EX-4.1 3 msdwex41_5-16.txt TRUST AGREEMENT TRUST AGREEMENT, between MSDW Structured Asset Corp. (the "Depositor") and LaSalle Bank National Association (the "Trustee"), made as of the date set forth in Schedule I attached hereto, which Schedule together with Schedules II and III attached hereto, are made a part hereof and are hereinafter referred to collectively as the "Terms Schedule". The terms of the Standard Terms for Trust Agreements, dated July 7, 1999 (the "Standard Terms") are, except to the extent otherwise expressly stated, hereby incorporated by reference herein in their entirety with the same force and effect as though set forth herein. Capitalized terms used herein and not defined shall have the meanings defined in the Standard Terms. References to "herein", "hereunder", "this Trust Agreement" and the like shall include the Terms Schedule attached hereto and the Standard Terms so incorporated by reference. WHEREAS, the Depositor and the Trustee desire to establish the Trust identified in Schedule I attached hereto (the "Trust") for the primary purposes of (i) holding the Securities, (ii) entering into any Swap Agreement with the Swap Counterparty and (iii) issuing the Units; WHEREAS, the Depositor desires that the respective beneficial interests in the Trust be divided into transferable fractional shares, such shares to be represented by the Units; and WHEREAS, the Depositor desires to appoint the Trustee as trustee of the Trust and the Trustee desires to accept such appointment; WHEREAS, the Depositor shall transfer, convey and assign to the Trust without recourse, and the Trust shall acquire, all of the Depositor's right, title and interest in and under the Securities and other property identified in Schedule II to the Trust Agreement (the "Trust Property"); and WHEREAS, the Trust agrees to acquire the Trust Property specified herein in consideration for Units having an initial Unit Principal Balance identified in Schedule I attached hereto, subject to the terms and conditions specified in the Trust Agreement; NOW THEREFORE, the Depositor hereby appoints the Trustee as trustee hereunder and hereby requests the Trustee to receive the Securities from the Depositor and to issue in accordance with the instructions of the Depositor Units having the terms specified in Schedule I attached hereto, and the Trustee accepts such appointment and, for itself and its successors and assigns, hereby declares that it shall hold all the estate, right, title and interest in any property contributed to the trust account established hereunder (except property to be applied to the payment or reimbursement of or by the Trustee for any fees or expenses which under the terms hereof is to be so applied) in trust for the benefit of all present and future Holders of the fractional shares of beneficial interest issued hereunder, namely, the Unitholders, and subject to the terms and provisions hereof and of the Standard Terms. IN WITNESS WHEREOF, each of the undersigned has executed this instrument as of the date set forth in the Terms Schedule attached hereto. LASALLE BANK NATIONAL ASSOCIATION as Trustee on behalf of the Trust identified in Schedule I hereto, and not in its individual capacity By: /s/ Brian D. Ames ------------------------------- Name: Brian D. Ames Title: Vice President MSDW STRUCTURED ASSET CORP. By: /s/ John Kehoe ------------------------------- Name: John Kehoe Title: Vice President Attachments: Terms Schedule (consisting of Schedules I, II and III) I-7 I-1 Schedule I (Terms of Trust and Units) Trust: SATURNS Trust No. 2002-5 Date of Trust Agreement: May 14, 2002 Trustee: LaSalle Bank National Association. References to Chase Bank of Texas, National Association in the Standard Terms shall be inapplicable. Initial Unit Principal Balance: $25,792,500 Issue Price: 100% Number of Units: 1,031,700 (Unit Principal Balance of $25 each) Minimum Denomination: $25 and $25 increments in excess thereof. The minimum denomination specified in Section 5.01(a) of the Standard Terms shall not apply. Each $25 of Unit Principal Balance is a Unit. Cut-off Date: May 14, 2002 Closing Date: May 14, 2002 Specified Currency: United States dollars Business Day: New York, New York and Chicago, Illinois Interest Rate: 8.25% per annum on the basis of a 360 day year consisting of twelve 30 day months. During an extension period with respect to the Securities, while interest will continue to accrue on the Unit Principal Balance at 8.25% per annum, interest will accrue on any deferred interest at a rate equal to the rate at which interest accrues on deferred interest with respect to the Securities. Interest Reset Period: Not Applicable Rating: Baa2 by Moody's BBB- by S&P Rating Agencies: Moody's and S&P Scheduled Final Distribution Date: July 15, 2037. The Units will have the same final maturity as the Securities. Prepayment/Redemption: The Trust Property is subject to redemption in accordance with the terms of the Securities and as described in Schedule II and is subject to liquidation upon exercise of the call rights specified in Schedule III. Any such redemption or exercise of the call rights will cause a redemption of a corresponding portion of the Units. If