and the Certificate of Incorporation of the Company, provide a fair summary of such provisions. 4. The execution and delivery of the Underwriting Agreement have been duly authorized by all necessary corporate action of the Company, and the Underwriting Agreement has been duly executed and delivered by the Company. 5. The sale of the Securities to the Underwriter pursuant to the Underwriting Agreement, and the performance by the Company of its obligations in the Underwriting Agreement and the Trust Agreement (a) do not require any consent, approval, authorization, registration or qualification of or with any governmental authority of the United States or the State of New York, except such as have been obtained or effected under the Securities Act (but we express no opinion as to any consent, approval, authorization, registration or qualification that may be required under state securities or Blue Sky laws), and (b) do not result in a breach or violation of any of the terms and provisions of, or constitute a default under the Certificate of Incorporation or By-Laws of the Company. [Insofar as the foregoing opinions relate to the valid existence and good standing of the Company, they are based solely on a certificate of good standing received from the Secretary of State of the State of Delaware and on a\telephonic confirmation from such Secretary of State.] Insofar as the foregoing opinions relate to the validity, binding effect or enforceability of any agreement or obligation of the Company, (a) we have assumed that each other party to such agreement or obligation has satisfied those legal requirements that are applicable to it to the extent necessary to make such agreement or obligation enforceable against it, and (b) such opinions are subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and to general principles of equity. The foregoing opinions are limited to the federal law of the United States of America, and the law of the State of New York and the General Corporation Law of the State of Delaware. We are furnishing this opinion letter to you, the Underwriter, solely for your benefit in connection with the offering of the Securities. This opinion letter is not to be used, circulated, quoted or otherwise referred to for any other purpose, except that this opinion letter may be relied upon by (i) the Trustee in its capacity as such and (ii) _______ in connection with their rating of the Securities. Very truly yours, CLEARY, GOTTLIEB, STEEN & HAMILTON By , a Partner ----------------------------- EX-3.1 3 CERTIFICATE OF INCORPORATION CERTIFICATE OF INCORPORATION OF MSDW STRUCTURED ASSET CORP. * * * 1. The name of the corporation is: MSDW Structured Asset Corp. 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purpose to be conducted or promoted by the Corporation is to engage exclusively in the following activities: (a) to acquire, own, hold, sell, transfer, pledge or otherwise dispose of, or to arrange for Trusts (as defined below) to acquire (1) interests in bonds, notes, debentures or other debt securities, loans, or other extensions of credit or evidences of indebtedness, instruments, contract rights and other financial assets, created, issued, owing or guaranteed by any person or persons (whether a government, sovereign, ruler, commissioner, public body or authority, whether supreme, municipal, local or otherwise, or a company, bank, association partnership or other entity or individual) located anywhere in the world ("Debt Securities"), (2) any combination of insurance policies, letters of credit, reserve accounts and other types of rights or other assets designed to assure the servicing or timely distribution of amounts due in respect of the Debt Securities or other property held by a Trust (collectively, "Credit Support"); (b) To act as settlor or depositor of trusts (each a "Trust") formed under a trust agreement, pooling and servicing agreement or other agreement to issue one or more series (any of which series may be issued in one or more classes) of trust units ("Units"), including without limitation pursuant to one or more Trust Agreements upon standard terms (the "Standard Terms") filed with the Securities and Exchange Commission in connection with registration of the Units under the Securities Act of 1933 pursuant to a form of base prospectus (the "Prospectus") and registration statement ("Registration Statement"), and supplements and amendments thereto from time to time (such Trust Agreements, together with the Swap Agreements and Distribution Agreements as defined in the Standard Terms, the Prospectus, the Registration Statement and other agreements and documents contemplated by the formation of the Trusts and issuance and distribution of the Units in connection therewith, the "Program Documents"), which Units shall represent beneficial interests in the Debt Securities, Credit Support, Swap Agreements and other Trust Property (as defined in the Standard Terms); (c) to register the Units on behalf of each Trust with the Commission pursuant to the Prospectus and Registration Statement and to comply with reporting, filing and other requirements applicable to the Trusts under the Securities Act and the Securities Exchange Act of 1934, and to participate in the sale and distribution of the Units through one or more broker-dealers (including Affiliates of the Corporation) as described in the Prospectus and Registration Statement applicable to the Units from time to time and pursuant to one or more Distribution Agreements as defined in the Standard Terms; (d) To hold, pledge, transfer or otherwise deal with (i) the Units, including Units representing a senior interest, subordinated interest or residual interest in one or more of the assets comprising the Trust Property (as defined in the Standard Terms), (ii) any Retained Interest (as defined in the Standard Terms) in the Trust Property and (iii) any option or other right with respect to the Units or the Trust Property; (e) to loan or invest or otherwise apply proceeds from Debt Securities, funds received in respect of the Units (including Units representing senior interests, subordinated interests or residual interests), Retained Interests and any other income; (f) to borrow money and otherwise incur indebtedness to facilitate any activity authorized herein and to pledge or otherwise grant security interests in its property to secure such borrowing, provided that (i) recourse with respect to all such indebtedness is limited to the proceeds of collateral pledged by the Corporation to secured such indebtedness and (ii) the terms of such indebtedness prohibit the creditor from filing or joining in the filing of any complaint or petition with respect to Corporation and any of the matters set forth in Paragraph 6; (g) to issue capital stock as provided for herein; and (h) to engage in any lawful act or activity to exercise any powers permitted to corporations organized under the General Corporation Law of the State of Delaware that are incidental to and necessary or convenient for the accomplishment of the foregoing purposes. 4. The total number of shares of common stock which the corporation shall have authority to issue is One Thousand (1,000) and the par value of each of such shares is One ($1.00) Dollar, amounting in the aggregate to One Thousand ($1,000) Dollars. 2 5. The name and mailing address of the incorporator is: Susan Krause Morgan Stanley Dean Witter 1221 Avenue of the Americas - 27th Floor New York, NY 10020 6. (a) As used in this Certificate of Incorporation, (i) a "Person" is an individual, partnership, corporation (including a business trust), joint stock company, trust, limited liability company, unincorporated association, joint venture, government (including any agency or subdivision thereof) or any other entity; (ii) an "Affiliate" of a Person is a Person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified; and (iii) an "Associate," when used to indicate a relationship with any Person, is (A) a corporation or organization of which such Person is an officer, director or partner or is, directly or indirectly, the beneficial owner of ten percent or more of any class of equity securities, (B) any trust or other estate in which such Person serves as trustee or in a similar capacity, and (C) any relative or spouse of such Person, or any relative of such spouse, who has the same home as such Person. (b) The business and affairs of the Corporation shall be managed by and under the direction of the Board of Directors. At any given time, the Corporation will have at least one member of the Corporation's Board of Directors (herein referred to as the "Independent Director") and at least one officer (herein referred to as the "Independent Officer"), each of whom shall be an individual who is not (and is not an Associate of), and for a twelve-month period prior to election or appointment, as the case may be, has not been a direct, indirect or beneficial holder of two percent or more of any class of equity securities, director, officer or employee of any Affiliate of the Corporation. The same individual may serve both as an Independent Director and an Independent Officer. (c) No Independent Director serving pursuant to the requirements of this Paragraph 6 shall, with regard to any matter described in Paragraph 8, owe a fiduciary duty or other obligation to the stockholders (except as may specifically be required by the statutory law of any applicable jurisdiction); instead, such Independent Director's fiduciary duty and other obligations with regard to any matter described in Paragraph 8 shall be owed to the Corporation including, without limitation, the Corporation's creditors. Every stockholder of the Corporation shall be deemed to have consented to the foregoing by virtue of such stockholder's purchase of shares of capital stock of the Corporation, and no further act or deed of any stockholder shall be required to evidence such consent. In addition, no Independent Director may be removed unless his or her successor has been duly elected. (d) The Corporation's Board of Directors is authorized to make, alter or repeal the by-laws of the corporation. Election of directors need not be by written ballot. 7. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, except for liability (i) for any breach by the director of his duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware or (iv) for any transaction from which the director derived an improper personal benefit. No repeal, modification or amendment of, or adoption of any provision inconsistent with this Paragraph 7 nor, to the fullest extent permitted by law, any modification of law shall adversely affect any right or protection of a director of the corporation existing at the time of such repeal, amendment, adoption or modification or affect the liability of any director of the corporation for any action taken or any omission that occurred prior to the time of such repeal, amendment, adoption or modification. If the General Corporation Law of the State of Delaware shall be amended after this Certificate of Incorporation is filed with the Secretary of State of Delaware to authorize corporate action further eliminating or limiting the liability of directors, then a director of the corporation, in addition to the circumstances in which he is not liable immediately prior to such amendment, shall be free of liability to the fullest extent permitted by the General Corporation Law of Delaware, as so amended. 8. The Corporation shall not, without the affirmative vote of each member of the Corporation's Board of Directors, including the affirmative vote of the Independent Director: (a) make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver, trustee or other similar official for it or for a substantial part of its property, commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute or similar law or statute of any jurisdiction, whether now or hereinafter in effect, consent or acquiesce in the filing of any such petition, application, proceeding or appointment of or taking possession by the custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Corporation or any substantial part of its property, admit its inability to pay its debts generally as they become due, or declare or effect a moratorium on its debt or authorize any of the foregoing to be done or taken on behalf of the Corporation; (b) be a party to any merger or consolidation or sell, transfer, assign, convey or lease any substantial part of the assets of the Corporation, unless the entity (if other than the Corporation) formed under or surviving the consolidation or merger or which acquires the properties or assets of the Corporation is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia, expressly assumes the due and punctual payment of, and all obligations of the Corporation in connection with, indebtedness of the Corporation permitted by this Certificate of Incorporation, has a certificate of incorporation containing provisions substantially identical to the provisions of Paragraph 3, Paragraph 6, Paragraph 8, Paragraph 9 and Paragraph 10, and, immediately after giving effect to the proposed merger, consolidation or transfer, no default or event of default under any obligation of the Corporation would occur and be continuing; or (c) dissolve or liquidate, in whole or in part; provided that if there is not one Independent Director then in office and acting, a vote upon any matter set forth in this Paragraph 8 shall not be taken unless and until one Independent Director shall have been duly elected. 9. Without the affirmative vote of each member of the Corporation's Board of Directors, including the affirmative vote of the Independent Director, the Corporation shall not amend Paragraph 3, Paragraph 6, Paragraph 8, Paragraph 10, and this Paragraph 9 (together, the "Independent Director Provisions") of this Certificate of Incorporation or any By-laws of the Corporation related to the Independent Director Provisions; provided that if there is not one Independent Director then in office, no vote upon any matter set forth in this Paragraph 9 shall be taken unless and until one Independent Director shall have been duly elected. 10. The Corporation shall take all reasonable steps to continue its identity as a separate legal entity and to make it apparent to third Persons that the Corporation is an entity with assets and liabilities distinct from those of Morgan Stanley Dean Witter & Co. and any other Person, and that the Corporation is not a division of Morgan Stanley Dean Witter & Co. or any other Person. Without limiting the generality of the foregoing, the Corporation shall take the following actions: (a) The Corporation will compensate each of its employees, consultants and agents from the Corporation's own funds for services provided to the Corporation, except as provided in the Services Agreement between the Corporation and Morgan Stanley & Co. Incorporated (the "Services Agreements"). Morgan Stanley Dean Witter and its subsidiaries and affiliates may act as agent of the Corporation only through express agencies created by arms-length agreements and any such agencies will be conducted only on a fully disclosed basis and for fair compensation. Accountants and attorneys will be fairly compensated by the Corporation for their fees and other charges as agreed to by the Corporation and such accountants or attorneys (as applicable). (b) The Corporation shall pay from its own assets all obligations of any kind incurred by the Corporation, recognizing, however, that certain organizational expenses of the Corporation have been or shall be paid by Morgan Stanley & Co. Incorporated in such capacity. (c) The Corporation shall take all appropriate action necessary to maintain its existence in good standing under the laws of the State of Delaware. The Corporation shall conduct its own business in its own name and shall observe all customary formalities, including holding regular meetings of its Board of Directors and its stockholders and maintenance of current minute books. Regular meetings of the Board of Directors shall be held at least annually. (d) The Corporation will allocate fairly and reasonably any overhead for shared office space. (e) The Corporation will maintain financial reports, corporate records and books of account separate from those of any other person, and stationery, invoices, and business forms that are separate and distinct from those of any other Person. (f) Any financial statements of any Affiliate of the Corporation which are consolidated to include the Corporation will contain detailed notes clearly stating that (i) all of the Corporation's assets are owned by the Corporation and (ii) the Corporation is a separate corporate entity with its own separate creditors which will be entitled to be satisfied out of the Corporation's assets prior to any asset of the Corporation becoming available to the holder of any stock of the Corporation. (g) The Corporation shall not commingle its assets with those of any of its Affiliates. The Corporation's assets will be separately identified and segregated. All of the Corporation's assets shall at all times be held by or on behalf of the Corporation, and, if held on behalf of the Corporation by another entity, shall be kept identifiable (in accordance with customary usages) as assets owned by the Corporation. The Corporation will strictly observe corporate formalities in its dealings with each of its Affiliates. The Corporation shall not maintain joint bank accounts or other depository accounts to which any of its Affiliates has independent access. (h) The Corporation shall not, directly or indirectly, be named and shall not enter into an agreement to be named as a direct or contingent beneficiary or loss payee on any insurance policy covering the property of any of its Affiliates. (i) The Corporation will maintain arm's length relationships with each of its Affiliates. All business transactions entered into by the Corporation with any of its Affiliates shall be on terms that are not more or less favorable to the Corporation than the terms and conditions that could have been obtained, under similar circumstances, from unaffiliated persons. In addition, except for transactions under the Services Agreement, purchases of Debt Securities or Credit Support by the Corporation for the purposes of the formation of Trusts and issuance of Units pursuant to the Program Documents, sales of Units by the Corporation to or through its broker-dealer Affiliates pursuant to a Distribution Agreement, and other transactions contemplated by the Program Documents in the ordinary course of the Corporation's business, all business transactions entered into by the Corporation with any of its Affiliates shall be approved by the unanimous written consent of the Board of Directors. The Corporation will pay its own liabilities out of its own funds. Neither the Corporation nor any of its Affiliates will guarantee the debts of the other, will pledge, or grant a security interest in or lien upon, its assets for the benefit of the other, or will be or will hold itself out to be responsible for the debts of the other or the decisions or actions respecting the daily business and affairs of the other. (j) The annual financial statements of the Corporation will disclose, in accordance with generally accepted accounting principles, any transactions between the Corporation and any of its Affiliates. (k) The Corporation will retain as its auditors a nationally recognized firm of certified public accountants. I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of Delaware, do make this Certificate, declaring and certifying that this is my act and deed and the facts stated herein are true, and accordingly have set my hand this 21st day of September, 1998. /s/ Susan Krause ----------------------- Susan Krause Sole Incorporator EX-3.2 4 BY-LAWS BY-LAWS of MSDW STRUCTURED ASSET CORP. (a Delaware Corporation) (As Adopted on September 30, 1998) ------------------ \ ARTICLE I Offices Section 1.1. Registered Office in Delaware. The registered office of MSDW Structured Asset Corp. (the "Corporation") in the State of Delaware shall be in the City of Wilmington, County of New Castle, and the registered agent in charge thereof shall be The Corporation Trust Company. ARTICLE II Meetings of Stockholders Section 2.1. Place of Meetings. All meetings of stockholders shall be held at such place or places, within or without the State of Delaware, as may from time to time be fixed by the Board of Directors, or as shall be specified in the respective notices, or waivers of notice, thereof. Section 2.2. Annual Meetings. The annual meeting of stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which meetings the stockholders shall elect a Board of Directors and transact such other business as may properly be brought before the meeting. Section 2.3. Special Meetings. A special meeting of the stockholders may be called at any time and for any purpose or purposes by the President or the Chairman of the Board or by order of the Board of Directors, and shall be called by the Secretary upon the written request of the holders of record of at least 80% of the voting power of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors. Every such request shall state the purpose or purposes of each meeting. Section 2.4. Notice of Meetings. Except as otherwise expressly required by law, written notice of each meeting of stockholders, whether annual or special, stating the place, date and hour of the meeting shall be given not less than ten days nor more than fifty days before the date on which the meeting is to be held, to each stockholder of record entitled to vote thereat by delivering a notice thereof to him personally or by mailing such notice in a postage prepaid envelope directed to him at his address as it appears on the stock ledger of the Corporation, unless he shall have filed with the Secretary of the Corporation a written request that notices intended for him be directed to another address, in which case such notice shall be directed to him at the address designated in such request. If any stockholder shall, in person or by attorney thereunto authorized, in writing or by telegraph, cable, telecopy or telex, waive notice of any meeting of the stockholders, whether prior to or after such meeting, notice thereof need not be given to him. Every notice of a special meeting of the stockholders, besides stating the time and place of the meeting, shall state briefly the purpose or purposes thereof. Section 2.5. List of Stockholders. It shall be the duty of the Secretary or other officer of the Corporation who shall have charge of the stock ledger to prepare and make, at least ten days before every meeting of the stockholders, a complete list of the stockholders entitled to vote thereat, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in his name. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall be kept and produced at the time and place of the meeting during the whole time thereof and subject to the inspection of any stockholder who may be present. The original or duplicate stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, such list or the books of the Corporation or to vote in person or by proxy at such meeting. Section 2.6. Quorum. At each meeting of the stockholders, the holders of record of a majority of the issued and outstanding stock of the Corporation entitled to vote at such meeting, present in person or by proxy, shall constitute a quorum for the transaction of business, except where otherwise provided by law, the Certificate of Incorporation or these ByLaws. In the absence of a quorum, any officer entitled to preside at, or act as Secretary of, such meeting shall have the power to adjourn the meeting from time to time until a quorum shall be constituted. Section 2.7. Voting. At all meetings of the stockholders, a quorum being present, all matters shall be decided by majority vote of the shares of stock entitled to vote held by the stockholders present in person or by proxy, except as otherwise required by the Certificate of Incorporation or the laws of the State of Delaware. Unless otherwise provided in the Certificate of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted after three years from its date, unless the proxy provides for a longer period. Section 2.8. Action Without Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III Board of Directors Section 3.1. Number, Term of Office and Eligibility. The number of directors shall be fixed from time to time by resolution of the stockholders or Board of Directors of the Corporation. Each director shall hold office until his successor is elected and qualified, or until his earlier resignation or removal. Section 3.2. Quorum and Manner of Acting. At all meetings of the Board of Directors a majority of the total number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by the laws of the State of Delaware, the Certificate of Incorporation or the By-Laws. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.3. Annual Meeting. Immediately after each annual meeting of stockholders for the election of directors the Board of Directors shall meet at the place of the annual meeting of stockholders for the purpose of organization, the election of officers and the transaction of other business. Notice of such meeting need not be given. If such meeting is held at any other time or place, notice thereof must be given or waived as hereinafter provided for special meetings of the Board of Directors. Section 3.4. Regular Meetings. Regular meetings of the Board of Directors may be held at such time and place, within or without the State of Delaware, as shall from time to time be determined by the Board of Directors. After there has been such determination, and notice thereof has been once given to each member of the Board of Directors, regular meetings may be held without further notice being given. Section 3.5. Special Meetings; Notice. Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board or the President. Notice of each such meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least two days before the date on which the meeting is to be held, or shall be sent to him at such place by telegraph, cable, telecopy or telex, or be delivered personally or by telephone, not later than the day before the day on which such meeting is to be held. Each such notice shall state the time and place of the meeting and the purposes thereof. If any director shall, in person or by attorney thereunto authorized, in writing or by telegraph, cable, telecopy or telex, waive notice of any meeting of the Board of Directors, whether prior to or after such meeting, notice thereof need not be given to him. No notice to or waiver by any director with respect to any special meeting shall be required if such director shall be present at said meeting. Section 3.6. Resignation. Any director of the Corporation may resign at any time by giving written notice to the Chairman of the Board, if any, the President or the Secretary of the Corporation. The resignation of any director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 3.7. Newly-Created Directorships and Vacancies on the Board of Directors. Subject to the rights of the holders of any class or series of stock having preference over the Common Stock as to dividends or upon liquidation, dissolution or winding up of the Corporation to elect directors under specified circumstances, if any, newly-created directorships resulting from any increase in the authorized number of directors or any vacancies on the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled by a majority vote of the directors then in office, although less than a quorum, or by a majority of the votes cast by the holders of the Voting Stock; and any director so chosen shall hold office for the remaining term of his predecessor or, if there shall have been no predecessor, until the next annual election of directors or until his successor shall have been duly elected and qualified. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. Section 3.8. Removal of Directors. Subject to the rights of the holders of any class or series of stock having preference over the Common Stock as to dividends or upon liquidation, dissolution or winding up of the Corporation to elect directors under specified circumstances, if any, any director, or the entire Board of Directors, may be removed from office at any time, with or without cause, only by the affirmative vote of the holders of at least 80% of the voting power of the Voting Stock, voting together as a single class. Section 3.9. Compensation of Directors. The Board of Directors shall have the authority to fix the compensation of directors and of members of committees of directors. Section 3.10. Action Without Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the records of the proceedings of the Board or committee. Section 3.11. Meeting by Conference Telephone. Directors and members of any committee designated by the Board of Directors may participate in a meeting of the Board of Directors or of such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section shall constitute presence in person at such meeting. ARTICLE IV Committees of Directors Section 4.1. Designation of Committees. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Section 4.2. Vacancies. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Section 4.3. Powers. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors to the extent provided by Section 141(c) of the General Corporation Law of the State of Delaware as it exists now or may hereafter be amended. Section 4.4. Minutes of Committee Meetings. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required. ARTICLE V Officers Section 5.1. Principal Officers. The Board of Directors shall elect a President, a Secretary and a Treasurer, and may in addition elect a Chairman of the Board, a Chief Financial Officer, one or more Vice Presidents, one or more Assistant Secretaries and one or more Assistant Treasurers. One person may hold, and perform the duties of, any two or more of said offices. Section 5.2. Election, Term of Office and Eligibility. The officers of the Corporation referred to in Section 5.1 shall be elected annually by the Board of Directors at the annual meeting thereof. Each such officer shall hold office until his successor shall have been duly elected and shall qualify, or until his death or until he shall resign or shall have been removed. Section 5.3. Other Officers. The Board of Directors may appoint such other officers as it may from time to time determine, each of whom shall hold office for such period, and perform such duties as the President or the Board of Directors may from time to time determine. The Board of Directors may delegate to any officer referred to in Section 5.1 the power to appoint and to remove any such officers. Section 5.4. Removal. Any officer may be removed, either with or without cause, at any time, by resolution adopted by the Board of Directors at any regular meeting of the Board or at any special meeting of the Board called for that purpose at which a quorum is present. Section 5.5. Resignations. Any officer may resign at any time by giving written notice to the Board of Directors, to the Chairman of the Board, if any, the President or the Secretary of the Corporation. The resignation of any officer shall take effect upon receipt of notice or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 5.6. Chairman of the Board. The Chairman of the Board, if any, shall preside at all meetings of stockholders and at all meetings of the Board of Directors. Subject to the control and the direction of the Board of Directors, the Chairman of the Board may enter into any contract and execute and deliver any instrument in the name and on behalf of the Corporation. The Chairman of the Board shall perform such other duties and have such other powers as the Board of Directors shall prescribe. Section 5.7. President. In the absence of the Chairman of the Board, the President shall preside at all meetings of the stockholders and at all meetings of the Board of Directors. Subject to the control and the direction of the Board of Directors, the President may enter into any contract and execute and deliver any instrument in the name and on behalf of the Corporation. The President shall perform such other duties and have such other powers as the Board of Directors shall prescribe. Section 5.8. Chief Financial Officer. The Chief Financial Officer shall be responsible for the financial affairs of the Corporation, including overseeing the duties performed by the Treasurer of the Corporation. Subject to the control and direction of the Board of Directors, the Chief Financial Officer may enter into any contract and execute and deliver any instrument in the name of and on behalf of the Corporation. The Chief Financial Officer shall perform such other duties and have such other powers as the Board of Directors prescribes. Section 5.9. Vice Presidents. The Vice Presidents shall perform such duties and have such powers as the President or the Board of Directors may from time to time prescribe. Subject to the control and the direction of the Board of Directors, each Vice President may enter into any contract and execute and deliver any instrument in the name and on behalf of the Corporation. Section 5.10. Secretary. The Secretary, if present, shall act as Secretary at all meetings of the Board of Directors and of the stockholders and keep the minutes thereof in a book or books to be provided for that purpose; he shall see that all notices required to be given by the Corporation are duly given and served; he shall have charge of the stock records of the Corporation; he shall see that all reports, statements and other documents required by law are properly kept and filed; and, in general, he shall perform all the duties incident to the office of Secretary. Section 5.11. Assistant Secretary. The Assistant Secretary, if any, or, if there be more than one, the Assistant Secretaries, in the order determined by the Board of Directors, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors, the Chairman of the Board or the President may from time to time prescribe. Section 5.12. Treasurer. The Treasurer shall have charge and custody of, and be responsible for, all funds and securities of the Corporation and shall deposit all such funds in the name of the Corporation in such banks or other depositories as shall be selected by the Board of Directors or by such officers as shall be designated by the Board of Directors. He shall exhibit at all reasonable times his books of account and records to any of the directors of the Corporation upon application during business hours at the office of the Corporation where such books and records shall be kept; when requested by the Board of Directors, he shall render a statement of the condition of the finances of the Corporation at any meeting of the Board or at the annual meeting of stockholders; he shall receive, and give receipt for, moneys due and payable to the Corporation from any source whatsoever; and, in general, he shall perform all the duties incident to the office of Treasurer. The Treasurer shall give such bond, if any, for the faithful discharge of his duties as the Board of Directors may require. Section 5.13. Assistant Treasurer. The Assistant Treasurer, if any, or, if there shall be more than one, the Assistant Treasurers, in the order determined by the Board of Directors, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors, the Chairman of the Board or the President may from time to time prescribe. ARTICLE VI Shares and Their Transfer Section 6.1. Certificates for Stock. The interest of each stockholder in the Corporation shall be evidenced by a certificate or certificates for shares of stock of the Corporation certifying the number of shares owned by him, in such form as the Board of Directors may from time to time prescribe. The certificates for shares of stock of the Corporation shall be signed by the Chairman of the Board, the President or a Vice President and by the Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer, and shall be countersigned and registered in such manner, if any, as the Board of Directors may by resolution prescribe; provided, however, that in case such certificates are signed by a transfer agent other than the Corporation or its employee or by a registrar other than the Corporation or its employee the signatures of the Chairman of the Board, President, Vice President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may be facsimile; and further provided that in case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures shall have been used thereon had not ceased to be such officer or officers of the Corporation. Section 6.2. Stock Ledger. A record shall be kept by the Secretary, transfer agent or by any other officer, employee or agent designated by the Board of Directors of the name of each person, firm or corporation holding capital stock of the Corporation, the number of shares represented by, and the respective dates of, each certificate for such capital stock, and in case of cancellation of any such certificate, the respective dates of cancellation. Section 6.3. Cancellation. Every certificate surrendered to the Corporation for exchange or registration of transfer shall be canceled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so canceled, except as provided in Section 6.5 and in cases provided by the applicable law. Section 6.4. Transfers. Shares of stock shall be transferable on the books of the Corporation by the holder of record thereof in person or by his attorney upon surrender of such certificate with an assignment endorsed thereon or attached thereto duly executed and with such proof of authenticity of signatures as the Corporation may reasonably require. The Board of Directors may make such rules and regulations as it may deem expedient, not inconsistent with the Certificate of Incorporation or these By-Laws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. The Board of Directors may appoint, or authorize any principal officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates of stock to bear the signature or signatures of any of them. Section 6.5. Lost, Stolen, Destroyed or Mutilated Certificates. Before any certificates for stock of the Corporation shall be issued in exchange for certificates which shall become mutilated or shall be lost, stolen or destroyed, proper evidence of such loss, theft, mutilation or destruction shall be procured for the Board of Directors, if it so requires. