-----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, S3XF5wm/+nuXJeRJixodAeIwOZ64W9m2JghGoFCCf8wiFenQwr1cO1fYqeXsclNO 3KdaEuKokt+v6bFKIkO25w== 0000903423-03-000200.txt : 20030221 0000903423-03-000200.hdr.sgml : 20030221 20030221133515 ACCESSION NUMBER: 0000903423-03-000200 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20030221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MS STRUCTURED ASSET CORP CENTRAL INDEX KEY: 0001071246 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 134026700 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-101155 FILM NUMBER: 03575640 BUSINESS ADDRESS: STREET 1: 1585 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2127611715 FORMER COMPANY: FORMER CONFORMED NAME: MSDW STRUCTURED ASSET CORP DATE OF NAME CHANGE: 19980929 S-3/A 1 saturns3aredline_02-20.txt As filed with the Securities and Exchange Commission on February 20, 2003 Registration No. 333-101155 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ PRE-EFFECTIVE AMENDMENT NO. 2 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------ STRUCTURED ASSET TRUST UNIT REPACKAGINGS (SATURNSSM) MS STRUCTURED ASSET CORP. (Exact name of registrant as specified in its charter) Delaware 13-4026700 (State or other jurisdiction of (I.R.S. employer identification number) incorporation or organization) 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) ------------------ Matthew J. Zola MS 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: Michael A. Mazzuchi, Esq. Warren Motley, Esq. Cleary, Gottlieb, Steen & Hamilton Davis Polk & Wardwell 2000 Pennsylvania Avenue, N.W. 450 Lexington Avenue Washington, D.C. 20006 New York, NY 10017 Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective. 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 on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"), 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, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement 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 ============================================================================================================================== ============================================================================================================================== Title of each class of Amount to be Proposed maximum Proposed maximum Amount of securities aggregate offering price to be registered registered(1) offering price per security (2) (2) registration fee - ------------------------------------------------------------------------------------------------------------------------------ Trust Units $5,000,000,000 100% $5,000,000,000 $460,000.42 ==============================================================================================================================
* $460,000.42 was paid with the original filing on November 12, 2002. (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 or until the registration statement shall become effective on such date as the Securities and Exchange Commission (the "Commission"), acting pursuant to Section 8(a), may determine. Subject to Completion, Issued February 20, 2003 PROSPECTUS SUPPLEMENT (To Prospectus dated [January __], 2003) Structured Asset Trust Unit Repackagings (SATURNS SM) [Series Name] Series _____ $________________ [Amount] [Class o] [Callable] Units, [o%] [Variable] Rate [Amount] [Class o] [Callable] Units, [o%] [Variable] Rate MS Structured Asset Corp. Depositor SATURNS Trust No. is offering [a single class][ classes] of Units. [Interest will accrue on the Units at rate of ____%. Distribution dates for the Class Units will occur _________ and _________.][[The Class _______ Units will receive all scheduled interest payments on the underlying securities held by the trust received by the trust before each distribution date, less expenses. ] [The final scheduled distribution date for the Class Units will occur on .] [The Class Units are not entitled to distributions of principal. If the underlying securities are prepaid or redeemed early, returns on the Class Units will be adversely affected and holders of the Class _____ Units may not recover their initial investment.] [Specify any call rights or other similar rights.] The Units will represent a beneficial interest in the underlying securities [and other trust property] described in this prospectus supplement under "Description of Trust Property". Those underlying securities [and other trust property] will be held by the trust. [The underlying securities have a different [denomination] [interest rate] [currency] [maturity] [credit risk] than do the Units.] Prior to this offering, there has been no public market for the Units. [The depositor will apply to list the Units on the [New York Stock Exchange][American Stock Exchange LLC], subject to meeting the applicable listing requirements.] See "Risk Factors" beginning on page [o] of this prospectus supplement and on page [o] of the accompanying prospectus to read about certain factors you should consider before buying Units. Underwriting Price to Discounts and Proceeds to Public Commissions the Trust Per unit $ $ $ Total $ $ $ [The initial public offering price set forth above does not include accrued interest, if any. Interest on the Units will accrue from __________.] The Securities and Exchange Commission and state securities regulators have not approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Morgan Stanley & Co. Incorporated expects to deliver the Units through the facilities of The Depository Trust Company against payment in New York, New York on __________. MORGAN STANLEY [Date] TABLE OF CONTENTS Prospectus Supplement Page ---- Summary................................................3 Risk Factors...........................................9 Incorporation of Certain Documents by Reference.......14 The Trust.............................................15 Description of Trust Property.........................17 [Swap Agreements......................................30 Description of Units..................................34 United States Federal Income Taxation.................38 ERISA Considerations..................................39 Plan of Distribution..................................39 [Legal Matters........................................41 Index of defined terms................................41 Prospectus Page ---- Prospectus Supplements.................................3 Risk Factors...........................................5 Available Information.................................11 Reports to Unitholders................................11 Important Currency Information........................12 Use of Proceeds.......................................12 The Depositor.........................................12 The Trusts............................................12 Description of Trust Agreements.......................14 Description of Trust Property.........................26 Description of Units..................................45 United States Federal Income Taxation.................65 ERISA Considerations..................................79 Plan of Distribution..................................82 Validity of Units.....................................85 Index of Defined Terms................................86 "SATURNS" is a service mark of Morgan Stanley. Summary In this prospectus supplement and the accompanying prospectus, the units offered by the trust are referred to as the "Units". By contrast, the underlying securities deposited into the trust are referred to as the "underlying securities", and terms such as "underlying securities purchase price", "underlying security issuance agreement", "underlying security issuer", "underlying security disclosure document", "underlying security registration statement" or other terms containing the phrase "underlying security" have related meanings. Capitalized terms used but not defined in this prospectus supplement have the meanings given to such terms in the accompanying prospectus. [An index of those defined terms can be found [on page [o] of this prospectus supplement and] on page [o] of] the accompanying prospectus]. The following summary is qualified in its entirety by reference to the more detailed information appearing elsewhere in this prospectus supplement and the accompanying prospectus. Depositor............................. MS Structured Asset Corp. Trustee............................... [LaSalle Bank National Association] Trust................................. SATURNS Trust No. [ ]. The trust will be formed under a trust agreement dated [ ] between the depositor and the trustee. Units................................. There will be __________ class[es] of Units, class[es] __________ [and __________ ]. The Units will be denominated in __________. The total principal amount of Units being issued is $__________. The Units will be issued in [book-entry form through the facilities of [the Depository Trust Company] [__________]] [definitive form] in minimum denominations of __________. [Payment Currency..................... [Specify, if payment of Units may or must be made in a currency other than their specified currency.] Underlying Securities................. The depositor will deposit into the trust [the following [fixed income] securities: __________ [a pool of securities consisting primarily of __________]]. [The underlying securities [have been purchased by the depositor or its affiliates in the secondary market]. See pages __________ for a description of the terms of the underlying securities. Underlying Security Issuer............ The issuer of the underlying securities is - [repeat for each]. The underlying security issuer is not participating in this offering and has no obligations under the Units. Information about [underlying security issuer] is available in filings with the SEC. Interest and Principal Distributions.. [Interest will be distributed each __________ by __________ [describe place and manner of distribution] to recordholders on __________. [The interest rate for the Units is [__________% annually] [variable]].] [Interest payments will be paid in the amounts and on the interest payment dates set forth on Annex A to this prospectus supplement, subject to their receipt by the trust from the underlying security issuers.] The trust will pass through interest to the holders of the Units based on payments [received by the trust under the underlying securities] [to the trust by the swap counterparty under the swap agreement described below.] [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 underlying securities].] [Principal will be distributed [on a final distribution date occurring on __________ [or as the trust receives distributions of principal on the underlying 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 __________] [if the trust is required to make a termination payment 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 underlying 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 __________% annually.] [The Class __________Units will not receive scheduled distributions of interest or principal, but will receive a distribution of the underlying securities in kind on ___________.] [If there is a default relating to the underlying securities or the underlying securities are redeemed early, the trust will terminate and the underlying securities or proceeds of redemption will be divided between the Class __________ [and Class __________] Units. The percentage share of the underlying securities received by each class will vary based on the termination date of the trust.] [Specify (1) the currency for any non-U.S. dollar distributions, (2) any arrangements for converting non-U.S. dollar amounts and (3) if interest rate is subject to adjustment in response to change in the rating of the Units.] [Call Rights][Warrants]............... [The Units may be called for redemption by the holder of the [call rights] [warrants] [on or after __________] at a price of __________.] [On any business day on or after [__________] that is designated as a "call date", the holders of [call rights] [warrants] may, upon notice of not less than [15] days ([or in the case of the announcement of any [redemption] [repurchase] or other] unscheduled payment of the underlying securities] or after receipt of notice of a trust wind-up event, not less than [three] days' notice, or when a tender offer for the underlying securities is pending, not less than [five] days' notice prior to the expiration of the tender offer acceptance period) but not more than [45] days prior to that call date, purchase your Units in whole [or in part] at [their stated amount plus any accrued and unpaid distributions to the call date]/[other call price]. On any business day before [__________] and after [[the announcement of any [[redemption] [repurchase] or other] unscheduled payment of the underlying securities or] receipt of notice of a trust wind-up event or when a tender offer for the underlying securities is pending, the holder of [call rights] [warrants] may, in the case of receipt of notice of any [[redemption] [repurchase] or other] unscheduled payment of the underlying securities or of] a trust wind-up event, upon notice of not less than [three] days or when a tender offer of the underlying securities is pending, upon notice of not less than [five] days' notice prior to the expiration of the tender offer acceptance period, but not more than [60] days prior to that call date, purchase your Units in whole or in part at $_____ plus any accrued and unpaid distributions to the call date, provided that if the warrants are to be exercised after the announcement of any redemption or other unscheduled payment of the underlying securities and prior to such redemption or other unscheduled payment, then the call date designated by the holder of [call rights] [warrants] must be the second business day prior to such [[redemption] [repurchase] or other] unscheduled payment. In addition, at any time upon an acceleration of the underlying securities and payment in full by the underlying securities issuer [or underlying securities guarantor] of all amounts when due, all outstanding [call rights] [warrants] will be exercised automatically. The Units will be purchased at [their stated amount plus any accrued and unpaid distributions to the exercise date]/[other call price].][Specify other procedures] [Optional Exchange.................... Holders of the Units have a limited right to exchange Units for corresponding portions of the underlying securities. The 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][call rights.]] [Additional Issuances................. The depositor may at its sole discretion deposit additional underlying securities into the trust, and the trust may issue a corresponding number of additional Units [(in total principal amounts of at least __________ per issuance of Units)], from time to time.] [Reports to Unitholders............... [Specify, if other than as described in the accompanying prospectus.] Use of Proceeds....................... [Specify, if proceeds from sale of Units will be used for purposes other than those described under "Use of Proceeds" in the accompanying prospectus.] [Swap Counterparty.................... __________.] [Swap Agreement....................... The swap counterparty will enter into [an interest rate swap] [a cross-currency swap] [a total return swap] [a [call] [put] option transaction] [other] transaction with the trust. The trust [will pay to the swap counterparty the [interest] [principal] amounts the trust receives on the underlying securities] [[will] [may be required to] deliver to the swap counterparty the underlying securities on __________ at a price of __________]. The trust will receive payments under the swap agreement on the same dates on which 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.]] [Calculation Agent.................... __________ will act as calculation agent under the swap agreement and will calculate the value of __________ from time to time.] [Exchange Rate Agent.................. __________ will act as exchange rate agent with respect to the Units and will calculate applicable rates of exchange between U.S. dollars and the specified currency.] [Selling Agent........................ __________ will act as selling agent under the trust agreement.] [Credit Support....................... The Units have the benefit of credit support that includes [a financial guaranty insurance policy] [letter of credit] [guaranty] [subordination features] [Describe.] [Retained Interest.................... __________.] Tax Status............................ The depositor will receive an opinion of counsel that the trust [[should][will] be characterized as a grantor trust and][will not be characterized as an association taxable as a corporation.] [Offering Restrictions................ The [Class _______] Units are being offered only to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.] ERISA Considerations.................. A plan subject to the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974, as amended, Section 4975 of the Internal Revenue Code or any governmental plan subject to any substantially similar provisions [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". Rating................................ [The Units must be assigned a rating of __________ by __________ in order to be issued.] Closing Date.......................... On or about __________. [Listing.............................. Application has been made to list the Units on the _________. Trading on the __________ is expected to begin within __________ days after the completion of this offering.] How to reach the Depositor............ You may contact the Depositor's offices at 1585 Broadway, New York, New York 10036 (telephone number (212) [761-2520]. Risk Factors In addition to the risk factors discussed in the accompanying prospectus, you should carefully consider the following risk factors before buying any Units: Absence of information Unitholders will be exposed to the credit risk of the underlying security issuer [and] [the swap counterparty] [and] [the swap guarantor] [and] [the credit support provider]. The material terms of the underlying securities and material information with respect to the underlying security issuer [and] [the swap counterparty] [and] [the swap guarantor] [and] [the credit support provider] are described in public filings prepared by the underlying security issuer and referred to in this prospectus supplement. In addition, this section does not contain any risk factors relating to the underlying securities or the underlying security issuer. No investigation of the financial condition or creditworthiness of the underlying security issuer or any of its affiliates, or of any ratings of the underlying securities, has been made by the trust, the trustee, the depositor, Morgan Stanley or any of their affiliates, in connection with the issuance of the Units. You should consider carefully the underlying security issuer's financial condition and its ability to make payments in respect of the underlying securities. We are not affiliated with the underlying security issuer and have not performed any due diligence investigation or review of the underlying security issuer. You should undertake an independent investigation of the underlying security issuer to the extent required in your judgment to allow you to make an informed decision with respect to an investment in the Units. [Unit ratings At the time of issue, the [Class __________] [list classes] Units will be rated __________ by __________. [The ratings on the Units correspond to the ratings on the [pool of] underlying securities [and other trust property].] The [ratings of the [pool of] underlying securities [and other trust property] and the Units may change over time. There is no guaranty that any such rating will not be lowered or withdrawn by the applicable rating agency in the future, which may adversely affect the value of the Units.] [Effect of particular features of underlying securities [call rights][warrants] The underlying securities [can be redeemed early at the option of the underlying security issuer [on __________] [if __________]] [may amortize early as a result of __________]. [The [Units][underlying securities] may be called by the holder of the [call rights][warrants][swap counterparty]. If the [Units][underlying securities] are [redeemed early][called], [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 underlying securities are redeemed early, the trust [and the [call rights][warrants][swap agreement]] will terminate [, and the trust may be required to make a termination payment under the [call rights][warrants][swap agreement.]] [See "--Liability for swap termination payments" in this section and "Risk Factors--Risks related to swap agreements" in the prospectus.] [Prepayments will affect yield [and recovery of investment] [A redemption of the underlying securities or exercise of the [call rights][warrants][swap agreement] may result in an early redemption of the Units at a time when reinvestment in securities with yields comparable to that of the Units is not possible. ] [The Class __________ Units are not entitled to distributions of principal but receive interest cash flows from the underlying securities for so long as the underlying securities are outstanding. If the underlying 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 their initial investment.] ] [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 underlying securities. As a result, due to changes in interest rates, the price that you can realize if you decide to sell Class __________ Units may be lower than expected.] [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 underlying 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 underlying 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 which 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 __________ currency against the U.S. dollar will result in a decrease in the effective yield of the Units for an investor who pays U.S. 