the call rights under the Swap Agreement are partially exercised or if there is a partial redemption of the Securities, the Trustee will randomly select Units to be redeemed in full from the proceeds of such partial exercise of the Swap Agreement or partial redemption of the Securities. If sufficient funds are not available to redeem each such redeemed Unit in full, one Unit may be fractionally redeemed as a result of each such partial redemption or exercise. Additional Distribution: If any of the Securities are redeemed by the Security Issuer prior to July 15, 2007, each of the Units which are redeemed in connection with such redemption of Securities (or related exercise of the Swap Agreement) will receive a pro rata distribution from the proceeds of the redemption of the Securities (or related exercise of the Swap Agreement if physical settlement applies) remaining after payment of principal and interest on such Units up to a maximum of $2.50 per Unit. The Units will also receive any additional amounts available at maturity or upon a redemption by the Security Issuer if all or a portion of the Swap Agreement has expired unexercised. Corporate Trust Office: The definition of "Corporate Trust Office" in the Standard Terms shall not apply. The Corporate Trust Office shall be the Trustee's Asset-Backed Securities Trust Services Group having an office at 135 S. LaSalle Street, Suite 1625, Chicago, Illinois 60603 or such other addresses as the Trustee may designate from time to time by notice to the Unitholders, the Depositor, the Swap Counterparty and the Guarantor. Swap Agreement: The ISDA Agreement referred to in Schedule III. In addition, in connection with an additional issuance of Units, any additional Swap Agreement entered into in connection therewith. Swap Counterparty: Party A to the Swap Agreement referred to in Schedule III or any assignee thereof. In addition, in connection with an additional issuance of Units, Party A to any additional Swap Agreement or any assignee thereof. In the event that there is more than one Swap Counterparty at any time when a partial redemption of the Securities occurs, the Trustee shall randomly select which options under the Swap Agreements shall be selected for exercise or termination (and receipt of a Swap Termination Payment). Guaranty: Morgan Stanley Dean Witter & Co. (the "Guarantor") shall guarantee the obligations of Morgan Stanley & Co. International Limited ("MSIL") for so long as MSIL is Party A to any Swap Agreement with the Trust. Swap Notional Amount: The notional amount specified in Schedule III. Swap Payment Date: Not Applicable Swap Rate: Not Applicable Additional Swap Agreements: In connection with an additional issuance of Units, the Depositor may arrange for the Trust to enter into an additional Swap Agreement with identical terms to those of the Swap Agreement entered into as of the Closing Date with an additional Swap Counterparty, except that such Swap Agreement may have a different Swap Counterparty, number of options, and premium amount than the Swap Agreement entered into on the Closing Date. The Rating Agency Condition must be satisfied with respect to such additional Swap Agreement. Distribution Date: Each January 15 and July 15, commencing July 15, 2002. If any payment with respect to the Securities held by the Trust is not received by the Trustee by 12 noon (New York City time) on a Distribution Date, the corresponding distribution on the Units will not occur until the next Business Day that the Trust is in receipt of proceeds of such payment prior to 12 noon, with no adjustment to the amount distributed. Record Date: Each January 1 and July 1, regardless of whether such day is a Business Day. Form: Global Security Depositary: DTC Trustee Fees and Expenses: As compensation for and in payment of trust expenses related to its services hereunder other than Extraordinary Trust Expenses, the Trustee will receive Trustee Fees on each Distribution Date in the amount equal to $3,750. The Trustee Fee shall cease to accrue after termination of the Trust. The "Trigger Amount" with respect to Extraordinary Trust Expenses for the Trust is $25,000 and the Maximum Reimbursable Amount is $100,000. The Trustee Fee will be paid by the Expense Administrator. Expenses will be reimbursed by the Expense Administrator in accordance with the Expense Administration Agreement. Expense Administrator: The Depositor will act as Expense Administrator on behalf of the Trust pursuant to an Expense Administration Agreement, dated as of the date of the Trust Agreement (the "Expense Administration Agreement"), between the Depositor as Expense Administrator (the "Expense Administrator") and the Trust. The Expense Administrator will receive a fee equal to 0.06% per annum of the principal amount of the Securities held by the Trust as its fee, payable on the basis of a 360 day year consisting of twelve 30 day months. The Expense Administrator will be entitled to interest on any deferred fee amounts that would have been payable but for deferral of interest on the Securities at the rate interest accrues on any deferred interest with respect to the Securities. The Expense Administrator's fee is payable only from