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 6.6. Record Dates. For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a date as a record date for any such determination of stockholders. Such record date shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. ARTICLE VII Indemnification The Corporation shall indemnify, to the fullest extent permitted by applicable law, any person who was or is a party or is threatened to be made a party to, or is involved in any manner in, any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that such person (1) is or was a director or officer of the Corporation or a Subsidiary or (2) is or was serving at the request of the Corporation or a Subsidiary as a director, officer, partner, member, employee or agent of another corporation, partnership, joint venture, trust, committee or other enterprise. To the extent deemed advisable by the Board of Directors, the Corporation may indemnify, to the fullest extent permitted by applicable law, any person who was or is a party or is threatened to be made a party to, or is involved in any manner in, any threatened, pending or completed action, suit or proceeding (whether civil, criminal, administrative or investigative) by reason of the fact that the person is or was an employee or agent (other than a director or officer) of the Corporation or a Subsidiary. The Corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation or a Subsidiary, or is or was serving at the request of the Corporation or a Subsidiary as a director, officer, partner, member, employee or agent of another corporation, partnership, joint venture, trust, committee or other enterprise, against any expense, liability or loss asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation or a Subsidiary would have the power to indemnify him against such expense, liability or loss under the provisions of applicable law. No repeal, modification or amendment of, or adoption of any provision inconsistent with, this Article VII, nor to the fullest extent permitted by applicable law, any modification of law shall adversely affect any right or protection of any person granted pursuant hereto existing at, or with respect to events that occurred prior to, the time of such repeal, amendment, adoption or modification. For purposes of this Article VII the term "Subsidiary" or "Subsidiaries" shall mean a corporation(s), all of the capital stock of which is owned directly or indirectly by the Corporation, other than directors' qualifying shares. The right to indemnification conferred in this Article VII also includes, to the fullest extent permitted by applicable law, the right to be paid the expenses (including attorney's fees) incurred in connection with any such proceeding in advance of its final disposition. The payment of any amounts to any director, officer, partner, member, employee or agent pursuant to this Article VII shall subrogate the Corporation to any right such director, officer, partner, member, employee or agent may have against any other person or entity. The rights conferred in this Article VII shall be contract rights. ARTICLE VIII Liability of Directors A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, except for liability (i) for any breach by the director of his duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware or (iv) for any transaction from which the director derived an improper personal benefit. No repeal, modification or amendment of, or adoption of any provision inconsistent with, this Article VIII nor, to the fullest extent permitted by law, any modification of law shall adversely affect any right or protection of a director of the Corporation existing at the time of such repeal, amendment, adoption or modification or affect the liability of any director of the Corporation for any action taken or any omission that occurred prior to the time of such repeal, amendment, adoption or modification. If the General Corporation Law of the State of Delaware shall be amended, after these By-Laws are amended to include this Article VIII, to authorize corporate action further eliminating or limiting the liability of directors, then a director of the Corporation, in addition to the circumstances in which he is not liable immediately prior to such amendment, shall be free of liability to the fullest extent permitted by the General Corporation Law of the State of Delaware, as so amended. ARTICLE IX Miscellaneous Provisions Section 9.1. Corporate Seal. The Board of Directors shall provide a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and words and figures showing that it was incorporated in the State of Delaware in the year 1998. The Secretary shall be the custodian of the seal. Section 9.2. Fiscal Year. The fiscal year of the Corporation shall be as specified by the Board of Directors. Section 9.3. Voting of Stocks Owned by the Corporation. The Board of Directors may authorize any person on behalf of the Corporation to vote and grant proxies to be used at any meeting of stockholders of any corporation (except this Corporation) in which the Corporation may hold stock. ARTICLE X Amendment of By-Laws In furtherance of and not in limitation of the powers conferred by statute, the Board of Directors of the Corporation from time to time may make, amend or repeal the ByLaws of the Corporation; provided that any By-Laws may be amended or repealed, and may be made, by the stockholders of the Corporation. Notwithstanding any other provisions of the Certificate of Incorporation of the Corporation or these By-Laws (and not withstanding the fact that a lesser percentage may be specified by law, the Certificate of Incorporation or these ByLaws), the affirmative vote of the holders of at least 80% of the voting power of the Voting Stock, voting together as a single class, shall be required for the stockholders of the Corporation to amend, repeal or adopt any By-Laws of the Corporation. EX-4.1 5 STANDARD TERMS FOR TRUST AGREEMENTS STRUCTURED ASSET TRUST UNIT REPACKAGINGS - ----------------------------------------------------------------------------- STANDARD TERMS FOR TRUST AGREEMENTS MSDW Structured Asset Corp. (as Depositor) and Chase Bank of Texas, National Association (as Trustee) - ----------------------------------------------------------------------------- TABLE OF CONTENTS Page ---- ARTICLE I Definitions; Construction SECTION 1.01. Definitions....................................................1 SECTION 1.02. Rules of Construction.........................................12 SECTION 1.03. Article and Section References................................13 ARTICLE II Declaration of Trust; Entry into Swap Agreement SECTION 2.01. Creation and Declaration of Trust; Assignment of Securities...13 SECTION 2.02. Entry into Swap Agreement and Distribution Agreement..........14 SECTION 2.03. Acceptance by Trustee.........................................14 SECTION 2.04. Representations and Warranties of the Depositor...............14 SECTION 2.05. Breach of Representation or Warranty..........................15 SECTION 2.06. Agreement to Authenticate and Deliver Units...................16 ARTICLE III Trust Powers; Administration of the Trust Property SECTION 3.01. Trust Property................................................16 SECTION 3.02. Administration of the Trust...................................16 SECTION 3.03. Collection of Certain Security Payments.......................18 SECTION 3.04. Sale..........................................................18 SECTION 3.05. Unit Account..................................................18 SECTION 3.06. Investment of Funds in the Accounts...........................19 SECTION 3.07 Retained Interest.............................................19 SECTION 3.08. Access to Certain Documentation...............................19 ARTICLE IV Distributions and Reports to Unitholders SECTION 4.01. Distributions.................................................20 SECTION 4.02. Reports to Unitholders........................................20 SECTION 4.03. Calculation of Interest Rates.................................22 SECTION 4.04. Compliance with Tax Reporting and Withholding Requirements....22 SECTION 4.05. Preservation of Information, Communications to Holders........22 ARTICLE V The Units SECTION 5.01. The Units.....................................................23 SECTION 5.02. Execution, Authentication and Delivery........................23 SECTION 5.03. Registration; Registration of Transfer and Exchange...........24 SECTION 5.04. Mutilated, Destroyed, Lost and Stolen Units...................25 SECTION 5.05. Distributions in Respect of Units.............................26 SECTION 5.06. Persons Deemed Owners.........................................26 SECTION 5.07. Cancellation..................................................27 SECTION 5.08. Currency of Distributions in Respect of Units; Redenomination................................................27 SECTION 5.09. Appointment of Paying Agent...................................27 SECTION 5.10. Authenticating Agent..........................................28 SECTION 5.11. Issuance and Transfer Restrictions............................29 SECTION 5.12. Optional Exchange.............................................31 SECTION 5.13. Limitation on Issuance of Bearer Units........................33 SECTION 5.14. Callable Units................................................34 SECTION 5.15. Delivery of Information.......................................34 ARTICLE VI The Depositor SECTION 6.01. Liability of the Depositor....................................35 SECTION 6.02. Limitation on Liability of the Depositor......................35 SECTION 6.03. Depositor May Purchase Units..................................35 SECTION 6.04. Preparation and Filing of Exchange Act Reports; Obligations of the Depositor..................................35 SECTION 6.05. Preferential Collection of Claims Against Depositor...........36 ARTICLE VII Rights of Unitholders SECTION 7.01. Voting Rights with Respect to Securities......................36 SECTION 7.02. Amendments and Waivers Under Swap Agreement and Guarantee.......................................37 ARTICLE VIII Default on Securities and Permitted Investments SECTION 8.01. Realization Upon Default......................................37 ARTICLE IX Trust Wind-Up Events SECTION 9.01. Trust Wind-Up Events..........................................38 SECTION 9.02. Liquidation Events............................................39 SECTION 9.03. Trust Property Made Available.................................39 SECTION 9.04. Limitation on Notice Requirement..............................42 SECTION 9.05. Expense Event.................................................42 SECTION 9.06. Special Depositor Wind-Up Event...............................43 ARTICLE X Concerning the Trustee SECTION 10.01. Duties of Trustee............................................43 SECTION 10.02. Certain Matters Affecting the Trustee........................44 SECTION 10.03. Limitation on Liability of Trustee...........................45 SECTION 10.04. Trustee May Own Units........................................46 SECTION 10.05. Trustee Fees and Expenses; Limited Indemnification...........46 SECTION 10.06. Eligibility Requirements for Trustee.........................47 SECTION 10.07. Resignation or Removal of the Trustee........................47 SECTION 10.08. Successor Trustee............................................48 SECTION 10.09. Merger or Consolidation of Trustee...........................48 SECTION 10.10. Appointment of Co-Trustee....................................49 SECTION 10.11. Appointment of Office or Agency..............................50 SECTION 10.12. Representations and Warranties of Trustee....................50 SECTION 10.13. Limitation of Powers and Duties..............................51 SECTION 10.14. Non-Petition.................................................51 ARTICLE XI Termination SECTION 11.01. Termination of the Trust.....................................52 ARTICLE XII Miscellaneous Terms SECTION 12.01. Amendment of Trust Agreement.................................52 SECTION 12.02. Counterparts.................................................53 SECTION 12.03. Limitation on Rights of Unitholders..........................53 SECTION 12.04. Governing Law................................................53 SECTION 12.05. Notices......................................................53 SECTION 12.06. Severability of Terms........................................54 SECTION 12.07. Notice to Rating Agencies....................................54 SECTION 12.08. Perfection of Swap Counterparty Security Interest............54 SECTION 12.09. No Recourse..................................................55 SECTION 12.10. Conflict With Trust Indenture Act............................55 EXHIBIT A Trust Agreement and Terms Schedule EXHIBIT B-1 Form of Registered Unit EXHIBIT B-2 Form of Bearer Unit STRUCTURED ASSET TRUST UNIT REPACKAGINGS STANDARD TERMS FOR TRUST AGREEMENTS Chase Bank of Texas, National Association, as Trustee MSDW Structured Asset Corp., as Depositor These Standard Terms for Trust Agreements, dated April ___, 1999 ("Standard Terms"), may be incorporated by reference in one or more Trust Agreements (each a "Trust Agreement") relating to a particular series of Structured Asset Trust Unit Repackagings described in the Prospectus dated __________ and the applicable Prospectus Supplement. Any such Trust Agreement may be in the form of Exhibit A hereto or such other form as MSDW Structured Asset Corp. (the "Depositor") and the Trustee may approve, such approval to be evidenced by their execution thereof. All terms defined herein shall have meanings solely with respect to the particular Trust Agreement in which these Standard Terms are incorporated. Incorporation of these Standard Terms into a Trust Agreement is for convenience only to avoid the necessity of physically including the Standard Terms in such Trust Agreement, and each trust created by a Trust Agreement shall be a legally separate and distinct trust from any other trust created by any other Trust Agreement into which these Standard Terms may also be incorporated. These Standard Terms shall by themselves be of no force and effect, and shall only have effect as and to the extent incorporated by reference in a Trust Agreement. Execution hereof by the Trustee and the Depositor is for purposes of identification only and the absence of such execution shall not affect the validity of any Trust Agreement or these Standard Terms to the extent incorporated therein. The Trust Agreement into which these Standard Terms are incorporated by reference, including the Terms Schedule attached thereto and made a part thereof and these Standard Terms so incorporated by reference therein, as amended, modified or supplemented from time to time, shall together constitute a single Trust Agreement and are referred to herein as the "Trust Agreement". In the event of a conflict between any Trust Agreement, including the Terms Schedule attached thereto, and these Standard Terms, the Trust Agreement and Terms Schedule shall control. ARTICLE I Definitions; Construction SECTION 1.01. Definitions. Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of these Standard Terms: "Account": As defined in Section 3.05. "Affected Securities": With respect to any Liquidation Event, the Securities affected by a Security Default, Disqualified Securities, or Securities related to a Disqualified Transaction. "Affected Transaction": As defined in the Swap Agreement. "Affiliate": With respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control", when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Alternative ERISA Restrictions": The restrictions on transfer of Units set forth in Section 5.11(d)(1). "Authenticating Agent": As defined in Section 5.10. "Authorized Newspaper": As defined in Section 12.05. "Available Funds": With respect to any Distribution Date, (i) all amounts received by the Trustee on or with respect to the Securities or other Trust Property plus (ii) all investment income from Permitted Investments plus (iii) all Swap Amounts, if any, paid to the Trustee by the Swap Counterparty pursuant to the Swap Agreement, or by the Guarantor pursuant to the Guarantee, minus (iv) all amounts paid or payable to the Swap Counterparty by the Trustee pursuant to the Swap Agreement, minus (v) any amounts reimbursable to the Trustee under Section 10.02(ix), in each case on deposit in the Unit Account, and available for distribution, on such Distribution Date. "Bearer Unit": Any Unit (with or without coupons), title of which passes by delivery only, but exclusive of any coupons. "Benefit Plan": The meaning specified in Section 5.11(d). "Book-Entry Unit": A Unit represented by a Global Security. "Business Day": As specified in the Terms Schedule. "Calculation Agent": As specified in the Terms Schedule, if any. "Call Date": As defined in Section 5.14. "Call Option": As specified in the Terms Schedule. "Call Price": As defined in Section 5.14. "Callable Series": A Series so designated in the Terms Schedule which grants one or more specified persons the right to purchase all or a portion of the Units of any given Series. "CEDEL": Cedelbank, S.A. "Certificate": A certificate in the form attached as Exhibit B1, evidencing a Registered Unit or B2, evidencing a Bearer Unit. "Certificate of Non-U.S. Beneficial Ownership": As defined in Section 5.13. "Class": A separately denominated class of the Units of any Series, entitled to specified distributions of the Trust Property. "Closing Date": As specified in the Terms Schedule. "Code": The Internal Revenue Code of 1986, as amended, and Treasury Regulations promulgated thereunder. "Commission": The Securities and Exchange Commission, or any successor agency. "Concentrated Security": Any Security that on the Closing Date constitutes 10% or more of the total Securities held by the Trust with respect to a Series of Units. "Corporate Trust Office": The Trustee's offices at 600 Travis Street, 9th Floor, Chase Tower, Houston, Texas 77002, Texas Commerce Trust Company of New York, 55 Water Street, North Building, Room 234, Windows 20 and 21, New York, New York 10041 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. "Credit Support": With respect to any Series (or any Class within such Series), any combination of insurance policies, letters of credit, reserve accounts and other types of rights or assets designed to support or ensure the servicing and distribution of amounts due in respect of the Trust Property, which in each case is specified as such in the applicable Terms Schedule. "Credit Support Provider": With respect to any Series (or any Class within such Series), the bank issuing a letter of credit or the financial guarantor or surety company issuing a financial guaranty or surety bond that serves as Credit Support with respect to such Series or Class. "Currency": Dollars or Foreign Currency. "Definitive Registered Unit": A Registered Unit in definitive, certificated form without coupons attached. "Depositary": DTC or, if so provided in the Terms Schedule, Euroclear or CEDEL; or another depositary specified in the Terms Schedule. "Depositor": MSDW Structured Asset Corp., a Delaware corporation, and any of its successors or assigns. "Depositor Order" or "Depositor Requests": A written order or request, respectively, signed in the name of the Depositor by any of its Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, President, a Vice President, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee. "Disqualified Credit Support": Any Credit Support with respect to which (i) the related Credit Support Provider ceases to be an Eligible Issuer and no means of replacing such Credit Support Provider or otherwise satisfying the Depositor's reporting obligations under the Exchange Act regarding the related Credit Support is described in the Terms Schedule; (ii) whether or not the Credit Support Provider was initially an Eligible Issuer, it becomes impossible or impractical for the Depositor to satisfy its reporting obligations under the Exchange Act regarding the related Credit Support. For purposes of the foregoing, a Credit Support Provider which is fully guaranteed by a guarantor who is an Eligible Issuer will be considered an Eligible Issuer. "Disqualified Security": Any Security (i) the issuer of which ceases to be an Eligible Issuer, where no additional means of providing current information regarding such Security Issuer is described in the Terms Schedule or (ii) with respect to which it becomes impossible or impractical for the Depositor to satisfy its reporting obligations under the Exchange Act (whether or not it is a Concentrated Security and whether or not the related Security Issuer was initially an Eligible Issuer). For purposes of the foregoing, a Security Issuer which is fully guaranteed by a guarantor who is an Eligible Issuer will be considered an Eligible Issuer. "Disqualified Transaction": Any Transaction under a Swap Agreement with respect to which (i) the Swap Counterparty ceases to be an Eligible Issuer and no means of replacing such Swap Counterparty or otherwise satisfying the Depositor's reporting obligations under the Exchange Act regarding such Transaction is described in the Terms Schedule; (ii) whether or not the related Swap Counterparty was initially an Eligible Issuer, it becomes impossible or impractical for the Depositor to satisfy its reporting obligations under the Exchange Act regarding such Transaction; or (iii) that is a credit swap transaction with respect to which the Deliverable Obligation is a Disqualified Security. For purposes of the foregoing, a Swap Counterparty which is fully guaranteed by a guarantor who is an Eligible Issuer will be considered an Eligible Issuer. "Distribution Agreement": The agreement between each Distribution Participant and the Trust relating to the distribution of the Units. "Distribution Date": As specified in the Terms Schedule. "Distribution Participant": Each Person acting as underwriter, dealer, placement agent or any similar capacity in connection with the initial distribution of the Units. "Dollar" or "$" or "USD": Such currency of the United States as at the time of payment is legal tender for the payment of public and private debts. "DTC": The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, its successors and assigns. "D&P": Duff & Phelps Credit Rating Co. "Early Termination Date": As defined in the Swap Agreement. "Eligible Account": A non-interest bearing account, held in either the United States or the United Kingdom, 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-i and Aaa by Moody's, A-1+ and AAA by S&P, and, if rated by D&P, D-1+ and AAA by D&P 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. "Eligible Issuer": (i) the United States government, (ii) any corporation, limited partnership, trust, limited liability company or other organization, banking organization or insurance company, in each case which meets the market capitalization and other requirements for a primary issuance of common stock on Form S-3 under the Securities Act and is subject to the informational requirements of the Exchange Act, and which, in accordance therewith, files reports and other information with the Securities and Exchange Commission (or another applicable agency pursuant to Section 12(i) of the Exchange Act), (iii) the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation or other government sponsored enterprise that has a comparable market capitalization and which makes information publicly available comparable to that of Exchange Act reporting companies or (iv) obligations of or guaranteed by a foreign sovereign or political subdivision or instrumentality thereof which has offered debt securities in the United States pursuant to a registration statement filed with the Commission containing information required by Schedule B of the Securities Act ("Schedule B"), that qualifies as a "seasoned" issuer under Securities and Exchange Commission practice and which is eligible to use Schedule B. "ERISA": The Employee Retirement Income Security Act of 1974, as amended, including any successor or amendatory statutes. "ERISA Benefit Plan": As specified in Section 5.11(d). "Euro": As defined in Section 5.08. "Euroclear": Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear System "Event of Default": As specified in the Swap Agreement. "Excess Expense Event": As defined in Section 9.05(a). "Exchange Act": The Securities Exchange Act of 1934, as amended. "Exchange Rate Agent" Unless otherwise specified in the Terms Schedule, Morgan Stanley & Co. Incorporated ("Morgan Stanley") or an Affiliate or agent of Morgan Stanley designated by Morgan Stanley. "Executive Officer": With respect to any corporation, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of such corporation; with respect to any partnership, any general partner thereof. "Extraordinary Trust Expense": As defined in Section 10.05(b). "Foreign Currency": A currency issued by the government of any country other than the United States or a composite currency the value of which is determined by reference to the values of the currencies of any group of countries. "Global Security": A Certificate in global form issued to the Depositary and (in the case of a Registered Unit) registered in the name of the Depositary or its nominee. "Guarantee": The Guarantee (if any) identified in the Terms Schedule of the obligations of the Swap Counterparty under the Swap Agreement. If the Terms Schedule does not specify a Guarantee, references to the Guarantee and the Guarantor herein shall be deemed deleted. "Guarantor": The Guarantor who issues and is identified in the Guarantee (if a Guarantee is identified in the Terms Schedule), and, if a successor Person shall have become the Guarantor pursuant to the Guarantee, "Guarantor" shall mean such successor Person. "Independent": When used with respect to any specified Person means that the Person (1) is in fact independent of the Depositor, the Swap Counterparty and the Guarantor and of any Affiliate of any of the foregoing Persons, (2) does not have any direct or indirect financial interest in the Depositor, the Swap Counterparty or the Guarantor, or in any Affiliate of any of the foregoing Persons which is material with respect to such Person and (3) is not connected with the Depositor, the Swap Counterparty or the Guarantor, as an officer, employee, promoter, partner, director or person performing similar functions. "Initial Security Accrual Period": The period from and including the Closing Date to but excluding the next Security Payment Date. "Initial Swap Rate Accrual Period": The period from and including the Closing Date to but excluding the next Swap Payment Date. "Insolvency Law": As defined in Section 10.14. "Interest Rate": As specified in the Terms Schedule. "Investment Company Act": The United States Investment Company Act of 1940, as amended, and applicable rules thereunder. "Liquidation Event": Any of the events described in Section 9.02. "Maximum Reimbursable Amount": As specified in the Terms Schedule (or any other amount specified by the party agreeing to indemnify the Trustee). "Moody's": Moody's Investors Service, Inc. "Notional Amount": A notional amount specified in the Terms Schedule with respect to any Class of Units with respect to which distributions of interest or other distributions are determined but which does not represent a Unit Principal Balance. "Officers' Certificate": A certificate signed by any one (or, if specified in the Trust Agreement, more than one) Executive Officer of the applicable Person, and delivered to the Trustee. "Opinion of Counsel": A written opinion of counsel, who may, except as otherwise expressly provided in the Trust Agreement, be counsel for the Depositor, acceptable to the Trustee. "Optional Exchange Date": As defined in Section 5.12. "Outstanding": As of any date of determination, all Units theretofore authenticated and delivered under the Trust Agreement, except: (i) Units theretofore canceled by the Unit Registrar or delivered to the Trustee for cancellation; and (ii) Units in exchange for or in lieu of which other Units have been authenticated and delivered pursuant to the Trust Agreement, unless proof satisfactory to the Trustee is presented that any such Units are held by a bona fide purchaser in whose hands such Units represent interests in the Trust. "Paying Agent": As defined in Section 5.09. "Permitted Investments": All investments made by the Trustee pursuant to Section 3.05 in any one or more of the following; provided, however, that the total return specified by the terms of each such obligation or security is at least equal to the purchase price thereof; and provided, further, that each such obligation or security shall be held in the name of the Trustee on behalf of the Trust: (i) direct obligations of, and obligations fully guaranteed by, the United States, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Federal Farm Credit System or any agency or instrumentality of the United States the obligations of which are explicitly backed by the full faith and credit of the United States of America; provided that obligations of, or guaranteed by, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association or the Federal Farm Credit System shall be Permitted Investments only if, at the time, and during the course, of investment, it has at least the credit rating of P-1 or Aaa by Moody's, A-1+ or AAA by S&P, and, if rated by D&P, D-1+ or AAA by D&P; (ii) demand and time deposits in, certificates of deposit of, or banker' acceptances issued by any depository institution or trust company (including the Trustee or any agent of the Trustee acting in their respective commercial capacities) incorporated under the laws of the United States or any State and subject to supervision and examination by Federal and/or State banking authorities so long as the commercial paper and/or the short-term debt obligations of such depository institution or trust company at the time of, and during the course of, such investment or contractual commitment providing for such investment have at least the credit rating of P-1 or Aaa by Moody's, A-l+ or AAA by S&P, and, if rated by D&P, D-1+ or AAA by D&P (or, in the case of a depository institution which is the principal subsidiary of a holding company, the commercial paper or other short-term debt obligations of such holding company have a credit rating of P-i or Aaa by Moody's, A-1+ or AAA by S&P, and, if rated by D&P, D-l+ or AAA by D&P; (iii) commercial paper having a maturity of not more than 180 days and having at the time, and during the course, of such investment at least the credit rating of P-1 by Moody's, A-1+ by S&P, and, if rated by D&P, D-l+ by D&P; and (iv) repurchase agreements with respect to (a) any security described in clause (i) above or (b) any other security issued or guaranteed by an agency or instrumentality of the United States with an entity having the credit rating of P-1 or Aaa by Moody's, A-1+ or AAA by S&P, and, if rated by D&P, D-1+ or AAA by D&P. Copies of any repurchase agreement entered into will be delivered to the Rating Agencies, if any. In no event shall a Permitted Investment at any time constitute (a) a swap agreement as defined in the United States Bankruptcy Code, 11 U.S.C. S 101 et seq., (b) an interest-only or principal-only security or (c) a liability of the Trust in excess of the principal amount invested by the Trustee. Permitted Investments shall include, without limitation, those investments for which the Trustee or an Affiliate of the Trustee provides services. "Person": Any individual, corporation, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof. "Predecessor Unit": With respect to any particular Unit, every previous Unit evidencing all or a portion of the same interest as that evidenced by such particular Unit; and, for the purpose of this definition, any Unit authenticated and delivered under Section 5.04 in lieu of a lost, destroyed or stolen Unit shall be deemed to evidence the same interest as the lost, destroyed or stolen Unit. "Proceeding": Any suit in equity, action at law or other judicial or administrative proceeding. "Rating Agencies": As specified in the Terms Schedule. "Rating Agencies Condition": A condition, with respect to any action or occurrence of which the Rating Agencies shall have been given 10 days (or such shorter period acceptable to the Rating Agencies) prior notice, the violation of which would cause the Rating Agencies to reduce or withdraw the then current rating of any Units. "Record Date": As specified in the Terms Schedule. "Redenomination Date": As defined in Section 5.08. "Registered Unit": Any Unit in registered form ownership of which is evidenced by the Unit Register. "Responsible Officer": With respect to the Trustee, any officer within the Corporate Trust Office of the Trustee, including any Vice President, Assistant Vice President, Secretary, Assistant Secretary or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer' knowledge of and familiarity with the particular subject. "Retained Interest": If applicable, with respect to any Security or other Trust Property, an ownership interest therein and a right to a portion of the payments thereon by the obligor thereof, as specified in the Terms Schedule, held by the Person so specified in such Terms Schedule. "Scheduled Final Distribution Date": As specified in the Terms Schedule. "Securities": As specified in the Terms Schedule. "Securities Act": The Securities Act of 1933, as amended. "Security Accrual Period": The Initial Security Accrual Period and each period from and including a Security Payment Date to but excluding the next succeeding Security Payment Date. "Security Agreement": The indenture, fiscal agency agreement, or other agreement with respect to a Security which sets forth the covenants and agreements of the Security Issuer in connection with issuance of the Security. "Security Amount": With respect to each Security Payment Date, an amount equal to the accrued interest and/or other payment obligation calculated with reference to the applicable Security for the immediately preceding applicable Security Accrual Period at the applicable Security Rate. "Security Default": Unless otherwise specified in the Terms Schedule, (i) the acceleration of the maturity of the Securities under the Securities and/or the Security Agreement, as applicable, whether by declaration of the Holders thereof, the Security Trustee or otherwise, (ii) the failure to pay an installment of principal of, or any amount of interest due on, the Securities after the due date, and after the expiration of any applicable grace period or cure period, (iii) the occurrence of any event of default relating to bankruptcy or insolvency of the Security Issuer under the Securities and/or the Security Agreement, as applicable or (iv) the occurrence of a waiver, deferral, restructuring, rescheduling, exchange or other adjustment with respect to the Security such that the Swap Counterparty reasonably determines that the economic terms of the Security are materially different or the Security represents materially greater credit or other risks. A Security Default will be deemed to have occurred for all purposes of the Trust Agreement notwithstanding any rescission or annulment of any such acceleration or any subsequent payment (after the default and after any applicable grace period) of such overdue principal or interest. "Security Issuer": As specified in the Terms Schedule. "Security Payment Date": As specified in the Terms Schedule. "Security Rate": As specified in the Terms Schedule. "Security Trustee": As specified in the Terms Schedule, if applicable. "Selling Agent": Unless otherwise specified in the Terms Schedule, Morgan Stanley or any Affiliate of Morgan Stanley designated by it. "Series": All of the Units issued by a particular Trust. "Special Depositor Wind-up Event": As defined in Section 9.06. "Specified Currency": Unless otherwise specified in the Terms Schedule, United States Dollars. "State": Any one of the 50 states of the United States or the District of Columbia. "S&P": Standard & Poor's Ratings Service, a division of The McGraw-Hill Companies, Inc. "Swap Agreement": The ISDA Master Agreement (including the Schedule thereto and Confirmation or Confirmations thereunder and any ISDA Credit Support Annex forming a part thereof), if any, to which the Trust is a party identified in the Terms Schedule. In the event that the Trust shall enter into more than one ISDA Master Agreement, "Swap Agreement" shall mean each such ISDA Master Agreement specified in the Terms Schedule. "Swap Amount": With respect to each Swap Payment Date, an amount, payable by, or on behalf of, the Swap Counterparty, equal to the accrued interest or other payment obligation calculated with reference to the Swap Notional Amount for the immediately preceding Swap Rate Accrual Period at the Swap Rate. "Swap Calculation Agent": The "Calculation Agent" as defined in the Swap Agreement. "Swap Counterparty": Morgan Stanley Capital Services, Inc., unless another Person is identified in the Terms Schedule as the counterparty of the Trust under the Swap Agreement; unless a successor Person shall have become the Swap Counterparty pursuant to the applicable terms of the Swap Agreement, whether by assignment or otherwise, and thereafter "Swap Counterparty" shall mean such Person. In the event that the Trust shall enter into more than one Swap Agreement, "Swap Counterparty" shall mean each counterparty of the Trust specified in the Terms Schedule. "Swap Default": The occurrence of an "Event of Default" (as defined in the Swap Agreement) under the Swap Agreement. "Swap Notional Amount": As specified in the Terms Schedule. "Swap Payment Date": As specified in the Terms Schedule. "Swap Rate": As specified in the Terms Schedule. "Swap Rate Accrual Period": The Initial Swap Rate Accrual Period and each period from and including a Swap Payment Date to but excluding the next succeeding Swap Payment Date. "Termination Event": As defined in the Swap Agreement. "Termination Payment": Any amounts payable under the Swap Agreement in accordance with its terms, whether to or by the Trust, as the case may be, in consequence of an early termination of one or more Transactions under the Swap Agreement. "Terms Schedule": The schedule or schedules (which may be in the form of Schedules I, II and III attached to Exhibit A hereto) which contains information with respect to the particular terms of the Units, as well as the Swap Agreement, the Securities and any other Trust Property. "TIA": The Trust Indenture Act of 1939, as amended. "Transaction": As defined in the Swap Agreement. "Transfer": To sell, convey, assign, transfer, create, grant a lien upon and a security interest in and right of setoff against, deposit, set over, contribute and confirm to the Trustee pursuant to the Trust Agreement; and the terms "Transferred" and "Transferring" have the meanings correlative to the foregoing. A Transfer of any Securities or of any other instrument shall include all rights, powers and options (but none of the obligations) of the Transferring party thereunder, including the first priority and continuing right to claim for, collect, receive and give receipt for principal, premium, if any, and interest payments in respect of such Securities and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Transferring party or otherwise, and generally to do and receive anything that the Transferring party is or may be entitled to do or receive thereunder or with respect thereto. "Treaty": As defined in Section 5.08. "Trigger Amount": As specified in the Terms Schedule. "Trust": The trust created by the Trust Agreement. "Trust Agreement": As defined in the preamble hereto. "Trust Property": As defined in Section 3.01. "Trust Reporting Event": "Trust Wind-up Event": As defined in Section 9.01. "Trustee": Chase Bank of Texas, National Association, a national banking association, or any co-trustee appointed pursuant to Section 10.10, until a successor Person shall have become the Trustee pursuant to the applicable terms of the Trust Agreement, and thereafter "Trustee" shall mean such successor Person. "Trustee Fee Letter": A letter agreement between the Trustee and the Depositor dated on or before the Closing Date setting forth the fees and expenses of the Trust and the Trustee which are subject to reimbursement by the Depositor. "Trustee Fees": The amount or amounts set forth in the Trustee Fee Letter. "UCC": The Uniform Commercial Code as in effect in the relevant jurisdiction or, with respect