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 those currencies and government interventions, and can be highly unpredictable. [In recent years, rates of exchange between the U.S. dollar and [the 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 those circumstances, the exchange rate agent will determine in its sole discretion when and how to make distributions on the Units. This may lead to delays until the specified currency is again available or distributions 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 currencies other than U.S. dollars. In New York courts, an action based on 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 the judgment or decree is entered. That exchange rate may be different from the rate that would have applied otherwise.] [Liability for swap termination payments [The swap agreement] [Each swap transaction] may be terminated early if [terms to be specified.] [At any time of early termination, the swap agreement or an individual 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 (1) the estimated cost, at prevailing market values, that would be incurred by the trust or its swap counterparty to enter into a replacement swap agreement (which cost depends on the comparative value of the remaining payments to be made by the trust and the remaining payments to be made by the swap counterparty) or (2) the losses suffered by the trust or its swap counterparty as a result of the termination of the swap agreement. Holders of the Units will effectively pay [will be charged] 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 may be highly volatile, and it is not possible to estimate the maximum amount of the termination payment.] [Conflicts of interest [Specify any actual or potential conflicts of interest resulting from underwriter's role in the initial distribution of underlying securities or deliverable securities under swap agreement] [Morgan Stanley and other affiliates of the depositor may commence, maintain or continue to maintain commercial relationships with respect to the underlying security issuer or its affiliates. In particular, affiliates of the depositor may provide investment banking and other financial services, and may enter into derivative transactions with, the underlying security issuer or its affiliates. Affiliates of the depositor may also hold long or short positions with respect to securities or other obligations of the underlying security issuer or its affiliates (including the underlying securities), or may enter into credit derivative or other derivative transactions with third parties with respect to those obligations. In connection with those transactions, affiliates of the depositor may exercise or enforce rights against, and may otherwise act with respect to, the underlying security issuer or its affiliates without regard to the issuance of the Units and the related transactions described in this prospectus supplement. Any such actions might have an adverse effect on the underlying securities, the underlying security issuer or the underlying security issuer, the ability of the trust to exercise or enforce any rights with respect to the underlying securities or the value of the Units. In the case of a bankruptcy or insolvency of the underlying security issuer or its affiliates, or any other default under securities or other obligations of the underlying security issuer or its affiliates (including the underlying securities), the interests of Unitholders with respect to underlying securities held by the trust may be in conflict with the interests of affiliates of the depositor that have entered into transactions with the underlying security issuer or its affiliates.] [[ ], the initial swap counterparty, will also act as calculation agent under the swap agreement to be entered into by the trust. As such, it will be responsible for calculating the respective payment obligations of the trust and the swap counterparty under this agreement. In addition, Morgan Stanley will act as selling agent under the trust agreement in the event of a trust wind-up event. Since in most circumstances, distributions to Unitholders following a trust wind-up event will be subordinated to any payments due to the swap counterparty under the swap agreement, the selling agent may face a conflict of interest with respect to the actions to be taken by it.]] [High yield underlying securities -- greater default risk [For pools not represented by concentrated underlying securities:] While the Units will have an investment grade rating at time of issuance, this rating is based upon the credit quality of the underlying securities, [specify other credit support or subordination for Units]. The underlying securities [are] [include] high yield corporate debt obligations of U.S. [and other] issuers rated below investment grade. High yield debt obligations have historically experienced greater default rates than has been the case for investment grade securities. The rate of defaults on the underlying securities and the rate of recovery on any defaults may be different from those expected by the rating agencies in assigning their rating to the Units which may result in changes in the rating of the Units, losses to the Units, changes in market value of the Units or other adverse consequences to holders of the Units. [The underlying 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 underlying security issuer and entail 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 those transactions, underlying security issuers incur a substantially higher amount of indebtedness than the level at which they [would otherwise operate]/[had previously operated]. [Emerging market underlying securities--special risks The underlying securities [include] [are] emerging market securities, and are subject to special 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. Such 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. 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 the underlying security issuer.] The underlying securities are also subject to special price volatility and liquidity risks. __________ [and other] emerging markets [has] [have] smaller capital markets with substantially less volume than [more established capital markets. As a result, emerging markets securities are generally less liquid and prices are generally more volatile][capital markets of non-emerging markets]. A limited number of issuers often represent a disproportionately large percentage of market capitalization and trading value in __________ [and other] emerging markets. In addition, large investors trading significant blocks of securities, or dealers making large dispositions of securities resulting from a failure to meet margin calls, may significantly affect price and liquidity in emerging markets. 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. 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. You may be able to obtain little publicly available information about an issuer in an emerging market country. The underlying 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 when applied to the underlying security issuer and the underlying securities.] [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 that characterization. See "United States Federal Income Taxation" in this prospectus supplement for a discussion of the consequences of any alternative characterization of the trust that might be asserted by the Internal Revenue Service.] [Units may not be actively traded The Units are not required or expected to be listed on any securities exchange or quoted on any automated quotation system. There may be little or no secondary market for the Units. [Although the Units have been approved for listing on the _________________ Exchange, it is not possible to predict whether the Units will trade in the secondary market.] Even if there is a secondary market, it may not provide significant liquidity. Incorporation of Certain Documents by Reference All documents filed by the depositor with respect to the trust pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, before, on or after the date of this prospectus supplement and prior to the termination of the offering of the related Units or, if later, the date on which any affiliates of the depositor cease offering and selling those Units will be deemed to be incorporated by reference in this prospectus supplement and to be a part of this prospectus supplement from the date of filing of those documents. Any statement contained in the prospectus, this prospectus supplement or in a document incorporated or deemed to be incorporated by reference will be deemed to be modified or superseded to the extent that a statement contained in the prospectus, this prospectus supplement or in any subsequently filed document which also is or is deemed to be incorporated by reference modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of the prospectus or this prospectus supplement. The depositor will provide without charge to each person, including any beneficial owner of Units, to whom this prospectus supplement is delivered, upon his or her written or oral request, a copy of any or all of the documents incorporated by reference in this prospectus supplement, excluding the exhibits to those documents unless they are specifically incorporated by reference in those documents. Written or oral requests for such copies should be directed to MS Structured Asset Corp., 1585 Broadway, New York, New York 10036, Attention: Secretary, Tel. [212-761-1715.] The Trust The trust will be formed under a trust agreement between the depositor and the trustee dated __________. [The trust agreement will incorporate the provisions of the Standard Terms for Trust Agreements described in the accompanying prospectus]. When the trust agreement is executed, the depositor will deposit the underlying securities into the trust. The trustee, on behalf of the trust, will accept the underlying securities [and credit support][and other trust property] [, enter into the swap agreement] and deliver the Units [call rights][warrants] to or in accordance with the order of the depositor. Description of trust agreement The following summarizes the material terms of the trust agreement to the extent that they are not described in the accompanying prospectus. 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 SEC following the issuance and sale of the Units. The property of the trust created under the trust agreement will consist of (1) the [underlying securities/the trust property] [(exclusive of the retained interest described below, which is not part of the trust)][subject to the warrant [Describe applicable terms]][subject to the swap agreement [Describe applicable terms]], (2) all payments on or collections in respect of the [underlying securities/the trust property] due after __________, together with any proceeds from the [underlying securities/the trust property] [, and (3) the credit support in respect of the Class __________ Units] [, and (4) the rights of the trust under the [swap agreement with the swap counterparty][repurchase agreement with the repo counterparty] [and the related guaranty].] 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 that the trustee is required to vote the underlying 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 in the table appearing below 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 percentages will be established by the calculation agent based on linear interpolation between the values on the immediately preceding and immediately following distribution dates [Describe other methodology]. ] [Under the rules, regulations and procedures creating and affecting the Depository Trust Company (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 DTC participants to whose account the corresponding Units are credited. Additionally, DTC will take actions with respect to specified voting rights only at the direction and on behalf of DTC participants whose holdings of those Units evidence those voting rights. DTC may take conflicting actions with respect to voting rights, to the extent that DTC participants whose holdings of Units evidence those voting rights, authorize divergent action. See "Description of Units--Form" in the accompanying prospectus.] [Specify (1) any particular provisions with respect to entities acting as a custodian or administrative agent under the trust agreement, (2) any modification or amendment supplemental to those provided under "Description of Trust Agreements--Modification and waiver" in the accompanying prospectus, (3) any departure from the reports described under "Description of Trust Agreements--Reports to Unitholders" in the accompanying prospectus, (4) whether an annual accountants' statement and statement of officers of the trustee will be prepared as described under "Description of Trust Agreements--Evidence as to compliance" in the accompanying prospectus and (5) any departure from the notice mechanism described under "Description of Trust Agreements--Notices" in the accompanying 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 fees of $__________, payable [from trust property] [by the depositor] [by __________]. [Specify any particular arrangements regarding manner and priority of payment with respect to fees.] [The "trigger amount" with respect to extraordinary trust expenses for the trust is __________ and the maximum reimbursable amount by the depositor is__________.] [____________ will act as expense administrator on behalf of the trust. The depositor will be responsible for paying the trustee fee and reimbursing certain other expenses of the trust. The Depositor will receive a fee payable on each distribution date. This fee is payable only from available interest receipts received with respect to the underlying securities [and other trust property] after application of such receipts to payment of accrued interest on the Units.] Trust wind-up events [and liquidation events] [The following events with respect to the underlying securities will also constitute an "underlying security default" [Specify]]. [The following constitute additional trust wind-up events: [Specify additional and different trust wind-up events] and will result in an early winding up of the trust] [and an early termination of the swap transaction related to the underlying securities.] [Specify additional or different procedures upon trust wind-up event and termination] [In the event that the underlying security issuer of any concentrated underlying security ceases to be an eligible underlying security issuer as described in the accompanying prospectus, [the trust will sell the underlying securities][a trust wind-up event will occur], and the [proceeds from the sale of the related underlying securities and other trust property will be distributed][the related underlying securities will be distributed in kind] to the Unitholders [subject to payment of any termination payment owed to the [swap counterparty][holder of [call rights][warrants]] for the termination of the related [swap transaction][call rights][warrant]. See "Risk Factors--Risks related to swap agreements" and "Description of Trust Agreements--Trust wind-up events, liquidation events and disqualification events" in the accompanying prospectus]. Retained interest The retained interest of the depositor with respect to the trust property is as follows: __________. [Specify any allocation of interest in the trust property different from that described under "Description of Trust Agreements--Retained interest" in the accompanying prospectus.] Description of Trust Property General [For concentrated underlying securities or other underlying securities or trust property representing a significant portion of the trust property:] [A significant portion of] [Virtually all of] [All of] the property of the trust will consist of the __________ due __________ of __________ [, exclusive of the retained interest of [the depositor], as described above]. The underlying securities were issued under an [indenture][__________] dated __________ between the underlying security issuer and __________. The underlying securities were part of a series of securities totaling __________. The underlying securities have an amortizing principal and the underlying securities to be held by the trust had as of __________ (the "cut-off date") an aggregate principal amount of approximately __________.] [The underlying 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 underlying securities will not be acquired either from the underlying security issuer or its affiliates or pursuant to any distribution by or agreement with the underlying security issuer or its affiliates.] [All information contained in this prospectus supplement regarding the underlying securities has been derived solely from the __________ relating to the underlying securities as filed with __________ on __________. You are urged to read that __________. No investigation of the financial condition or creditworthiness of the underlying security issuer or any of its affiliates, or of any ratings of the related underlying securities, will be made by the trust, the trustee, the depositor, MS&Co. or any of their affiliates in connection with the issuance of the Units. Prospective purchasers of Units should carefully consider each underlying security issuer's financial condition and its ability to make payments in respect of the related underlying securities. The depositor [, MS&Co.] and the trustee, as well as their respective affiliates, did not participate in the preparation of the __________ or other public information relating to the underlying securities in connection with the issuance of the Units, and they take no responsibility for the accuracy or completeness of the information contained in that __________.] The following is a summary of certain material terms of the underlying securities: Title and Original Issue Date: __________ Underlying Security Issuer: __________ Aggregate Principal Amount Held By Trust: __________ Limit on Aggregate Principal Amount of Underlying Securities: __________ Interest Rate: __________ Scheduled Payment Dates: __________ Scheduled Maturity: __________ Ranking: __________ [Specify (1) any subordination provisions with respect to concentrated underlying securities and (2) the relative percentages of senior underlying securities