available interest receipts received with respect to the Securities after application of such receipts to payment of accrued interest (including accrued interest on deferred interest) on the Units. In addition the Expense Administrator shall own that portion of the Securities which represents the interest of a fractional Unitholder that would remain after a partial exercise of the Swap Agreement had the Swap Counterparty not been obligated to pay the Fractional Unit Make Whole Amount (pursuant to and as defined in the Swap Agreement). The Expense Administrator shall receive all interest and principal with respect to such portion of the Securities. The Expense Administrator will be responsible for paying the Trustee Fee and reimbursing certain other expenses of the Trust in accordance with the Expense Administration Agreement. Listing: The Depositor has applied to list the Units on the New York Stock Exchange ERISA Restrictions: None of the restrictions in the Standard Terms relating to the Employee Retirement Income Security Act of 1974, as amended, and related matters shall apply. Alternative ERISA Restrictions: Not Applicable Deemed Representations: Not Applicable QIB Restriction Not Applicable Trust Wind-Up Event: The Trust Wind-Up Events specified in Sections 9.01(a), 9.01(c), 9.01(d), 9.01(f) and 9.01(h) shall not apply. The Trust Wind Events specified in Sections 9.01(b) (Security Default), 9.01(e) (Early Termination Date designated due to "illegality" or "tax event" under the Swap Agreement), 9.01(g) (Disqualified Securities), 9.01(i) (Excess Expense Event) shall apply. Pursuant to Section 9.01(j), the following events also shall constitute Trust Wind-Up Events: (i) redemption (or completion of a self-tender) by the Security Issuer of all Securities held by the Trust and (ii) exercise of the call rights under the Swap Agreement as to all Securities held by the Trust. Termination: If a Trust Wind-Up Event occurs (other than due to exercise of the call rights under the Swap Agreement as to all Securities held by the Trust), any Securities held by the Trust will be liquidated (in the case of a Trust Wind-Up Event resulting from a self-tender offer or redemption by the Security Issuer, by delivery to the Security Issuer) and the proceeds will be applied first to redeem the Units at 100% of their principal balance plus accrued interest and then to apply any remaining amounts to the payment of any amounts owed to the Swap Counterparty as a Swap Termination Payment under the Swap Agreement. Self-Tender by Security Issuer: In the event the Security Issuer makes a self-tender offer for the Securities, 100% of the Unitholders may direct the Trustee to tender all of the Securities held by the Trust. The Trustee will only accept an instruction to tender the Securities if all of the Securities held by the Trust are to be tendered. Terms of Retained Interest: The Depositor retains the right to receive any and all interest that accrues on the Securities prior to the Closing Date. The Depositor will receive such accrued interest on the first Distribution Date for the Units and such amount shall be paid from the interest payment made with respect to the Securities on the first Distribution Date. The amount of the Retained Interest is $703,383. If a Security Default occurs on or prior to the first Distribution Date and the Depositor does not receive such Retained Interest amount in connection with such Distribution Date, the Depositor will have a claim for such Retained Interest, and will share pro rata with holders of the Units to the extent of such claim in the proceeds from the recovery on the Securities. Call Option Terms: Not Applicable Security Default: The definition of Security Default in the Standard Terms shall not apply. A "Security Default" shall mean one of the following events: (i) the acceleration of the outstanding Securities under the terms of the Securities and/or the applicable Security Agreement and failure to pay the accelerated amount on the acceleration date; (ii) the failure of the Security Issuer (or the Security Guarantor on its behalf or under the Security Guaranty) to pay an installment of principal of, or any amount of interest due on, the Securities after the due date thereof and after the expiration of any applicable grace period; or (iii) the occurrence of any of the events of default under such Securities and/or Security Agreement relating to the insolvency or bankruptcy of the Security Issuer or the Security Guarantor. Sale of Securities: If the Trust must sell the Securities it holds, the Trust will sell the Securities through the Selling Agent in accordance with Section 9.03(b) and the following terms. The Selling Agent must solicit at least three bids for all of the Securities held by the Trust. The Selling Agent must solicit at least three of such bids from registered broker-dealers of national reputation, but additional bids may be solicited from one or more financial institutions or other counterparties with credit worthiness acceptable to the Selling Agent in its discretion. The Selling Agent will, on behalf of the Trust, sell the Securities at the highest bid price received. The Selling Agent may not bid for the