to the State of Louisiana, the equivalent body of statutory and common law. "Unit Account": As defined in Section 3.04. "Unit Principal Balance": With respect to a Unit that is Outstanding, as determined at any time, the maximum amount that the Holder thereof is entitled to receive as distributions allocable to principal payments on the Securities. "Unit Register" and "Unit Registrar": As respectively defined in Section 5.03. "Unitholder" and "Holder": In the case of Registered Units, the Person in whose name a Unit is registered in the Unit Register on the applicable Record Date, and in the case of Bearer Units, the bearer of such Unit. "Units": The securities authorized by, and authenticated and delivered under, the Trust Agreement and evidenced by a certificate in the form or forms attached hereto as Exhibit B. "United States": The United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction. "U.S. Person": A citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof, an estate the income of which is subject to United States federal income taxation regardless of its source or a trust if (i) a U.S. court is able to exercise primary supervision over the trust's administration and (ii) one or more U.S. persons have the authority to control all of the trust's substantial decisions. Certain additional defined terms have the meanings assigned thereto in other terms hereof. SECTION 1.02. Rules of Construction. Unless the context otherwise requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect in the United States from time to time; (iii) "or" is not exclusive; (iv) the words "herein", "hereof", "hereunder" and other words of similar import refer to the Trust Agreement as a whole and not to any particular Article, section or other subdivision; (v) "including" means including without limitations; and (vi) words in the singular include the plural and words in the plural include the singular. SECTION 1.03. Article and Section References. All article and section references used in the Trust Agreement, unless otherwise provided, are to articles and sections in the Trust Agreement. Any reference to "this Section" appearing within a particular paragraph of a section is a reference to such section as a whole. ARTICLE II Declaration of Trust; Entry into Swap Agreement; Issuance of Units SECTION 2.01. Creation and Declaration of Trust; Assignment of Securities. (a) The Depositor, concurrently with the execution and delivery of the Trust Agreement, Transfers to the Trustee, on behalf and for the benefit of the Unitholders and without recourse, all the right, title and interest of the Depositor, including any security interest therein, in, to and under (i) the Securities, (ii) the Unit Account, including all income from the investment of funds in the Unit Account, (iii) all payments on or under and all proceeds of any of the foregoing (including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, causes of action, rights to payment of any and every kind and other forms of obligations, receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing) and (iv) all other assets included or to be included in the Trust Property; in each case except for any specified Retained Interest. (b) In connection with the Transfer referred to in the preceding paragraph, the Depositor shall, not later than the Closing Date, (i) deposit the Securities with the Trustee by physical delivery of such Securities, duly endorsed, to the Trustee or cause the Securities to be registered by book-entry in the name of the Trustee provided that the book-entry depositary will be an agency of the United States, DTC or another book-entry institution acceptable to the Depositor and (ii) with respect to each such Security, deliver or cause to be delivered to the Trustee all documents necessary to transfer such Security to the Trustee. (c) The Guarantor shall deliver the Guarantee to the Trustee for the benefit of the Unitholders. (d) The Transfer of the Securities by the Depositor accomplished by the Trust Agreement is absolute (other than with respect to any Retained Interest) and is intended by the parties thereto as a sale as further provided in Section 3.03. SECTION 2.02. Entry into Swap Agreement and Distribution Agreement. Concurrently with the execution of the Trust Agreement, the Trust shall (i) execute and deliver the Swap Agreement and each Transaction thereunder, if any, (ii) accept the Guarantee and (iii) enter into any Distribution Agreement with each Distribution Participant. It shall be a condition to the effectiveness of the Trust Agreement that the Swap Agreement be effective as of the date of the Trust Agreement. The Trustee shall, on behalf of the Trust, perform the obligations of the Trust under the Swap Agreement in accordance with its terms and shall make demands under the Guarantee immediately upon obtaining notice of a payment default under the Swap Agreement by the Swap Counterparty. The Trustee and the Depositor agree, and each Unitholder by acquiring its Units shall be deemed to agree, that the Swap Agreement does not represent an ownership interest in the Trust or its assets and that none of them shall treat the Swap Agreement as an ownership interest for the Trust for any purpose. Except as expressly set forth in this Trust Agreement and in the Swap Agreement, the receipt by the Trustee of the Securities and the execution by the Trustee of the Swap Agreement shall not constitute and is not intended to result in an assumption by the Trustee or any Unitholder of any obligation of the issuer of the Securities or the Swap Counterparty or any other Person in connection with the Securities or the Swap Agreement or under any agreements or instruments relating to any of them. SECTION 2.03. Acceptance by Trustee. The Trustee will acknowledge receipt by it of (i) the Securities and the related documents referred to in Section 2.01, now existing or hereafter acquired, (ii) the Swap Agreement, (ii) the Guarantee and (iv) the documents specified in the Swap Agreement (in Part 3 of the Schedule to the 1992 Master Agreement), and declares that it will hold such assets and all other assets comprising the Trust Property in trust, for the exclusive use and benefit of all present and future Unitholders and for the purposes and subject to the terms and conditions set forth in the Trust Agreement, including the Trustee's obligations, as and when they may arise, (I) to pay any amount due from the Trust under the Swap Agreement, which obligations shall be and hereby are designated to be secured, under the terms of the Swap Agreement, by a pledge of all of the Trust Property, (II) to pay Extraordinary Trust Expenses and (III) to make distributions to the Unitholders in accordance with Section 4.01. SECTION 2.04. Representations and Warranties of the Depositor. The Depositor represents and warrants to the Trustee that as of the Closing Date or as of such other date otherwise specifically provided in the Trust Agreement: (i) the Depositor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; (ii) to the Depositor' knowledge after the inquiry, there are not any liens or encumbrances on the Securities immediately prior to the time of Transfer except those created by the Trust Agreement; (iii) the execution and delivery of the Trust Agreement by the Depositor and its performance of and compliance with the terms thereof will not violate the Depositor' articles of incorporation or By-laws or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or result in the breach or acceleration of, any material contract, agreement or other instrument to which the Depositor is a party or by which the Depositor or any of its assets is bound; (iv) to the Depositor' knowledge after due inquiry, the Depositor has the full power and authority to enter into and consummate all transactions contemplated by the Trust Agreement, has duly authorized the execution, delivery and performance of the Trust Agreement and has duly executed and delivered the Trust Agreement. The Trust Agreement, upon its execution and delivery by the Depositor and assuming due authorization, execution and delivery by the Trustee, will constitute a valid, legal and binding obligation of the Depositor, enforceable against it in accordance with the terms thereof, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law); and (v) to the Depositor' knowledge after due inquiry, the Depositor is not in violation, and the execution and delivery of the Trust Agreement by the Depositor and its performance and compliance with the terms of the Trust Agreement will not constitute a violation, of any order decree of any court or any order or regulation of any Federal, State, municipal or governmental agency having jurisdiction over the Depositor or its properties, which violation would reasonably be expected to have a material and adverse effect on the duties and obligations of the Depositor under the Trust Agreement. It is understood and agreed that the representations and warranties of the Depositor set forth in this Section shall survive delivery of the respective documents to the Trustee and shall inure to the benefit of the Trustee on behalf of the Unitholders notwithstanding any restrictive or qualified endorsement or assignment. Upon discovery by any of the Depositor, the Guarantor, or the Trustee of a breach of any of the foregoing representations and warranties which materially and adversely affects the interests of the Unitholders, the party discovering such breach shall give prompt written notice thereof to the other parties. SECTION 2.05. Breach of Representation or Warranty. Upon the earlier of discovery by the Depositor or receipt of notice by the Depositor of a breach of any representation or warranty of the Depositor set forth in Section 2.04 that materially and adversely affects the rights of the Unitholders to receive distributions under the Trust Agreement when due and payable, the Depositor shall notify the Rating Agencies of such breach. The Depositor shall cure such breach in all material respects within two Business Days of the earlier of discovery by the Depositor or receipt of notice by the Depositor of such breach. SECTION 2.06. Agreement to Authenticate and Deliver Units. The Trustee agrees and acknowledges that it will, concurrently with the Transfer to and receipt by it of the Securities and the Guarantee and delivery to it by the Depositor of the executed Trust Agreement and by the Swap Counterparty of the executed Swap Agreement, cause to be executed, authenticated and delivered to or upon the order of the Depositor, in exchange for the Securities and such other assets constituting the Trust Property, Units duly executed and authenticated by or on behalf of the Trustee in authorized denominations evidencing ownership of the entire Trust Property, all in accordance with the terms and subject to the conditions of Section 5.02. ARTICLE III Trust Powers; Administration of the Trust Property SECTION 3.01. Trust Property. (a) The "Trust Property" with respect to a Trust will consist of: (i) the related Securities and all payments on or collections in respect of such Securities due after a specified "Cut-off Date" set forth in the Terms Schedule; (ii) all the Trustee's right, title and interest under any Swap Agreement and any related Guarantee; (iii) all the Trustee's right, title and interest in any related Credit Support, if any; (iv) all Permitted Investments and all funds from time to time deposited in certain segregated accounts held by the Trustee in trust and for the benefit of the Unitholders representing interests in such Trust; and (v) any other asset described in the Terms Schedule as constituting a portion of such Trust Property, in each case exclusive of any Retained Interest. (b) The Trust Property for a given Series of Units and the related Trust will not constitute Trust Property for any other Series of Units and the related Trust and the Units of each Class of a given Series possess an equal and ratable undivided ownership interest in such Trust Property. The Terms Schedule may, however, specify that certain assets constituting a part of the Trust Property relating to any given Series may be beneficially owned solely by or deposited solely for the benefit of one Class or a group of Classes within such Series. In such event, the other Classes of such Series will not possess any beneficial ownership interest in those specified assets constituting a part of the Trust Property. SECTION 3.02. Administration of the Trust. (a) The Trustee shall administer the Trust Property for the benefit of the Unitholders. In engaging in such activities, the Trustee shall follow or cause to be followed collection procedures in accordance with the terms of the Trust Agreement, the Securities, the Swap Agreement, the indemnification offered by the Depositor pursuant to Section 10.05(b) and the Guarantee. The duties of the Trustee shall be performed in accordance with applicable local, State and Federal law. (b) Subject to Article X, the Trustee is hereby authorized to perform, and from time to time hereafter, shall perform only those acts which are described in the Trust Agreement as obligations of the Trustee. Notwithstanding the generality of the foregoing, the Trustee is hereby specifically authorized to do the following on behalf of the Trust: to issue the Certificates evidencing Units; to execute and deliver and perform its obligations and exercise its rights under the Swap Agreement; to establish and maintain the Unit Account hereunder; to accept delivery of the Securities and the Swap Agreement; to pledge the assets of the Trust (including the Securities) to secure the obligations of the Trust including obligations under the Swap Agreement; to sell the Securities through the Selling Agent in accordance with Section 9.03; to make Permitted Investments pursuant to Section 3.06; to liquidate the Trust pursuant to Article IX and to make distributions pursuant to Article IV. (c) Notwithstanding anything to the contrary herein, the Trust shall not engage in any business or activities other than receiving the Securities and any Credit Support or other Trust Property and entering into the Swap Agreement as provided herein, holding the Securities, the Swap Agreement and any Credit Support (or other Trust Property), issuing Certificates evidencing Units, making Permitted Investments in accordance with Section 3.06 and performing its obligations hereunder and under the Swap Agreement; provided, however, that during its existence the Trust shall not engage in any business or activity which will cause it to be or become an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act, or to be or become a closed-end investment company required to be registered, but not registered, under the Investment Company Act. (d) The Trustee shall not sell, assign, pledge or otherwise transfer the Securities, the Swap Agreement, any Credit Support or other Trust Property, or any interest of the Trust therein, to any Person or Persons, except to a successor trustee as provided in Section 10.07, through the Selling Agent in accordance with Section 9.03, in accordance with Section 10.02(a)(x), as required under any Swap Agreement or as otherwise expressly permitted hereunder. This section shall not be construed to prohibit transfers of the Units. (e) The Trustee shall have the legal power to exercise all of the rights, powers and privileges of holders of the Securities in which the Units evidence an interest; provided, however, that the exercise of such powers shall be subject to the provisions of this Section 3.02, Article X and the other provisions hereof. However, neither the Trustee (except as specifically provided herein or in the TIA) nor the Depositor shall be under any obligation whatsoever to appear in, prosecute or defend any action, suit or other proceeding in respect of Securities or Units. (f) Except for actions expressly authorized by the Trust Agreement, the Trustee shall not take actions reasonably likely to (nor fail to take actions, if such failure would be reasonably likely to) (i) impair the interests of the Trust in any Security, any Credit Support, the Swap Agreement or the Guarantee (or any other Trust Property); (ii) impair the value of any Security, any Credit Support, the Swap Agreement or the Guarantee (or any other Trust Property); or (iii) alter the classification of a Trust for U.S. federal income tax purposes. (g) Except as expressly provided in the Trust Agreement, the Trustee shall have no power to vary the corpus of the Trust Property including by (i) accepting any substitute obligation or asset for a Security or any Credit Support, (ii) entering into any amendment or modification of the Swap Agreement or the Securities, (iii) accepting any substitute guarantee for the Guarantee, (iv) adding any other investment, obligation or security to the Trust Property, (v) withdrawing from the Trust Property any Securities or Credit Support, (vi) terminating the Swap Agreement except in accordance with its terms or (vii) rejecting or otherwise failing to accept the continuing benefits of the Guarantee. SECTION 3.03. Collection of Certain Security Payments. The Trustee shall make reasonable efforts to collect all payments required to be made pursuant to the terms of the Securities in a manner consistent with the terms of the Trust Agreement and such Securities. SECTION 3.04. Sale. The parties hereto agree and intend that the Transfer of Securities, the Swap Agreement and all proceeds of any of the foregoing shall be treated as a sale and purchase by the Trust and not a loan or a pledge to secure a loan. If for any reason such Transfer is deemed to be a loan or a pledge to secure a loan, the parties intend that the Trust Agreement shall be a security agreement pursuant to which there shall be deemed to have been granted to the Trustee a security interest in all right, title and interest in the Securities, the Swap Agreement and all proceeds of any of the Trust Property granted in favor of the Swap Counterparty pursuant to the Swap Agreement and to the obligation of the Trust to pay Extraordinary Trust Expenses. If the Trust terminates prior to the satisfaction of the claims of any Unitholder under any Unit, the security interest created hereby shall continue in full force and effect and the Trustee shall be deemed to be the collateral agent for the benefit of such Unitholder, subject to the prior security interest of the Swap Counterparty under the Swap Agreement and to the terms of the Trust Agreement. SECTION 3.05. Unit Account. (a) The Trustee shall establish and maintain one or more Eligible Accounts (collectively, the "Unit Account"), held in trust for the benefit of the Unitholders, subject to the security interest in all of the Trust Property granted in favor of the Swap Counterparty pursuant to the Swap Agreement and the obligation of the Trust to pay Extraordinary Trust Expenses. The Trustee, on behalf of the Unitholders, shall possess all right, title and interest in all funds on deposit from time to time in the Unit Account and in all proceeds thereof, subject to the security interest in all of the Trust Property granted in favor of the Swap Counterparty pursuant to the Swap Agreement and the obligation of the Trust to pay Extraordinary Trust Expenses. The Unit Account shall be under the sole dominion and control of the Trustee. The Trustee shall deposit or cause to be deposited in the Unit Account all amounts collected with respect to the Securities, Swap Agreement and the Guarantee including: (i) all payments received by the Trustee on account of principal of the Securities; (ii) all payments received by the Trustee on account of interest (if any) on the Securities; (iii) all payments received by the Trustee on account of premium (if any) on the Securities; (iv) all Swap Amounts and all other payments, if any, received by the Trustee on account of the Swap Agreement; (v) the Unit Principal Balance, if applicable; (vi) all payments received by the Trustee on account of the Guarantee; and (vii) it is understood and agreed that payments in the nature of prepayment or redemption penalties, late payment charges or assumption fees which may be received by the Trustee shall be deposited by the Trustee in the Unit Account and shall not be retained by the Trustee for its own account. If, at any time, a formerly Eligible Account no longer fulfills the definition of Eligible Account, the Trustee shall within five Business Days or by the next Distribution Date, whichever comes earlier, establish a new Unit Account meeting the conditions specified above and transfer any cash and any investments on deposit in the Unit Account to such new Unit Account, and from the date such new Unit Account is established, it shall be the Unit Account. (b) The Trustee shall give notice to the Depositor and the Rating Agencies of the location of each Eligible Account constituting the Unit Account prior to any change thereof. SECTION 3.06. Investment of Funds in the Accounts. The Depositor, on behalf of the Trust, may direct in writing the Trustee or any depositary institution maintaining the Unit Account, if any, and any other segregated account the contents of which are held for the benefit of the Trust (each, an "Account") to invest the funds therein in one or more Permitted Investments bearing interest or sold at a discount, which shall be held to maturity unless payable on demand. If the Depositor does not provide any investment directions to the Trustee, then the Trustee shall invest funds held in any Account in the Permitted Investments specified in clause (i) of the definition thereof upon receipt of such funds. Such funds shall be invested in Permitted Investments that will mature at least one calendar day prior to the next Distribution Date. SECTION 3.07. Retained Interest. The Retained Interest, if any, in any Security or other Trust Property shall initially be held by the Person so specified in the Terms Schedule and to the extent specified therein. The Retained Interest will be established on an asset-by-asset basis. With respect to each Security, unless otherwise specified in the Terms Schedule, the Retained Interest shall be deducted by the Trustee from applicable collections in respect of such Security or other Trust Property. Unless otherwise provided in the Terms Schedule, collections in respect of Retained Interest shall not be deposited in the Unit Account and shall not constitute a part of the Trust, but shall instead be distributed to the holder of such Retained Interest; provided, however, that the Terms Schedule with respect to which there is a Retained Interest may provide that commingled amounts received in respect of Securities and the related Retained Interest may initially be deposited in separate and discrete accounts established by the Trustee. SECTION 3.08. Access to Certain Documentation. The Trustee shall provide to any Federal, State or local regulatory authority that may exercise authority over the Depositor, the Swap Counterparty, the Guarantor or any Unitholder access to the documentation regarding the Securities, the Swap Agreement and the Guarantee required by applicable laws and regulations. Such access shall be afforded without charge, but only upon reasonable request and during normal business hours at the offices of the Trustee designated by it. In addition, access to the documentation regarding the Securities, the Swap Agreement and the Guarantee will be provided to the Depositor, the Swap Counterparty, the Guarantor or any Unitholder upon reasonable request during normal business hours at the offices of the Trustee designated by it at the expense of the Person requesting such access. ARTICLE IV Distributions and Reports to Unitholders SECTION 4.01. Distributions. On each Distribution Date for the Units (including the Scheduled Final Distribution Date), the Trustee shall distribute the pro rata portion of the Available Funds in the Unit Account allocable to each Unitholder. SECTION 4.02. Reports to Unitholders. (a) On each Distribution Date the Trustee shall forward or cause to be forwarded to the Depositor, the Rating Agency, if any, and each Unitholder a statement setting forth: (i) the amount of such distribution to Unitholders allocable to principal of or interest or premium, if any, on the Units; (ii) the Interest Rate applicable to such Distribution Date; (iii) the aggregate stated principal amount of the Securities as of the Distribution Date and the interest rate applicable to the Securities for the Security Accrual Period therefor next beginning; (iv) the amount received by the Trustee on the related Securities for the Security Accrual Period therefor last ended; (v) the amounts of and the recipients of any payments under the Swap Agreement for the Swap Rate Accrual Period last ended; (vi) if feasible, the new Swap Rate applicable to the Swap Rate Accrual Period next beginning; (vii) the aggregate Unit Principal Balance (or Notional Amount, if applicable) at the close of business on such Distribution Date; (viii) the current rating, if any, of the Units and the Securities and the name of the Rating Agencies giving such rating; (ix) the cumulative amount of Extraordinary Trust Expense, if any, on such Distribution Date; (x) with respect to any Trust having Trust Property which includes Credit Support, the available amount of each element of Credit Support; and (xi) any additional information relevant to the Unitholders as specified in the Terms Schedule. In the case of information furnished pursuant to clause (i) above, any amount shall be expressed as a Dollar amount (or the equivalent thereof in any other Specified Currency) per minimum denomination of Units or for such other specified portion thereof. Within a reasonable period of time after the end of each calendar year, the Trustee shall furnish to each Person who at any time during each such calendar year was a Unitholder a statement containing the information set forth in clause (i) above, aggregated for such calendar year or the applicable portion thereof during which such Person was a Unitholder which statement shall contain sufficient information to allow Unitholders to calculate their U.S. federal income tax liability with respect to the Units. Such obligation of the Trustee shall be deemed to have been satisfied to the extent that substantially comparable information shall have been provided by the Trustee pursuant to any requirements of the Code as are from time to time in effect. (b) At any time when the Trust is not subject to Section 13 or 15(d) of the Exchange Act, upon request to the Trustee by a Unitholder or a prospective purchaser from a Unitholder of the information required by Rule 144A(d)(4)(i) of the Securities Act, the Trustee shall promptly notify the Depositor of such request, and the Depositor shall promptly thereafter provide such information to the Trustee, and the Trustee shall furnish such information to such Unitholder or prospective purchaser, provided, that for purposes of this Section 4.02(b), the information required by Rule 144A(d)(4)(i) shall be as interpreted in Release No. 33-6862, Part D, i.e., basic, material information concerning the structure of the Trust, the Units and distributions in respect thereof, and the nature and performance of the Securities, the Swap Agreement and any other assets of the Trust. (c) The Trustee will deliver to Unitholders copies of all notices and communications it receives from each Security Issuer, including notice of any call of the Securities by the Security Issuer. The Trustee will also notify the Unitholders of any call of the Securities by a Swap Counterparty under the terms of a Swap Agreement. (d) If so specified in the Terms Schedule commencing on a certain date and on or before a specified date in each year thereafter, a firm of independent public accountants will furnish a statement to the Trustee to the effect that such firm has examined certain documents and records relating to the administration of the Trust Property during the related 12-month period (or, in the case of the first such report, the period ending on or before the date specified in the Terms Schedule, which date shall not be more than one year after the related original issue date with respect to such Units) and that, on the basis of certain agreed upon procedures considered appropriate under the circumstances, such firm is of the opinion that such administration was conducted in compliance with the terms of the Trust Agreement, except for such exceptions as such firm shall believe to be immaterial and such other exceptions and qualifications as shall be set forth in such report. The Terms Schedule may also provide for delivery to the Depositor and the Trustee on behalf of the Unitholders, on or before a specified date in each year, of an annual statement signed by two officers of the Trustee to the effect that the Trustee has fulfilled its obligations under the Trust Agreement throughout the preceding year with respect to any Series of Units. Copies of the annual accountants' statement, if any, and the statement of officers of the Trustee may be obtained by Unitholders without charge upon written request to the Trustee. (e) If the Terms Schedule provides the Units are subject to the right of one or more specified Persons to purchase all or a portion of the Units of a given Series (a "Call Option") and designates such Series a "Callable Series," then after receiving notice of the exercise of such a call right, the Trustee will provide notice thereof as provided in the Terms Schedule. The Trustee and the Depositor agree, and each Unitholder by acquiring its Units shall be deemed to agree, that the Call Option does not represent an ownership interest in the Trust or its assets and that none of them shall treat the Call Option as an ownership interest in the Trust for any purpose. (f) If required by TIA Section 313(a), within 60 days after December 31 of each year, the Trustee shall mail to (i) each Unitholder as required by TIA Section 313(c) and (ii) the Depositor, a brief report dated as of such date that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b). A copy of any report delivered pursuant to this Section 4.02(f) shall, at the time of its mailing to Unitholders and the Depositor, be filed by the Trustee with the Commission and each stock exchange, if any, on which the Units are listed. The Depositor shall notify the Trustee if and when the Units are listed on any stock exchange. SECTION 4.03. Calculation of Interest Rates. Unless otherwise specified in the Terms Schedule, the Interest Rate applicable to the Units will be the equivalent floating rate applicable to payments received by the Trust under any related Swap Agreement (as determined by the Swap Calculation Agent) or under the Securities. If the Terms Schedule specifies a Calculation Agent, the Calculation Agent shall calculate the Interest Rate applicable to the Units from time to time as specified in the Terms Schedule. All determinations of interest by the Calculation Agent hereunder shall, in the absence of manifest error, be conclusive for all purposes and binding on the holders of Units. Each of the protections, releases, indemnities and other terms applicable to the Trustee under Section 10.01, 10.02, 10.03 and 10.05 shall apply to the Calculation Agent in connection with its actions as Calculation Agent for the Trust. SECTION 4.04. Compliance with Tax Reporting and Withholding Requirements. Unless otherwise specified in the Terms Schedule, the Trustee shall file or cause to be filed, within the time limits established by law, federal and state income tax returns and information statements as a grantor trust for each of Trust's taxable years. The Trust's taxable year shall be the calendar year. Notwithstanding any other provision of the Trust Agreement to the contrary, the Trustee shall comply with all Federal withholding requirements respecting distributions to, or receipts of amounts on behalf of, Unitholders and pursuant to the Swap Agreement that the Trustee reasonably believes are applicable under the Code. The consent of Unitholders shall not be required for such withholding. In the event the Trustee does withhold any amount from interest or original issue discount distributions thereof to any Unitholder pursuant to Federal withholding requirements, the Trustee shall indicate in the statement required pursuant to Section 4.02 the amount so withheld. SECTION 4.05. Preservation of Information, Communications to Holders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Unitholders contained in the most recent list furnished to the Trustee and the names and addresses of Unitholders received by the Trustee in its capacity as Unit Registrar. The Trustee may destroy any list furnished to it as provided upon receipt of a new list. (b) Unitholders shall have the right to communicate pursuant to TIA Section 312(b) with other Unitholders with respect to their rights under this Agreement or under the Certificates. (c) Irrespective of whether the TIA shall apply to this Agreement, the Depositor, the Trustee, the Paying Agent and the Unit Registrar shall have the protections provided pursuant to TIA Section 312(c). ARTICLE V The Units SECTION 5.01. The Units. (a) The Units may be issued in the form of and be represented by definitive certificates substantially in the form of Exhibit B1 or B2 hereto (a "Certificate") or by one or more Global Securities. Units will be issued in denominations specified in the applicable Terms Schedule, but in no event will Units denominated in U.S. dollars be issued in denominations less than $100,000 and in integral multiples of $1,000 in excess thereof. The authorized denomination of Units having a Specified Currency other than U.S. dollars will be set forth in the applicable Terms Schedule. All Units of the same Class shall be identical in all respects except for the denominations thereof. All Units issued under the Trust Agreement shall be in all respects equally and ratably entitled to the benefits thereof without preference, priority or distinction on account of the actual time or times of authentication and delivery, all in accordance with the Terms Schedule. No additional interests in the Trust other than the Units shall be issued hereunder, except in accordance with Section 5.04. The Units in the aggregate may be subject, to the extent provided in the Terms Schedule, to Call Option. (b) The Units issued under a Trust Agreement may be limited to a single class, or, if so specified in the Terms Schedule, a Series of Units may include two or more Classes differing as to entitlement to distributions of principal, interest or premium and one or more Classes may be subordinated in certain respects to other Classes of such Series with respect to allocation of losses arising from any defaults with respect to the Trust Property. Each Series and Class of Units may be issued as Registered Units or, subject to Section 5.13, as Bearer Units, in definitive form or as one or more Global Securities. Unless otherwise specified in the Terms Schedule, all Units of a given Series (or, if more than one Class exists, any given Class within that Series) will, upon issuance, be represented by one or more Global Securities that will be deposited with, or on behalf of, DTC (only for Registered Units denominated and payable in U.S. dollars), Euroclear, CEDEL, or another Depositary. Global Securities may be issued in either registered or bearer form and in either temporary or permanent form. Global Securities representing Registered Units will be registered in the name of a nominee of the Depositary, and will clear and settle in book-entry form only through the facilities of one or more Depositaries. Unless and until it is exchanged in whole or in part for the individual Units represented thereby, a Global Security may not be transferred except as a whole by the Depositary for such Global Security to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor of such Depositary or a nominee of such successor. SECTION 5.02. Execution, Authentication and Delivery. (a) The Units shall be executed on behalf of the Trust by the Trustee by its President, its Treasurer, or one of its Vice Presidents, Assistant Vice Presidents or Trust Officers. The signature of any of these officers may be manual or facsimile. Units bearing the manual or facsimile signature of individuals who were at any time the proper officers of the Trustee shall be binding, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Units or did not hold such offices at the date of such Units. (b) The Trustee shall not be required to authenticate any Units if the issuance of such Units pursuant to the Trust Agreement will adversely affect the Trustee' own rights, duties or immunities under the Trust Agreement. (c) Each Unit shall be dated as of the date of its authentication. (d) Subject to Section 5.10(c), no Unit shall be entitled to any benefit under the Trust Agreement or be valid or obligatory for any purpose, unless there appears on such Unit a certificate of authentication substantially in the form as contained in the form of Unit attached to the Trust Agreement as Exhibit B1 or B2 executed by the Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Unit shall be conclusive evidence, and the only evidence, that such Unit has been duly authenticated and delivered under the Trust Agreement and is entitled to the benefits of the Trust Agreement. Any Unit duly authenticated and delivered to the Depositor under the Trust Agreement shall be fully paid and non-assessable for all purposes. SECTION 5.03. Registration; Registration of Transfer and Exchange. (a) The Trustee shall cause to be kept a register for Registered Units (the registers maintained in such office and in any other office or agency of the Trustee from which distributions are made being herein sometimes collectively referred to as the "Unit Register") in which, subject to such reasonable regulations as it may prescribe, a transfer agent and registrar (which may be the Trustee) (the "Unit Registrar") shall provide for the registration of Registered Units and the registration of transfers and exchanges of Registered Units. The Trustee is hereby initially appointed Unit Registrar for the purpose of registering Registered Units and transfers and exchanges of Registered Units as herein provided and the Trustee shall remain Unit Registrar for such purposes until the earlier to occur of (i) the appointment by the Depositor of a different Unit Registrar, (ii) the resignation or termination of the Trustee and appointment of a successor trustee in accordance with Section 10.07, in which case such successor trustee shall assume the duties of Unit Registrar and (iii) the termination of the Trust and discharge of the Trustee' obligations under the Trust Agreement in accordance with the applicable terms of Articles IX and XI; provided, however, that the Trustee may appoint one or more Co-Unit Registrars. Upon any resignation of any Unit Registrar appointed by the Depositor pursuant to clause (i) above, the Trustee shall promptly appoint a successor or, in the absence of such appointment, assume the duties of Unit Registrar. Upon (i) the appointment by the Depositor of a Person other than the Trustee as Unit Registrar, (ii) the appointment of any Co-Unit Registrar or (iii) any change in the identity of the Unit Registrar or any Co-Unit Registrar, the Depositor will in each case give each of the Trustee and each Rating Agency, if any, written notice within three Business Days of any such appointment or change and of the location, and any change in the location, of the Unit Register, and the Trustee shall have the right to rely upon a