and subordinated underlying securities, if any, in the case of underlying securities other than concentrated underlying securities.] [Rating at Issuance: __________] Underlying Security Issuance Agreement: __________ [Terms of Pledge, Lien or other Security Interest: __________] [Guaranty or other Credit Support: __________] [Currency of Denomination: __________] [Redemption, Repurchase, Amortization or Sinking Fund Terms: _________] [Optional Redemption Terms: __________] Trustee or Other Agent for Underlying Security Holders: __________ [Listing: __________] Form: __________ CUSIP: __________ Underlying Security disclosure document: __________ Underlying Security Registration Statement: __________ [Other Terms: __________] [See also the list of material terms under "Description of Trust Property--Underlying securities" in the accompanying prospectus.] [On __________ /As of the cut-off date,] the underlying securities were rated __________ by __________ [and the obligor thereon was not in default in the payment of any installments of principal, interest or premium (if any) with respect thereto]. The rating[s] of the underlying securities [is] [are] not a recommendation to purchase, hold or sell the underlying securities or the Units, and there can be no assurance that a rating will remain in place for any given period of time or that a rating will not be lowered or withdrawn entirely by a rating agency in the future. [See "Risk Factors--Unit ratings" above regarding certain considerations applicable to the ratings of the Units.] [Available Information [For concentrated underlying securities: According to publicly available documents of the underlying security issuer, the underlying security issuer is a __________, whose principal executive offices are located at __________. The business of the underlying security issuer is __________. The depositor is not an affiliate of the underlying security issuer.] The [parent of the] underlying security issuer is subject to the informational requirements of the Exchange Act, and in accordance with those requirements files reports and other information (including financial information) with the SEC. Those reports and other information can be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of those materials can be obtained by making a written request to the SEC, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The SEC also maintains a website on the internet at http://www.sec.gov at which users can view and download copies of reports, proxy, information statements and other information filed electronically. [One or more classes of the underlying security issuer's securities are also listed on the __________ and such reports and other information can be inspected at the offices of the __________]. In addition, those reports and other information may also be obtained from the underlying security issuer, according to [its] most recent annual report, by making a request to the underlying security issuer. [Specify any other means of obtaining current information regarding the underlying security issuer.] This prospectus supplement does not provide information with respect to the underlying security issuer, and neither the trust, the trustee, the depositor, Morgan Stanley nor any of their affiliates has made any investigation of the financial condition or creditworthiness of the underlying security issuer or any of its affiliates, or of any ratings of the underlying securities, in connection with the issuance of the Units. You should consider carefully the underlying security issuer's financial condition and its ability to make payments in respect of the underlying securities. All information contained in this prospectus supplement regarding the underlying security issuer has been derived from __________. It is possible that events affecting the underlying securities or the underlying security issuer have occurred that have not yet been publicly disclosed and would affect the accuracy or completeness of the publicly available documents described above. [[Use the following where Units are backed principally by Treasury or GSE securities]: [The underlying securities are [issued] [guaranteed] by [the United States of America] [agency].] [Payment of the underlying securities is guaranteed by the full faith and credit of the United States of America.] [The underlying securities are obligations of the Federal National Mortgage Association or "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.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 Fannie Mae, Investor Relations, 3900 Wisconsin Avenue, N.W., Washington, D.C. 20016 (telephone: (202) 752-7115), or at Fannie Mae's website at www.fanniemae.com. Fannie Mae is not subject to the periodic reporting requirements of the Exchange Act.] [The underlying securities are obligations of the Federal Home Loan Mortgage Association or "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. 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, Shareholder Relations, 8200 Jones Branch Drive, Mail Stop 485, McLean, Virginia 22102 (outside Washington, D.C. metropolitan area, telephone (800) 336-3672; within Washington, D.C. metropolitan area, telephone (703) 903-3725, or at Freddie Mac's website at www.freddiemac.com). Freddie Mac is not subject to the periodic reporting requirements of the Exchange Act.] [The Student Loan Marketing Association or "Sallie Mae" is a stockholder-owned corporation established by the 1972 amendments to the Higher Education Act of 1965, as amended, to provide liquidity, primarily through secondary market and warehousing activities, for lenders participating in the Federal Family Education Loan program or FFEL and the Health Education Assistance Loan Program. Under the Higher Education Act, Sallie Mae is authorized to purchase, warehouse, sell and offer participations or pooled interests in, or otherwise deal in, student loans, including, but not limited to, loans insured under the FFEL program, and to make commitments for any of the foregoing. Sallie Mae is also authorized to buy, sell, hold, underwrite and otherwise deal in obligations of eligible lenders, if such obligations are issued by such eligible lender for the purpose of making or purchasing federally guaranteed student loans under the Higher Education Act. As a federally chartered corporation, Sallie Mae's structure and operational authorities are subject to revision by amendments to the Higher Education Act of other federal enactments. Sallie Mae prepares an information statement annually which describes Sallie Mae, its business and operations and contains Sallie Mae's audited financial statements. From time to time Sallie Mae prepares supplements to its information statement which include certain unaudited financial data and other information concerning the business and operations of Sallie Mae. These documents can be obtained without charge upon written request to the Corporate and Investor Relations Division of Sallie Mae at 1050 Thomas Jefferson Street, N.W., Washington, D.C. 20007. Sallie Mae is not subject to the periodic reporting requirements of the Exchange Act.] [The Resolution Funding Corporation is a mixed-ownership government corporation established by Title V of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 or "FIRREA". The sole purpose of the Resolution Funding Corporation is to provide financing for the Resolution Trust Corporation. The Resolution Funding Corporation is to be dissolved, as soon as practicable, after the maturity and full payment of all obligations issued by it. The Resolution Funding Corporation is subject to the general oversight and direction of the Oversight Board, which is comprised of the Secretary of the Treasury, the Chairman of the Federal Reserve Board of Governors, the Secretary of Housing and Urban Development and two independent members from different political parties to be appointed by the President with the advice and consent of the Senate. The day-to-day operations of the Resolution Funding Corporation are under the management of a three-member Directorate comprised of the Director of the Office of Finance of the Federal Home Loan Banks and two members selected by the Oversight Board from among the presidents of twelve Federal Home Loan Banks. The Resolution Trust Corporation was established by FIRREA to manage and resolve cases involving failed savings and loan institutions pursuant to policies established by the Oversight Board. The Resolution Trust Corporation manages and resolves cases for which a receiver or conservator was appointed between January 1, 1989 through August 9, 1992. The Resolution Trust Corporation is authorized to issue nonvoting capital certificates to Resolution Funding Corporation in exchange for the funds transferred from the Resolution Funding Corporation to the Resolution Trust Corporation. The Resolution Trust Corporation will terminate on or before December 31, 1996. FIRREA limits the aggregate principal amount of interest bearing obligations which may be issued by the Resolution Funding Corporation to $30 billion, which amount of obligations was issued in 1989. Pursuant to FIRREA, the net proceeds of these obligations are used to purchase nonvoting capital certificates issued by the Resolution Trust Corporation or to retire previously issued Resolution Funding Corporation obligations. Information concerning Resolution Funding Corporation may be obtained from the Resolution Funding Corporation, Suite 850, 655 Fifteenth Street, N.W., Washington, D.C. 20005. Resolution Funding Corporation is not subject to the periodic reporting requirements of the Exchange Act.] [The Federal Home Loan Banks constitute a system of twelve federally chartered corporations. The mission of each Federal Home Loan Bank is to enhance the availability of residential mortgage credit by providing a readily available, low-cost source of funds to its member institutions. A primary source of funds for the Federal Home Loan Banks is the proceeds from the sale to the public of debt instruments issued by the Federal Housing Finance Board, which are the joint and several obligations of all of the Federal Home Loan Banks. The Federal Home Loan Banks are supervised and regulated by the Federal Housing Finance Board, which is an independent federal agency in the executive branch of the United States government, but obligations of the Federal Home Loan Banks are not obligations of the United States government. The Federal Home Loan Bank System produces annual and quarterly financial reports in connection with the original offering and issuance by the Federal Housing Finance Board of consolidated bonds and consolidated notes of the Federal Home Loan Banks. Questions regarding the Federal Home Loan Banks Combined Financial Statement should be directed to the Deputy Director, Financial Reporting and Operations Divisions, Federal Housing Finance Board, 1777 F Street, N.W., Washington, D.C. 20006. Copies of the Financial Reports will be furnished upon request to the Capital Markets Divisions, Office of Finance.] The Tennessee Valley Authority or "TVA" is a wholly owned corporate agency and instrumentality of the United States of America established pursuant to the Tennessee Valley Authority Act of 1933, as amended. TVA's objective is to develop the resources of the Tennessee Valley region in order to strengthen the regional and national economy and the national defense. The programs of TVA consist of power and nonpower programs. The power program is required to be self-supporting from revenues it produces. The TVA Act authorizes TVA to issue evidences of indebtedness that may only be used to finance its power program. TVA prepares an information statement annually which describes TVA, its business and operations and contains TVA's audited financial statements. From time to time TVA prepares supplements to its information statement, which include certain unaudited financial data and other information concerning the business and operations of TVA. These documents can be obtained upon written request directed to Tennessee Valley Authority, 400 West Summit Hill Drive, Knoxville, Tennessee 37902, Attention: Vice President and Treasurer.] [The Farm Credit System is a nationwide system of lending institutions and affiliated service and other entities. Through its banks and related associations, the Farm Credit System provides credit and related services to farmers, ranchers, producers and harvesters of aquatic products, rural homeowners, certain farm-related businesses, agricultural and aquatic cooperatives and rural utilities. System institutions are federally chartered under the Farm Credit Act of 1971, as amended, and are subject to regulation by a Federal agency, the Farm Credit Administration. The Farm Credit Banks and associations are not commonly owned or controlled. They are cooperatively owned, directly or indirectly, by their respective borrowers. Unlike commercial banks and other financial institutions that lead to the agricultural sector in addition to other sectors of the economy, under the Farm Credit Act the Farm Credit System institutions are restricted solely to making loans to qualified borrowers in the agricultural sector and to certain related businesses. Moreover, the Farm Credit System is required to make credit and other services available in all areas of the nation. In order to fulfill its broad statutory mandate, the Farm Credit System maintains lending units in all 50 states and the Commonwealth of Puerto Rico. The Farm Credit System obtains funds for its lending operations primarily from the sale of debt securities issued under Section 4.2(d) of the Farm Credit Act ("Systemwide Debt Securities"). The Farm Credit Banks are jointly and severally liable on all Systemwide Debt Securities. Systemwide Debt Securities are issued by the Farm Credit Banks through the Federal Farm Credit Banks Funding Corporation, as agent for the Farm Credit Banks. Each Farm Credit Bank determines its participation in each issue of Systemwide Debt Securities based on its funding and operating requirements, subject to the availability of eligible collateral, to determinations by the Funding Corporation as to conditions of participation and terms of each issuance, and to Farm Credit Administration approval.] Important information regarding the Farm Credit Banks and the Farm Credit System, including combined financial information, is contained in disclosure information made available by the Farm Credit Banks Funding Corporation. This information consists of the most recent Farm Credit System annual information statement and any quarterly information statements issued subsequent thereto and certain press releases issued from time to time by the Funding Corporation. Such information and the Farm Credit System Annual Report to Investors for the current and two preceding fiscal years are available for inspection at the Federal Farm Credit Banks Funding Corporation, Investment Banking Services Department, 10 Exchange Place, Suite 1401, Jersey City, New Jersey 07302. Upon request, the Farm Credit Banks Funding Corporation will furnish, without charge, copies of the above information.] [Set forth similar summary statement for eligible sovereign or other GSEs.]] [Government Trust Certificates or "GTC Notes" consist of certificates evidencing undivided fractional interests in a trust, the assets of which consist of promissory notes (the "notes"), payable in U.S. Dollars, of a certain foreign government, backed by a full faith and credit guaranty issued by the United States of America, acting through the Defense Security Assistance Agency of the Department of Defense, of the due and punctual payment of 90% of all payments of principal and interest due on the notes and a security interest in collateral, consisting of non-callable securities issued or guaranteed by the United States government or agencies thereof, sufficient to pay the remaining 10% of all payments of principal and interest due on the Notes. Many issuances of GTC Notes were undertaken pursuant to Title III of the Foreign Operations, Export Financing and Related Programs Appropriations Acts (the "Appropriations Acts"), which permit borrowers to prepay certain eligible high-interest loans made by the Federal Financing Bank under the Foreign Military Sales Credit Program. The Appropriations Acts permit repayment of the Foreign Military Sales loans with the proceeds of new loans and authorize the issuance of a United States government guaranty covering no more and no less than ninety percent (90%) of the payments due on each such new loan, in accordance with the requirements of the Arms Export Control Act, as amended. It is a condition to the issuance of certificates under such program that the Defense Security Assistance Agency approve the refinancing of any such Foreign Military Sales loan. Although 90% of all payments of principal and interest on the notes are guaranteed by the United States government or agencies thereof, and 10% of such payments are secured by securities of the United States government or agencies thereof, the GTC Notes themselves are not so guaranteed. In the event of a default on the Notes, the Trustee of the Trust would be required by the operative documents to make a claim against the United States government or an agency thereof or would be required to liquidate the collateral securing the notes. If the borrower under the notes (the "borrower") fails to deposit with the related trustee all amounts due on the Notes on any Note payment date (each, a "note payment date"), the Trustee will first notify the Borrower and, one business day thereafter, will send a notice to the Director of the Defense Security Assistance Agency and to the related depositary (the "GTC depositary") setting forth the amounts due on the Notes on such note payment date and the amounts, if any, received from the Borrower. On the [11th calendar day] following the note payment date, if any amounts due on a note remain unpaid, the underlying trustee will demand payment from the Defense Security Assistance Agency on the applicable guaranty in accordance with its terms. On the day the underlying trustee receives such payment, it will instruct the GTC depositary immediately to deliver sufficient funds to pay the amounts remaining unpaid on the note. On the occurrence of an event of default (as defined in the related loan agreement), the underlying trustee in its discretion may proceed to protect and enforce the rights of the GTC Note holders under the underlying declaration of trust by a suit, action or other proceeding. As provided in the loan agreement, the guaranty and the GTC depositary agreement, the underlying trustee has the legal power to exercise all the rights, powers and privileges of a holder of the note. The underlying trustee is required to take all necessary action, as permitted by the underlying declaration of trust and applicable law (i) to enforce payments due from the Defense Security Assistance Agency under the guaranty and (ii) to take possession of collateral maturing or paying interest on or prior to the note payment date on which default occurred, and to apply such funds in accordance with the underlying declaration of trust for the benefit of holders of GTC Notes. The Trustee is required to notify the borrower upon taking the foregoing actions. Neither the underlying trust holding a note nor the Defense Security Assistance Agency has the right to accelerate payment of the note, notwithstanding any failure of the borrower to make payment on the note or other event of default with respect to the Note. [Described with respect to GTC Notes the waiting period that must elapse before reimbursement for a default on the notes, and the delay between payment on the notes and payment on the GTC Notes that is built into the GTC Notes to protect against a delay in reimbursement.][Specify, to the extent applicable: (i) the aggregate principal amount of such GTC Notes, (ii) the coupon, if any, borne by such GTC Notes, (iii) the stated maturity of each GTC Note, (iv) the identity of each underlying obligor, and (v) the conditions under which, and the terms on which, any underlying obligation may be prepaid or redeemed prior to the stated maturity of the obligation.]] [Underlying securities pool [Use the following where the underlying securities consist of a pool of obligations of multiple obligors.] The composition of the underlying securities pool and the distribution by ratings, remaining term to maturity and interest rate of the underlying securities as of the cut-off date are as set forth in Tables 1 through 5 below: Composition Of The Underlying Securities Pool -------------------------------------- As Of The Cut-Off Date -------------------------------------- Number of Underlying 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 Underlying Securities Pool As Of The Cut-Off Date --------------------------------------------------------------------------------------------------- Industry Classification Number Aggregate Percent of Aggregate Principal Balance Principal Balance --------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------- Total ---------------------------------------------------------------------------------------------------