Securities. Additional Issuance of Units: Upon no less than 5 days' notice to the Trustee, the Depositor may deposit additional Securities at any time in exchange for additional Units in a minimum aggregate amount of $250,000 and, if in excess of such amount, in a $25 integral multiple in excess thereof. The principal amount of Securities deposited must be in the same ratio to the Unit Principal Balance of the Units received as the ratio of the aggregate principal amount of Securities deposited on the Closing Date to the aggregate Unit Principal Balance on the Closing Date. The Depositor must either arrange for the Swap Counterparty and the Trust to increase proportionally the notional amount under the Swap Agreement or arrange for an additional Swap Agreement to be entered into between the Trust and an additional Swap Counterparty. Any accrued interest will be reflected in the price of the additional Units and the Securities. The Rating Agency Condition must be satisfied in connection with any such additional issuance. Selling Agent: Morgan Stanley & Co. Incorporated. Notwithstanding any provision of the Standard Terms to the contrary, any sale of the Securities shall be conducted by and through the Selling Agent and not the Trustee. Rating Agency Condition: The definition of Rating Agencies Condition in the Standard Terms shall not apply. "Rating Agency Condition": With respect to any specified action or determination, means receipt of (i) oral or written confirmation by Moody's (for so long as the Units are outstanding and rated by Moody's) and (ii) written confirmation by S&P (for so long as the Units are outstanding and rated by S&P), that such specified action or determination will not result in the reduction or withdrawal of their then-current ratings on the Units; provided, however, that if the Rating Agency Condition specified herein is to be satisfied only with respect to Moody's or S&P, only clause (i) or clause (ii) shall be applicable. Such satisfaction may relate either to a specified transaction or may be a confirmation with respect to any future transactions which comply with generally applicable conditions published by the applicable rating agency. Eligible Account: The definition of "Eligible Account" in the Standard Terms shall not apply. "Eligible Account": A non-interest bearing account, held in the United States, in the name of the Trustee for the benefit of the Trust that is either (i) a segregated account or segregated accounts maintained with a Federal or State chartered depository institution or trust company the short-term and long-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the short-term and long-term unsecured debt obligations of such holding company) are rated P-1 and Aa2 by Moody's, A-1+ and AA by S&P, and, if rated by Fitch, F1 and AA by Fitch at the time any amounts are held on deposit therein including when such amounts are initially deposited and all times subsequent or (ii) a segregated trust account or segregated accounts maintained as a segregated account or as segregated accounts and held by the Trustee in its Corporate Trust Office in trust for the benefit of the Unitholders. Permitted Investments: The following shall be a Permitted Investment in addition to the investments specified in the Standard Terms: Units of the Dreyfus Cash Management Fund Investor Shares or any other money market funds which are rated in the highest applicable rating category by each Rating Agency (or such lower rating if the Rating Agency Condition is satisfied). Amendment of Trust Agreement: Section 12.01(a) of the Standard Terms shall be replaced with the following: (a) The Trust Agreement may be amended from time to time by the Depositor and the Trustee without the consent of any of the Unitholders, upon delivery by the Depositor of an Opinion of Counsel acceptable to the Trustee to the effect that such amendment will not materially and adversely affect the interests of any holder of a Class of Units that is not voting with respect to such amendment pursuant to Section 12.01(b), for any of the following purposes: (i) to cure any ambiguity or defect or to correct or supplement any provision in the Trust Agreement which may be defective or inconsistent with any other provision in the Trust Agreement; (ii) to provide for any other terms or modify any other terms with respect to matters or questions arising under the Trust Agreement; (iii) to amend the definitions of Trigger Amount and Maximum Reimbursable Amount so as to increase, but not decrease, the respective amounts contained in such definitions or to otherwise amend or waive the terms of Section 10.05(b) in any manner which shall not adversely affect the Unitholders in any material respect; (iv) to amend or correct or to cure any defect with respect to the Trustee Fee or Expense Administrator's fee; (v) to evidence and provide for the acceptance of appointment under the Trust Agreement by a successor Trustee; or (vi) to add or change any of the terms of the Trust Agreement as shall be necessary to provide for or facilitate the administration of the Trust, including any amendment necessary to ensure the classification of the Trust as a grantor trust for United