certificate executed on behalf of the Unit Registrar by an Executive Officer thereof as to the names and addresses of the Holders of the Registered Units and the principal amounts and numbers of such Registered Units. Upon surrender for registration of transfer of any Registered Unit at the office or agency of the Trustee, if the requirements of Section 8-401(1) of the Uniform Commercial Code are met to the Trustee's satisfaction, and subject to the transfer restrictions set forth in Section 5.11 hereof, the Trustee shall execute, authenticate and deliver, in the name of the designated transferee or transferees, one or more new Registered Units of any authorized denominations, of a like aggregate Unit Principal Balance. All transfers of Registered Units are subject to the approval of the Trustee and the Trustee shall not register any transfer of Registered Units if such transfer would violate any provision of the Trust Agreement. (b) At the option of the Holder, Registered Units may be exchanged for other Registered Units of any authorized denomination or denominations of like tenor and aggregate Unit Principal Balance upon surrender of the Registered Units to be exchanged at the office or agency of the Trustee maintained for such purpose. Whenever any Registered Units are so surrendered for exchange, the Trustee shall execute, authenticate and deliver the Registered Units that the Holder making the exchange is entitled to receive. All Registered Units issued upon any registration of transfer or exchange of Units shall constitute complete and indefeasible evidence of ownership in the Trust Property and be entitled to the same benefits under the Trust Agreement as the Units surrendered upon such registration of transfer or exchange. (c) Every Registered Unit presented or surrendered for registration of transfer or exchange shall (if so required by the Trustee or the Unit Registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Trustee and the Unit Registrar, duly executed, by the Holder thereof or his attorney duly authorized in writing, with such signature guaranteed by a commercial bank or trust company located, or having a correspondent located, in The City of New York or the city in which the Corporate Trust Office is located, or by a member firm of a national securities exchange, and such other documents as the Trustee may require. No service charge shall be made to a Holder for any registration of transfer or exchange of Units, but the Trustee may require payment by the Holders of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Units. SECTION 5.04. Mutilated, Destroyed, Lost and Stolen Units. If (i) any mutilated Unit is presented to the Depositor and the Trustee or (ii) the Depositor and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Unit, and there is delivered to the Depositor and the Trustee such security or indemnity as they may require to save each of them and any Paying Agent harmless, and neither the Depositor nor the Trustee receives notice that such Unit has been acquired by a bona fide purchaser, then, in each case, the Trustee, shall execute, authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Unit, a new Unit of like tenor, form, terms and principal amount, bearing a number not contemporaneously Outstanding, so that neither gain nor loss in interest shall result from such exchange or substitution. Upon the issuance of any new Unit under this Section, the Trustee may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in respect thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Unit issued pursuant to this Section shall constitute complete and indefeasible evidence of ownership in the Trust Property, whether or not the destroyed, lost or stolen Unit shall be at any time enforceable by anyone, and shall be entitled to all the benefits of the Trust Agreement equally and proportionately with any and all other Units, if any, duly issued thereunder. The terms of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Units. SECTION 5.05. Distributions in Respect of Units. (a) Any per Unit amount in respect of a Registered Unit that is payable and is punctually paid or duly provided for on any Distribution Date or any other date shall be distributed to the Person in whose name such Registered Unit (or one or more Predecessor Units) is registered at the close of business on the related Record Date notwithstanding the cancellation of such Registered Unit upon any transfer or exchange subsequent to such related Record Date. Distributions on Registered Units shall be made, in accordance with arrangements satisfactory to the Trustee, by wire transfer to an account designated in writing by a Holder, or, in the case of distributions of Securities in kind, by delivery of such Securities to any DTC or other depositary account designated in writing by a Holder, or, if such arrangements with respect to any Holder are not so made no later than 15 calendar days prior to the applicable Distribution Date, at the Corporate Trust Office (with respect to the final distribution and distributions in kind of Securities) or by check mailed to the address of the Person entitled thereto as such address shall appear in the Unit Register. (b) Unless otherwise indicated in the Terms Schedule, subject to Section 5.13 and to applicable laws and regulations, distributions in respect of interest or principal or premium on Bearer Units will be payable only upon surrender of applicable coupons, if any, or Units, respectively, and at such offices or agencies outside the United States as the Trustee may from time to time designate. (c) Subject to the foregoing terms of this Section, each Unit delivered under the Trust Agreement upon transfer of or in exchange for or in lieu of any other Unit shall carry the rights to amounts to be distributed that are accrued and undistributed, and to accrue, that were carried by such other Unit. SECTION 5.06. Persons Deemed Owners. Subject to Section 5.05 and except for the final distribution, the Depositor and the Trustee and any agent of the Depositor or the Trustee may treat the Person in whose name any Registered Unit is registered as the owner of such Unit on the related Record Date for the purpose of receiving distributions of principal of (and premium, if any) and (subject to Section 5.05) interest, if any, on such Unit and for all other purposes whatsoever, whether or not such Unit be overdue, and neither the Depositor, the Trustee, nor any agent of the Depositor or the Trustee shall be affected by notice to the contrary. All distributions made to any such Holder, or upon his order, shall be valid, and, to the extent of the sum or sums paid, effectual to satisfy and discharge the liability for moneys distributable upon such Unit. SECTION 5.07. Cancellation. All Units surrendered for payment, redemption, transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it. No Units shall be authenticated in lieu of or in exchange for any Units canceled as provided in this Section, except as expressly permitted by the Trust Agreement. SECTION 5.08. Currency of Distributions in Respect of Units; Redenomination. (a) Except as provided in (b) below, distributions of the principal of (and premium and interest, if any) on the Units will be made in the Specified Currency. (b) Except as set forth below or unless otherwise provided in the Terms Schedule, if distributions in respect of a Unit are required to be made in a Specified Currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the control of the Depositor or the Trust or their respective Affiliates, or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community (other than under the circumstances described in (c)), then all distributions in respect of such Unit shall be made at a time and in a manner determined by the Exchange Rate Agent in its sole discretion, which may be in the Specified Currency at such time as such currency is again available or so used or in such other currency and at such rates as the Exchange Rate Agent shall determine. Each of the protections, releases, indemnities and other terms applicable to the Trustee under Section 10.01, 10.02, 10.03 and 10.05 shall apply to the Exchange Rate Agent in connection with its actions as Exchange Rate Agent for the Trust. SECTION 5.09. Appointment of Paying Agent. (a) The Trustee may appoint one or more paying agents (each, a "Paying Agent") with respect to the Units, and shall appoint at least one Paying Agent outside the United States in respect of payments to be made on any Bearer Units. Any such Paying Agent shall be authorized to make distributions to Unitholders pursuant to the Trust Agreement and shall report the amounts of such distributions to the Trustee. The Trustee may remove the Paying Agent if the Trustee determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under the Trust Agreement in any material respect or if the Paying Agent fails to satisfy the eligibility requirements set forth in paragraph (b) of this Section. The Paying Agent shall initially be the Trustee and any co-paying agent chosen by the Depositor and acceptable to the Trustee. Any Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written notice to the Trustee. In the event that the Trustee shall no longer be the Paying Agent, the Trustee shall appoint a successor or additional Paying Agent and shall provide written notice of such appointment to the Rating Agencies, if any. The Trustee shall cause each such Paying Agent to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee that it will hold all sums, if any, held by it for distribution to the Unitholders in an Eligible Account in trust for the benefit of the Unitholders entitled thereto until such sums shall be distributed to such Unitholders. The Paying Agent shall return all. unclaimed funds to the Trustee within two years from the time such funds were first eligible to be claimed and promptly upon removal shall also return all funds in its possession to the Trustee. (b) The Paying Agent shall at all times be a corporation or an association, the combined capital and surplus of which is at least $50,000,000 and the long-term debt obligations of which are rated in one of the four highest categories assigned long-term debt obligations by each of the Rating Agencies, and is subject to supervision of examination by Federal or State authority. If such corporation or association publishes reports of conditions at least annually, pursuant to combined capital and surplus of such corporation or association shall be deemed to be its combined capital and surplus as set forth in its most recent report of conditions so published. In the event that at any time the Paying Agent shall cease to be eligible in accordance with the terms of this paragraph, the Paying Agent shall release all Trust Property to the Trustee and then resign immediately. Upon such resignation, the Trustee shall act as Paying Agent until the appointment of a successor Paying Agent in accordance with paragraph (c) of this Section. (c) The terms of Sections 10.01, 10.02, 10.03, 10.05 and 10.06 shall apply to the Trustee also in its role as Paying Agent, for so long as the Trustee shall act as Paying Agent. (d) Any reference in the Trust Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. SECTION 5.10. Authenticating Agent. (a) The Trustee may appoint any one or more Authenticating Agents (each, an "Authenticating Agent") with respect to the Units which shall be authorized to act on behalf of the Trustee in authenticating the Units in connection with the issuance, delivery and registration or transfer or exchange of the Units. Whenever reference is made in the Trust Agreement to the authentication of Units by the Trustee or the Trustee's unit of authentication, such reference shall be deemed to include authentication on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent must be acceptable to the Depositor. (b) Any institution succeeding to the corporate agency business of any Authenticating Agent shall continue to be an Authenticating Agent without the execution or filling of any power or any further act on the part of the Trustee or such Authenticating Agent. An Authenticating Agent may at any time resign by giving notice of resignation to the Trustee, the Depositor and the Rating Agencies. The Trustee may at any time terminate the agency of an Authenticating Agent by signing notice of termination to such Authenticating Agent and to the Depositor. Upon receiving such a notice of resignation or upon such a termination, or in case at any time an Authenticating Agent shall cease to be acceptable to the Trustee or the Depositor, the Trustee may appoint a successor Authenticating Agent. Subsequent to any such removal or resignation of the Authenticating Agent, the Trustee shall act as Authenticating Agent until a successor Authenticating Agent, if any, is appointed. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless acceptable to the Depositor. The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensating for its services under this Section. The provision of Sections 10.01, 10.02 and 10.03 shall be applicable to any Authenticating Agent. (c) Pursuant to an appointment made under this Section, the Units may have endorsed thereon, in lieu of the Trustee' certificate of authentication, an alternate certificate of authentication in substantially the following form: This is one of the Units described in the Trust Agreement. --------------------------------- as Authenticating Agent for the Trustee, By_______________________________ Authorized Signatory SECTION 5.11. Issuance and Transfer Restrictions. (a) The Units shall be issued on the Closing Date upon (i) deposit of the Securities into the Trust by the Depositor in exchange for all the Units, (ii) satisfaction of the conditions set forth in Section 2.06 and (iii) the due authentication by the Trustee of the Units in the form set forth in Exhibit B1 or B2 attached hereto. (b) In the event that the Terms Schedule provides that the Units will be Book-Entry Units, the following terms shall apply: (i) The Units will be represented by one or more Global Securities registered (in the case of Registered Units) in the name of a Depositary or its nominee. (ii) Unless otherwise provided in the Units or the Terms Schedule, any Global Security representing Registered Units shall be exchangeable for Certificates registered in the name of Persons other than the Depositary or its nominee only if (i) the Depositary is no longer willing or able to act as a depositary and the Trustee is unable to locate a qualified successor within 30 days, or (ii) there shall have occurred and be continuing an event specified in Section 9.01. Upon such issuance, the Trustee shall register such Certificates in the name of, and cause the same to be delivered to, such Person or Persons (or the nominee thereof) consistent with Section 5.02. (iii) Any Global Security representing Registered Units may bear a legend in substantially the following form: "This Certificate is a Global Security within the meaning of the Trust Agreement hereinafter referred to and is registered in the name of a Depositary or a nominee of a Depositary. This Certificate is exchangeable for Certificates registered in the name of a person other than the Depositary or its nominee only in the limited circumstances described in the Trust Agreement, and may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary." (iv) Any Global Security representing Bearer Units shall be exchangeable for definitive bearer Certificates only outside the United States and otherwise in the time and manner set forth in Section 5.13. (c) (i) If the Terms Schedule provides that the Alternative ERISA Restrictions apply, Units will be issued only as definitive Registered Units and no transfer of any Certificate evidencing a Unit shall be made to any employee benefit plan, domestic or foreign, whether or not subject to ERISA, or described in Section 4975(e)(1) of the Code, or comparable terms of any subsequent enactments, or a trustee of any such plan, or an entity whose underlying assets include the assets of any such plan (each of the foregoing a "Benefit Plan"), unless immediately after such transfer, either (i) no Certificates are held by a Benefit Plan subject to the fiduciary responsibility terms of Part 4, Subtitle A, Title I of ERISA, described in Section 4975(e)(1) of the Code or subject to substantially similar legal requirements (an "ERISA Benefit Plan") or (ii) Certificates representing a percentage interest of not more than 24.9% are held by Benefit Plans (for this purpose the percentage interest shall be calculated as if any Certificates held by the Depositor, the Trustee or any of their affiliates (within the meaning of Department of Labor Reg. ss. 2510.3-101(f)(3)) were not outstanding). If the Terms Schedule provides that the Alternative ERISA Restrictions apply, the Distribution Agreement shall require any prospective transferee to certify whether or not it is a Benefit Plan or an ERISA Benefit Plan. (ii) If the Terms Schedule provides that "Deemed Representations" apply, the restrictions described in d(1) above will not apply. Units will be issued in reliance on certain exemptions from the prohibited transaction provisions of Section 406 of ERISA and Section 4975 of the Code which may be applicable, depending in part on the type of Plan fiduciary making the decision to acquire a Unit and the circumstances under which such decision is made. Included among these exemptions are Prohibited Transaction Class Exemption ("PTCE") 91-38 (relating to investments by bank collective investment funds), PTCE 84-14 (relating to transactions effected by a "qualified professional asset manager"), PTCE 90-1 (relating to investments by insurance company pooled separate accounts) and PTCE 96-23 (relating to transactions determined by in-house asset managers). Where "Deemed Representations" apply, BY ITS PURCHASE OF ANY UNIT, THE PURCHASER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED EITHER THAT (A) IT IS NOT AN ERISA PLAN OR OTHER PLAN, AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH ERISA PLAN OR OTHER PLAN, OR A GOVERNMENTAL PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR (B) ITS PURCHASE, HOLDING AND DISPOSITION OF A UNIT WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL PLAN, ANY SUBSTANTIALLY SIMILAR FEDERAL, STATE OR LOCAL LAW) FOR WHICH AN EXEMPTION IS NOT AVAILABLE OR (C) IT IS AN INSURANCE COMPANY ACQUIRING THE UNIT(S) FOR ITS GENERAL ACCOUNT WHICH IS AN INSURANCE COMPANY GENERAL ACCOUNT AS SUCH TERM IS USED IN PTCE 95-60 ISSUED BY THE UNITED STATES DEPARTMENT OF LABOR AND THERE IS NO EMPLOYEE BENEFIT PLAN (TREATING AS A SINGLE PLAN ALL PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE ORGANIZATION) WITH RESPECT TO WHICH THE AMOUNT OF THE GENERAL ACCOUNT RESERVES AND LIABILITIES FOR ALL CONTRACTS HELD BY OR ON BEHALF OF SUCH PLAN EXCEEDS 10% OF THE TOTAL RESERVES AND LIABILITIES OF SUCH GENERAL ACCOUNT (EXCLUSIVE OF SEPARATE ACCOUNT LIABILITIES) PLUS SURPLUS, AS SET FORTH IN THE NAIC ANNUAL STATEMENTS FILED WITH ITS STATE OF DOMICILE. (iii) Unless the Alternative ERISA Restrictions or Deemed Representations apply, no Certificate may be transferred to any ERISA Benefit Plan. Notwithstanding the preceding sentence, unless the Alternative ERISA Restrictions apply, each person who acquires a Certificate, and each fiduciary which causes a person to acquire a Certificate, in such fiduciary's individual capacity, hereby agrees to indemnify and hold harmless the Depositor, the Swap Counterparty, the Trustee and their affiliates from any cost, damage, loss or expense incurred by them as a result of such person being or being deemed to be an ERISA Benefit Plan. (d) The Trustee and the Depositor are entitled to request additional evidence from a proposed transferee of such Units to ensure to their sole satisfaction the accuracy of the representations in the items in the Distribution Agreement described above. (e) If, at any time, the Trustee learns that any of the representations or warranties provided by a potential transferee of Units is false or that any agreement made therein has been violated, any transfer of a Unit to such potential transferee shall be null and void ab initio. The Trustee will arrange for the compulsory sale (at a price determined by the Depositor) for any Unit sold or otherwise acquired in contravention of any of the transfer restrictions set forth herein. The Trustee shall also have such other powers to effect compliance with the terms of this Section 5.11 as it deems appropriate. (f) If the Terms Schedule specifies that the "QIB Restriction" is applicable, sales of the Units will be restricted to "qualified institutional buyers" as defined in Rule 144A under the Securities Act, and each purchaser of the Units is deemed to represent (or in the case of definitive Units, shall be required to represent) for the benefit of the Depositor, the Trustee and each Distribution Participant that such purchaser is a "qualified institutional buyer". (g) Each Certificate shall be required to bear a legend describing the restrictions on transferability set forth in this Section 5.11 applicable thereto. SECTION 5.12. Optional Exchange. (a) In order for a Unit of a given Exchangeable Series (or Class within such Exchangeable Series) to be exchanged by the applicable Unitholder, the Trustee must receive, at least 30 (or such shorter period acceptable to the Trustee) but not more than 45 days prior to an Optional Exchange Date (i) such Unit with the form entitled "Option to Elect Exchange" on the reverse thereof duly completed or (ii) in the case of Registered Units, a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., the Depositary (in accordance with its normal procedures) or a commercial bank or trust company in the United States setting forth the name of the Holder of such Registered Unit, the Unit Principal Balance or Notional Amount of such Registered Unit to be exchanged, the certificate number or a description of the tenor and terms of such Registration Unit, a statement that the option to elect exchange is being exercised thereby and a guarantee that the Registered Unit to be exchanged with the form entitled "Option to Elect Exchange" on the reverse of the Registered Unit duly completed will be received by such Trustee not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter. If the procedure described in clause (ii) of the preceding sentence is followed, then such Registered Unit and form duly completed must be received by such Trustee by such fifth Business Day. Any tender of a Unit by the Holder for exchange shall be irrevocable. The exchange option may be exercised by the Holder of a Unit for less than the entire Unit Principal Balance of such Unit provided that the Unit Principal Balance or Notional Amount, as applicable, of such Unit remaining outstanding after redemption is an authorized denomination and all other exchange requirements set forth in the related Terms Schedule are satisfied. Upon such partial exchange, such Unit shall be canceled and a new Unit or Units for the remaining Unit Principal Balance thereof shall be issued (which, in the case of any Registered Unit, shall be in the name of the Holder of such exchanged Unit). (b) Unless otherwise provided in the Terms Schedule, upon the satisfaction of the foregoing conditions and any applicable conditions with respect to the related Trust Property, the applicable Unitholder will be entitled to receive a distribution of a pro rata share of the Trust Property related to the Exchangeable Series (and Class within such Exchangeable Series) of the Unit being exchanged, in the manner and to the extent described in the Terms Schedule. Alternatively, if so specified in the Terms Schedule, the applicable Unitholder, upon satisfaction of such conditions, may direct the Trustee to sell, on behalf of such Unitholder, such pro rata share of the Trust Property, in which event the Unitholder shall be entitled to receive the net proceeds of such sale, less any costs and expenses incurred by such Trustee in facilitating such sale, subject to any additional adjustments set forth in the Terms Schedule. Any right of exchange in respect of Units of an Exchangeable Series shall be exercisable only to the extent that the Depositor determines that such exchange would not be inconsistent with the Depositor's and such Trust's continued satisfaction of the applicable requirements for exemption under Rule 3a-7 under the Investment Company Act. The Terms Schedule shall set forth additional terms pertaining to any right of exchange, including but are not limited to, the following: (i) a requirement that the exchanging Holder tender to the Trustee Units of each Class within such Exchangeable Series; (ii) a minimum Unit Principal Balance or Notional Amount, as applicable, with respect to each Unit being tendered for exchange; (iii) a requirement that the Unit Principal Balance or Notional Amount, as applicable, of each Unit tendered for exchange be an integral multiple of an amount specified in the Terms Schedule; (iv) specified dates during which a Holder may effect such an exchange (each, an "Optional Exchange Date"); (v) limitations on the right of an exchanging Holder to receive any benefit upon exchange from any Credit Support or other non-Securities deposited in the applicable Trust; (vi) adjustments to the value of the proceeds of any exchange based upon the Unitholder's allocable share of expenses incurred but not yet paid and the establishment of a reserve for any allocable Extraordinary Trust Expenses as set forth in the Terms Schedule; and (vii) a requirement that the exchanging holder obtain the consent of any Swap Counterparty to such exchange and tender to the Swap Counterparty a termination payment for termination of the portion of the Swap Agreement corresponding to the portion of the Securities to be distributed by the Trustee. (c) If the Terms Schedule states that "Depositor Optional Exchange" is applicable to the Units of a given Series, any Units held by the Depositor or its affiliates from time to time will be subject to optional exchange by the Depositor or such affiliates, but not by other Unitholders, for a pro rata portion of the Trust Property of the related Trust, subject to one or more of the conditions set forth in (b) above and as described in the Terms Schedule, to the above limitations under Rule 3a-7 and to such other conditions as may be specified in the Terms Schedule. SECTION 5.13. Limitations on Issuance of Bearer Units. In compliance with U.S. federal income tax laws and regulations, the Depositor and any underwriter, agent or dealer participating in the offering of any Bearer Unit will agree that, in connection with the original issuance of such Bearer Unit and during the period ending 40 days after the issue of such Bearer Unit, they will not offer, sell or deliver such Bearer Unit, directly or indirectly, to a U.S. Person or to any person within the United States, except to the extent permitted under U.S. Treasury regulations. Bearer Units will bear a legend to the following effect: "Any United States Person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code." The sections referred to in the legend provide that, with certain exceptions, a United States taxpayer who holds Bearer Units will not be allowed to deduct any loss with respect to, and will not be eligible for capital gain treatment with respect to any gain realized on a sale, exchange, redemption or other disposition of, such Bearer Units. Pending the availability of a permanent Global Security or definitive Bearer Units, as the case may be, Units that are issuable as Bearer Units may initially be represented by a single temporary Global Security, without interest coupons, to be deposited with a common depositary in London for Euroclear and CEDEL for credit to the accounts designated by or on behalf of the purchasers thereof. Following the availability of a permanent Global Security in bearer form, without coupons attached, or definitive Bearer Units and subject to any further limitations described in the Terms Schedule, the temporary Global Security will be exchangeable for interests in such permanent Global Security or for definitive Bearer Units, respectively, only upon receipt of a certificate acceptable to the Depositor and the Trustee to the effect that a beneficial interest in a temporary Global Security is owned by a person that is not a U.S. Person or is owned by or through a financial institution in compliance with applicable U.S. Treasury regulations (a "Certificate of Non-U.S. Beneficial Ownership"). No Bearer Unit will be delivered in or to the United States. If so specified in the Terms Schedule, interest on a temporary Global Security will be distributed to each of Euroclear and CEDEL with respect to that portion of such temporary Global Security held for its account, but only upon receipt as of the relevant Distribution Date of a Certificate of Non-U.S. Beneficial Ownership. SECTION 5.14. Callable Units . If one or more specified Persons has the right to purchase all or a portion of the Units of any given Series, the Terms Schedule will designate such Series as a "Callable Series," and specify the terms upon which any such specified Person may exercise its right to purchase all or a portion of the Units. Such terms may relate to, but are not limited to, the following: (i) a minimum Unit Principal Balance with respect to each Unit being purchased; (ii) a requirement that the Unit Principal Balance of each Unit being purchased be an integral multiple of a specified amount; (iii) specified dates during which such a purchase may be effected (each, a "Call Date"); and (iv) the price at which such a purchase may be effected (the "Call Price"). After receiving notice of the exercise of such a call right, the Trustee will provide notice thereof as specified in the Terms Schedule. Upon the satisfaction of any applicable conditions to the exercise of such right to purchase of the Units described in such Terms Schedule, each Unitholder will be entitled to receive a distribution of a pro rata share of the Call Price paid in connection with such exercise, in the manner and to the extent described in such Terms Schedule. SECTION 5.15. Delivery of Information. The Trustee shall deliver to the Unitholders copies of all notices and communications it receives from the Security Issuer, including notice of any exercise of any call option with respect to the Securities by the Security Issuer. The Trustee shall also notify the Unitholders of any call of the Securities by the Counterparty under the terms of the Swap Agreement. ARTICLE VI The Depositor SECTION 6.01. Liability of the Depositor. The Depositor shall be liable in accordance with the Trust Agreement only to the extent of the obligation specifically imposed thereby. SECTION 6.02. Limitation on Liability of the Depositor. (a) Unless otherwise expressly specified in the Trust Agreement, the Depositor shall not be under any obligation to expend or risk its own funds, except to the extent of its obligation to pay any amount payable under the Trustee Fee Letter or under Section 10.05(b) hereof, or otherwise incur financial liability in the performance of its duties thereunder or in the exercise of any of its rights or powers if reasonable grounds exist for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (b) Neither the Depositor nor any of the directors, officers, employees or agents of the Depositor shall be under any liability to the Trustee, the Trust Property or the Unitholders for any action taken, or for refraining from the taking of any action, in good faith pursuant to the Trust Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Depositor or any such person against any breach of warranties, representations or covenants made in the Trust Agreement, or against any specific liability imposed on the Depositor pursuant to the Trust Agreement, or against any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties specifically set forth in the Trust Agreement or by reason of reckless disregard of obligations and duties specifically set forth in the Trust Agreement. The Depositor shall not be under any obligation to appear in, prosecute or defend any legal action unless such action is related to its duties under the Trust Agreement and, in its reasonable opinion, does not involve it in any expense or liability; provided, however, that the Depositor may in its discretion undertake any such action which it may deem necessary or desirable with respect to the Trust Agreement and the rights and duties of the parties thereto and the interests of the Unitholders. SECTION 6.03. Depositor May Purchase Units. The Depositor or its Affiliates may at any time purchase Units in the open market or otherwise. Units so purchased by the Depositor may, at the discretion of the Depositor, be held or resold. SECTION 6.04. Preparation and Filing of Exchange Act Reports; Obligations of the Depositor. The Depositor shall: (a) on behalf of the Trust, prepare, sign and file with the Commission, within the time period set forth below, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe), if any, which the Depositor on behalf of the Trust may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (collectively, "Exchange Act Reports") with respect to the Trust. The names of such Exchange Act Reports and the dates on which they are required to be filed with the Commission are as follows: (i) Form 8-K, within the time requirement prescribed by the Exchange Act if the filing of Form 8-K is necessary; (ii) Form 10-K, within the time requirement prescribed by the Exchange Act; and (iii) such other reports as may be required pursuant to Section 13 or 15(d) of the Exchange Act. (b) deliver to the Trustee within 15 days after the Depositor is required to file the same with the Commission, such additional information, documents and reports with respect to compliance by the Depositor with the conditions and covenants of this Agreement, if any, as may be required to be filed with the Commission from time to time by such rules and regulations; and (c) deliver to the Trustee, which shall then transmit by mail to all Holders described in TIA Section 313(c), in the manner and to the extent provided therein, such summaries of any information, documents and reports required to be filed by the Depositor and received pursuant to clauses (a) and (b) of this Section 6.04, if any, as may be required by rules and regulations prescribed from time to time by the Commission. SECTION 6.05. Preferential Collection of Claims Against Depositor. Irrespective of whether the TIA shall apply to those Agreement, the Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent required by TIA Section 311(a). ARTICLE VII Rights of Unitholders SECTION 7.01. Voting Rights with Respect to Securities. (a) Within five Business Days after receipt of notice of any meeting of, or other occasion for the exercise of voting rights or the giving of consents by, owners of any of the Securities, the Trustee shall give notice to the Unitholders, setting forth (i) such information as is contained in such notice to owners of Securities, (ii) a statement that the Unitholders will be entitled, subject to any applicable provision of law and any applicable terms of such Securities (and to the extent of the voting rights allocated to the Unitholders), to instruct the Trustee as to the exercise of voting rights, if any, pertaining to such Securities and (iii) a statement as to the manner in which instructions may be given to the Trustee to give a discretionary proxy to a person designated in the notice received by the Trustee. Such notice shall be given by the Trustee to the Unitholders of record on such record date. (b) Unless otherwise specified in the Terms Schedule the voting rights allocable to the owners of the Securities pursuant to the terms thereof will be allocated among the Unitholders pro rata, in the proportion that the denomination of each Unit bears to the aggregate denomination of all Units; and upon the written request of the applicable Unitholder, received on or before the date established by the Trustee for such purpose, the Trustee shall endeavor, insofar as practicable and permitted under any applicable provision of law and any applicable provision of or governing the Securities, to vote in accordance with any nondiscretionary instruction set forth in such written request, provided, that the Trustee shall not vote except as specifically authorized and directed in written instructions from the applicable Unitholder entitled to give such instructions. (c) Notwithstanding Section 7.01(b), the Trustee must reject any vote to (i) after the currency, amount or timing of payment of, or the method or rate of accruing, any principal or interest on the Securities underlying the Units held by such Unitholder or (ii) consent to any redemption or prepayment of the Securities underlying the Units held by such Unitholder or (iii) consent to the issuance of new obligations in exchange or substitution for any Securities pursuant to a plan or refunding of the Securities or any other offer for the Securities; in each case unless the Trustee is directed by the affirmative vote of all Unitholders to accept such amendment or offer as the case may be; and provided, further, that the Trustee receives advice of nationally recognized independent tax counsel, designated by the Depositor, that such exercise of voting rights with respect to any Securities would not result in a "sale or other disposition" of such Securities within the meaning of Section 1001(a) of the Code. The Trustee will not grant any consent (other than a unanimous consent) solicited from the owners of the Securities underlying the Units with respect to the foregoing matters in (i), (ii) and (iii) above nor will it accept or take any action in respect of any consent, proxy or instructions received from any Unitholder in contravention of such provisions. In addition, if the Trustee determines (based upon advice furnished by nationally recognized independent tax counsel, whether at the request of any Unitholder or otherwise) that the exercise of voting rights with respect to any Securities could result in a "sale or other disposition" of such Securities within the meaning of Section 1001(a) of the Code, the Trustee shall exercise such voting rights in a manner that would not result in any such sale or other disposition. The Trustee will have no responsibility to undertake on its own initiative to determine that any exercise of voting rights will result in any such sale or other disposition and in any event will not undertake to make such determination unless given an indemnity reasonably satisfactory to it against the costs of such determination. SECTION 7.02. Amendments and Waivers Under Swap Agreement and Guarantee. Without the need for consent of any Unitholder, the Trustee shall enter into any amendment of the Swap Agreement or the Guarantee requested by the Swap Counterparty or the Guarantor, respectively, to cure any ambiguity or manifest error in, or to correct or supplement any provision of, the Swap Agreement or the Guarantee, so long as (i) the Trustee determines that such amendment will not adversely affect the interests of the Unitholders and (ii) the Trustee has received an Opinion of Counsel, at the expense of the Swap Counterparty or the Guarantor, to the effect that such amendment will not adversely affect the interests of the Unitholders and will not alter the classification of the Trust for Federal income tax purposes. The Trustee shall not agree to any other request from the Swap Counterparty or the Guarantor for approval of