Distribution By Remaining Term To Maturity Of The Underlying Securities Pool As Of The Cut-Off Date - ----------------------------------------------------------------------------------------------------- Aggregate Percent of Aggregate Remaining Term to Maturity Number Principal Balance Principal Balance - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- Total - ----------------------------------------------------------------------------------------------------- Distribution By Industry Interest Rate Of The Underlying Securities Pool As Of The Cut-Off Date - ----------------------------------------------------------------------------------------------------- Aggregate Percent of Aggregate Interest Rate Range Number Principal Balance Principal Balance - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- Total - ----------------------------------------------------------------------------------------------------- Distribution By Rating Of The Underlying Securities Pool As Of The Cut-Off Date - ----------------------------------------------------------------------------------------------------- Aggregate Percent of Aggregate Rating Number Principal Balance Principal Balance - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- Total - -----------------------------------------------------------------------------------------------------
[As of the cut-off date, [all of] [approximately % of] such underlying securities were rated [investment grade] [specify particular rating] [weighted average rating] by at least one nationally recognized rating agency, and no obligor of any underlying 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 underlying securities is not a recommendation to purchase, hold or sell such underlying 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 "Risk factors--Unit ratings" in this prospectus supplement regarding certain considerations applicable to the ratings of the Units.] [In the event that the depositor is unable to deliver any of the underlying securities on the closing date and such underlying securities constitute 5% or less of trust property, the Units will nevertheless be issued and the depositor will assign to the trustee the Depositor's contractual right to receive from MS&Co. (x) the underlying securities as soon as commercially practicable thereafter, and after the closing date, (y) the amount of any distributions paid on such underlying securities after the closing date and prior to the date of delivery of such underlying securities to the trustee and (z) if delivery of the relevant underlying securities does not occur on or before the earlier of (i) the fifth business day after the closing date and (ii) the first distribution date (the "Final Delivery Date"), liquidated damages equal to the greater of the specified purchase price for such underlying securities or the market value of such underlying securities as determined on the Final Delivery Date, together with accrued interest at the applicable underlying security rate. The trustee will distribute any payments received pursuant to the foregoing assigned rights promptly to the Unitholders. Ms&Co.'s obligation to pay the foregoing amounts will be guaranteed by Morgan Stanley.] Underlying security issuance agreement The [indenture] [__________] under which the underlying securities were issued limits the underlying security issuer's ability to engage in certain activities and transactions and requires that the underlying security issuer perform certain obligations with respect to the underlying securities. [The following is a summary of significant restrictive, financial and other covenants under the [indenture] [__________]: ____________]. [The following is a summary of significant events of default under the [indenture] [__________]: [Specify (1) any remedies other than acceleration upon default and (2) any security arrangements and collateral with respect to the underlying securities.] [As of the cut-off date, [approximately __________% of] the underlying securities were [subject to [describe any put, call or other conversion or redemption options applicable to the underlying securities as well as the nature of the obligation represented by such underlying securities (i.e., senior, subordinate, secured) and describe commonalities with respect to any subordination or security provisions or collateral].] [Each of the] [The] underlying securities [was] [were] [registered under the Securities Act][publicly issued].] [Each of the] [The] underlying securities are eligible for resale pursuant to Rule 144(k) under the Securities Act.] [Repurchase agreement The trust will enter into a repurchase agreement with respect to the underlying securities. The repurchase agreement will be substantially in the form of the Bond Market Association Master Repurchase Agreement (1996 Version). Pursuant to the repurchase agreement, the Trust will purchase the underlying securities from [name of counterparty] under the repurchase agreement (the "repo counterparty") on the date of issuance of the Units. Under the repurchase agreement, the repo counterparty will pay to the trust a [fixed rate] [floating rate based on [index]], and the repo counterparty will be entitled to all interest income received on the underlying securities. In the event that any principal payments are made on the underlying securities prior to the stated expected payment date of principal for the underlying securities, such payments will be retained by the trust, subject to the right of the repo counterparty to make a substitution of new underlying securities under the terms of the repurchase agreement. The terms of the repurchase agreement, will require the repo counterparty to repurchase the underlying securities on [specify dates] [any trust wind-up event] [specified settlement dates under the swap agreement]. Upon [specify events], the repurchase agreement will be cancelled and the repo counterparty will not be required to repurchase the securities. [The repo counterparty will have the right to replace the underlying securities with substitute underlying securities only if (i) the underlying securities would constitute disqualified underlying securities or (ii) notice is given by the underlying security issuer that a principal payment will be made on the underlying securities prior to the stated expected payment date of principal for the underlying securities. The repo counterparty will not be required to make any substitutions. [If the repo counterparty does not make a substitution in the event of a principal pre-payment, a trust wind-up event will occur at the option of the repo counterparty.] "Substitute securities" must [have a face amount equivalent to the face amount of the securities (prior to any early principal repayments)], [a rating of at least [specify]], [pay interest determined by reference to [index]], [be denominated in [currency]], [otherwise constitute an asset of the same class and type as the initial underlying securities], [have an expected maturity and final legal maturity not later than [date]] and [other requirements].] [Credit support For the benefit [solely] of the [Class __________] Units, credit support will be obtained [and will constitute part of the trust property to the extent described 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 transfer to the trust a letter of credit from __________ 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 (1) __________% of the aggregate unit principal balance outstanding on the immediately preceding distribution date (after giving effect to any payment of principal made on that preceding distribution date) but in any event not less than __________, and (2)] the amount of the letter of credit on that preceding distribution date, [plus (1) reimbursement of certain advances under the letter of credit and (2) recoveries on defaulted trust property]. 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 [__________] 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 issuer of the letter of credit with respect to its [credit/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 issuer of the letter of credit. In addition, to the extent that the letter of credit will cover payment of 20% or more of the trust property, provide or incorporate by reference financial statements and other information with respect to the issuer of the letter of credit.] [Simultaneously with the depositor's assignment of the trust property to the trust, the depositor will transfer to the trust a financial guaranty insurance policy from __________ 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 issuer of the policy. In addition, to the extent that the policy will cover payment of 20% or more of the trust property, provide or incorporate by reference financial statements and other information with respect to the issuer of the policy.] [In the event that a disqualification event occurs with respect to the [letter of credit] [policy] [other credit support] as described in the accompanying prospectus, [[the trust will [terminate] [liquidate] the [credit support][a trust wind-up event will occur], and the [proceeds from the sale of the related [credit support][underlying securities and other trust property] will be distributed][the underlying securities will be distributed in kind] to the Unitholders [subject to payment of any termination payment owed to the [swap counterparty][holders of the [call rights][warrants]] for the termination of the related [swap transaction][call rights][warrant]. See "Risk Factors -- Risks related to swap agreements" and "Description of Trust Agreements -- Trust wind-up events, liquidation events and disqualification events" in the accompanying prospectus.] [Specify any provisions for replacement of credit support provider]. [The depositor will establish, for the benefit of the trustee on behalf of the Unitholders, on the closing date for this offering 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 that are not distributed to Unitholders will be deposited in that reserve account. Amounts so deposited in the 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 - [may be paid to [the depositor]] [__________].] [Specify whether the issuer of the letter of credit or financial guaranty insurance policy, as applicable, is required to satisfy any ongoing credit rating or other requirements.] [The subordination of the Class __________Units, as described below, 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 those losses and other shortfalls are not so covered, or the related coverage has been exhausted.] Realized losses will be allocated on any distribution date among the [various] class[es] of Units as follows: [__________] [Swap Agreements The trust will enter into a swap agreement with [Morgan Stanley Capital Services Inc.][Other Swap counterparty] in the form of an ISDA Master Agreement. [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 underlying 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 underlying securities into the effective coupon which 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] underlying 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 underlying 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 underlying securities during the relevant period, and] will receive from the swap counterparty [interest] [principal] payments based on the increase in value of the __________ during the relevant period or make payments to the swap counterparty based on the decrease in value of the __________ during the relevant period. The trust will not be required to make payments under the total rate of return swap transaction if those 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 underlying securities to a return based on the performance of the __________ 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 underlying 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 underlying securities into the right to receive another security.] [The put option will entitle the trust to put to the swap counterparty the underlying securities at par, thereby protecting the trust from a decline in the market value of the underlying securities in circumstances where the underlying 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 according to the swap agreement by the Unitholders, if the market value of the underlying securities on the exercise date for the put option is less than the par value of the underlying securities.] [Describe characteristics of any other type of swap transaction not described above. Specify, (1) if netting may be applied to more than one transaction, (2) any circumstances (other than those described under "Description of Trust Property--Swap agreements--Modification and amendment" in the accompanying prospectus) under which the swap agreement may be amended, (3) any arrangements for securing the obligations of the swap counterparty and (4) any events of default not described under "Description of Trust Property--Swap agreements--Defaults" in the accompanying prospectus.] The following events constitute termination events or events of default which apply with respect to the swap agreement: [Specify]. The notional amount of the [interest rate] [currency] [total rate of return] swap transaction will be equivalent to [the principal amount of underlying 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 under the swap agreement 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 first day of the interest period]. The value of the [floating rate] [index] will be determined by reference to __________ or in the event such [floating rate] [index] is unavailable by reference to quotations from market makers obtained by the calculation agent under the swap agreement. The principal economic terms of the swap transaction will be contained in a confirmation under the __________ dated __________. A current report on Form 8-K relating to the Units containing a copy of each executed confirmation under the swap agreement will be filed by the depositor with the SEC 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:] [Any other material terms of the Confirmation] Calculation Agent: Business Days: As described in the accompanying prospectus, early termination of the swap agreement in the case of a specified early termination event may result in the trust becoming liable for a swap termination payment, and the trust may be required to sell underlying securities in order to pay that swap termination payment. You should consider carefully the risk factors applicable to swap agreements described under "Risk Factors -- Risks related to swap agreements" in the accompanying prospectus. [Specify (1) any termination events not described under "Description of Trust Property -- Swap agreements -- Termination events" in the accompanying prospectus, (2) any circumstances under which the occurrence of an event of default or termination event does not lead to a termination of the swap agreement and (3) if swap counterparty's claim on trust property will be pro-rated with claims of Unitholders, as described under "Description of Trust Agreements--Trust wind-up events, liquidation events and disqualification events" in the accompanying prospectus.] [Guaranty of swap counterparty obligations by Morgan Stanley [Update from regular reports if used: Morgan Stanley will unconditionally and irrevocably guarantee the due and punctual payment of all amounts payable by the initial swap counterparty under the swap agreement. Pursuant to that guaranty, Morgan Stanley will agree to pay or cause to be paid all such amounts if (1) the swap counterparty fails to punctually pay any such amount and (2) the trustee demands Morgan Stanley in writing pay such amount. Morgan Stanley will not guarantee the obligations of any assignee of the initial swap counterparty or any other person who is or becomes a swap counterparty. Morgan Stanley is the parent company of the depositor and the indirect parent of MS&Co. In June 2002, the Company changed its name from "Morgan Stanley Dean Witter & Co." to "Morgan Stanley". Morgan Stanley is a global financial services firm that maintains leading market positions in each of its business segments--Institutional Securities, Individual Investor Group, Investment Management and Credit Services. Morgan Stanley's Institutional Securities business includes securities underwriting and distribution; financial advisory services, including advice on mergers and acquisitions, restructurings, real estate and project finance; sales, trading, financing and market-making activities in equity securities and related products and fixed income securities and related products, including foreign exchange and commodities; principal investing, including private equity activities; and aircraft financing activities. Morgan Stanley's Individual Investor Group business provides comprehensive financial planning and investment advisory services designed to accommodate individual investment goals and risk profiles. The Individual Investor Group provides its clients with several investment and credit products and services, including mutual funds, insurance products, financial planning, retirement planning, personal trust and estate planning, credit management and account services. Morgan Stanley's Investment Management business provides global asset management products and services for individual and institutional investors through three principal distribution channels: a proprietary channel consisting of Morgan Stanley's financial advisors and investment representatives; a non-proprietary channel consisting of third-party broker-dealers, banks, financial planners and other intermediaries; and Morgan Stanley's institutional channel. Morgan Stanley's Credit Services business includes the issuance of the Discover(R) Classic Card, the Discover Gold Card, the Discover Platinum Card, the Morgan Stanley CardSM and other proprietary general purpose credit cards; and the operation of Discover Business Services, a proprietary network of merchant and cash access locations in the U.S. Morgan Stanley provides its products and services to a large and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Morgan Stanley conducts its business from its headquarters in New York City, its regional offices and branches throughout the United States, and its principal offices in London, Tokyo, Hong Kong and other world financial centers. Morgan Stanley's principal executive offices are at 1585 Broadway, New York, New York 10036, and its telephone number is (212) 761-4000. The long term debt of Morgan Stanley is currently rated [__] by Moody's Investor Services, [__] by Standard & Poor's and [__] by Fitch [watch list][outlook]. At prescribed rates, Unitholders may obtain copies of all reports, proxy statements and other publicly available information filed by Morgan Stanley with the SEC from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, United States of America. Information provided by or filed with the SEC by Morgan Stanley pursuant to the Exchange Act can be located by reference to SEC file number 1-11758. In addition, the SEC maintains a website that contains reports, proxy and other information regarding registrants that file electronically, such as Morgan Stanley. The address of the SEC's website is www.sec.gov.] Description of Units The Units will consist of __________ class[es] of Units, designated as __________. Each class is denominated in __________. [The Class __________ Units have in the aggregate an initial principal balance of $__________.] [The Class __________ Units do not have a principal balance but are entitled to distributions of interest based on a notional amount of __________.] [The unit principal balance of the Class __________ Units amortizes, in accordance with the schedule described under "Amortizing distributions" below.] [The Class ______ Units [are callable][may be redeemed as a result of [specify]] [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 for this offering, and may be sold at any time by the depositor in accordance with the terms of the trust agreement.] [The Units [(other than the Class __________ Units)] will be issued, maintained and transferred on the book-entry records of the Depositary Trust Company and its participants in minimum denominations of __________ and multiples of __________ in excess of __________.] [The Class __________ Units will be offered in registered, certificated form, in minimum percentage interests corresponding to the [initial notional amount] [initial principal balance], of __________ and integral multiples of __________. 