States federal income tax purposes; provided, however, that in the case of any amendment pursuant to any of clauses (i) through (v) above, the Rating Agency Condition shall be satisfied with respect to such amendment. If more than one Class of Units has been issued under the Trust Agreement, the provisions of this Section 12.01(a) shall apply to each Class of Units that is not materially and adversely affected by such amendment. Section 12.01(c) shall be re-designated Section 12.01(d). Section 12.01(b) shall be re-designated Section 12.01(c). The following shall constitute Section 12.01(b): (b) The Trust Agreement may be amended from time to time by the Depositor and the Trustee with the consent of a 100% of the outstanding Unit Principal Balance of each Class of Units materially and adversely affected thereby. The Rating Agency Condition shall be satisfied with respect to such amendment unless Units representing 100% of the Unit Principal Balance of all affected Units vote in favor of such amendment with notice that the Rating Agency Condition will not be satisfied. The following shall constitute Section 12.01(e): (e) For purposes of this Section 12.01, Schedule III to any Trust Agreement and any Swap Agreements entered into in connection with any related Trust shall not be considered part of the Trust Agreement. Section 7.02 shall govern action taken under the Trust Agreement with respect to any amendments to such Swap Agreements. Other Terms: The Trust shall not merge or consolidate with any other trust, entity or person and the Trust shall not acquire the assets of, or an interest in, any other trust, entity or person except as specifically contemplated herein. The Trustee shall provide to the Unitholders copies of any notices it receives with respect to a redemption of the Securities or exercise of the call rights under the Swap Agreement and any other notices with respect to the Securities. The reference to "B2" in the definition of Certificate in the Standard Terms shall be replaced with "Exhibit B2". The reference to "Section 10.02(ix)" in the definition of Available Funds in the Standard Terms shall be replaced with "Section 10.02(a)(ix)". The reference to "Section 3.04" in the definition of Unit Account in the Standard Terms shall be replaced with "Section 3.05". The transfer by the Depositor to the Trustee specified in Section 2.01(a) of the Standard Terms shall be in trust. Section 2.06 of the Standard Terms shall be incorporated herein by inserting "cash in an amount equal to the premium under the Swap Agreement and" after the phrase "constituting the Trust Property," therein. The reference to "calendar day" in the last sentence of Section 3.06 of the Standard Terms shall be replaced with "Business Day". Section 4.02(d) of the Standard Terms shall be incorporated herein by striking "and the Trustee on behalf of the Unitholders" from the first sentence of the second paragraph thereof. Section 5.03(c) of the Standard Terms shall be incorporated herein by striking "(if so required by the Trustee or the Unit Registrar)" from the first sentence thereof. Section 7.01(c)(i) of the Standard Terms shall be incorporated herein by replacing the first word thereof ("after") with "alter". Section 7.01(c) of the Standard Terms shall be incorporated herein by inserting "(i)" between "Securities" and "would" in the clause that begins "and provided, further," and adding at the end of the same sentence "and (ii) will not alter the classification of the Trust for Federal income tax purposes." Section 7.02 of the Standard Terms shall be incorporated herein by striking "(i) the Trustee determines that such amendment will not adversely affect the interests of the Unitholders and (ii)" from the first sentence thereof, inserting "on which it may conclusively rely" after "Opinion of Counsel" in such sentence, and striking "clause (ii)" from the second sentence of such Section. Section 9.03(a) of the Standard Terms shall be incorporated herein by striking "or oral" after the "at any time by" in the third sentence thereof. Clause (ix) of Section 10.02(a) shall not apply. Section 10.02(a)(x) of the Standard Terms shall be replaced with the following: (x) the Trustee shall have the power to sell the Securities and other Trust Property, in accordance with Article IX and XI, through the Selling Agent or, if the Selling Agent shall have resigned or declined to sell some or all of the Securities, any broker selected by the Trustee (at the direction of the Depositor) with reasonable care, in an amount sufficient to pay any amount due to the Swap Counterparty under the Swap Agreement (including Termination Payments) or reimbursable to itself in respect of unpaid Extraordinary Trust Expenses and to use the proceeds thereof to make such payments after the distribution of funds or Trust Property to Unitholders. Any such broker shall be instructed by the Trustee to sell such Trust Property in a reasonable manner designed to maximize the sale proceeds. Section 10.05(b) of the Standard Terms shall be incorporated herein by replacing ", pursuant to the first sentence of this paragraph" with "the Trustee shall be indemnified by the Trust, however," in the last sentence