any consent, waiver or other modification of the Swap Agreement or the Guarantee without the unanimous consent of the Unitholders and compliance with clause (ii) of the preceding sentence. ARTICLE VIII Default on Securities and Permitted Investments SECTION 8.01. Realization Upon Default. (a) The Trustee, on behalf of the Unitholders, shall assert claims under the Securities or the Permitted Investments, and shall take such reasonable steps as are necessary to receive payment or to permit recovery thereunder with respect to any default, subject in all cases to the terms of Article X. (b) If the Trustee is unable to obtain full recovery in respect of a defaulted Security or Permitted Investment, the Trustee shall follow or cause to be followed such normal practices and procedures as it deems necessary or advisable to realize upon such defaulted Security or Permitted Investment, subject in all cases to the terms of Article X. (c) If there is an event of default (as defined in the indenture or other document pursuant to which the Securities were issued) with respect to any Security and such default is known to the Trustee, the Trustee shall promptly give notice to the Unitholders thereof as promptly as practicable as provided in Section 12.05 hereof, and in the manner and to the extent provided in TIA Section 313(c)) within 90 days after such event of default occurs. ARTICLE IX Trust Wind-Up Events SECTION 9.01. Trust Wind-Up Events. If any of the following events (each event, a "Trust Wind-up Event") shall occur: (a) any Swap Default arising from any action taken or failure to act, by the Swap Counterparty, if applicable; (b) the occurrence of one or more Security Defaults which either (i) results in a Security Default with respect to all Securities held by the Trust or (ii) results in a Termination Event under the Swap Agreement with respect to which all Transactions under the Swap Agreement are Affected Transactions, as a result of; (c) any Termination Event under the Swap Agreement with respect to which the Swap Counterparty shall be the sole "Affected Party" (as defined in the Swap Agreement); provided that at the time of such occurrence no Settlement Amount would be payable by the Trust to the Swap Counterparty upon designation of an Early Termination Date by the Trust; (d) any Transaction under the Swap Agreement has become a Disqualified Transaction and (i) the Trust is not a party to any other Transaction under the Swap Agreement which is not a Disqualified Transaction and the Terms Schedule does not set forth provisions for substituting a replacement Swap Counterparty, or (ii) the Terms Schedule provides that a Trust Wind-Up Event shall occur upon such Transaction becoming a Disqualified Transaction; (e) the designation of an Early Termination Date by the Swap Counterparty under a related Swap Agreement (other than with respect to the termination of fewer than all Transactions entered into under the Swap Agreement); (f) the designation of a Special Depositor Wind-Up Event described in Section 9.06; (g) any Security held by the Trust becomes a Disqualified Security and (i) the Trust holds no other Security which is not a Disqualified Security or (ii) the Terms Schedule provides that a Trust Wind-Up Event shall occur upon such Security becoming a Disqualified Security; (h) any Credit Support held by the Trust becomes Disqualified Credit Support and the Terms Schedule specifies that a Trust Wind-Up Event shall occur upon such Credit Support becoming Disqualified Credit Support; (i) any Excess Expense Event; and (j) any other Trust Wind-Up Event set forth in the Terms Schedule; then the Trustee shall by notice to the Swap Counterparty terminate the Swap Agreement (including all Transactions thereunder) if such notice is applicable under the Swap Agreement, and the Trustee shall distribute to each Unitholder its pro rata share of the Trust Property in accordance with Section 9.03 and the Trust shall terminate. The Trustee shall also provide notice of such Trust Wind-up Event to the Rating Agencies immediately upon discovery or receipt of notice of such Trust Wind-Up Event. SECTION 9.02. Liquidation Events. (a) In the event that (i) a Security Default shall occur which under the terms of the Swap Agreement results in the termination of at least one but fewer than all Transactions under the Swap Agreement or (ii) any Security held by the Trust becomes a Disqualified Security, but the Trust holds one or more other Securities which are not Disqualified Securities, and a Trust Wind-Up Event has not otherwise occurred, then the Affected Securities (and, if necessary, other Trust Property) shall be sold to the extent necessary to pay any Termination Payment applicable to the Affected Transaction under the Swap Agreement, and the remainder distributed to the Unitholders in accordance with Section 9.03, but the Trust shall continue thereafter. (b) In the event that any Transaction under a Swap Agreement becomes a Disqualified Transaction but the Trust holds one or more other Securities other than the Affected Securities which are not Disqualified Securities and a Trust Wind-Up Event has not otherwise occurred, then the Affected Securities (and, if necessary, other Trust Property) shall be sold to the extent necessary to pay any Termination Payment applicable to the Disqualified Transaction under the Swap Agreement, and the remainder distributed to the Unitholders in accordance with Section 9.03, but the Trust shall continue thereafter. (c) In the event that any Credit Support becomes Disqualified Credit Support but a Trust Wind-Up Event has not otherwise occurred, then such Credit Support shall be terminated and any proceeds of such termination shall be distributed pro rata to the Unitholders, but the Trust shall continue thereafter. SECTION 9.03. Trust Property Made Available. (a) Subject to Section 9.04, as promptly as possible after the occurrence of a Trust Wind-up Event or Liquidation Event, and in any case within three Business Days following such occurrence, the Trustee shall provide notice to the Unitholders and the Rating Agencies of the occurrence of a Trust Wind-up Event or Liquidation Event, the termination of the Swap Agreement or the particular Affected Transaction(s) thereunder, the amount of any related Termination Payment and a notice of the rights of the Unitholders under Section 9.03(c). In the case of a Trust Wind-Up Event, subject to Section 9.01, the Trustee shall also provide notice to the Unitholders and the Rating Agencies of the termination of the Trust and that Holders should surrender their Units to the Trustee, or deliver security or indemnity acceptable to the Trustee, for their respective pro rata distributions of the Securities and any other remaining Trust Property, if any. Such notice to the Unitholders and the Rating Agencies shall also specify (i) the cause of the Trust Wind-up Event, (ii) the location and hours of the Corporate Trust Office at which Units should be presented and surrendered and (iii) that each Holder must supply transfer instructions in writing with respect to the Securities and/or other Trust Property to be distributed in cash or in kind. (b) Immediately upon receipt of notice from the Swap Counterparty that the Trust will be obligated to pay a Termination Payment or upon other notice from the Trustee that the Trust is required to sell Securities, the Selling Agent shall undertake to sell Securities on behalf of the Trust, unless and until the Selling Agent receives notice from the Trustee of an exercise by the Unitholders of their rights under Section 9.03(c); provided, however, that the Selling Agent may elect not to act as Selling Agent with respect to some or all of the Securities by written notice to that effect to the Trustee. The timing, price and other terms of any sale conducted by the Selling Agent shall be determined by the Selling Agent in its sole discretion, but all such sales shall be completed within 30 days or such longer period of time as may be reasonable with respect to particular Securities. In the case of a Liquidation Event, sales under this provision shall be limited to the Affected Securities except where the proceeds from the Affected Securities are insufficient to make payment of the Termination Payment. (c) Notwithstanding Section 9.03(b), in connection with any Termination Payment payable by the Trust, the Unitholders may, acting unanimously, deliver to the Trustee the amount of such outstanding Termination Payment (together with, in the case of a Trust Wind-Up Event, any Extraordinary Trust Expenses in excess of the Maximum Reimbursable Amount payable to the Trustee) and a written instruction to discontinue sale of the Securities. If the Selling Agent receives notice from the Trustee of the exercise by the Unitholders of their rights under this Section 9.03(c), the Selling Agent shall promptly discontinue sales of the related Securities (but the Selling Agent and the Trustee shall complete the settlement of any sale already agreed). It is expressly understood and agreed that Securities may be sold in the time necessary for the Unitholders to be notified of and act upon their rights under this Section 9.03(c). (d) Subject to the security interest in all of the Trust Property granted in favor of the Swap Counterparty pursuant to the Swap Agreement and the obligation of the Trust to pay Extraordinary Trust Expenses, and as provided in the Terms Schedule, the Securities or Affected Securities shall be made available by the Trustee to the Holders upon the occurrence of a Trust Wind-up Event or Liquidation Event, respectively, after expiration of any sale period referred to in Section 9.03(b), and upon surrender, or delivery of security or indemnity acceptable to the Trustee, by each Holder of its Units at the Corporate Trust Office specified pursuant to paragraph (a) of this Section 9.03. Upon receipt by the Trustee of (i) appropriate transfer instructions in writing from a Holder with respect to the Securities and (ii) such Holder' Units (or acceptable security or indemnity), the Trustee shall promptly deliver Securities to such Holder in an aggregate principal amount equal to the aggregate Unit Principal Balance of such Holder' Units in accordance with such transfer instructions by (A) physical delivery or (B) if applicable, causing the book-entry depositary for such Securities to credit such Securities to an account of such Holder with such depositary or an account of a designated participant in such depositary, provided that such book-entry depositary will be an agency of the United States, DTC or another book-entry institution acceptable to the Depositary. Any Transfer made in accordance with this paragraph shall satisfy all obligations of the Trust with respect to the Unitholders. (e) Unless otherwise provided in the Terms Schedule, and notwithstanding any other provision of this Agreement (and as specified in the Swap Agreement), in connection with early termination of a Swap Agreement or one or more Transactions thereunder, other than as a result of Security Default, the claim of the Swap Counterparty against the Securities (or proceeds thereof arising from sale thereof) and any other Trust Property will be limited to a claim pro rata with that of the Unitholders according to the amount of the Termination Payment otherwise payable to the Swap Counterparty and the Unitholders' aggregate Unit Principal Balance plus accrued interest. (f) The only distributions from the Trustee to which the Holders shall be entitled are, subject to the security interest in all of the Trust Property granted in favor of the Swap Counterparty pursuant to the Swap Agreement and the obligation of the Trust to pay Extraordinary Trust Expenses, payments on the Securities, amounts, if any, recovered under the Swap Agreement (including Termination Payments, if any, and amounts collected pursuant to Section 2(e) and Section 11 of the Swap Agreement) or Guarantee, received by the Trustee after the occurrence of the Trust Wind-Up Event, and any other remaining Trust Property, if any, which in each case the Trustee shall distribute pro rata to the Unitholders in the manner provided pursuant to Section 4.01 upon satisfaction of the conditions for transfer of Securities referred to in paragraph (b) of this Section. (g) Except for reports and other information required to be provided to Holders under the Trust Agreement, the obligations the Trustee and the Depositor will terminate upon the distribution to Unitholders of all amounts required to be distributed to them and the disposition of all Securities held by the Trustee, and such distribution shall constitute full satisfaction of all of the interests of the Unitholders under this Trust Agreement. (h) In the event that the Selling Agent resigns or declines to sell specific Securities, the Trustee shall proceed under Section 10.02(a)(x). (i) The Selling Agent is an agent of the Trustee only and shall have no fiduciary or other duties to the Unitholders, nor shall the Selling Agent have any liability to the Trust in the absence of the Selling Agent's bad faith or willful default. The Selling Agent shall be permitted to sell Securities to Affiliates of the Selling Agent. The Selling Agent may (in addition to declining to sell specific Securities as provided in Section 9.03(b)) resign at any time by oral or written notice to the Trustee, such resignation to take effect immediately upon notice. Except as provided in the first sentence of this Section 9.03(i), each of the protections, releases, indemnities and other terms applicable to the Trustee under Section 10.01, 10.02, 10.03 and 10.05 shall apply to the Selling Agent in connection with its actions as Selling Agent for the Trust. (j) Subject to Section 9.03(b) and Section 9.03(e), the Trustee agrees that upon any failure of the Trust to make any payment when due under the Swap Agreement, the Swap Counterparty shall have the right to take all action and to pursue all remedies with respect to such property that a secured party is permitted to take with respect to collateral under the UCC, including the right to require the Trustee promptly to sell all or any portion of the Securities in the open market or, if the Swap Counterparty elects, to sell the Securities to the Swap Counterparty for its fair value as determined in good faith by the Swap Counterparty. In either case, the proceeds of sale shall be applied to any amounts owed to the Swap Counterparty. The Trustee further agrees to take any actions necessary to facilitate the perfection of the aforementioned security interest of the Swap Counterparty in the property of the Trust as the Swap Counterparty may reasonably request. (k) No Unitholder shall have any liability as a seller of the Trust Property in connection with any sale of Trust Property by the Trustee or the Selling Agent. SECTION 9.04. Limitation on Notice Requirement. The Trustee shall not be responsible for terminating the Swap Agreement (or any individual Affected Transaction thereunder) or giving notice of a Trust Wind-up Event unless and until (i) the Trustee fails to receive funds due on the Securities or under the Swap Agreement when due and such funds are not received within any applicable grace period, (ii) receipt by the Trustee of notice from the Swap Counterparty of the occurrence of a Swap Default or Termination Event or upon actual knowledge of a Swap Default or Termination Event by a Responsible Officer of the Trustee; provided, however, that the Trustee is responsible for making due inquiry as to whether a Trust Wind-up Event occurred if it has reason to believe that such a Trust Wind-up Event has occurred or (iii) receipt of notice from the Security Issuer of an event constituting a Security Default. SECTION 9.05. Expense Event. (a) In the event that the Trustee incurs Extraordinary Trust Expense in an aggregate amount exceeding the Trigger Amount and neither the Swap Counterparty nor the Unitholders have provided adequate assurance of indemnity to the Trustee in accordance with the terms of paragraph (b) or paragraph (c), as applicable, of this Section (such event, an "Excess Expense Event"), the Trust shall terminate as provided in Section 9.01. (b) Promptly upon the incurrence by the Trustee of Extraordinary Trust Expense in an aggregate amount exceeding the Trigger Amount, and in any event within one Business Day after such incurrence, the Trustee shall provide notice to each Unitholder, to the Swap Counterparty and to the Rating Agencies, if any. Such notice shall state that an Excess Expense Event shall occur on the seventh calendar day (or, if such day is not a Business Day, on the next succeeding day that is a Business Day) following the provision of such notice unless prior to such day either the Unitholders unanimously agree, or the Swap Counterparty agrees, to indemnify the Trustee for Extraordinary Trust Expense in an aggregate amount exceeding the Maximum Reimbursable Amount (or any other amount specified by the party agreeing to indemnify the Trustee), and actually incurred by the Trustee as of the date of such agreement, to the reasonable satisfaction of the Trustee and its counsel; provided, however, in no event shall the Trustee be released from its obligations under the Trust Agreement until such seventh calendar day (or, if such day is not a Business Day, on the next succeeding day that is a Business Day). (c) Following an agreement to indemnify the Trustee for future Extraordinary Trust Expense, upon the incurrence of Extraordinary Trust Expense in excess of the Maximum Reimbursable Amount, then an "Excess Expense Event" will occur unless adequate assurance of indemnity is given to the Trustee in the manner specified in paragraph 9.05(b). (d) Nothing in this Section shall be construed to excuse the Depositor from its indemnification obligations under Section 10.05. SECTION 9.06. Special Depositor Wind-Up Event. If the Depositor (or, if applicable, its permitted assignee) owns 100% of the Units, then it shall have the power to designate a distribution of the Trust Property to the Unitholders and the termination of the Trust (a "Special Depositor Wind-Up Event") pursuant to this Article IX. ARTICLE X Concerning the Trustee SECTION 10.01. Duties of Trustee. (a) The Trustee undertakes to perform such duties and only such duties as are specifically set forth in the Trust Agreement. Any permissive right of the Trustee enumerated in the Trust Agreement shall not be construed as a duty. (b) The Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trustee which are specifically required to be furnished pursuant to any provision of the Trust Agreement, shall examine them to determine whether they conform to the requirements of the Trust Agreement. If any such instrument is found not to conform to the requirements of the Trust Agreement, the Trustee shall take action as it deems appropriate to have the instrument corrected, and if the instrument is not corrected to the Trustee' satisfaction, the Trustee will provide notice thereof to the Depositor, the Unitholders and the Rating Agencies, if any. (c) Upon a default by the Swap Counterparty in making any other payment due under the Swap Agreement and upon a default by the Guarantor after the Trustee makes demand under the Guarantee, the Trustee shall exercise such of the rights and powers vested in it by the Trust Agreement, and shall use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person' own affairs. (d) No provision of the Trust Agreement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own misconduct; provided, however, that: (i) the duties and obligations of the Trustee shall be determined solely by the express terms of the Trust Agreement, the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in the Trust Agreement, no implied covenants or obligations (except for a fiduciary duty to the beneficiaries of the Trust) shall be read into the Trust Agreement against the Trustee and, in the absence of negligence, bad faith or willful misconduct on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee that conform to the requirements of the Trust Agreement; (ii) the Trustee shall not be personally liable for an error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (iii) except with respect to actions or duties required to be taken or performed, as applicable, by the Trustee under the express terms of the Trust Agreement, the Trustee shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights powers under the Trust Agreement if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; provided, however, that the Trustee agrees that the indemnification under Section 10.05 will provide reasonable assurance against such risk or liability; and (iv) in the event that the Paying Agent or the Unit Registrar shall fail to perform any obligation, duty or agreement in the manner or on the day required to be performed by the Paying Agent or Unit Registrar, as the case may be, under the Trust Agreement, the Trustee shall be obligated promptly upon its knowledge thereof to perform such obligation, duty or agreement in the manner so required. SECTION 10.02. Certain Matters Affecting the Trustee. (a) Except as otherwise provided in Section 10.01: (i) the Trustee may request and rely upon and shall be protected in acting or refraining from acting upon any resolution, Officers' Certificate, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document reasonably believed by it to be genuine and to have been signed by the proper party or parties; (ii) the Trustee may consult with counsel and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it under the Trust Agreement in good faith and in accordance with such advice or Opinion of Counsel; (iii) except for the duties and obligations of the Trustee expressly created by the Trust Agreement, the Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by the Trust Agreement or to institute, conduct or defend any litigation thereunder or in relation thereto, at the request, order or direction of any of the Unitholders, pursuant to the terms of the Trust Agreement, unless such Unitholders or the Depositor shall have, to the reasonable satisfaction of the Trustee and its counsel, offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; (iv) the Trustee shall not be personally liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by the Trust Agreement; (v) the Trustee shall not be bound to make any investigation into the facts of matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, approval, bond or other paper or document believed by it to be genuine; (vi) the Trustee may execute any of the trusts or powers or perform any duties under the Trust Agreement either directly or by or through agents or attorneys or a custodian or administrative agent; (vii) the Trustee shall not be personally liable for any loss resulting from the investment of funds held in any Unit Account pursuant to Section 3.04; (viii) the Trustee shall not be deemed to have notice or knowledge of any matter unless a Responsible Officer assigned to and working in the Corporate Trust Office has actual knowledge thereof or unless written notice thereof is received by the Trustee at the Corporate Trust Office and such notice references the Units generally or the Trust Agreement; (ix) the Trustee shall have the power to reimburse itself for any unpaid Extraordinary Trust Expense actually incurred in accordance with the terms and conditions of this Trust Agreement prior to the distribution of funds or Trust Property to Unitholders; and (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 (with the consent 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 prior to 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. (b) All rights of action under the Trust Agreement or under any of the Units, enforceable by the Trustee, may be enforced by it without the possession of any of the Units, or the production thereof at the trial or other Proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the Holders, subject to the terms of the Trust Agreement. SECTION 10.03. Limitation on Liability of Trustee. The Trustee assumes no responsibility for the correctness of the recitals contained in the Trust Agreement, the Units, the Swap Agreement and the Guarantee, or in any document issued in connection with the sale of the Units (other than the signature and authentication on the Units). The sole obligor with respect to the Securities is the related Security Issuer, with respect to the Swap Agreement is the Swap Counterparty and with respect to the Guarantee, is the Guarantor. Except as set forth in Section 10.12, the Trustee makes no representations or warranties as to the validity or sufficiency of the Trust Agreement, the Units (other than the signature and authentication on the Units), any Security, the Swap Agreement, the Guarantee or of any related document. The Trustee shall not be accountable for the use or application by the Depositor of any of the Units or of the proceeds of such Units, or for the use or application of any funds paid to the Depositor or the Swap Counterparty in respect of the Securities. The Units do not represent interests in or obligations of the Trustee and the Trustee shall not be responsible or accountable for any tax, accounting or other treatment proposed to be applied to the Units or any interest therein except as expressly provided in the Trust Agreement. SECTION 10.04. Trustee May Own Units. The Trustee in its individual capacity or any other capacity may become the owner or pledgee of Units with the same rights it would have if it were not Trustee. SECTION 10.05. Trustee Fees and Expenses; Limited Indemnification. (a) As compensation for its regular and customary services and in payment of its regular and customary expenses under the Trust Agreement (including the reasonable compensation, expenses and disbursements of its counsel for regular and customary services hereunder) the Trustee shall be entitled to the Trustee Fees (which shall not be limited by any provision of law in regard to compensation or payment of a trustee of an express trust). The Depositor agrees to pay such Trustee Fees when due in accordance with the Trustee Fee Letter; provided, however, that, subject to paragraph (b) below, the Depositor shall be under no obligation to make any other payment for any other services and expenses, disbursements and advances of the Trustee. (b) The Trustee and any director, officer, employee or agent of the Trustee shall be indemnified by the Depositor and held harmless against any loss, liability or expense incurred in connection with any Proceeding relating to the Trust Agreement, the Swap Agreement or the Units or the performance of any of the Trustee' duties under the Trust Agreement, other than any loss, liability or expense (i) that constitutes a specific liability of the Trustee under the Trust Agreement or (ii) incurred by reason of willful misfeasance, bad faith or negligence in the performance of the Trustee' duties thereunder or by reason of reckless disregard of the Trustee' obligations and duties thereunder (such loss, liability or expense, other than as described in clauses (i) and (ii) of this sentence, "Extraordinary Trust Expense"); provided, however, that with respect to any such Proceeding, (1) the Trustee shall have given the Depositor notice thereof promptly after the Trustee shall have knowledge thereof; (2) while maintaining control over its own defense in any such legal action, the Trustee shall consult with the Depositor in preparing such defense; (3) if any Person ever alleges such willful misfeasance, bad faith or negligence by the Trustee, the indemnification provided for in this paragraph (b) shall nonetheless be paid upon demand, subject to later adjustment or reimbursement, until such time as a court of competent jurisdiction enters a final judgment as to the extent and effect of the alleged willful misfeasance, bad faith or negligence; and (4) the Depositor shall in no event be obligated under the Trust Agreement to indemnify the Trustee for any Extraordinary Trust Expense to the extent that such Extraordinary Trust Expense, when aggregated with all Extraordinary Trust Expense previously indemnified, exceeds the Maximum Reimbursable Amount. Subject to clause (4) of the proviso to the immediately preceding sentence, the indemnity for Extraordinary Trust Expense shall survive the termination or discharge of the Trust Agreement and the resignation or removal of the Trustee. In the event the Trustee is not indemnified by the Depositor, whether due to bankruptcy, insolvency or otherwise, pursuant to the first sentence of this paragraph, the Trustee shall nevertheless remain obligated to perform its duties under the Trust Agreement. (c) The Trustee and the Depositor expressly acknowledge that the limited obligations of the Depositor to indemnify the Trustee pursuant to paragraph (b) of this Section do not extend to amounts attributable to compensation for services or payment of expenses of the Trustee, which amounts are payable in full in the form of the Trustee Fee. SECTION 10.06. Eligibility Requirements for Trustee. (a) The Trustee shall at all times satisfy the requirements of TIA Section 310(a) and Section (a)(4)(i) of Rule 3a-7 under the Investment Company Act. The Trustee hereunder shall at all times be a corporation which is not an Affiliate of the Depositor (but may have normal banking relationships with the Depositor or any obligor with respect to the Securities with respect to such Series of Units and their respective Affiliates) organized and doing business under the laws of any State or the United States, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or State authority, and the long-term debt obligations of which are rated in one of the four highest categories assigned long-term debt obligations by each of the Rating Agencies. If such corporation or association publishes reports of conditions at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such corporation or association shall be deemed to be its combined capital and surplus as set forth in its most recent report of conditions so published. In the event that at any time the Trustee shall cease to be eligible in accordance with the terms of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 10.07. (b) The Trustee shall comply with Section 310(b) of the TIA; provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1), any Series under which other securities are outstanding evidencing ownership interest in obligations of the Security Issuer if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met. SECTION 10.07. Resignation or Removal of the Trustee. (a) Subject to the last sentence of this paragraph (a), the Trustee may at any time resign and be discharged from the Trust by giving written notice thereof to the Depositor, the Swap Counterparty and the Guarantor and to all Unitholders. Upon receiving such notice or resignation, the Depositor, with the consent of the Swap Counterparty and the Guarantor which consents shall not be unreasonably withheld, shall as promptly as possible (and in any event within 30 days after the date of such notice of resignation) appoint a successor trustee by written instrument, in duplicate, which instrument shall be delivered to the resigning Trustee and to the successor trustee. A copy of such instrument shall be delivered to the Unitholders, the Swap Counterparty, the Guarantor and the Rating Agencies by the Depositor. If no such successor trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee for the Units. Upon any appointment of a successor trustee pursuant to this paragraph (a), the resigning Trustee shall be solely liable for (i) the payment of such successor trustee' fees and expenses and (ii) provision of adequate indemnities satisfactory to such successor trustee (it being understood that the indemnification obligations of the Depositor pursuant to Section 10.05(b) shall inure to the benefit of such successor trustee, but that any Extraordinary Trust Expense previously indemnified by the Depositor shall reduce the Maximum Reimbursable Amount with respect to such successor trustee on a dollar-for-dollar basis). In the event that the Trustee fails to satisfy the conditions contained in clauses (i) and (ii) above, the Trustee may not resign pursuant to this paragraph (a). (b) If at any time the Trustee shall cease to be eligible in accordance with the terms of Section 10.06 and shall fail to resign after written request therefor by the Depositor, or if at any time the Trustee shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Depositor may, with the consent of the Swap Counterparty and the Guarantor which consents shall not be unreasonably withheld, remove the Trustee and appoint a successor trustee by written instrument, in duplicate, which instrument shall be delivered to the Trustee so removed and to the successor trustee. A copy of such instrument shall be delivered to the Unitholders, the Swap Counterparty, the Guarantor, and the Rating Agencies by the Depositor. (c) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the terms of this Section shall not become effective until acceptance of appointment by the successor trustee as provided in Section 10.08. SECTION 10.08. Successor Trustee. (a) Any successor trustee appointed as provided in Section 10.07 shall execute, acknowledge and deliver to the Depositor, its predecessor trustee and the Rating Agencies an instrument accepting such appointment under the Trust Agreement, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor under the Trust Agreement, with the like effect as if originally named as trustee in the Trust Agreement. The predecessor trustee shall deliver to the successor trustee all documents and statements held by it under the Trust Agreement, and the Depositor and the predecessor trustee shall execute and deliver such instruments and do such other things as may reasonably be required for more fully and certainly vesting and confirming in the successor trustee all such rights, powers, duties and obligations. No successor trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor trustee shall be eligible under the terms of Section 10.06. (b) Upon acceptance of appointment by a successor trustee as provided in this Section, the Depositor shall transmit notice of the succession of such trustee under the Trust Agreement to all Unitholders in the manner provided pursuant to Section 12.05. SECTION 10.09. Merger or Consolidation of Trustee. Any corporation or association into which the Trustee may be merged or converted or with which it may be consolidated or any corporation or association resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or association succeeding to the business of the Trustee, shall be the successor of the Trustee under the Trust Agreement, provided such corporation or association shall be eligible under the terms of Section 10.06, without the execution or filing of any paper or any further act on the part of any of the parties to the Trust Agreement, anything in the Trust Agreement to the contrary notwithstanding. SECTION 10.10. Appointment of Co-Trustee. (a) Notwithstanding any other terms of the Trust Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any party of the Trust Property may at the time be located, the Depositor and the Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, of all or any part of the Trust Property, and to vest in such Person or Persons, in such capacity, such title to the Trust Property, or any part thereof, and, subject to the other terms of this Section, such powers, duties, obligations, rights and trusts as the Depositor and the Trustee may consider necessary or desirable. If the Depositor shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, the Trustee alone shall have the power to make such appointment. No co-trustee under the Trust Agreement shall be required to meet the terms of eligibility as a successor trustee under Section 10.06 and no notice to Unitholders of the appointment of a co-trustee or co-trustees shall be required under Section 10.08. (b) In the case of any appointment of a co-trustee pursuant to this Section, all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such co-trustee jointly, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed by the Trustee, the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to such Trust Property or any portion thereof in any such jurisdiction) shall be exercised and performed by such co-trustee at the direction of the Trustee. (c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of then co-trustees, as effectively as if given to each of them. Every instrument appointment any co-trustee shall refer to the Trust Agreement and the conditions of this Article X. Each co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, jointly with the Trustee subject to all the terms of the Trust Agreement, specifically including every provision of the Trust Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Every such instrument shall be filed with the Trustee. (d) Any co-trustee may, at any time, constitute the Trustee, its agent or attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of the Trust Agreement on its behalf and in its name. If any co-trustee shall die, become incapable of acting, resign or be removed, all its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. SECTION 10.11. Appointment of Office or Agency. The Units may be surrendered for registration of transfer or exchange, and presented for the final distribution with respect thereto, and notices and demands to or upon the Trustee in respect of the Units and the Trust Agreement may be served at the Corporate Trust Office. SECTION 10.12. Representations and Warranties of Trustee. (a) The Trustee represents and warrants that: (i) the Trustee is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or association; (ii) the Trustee has full power, authority and right to execute, deliver and perform its duties and obligations under the Trust Agreement, the Units and the Swap Agreement and has taken all necessary action to authorize the execution, delivery and performance by it (or, with respect to the Units, by an Authenticating Agent on its behalf, if applicable) of the Trust Agreement, the Units and the Swap Agreement; (iii) the execution and delivery of the Trust Agreement, the Units, the Distribution Agreement and the Swap Agreement by the Trustee and its performance of and compliance with the terms of the Trust Agreement, the Units and the Swap Agreement will not violate the Trustee's articles of incorporation, association or other constitutive documents or By-laws or constitute a default under, or result in the breach or acceleration of, any material contract, agreement or other instrument to which the Trustee is a party or which may be applicable to the Trustee or any of its assets; (iv) as of the Closing Date, each of the Trust Agreement, the Units and the Swap Agreement has been duly executed and delivered by the Trustee (or, with respect to the Units, by an Authenticating Agent on its behalf, if applicable) and each of the Trust Agreement and the Swap Agreement constitutes the legal, valid and binding obligation of the Trustee, enforceable in accordance with its terms, except as enforcement may be limited by the applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and general principles of equity; (v) the Trustee is not in violation, and the execution and delivery of the Trust Agreement, the Swap Agreement and the Units by the Trustee and its performance and compliance with respective terms of the Trust Agreement, the Swap Agreement and the Units will not constitute a violation, of any order or decree of any court or any order or regulation of any Federal, State, municipal or governmental agency having jurisdiction over the Trustee or its properties, which violation would reasonably be expected to have a material adverse effect on the condition (financial or otherwise) or operations of the Trustee or its properties or on the performance of its duties thereunder; (vi) there are no actions or proceedings against, or investigations of, the Trustee pending, or, to the knowledge of the Trustee, threatened, before any court, administrative agency or other tribunal (A) that could reasonably be expected to prohibit its entering into the Trust Agreement or the Swap Agreement or to render the Units invalid, (B) seeking to prevent the issuance of the Units or the consummation of any of the transactions contemplated by the Trust Agreement or the Swap Agreement or (C) that could reasonably be expected to prohibit or materially and adversely affect the performance by the Trustee of its obligations under, or the validity or enforceability of, the Trust Agreement, the Swap Agreement or the Units; and (vii) no consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Trustee of, or compliance by the Trustee with, the Trust Agreement, the Swap Agreement or the Units, or for the consummation of the transactions contemplated by the Trust Agreement or the Swap Agreement, except for such consents, approvals, authorizations and orders, if any, that have been obtained prior to the Closing Date. (b) Within 30 days of the earlier of discovery by the Trustee or receipt of notice by the Trustee of a breach of any representation or warranty of the Trustee set forth in this Section 10.12 that materially and adversely affects the interests of the Unitholders, the Trustee shall promptly cure such breach in all material respects. SECTION 10.13. Limitation of Powers and Duties. The Trust is constituted solely for the purposes of acquiring and holding the Securities, entering into the Swap Agreement, accepting the Guarantee, entering into the Distribution Agreement and issuing the Units. The Trust may not incur any additional debt other than the debt that does not constitute a claim against the Trust to the extent that excess proceeds are insufficient to pay such debt. The Trustee is not authorized to acquire any other investments or engage in any activities not authorized in the Trust Agreement and, in particular, the Trustee is not authorized (i) to sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of any of the Securities or interests therein, including to Unitholders (except upon termination of the Trust in accordance with Article IX and Article XI of the Trust Agreement) or (ii) to do anything that would cause the Trust to fail or cease to qualify as a "grantor trust" for Federal income tax purposes. 