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 occurring on the [third business day] prior to each distribution date except that in respect of the final distribution date, when distributions will be made against presentation of Units.] [Application has been made to list the Units on the __________. Trading on the __________ is expected to begin within __________ days after the completion of this offering.] [Specify (1) any additional terms of the Units of a type specified under "Description of Units--General" in the accompanying prospectus, (2) any particular right of a holder to receive individually registered Units, (3) if individual Units are issuable in unusual denominations, (4) any depositary arrangements different from those described under "Description of Units--Form" in the accompanying prospectus and (5) any arrangements to make distributions to Unitholders by check or against presentation of the relevant Units.] Interest distributions Distribution dates for the Units will occur on [_______] and [______]. [Exact distribution dates are subject to the provisions of the trust agreement and [the underlying securities] [the swap agreement] 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.][ If any payment with respect to the underlying securities held by the trust is not received by the trustee by 12 noon (New York City time) on a distribution date, the corresponding distribution on the Class A 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.] For purposes of the Units [and the swap agreement], "business days" will include __________. [The interest rate applicable to the Units is a [fixed rate of __________% annually][variable rate].] Each 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 the interest that it receives on the underlying securities. [Distributions of interest for a given period will be based on __________ 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 __________ [determined as of the __________ day prior to the first day] [determined on the __________ day prior to the last day] of that interest period by the calculation agent under the swap agreement.] [Describe any other method by which payments of interest may be determined.] Principal distributions Principal will be distributed on the final scheduled distribution date occurring on __________ [or as the trust receives distributions of principal on the underlying securities it holds] [other dates][subject to their receipt by the trust from the security issuers]. The trust will also pass through to the Unitholders payments of principal received on the underlying securities due to any early amortization or partial redemption of the underlying securities. Distributions of principal on the Class __________ Units may be less than the full principal amount of the Units [depending on the value of __________] [if the trust is required to make a termination payment 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 any interest payment received on the underlying, [minus fees and expense reimbursements paid to the trustee]. The amount distributed will be __________% of the principal amount of the underlying securities held by the trust. The amount will be allocated between payment of interest on the outstanding principal balance of the Class __________ Units at an interest rate of __________% annually and a partial return of principal on the Class __________ Units in accordance with the amortization schedule below. The principal balance of the Class __________ Units will be decreased on each distribution date by the amount allocated to return of principal on the Class __________ Units on that date. [Insert amortization 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 underlying securities and will be paid solely from interest payments on the underlying securities. Except in the case of an 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 the proceeds from the sale of all of the underlying securities and other trust property held by the trust as of such date. If a default occurs under the underlying security issuance agreement under which the underlying securities were issued or the underlying securities are redeemed early, the trust will terminate and the proceeds of sale or redemption will be divided between Class __________ Units [and Class __________ Units]. The percentage shares of the underlying securities received by the Class __________ [and Class __________] Units will vary, as specified in the above amortization schedule, based on the outstanding principal balance of the Class __________ Units on the date on which the trust terminates. The Class __________ Units will receive a percentage amount of the sale or redemption proceeds equal to the ratio between the principal balance of the Class __________ Units on the date of termination and the principal amount of the underlying securities. If the date of termination is not a distribution date, the principal balance of the Class __________ Units will be determined by the calculation agent by linear interpolation between the principal balance of the Class __________ Units principal balance on the distribution date immediately preceding and immediately succeeding such date. The Class __________ Units will receive the remaining portion of the sale or redemption proceeds.] [Call rights][warrants] [The Units are callable. The holder of the [call rights][warrants] has the right to purchase all or a portion of the Units at a price of __________% [and must exercise that right with respect to a minimum principal balance of __________ and integral multiples of __________] [within __________]. Each Unitholder will be entitled to receive a distribution of a pro rata share of the price paid in connection with an exercise of the [call rights][warrants].] [On any business day on or after [__________] that is designated as a "call date", the holders of [call rights] [warrants] may, upon notice of not less than [15] days ([or in the case of the announcement of any [redemption] [repurchase] or other] unscheduled payment of the underlying securities] or after receipt of notice of a trust wind-up event, not less than [three] days' notice, or when a tender offer for the underlying securities is pending, not less than [five] days' notice prior to the expiration of the tender offer acceptance period) but not more than [45] days prior to that call date, purchase your Units in whole [or in part] at [their stated amount plus any accrued and unpaid distributions to the call date]/[other call price]. On any business day before [__________] and after [[the announcement of any [[redemption] [repurchase] or other] unscheduled payment of the underlying securities or] receipt of notice of a trust wind-up event or when a tender offer for the underlying securities is pending, the holder of [call rights] [warrants] may, in the case of receipt of notice of any [[redemption] [repurchase] or other] unscheduled payment of the underlying securities or of] a trust wind-up event, upon notice of not less than [three] days or when a tender offer of the underlying securities is pending, upon notice of not less than [five] days' notice prior to the expiration of the tender offer acceptance period, but not more than [60] days prior to that call date, purchase your Units in whole or in part at $_____ plus any accrued and unpaid distributions to the call date, provided that if the warrants are to be exercised after the announcement of any redemption or other unscheduled payment of the underlying securities and prior to such redemption or other unscheduled payment, then the call date designated by the holder of [call rights] [warrants] must be the second business day prior to such [[redemption] [repurchase] or other] unscheduled payment. In addition, at any time upon an acceleration of the underlying securities and payment in full by the underlying securities issuer [or underlying securities guarantor] of all amounts when due, all outstanding [call rights] [warrants] will be exercised automatically. The Units will be purchased at [their stated amount plus any accrued and unpaid distributions to the exercise date]/[other call price].][Specify other procedures] [Voting rights [At all times,] [Subject to the immediately following paragraph,] __________% of all voting rights related to the Units are allocated among the holders of the Class __________ Units [and the Class __________ Units] in proportion to the outstanding principal balances [or notional amounts, if applicable,] of Units held by them and __________% of all voting rights related to the Units are allocated among the holders of the Class __________ Units in proportion to the outstanding principal balances [or notional amounts, if applicable.] [Specify whether and under what circumstances voting will be class by class]. [Specify conditions, if any, under which allocation of voting rights would change from the foregoing percentages.]] [Specify any applicable maturity and yield considerations other than those described under "Description of Trust Property--Underlying securities--Maturity and yield considerations" in the accompanying prospectus.]] United States Federal Income Taxation The discussion under the heading "United States Federal Income Taxation" herein represents the opinion of [ ] with respect to the material United States federal income tax consequences of the purchase, ownership and disposition of Units by a Unitholder who acquires its Units on the closing date. This discussion should be read in conjunction with the discussion contained in the prospectus under "United States Federal Income Taxation". [Discuss partnership or FASIT treatment, if applicable.] The trust will not be characterized as an association taxable as a corporation [and will be treated as a grantor trust] for U.S. federal income tax purposes. Each Unitholder will be treated, for U.S. federal income tax purposes, as if it had [(1)] purchased its pro rata share of the underlying securities [and (2)][granted a call option to the swap counterparty in respect of those underlying securities in exchange for a premium equal to the fair market value of such option][purchased a put option from the swap counterparty in exchange for a premium equal to the fair market value of such option][entered into a "notional principal contract" with the swap counterparty [that contemplates the payment of a swap premium (as defined in the prospectus) [to the swap counterparty][by the swap counterparty]]]. Accordingly, a Unitholder's initial basis in its pro rata share of the underlying securities will equal the [sum of][difference between] its cost for the Units and its pro rata share of such [Swap Premium][option premium]. See the discussion in the accompanying prospectus under "United States Federal Income Taxation--Allocation of basis and sales proceeds". [The trust will not identify the underlying securities and the swap agreement as part of an integrated transaction within the meaning of Treasury Regulations Section 1.1275-6, and the following discussion assumes that the underlying securities and the swap agreement are not integrated. Accordingly, a U.S. Unitholder (as defined in the prospectus) should consult the discussion under "United States Federal Income Taxation--Taxation of underlying securities" and "United States Federal Income Taxation--Taxation of the swap agreement" concerning the treatment of the underlying securities and the swap agreement as separate transactions for U.S. federal income tax purposes. A U.S. Unitholder should consult its own tax advisor regarding the availability and consequences of integration of the underlying securities and swap agreement. See the prospectus under "United States Federal Income Taxation--Taxation of underlying securities and swap agreement as an integrated transaction".][Discuss consequences of integration election, if applicable.] [Interest on the Units will be included in income as ordinary interest income (and not as original issue discount) as it is paid or accrued, in accordance with the U.S. Unitholder's method of accounting. [Discuss any special features, including original issue discount, contingent debt, or foreign currency gain or loss.]] [A U.S. Unitholder's basis in the underlying securities will be less than the stated redemption price at maturity of the underlying securities. Accordingly, the trust will be considered to have acquired the underlying securities with "market discount". For a discussion of the treatment of market discount, see "United States Federal Income Taxation--Taxation of the underlying securities--Market discount" in the prospectus.] [A U.S. Unitholder's basis in the underlying securities will exceed the principal amount of the underlying securities. Accordingly, the trust will be considered to have acquired the underlying securities with "amortizable bond premium". For a discussion of the treatment of amortizable bond premium, see "United States Federal Income Taxation--Taxation of the underlying securities--Acquisition premium and amortizable bond premium" in the prospectus.] [Although the Units are expected to trade "flat" (without a specific allocation to accrued interest), for U.S. federal income tax purposes a portion of the amount realized on sale will be treated as a payment of accrued interest and taxed as an interest payment to the extent such amount has not already been included in income.] [Discuss possible capital gains related to liquidated damages payable in the event that the depositor is unable to deliver underlying securities on the Final Delivery Date, if applicable.] [As discussed above, for U.S. federal income tax purposes a U.S. Unitholder will be treated as having [received][paid] option premium [from][to] the swap counterparty. The option premium will be taken into account as [an additional amount realized][a reduction of the amount realized] when the option is settled or otherwise terminated as to the U.S. Unitholder, including by disposition through sale of the Units.] [A U.S. Unitholder's ownership interest in the underlying securities and related position under the swap agreement will constitute a straddle for U.S. federal income tax purposes, assuming the underlying securities are considered to be "actively traded", which is likely to be the case. Under the straddle rules, any capital gain or loss realized upon a sale, redemption or other disposition of a Unit will be short term capital gain or loss without regard to the length of time that the holder has held the Unit. See "United States Federal Income Taxation--Straddle rules" in the prospectus.] [A prospective purchaser of the Units should read the tax disclosure in the underlying security prospectus for a description of the U.S. federal income tax consequences of purchasing, holding and disposing of the underlying securities.] ERISA Considerations [Specify applicable ERISA restrictions][Other applicable restrictions and considerations] Plan of Distribution [Under the terms and subject to the conditions contained in an underwriting agreement dated as of the date hereof (the "underwriting agreement"), [each of] [the] [the depositor and the underwriter[s] for the offering (the "underwriter[s]") named below, [for whom Morgan Stanley & Co. Incorporated, which we refer to as "MS&Co.", is acting as global representative,] have severally agreed to purchase, and we have agreed to sell to them, severally, the respective principal amount of Units set forth opposite their names below: Name Principal amount of units - ---- ------------------------- Morgan Stanley & Co. Incorporated [ ] [ ] [ ] [ ] ------------------------- Total ========================= [The underwriters initially propose to offer part of the Units directly to the public at the public offering price set forth on the cover page hereof and part to certain dealers at a price that represents a concession not in excess of [ ]% of the principal amount of the Units. The underwriters may allow, and those dealers may reallow, a concession not in excess of [ ]% of the principal amount of the Units to certain other dealers. After the initial offering of the Units, the offering price and other selling terms may from time to time be varied by the underwriters. This prospectus supplement and the accompanying prospectus may be used by MS&Co., an affiliate of the depositor, and other affiliates of ours in connection with offers and sales of the Units in market-making transactions at negotiated prices related to prevailing market prices at the time of sale or otherwise. MS&Co. and such other affiliates of ours may act as principal or agent in such transactions. The underwriters do not intend to confirm sales to accounts over which they exercise discretionary authority. In order to facilitate the offering of the Units, the certain underwriters and selling group members and their respective affiliates may engage in transactions that stabilize, maintain or otherwise affect the price of the Units or any other securities the prices of which may be used to determine payments on the Units. Specifically, the underwriters may sell more Units than they are obligated to purchase in connection with the offering, creating a short position for their own accounts. A short sale is covered if the short position is no greater than the number or amount of securities available for purchase by the agents under any overallotment option. The underwriters can close out a covered short sale by exercising the overallotment option or purchasing the Units in the open market. In determining the source of securities to close out a covered short sale, the agents will consider, among other things, the open market price of the Units compared to the price available under the overallotment option. The underwriters may also sell Units or any other securities in excess of the overallotment option, creating a naked short position. The underwriters must close out any naked short position by purchasing Units in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Units in the open market after pricing that could adversely affect investors who purchase in the offering. As an additional means of facilitating the offering, the underwriters may bid for, and purchase, Units or any other securities in the open market to stabilize the price of the Units or of any other securities. Finally, in any offering of Units through a syndicate of underwriters, the underwriting syndicate may also reclaim selling concessions allowed to an underwriter or a dealer for distributing the Units in the offering, if the syndicate repurchases previously distributed Units to cover syndicate short positions or to stabilize the price of Units. Any of these activities may raise or maintain the market price of the Units above independent market levels or prevent or retard a decline in the