thereof. Section 10.06(a) of the Standard Terms shall be incorporated herein by inserting "or association" after the word "corporation" in the second sentence thereof. Section 10.07(a) of the Standard Terms shall be incorporated herein by replacing "notice or resignation" with "notice of resignation" in the second sentence thereof and striking the last two sentences thereof. Section 10.10(b) of the Standard Terms shall be incorporated herein by inserting "The Trustee shall not be liable for the acts or omissions of any co-trustee." after the last sentence thereof. Section 10.14 of the Standard Terms shall be replaced with the following: SECTION 10.14. Non-Petition. Prior to the date that is one year and one day after all distributions in respect of the Units have been made, none of the Trustee, the Trust or the Depositor shall take any action, institute any proceeding, join in any action or proceeding or otherwise cause any action or proceeding against any of the others under the United States Bankruptcy Code or any other liquidation, insolvency, bankruptcy, moratorium, reorganization or similar law ("Insolvency Law") applicable to any of them, now or hereafter in effect, or which would be reasonably likely to cause any of the others to be subject to, or seek the protection of, any such Insolvency Law. Section 12.01(a) of the Standard Terms shall be incorporated herein by replacing "(v)" with "(vi)" in the last proviso thereof. Section 12.01(c) of the Standard Terms shall be incorporated herein by inserting ",provided at the expense of the party requesting such amendment," after "Opinion of Counsel". Section 12.05 of the Standard Terms shall be incorporated herein by striking "the Trustee and" in the last sentence of the second paragraph thereof. The reference to "its President, its Treasurer, or one of its Vice Presidents, Assistant Vice Presidents or Trust Officers" in the first sentence of Section 5.02(a) of the Standard Terms shall be replaced with "a Responsible Officer". The reference to "the proper officers" in the second sentence of Section 5.02(a) of the Standard Terms shall be replaced with "a Responsible Officer". The reference to "one of its authorized signatories" in the first sentence of Section 5.02(d) of the Standard Terms shall be replaced with "a Responsible Officer". The reference to the "Trust" in the first sentence of Section 5.08(b) of the Standard Terms shall be replaced with the "Trustee". References to D&P in the Standard Terms shall be incorporated as references to Fitch Inc. ("Fitch"). Schedule II (Terms of Trust Property) Securities: SAFECO Capital Trust I 8.072% trust preferred capital securities due July 15, 2037 Security Issuer: SAFECO Capital Trust I Security Guarantor: SAFECO Corporation The Security Guarantor will be considered the "Security Issuer" for purposes of determining whether the Security Issuer is an Eligible Issuer and whether the Securities are Disqualified Securities. Guarantor Debentures: The Guarantor's 8.072% junior subordinated debentures due 2037. Such debentures are the only assets of the Security Issuer. In the event that the Guarantor Debentures are exchanged for the Securities or distributed in liquidation of the Security Issuer, the Guarantor Debentures shall be treated as the Securities for all purposes and the Security Guarantor shall be treated as the Security Issuer for all purposes. Such exchange or liquidation shall not be considered a redemption. Principal Amount: $26,525,000 Security Rate: 8.072% Credit Ratings: Baa2 by Moody's BBB- by S&P Listing: Not Applicable Security Agreement: As to the Securities, the amended and restated declaration of trust dated as of July 15, 1997 relating to the Security Issuer. As to the Guarantor Debentures, the indenture, dated as of July 15, 1997, between the Security Guarantor and JPMorgan Chase Bank (as successor to The Chase Manhattan Bank). Form: Global Currency of Denomination: United States dollars Acquisition Price by Trust: $25,046,349 Security Payment Date: Each January 15 and July 15. Original Issue Date: The Securities were issued July 15, 1997. Maturity Date: July 15, 2037. Sinking Fund Terms: Not Applicable Redemption Terms: The Guarantor Debentures and the Securities may be redeemed upon a "tax event" (as defined in the underlying indenture and declaration of trust). The Guarantor Debentures may also be distributed in exchange for the Securities or in liquidation of the Issuer. In such event the Guarantor Debentures would become the Securities under the Trust Agreement. CUSIP No.:/ISIN No. 786427 AC8 Security Trustee: JPMorgan Chase Bank (as successor to The Chase Manhattan Bank) Guarantor Debenture Trustee: JPMorgan Chase Bank (as successor to The Chase Manhattan Bank) Available Information Regarding the Security Issuer (if other than U.S. Treasury obligations): The Security Guarantor is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission"). Such reports and other information can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, District of Columbia 20549 and at the following Regional Offices of the Commission: Woolworth Building, 233 Broadway, New York, New York 10279, and Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such