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, neither the Trustee nor the Depositor shall take any action or institute any proceeding against the other under the United States Bankruptcy Code or any other liquidation, insolvency, bankruptcy, moratorium, reorganization or similar law ("Insolvency Law") applicable to either of them, now or hereafter in effect, or which would be reasonably likely to cause the other to be subject to, or seek the protection of, any such Insolvency Law. ARTICLE XI Termination SECTION 11.01. Termination of the Trust. (a) Except as otherwise provided in Article IX, the respective obligations and responsibilities under the Trust Agreement of the Depositor and the Trustee (other than the obligations imposed by Section 10.05(b) and the obligations of the Trustee to provide reports and other information under the Trust Agreement and to make distributions to Unitholders as hereafter set forth) shall terminate upon the distribution to such Holders of all amounts held in all the Accounts and required to be paid to such Holders pursuant to the Trust Agreement; provided, however, that in no event shall the Trust continue beyond the expiration of 21 years from the death of the last survivor of the descendants of Queen Elizabeth II of England, living on the date of the Trust Agreement. (b) Written notice of any termination shall be provided to each Unitholder and the Depositor, the Swap Counterparty, the Guarantor, each Distribution Participant and the Rating Agencies pursuant to Section 12.05 within ten Business Days, unless such termination occurs pursuant to the Scheduled Final Distribution Date. (c) On the Scheduled Final Distribution Date, the Trustee shall distribute to each Holder presenting and surrendering its Units, and to each Holder delivering such security or indemnity to the Trustee as the Trustee may require to save the Trustee and hold the Trustee harmless, the amount distributable on such Distribution Date pursuant to Section 4.01 in respect of the Units so presented and surrendered. Any funds not distributed on such Distribution Date shall be set aside and held in trust for the benefit of Unitholders either (i) not presenting and surrendering their Units in the aforesaid manner or (ii) not delivering such security or indemnity to the Trustee. as the Trustee may require to save the Trustee and hold the Trustee harmless, and shall be disposed of in accordance with this Section and Sections 4.01 and 5.09. Immediately following the deposit of such funds in trust hereunder, the Trust shall terminate. ARTICLE XII Miscellaneous Terms SECTION 12.01. Amendment of Trust Agreement. (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 adversely affect in any material respect the interests of any Unitholder, for any of the following purposes: (i) to cure any ambiguity 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 the definition of Trustee 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; provided, however, that in the case of any amendment pursuant to any of clauses (i) through (v) above, the Rating Agency Condition shall be satisfied with respect to such amendment. (b) Promptly after the execution of any such amendment or modification, the Trustee shall furnish a copy of such amendment or modification to each Unitholder. (c) Notwithstanding the foregoing, no amendment or modification to the Trust Agreement shall be permitted unless the Trustee first receives an Opinion of Counsel that such amendment or modification will not alter the classification of the Trust for U.S. federal income tax purposes. SECTION 12.02. Counterparts. The Trust Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument. SECTION 12.03. Limitation on Rights of Unitholders. (a) The death or incapacity of any Unitholder shall not operate to terminate the Trust Agreement or the Trust Property, nor entitle such Unitholder' legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of the Trust Property, nor otherwise affect the rights, obligations and liabilities of the parties thereto or any of them. (b) Except as otherwise expressly provided herein, no Unitholder shall have any right to control the operation and management of any Trust Property, or the obligations of the parties thereto, nor shall anything in the Trust Agreement set forth, or contained in the terms of the Units, be construed so as to constitute the Unitholders from time to time as partners or members of an association; nor shall any Unitholder be under any liability to any third person by reason of any action taken by the parties to the Trust Agreement pursuant to any provision thereof. (c) No Unitholder shall have any right by virtue of any provision of the Trust Agreement to institute any suit, action or proceeding in equity or at law upon or under or with respect to the Trust Agreement. SECTION 12.04. Governing Law. The Trust Agreement and each Unit issued thereunder shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely therein without reference to such State' principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby, and the obligations, rights and remedies of the parties thereunder shall be determined in accordance with such laws. SECTION 12.05. Notices. All directions, demands and notices under the Trust Agreement shall be in writing and shall be delivered to the offices of the Trustee specified in the offering documents dated as of the Closing Date. Unless otherwise provided in the Terms Schedule, any notice required to be given to a holder of a Registered Unit will be given by facsimile to such number as may be provided to the Trustee or be mailed to the last address of such holder set forth in the applicable Unit Register. Any notice so mailed within the time prescribed in the Trust Agreement shall be conclusively presumed to have been duly given when mailed, whether or not the Unitholder receives such notice. Notices given by facsimile will be effective upon confirmation (including electronic confirmation) of effective transmission. Notice shall be sufficiently given to Holders of Bearer Units if (i) published in an "Authorized Newspaper" (which shall be a leading daily newspaper of general circulation in such city or cities as may be specified in such Units) on a Business Day and (ii) in the case of a Global Security, if also delivered to Euroclear or CEDEL, as applicable for communication by them to the persons shown in their respective records as having interests therein. In case by reason of suspension of publication of any Authorized Newspaper or Authorized Newspapers or by reason of any other cause it shall be impracticable to publish any notice to Holders of Bearer Units as provided above, then such notification to Holders of Bearer Units shall be published as provided above in an Authorized Newspaper of general circulation in Europe or, if such publication shall also be impracticable, such notification shall be given in such manner as shall be approved by the Trustee and the Depositor. SECTION 12.06. Severability of Terms. If any one or more of the covenants, agreements or terms of the Trust Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements or terms shall be deemed severable from the remaining covenants, agreements or terms of the Trust Agreement and shall in no way affect the validity or enforceability of the other terms of the Trust Agreement or of the Units or the rights of the Holders thereof. SECTION 12.07. Notice to Rating Agencies. The Trustee shall use its best efforts promptly to provide notice to the Rating Agencies with respect to each of the following of which it has actual knowledge: (i) any material change or amendment to the Trust Agreement; (ii) the occurrence of any Swap Default or Termination Event; (iii) the resignation or termination of the Trustee; (iv) the final payment to Holders of the Units; (v) any change in the location of the Unit Account; and (vi) any Security Default. In addition, the Trustee shall promptly furnish to the Rating Agencies copies of each report to Unitholders described in Section 4.02. Any such notice pursuant to this Section shall be in writing and shall be deemed to have been duly given if personally delivered or mailed by first class mail, postage prepaid, or by express delivery service to the Rating Agencies at the addresses set forth in the Terms Schedule SECTION 12.08. Perfection of Swap Counterparty Security Interest. At the request of the Swap Counterparty, the Trustee will assist the Swap Counterparty in the perfection of the security interest in the Trust Property described in Section 3.04 and granted by the Trust to the Counterparty under the Swap Agreement. SECTION 12.09. No Recourse. Each Unitholder by accepting a Unit acknowledges that such Unitholder's Units represent beneficial interests in the Trust only and do not represent interests in or obligations of the Depositor, the Trustee, the Swap Counterparty, the Guarantor or any Affiliate of the foregoing Persons and no recourse may be had against such Persons or their respective assets, except as may be expressly set forth in the Trust Agreement, the Swap Agreement or the Units. SECTION 12.10. Conflict With Trust Indenture Act . (a) If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Agreement by any of the provisions of the TIA, such required provision shall control. b) The provisions of the TIA Sections 310 through 317 that impose duties on any Person (including the provisions automatically deemed included herein unless expressly excluded by this Agreement) are a part of and govern this Agreement, whether or not physically contained herein. (c) Except as expressly provided in this Agreement, all provisions specifically referencing the TIA shall be inapplicable until such time as this Agreement is qualified under the TIA. IN WITNESS WHEREOF, the Depositor and the Trustee have caused this instrument to be duly executed by their respective officers thereunto duly authorized as of the date first above written. MSDW STRUCTURED ASSET CORP. By______________________________ Name: Title: CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Trustee on behalf of the Trust identified in Schedule I to the Trust Agreement dated today's date, and not in its individual capacity By______________________________ Name: Title: EXHIBIT A TRUST AGREEMENT TRUST AGREEMENT 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 April __, 1999 (the "Standard Terms"), executed by Chase Bank of Texas, National Association, as trustee (the "Trustee"), and MSDW Structured Asset Corp. (the "Depositor") 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. CHASE BANK OF TEXAS, NATIONAL ASSOCIATION as Trustee on behalf of the Trust identified in Schedule I hereto, and not in its individual capacity By: ____________________________ Name: Title: MSDW STRUCTURED ASSET CORP. By: ____________________________ Name: Title: Attachments: Terms Schedule (consisting of Schedules I, II and III) Schedule I (Terms of Trust and Units) Trust: Structured Asset Trust Unit Repackagings Series 199_-_ Date of Trust Agreement: Trustee: Initial Unit Principal Balance: Issue Price: Cut-off Date: Closing Date: Specified Currency: Business Day: Interest Rate: [Swap Rate] Interest Reset Period: [Each Swap Rate Accrual Period] Rating: Rating Agencies: Scheduled Final Distribution Date: Swap Agreement: [The ISDA Agreement referred to in Schedule III] Swap Counterparty: [Party A to the Swap Agreement referred to in Schedule III] Guarantee: Swap Notional Amount: [The Notional Amount specified in Schedule III] Swap Payment Date: [Each Payment Date specified in Schedule III for Party A] Swap Rate: [The [Fixed][Floating] Rate specified in Schedule III for the applicable Calculation Period under the Swap Agreement, plus or minus the Spread specified in Schedule III]. Distribution Date: Record Date: Form: [Global/Definitive] [Registered/Bearer] Depositary: Alternative ERISA Restrictions: [Apply] [Do Not Apply] Deemed Representations: [Apply] [Do Not Apply] QIB Restriction [Applicable] [Not Applicable] Additional Trust Wind-Up Event: Exchangeable Series Terms: Terms of Retained Interest: Call Option Terms: Other Terms: Schedule II (Terms of Trust Property) Concentrated Securities: Securities: Security Issuer: Principal Amount: Security Rate: Credit Ratings: Listing: Security Agreement: Events of Default: Form: Currency of Denomination: Acquisition Price Units having an initial Unit Principal by Trust: Balance of [$______]. Security Payment Date: Original Issue Date: Maturity Date: Sinking Fund Terms: Redemption Terms: CUSIP No.:/ISIN No. Security Trustee: Available Information [[name of issuer of Securities] is Regarding the Security Issuer subject to the informational (if other than U.S. requirements of the Securities Treasury obligations): 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: 7 World Trade Center, 13th Floor, New York, New York 10048 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, D.C. 20549 at prescribed rates.] [In addition, [attached to the Prospectus is a copy of] [[name of issuer of Securities] has also filed with the Commission] a Prospectus, dated ________ __, 19__, relating to the original offering of the Securities.] Cut-Off Date: Description of Credit Support: Other Trust Property: Schedule III (Swap Terms) EXHIBIT B1 FORM OF REGISTERED UNIT STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS") TRUST UNITS, SERIES ____ [THIS CERTIFICATE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS UNIT IS EXCHANGEABLE FOR UNITS REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.] [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] THIS UNIT MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS PROVIDED IN THE TRUST AGREEMENT FOR THE TRUST TO WHICH THIS UNIT RELATES. THIS UNIT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. UNLESS THE TERMS SCHEDULE TO THE TRUST AGREEMENT PROVIDES THAT THE ALTERNATIVE ERISA RESTRICTIONS OR DEEMED REPRESENTATIONS APPLY, EACH PURCHASER OR TRANSFEREE OF THIS UNIT OR ANY INTEREST HEREIN REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, DOMESTIC OR FOREIGN, WHETHER OR NOT SUBJECT TO ERISA, OR DESCRIBED IN SECTION 4975(E)(1) OF THE CODE, OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS, OR A TRUSTEE OF ANY SUCH PLAN, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH PLAN (EACH OF THE FOREGOING A "BENEFIT PLAN"), UNLESS THE BENEFIT PLAN IS NOT SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF PART 4, SUBTITLE A, TITLE I OF ERISA, DESCRIBED IN SECTION 4975(E)(1) OF THE CODE OR SUBJECT TO SUBSTANTIALLY SIMILAR LEGAL REQUIREMENTS (AN "ERISA BENEFIT PLAN"). AS USED HEREIN, THE TERM "CODE" MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND "ERISA" MEANS THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, IN EACH CASE INCLUDING ANY SUCCESSOR OR AMENDATORY STATUTES. IF THE TERMS SCHEDULE TO THE TRUST AGREEMENT PROVIDES THAT DEEMED REPRESENTATIONS APPLY, EACH PURCHASER OR TRANSFEREE OF THIS UNIT OR ANY INTEREST HEREIN REPRESENTS AND WARRANTS THAT EITHER (A) THE PURCHASER IS NOT AN ERISA PLAN OR OTHER PLAN, AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH ERISA PLAN OR OTHER PLAN, OR A GOVERNMENTAL PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR (B) ITS PURCHASE, HOLDING AND DISPOSITION OF A UNIT WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL PLAN, ANY SUBSTANTIALLY SIMILAR FEDERAL, STATE, OR LOCAL LAW) FOR WHICH AN EXEMPTION IS NOT AVAILABLE OR (C) THE PURCHASER IS AN INSURANCE COMPANY ACQUIRING THE UNIT(S) FOR ITS GENERAL ACCOUNT WHICH IS AN INSURANCE COMPANY GENERAL ACCOUNT AS SUCH TERM IS USED IN PTCE 95-60 ISSUED BY THE UNITED STATES DEPARTMENT OF LABOR AND THERE IS NO EMPLOYEE BENEFIT PLAN (TREATING AS A SINGLE PLAN ALL PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE ORGANIZATION) WITH RESPECT TO WHICH THE AMOUNT OF THE GENERAL ACCOUNT RESERVES AND LIABILITIES FOR ALL CONTRACTS HELD BY OR ON BEHALF OF SUCH PLAN EXCEEDS 10% OF THE TOTAL RESERVES AND LIABILITIES OF SUCH GENERAL ACCOUNT (EXCLUSIVE OF SEPARATE ACCOUNT LIABILITIES) PLUS SURPLUS, AS SET FORTH IN THE NAIC ANNUAL STATEMENTS FILED WITH ITS STATE OF DOMICILE. UNLESS THE ALTERNATIVE ERISA RESTRICTIONS OR DEEMED REPRESENTATIONS APPLY, THE PURCHASER AND EACH OTHER PERSON WHO ACQUIRES A UNIT, AND EACH FIDUCIARY WHICH CAUSES A PERSON TO ACQUIRE A UNIT, IN SUCH FIDUCIARY'S INDIVIDUAL CAPACITY, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE SWAP COUNTERPARTY, THE TRUSTEE AND THEIR AFFILIATES FROM ANY COST, DAMAGE, LOSS OR EXPENSE INCURRED BY THEM AS A RESULT OF SUCH PERSON BEING OR BEING DEEMED TO BE AN ERISA BENEFIT PLAN. IF THE TERMS SCHEDULE TO THE TRUST AGREEMENT PROVIDES THAT THE ALTERNATIVE ERISA RESTRICTIONS APPLY, EACH PROSPECTIVE TRANSFEREE OF THE UNITS PURCHASED PURSUANT TO THIS PURCHASE AGREEMENT SHALL BE REQUIRED TO CERTIFY WHETHER OR NOT IT IS A BENEFIT PLAN OR AN ERISA BENEFIT PLAN. [EACH PURCHASER OR OTHER TRANSFEREE OF THIS UNIT OR ANY INTEREST HEREIN (EACH, A "PURCHASER") OF THIS UNIT, BY ITS ACCEPTANCE HEREOF, IS DEEMED TO REPRESENT AND WARRANT FOR THE BENEFIT OF THE TRUSTEE AND THE DEPOSITOR OF THE TRUST, AND EACH DISTRIBUTION PARTICIPANT AS DEFINED IN THE TRUST AGREEMENT, REFERRED TO BELOW THAT SUCH PURCHASER IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT] REGISTERED INITIAL AMOUNT: $__________ No. ______AGGREGATE INITIAL CUSIP No. ___________AMOUNT OF ALL UNITS: $_________ FRACTIONAL SHARE: ___% STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS") SERIES ___ This certifies that __________________________________________________ is the registered owner of an undivided fractional interest in the Trust Property referred to below. The amount due on this Unit on any Distribution Date is determined by multiplying the Fractional Share hereby represented by the amount of Distribution, reduced by prior payments of the fees and expenses of and any other applicable amounts payable to the Trustee and Depositor out of Available Funds, on such Distribution Date. The Trust Property will be held in trust by the Trustee identified in Schedule I hereto (the "Trust"). The Trust has been created pursuant to a Trust Agreement (the "Trust Agreement"), executed as of the date set forth in Schedule I hereto between Chase Bank of Texas, National Association, as Trustee of the Trust (the "Trustee"), and MSDW Structured Asset Corp. To the extent not defined herein, all capitalized terms shall have the meanings assigned to such terms in the Trust Agreement and the Terms Schedule attached thereto. This Unit is one of the Units described in the Trust Agreement and is issued under and subject to the terms, provisions and conditions of the Trust Agreement. Certain of those terms are set forth in Schedule I hereto. By acceptance of this Unit, the Holder assents to and becomes bound by the Trust Agreement. The Trust Property consists of the Securities, the Swap Agreement and any Permitted Investments. Pursuant to the Trust Agreement, the Trust has granted a first priority security interest in such Trust Property to the Swap Counterparty to secure the payment of any amounts owed by the Trust to the Swap Counterparty pursuant to the Swap Agreement. Subject to the terms and conditions of the Trust Agreement (including the availability of funds for distributions and any grace period or cure period applicable to the Trust Property) and to the prior obligation of the Trust to pay (i) all amounts due to the Swap Counterparty pursuant to the Swap Agreement and (ii) all unpaid Extraordinary Trust Expenses, and until the obligations created by the Trust Agreement shall have terminated in accordance therewith, there will be distributed on each Distribution Date specified in Schedule I hereto, to the Person in whose name this Unit is registered at the close of business on the second Business Day immediately preceding such Distribution Date (the "Record Date"), such Unitholder's fractional undivided interest in the amounts to be distributed to Unitholders pursuant to the Trust Agreement on such Distribution Date. The amount to be distributed on the Scheduled Final Distribution Date will include the full repayment of principal; provided, however, that if the applicable Securities are not redeemed on the Scheduled Final Distribution Date, a Unitholder will be entitled to receive an in kind distribution of the Notes. Distributions on this Certificate (so long as the original principal amount hereof is not less than $10,000,000) will be made by wire transfer in accordance with a written notice to the Trustee providing appropriate wire transfer instructions given no later than 15 calendar days prior to the applicable Distribution Date. If no such notice has been given, distributions will be made by the Trustee by check mailed to the Unitholder of record at its address as it appears in the Unit Register without the presentation or surrender of this Certificate or the making of any notation hereon, by wire transfer of immediately available funds. Except as otherwise provided in the Trust Agreement and notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Trustee of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency maintained for that purpose by the Trustee in the Borough of Manhattan, The City of New York. This Certificate does not purport to summarize the Trust Agreement and reference is hereby made to the Trust Agreement for information with respect to the rights, benefits, obligations and duties evidenced thereby. A copy of the Trust Agreement may be examined during normal business hours at the Corporate Trust Office of the Trustee, located at 600 Travis Street, 9th Floor, Chase Tower, Houston, Texas 77002, the Trustee's offices at 55 Water Street, North Building, Room 234, Windows 20 and 21, New York, New York 10041, and at such other places, if any, designated by the Trustee, by any Unitholder upon request. Reference is hereby made to the further terms of this Certificate set forth on the reverse hereof, which further terms shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Trustee, by manual signature, this Certificate shall not entitle the Holder hereof to any benefit under the Trust Agreement or be valid for any purpose. IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in its individual capacity, has caused this Certificate to be duly executed. SATURNS TRUST NO. ___ By: CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Trustee By: ______________________________ Authorized Signatory DATED: [SEAL] Trustee's Certificate of Authentication: This is one of the Units referred to in the within-mentioned Agreement. CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Trustee By: ____________________________ Authorized Signatory Attachment: Schedule I [Schedule I, not repeated here, shall be identical to the Schedule I attached to the Trust Agreement, a form of which is Exhibit A to the Standard Terms.] [REVERSE OF UNIT CERTIFICATE] STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS") SERIES ___ The Trust Agreement permits the amendment thereof, in certain circumstances, without the consent of the Holders of any of the Certificates. As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registerable in the Unit Register upon surrender of this Certificate for registration of transfer at the office or agency maintained by the Trustee in the Borough of Manhattan, The City of New York, accompanied by a written instrument of transfer and a Distribution Agreement in form and substance satisfactory to the Trustee duly completed and executed by the Holder hereof or such Holder' attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations evidencing the same aggregate interest in the Trust will be issued to the designated transferee. As provided in the Trust Agreement and subject to certain limitations therein set forth, Certificates are exchangeable for new Certificates representing different numbers of Units which evidence the same aggregate interest in the Trust, as requested by the Holder surrendering the same. No service charge will be made for any such registration of transfer or exchange, but the Trustee may require payment of a sum sufficient to cover any tax or governmental charges payable in connection therewith. The Depositor, the Trustee and any agent of the Depositor or the Trustee may treat the person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Depositor, the Trustee, or any such agent shall be affected by any notice to the contrary. The obligations and responsibilities created by the Trust Agreement and the Trust created thereby will terminate upon the payment to Unitholders of all amounts required to be paid to them pursuant to the Trust Agreement. Notwithstanding anything contained in the Trust Agreement to the contrary the Trust Agreement has been accepted by Chase Bank of Texas, National Association not in its individual capacity but solely as Trustee and in no event shall Chase Bank of Texas, National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the Depositor thereunder or in any of the certificates, notices or agreements delivered pursuant thereto, as to all of which recourse shall be had solely to the assets of the Depositor, and under no circumstances shall Chase Bank of Texas, National Association be personally liable for the payment of any indebtedness or expenses of the Trust. The Units do not represent interests in or obligations of the Trustee and the Trustee shall not be responsible or accountable for any tax, accounting or other treatment proposed to be applied to the Units or any interest therein except as expressly provided in the Trust Agreement. ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE - -------------------------------------------------------------------------------- (Please print or typewrite name and address, including postal zip code, of assignee) - -------------------------------------------------------------------------------- the within Certificate, and all rights thereunder, hereby irrevocably constituting and appointing - -------------------------------------------------------------------------------- Attorney to transfer said Certificate on the books of the Certificate Registrar, with full power of substitution in the premises. Dated: _______________________________ */ Signature Guaranteed: _______________________________ */ - --------------- */ NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Certificate in every particular, without alteration, enlargement or any change whatever. Such signature must be guaranteed by a member of the New York Stock Exchange or a commercial bank or trust company. OPTION TO ELECT EXCHANGE The undersigned hereby irrevocably requests and instructs the Trustee to effect exchange of this Unit for the Trust Property in which this Unit evidences a beneficial interest (or portion thereof specified below) pursuant to its terms and in accordance with the Term Schedule and Section 5.12 of the Trust Agreement, to be delivered to the undersigned, at - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Please print or typewrite name and address of the undersigned.) If less than the entire Unit Principal Balance of this Unit is to be redeemed, specify the portion thereof which the Holder elects to have exchanged: ___________________; and specify the denomination or denominations (which shall not be less than the minimum authorized denomination) of the Units to be issued to the Holder for the portion of the within Units not being exchanged (in the absence of any such specification, one such Unit will be issued for the portion not being redeemed): Dated: __________________ EXHIBIT B2 FORM OF BEARER UNIT STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS") TRUST UNITS, SERIES ____ [THIS CERTIFICATE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO. THIS UNIT IS EXCHANGEABLE FOR DEFINITIVE BEARER UNITS ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. FOLLOWING THE AVAILABILITY OF A PERMANENT GLOBAL SECURITY IN BEARER FORM (IF THIS UNIT IS A TEMPORARY GLOBAL SECURITY) OR DEFINITIVE BEARER UNITS, AND SUBJECT TO ANY FURTHER LIMITATIONS DESCRIBED IN THE TERMS SCHEDULE, THIS GLOBAL SECURITY WILL BE EXCHANGEABLE FOR INTERESTS IN SUCH PERMANENT GLOBAL SECURITY OR FOR DEFINITIVE BEARER UNITS, RESPECTIVELY, ONLY UPON RECEIPT OF A CERTIFICATE ACCEPTABLE TO THE DEPOSITOR AND THE TRUSTEE TO THE EFFECT THAT A BENEFICIAL INTEREST IN THIS GLOBAL SECURITY IS OWNED BY A PERSON THAT IS NOT A U.S. PERSON OR IS OWNED BY OR THROUGH A FINANCIAL INSTITUTION IN COMPLIANCE WITH APPLICABLE U.S. TREASURY REGULATIONS (A "CERTIFICATE OF NON-U.S. BENEFICIAL OWNERSHIP").] ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE. THIS UNIT MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS PROVIDED IN THE TRUST AGREEMENT FOR THE TRUST TO WHICH THIS UNIT RELATES. THIS UNIT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. [IF SO SPECIFIED IN THE TERMS SCHEDULE, INTEREST ON THIS TEMPORARY GLOBAL SECURITY WILL BE DISTRIBUTED TO EACH OF EUROCLEAR AND CEDEL WITH RESPECT TO THAT PORTION OF SUCH TEMPORARY GLOBAL SECURITY HELD FOR ITS ACCOUNT, BUT ONLY UPON RECEIPT AS OF THE RELEVANT DISTRIBUTION DATE OF A CERTIFICATE OF NON-U.S. BENEFICIAL OWNERSHIP.] UNLESS THE TERMS SCHEDULE TO THE TRUST AGREEMENT PROVIDES THAT THE DEEMED REPRESENTATIONS APPLY, EACH PURCHASER OR TRANSFEREE OF THIS UNIT OR ANY INTEREST HEREIN REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, DOMESTIC OR FOREIGN, WHETHER OR NOT SUBJECT TO ERISA, OR DESCRIBED IN SECTION 4975(E)(1) OF THE CODE, OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS, OR A TRUSTEE OF ANY SUCH PLAN, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH PLAN (EACH OF THE FOREGOING A "BENEFIT PLAN"), UNLESS THE BENEFIT PLAN IS NOT SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF PART 4, SUBTITLE A, TITLE I OF ERISA, DESCRIBED IN SECTION 4975(E)(1) OF THE CODE OR SUBJECT TO SUBSTANTIALLY SIMILAR LEGAL REQUIREMENTS (AN "ERISA BENEFIT PLAN"). AS USED HEREIN, THE TERM "CODE" MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND "ERISA" MEANS THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, IN EACH CASE INCLUDING ANY SUCCESSOR OR AMENDATORY STATUTES. IF THE TERMS SCHEDULE TO THE TRUST AGREEMENT PROVIDES THAT DEEMED REPRESENTATIONS APPLY, EACH PURCHASER OR TRANSFEREE OF THIS UNIT OR ANY INTEREST HEREIN REPRESENTS AND WARRANTS THAT EITHER (A) THE PURCHASER IS NOT AN ERISA PLAN OR OTHER PLAN, AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH ERISA PLAN OR OTHER PLAN, OR A GOVERNMENTAL PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR (B) ITS PURCHASE, HOLDING AND DISPOSITION OF A UNIT WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL PLAN, ANY SUBSTANTIALLY SIMILAR FEDERAL, STATE, OR LOCAL LAW) FOR WHICH AN EXEMPTION IS NOT AVAILABLE OR (C) THE PURCHASER IS AN INSURANCE COMPANY ACQUIRING THE UNIT(S) FOR ITS GENERAL ACCOUNT WHICH IS AN INSURANCE COMPANY GENERAL ACCOUNT AS SUCH TERM IS USED IN PTCE 95-60 ISSUED BY THE UNITED STATES DEPARTMENT OF LABOR AND THERE IS NO EMPLOYEE BENEFIT PLAN (TREATING AS A SINGLE PLAN ALL PLANS MAINTAINED BY THE SAME EMPLOYER OR EMPLOYEE ORGANIZATION) WITH RESPECT TO WHICH THE AMOUNT OF THE GENERAL ACCOUNT RESERVES AND LIABILITIES FOR ALL CONTRACTS HELD BY OR ON BEHALF OF SUCH PLAN EXCEEDS 10% OF THE TOTAL RESERVES AND LIABILITIES OF SUCH GENERAL ACCOUNT (EXCLUSIVE OF SEPARATE ACCOUNT LIABILITIES) PLUS SURPLUS, AS SET FORTH IN THE NAIC ANNUAL STATEMENTS FILED WITH ITS STATE OF DOMICILE. NOTWITHSTANDING THE TWO PRECEDING SECTIONS, UNLESS THE DEEMED REPRESENTATIONS APPLY, THE PURCHASER AND EACH OTHER PERSON WHO ACQUIRES A UNIT, AND EACH FIDUCIARY WHICH CAUSES A PERSON TO ACQUIRE A UNIT, IN SUCH FIDUCIARY'S INDIVIDUAL CAPACITY, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE SWAP COUNTERPARTY, THE TRUSTEE AND THEIR AFFILIATES FROM ANY COST, DAMAGE, LOSS OR EXPENSE INCURRED BY THEM AS A RESULT OF SUCH PERSON BEING OR BEING DEEMED TO BE AN ERISA BENEFIT PLAN. [EACH PURCHASER OR OTHER TRANSFEREE OF THIS UNIT OR ANY INTEREST HEREIN (EACH, A "PURCHASER") OF THIS UNIT, BY ITS ACCEPTANCE HEREOF, IS DEEMED TO REPRESENT AND WARRANT FOR THE BENEFIT OF THE TRUSTEE AND THE DEPOSITOR OF THE TRUST, AND EACH DISTRIBUTION PARTICIPANT AS DEFINED IN THE TRUST AGREEMENT, REFERRED TO BELOW THAT SUCH PURCHASER IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT] INITIAL AMOUNT: $__________ No. ______AGGREGATE INITIAL CUSIP No. ___________AMOUNT OF ALL UNITS: $_________ FRACTIONAL SHARE: ___% STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS") SERIES ___ This certifies that the bearer hereof is the owner of an undivided fractional interest in the Trust Property referred to below. The amount due on this Unit on any Distribution Date is determined by multiplying the Fractional Share hereby represented by the amount of Distribution, reduced by prior payments of the fees and expenses of and any other applicable amounts payable to the Trustee and Depositor out of Available Funds, on such Distribution Date. The Trust Property will be held in trust by the Trustee identified in Schedule I hereto (the "Trust"). The Trust has been created pursuant to a Trust Agreement (the "Trust Agreement"), executed as of the date set forth in Schedule I hereto between Chase Bank of Texas, National Association, as Trustee of the Trust (the "Trustee"), and MSDW Structured Asset Corp. To the extent not defined herein, all capitalized terms shall have the meanings assigned to such terms in the Trust Agreement and the Terms Schedule attached thereto. This Unit is one of the Units described in the Trust Agreement and is issued under and subject to the terms, provisions and conditions of the Trust Agreement. Certain of those terms are set forth in Schedule I hereto. By acceptance of this Unit, the Holder assents to and becomes bound by the Trust Agreement. The Trust Property consists of the Securities, the Swap Agreement and any Permitted Investments. Pursuant to the Trust Agreement, the Trust has granted a first priority security interest in such Trust Property to the Swap Counterparty to secure the payment of any amounts owed by the Trust to the Swap Counterparty pursuant to the Swap Agreement. Subject to the terms and conditions of the Trust Agreement (including the availability of funds for distributions and any grace period or cure period applicable to the Trust Property) and to the prior obligation of the Trust to pay (i) all amounts due to the Swap Counterparty pursuant to the Swap Agreement and (ii) all unpaid Extraordinary Trust Expenses, and until the obligations created by the Trust Agreement shall have terminated in accordance therewith, there will be distributed on each Distribution Date specified in Schedule I hereto, to the bearer of this Unit, against the presentation hereof at an office or agency of the Trustee outside the United States, such Unitholder's fractional undivided interest in the amounts to be distributed to Unitholders pursuant to the Trust Agreement on such Distribution Date. The amount to be distributed on the Scheduled Final Distribution Date will include the full repayment of principal; provided, however, that if the applicable Securities are not redeemed on the Scheduled Final Distribution Date, a Unitholder will be entitled to receive an in kind distribution of the Notes. Distributions on this Certificate (so long as the original principal amount hereof is not less than $10,000,000) will be by check or by wire transfer in accordance with a written instruction of the bearer hereof on the applicable Distribution Date. Except as otherwise provided in the Trust Agreement and notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Trustee of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency maintained for that purpose by the Trustee outside the United States. This Certificate does not purport to summarize the Trust Agreement and reference is hereby made to the Trust Agreement for information with respect to the rights, benefits, obligations and duties evidenced thereby. A copy of the Trust Agreement may be examined during normal business hours at the Corporate Trust Office of the Trustee, located at 600 Travis Street, 8th Floor, Chase Tower, Houston, Texas 77002, the Trustee's offices at 55 Water Street, North Building, Room 234, Windows 20 and 21, New York, New York 10041, and at such other places, if any, designated by the Trustee, by any Unitholder upon request. This Certificate and the Units represented hereby are subject to redenomination in connection with European Monetary Union as provided in Section 5.08 of the Trust Agreement. The city or cities with respect to which notice may be given, subject to Section 12.05 of the Trust Agreement, by publication in an Authorized Newspaper in connection with this Unit and the Trust Agreement are - ---------------------------------------. Reference is hereby made to the further terms of this Certificate set forth on the reverse hereof, which further terms shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Trustee, by manual signature, this Certificate shall not entitle the Holder hereof to any benefit under the Trust Agreement or be valid for any purpose. IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in its individual capacity, has caused this Certificate to be duly executed. SATURNS TRUST NO. ___ By: CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Trustee By: ______________________________ Authorized Signatory DATED: [SEAL] Trustee's Certificate of Authentication: This is one of the Units referred to in the within-mentioned Agreement. CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Trustee By: ____________________________ Authorized Signatory Attachment: Schedule I [Schedule I, not repeated here, shall be identical to the Schedule I attached to the Trust Agreement, a form of which is Exhibit A to the Standard Terms.] [REVERSE OF UNIT CERTIFICATE] STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS") SERIES ___ The Trust Agreement permits the amendment thereof, in certain circumstances, without the consent of the Holders of any of the Certificates. As provided in the Trust Agreement and subject to certain limitations therein set forth, Certificates are exchangeable for new Certificates representing different numbers of Units which evidence the same aggregate interest in the Trust, as requested by the Holder surrendering the same. No service charge will be made for any such exchange, but the Trustee may require payment of a sum sufficient to cover any tax or governmental charges payable in connection therewith. The obligations and responsibilities created by the Trust Agreement and the Trust created thereby will terminate upon the payment to Unitholders of all amounts required to be paid to them pursuant to the Trust Agreement. Notwithstanding anything contained in the Trust Agreement to the contrary the Trust Agreement has been accepted by Chase Bank of Texas, National Association not in its individual capacity but solely as Trustee and in no event shall Chase Bank of Texas, National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the Depositor thereunder or in any of the certificates, notices or agreements delivered pursuant thereto, as to all of which recourse shall be had solely to the assets of the Depositor, and under no circumstances shall Chase Bank of Texas, National Association be personally liable for the payment of any indebtedness or expenses of the Trust. The Units do not represent interests in or obligations of the Trustee and the Trustee shall not be responsible or accountable for any tax, accounting or other treatment proposed to be applied to the Units or any interest therein except as expressly provided in the Trust Agreement. OPTION TO ELECT EXCHANGE The undersigned hereby irrevocably requests and instructs the Trustee to effect exchange of this Unit for the Trust Property in which this Unit evidences a beneficial interest (or portion thereof specified below) pursuant to its terms and in accordance with the Term Schedule and Section 5.12 of the Trust Agreement, to be delivered to the undersigned, at - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Please print or typewrite name and address of the undersigned.) If less than the entire Unit Principal Balance of this Unit is to be redeemed, specify the portion thereof which the Holder elects to have exchanged: ___________________; and specify the denomination or denominations (which shall not be less than the minimum authorized denomination) of the Units to be issued to the Holder for the portion of the within Units not being exchanged (in the absence of any such specification, one such Unit will be issued for the portion not being redeemed): Dated: __________________ EX-5.1 6 OPINION RE: LEGALITY April __, 1999 Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 MSDW Structured Asset Corp. 1585 Broadway New York, New York 10036 Ladies and Gentlemen: We have acted as special counsel to MSDW Structured Asset Corp., a Delaware corporation (the "Depositor") in connection with the Depositor's preparation and filing with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (File No. 333-64879 (the "Registration Statement") and the related prospectus (the "Prospectus"), first filed September 30, 1998 and amended by filings on February 24, 1999, and April 28, 1999, with respect to the offering of Structured Asset Trust Unit Repackagings (the "Units"), which the Depositor plans to offer in series. Each Series of Units will be issued under a separate Trust Agreement (a "Trust Agreement"), in all material respects relevant hereto incorporating the Standard Terms of Trust Agreements dated as of April 28, 1999 (the "Standard Terms") between the Depositor and Chase Bank of Texas, National Association ("Chase Bank of Texas"), as trustee, in the form included as an exhibit to the Registration Statement, between the Depositor and Chase Bank of Texas or another trustee to be identified in the prospectus supplement for such series of Units (the "Trustee" for such series). In arriving at the opinions expressed below, we have reviewed the following documents: (a) the Registration Statement and the related Prospectus and the documents incorporated by reference therein; (b) the Standard Terms; and (c) forms of the Units set forth in the Standard Terms. In addition, we have reviewed the originals or copies certified or otherwise identified to our satisfaction of all such corporate records of the Depositor and such other instruments and other certificates of public officials, officers and representatives of the Depositor and such other persons, and we have made such investigations of law, as we have deemed appropriate as a basis for the opinions expressed below. In rendering the opinions expressed below, we have assumed the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies. In addition, we have assumed and have not verified the accuracy as to factual matters of each document we have reviewed (including, without limitation, the accuracy of the representations and warranties of the Depositor in the Standard Terms). Based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion that: 1. When, in respect of a series of Units, a Trust Agreement has been duly authorized by all necessary action of, and duly executed and delivered by the Depositor and the Trustee for such series, such Trust Agreement will be a valid, binding and enforceable obligation of the Depositor; and 2. When a Trust Agreement for a series of Units has been duly authorized by all necessary action of, and duly executed and delivered by, the Depositor and the Trustee for such series, and when the Units of such series have been duly executed and countersigned in accordance with the terms of the Trust Agreement and issued and sold as contemplated in the Registration Statement and the prospectus with respect to such series delivered pursuant to Section 5 of the Act, such Units will be legally and validly issued, the holders of such Units will be entitled to the benefits of such Trust Agreement, and such Units will be fully paid and nonassessable in accordance with the terms of the Trust Agreement. Insofar as the foregoing opinions relate to the validity, binding effect or enforceability of any agreement or obligation (a) we have assumed that each other party to such agreement or obligation other than the Depositor has satisfied those legal requirements that are applicable to it to the extent necessary to make such agreement or obligation enforceable against it, and (b) such opinions are subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and to general principles of equity. The foregoing opinions are limited to the federal law of the United States of America, and the law of the State of New York. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the reference to this firm in the Registration Statement and the related Prospectus under the caption "Legal Matters." By giving such consent, we do not admit that we are "experts" within the meaning of the Act, or the rules and regulations of the Commission issued thereunder with respect to any part of the Registration Statement, including this exhibit. Very truly yours, CLEARY, GOTTLIEB, STEEN & HAMILTON By: ---------------------- Mitchell S. Dupler, a Partner EX-8.1 7 OPINION RE: TAX MATTERS April __, 1999 Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 MSDW Structured Asset Corp. 1585 Broadway New York, New York 10036 Ladies and Gentlemen: We have acted as special counsel to MSDW Structured Asset Corp., a Delaware corporation (the "Depositor"), in connection with the Depositor's preparation and filing with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (File No. 333-64879 (the "Registration Statement") and the related prospectus (the "Prospectus"), first filed September 30, 1998 and amended by filings on February 24, 1999, and April 28, 1999, with respect to the offering of Structured Asset Trust Unit Repackagings (the "Units"), which the Depositor plans to offer in series. Our advice formed the basis for the discussion of federal income tax consequences appearing in the Prospectus under the heading "Federal Income Tax Consequences," which discusses and represents our opinion pertaining to the material federal income tax consequences of purchasing, owning and disposing of the Units. We hereby consent to the filing of this letter as an exhibit to the Registration Statement and the reference to this firm in the Registration Statement and the related Prospectus under the caption "Legal Matters." By giving such consent, we do not admit that we are "experts" within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the Commission issued thereunder with respect to any part of the Registration Statement, including this exhibit. Very truly yours, CLEARY, GOTTLIEB, STEEN & HAMILTON By: -------------------- James M. Peaslee, a Partner EX-10.1 8 FORM OF ISDA MASTER AGREEMENT ISDA(R) International Swap Dealers Association, Inc. MASTER AGREEMENT dated as of _____________________________ and _____________________________ have entered and/or anticipate entering into one or more transactions (each a "Transaction") that are or will be governed by this Master Agreement, which includes the schedule (the "Schedule"), and the documents and other confirming evidence (each a "Confirmation") exchanged between the parties confirming those Transactions. Accordingly, the parties agree as follows:-- 1. Interpretation (a) Definitions. The terms defined in Section 14 and in the Schedule will have the meanings therein specified for the purpose of this Master Agreement. (b) Inconsistency. In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the provisions of any Confirmation and this Master Agreement (including the Schedule), such Confirmation will prevail for the purpose of the relevant Transaction. (c) Single Agreement. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmations form a single agreement between the parties (collectively referred to as this "Agreement"), and the parties would not otherwise enter into any Transactions. 2. Obligations (a) General Conditions. (i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement. Copyright (C) 1992 by International Swap Dealers Association, Inc. (ii) Payments under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement. (iii)Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other applicable condition precedent specified in this Agreement. (b) Change of Account. Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the scheduled date for the payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objection to such change. (c) Netting. If on any date amounts would otherwise be payable:-- (i) in the same currency; and (ii) in respect of the same Transaction, by each party to the other, then, on such date, each party's obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount. The parties may elect in respect of two or more Transactions that a net amount will be determined in respect of all amounts payable on the same date in the same currency in respect of such Transactions, regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the Schedule or a Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions identified as being subject to the election, together with the starting date (in which case subparagraph (ii) above will not, or will cease to, apply to such Transactions from such date). This election may be made separately for different groups of Transactions and will apply separately to each pairing of Offices through which the parties make and receive payments or deliveries. (d) Deduction or Withholding for Tax. (i) Gross-Up. All payments under this Agreement will be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, then in effect. If a party is so required to deduct or withhold, then that party ("X") will:-- (1) promptly notify the other party ("Y") of such requirement; (2) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any additional amount paid by X to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y; (3) promptly forward to Y an official receipt (or a certified copy), or other documentation reasonably acceptable to Y, evidencing such payment to such authorities; and (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise entitled under this Agreement, such additional amount as is necessary to ensure that the net amount actually received by Y (free and clear of Indemnifiable Taxes, whether assessed against X or Y) will equal the full amount Y would have received had no such deduction or withholding been required. However, X will not be required to pay any additional amount to Y to the extent that it would not be required to be paid but for:-- (A) the failure by Y to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or (B) the failure of a representation made by Y pursuant to Section 3(f) to be accurate and true unless such failure would not have occurred but for (I) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (II) a Change in Tax Law. (ii) Liability. If:-- (1) X is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding in respect of which X would not be required to pay an additional amount to Y under Section 2(d)(i)(4); (2) X does not so deduct or withhold; and (3) a liability resulting from such Tax is assessed directly against X, then, except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y will promptly pay to X the amount of such liability (including any related liability for interest, but including any related liability for penalties only if Y has failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)). (e) Default Interest; Other Amounts. Prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any payment obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as such overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment, at the Default Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. If, prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party defaults in the performance of any obligation required to be settled by delivery, it will compensate the other party on demand if and to the extent provided for in the relevant Confirmation or elsewhere in this Agreement. 3. Representations Each party represents to the other party (which representations will be deemed to be repeated by each party on each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all times until the termination of this Agreement) that:-- (a) Basic Representations. (i) Status. It is duly organised and validly existing under the laws of the jurisdiction of its organisation or incorporation and, if relevant under such laws, in good standing; (ii) Powers. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorise such execution, delivery and performance; (iii)No Violation or Conflict. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets; (iv) Consents. All governmental and other consents that are required to have been obtained by it with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such consents have been complied with; and (v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)). (b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement or any Credit Support Document to which it is a party. (c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations under this Agreement or such Credit Support Document. (d) Accuracy of Specified Information. All applicable information that is furnished in writing by or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the information, true, accurate and complete in every material respect. (e) Payer Tax Representation. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(e) is accurate and true. (f) Payee Tax Representations. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true. 4. Agreements Each party agrees with the other that, so long as either party has or may have any obligation under this Agreement or under any Credit Support Document to which it is a party:-- (a) Furnish Specified Information. It will deliver to the other party or, in certain cases under subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs:-- (i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation; (ii) any other documents specified in the Schedule or any Confirmation; and (iii)upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the legal or commercial position of the party in receipt of such demand), with any such form or document to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably required certification, in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as soon as reasonably practicable. (b) Maintain Authorisations. It will use all reasonable efforts to maintain in full force and effect all consents of any governmental or other authority that are required to be obtained by it with respect to this Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become necessary in the future. (c) Comply with Laws. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Agreement or any Credit Support Document to which it is a party. (d) Tax Agreement. It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true promptly upon learning of such failure. (e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated, organised, managed and controlled, or considered to have its seat, or in which a branch or office through which it is acting for the purpose of this Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other party's execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party. 5. Events of Default and Termination Events (a) Events of Default. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes an event of default (an "Event of Default") with respect to such party:-- (i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party; (ii) Breach of Agreement. Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied on or before the thirtieth day after notice of such failure is given to the party; (iii) Credit Support Default. (1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed;\ (2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or (3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Credit Support Document; (iv) Misrepresentation. A representation (other than a representation under Section 3(e) or (f)) made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated; (v) Default under Specified Transaction. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last payment, delivery or exchange date of, or any payment on early termination of, a Specified Transaction (or such default continues for at least three Local Business Days if there is no applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf); (vi) Cross Default If "Cross Default" is specified in the Schedule as applying to the party, the occurrence or existence of (1) a default, event of default or other similar condition or event (however described) in respect of such party, any Credit Support Provider of such party or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments, before it would otherwise have been due and payable or (2) a default by such party, such Credit Support Provider or such Specified Entity (individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than the applicable Threshold Amount under such agreements or instruments (after giving effect to any applicable notice requirement or grace period); (vii)Bankruptcy. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party:-- (1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (8) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or (viii) Merger Without Assumption. The party or any Credit Support Provider of such party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer:-- (1) the resulting, surviving or transferee entity fails to assume all the obligations of such party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other party to this Agreement; or (2) the benefits of any Credit Support Document fail to extend (without the consent of the other party) to the performance by such resulting, surviving or transferee entity of its obligations under this Agreement. (b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any event specified below constitutes an Illegality if the event is specified in (i) below, a Tax Event if the event is specified in (ii) below or a Tax Event Upon Merger if the event is specified in (iii) below, and, if specified to be applicable, a Credit Event Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if the event is specified pursuant to (v) below:-- (i) Illegality. Due to the adoption of, or any change in, any applicable law after the date on which a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for such party (which will be the Affected Party):-- (1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or (2) to perform, or for any Credit Support Provider of such party to perform, any contingent or other obligation which the party (or such Credit Support Provider) has under any Credit Support Document relating to such Transaction; (ii) Tax Event. Due to (x) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (y) a Change in Tax Law, the party (which will be the Affected Party) will, or there is a substantial likelihood that it will, on the next succeeding Scheduled Payment Date (1) be required to pay to the other party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to be deducted or withheld for or on account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B)); (iii)Tax Event Upon Merger. The party (the "Burdened Party") on the next succeeding Scheduled Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been deducted or withheld for or on account of any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or amalgamating with, or merging with or into, or transferring all or substantially all its assets to, another entity (which will be the Affected Party) where such action does not constitute an event described in Section 5(a)(viii); (iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified in the Schedule as applying to the party, such party ("X"), any Credit Support Provider of X or any applicable Specified Entity of X consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and such action does not constitute an event described in Section 5(a)(viii) but the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such Credit Support Provider or such Specified Entity, as the case may be, immediately prior to such action (and, in such event, X or its successor or transferee, as appropriate, will be the Affected Party); or (v) Additional Termination Event. If any "Additional Termination Event" is specified in the Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the Affected Party or Affected Parties shall be as specified for such Additional Termination Event in the Schedule or such Confirmation). (c) Event of Default and Illegality. If an event or circumstance which would otherwise constitute or give rise to an Event of Default also constitutes an Illegality, it will be treated as an Illegality and will not constitute an Event of Default. 6. Early Termination (a) Right to Terminate Following Event of Default. If at any time an Event of Default with respect to a party (the "Defaulting Party") has occurred and is then continuing, the other party (the "Non-defaulting Party") may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, "Automatic Early Termination" is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8). (b) Right to Terminate Following Termination Event. (i) Notice. If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of it, notify the other party, specifying the nature of that Termination Event and each Affected Transaction and will also give such other information about that Termination Event as the other party may reasonably require. (ii) Transfer to Avoid Termination Event. If either an Illegality under Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require such party to incur a loss, excluding immaterial, incidental expenses) to transfer within 20 days after it gives notice under Section 6(b)(i) all its rights and obligations under this Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such Termination Event ceases to exist. If the Affected Party is not able to make such a transfer it will give notice to the other party to that effect within such 20 day period, whereupon the other party may effect such a transfer within 30 days after the notice is given under Section 6(b)(i). Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the prior written consent of the other party, which consent will not be withheld if such other party's policies in effect at such time would permit it to enter into transactions with the transferee on the terms proposed. (iii)Two Affected Parties. If an Illegality under Section 5(b)(i)( 1) or a Tax Event occurs and there are two Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days after notice thereof is given under Section 6(b)(i) on action to avoid that Termination Event. (iv) Right to Terminate. If:-- (1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be, has not been effected with respect to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not the Affected Party, either party in the case of an Illegality, the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an Additional Termination Event if there is more than one Affected Party, or the party which is not the Affected Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only one Affected Party may, by not more than 20 days notice to the other party and provided that the relevant Termination Event is then continuing, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all Affected Transactions. (c) Effect of Designation. (i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early Termination Date will occur on the date so designated, whether or not the relevant Event of Default or Termination Event is then continuing. (ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement. The amount, if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e). (d) Calculations. (i) Statement. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation obtained in determining a Market Quotation, the records of the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such quotation. (ii) Payment Date. An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default) and on the day which is two Local Business Days after the day on which notice of the amount payable is effective (in the case of an Early Termination Date which is designated as a result of a Termination Event). Such amount will be paid together with (to the extent permitted under applicable law) interest thereon (before as well as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. (e) Payments on Early Termination. If an Early Termination Date occurs, the following provisions shall apply based on the parties' election in the Schedule of a payment measure, either "Market Quotation" or `Loss", and a payment method, either the "First Method" or the "Second Method". If the parties fail to designate a payment measure or payment method in the Schedule, it will be deemed that "Market Quotation" or the "Second Method", as the case may be, shall apply. The amount, if any, payable in respect of an Early Termination Date and determined pursuant to this Section will be subject to any Set-off. (i) Events of Default. If the Early Termination Date results from an Event of Default:-- (1) First Method and Market Quotation. If the First Method and Market Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if a positive number, of (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. (2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party's Loss in respect of this Agreement. (3) Second Method and Market Quotation. If the Second Method and Market Quotation apply, an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party. (4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable equal to the Non-defaulting Party's Loss in respect of this Agreement. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party. (ii) Termination Events. If the Early Termination Date results from a Termination Event:-- (1) One Affected Party. If there is one Affected Party, the amount payable will be determined in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting Party and to the Non-defaulting Party will be deemed to be references to the Affected Party and the party which is not the Affected Party, respectively, and, if Loss applies and fewer than all the Transactions are being terminated, Loss shall be calculated in respect of all Terminated Transactions. (2) Two Affected Parties. If there are two Affected Parties:-- (A) if Market Quotation applies, each party will determine a Settlement Amount in respect of the Terminated Transactions, and an amount will be payable equal to (I) the sum of (a) one-half of the difference between the Settlement Amount of the party with the higher Settlement Amount ("X") and the Settlement Amount of the party with the lower Settlement Amount ("Y") and (b) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of the Unpaid Amounts owing to Y; and (B) if Loss applies, each party will determine its Loss in respect of this Agreement (or, if fewer than all the Transactions are being terminated, in respect of all Terminated Transactions) and an amount will be payable equal to one-half of the difference between the Loss of the party with the higher Loss ("X") and the Loss of the party with the lower Loss ("Y"). If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of that amount to Y. (iii)Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs because "Automatic Early Termination" applies in respect of a party, the amount determined under this Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii). (iv) Pre-Estimate. The parties agree that if Market Quotation applies an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of protection against future risks and except as otherwise provided in this Agreement neither party will be entitled to recover any additional damages as a consequence of such losses. 7. Transfer Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this Agreement may be transferred (whether by way of security or otherwise) by either party without the prior written consent of the other party, except that:-- (a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy under this Agreement); and (b) a party may make such a transfer of all or any part of its interest in any amount payable to it from a Defaulting Party under Section 6(e). Any purported transfer that is not in compliance with this Section will be void. 8. Contractual Currency (a) Payment in the Contractual Currency. Each payment under this Agreement will be made in the relevant currency specified in this Agreement for that payment (the "Contractual Currency"). To the extent permitted by applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be discharged or satisfied by any tender in any currency other than the Contractual Currency, except to the extent such tender results in the actual receipt by the party to which payment is owed, acting in a reasonable manner and in good faith in converting the currency so tendered into the Contractual Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable in respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law, immediately pay such additional amount in the Contractual Currency as may be necessary to compensate for the shortfall. If for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual Currency payable in respect of this Agreement, the party receiving the payment will refund promptly the amount of such excess. (b) Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement or (iii) in respect of a judgment or order of another court for the payment of any amount described in (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other party the amount of any shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other currency and will refund promptly to the other party any excess of the Contractual Currency received by such party as a consequence of sums paid in such other currency if such shortfall or such excess arises or results from any variation between the rate of exchange at which the Contractual Currency is converted into the currency of the judgment or order for the purposes of such judgment or order and the rate of exchange at which such party is able, acting in a reasonable manner and in good faith in converting the currency received into the Contractual Currency, to purchase the Contractual Currency with the amount of the currency of the judgment or order actually received by such party. The term "rate of exchange" includes, without limitation, any premiums and costs of exchange payable in connection with the purchase of or conversion into the Contractual Currency. (c) Separate Indemnities. To the extent permitted by applicable law, these indemnities constitute separate and independent obligations from the other obligations in this Agreement, will be enforceable as separate and independent causes of action, will apply notwithstanding any indulgence granted by the party to which any payment is owed and will not be affected by judgment being obtained or claim or proof being made for any other sums payable in respect of this Agreement. (d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient for a party to demonstrate that it would have suffered a loss had an actual exchange or purchase been made. 9. Miscellaneous (a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto. (b) Amendments. No amendment, modification or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system. (c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction. (d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law. (e) Counterparts and Confirmations. (i) This Agreement (and each amendment, modification and waiver in reHspect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original. (ii) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation shall be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex or electronic message constitutes a Confirmation. (f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege. (g) Headings. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement. 10. Offices; Multibranch Parties (a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction through an Office other than its head or home office represents to the other party that, notwithstanding the place of booking office or jurisdiction of incorporation or organisation of such party, the obligations of such party are the same as if it had entered into the Transaction through its head or home office. This representation will be deemed to be repeated by such party on each date on which a Transaction is entered into. (b) Neither party may change the Office through which it makes and receives payments or deliveries for the purpose of a Transaction without the prior written consent of the other party. (c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make and receive payments or deliveries under any Transaction through any Office listed in the Schedule, and the Office through which it makes and receives payments or deliveries with respect to a Transaction will be specified in the relevant Confirmation. 11. Expenses A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document to which the Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited to, costs of collection. 12. Notices (a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in any manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging system) to the address or number or in accordance with the electronic messaging system details provided (see the Schedule) and will be deemed effective as indicated:-- (i) if in writing and delivered in person or by courier, on the date it is delivered; (ii) if sent by telex, on the date the recipient's answerback is received; (iii)if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender's facsimile machine); (iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date that mail is delivered or its delivery is attempted; or (v) if sent by electronic messaging system, on the date that electronic message is received, unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication shall be deemed given and effective on the first following day that is a Local Business Day. (b) Change of Addresses. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at which notices or other communications are to be given to it. 13. Governing Law and Jurisdiction (a) Governing Law. This Agreement will be governed by and construed in accordance with the law specified in the Schedule. (b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement ("Proceedings"), each party irrevocably:-- (i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City, if this Agreement is expressed to be governed by the laws of the State of New York; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction (outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification, extension or re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction. (c) Service of Process. Each party irrevocably appoints the Process Agent (if any) specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any party's Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process given in the manner provided for notices in Section 12. Nothing in this Agreement will affect the right of either party to serve process in any other manner permitted by law. (d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance or for recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings. 14. Definitions As used in this Agreement:-- "Additional Termination Event" has the meaning specified in Section 5(b). "Affected Party" has the meaning specified in Section 5(b). "Affected Transactions" means (a) with respect to any Termination Event consisting of an Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event and (b) with respect to any other Termination Event, all Transactions. "Affiliate" means, subject to the Schedule, in relation to any person, any entity controlled, directly or indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the person. For this purpose, "control" of any entity or person means ownership of a majority of the voting power of the entity or person. "Applicable Rate" means:-- (a) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate; (b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the Default Rate; (c) in respect of all other obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and (d) in all other cases, the Termination Rate. "Burdened Party" has the meaning specified in Section 5(b). "Change in Tax Law" means the enactment, promulgation, execution or ratification of, or any change in or amendment to, any law (or in the application or official interpretation of any law) that occurs on or after the date on which the relevant Transaction is entered into. "consent" includes a consent, approval, action, authorisation, exemption, notice, filing, registration or exchange control consent. "Credit Event Upon Merger" has the meaning specified in Section 5(b). "Credit Support Document" means any agreement or instrument that is specified as such in this Agreement. "Credit Support Provider" has the meaning specified in the Schedule. "Default Rate" means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum. "Defaulting Party" has the meaning specified in Section 6(a). "Early Termination Date" means the date determined in accordance with Section 6(a) or 6(b)(iv). "Event of Default" has the meaning specified in Section 5(a) and, if applicable, in the Schedule. "Illegality" has the meaning specified in Section 5(b). "Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in respect of a payment under this Agreement but for a present or former connection between the jurisdiction of the government or taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient (including, without limitation, a connection arising from such recipient or related person being or having been a citizen or resident of such jurisdiction, or being or having been organised, present or engaged in a trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a connection arising solely from such recipient or related person having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement or a Credit Support Document). "law" includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of any relevant governmental revenue authority) and "lawful" and "unlawful" will be construed accordingly. "Local Business Day" means, subject to the Schedule, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any other payment, in the place where the relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment, (c) in relation to any notice or other communication, including notice contemplated under Section 5(a)(i), in the city specified in the address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the place where the relevant new account is to be located and (d) in relation to Section 5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction. "Loss" means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and a party, the Termination Currency Equivalent of an amount that party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with this Agreement or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment or delivery required to have been made (assuming satisfaction of each applicable condition precedent) on or before the relevant Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)( 1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and out-of-pocket expenses referred to under Section 11. A party will determine its Loss as of the relevant Early Termination Date, or, if that is not reasonably practicable, as of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in the relevant markets. "Market Quotation" means, with respect to one or more Terminated Transactions and a party making the determination, an amount determined on the basis of quotations from Reference Market-makers. Each quotation will be for an amount, if any, that would be paid to such party (expressed as a negative number) or by such party (expressed as a positive number) in consideration of an agreement between such party (taking into account any existing Credit Support Document with respect to the obligations of such party) and the quoting Reference Market-maker to enter into a transaction (the "Replacement Transaction") that would have the effect of preserving for such party the economic equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent and assuming the satisfaction of each applicable condition precedent) by the parties under Section 2(a)(i) in respect of such Terminated Transaction or group of Terminated Transactions that would, but for the occurrence of the relevant Early Termination Date, have been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated Transaction or group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery that would, but for the relevant Early Termination Date, have been required (assuming satisfaction of each applicable condition precedent) after that Early Termination Date is to be included. The Replacement Transaction would be subject to such documentation as such party and the Reference Market-maker may, in good faith, agree. The party making the determination (or its agent) will request each Reference Market-maker to provide its quotation to the extent reasonably practicable as of the same day and time (without regard to different time zones) on or as soon as reasonably practicable after the relevant Early Termination Date. The day and time as of which those quotations are to be obtained will be selected in good faith by the party obliged to make a determination under Section 6(e), and, if each party is so obliged, after consultation with the other. If more than three quotations are provided, the Market Quotation will be the arithmetic mean of the quotations, without regard to the quotations having the highest and lowest values. If exactly three such quotations are provided, the Market Quotation will be the quotation remaining after disregarding the highest and lowest quotations. For this purpose, if more than one quotation has the same highest value or lowest value, then one of such quotations shall be disregarded. If fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined. "Non-default Rate" means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant amount. "Non-defaulting Party" has the meaning specified in Section 6(a). "Office" means a branch or office of a party, which may be such party's head or home office. "Potential Event of Default" means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default. "Reference Market-makers" means four leading dealers in the relevant market selected by the party determining a Market Quotation in good faith (a) from among dealers of the highest credit standing which satisfy all the criteria that such party applies generally at the time in deciding whether to offer or to make an extension of credit and (b) to the extent practicable, from among such dealers having an office in the same city. "Relevant Jurisdiction" means, with respect to a party, the jurisdictions\(a) in which the party is incorporated, organised, managed and controlled or considered to have its seat, (b) where an Office through which the party is acting for purposes of this Agreement is located, (c) in which the party executes this Agreement and (d) in relation to any payment, from or through which such payment is made. "Scheduled Payment Date" means a date on which a payment or delivery is to be made under Section 2(a)(i) with respect to a Transaction. "Set-off" means set-off, offset, combination of accounts, right of retention or withholding or similar right or requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising under this Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such payer. "Settlement Amount" means, with respect to a party and any Early Termination Date, the sum of:-- (a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined; and (b) such party's Loss (whether positive or negative and without reference to any Unpaid Amounts) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be determined or would not (in the reasonable belief of the party making the determination) produce a commercially reasonable result. "Specified Entity" has the meaning specified in the Schedule. "Specified Indebtedness" means, subject to the Schedule, any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money. "Specified Transaction" means, subject to the Schedule, (a) any transaction (including an agreement with respect thereto) now existing or hereafter entered into between one party to this Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions), (b) any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation. "Stamp Tax" means any stamp, registration, documentation or similar tax. "Tax" means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any payment under this Agreement other than a stamp, registration, documentation or similar tax. "Tax Event" has the meaning specified in Section 5(b). "Tax Event Upon Merger" has the meaning specified in Section 5(b). "Terminated Transactions" means with respect to any Early Termination Date (a) if resulting from a Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions (in either case) in effect immediately before the effectiveness of the notice designating that Early Termination Date (or, if "Automatic Early Termination" applies, immediately before that Early Termination Date). "Termination Currency" has the meaning specified in the Schedule. "Termination Currency Equivalent" means, in respect of any amount denominated in the Termination Currency, such Termination Currency amount and, in respect of any amount denominated in a currency other than the Termination Currency (the "Other Currency"), the amount in the Termination Currency determined by the party making the relevant determination as being required to purchase such amount of such Other Currency as at the relevant Early Termination Date, or, if the relevant Market Quotation or Loss (as the case may be), is determined as of a later date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of such Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be customary for the determination of such a rate for the purchase of such Other Currency for value on the relevant Early Termination Date or that later date. The foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be selected in good faith by that party and otherwise will be agreed by the parties. "Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event. "Termination Rate" means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such amounts. "Unpaid Amounts" owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be settled by delivery to such party on or prior to such Early Termination Date and which has not been so settled as at such Early Termination Date, an amount equal to the fair market value of that which was (or would have been) required to be delivered as of the originally scheduled date for delivery, in each case together with (to the extent permitted under applicable law) interest, in the currency of such amounts, from (and including) the date such amounts or obligations were or would have been required to have been paid or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such amounts of interest will be calculated on the basis of daily compounding and the actual number of days elapsed. The fair market value of any obligation referred to in clause (b) above shall be reasonably determined by the party obliged to make the determination under Section 6(e) or, if each party is so obliged, it shall be the average of the Termination Currency Equivalents of the fair market values reasonably determined by both parties. IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with effect from the date specified on the first page of this document. - ---------------------- ----------------------- (Name of Party) (Name of Party) By: __________________ By: __________________ Name: Name: Title: Title: Date: Date: SCHEDULE TO THE MASTER AGREEMENT dated as of ________, ____ between [MORGAN STANLEY CAPITAL SERVICES INC.] ("Party A") and SATURNS TRUST NO. _____ ("Party B" or the "Trust") Part 1. Termination Provisions. (a) "Specified Entity" means in relation to Party A for the purpose of:- Section 5(a)(v), None Specified Section 5(a)(vi), None Specified Section 5(a)(vii), None Specified Section 5(b)(iv), None specified and in relation to Party B for the purpose of:- Section 5(a)(v), None Specified Section 5(a)(vi), None Specified Section 5(a)(vii), None Specified Section 5(b)(iv), None Specified (b) "Specified Transaction" means, in lieu of the meaning specified in Section 14, any contract or transaction (whether or not documented under or effected pursuant to a master agreement) now existing or hereafter entered into between Party A, any Credit Support Provider of Party A or any Affiliate of Party A, and Party B, any Credit Support Provider of Party B or any Affiliate of Party B, provided however, that (i) Specified Transaction shall exclude any contract or transaction for Specified Indebtedness and any securities repurchase or reverse repurchase agreement or similar transaction, and (ii) for the purposes of Section 5(a)(v), Specified Transaction shall also exclude any contract or transaction not documented under or effected pursuant to a master agreement. (c) "Failure to Pay or Deliver", "Breach of Agreement", "Credit Support Default" "Misrepresentation", "Default Under Specified Transaction" and "Cross-Default": Section 5(a)(i) is amended by deleting the words "if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party." Sections 5(a)(ii), 5(a)(iv), 5(a)(v) and 5(a)(vi) will not apply to Party A or Party B (provided that a default by Party B under a Specified Transaction may independently give rise to a Trust Wind Up Event under the terms of the Trust Agreement dated ______, _____ between MSDW Structured Asset Corp. as Depositor and Chase Bank of Texas, National Association, as Trustee (the "Trust Agreement")). Section 5(a)(iii) will not apply to Party B. (d) "Specified Indebtedness" has the meaning specified in Section 14. (e) "Threshold Amount" means, with respect to a party, U.S. $10,000,000 (or the equivalent in another currency, currency unit or combination thereof). (f) "Credit Event Upon Merger"; "Tax Event Upon Merger": Sections 5(b)(iii) and 5(b)(iv) shall not apply. (g) The "Automatic Early Termination" provisions of Section 6(a) will not apply to Party A and will not apply to Party B; provided, however, where the Event of Default is specified in Sections 5(a)(vii)(1),(3),(4),(5),(6) or to the extent analogous thereto, (8) is governed by a system of laws which does not permit termination to take place upon or after the occurrence of the relevant Event of Default in accordance with the terms of this Agreement, then the Automatic Early Termination provision of Section 6(a) will apply to Party A and Party B. (h) Payments on Early Termination. "Market Quotation" and "Second Method" will apply for purposes of Section 6(e) of this Agreement; provided, however, that notwithstanding any other provision of this Agreement, the claim of Party A for any Settlement Amount arising other than as a result of a Security Default as defined in the Trust Agreement shall be limited in accordance with the provisions of the Trust Agreement to a claim pro rata with that of the Unitholders under the Trust Agreement for their Unit Principal Balance plus accrued interest (but this proviso shall not apply if the Trust Agreement does not provide for such limitation). (i) "Termination Currency" means United States Dollars. (j) Additional Termination Event will apply. Each of the following shall constitute an Additional Termination Event, with Party B as the Affected Party: (i) Trust Wind-Up Event. Any "Trust Wind-Up Event" shall occur in respect of Party B in accordance with Section 9.01 of the Trust Agreement. All Transactions shall be Affected Transactions. (ii) Security Default. A "Security Default" shall occur as defined in the Trust Agreement. Unless otherwise provided in the related Confirmation, only the specific Transaction related to such Security (as defined in the Trust Agreement) shall be an Affected Transaction. (iii) Disqualified Security. A Security related to a Transaction hereunder shall become a "Disqualified Security" as defined in the Trust Agreement. Unless otherwise provided in the related Confirmation, only the specific Transaction related to such Disqualified Security shall be an Affected Transaction. (iv) Disqualified Transaction. Any Transaction hereunder becomes a "Disqualified Transaction" as defined in the Trust Agreement. Unless otherwise provided in the related Confirmation, only the specific Disqualified Transaction shall be an Affected Transaction. (k) Events of Default with respect to Party B. With respect to Party B only, Section 5(a)(vii) shall apply with the following amendments: (i) Section 5(a)(vii)(2) shall not apply; (ii) Section 5(a)(vii)(3) shall take effect with the words "the Unitholders" substituted for "its creditors"; and (iii)Sections 5(a)(vii)(6) and (7) shall take effect with the words "assets comprising the property of the Trust, otherwise than in accordance with the Trust Agreement" substituted for "all or substantially all its assets". Part 2. Tax Representations. (a) Payer Tax Representations. For the purpose of Section 3(e), Party A and Party B each makes the following representation:- It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(a)(iii), 2(e), 6(d)(ii) or 6(e)) to be made by it to the other party under this Agreement. In making this representation, it may rely on:- (i) the accuracy of any representation made by the other party pursuant to Section 3(f); (ii) the satisfaction of the agreement of the other party contained in Section 4(a)(i) or 4(a)(iii) and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii); and (iii) the satisfaction of the agreement of the other party contained in Section 4(d); provided that it shall not be a breach of this representation where reliance is placed on clause (ii), and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position. (b) Payee Tax Representations. There are no payee representations. Part 3. Agreement to Deliver Documents.
Party required Form/Document/ Date by which to be Covered by Section to deliver document Certificate delivered 3(d) Representation Party A and Party B Either (1) a signature booklet The earlier of the fifth Yes containing secretary's Business Day after the certificate and resolutions Trade Date of the first ("authorizing resolutions") Transaction or upon authorizing the party to enter execution of this into derivatives transactions Agreement and as deemed of the type contemplated by necessary for any further the parties or (2) a documentation. secretary's certificate, authorizing resolutions and incumbency certificate for such party and any Credit Support Provider of such party reasonably satisfactory in form and substance to the other party. Party B Certified copies of documents As soon as practicable Yes evidencing Party B's capacity after the execution of to execute this Agreement, this Agreement. each Confirmation and any Credit Support Document (if applicable) and to perform its obligations hereunder and thereunder. Party B A written opinion of legal Upon execution of this No counsel to Party B, reasonably Agreement and as deemed satisfactory in form and necessary for any further substance to Party A. documentation. Party A and Party B Such other documents as the Upon request. No other party may reasonably request
Part 4. Miscellaneous. (a) Addresses for Notices. For the purpose of Section 12(a):- (i) Address for notice or communications to Party A:- [Morgan Stanley Capital Services Inc. 1585 Broadway New York, New York 10036 Attention: Derivative Products Group - 3rd floor - Swaps Facsimile No.: 212-761-0580 Telephone No.: 212-761-2566] (ii) Address for notice or communications to Party B:- SATURNS Trust No. ______ c/o Chase Bank of Texas, National Association, as Trustee 600 Travis Street, 9th Floor Chase Tower, Houston, Texas 77002 Attn: Capital Markets Fiduciary Services -- SATURNS Trust No. ______ Facsimile No.: (713) 216-2101 Telephone No.: (713) 216-4181 (b) Notices. Section 12(a) is amended by adding in the third line thereof after the phrase "messaging system" and before the ")" the words, "; provided, however, any such notice or other communication may be given by facsimile transmission if telex is unavailable, no telex number is supplied to the party providing notice, or if answer back confirmation is not received from the party to whom the telex is sent." (c) Process Agent. For the purpose of Section 13(c) of this Agreement, Party B irrevocably appoints as its Process Agent: Same as above address for notices (d) Offices. The provisions of Section 10(a) will apply to Party A and to Party B. (e) Multibranch Party. For the purpose of Section 10(c):- Party A is not a Multibranch Party. Party B is not a Multibranch Party. (f) "Calculation Agent" means Party A. (g) "Credit Support Document" means any credit support annex, any Confirmation and any other document any of which by its terms secures, guarantees or otherwise supports either or both parties' obligations under this Agreement[, including, but not limited to, the guarantee of Morgan Stanley Dean Witter & Co. set forth in a letter to the Trust.] (h) Credit Support Provider means in relation to Party A: [Morgan Stanley Dean Witter & Co.] (i) Governing Law; Jurisdiction. This Agreement, any Credit Support Document and each Confirmation will be governed by and constructed in accordance with the laws of the State of New York, without reference to its choice of law doctrine. Section 13(b) is amended by: (1) deleting "non-" from the second line of clause (i); and (2) deleting the final paragraph. (j) Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any Proceedings relating to this Agreement or any Credit Support Document. (k) Netting of Payment. Clause (ii) of Section 2(c) will not apply to any amounts payable with respect to Transactions from the date of this Agreement. (l) "Affiliate" has the meaning specified in Section 14, but excludes Morgan Stanley Derivative Products Inc. Part 5. Other Provisions. (a) Trustee Capacity. It is expressly understood and agreed by the parties hereto that insofar as this Agreement is executed on behalf of the Trust (i) this Agreement is executed and delivered by Chase Bank of Texas, National Association, not in its individual capacity but solely as Trustee under the Trust Agreement in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as representations, warranties, covenants, undertakings and agreements by Chase Bank of Texas, National Association in its individual capacity but is made and intended for the purpose of binding only the Trust and (iii) under no circumstances shall Chase Bank of Texas, National Association in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Agreement. (b) Additional Representations. Section 3 is hereby amended by adding at the end thereof the following Subparagraphs: "(g) It is an "eligible swap participant" under, and as defined in, 17 C.F.R. ss.35.1 and was not formed solely for the purposes of constituting an "eligible swap participant." (h) It has entered into this Agreement (including each Transaction evidenced hereby) in conjunction with its line of business (including financial intermediation services) or the financing of its business. (i) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of that Transaction. (j) Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the risks of that Transaction. (k) Status of Parties. The other party is not acting as a fiduciary for or adviser to it in respect of that Transaction. It is entering into this Agreement, any Credit Support Document to which it is a party, each Transaction and any other documentation relating to this Agreement or any Transaction as principal (and not as agent or in any other capacity, fiduciary or otherwise)." (c) Setoff and Related Matters. (i) The occurrence or designation of an Early Termination Date on account of an Event of Default with respect to a party hereto ("Y") shall constitute a material breach and event of default (howsoever described) under all Specified Transactions to which Y is a party, whereupon the Nondefaulting Party ("X") or any Affiliate X shall have the right to terminate, liquidate and otherwise close out any such Specified Transactions (and Y shall be liable for any damages suffered by X and any Affiliate of X as a result thereof). For purposes of Section 6(a) of this Agreement, each Transaction will be deemed to be outstanding until all obligations (including payment, delivery and exchange obligations) in respect of such Transaction have been fully discharged and satisfied. (ii) Upon such occurrence, or designation of any Early Termination Date on account on an Event of Default, any amount payable by X or any Affiliate of X under this Agreement, any Specified Transaction with Y, or in respect of any other matured, liquidated or terminated obligation to Y will, at the option of X or any Affiliate of X (and without prior notice to Y), be reduced by its setoff and recoupment against any amount(s) payable by Y to X or any Affiliate of X under this Agreement, any Specified Transaction with Y or in respect of any other matured, liquidated or terminated obligation of Y (and any such amount(s) payable by Y will be discharged promptly and in all respects to the extent it is so setoff). X or an Affiliate of X, as appropriate, will give notice to Y after any setoff and recoupment is effected under this paragraph. For purposes of the foregoing, X and any Affiliate of X shall be entitled to convert any obligations denominated in one currency into another at such rates of exchange as it deems appropriate in good faith and in a commercially reasonable manner, and amounts may be set off and recouped irrespective of the currency, place of payment or booking office of any obligation to or from Y. If an obligation is unascertained, X or any Affiliate of X, as appropriate, may in good faith estimate that obligation and setoff and recoup in respect of that estimate, subject to the relevant party's accounting to the other(s) when the obligation is ascertained. All obligations of X and any Affiliate of X under this Agreement, any Specified Transaction with Y or in respect of any other matured, liquidated or terminated obligation to Y are subject to the condition precedent that Y shall have performed all of its obligations to X and any Affiliate of X under this Agreement, any Specified Transaction with X and in respect of any other matured, liquidated or terminated obligation of Y. Party A and Party B and their Affiliates intend that all Transactions and Specified Transactions be treated as mutual and part of a single, indivisible contractual and business relationship. (iii) If either party ("C"), its Credit Support Provider or any Affiliate of C has reasonable grounds for insecurity regarding a potential default under this Agreement or any Specified Transaction by the other party ("D"), any Credit Support Provider or any Affiliate of D, then C or any Affiliate of C may transfer its rights and obligations under this Agreement or any agreement for a Specified Transaction to any Affiliate of C or to C, and each of the parties hereto agrees to such transfer and to use its best efforts to obtain any required consents from its relevant Affiliate to any such transfer. (iv) Nothing in this Part 5(c) shall be effective to create a charge or other security interest. This Part 5(c) shall be without prejudice and in addition to any right of setoff, recoupment, combination of accounts, lien or other right to which any party or any of its Affiliates is at any time otherwise entitled (whether by operation of law, contract or otherwise). (d) Confirmations. Party A will deliver to Party B a Confirmation relating to each Transaction. (e) Security. As collateral security for the prompt and complete payment and performance when due of the obligations of Party B hereunder, Party B hereby grants to Party A a continuing security interest in all of Party B's right, title and interest in the Trust Property as such term is defined in the Trust Agreement pursuant to which Party B was formed. Such security interest shall remain in full force and effect until Party A has received amounts due to it hereunder. (f) Further Acknowledgments. Each party agrees and acknowledges that: (i) Each transfer of funds, securities or other property under this Agreement or any Transaction hereunder constitutes a transfer that may not be avoided under Sections 544, 545, 547, 548(a)(2) or 548(b) of Title 11 of the United States Code (the "Bankruptcy Code"). (ii) The rights given to each party hereunder upon an Event of Default by the other to cause the liquidation and termination of this Agreement and each Transaction hereunder, and to set off mutual debts and claims in connection therewith, may not be stayed, limited or avoided under the Bankruptcy Code, including, without limitation, Section 362, 365(c) or 105(a) thereof. (g) Non-Petition. Prior to the date that is one year and one day after all distributions in respect of the Units issued by the Trust have been made, Party A shall not take any action or institute any proceeding against the Trust under the United States Bankruptcy Code or any other liquidation, insolvency, bankruptcy, moratorium, reorganization or similar law ("Insolvency Law") applicable to the Trust, now or hereafter in effect, or which would be reasonably likely to cause the Trust to be subject to, or seek the protection of, any such Insolvency Law. (h) Rating Agency Confirmation. No amendment to this Agreement shall take effect unless and until the Rating Agencies Condition specified in the Trust Agreement shall be satisfied with respect to such amendment. IN WITNESS WHEREOF, the parties have executed this Schedule by their duly authorized officers as of the date hereof. [MORGAN STANLEY CAPITAL SERVICES INC.] By: ______________________________ Name: Tile: Date: SATURNS TRUST NO. ______ By: Chase Bank of Texas, National Association, as Trustee By: ____________________________ Name: Title: Date: EX-25.1 9 STATEMENT OF ELIGIBILITY ================================================================= SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A 1 CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)______ -------------- CHASE BANK OF TEXAS, NATIONAL ASSOCIATION (Exact name of trustee as specified in its charter) 74-0800980 (I.R.S. Employer Identification No.) 712 Main Street Houston, Texas 77002 (Address of principal (Zip Code) executive offices) -------------- MSDW STRUCTURED ASSET CORP. (Exact name of obligor as specified in its charter) Delaware Applied For (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1585 Broadway New York, New York 10036 (Address of principal (Zip Code) executive offices) Structured Asset Trust Units Repackagings (Title of the indenture securities) ================================================================= Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Comptroller of the Currency, Washington, D.C. Federal Deposit Insurance Corporation, Washington, D.C. Board of Governors of The Federal Reserve System, Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. The obligor is not an affiliate of the trustee. (See Note on Page 5.) Item 3. Voting securities of the trustee. Furnish the following information as to each class of voting securities of the trustee: Col. A Col. B Title of Class Amount outstanding -------------- ------------------ Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. Item 4. Trusteeships under other indentures. If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, furnish the following information: (a) Title of the securities outstanding under each such other indenture. Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. (b) A brief statement of the facts relied upon as a basis for the claim that no conflicting interest within the meaning of Section 310(b)(1) of the Act arises as a result of the trusteeship under any such other indenture, including a statement as to how the indenture securities will rank as compared with the securities issued under such other indenture. Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. Item 5. Interlocking directorates and similar relationships with the obligor or underwriters. If the trustee or any of the directors or executive officers of the trustee is a director, officer, partner, employee, appointee or representative of the obligor or of any underwriter for the obligor, identify each such person having any such connection and state the nature of each such connection. Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. Item 6. Voting securities of the trustee owned by the obligor or its officials. Furnish the following information as to the voting securities of the trustee owned beneficially by the obligor and each director, partner and executive officer of the obligor. Col. A Col. B Col. C Col. D Percentage of voting securities represented by Amount owned amount given Name of owner Title of class beneficially in Col. C ------------- -------------- ------------ ----------------- Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. Item 7. Voting securities of the trustee owned by underwriters or their officials. Furnish the following information as to the voting securities of the trustee owned beneficially by each underwriter for the obligor and each director, partner and executive officer of each such underwriter. Col. A Col. B Col. C Col. D Percentage of voting securities represented by Amount owned amount given Name of owner Title of class beneficially in Col. C ------------- -------------- ------------ ----------------- Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. Item 8. Securities of the obligor owned or held by the trustee. Furnish the following information as to securities of the obligor owned beneficially or held as collateral security for obligations in default by the trustee. Col. A Col. B Col. C Col. D Amount owned beneficially or held Percent of Whether the as collateral class are voting security represented by or nonvoting for obligations amount given Title of class securities in default in Col. C -------------- ------------ --------------- -------------- Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. Item 9. Securities of underwriters owned or held by the trustee. If the trustee owns beneficially or holds as collateral security for obligations in default any securities of an underwriter for the obligor, furnish the following information as to each class of securities of such underwriter any of which are so owned or held by the trustee. Col. A Col. B Col. C Col. D Amount owned beneficially or held Percent of as collateral class repre- Name of security for sented by issuer and Amount obligations in amount given title of class outstanding default by trustee in Col. C -------------- ----------- ------------------ ------------ Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. Item 10. Ownership or holdings by the trustee of voting securities of certain affiliates or security holders of the obligor. If the trustee owns beneficially or holds as collateral security for obligations in default voting securities of a person who, to the knowledge of the trustee (1) owns 10 percent or more of the voting securities of the obligor or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the following information as to the voting securities of such person: Col. A Col. B Col. C Col. D Amount owned beneficially or held Percent of as collateral class repre- Name of security for sented by issuer and Amount obligations in amount given title of class outstanding default by trustee in Col. C -------------- ----------- ------------------ ------------ Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. Item 11. Ownership or holdings by the trustee of any securities of a person owning 50 percent or more of the voting securities of the obligor. If the trustee owns beneficially or holds as collateral security for obligations in default any securities of a person who, to the knowledge of the trustee, owns 50 percent or more of the voting securities of the obligor, furnish the following information as to each class of securities of such person any of which are so owned or held by the trustee. Col. A Col. B Col. C Col. D Amount owned beneficially or held Percent of as collateral class repre- Name of security for sented by issuer and Amount obligations in amount given title of class outstanding default by trustee in Col. C -------------- ----------- ------------------ ------------ Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. Item 12. Indebtedness of the obligor to the trustee. Except as noted in the instructions, if the obligor is indebted to the trustee, furnish the following information: Col. A Col. B Col. C Nature of Amount Indebtedness Outstanding Date Due ------------ ----------- -------- Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. Item 13. Defaults by the obligor. (a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. There is not, nor has there been, a default with respect to the securities under this indenture. (See Note on Page 5.) (b) If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. There has not been a default under any such indenture or series. (See Note on Page 5.) Item 14. Affiliations with the underwriters. If any underwriter is an affiliate of the trustee, describe each such affiliation. Not applicable by virtue of Form T-1 General Instruction B and response to Item 13. Item 15. Foreign trustee. Identify the order or rule pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. Not applicable. Item 16. List of exhibits. List below all exhibits filed as a part of this statement of eligibility. M1 -- A copy of the articles of association of the trustee as now in effect. #2 -- A copy of the certificate of authority of the trustee to commence business. *3 -- A copy of the certificate of authorization of the trustee to exercise corporate trust powers issued by the Board of Governors of the Federal Reserve System under date of January 21, 1948. R4 -- A copy of the existing by-laws of the trustee. 5 -- Not applicable. *6 -- The consent of the United States institutional trustees required by Section 321(b) of the Act. E7 -- A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 8 -- Not applicable. 9 -- Not applicable. - ------------- M Incorporated by reference to exhibit bearing the same designation and previously filed with the Securities and Exchange Commission as an exhibit to the Form S-3 File No. 33-56195. # Incorporated by reference to exhibit bearing the same designation and previously filed with the Securities and Exchange Commission as an exhibit to the Form S-3 File No. 33-42814. * Incorporated by reference to exhibit bearing the same designation and previously filed with the Securities and Exchange Commission as exhibits to the Form S-11 File No. 33-25132. R Incorporated by reference to exhibit bearing the same designation and previously filed with the Securities and Exchange Commission as an exhibit to the Form S-3 File No. 33-65055. E Incorporated by reference to exhibit bearing the same designation and previously filed with the Securities and Exchange Commission as an exhibit to the Form S-4 File No. 333-6374. ------------------------------- NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the trustee of all facts on which to base responsive answers to Items 2 and 13, the answers to said Items are based on incomplete information. Such Items may, however, be considered as correct unless amended by an amendment to this Form T-1. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the trustee, Chase Bank of Texas, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Houston and State of Texas, on the ___ day of September, 1998. CHASE BANK OF TEXAS, NATIONAL ASSOCIATION By: --------------------- Bruce C. Boyd Vice President SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the trustee, Texas Commerce Bank National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Houston and State of Texas, on the 1st day of August, 1997. TEXAS COMMERCE BANK NATIONAL ASSOCIATION By: /s/ Bruce C. Boyd --------------------- Bruce C. Boyd Vice President -----END PRIVACY-ENHANCED MESSAGE-----