market price of these securities. The underwriters are not required to engage in these activities, and may end any of these activities at any time. Affiliates of other underwriters may also act as agents or underwriters in connection with the sale of the Units. Any such affiliate will be named, and its affiliation with the underwriters described, in the applicable prospectus supplement. Also, MS&Co., affiliates of the underwriters may act as principals or agents in connection with market-making transactions relating to the Units. Neither MS&Co, nor its affiliates is obligated to do so, however, and the agents may discontinue making a market at any time without notice. The underwriters, their affiliates or agents may use this prospectus in connection with any of those transactions. No assurance can be given as to the liquidity of any trading market for the Units. [The Units are a new issue of securities with no established trading market. The depositor has been advised by the underwriter[s] that the underwriter[s] intend[s] to make a market in the Units but [is] [are] not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Units.] The depositor estimates that its share of the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $__________. The depositor has agreed to indemnify the [several] underwriter[s] against certain liabilities, including liabilities under the Securities Act.] Legal Matters 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 [Provide index of defined terms for applicable prospectus supplement] Subject to Completion, Issued February 20, 2003 PROSPECTUS $5,000,000,000 MS Structured Asset Corp. Depositor Structured Asset Trust Unit Repackagings (SATURNS SM) Issuable in Series The Structured Asset Trust Unit Repackagings or "SATURNS" described in this prospectus, which we refer to in this prospectus as the Units, will be offered from time to time in one or more series, and in one or more classes within each such series, denominated in U.S. dollars or in one or more foreign currencies. Units of each series and class will be offered on terms to be determined at the time of sale as described in the applicable prospectus supplement. Each series of Units will represent beneficial interests in one or more debt, asset-backed or other fixed income securities or loans, together with, if specified in the applicable prospectus supplement, rights under swap or other derivative agreements or other assets. If specified in the applicable prospectus supplement, the trust property for a particular series of Units may also include, or the holders of those Units may have the benefit of, a 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 under the Units. The trust property with respect to a particular series of Units will be deposited in a trust formed pursuant to a trust agreement to be entered into between MS Structured Asset Corp., as depositor, and the trustee specified in the applicable prospectus supplement. Each class of Units of any series will represent the right, which may be senior to those of one or more other classes of that series, to receive specified portions of payments of principal, interest and certain other amounts on the trust property in the manner described in this prospectus or the applicable prospectus supplement. The Units represent interests in the related trust only and do not represent obligations of or interests in the depositor, any credit support provider, any swap counterparty or guarantor, Morgan Stanley & Co. Incorporated, which we refer to as MS&Co., the trustee or any of their affiliates. The Units do not represent direct obligations of any issuer of securities deposited into the related trust or of its affiliates. See "Risk Factors" beginning on page 5 of this prospectus to read about factors you should consider before buying the Units. The Securities and Exchange Commission and state securities regulators have not approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. MORGAN STANLEY , 2003 TABLE OF CONTENTS Page Prospectus Supplements...............................................3 Risk Factors.........................................................5 Available Information...............................................11 Reports to Unitholders..............................................12 Important Currency Information......................................12 Use of Proceeds.....................................................12 The Depositor.......................................................13 The Trusts..........................................................13 Description of Trust Agreements.....................................14 Description of Trust Property.......................................26 Description of Units................................................44 United States Federal Income Taxation...............................64 ERISA Considerations................................................79 Plan of Distribution................................................82 Validity of Units...................................................85 Index of Defined Terms..............................................86 "SATURNS" is a service mark of Morgan Stanley. Prospectus Supplements A prospectus supplement which describes the matters identified below will be provided with this prospectus. This prospectus provides information regarding terms generally applicable to the Units, and must be read in conjunction with the applicable prospectus supplement, which describes the specific terms applicable to the Units to which it relates and may modify any of the terms described in this prospectus. The specific terms described in the applicable prospectus supplement qualify any related general discussion in this prospectus. Each prospectus supplement will describe, among other things, the following with respect to the series of Units to which it relates: o the title, aggregate principal amount or notional amount and authorized denominations, o the currency or currencies in which the principal, premium, if any, and any interest are distributable on the Units, if other than U.S. dollars, o the interest rate on the Units or the method for calculating that interest rate, or the scheduled interest payments, o any call rights exercisable by the depositor or any third party, or any other mandatory or optional redemption terms, o the terms of one or more swap, option or other derivative transactions, if any, to be entered into by the related trust, o the number of classes of that series and, with respect to each class, its designation, aggregate principal amount or notional amount, and authorized denominations, o the time and place of distribution of any interest, premium or principal, o the original date of issue and the scheduled final distribution date for the Units, o the Units price, if offered at a fixed price, o certain information concerning the type, characteristics and specifications of the trust property for that series or a particular class within that series, o the relative rights and priorities of each class within that series, 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 that trust property, o a description of specific provisions of any related swap agreement to the extent not described under "Description of Trust Property--Swap agreements" in this prospectus or inconsistent with that description, the identity of any entity entering into a swap or other derivative transactions with the trust upon which the trust will depend for payments on the Units and a description of any guaranty or other type of support of the obligations of that entity, if any, under the related swap agreement, and o any other relevant terms of the 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. Risk Factors The following is a discussion of the material risks generally associated with an investment in the Units. The applicable prospectus supplement may contain additional information regarding special considerations applicable to the Units to which it relates. Limited Recourse Each trust will be a special purpose entity and will have no assets other than those described in the applicable prospectus supplement Each trust will be formed solely for the purpose of issuing the Units evidencing beneficial interests in its assets, and will have no assets other than the underlying securities and any other assets transferred to it by the depositor or otherwise acquired by the trust. If those assets are insufficient to make distributions of interest, premium, if any,, principal or any other payments on the Units, the amounts of those distributions will be reduced to the extent of the shortfall. As a result, purchasers of the Units may lose a part or all of the value of their initial investment. There is no recourse to the depositor, MS&Co. or others for payments on the Units The Units are obligations only of the applicable trust. The Units do not represent obligations of or interests in the depositor, any credit support provider, any swap counterparty or guarantor, MS&Co., Morgan Stanley, the trustee or any of their affiliates, except to the limited extent described in this prospectus or the applicable prospectus supplement. None of the depositor, MS&Co., Morgan Stanley, any swap counterparty, the trustee or any of their affiliates will be obligated to make payments on the Units in the event that the applicable trust property is insufficient to provide for distributions, and holders of the Units will have no recourse against any of them or their assets in respect of payments not made on the Units. Limited Liquidity 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 those 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 those Units. MS&Co. is not obligated to make a market for any Units, and may or may not do so. Limited liquidity may adversely affect the timing of an investor's resale of the Units or the price obtainable in the case of a resale. Listing of the Units may be removed by the relevant stock exchange If the Units of any series are listed on a registered securities exchange or market system, the listing of such series will be subject to the rules of the applicable securities exchange or market system. Events may occur with respect to the related underlying security issuer that may cause the applicable securities exchange or market system to determine, in its discretion, to remove the listing of the Units on such securities exchange or market system. Priority of Other Claims Claims of the trustee and a swap counterparty may adversely affect distributions on the Units No final distribution will be made to Unitholders of a particular trust before the payment of (1) all amounts due to the swap counterparty under any swap agreement to which the trust is a party (unless those amounts are subordinated in right of payment to the final distribution to Unitholders), as described under "Description of Trust Property--Swap agreements--Swap termination payments", (2) any extraordinary trust expenses to be borne by that trust (if agreed by all Unitholders), as described under "Description of Trust Agreements--Trustee compensation" and (3) any regular and ordinary expenses to be borne by that trust, as described under "The Trusts". Trust property may be sold by the trustee to fund any such payments. It is possible that all or a substantial part of the trust property may be required to be paid to the trustee or a swap counterparty prior to any final distribution to Unitholders. Dependence on Underlying Securities The ability of a trust to make payments under its Units depends on the receipt of payments from the related underlying security issuer, credit support provider, swap counterparty or swap guarantor Since the assets of each trust will be limited to the underlying securities and any other assets transferred to the trust, a trust will be able to distribute interest, premium, if any, and principal on the Units issued by it only to the extent that it receives the corresponding amounts from the related underlying security issuer, credit support provider, swap counterparty or guarantor. The underlying security issuer or issuers, credit support provider, swap counterparty and guarantor are vulnerable to adverse business conditions which may affect payment on the underlying securities, and in turn, on the Units. Financial difficulties experienced by them could cause delays in payment, partial payment or nonpayment of the underlying securities and the Units. In deciding whether to purchase or sell Units, an investor should therefore obtain and evaluate information concerning the relevant underlying security issuer, credit support provider, swap counterparty or guarantor as if it were investing directly in securities issued by that person. The trust, the trustee, the depositor, MS&Co. and their affiliates have not verified, have not undertaken to verify and will not verify, the accuracy, completeness or continued availability of any such information, and have not made any investigation of the financial condition or creditworthiness of any such person (except to the extent that MS&Co. or one of its affiliates acts as credit support provider, swap counterparty or guarantor). Furthermore, we cannot give any assurance that all events occurring prior to the date any Units are offered for sale (including events that would affect the accuracy or completeness of the publicly available documents) that would affect the creditworthiness of the relevant underlying security issuer, credit support provider, swap counterparty or guarantor have been publicly disclosed. Therefore, neither the issuance and sale of any series of Units nor the inclusion of information regarding a particular underlying security issuer, credit support provider, swap counterparty or guarantor in the applicable prospectus supplement should be construed as an endorsement of any such Person or a statement regarding the financial condition or creditworthiness of any such person. Subsequent disclosure of any such events or the disclosure of or failure to disclose material future events concerning any underlying security issuer, credit support provider, swap counterparty or guarantor could affect the value received at maturity with respect to the Units. You should undertake an independent investigation of the relevant underlying security issuer, credit support provider, swap counterparty or guarantor Affiliates of the depositor may currently or from time to time engage in business with any unaffiliated underlying security issuer, credit support provider, swap counterparty or guarantor, including extending loans to, or making equity investments in, or providing advisory services to, including merger and acquisition advisory services, such entities. In the course of such business, affiliates of the depositor may acquire non-public information with respect to any such underlying security issuer, credit support provider, swap counterparty or guarantor, and neither the depositor nor any of its affiliates undertakes to disclose any such information to you. In addition, one or more of affiliates of the depositor may publish research reports with respect to any such underlying security issuer, credit support provider, swap counterparty or guarantor. As a prospective purchaser of Units, you should undertake an independent investigation of each underlying security issuer, credit support provider, swap counterparty or guarantor necessary to make an informed decision with respect to an investment in the related Units. Reinvestment Risk The Units may be redeemed or called at a time when comparable investments are not available The timing of distributions of interest, premium, if any, and principal of the Units will be affected by any early redemption, amortization or prepayment of the related underlying securities and by any exchange of the related underlying securities pursuant to a tender offer or otherwise. The underlying securities may also be subject to a call option or other similar rights providing a person the right, but not the obligation, to purchase underlying securities from the trust at a specified price. The Units may be subject to call rights, warrants or similar rights providing a person the right, but not the obligation, to purchase your Units from you at a specified price. Call, redemption, early payment, amortization or similar events may adversely affect an investor by returning principal amounts to the investor when prevailing interest rates have declined and reinvestment of those amounts at the rate applicable to the Units is not possible. Extension of maturity of securities may cause illiquidity and loss of more favorable investment opportunities The timing of distributions of interest, premium, if any, and principal of the Units will also be affected by any extension of maturity of the related underlying securities. Extension of maturity prevents an investor from obtaining principal amounts at the originally scheduled time and may prevent an investor from reinvesting those amounts at a time when prevailing interest rates have risen. Passive Vehicle The trustee will not actively manage the trust The trustee with respect to any series of Units will hold the trust property for the benefit of the related Unitholders. Each trust will generally hold the trust property to maturity and not dispose of it, except under conditions specified in the applicable trust agreement, regardless of any adverse events, financial or otherwise, which may affect any related underlying security issuer or the value of the trust property. Restrictions on the trustee's powers and obligations may mean that the trust will not take actions with respect to the trust property--in particular, to sell or enforce remedies under underlying securities that constitute a part of the trust property--that an investor might take if it held the trust property directly. Risks Related To Swap Agreements General A swap agreement entered into by a trust may alter the amounts, timing or currency of distributions of principal or interest on the related Units from those that a holder would be entitled to receive from the related underlying securities directly. A swap agreement is not a guaranty of the related underlying securities in whole or in part, and no assurance can be given that the applicable trustee will receive either the payments due to be received on the underlying securities or the payments due to be received under that agreement, or that the trustee will recover moneys under any related guaranty, in the case of a payment default by the swap counterparty under that agreement. Moreover, unless expressly entered into for such purpose, a swap agreement does not protect an investor against risks associated with any early redemption, amortization, prepayment, exchange or extension of maturity of the related underlying securities. To the extent that the aggregate principal amount of the related underlying securities is reduced through any such redemption, prepayment, exchange or extension, the corresponding notional amount of any swap or amount or other reference amount for any derivative obligation subject to a swap agreement, and accordingly, the amounts payable by the swap counterparty under that agreement, may be ratably reduced. Alternatively, such events may be treated as termination events under a swap agreement and create potential liability for swap termination payments as described below. Changes in the value of a swap transaction may cause losses if that swap transaction terminates early In the case of an early termination of one or more transactions under a swap agreement, a swap termination payment may be payable by the trust to its swap counterparty or by the swap counterparty to the trust. The amount of any such payment will be based on (1) the estimated cost, at prevailing market values, that would be incurred by the trust or its swap counterparty to enter into a transaction or transactions having economic terms similar to that of the relevant terminated transaction or transactions or (2) the losses suffered by the trust or its swap counterparty as a result of the termination of the relevant transaction or transactions. In general, the swap counterparty will have the sole right to determine in