materials can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Schedule III (Call Option Confirm) MORGAN STANLEY -------------------------------------------------------------------------------- Date: May 14, 2002 To: SATURNS Trust No. 2002-5 From: Morgan Stanley & Co. International Limited Attn: Asset-Backed Securities Group Contact: Chris Boas SATURNS Trust No. 2002-5 Fax: 312-904-2084 Fax: 212-761-0406 Tel: 312-904-9387 Tel: 212-761-1395 -------------------------------------------------------------------------------- Re: Bond Option Transaction. MS Reference Number SQ1D6 The purpose of this letter agreement is to confirm the terms and conditions of the Transaction entered into between you and Morgan Stanley & Co. International Limited ("MSIL"), with Morgan Stanley & Co. Incorporated ("MS&Co."), as agent, on the Trade Date specified below (the "Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the Agreement below. The definitions and provisions contained in the 1997 ISDA Government Bond Option Definitions as published by the International Swaps and Derivatives Association, Inc. ("ISDA") are incorporated into this Confirmation and this transaction shall be deemed a "Government Bond Option Transaction" for purposes of such definitions. In the event of any inconsistency between those definitions and this Confirmation, this Confirmation will govern. 1. This Confirmation supplements, forms a part of, and is subject to, the ISDA Master Agreement dated as of the date hereof, as amended and supplemented from time to time (the "Agreement"), between you and us. All provisions contained in the Agreement govern this Confirmation except as expressly modified below. 2. The terms of the particular Transaction to which this Confirmation relates are as follows: I. General Terms ---------------- Trade Date: May 7, 2002 Option Style: American Option Type: Call Buyer: MSIL ("Party A") Seller: SATURNS Trust No. 2002-5 ("Party B")
Bonds: The obligation identified as follows: Bond Issuer: SAFECO Capital Trust I Issue: 8.072% Debentures due 2037 CUSIP: 786427 AC8 Coupon: 8.072% Maturity Date: July 15, 2037 Face Amount Purchased: USD 26,525,000
Premium: USD 66,313 Premium Payment Date: May 14, 2002 Number of Options: 26,525 Option Entitlement: USD 1,000 of face amount of the Bonds per Option. Strike Price: (i) For any Exercise Date prior to July 15, 2007, the redemption price of the Bonds including any make-whole amount (expressed as a percentage) subject to a maximum of 110% of the face amount of the Bonds exclusive of accrued interest, or (ii) for any Exercise Date on or after July 15, 2007, 97.239% of the face amount of the Bonds exclusive of accrued interest. Calculation Agent: Party A II. Exercise Terms ------------------ Automatic Exercise: Inapplicable Exercise Period: Any Business Day from, and including, 9:00 a.m. (New York time) on July 15, 2007, to, and including, the Expiration Time on the Expiration Date; provided, however, the Exercise Period shall also include any Business Day prior to July 15, 2007, if notice of redemption has been delivered by the Bond Issuer. Exercise Date: For each Option exercised, the day during the Exercise Period on which that Option is exercised. Multiple Exercise: Applicable Minimum Number of Options: 1 Written Confirmation of Exercise: Applicable. Buyer shall give irrevocable exercise notice which may be given orally (including by telephone) during the Exercise Period but no later than the Notification Date. Buyer will execute and deliver a written exercise notice confirming the substance of such oral notice, however, failure to provide such written notice will not affect the validity of the oral notice. Limitation on Rights of MSIL: For so long as Party A is MSIL or an Affiliate thereof, Party A may only exercise Options hereunder in conjunction with a redemption by the Bond Issuer. MSIL or, if applicable, an Affiliate thereof, may only exercise the number of Options corresponding to the number of Bonds owned by Party B being redeemed. This restriction shall be of no further force and effect as to any Options assigned by MSIL to a person or entity who is not an Affiliate of MSIL. For purposes of these limitations of rights with respect to MSIL and its Affiliates, the definition of "Affiliate" (as defined in the Agreement) shall be construed to include a person or entity that is an Affiliate of MSIL and a person or entity of whom MSIL is an Affiliate. Notification Date: Any date at least 20 calendar days but not more than 60 calendar days prior to the Exercise Date, provided that any date that is at least 10 calendar days prior to the Exercise Date is also a Notification Date if the Bond Issuer has provided notice of redemption. Limited Right to Confirm Exercise: Inapplicable Expiration Date: July 15, 2034 Expiration Time: 4:00 p.m. New York time Business Days: New York and Chicago III. Settlements: ----------------- Settlement: Cash Settlement if MSIL is Party A; otherwise Physical Settlement. Party A will notify Party B separately regarding the clearance system details for Physical Settlement. Spot Price (Cash Settlement Only): The redemption price paid by the Bond Issuer, excluding accrued