good faith the amount of any swap termination payment. A swap termination payment and the resulting loss to Unitholders may be substantial in relation to the total value of the related underlying securities if interest rates, currency rates, swap spreads, credit spreads or option volatilities, as applicable, have changed significantly since the closing date for the offering of the applicable Units. Any swap termination payment payable by the trust will be limited (1) in the case of an early termination other than as a result of an underlying security default, to a claim against the trust property pro rata with that of the Unitholders based on the aggregate Unit principal balance and (2) in the case of an early termination as a result of an underlying security default, to the trust property. See "Description of Units--Early distribution of trust property" and "Description of Trust Agreements--Trust wind-up events, liquidation events and disqualification 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 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. The price obtained by liquidating trust property to make a swap termination payment may be unfavorable If the trust is liable for a swap termination payment, underlying securities and other trust property may be sold by the trustee, through a selling agent or otherwise. Unless the applicable prospectus supplement designates a different selling agent, the selling agent may be MS&Co. or one of its affiliates (including any swap counterparty) designated by it. The timing, price and other terms of any sale conducted by the selling agent will 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 underlying securities. The selling agent will be permitted to sell underlying securities and other trust property to affiliates of the selling agent. While Unitholders, acting unanimously, may deliver to the trustee the amount of any swap termination payment payable by the related trust (and any fees payable to the trustee) and written instruction to discontinue the sale of the underlying securities and other trust property, it is possible that underlying securities may be sold by the selling agent in the time necessary for Unitholders to be notified of and exercise the foregoing right. Unitholders could be materially adversely affected if the related trust is required to sell underlying securities in order to make a swap termination payment at a time when prices for the underlying securities in the secondary market are depressed as a result of a default on the underlying securities, changes in interest rates or for any other reason. Early swap termination may leave a trust with underlying securities that have unfavorable investment characteristics During its term, a swap agreement may enable a trust to make scheduled distributions of principal and interest in the currency, on the interest rate basis and at the maturity specified in that agreement, notwithstanding that the related underlying securities may have a different currency, interest rate basis or maturity, or other features different from those of the Units. In the case of a trust wind-up event, after giving effect to any sales of the related underlying securities and payment or receipt of any swap termination payment, the proceeds from the sale of any remaining underlying securities or other trust property and any swap termination payment received by the related trust will be distributed ratably to the applicable Unitholders. That distribution will constitute full satisfaction of each Unitholder's fractional undivided interest in the related trust. After any such distribution of underlying securities, the holders will only be entitled to distributions of principal and interest in accordance with the terms of those underlying securities, and not in accordance with the terms of the terminated transaction or transactions under the swap agreement. As a result, those holders may receive less than they would have received under the related Units. Certain events may require that a trust be wound up early on terms that may result in losses to Unitholders A trust may terminate prior to the final scheduled distribution on the Units issued by it if specified wind-up events occur. In the case of any such event, each transaction under any swap agreement to which the trust is a party will terminate, and the trust may be required to sell trust property to make any swap termination payment. A partial trust wind-up may occur as a result of events affecting only specific underlying 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. It is possible that all or a substantial part of the trust property may be required to be paid to the trustee or a swap counterparty prior to any final distribution to Unitholders. See "Description of Trust Agreements--Trust wind-up events, liquidation events and disqualification events" in this prospectus and the description of the trust agreement in the related prospectus supplement for a description of trust wind-up events. A swap counterparty may have discretion to calculate the payment obligations to or of the related trust A swap counterparty (or one of its affiliates) may act as calculation agent under its swap agreement, and there may be conflicts of interest between the swap calculation agent and the trustee with respect to calculations or determinations under the swap agreement. A swap calculation agent will be obligated only to carry out its duties and functions as swap calculation agent in good faith, will have no fiduciary obligations to Unitholders and will not necessarily be acting in the interests of Unitholders. All determinations by the swap calculation agent under any swap agreement will, in the absence of manifest error, be conclusive and binding for all purposes on the trust and Unitholders. The swap counterparty may be responsible for liquidating a trust's assets to pay the swap counterparty's own claims A swap counterparty (which may be an affiliate of MS&Co.), MS&Co. or one of its other affiliates may act as selling agent, and as such have the right to sell underlying securities on such terms as it may determine in its sole discretion if any such sale is required to enable the trust to make any swap termination payment. If a swap termination payment is owed to a swap counterparty, that swap counterparty and the related Unitholders may have adverse economic interests with respect to the liquidation of underlying securities. Moreover, a selling agent will be permitted to sell underlying securities to its affiliates. A selling agent will be an agent of the trustee only and will have no fiduciary or other duties to Unitholders, nor will a selling agent have any liability to the applicable trust in the absence of bad faith or willful misconduct. Underlying securities may be sold when their market value is diminished Unless underlying securities are redeemed by their issuer or the related prospectus supplement provides otherwise, if a trust wind-up event occurs, the selling agent will sell, on behalf of the trust, any such underlying securities held by the trust. Those sales may occur when the underlying security issuer is in default (either with respect to the underlying securities or with respect to any other obligation) or the market value of the underlying securities is diminished for other reasons. In such circumstances, liquidation by the selling agent may result in Unitholders incurring losses that would not be incurred if the holders received a distribution of the underlying securities in kind. Available Information Each trust will be subject, to a limited extent, to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance with those requirements, the depositor will file on behalf of each trust certain reports and other information with the Securities and Exchange Commission (the "SEC"). Those reports and other information can be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of those materials can be obtained by making a written request to the SEC, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The SEC also maintains a site on the internet at www.sec.gov at which users can view and download copies of reports, proxy, information statements and other information filed electronically. 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 those 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. If the prospectus supplement for the Units of a given series specifies that those Units are to be listed on the American Stock Exchange LLC, reports and other information concerning the related trust can also be inspected at the offices of the American Stock Exchange LLC, 86 Trinity Place, New York, New York 10006. The depositor has filed with the SEC a registration statement relating to the Units on Form S-3 under the Securities Act. The SEC file number for the Registration Statement is 333-101155. This prospectus does not contain all the information contained in the registration statement. For further information, please refer to the registration statement. Incorporation of Certain Documents by Reference All documents filed by the depositor with respect to a trust pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, before, on or after the date of this prospectus and prior to the termination of the offering of any series of Units or, if later, the date on which any affiliates of the depositor cease offering and selling those Units will with respect to such Units be deemed to be incorporated by reference in this prospectus and to be a part of this prospectus from the date of filing of those documents. Any statement contained in this prospectus, the prospectus supplement or in a document incorporated or deemed to be incorporated by reference will be deemed to be modified or superseded to the extent that a statement contained in this prospectus or the prospectus supplement or in any subsequently filed document which also is or is deemed to be incorporated by reference modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus or the prospectus supplement. The depositor will provide without charge to each person, including any beneficial owner of Units, to whom this prospectus is delivered, upon his or her written or oral request, a copy of any or all of the documents incorporated by reference in this prospectus, excluding the exhibits to those documents unless they are specifically incorporated by reference in those documents. Written or oral requests for such copies should be directed to MS Structured Asset Corp., 1585 Broadway, New York, New York 10036, Attention: Secretary, Tel. [212-761-1715.] Reports to Unitholders On each distribution date (or on any other dates specified in the applicable prospectus supplement), unaudited reports containing information concerning each trust will be prepared by the trustee and sent to registered Unitholders of that trust, unless otherwise stated in the applicable prospectus supplement. Where Units are represented by a global security in registered form, reports will be sent only to the depositary or its nominee, as registered holder of the Units. See "Description of Units--Form" and "Description of Trust Agreements--Reports to Unitholders" and "--Notices". Those reports will not constitute financial statements prepared in accordance with generally accepted accounting principles. Important Currency Information Unless the applicable prospectus supplement provides for the payment by purchasers of Units in a currency other than the specified currency for those Units, purchasers will be required to pay for those Units in that specified currency. 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 Units with a specified currency other than U.S. dollars, MS&Co. or an affiliate or agent, as exchange rate agent, in its sole discretion, may arrange for the exchange of U.S. dollars into a specified currency to enable that purchaser to pay for the Units. 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 the exchange will be borne by the purchaser. Use of Proceeds The net proceeds to be received from the initial sale of each series or class of Units 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 applicable prospectus supplement, arranging for credit support (including by making required deposits into any reserve account (as described below) or another account of the trustee for the benefit of the Unitholders of such series or class) or making initial payments under any swap agreement. Any remaining net proceeds from the initial sale are expected to be to be used by the depositor for general corporate purposes or for other purposes as may be described in the prospectus supplement. The Depositor The depositor was incorporated in the State of Delaware on September 21, 1998, as a direct, wholly-owned, limited-purpose subsidiary of Morgan Stanley. The address of the depositor is 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 underlying securities, arranging for credit support, acting as depositor of trusts in connection with series of Units, registering the Units with the SEC 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 in trust property, and engaging in other related activities and transactions. The depositor is required at all times to have at least one director who is not affiliated with Morgan Stanley. The Trusts The Units of any series will be issued by a trust. Each trust will be established under the laws of the State of New York pursuant to a trust agreement between the depositor and the trustee. Concurrently with the execution and delivery of that trust agreement, (1) the depositor will transfer the related underlying securities and other trust property to the trustee for the benefit of Unitholders and deposit those underlying securities in the trust, (2) if applicable, the trustee will enter into any swap agreement and accept any related guaranty, (3) if applicable, sell any call rights or warrants as described under "Description of Units--Call rights and warrants" below and (4) if applicable, accept any credit support, enter into any repurchase agreements and enter into other agreements or arrangements described in the applicable prospectus supplement. The trustee, on behalf of the trust, will accept the underlying securities and other trust property and deliver the related Units to or in accordance with the order of the depositor. The depositor's transfer of the underlying securities to the trustee will be without recourse. The trust property of each trust will consist of: o the related underlying securities and all payments on or collections in respect of those underlying securities due after a specified cut-off date, o all the trust's right, title and interest under any swap agreement and any related guaranty, o all the trust's right, title and interest in any related credit support, o all funds from time to time deposited in specified segregated accounts held by the trustee in trust for the benefit of the Unitholders, and o any other asset described in the applicable prospectus supplement as constituting a part of the trust property, all as more fully described in this prospectus or the applicable prospectus supplement, and exclusive of any interest retained by the depositor or a third party in the underlying securities, the swap agreement or other assets constituting trust property. The Units to be issued by a trust will represent fractional undivided interests in, or evidence direct ownership of, the related trust property. Claims of Unitholders on the related trust property will be subject to (1) if applicable, the security interest of any swap counterparty with respect to all amounts due to it under any swap agreement to which the trust is a party (unless those amounts are subordinated in right of payment to the claims of Unitholders), as limited in the case of a termination other than for an underlying security default to a claim ratable and equal with that of the Unitholders, as described under "Description of Trust Property--Swap agreements--Swap termination payments", (2) any extraordinary trust expenses to be borne by the trust, as described under "Description of Trust Agreements--Trustee compensation" and (3) if applicable, the rights of any holder of call rights or similar rights or, if applicable, any repo counterparty. The trustee will administer the trust property pursuant to the related trust agreement and will perform those tasks with respect to the related Units that are specified in that trust agreement. Unless otherwise specified in the related prospectus supplement, the trustee will receive customary fees as compensation and in payment of all of its regular and ordinary expenses, which will be paid from trust property or the proceeds of such property. See "Description of Trust Agreements--Trustee compensation". Description of Trust Agreements General Unless otherwise provided in the applicable prospectus supplement, each trust agreement will be entered into by the depositor and the trustee, and will incorporate, to the extent specified in each trust agreement, the "Standard Terms for Trust Agreements", 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 contain specific terms of the related trust, depending on the terms of the Units to be issued by that trust, the related underlying securities and any swap agreement. The following summary is subject to the detailed provisions of the "Standard Terms for Trust Agreements" and the specific provisions of the applicable trust agreement. Specific provisions of each trust agreement, to the extent that they differ materially from the summary below, will be described in the applicable prospectus supplement. Collections on underlying securities With respect to each series of Units, the trustee will make reasonable efforts to collect all scheduled payments on the related underlying securities and other trust property, provided that the procedures used are consistent with the applicable trust agreement. However, except as otherwise expressly specified in the applicable trust agreement, the trustee will not be required to expend or risk its own funds or otherwise incur financial liability. Certain matters regarding the depositor and the trustee Each 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 its Unitholders for any action taken, or for refraining from taking any action, in good faith pursuant to the trust agreement or for errors in judgment. However, none of the foregoing persons will be protected against any loss, liability or expense resulting from willful misfeasance, bad faith or negligence in the performance of specific duties under the trust agreement or from reckless disregard of obligations and duties under the trust agreement. In addition, each 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 that agreement which in its opinion may expose it to any expense or liability. The depositor may, however, in its discretion undertake any action which it deems necessary or desirable with respect to the trust agreement, the rights and duties of the parties to that agreement or the interests of the Unitholders. The trustee will undertake to perform only those duties that are specified in the trust agreement. Each trust agreement will provide that the trustee may elect to perform some or all of its duties through a co-trustee or agent. Any particular provisions with respect to entities acting as a co-trustee or agent will be described in the applicable prospectus supplement. Prior to the date that is one year and one day after all distributions in respect of the Units of a particular series have been made, neither the depositor nor the trustee will take any action or institute any proceeding against each other under the U.S. Bankruptcy Code or any other liquidation, insolvency, bankruptcy, moratorium, reorganization or similar law applicable to either of them, or any action which would likely cause the other to be subject to, or seek the protection of, any such law. Retained interest The applicable prospectus supplement will specify whether there will be any retained interest with respect to the trust property, and, if so, the owner of that interest. Any such retained interest will be established on an asset-by-asset basis and will be specified in the applicable trust agreement. A retained interest in the trust property represents a specified interest in that property. Payments in respect of a retained interest will be deducted from any payments received on the trust property and, in general, will not become a part of the related trust. Unless a different allocation is described in the applicable prospectus supplement, any partial recovery of interest on the trust property will be allocated equally and ratably between any retained interest and the aggregate amount of the related Units. Modification and waiver The trust agreement for a particular series of Units may be amended by the depositor and the trustee, if the Rating Agency Condition is satisfied, without notice to or consent of the holders of those Units, for certain purposes, including the following: o to cure any ambiguity or defect or to correct or supplement any provision which may be defective or inconsistent with any other provision or with the disclosure in the applicable prospectus supplement, o to add or supplement any credit support for the benefit of any Unitholders, o to increase the trigger amount or the maximum reimbursable amount or other liabilities of the trustee, o to evidence and provide for the acceptance of appointment under the trust agreement by a successor trustee, o to add to the covenants, restrictions or obligations of the depositor, or the trustee for the benefit of the Unitholders, o to comply with any requirements imposed by the Internal Revenue Code or other applicable law, and o to change any of the terms thereof if no Unitholder of the related series will be materially and adversely affected by such change. In addition to the foregoing, a trust agreement may also be amended from time to time by the depositor and the trustee, with the consent of the holders of Units materially and adversely affected by such amendment evidencing not less than a specified percentage of each class of the Units that are affected by such modification or amendment, for the purpose of adding, changing or eliminating any provision or modifying the rights of the Unitholders of any class. Unless specified in the applicable prospectus supplement, no amendment to a trust agreement may change the principal amount, interest rate, maturity, or other terms specified in the applicable prospectus supplement, of any class or series of Units without the consent of 100% of the outstanding Unit Principal Balance of each class of Units affected thereby. In the case of any such amendment that would adversely affect the current rating of any class of Units by each rating agency rating such class of the Units, the amendment must be approved by all Unitholders of such class. 