interest. Deposit of Bond Payment (Physical Party A must deposit the Bond Payment with the Trustee on Settlement Only): the Business Day prior to the Exercise Date. The Bonds are to be delivered "free" to Party A. Additional Payment Obligation of To the Expense Administrator (the Party A: "Expense Administrator Payment Obligation"): If the Bond Issuer has not given notice of redemption in connection with the exercise of Options hereunder and if any such exercise is an exercise of less than all Options remaining unexercised hereunder, Party A shall pay to the Expense Administrator an amount equal to the present value of a stream of payments equal to $6,601 payable on each payment date for the Bonds until the maturity of the Bonds discounted at a rate of 6.0% per annum on the basis of a 360 day year consisting of twelve 30 day months from the date of such exercise until the Scheduled Final Distribution Date (as defined in the Trust Agreement), assuming for this purpose that the Trust (as defined in the Trust Agreement) is not terminated prior to the Scheduled Final Distribution Date, multiplied by the Option Entitlement multiplied by the number of Options exercised and divided by $26,525,000. To Party B: Upon any exercise, Party A shall pay to Party B the Fractional Unit Make-Whole Amount. Party A shall be entitled to reimbursement of any amounts paid or netted from payments received in respect of the Fractional Unit Make-Whole Amount from the Expense Administrator to the extent, and only to the extent, provided in the Expense Administration Agreement. Settlement Date: For Cash Settlement, the Business Day of settlement of a redemption of Bonds by the Bond Issuer. For Physical Settlement, the Exercise Date. 3. Additional Definitions. ---------------------- "Expense Administration Agreement" means the expense administration agreement dated as of the date hereof between Party B and the Expense Administrator. "Expense Administrator" means MSDW Structured Asset Corp. acting pursuant to the Expense Administration Agreement. "Fractional Unit Make Whole Amount" means an amount equal to the Unit Principal Balance (as defined in the Trust Agreement) of any fractional Unit (as defined in the Trust Agreement) that would remain after any exercise hereunder if no provision were made to pay to Party B an additional amount equal to such Unit Principal Balance, together with accrued interest on such fractional Unit and, if applicable, any Additional Distribution (as defined in the Trust Agreement) on such fractional Unit. "Trust Agreement" means the trust agreement dated as of the date hereof, between the MSDW Structured Asset Corp. and LaSalle Bank National Association. 4. Representations. Morgan Stanley & Co. Incorporated is acting as agent for both parties but does not guarantee the performance of Party A. 5. Additional Termination Event. As set forth in the Agreement, a Trust Wind-Up Event will result in an Additional Termination Event under the Agreement with respect to which Party B shall be the Affected Party and this Transaction shall be an Affected Transaction. 6. Swap Termination Payments. In the event an Early Termination Date is designated with respect to which this Transaction is an Affected Transaction, there shall be payable to Party A as a termination payment in lieu of the termination payment determined in accordance with Section 6(e) of the Agreement an amount equal to the excess (if any) of the sale proceeds (or redemption proceeds), excluding accrued interest, of the Bonds in excess of the Strike Price. 7. Assignment. The rights under this Confirmation and the Agreement may be assigned at any time and from time to time in whole or in part; provided that the Rating Agency Condition (as defined in the Trust Agreement) is satisfied with respect to such assignment and any transfer. The transferee in any such assignment or transfer must be a qualified institutional buyer as defined in Rule 144A under the Securities Act of 1933. 8. Account Details. --------------- Payments to Party A: Citibank, N.A., New York SWIFT BIC Code: CITIUS33 ABA No. 021 000 089 FAO: Morgan Stanley & Co. International Limited Account No. 3042-1519 Operations Contact: Barbara Kent Tel 212-537-1449 Fax 212-537-1868 Payments to Party B: LaSalle Bank, Chicago, Illinois ABA No. 071 000 505 Reference: SATURNS 2002-5 Unit Account / AC-2090067/ Account No.: 67-9000-80-2 Operations Contact: Andy Streepey Tel: 312-904-9387 Fax: 312-904-2084 Please confirm that the foregoing correctly sets forth the terms of our agreement MS Reference Number SQ1D6 by executing this Confirmation and returning it to us. Best Regards, MORGAN STANLEY & CO. INTERNATIONAL LIMITED BY: ----------------------- Name: Chris Boas Title: Attorney in fact Acknowledged and agreed as of the date first written above: SATURNS TRUST NO. 2002-5 BY: LaSalle Bank National Association, solely as Trustee and not in its individual capacity. BY: ----------------------- Name: Brian D. Ames Title: Vice President MORGAN STANLEY & CO. INCORPORATED hereby agrees to and acknowledges its role as agent for both parties in accordance with the Schedule to the Agreement. BY: ----------------------- Name: John Kehoe Title: Attorney in fact