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. In connection with an amendment, the trustee is entitled to receive and shall be fully protected in relying upon an opinion of counsel stating that the execution of such amendment is authorized or permitted by the trust agreement. The trustee will not agree to any amendment that would affect the rights or obligations of any swap counterparty of the trust, without first obtaining the approval of that swap counterparty. Holders of Units evidencing not less than a specified percentage of the Units of a particular class may, on behalf of all holders of the Units of that class, (1) waive, insofar as that class is concerned, compliance by the depositor or the trustee with any restrictive provisions of the trust agreement before the time for such compliance or (2) waive any past default under the trust agreement with respect to the Units of that class, except for (A) a default resulting from any failure to distribute amounts received as principal of (and premium, if any) or any interest on any such Unit and (B) a default in respect of any covenant or provision the modification or amendment of which would require the consent of the holder of each outstanding Unit affected by the default. Any terms relating to the modification or waiver of the trust agreement for a particular class of Units in addition to or that differ from the foregoing will be described in the applicable prospectus supplement. Reports to Unitholders On each distribution date for the Units of a particular series, the trustee will forward or make available or cause to be forwarded or made available to each holder of the Units a statement setting forth: o the amounts of the corresponding distribution allocable to principal of or interest or premium, if any, on the Units, o if applicable and feasible, the interest rate and scheduled principal payment, o the aggregate stated principal amount of the related underlying securities as of that distribution date and, if applicable, the interest rate applicable to the underlying securities for the next accrual period, o the amount received by the trustee on the related underlying securities for the last accrual period, o the amounts of and recipients of any payments under any swap agreement for the last accrual period, o if applicable, the swap rate payable to the trust applicable to the next accrual period under any swap agreement, o the aggregate principal balance (or notional amount, as applicable) of the Units at the close of business on such distribution date, o if the ratings of the Units or the underlying securities are specified in the applicable prospectus supplement, the current ratings of the Units or the underlying securities, as applicable, if different from the ratings provided in the prospectus supplement and the names of the rating agencies that assigned such ratings, o the cumulative amount of extraordinary trust expenses, if any, as of that distribution date, o in the case of any trust having trust property which includes credit support, any change in the available amount of each element of that credit support, and o any additional information relevant to holders of the Units, as specified in the applicable prospectus supplement. The prospectus supplement may specify that some of the information described above will not be furnished with respect to the Units to which it relates. In the case of the information as to distributions of principal, interest and premium, if any, the relevant amounts will be expressed as U.S. dollar amounts (or equivalents in any other specified currency) per minimum denomination of Units or for another specified portion of the Units. Within a reasonable period of time after the end of each calendar year, the trustee will furnish to each person who at any time during that year was a Unitholder, a statement containing the relevant information as to distributions of principal, interest and premium, if any, aggregated for that year and containing sufficient information to enable each Unitholder to calculate its U.S. federal income tax liability with respect to the Unit held by it. 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 Internal Revenue Code as are from time to time in effect. Evidence as to compliance If 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 following year, a firm of independent public accountants will furnish a statement to the trustee to the effect that they have examined specified 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 must not be more than one year after the original issue date of the Units to which that prospectus supplement relates) and that, on the basis of specified agreed procedures considered appropriate under the circumstances, they are of the opinion that such administration was conducted in compliance with the terms of the trust agreement, except for any exceptions as they believe to be immaterial and any other exceptions and qualifications as are identified in the report. A trust agreement may also provide for delivery to the depositor, 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. Copies of the annual accountants' statement and the statement of officers of the trustee, if any, may be obtained by Unitholders without charge by making a written request to the trustee at the address identified in the applicable prospectus supplement. Notices The trustee will notify Unitholders as promptly as possible, but in any event within three business days from receipt, of all notices and communications it receives from the relevant underlying security issuer, including any notice of redemption of the related underlying securities by that underlying security issuer. The trustee will also notify the Unitholders of any exercise of any call rights as to the related underlying securities by a swap counterparty under the terms of any swap agreement. Unless otherwise specified in the applicable prospectus supplement, any notice required to be given to a holder of a Unit will be given by facsimile to any number previously provided to the trustee or mailed to the last address of that holder identified in the Unit register. Any notice mailed within the time specified in the trust agreement will be presumed to have been given when mailed, whether or not the Unitholder actually receives it. Notices given by facsimile will be effective when a confirmation (including electronic confirmation) of effective transmission is received. In the case of Units in global form, the depositary will be the sole direct recipient of notices. See "Description of Units--Form". Replacement Units In the event that 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 of New York after the holder has (1) paid any expenses that may be incurred by the trustee in connection with the replacement and (2) furnished any evidence and indemnity that 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, any security or indemnity that they may require to hold each of them harmless. Trust wind-up events, liquidation events and disqualification events Disqualification events. A "disqualification event" will occur under each trust agreement if an underlying security becomes a disqualified underlying security, a swap transaction becomes a disqualified swap transaction or any credit support becomes disqualified credit support, each as described below. Unless otherwise specified in the applicable prospectus supplement, if the applicable issuer of any underlying security, other than a government security, that constitutes 10% or more of the trust property (referred to as a "concentrated underlying security"): o has ceased to be an eligible underlying security issuer as described under "Description of Trust Property--Underlying securities" and no additional means of providing current information regarding that underlying security issuer is described in the applicable prospectus supplement, and either: o twelve months have elapsed, or o the applicable issuer has formally terminated its reporting obligations under the Exchange Act, then such underlying security will be considered a "disqualified underlying security", unless the depositor, after discussion with the staff of the SEC, determines that the depositor would not be required to provide information with respect to that underlying security issuer if the trust continued to hold such underlying security. If a concentrated underlying security is considered a disqualified underlying security: o a termination event will occur with respect to any transaction related to that disqualified underlying security under any related swap agreement, o the trust will sell that disqualified underlying security or otherwise liquidate that disqualified underlying security, o the trust may be required to sell other underlying securities to the extent necessary to pay any swap termination payment that may result, and o unless otherwise provided in the applicable prospectus supplement, if the trust holds only disqualified underlying securities to be sold or liquidated as described above, a trust wind-up event will occur. If any swap transaction has a value to the trust equal to 10% or more of the trust property and a concentrated underlying security of the swap counterparty would be a disqualified underlying security, such swap transaction will be considered a "disqualified swap transaction". In that case: o a termination event will occur with respect to such disqualified swap transaction, o the trust shall sell any related underlying securities and if necessary other trust property to the extent necessary to pay any related swap termination payment, and o if such terminations occur with respect to all swap transactions or the swap transactions specified in the applicable prospectus supplement, and the applicable prospectus supplement so provides, a trust wind-up event will occur. If any credit support arrangement has a value to the trust of 10% or more of the trust property and a concentrated underlying security of the credit support provider would be a disqualified underlying security, such credit support will be considered "disqualified credit support". In that case: o the trust shall terminate such credit support, and o if the applicable prospectus supplement so provides, a trust wind-up event will occur. Unless otherwise specified in the applicable prospectus supplement, if any of the above events occur and does not result in a trust wind-up event, the trust shall distribute any net proceeds to the trust from any such events in the manner described in the applicable prospectus supplement to the holders of Units and the trust shall continue thereafter. Liquidation events. A "liquidation event" will occur following a disqualification event as described above, an underlying security default as described below, any termination event with respect to a swap agreement as described under "Description of Trust Property--Swap agreements" or a default or other applicable event with respect to any credit support. Following a liquidation event, the trust will liquidate trust property as described below. A liquidation event with respect to an underlying security may also result in a termination of a swap transaction or liquidation of credit support relating to such underlying security. In connection with a liquidation event, the trust may need to liquidate trust property related to the swap transaction or other trust property in order to satisfy any swap termination payment or other payments. A liquidation event may also result in a trust wind-up event. If an event occurs that is a trust wind-up event described below as well as a liquidation event, such event will be treated as a trust wind-up event. An "underlying security default" will occur with respect to an underlying security if any of the following occurs: o the failure of the underlying security issuer to pay an installment of principal of, or any amount of interest due on, the underlying securities (or other securities of the underlying security issuer that rank equal or senior to the underlying securities) on the due date, after the expiration of any applicable cure period, o the acceleration of the maturity of the underlying securities pursuant to the terms of the underlying securities or the relevant underlying security issuance agreement and failure to pay the accelerated amount on the acceleration date, o the initiation by the underlying security issuer of any proceedings seeking a judgment of insolvency or bankruptcy or seeking relief under bankruptcy or insolvency laws or similar laws affecting creditor's rights, o the passage of thirty (30) calendar days since the day upon which any person or entity other than the underlying security issuer initiates any proceedings against the underlying security issuer seeking a judgment of insolvency or bankruptcy or seeking relief under bankruptcy or insolvency laws or similar laws affecting creditor's rights and such proceeding has not been dismissed prior to such thirtieth day, or o other events described in the prospectus supplement. A liquidation event will occur with respect to any credit support if an event which would constitute an underlying security default occurs with respect to the issuer of such credit support or if such credit support becomes disqualified credit support. Upon the occurrence of a liquidation event (unless the provisions relating to trust wind-up events are applicable), the trustee, through the selling agent, will liquidate the applicable underlying security, swap agreement or credit support, by a sale or otherwise as described in the applicable prospectus supplement, and will apply the proceeds to satisfy any swap termination payment and other required payments, with the balance to be distributed to the Unitholders as described in the prospectus supplement. Trust wind-up events. Trust wind-up events with respect to any trust, unless otherwise specified in the applicable prospectus supplement, include the following: o an underlying security default that affects all underlying securities held by the trust or any underlying securities specified in the prospectus supplement, o the consummation of any redemption of, tender for, exercise of any call option on, or other similar transactions with respect to all underlying securities held by the trust, o any event of default or termination event under the swap agreement or swap agreements specified in the applicable prospectus supplement, including without limitation: o an event of default under the swap agreements or a termination event under the swap agreements with respect to which all transactions are "affected transactions" (as defined in the swap agreement), o any swap default arising from any action taken or failure to act by the swap counterparty, o any termination event under the related swap agreement with respect to which the swap counterparty is 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, or o the designation of an early termination date by the swap counterparty under the related swap agreement with respect to all transactions entered into under that agreement, o any credit support default specified in the applicable prospectus supplement, o the occurrence of a disqualification event that leads to a trust wind-up, as described above, o the occurrence of an excess expense event, as described below, o the designation by the depositor, if the depositor owns 100% of the Unit principal balance, of a special depositor wind-up event, or o any other wind-up event described in the applicable prospectus supplement. Unless otherwise specified in the applicable prospectus supplement, if more than one trust wind-up event occurs, only the first such event will be the "trust wind-up event" for all purposes under the relevant trust agreement, any swap agreement and any related agreements or other documents. Excess expense event. 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. The trustee will be required to provide notice to any swap counterparty 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 fifth business day following the provision of such notice. If the applicable prospectus supplement so specifies, notice will also be given to the Unitholders. An excess expense event will not occur if the swap counterparty agrees to provide adequate assurance of indemnity to the trustee within five business days after such notice, and prior to such day any swap counterparty agrees to indemnify the trustee to its reasonable satisfaction 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. If the applicable prospectus supplement so specifies, Unitholders may unanimously agree to provide such indemnity. Consequences of a trust wind-up event. Except as specified in the applicable prospectus supplement, if a trust wind-up event occurs: o the relevant trust agreement and each transaction under any swap agreement will terminate, o the trustee, through the selling agent, will liquidate the underlying securities and trust property pursuant to the swap agreements or otherwise by sale, o the trustee will apply the proceeds of any such liquidation or sale to fund any swap termination payment, as described under "Description of Trust Property--Swap agreements--Swap termination payments" and any extraordinary trust expenses to be borne by the trust, as described under "--Trustee compensation" below, and o the trustee will hold all remaining liquidation proceeds and other trust property, if applicable, until the satisfaction of certain conditions, at which time the trustee will distribute such proceeds to the Unitholders. See "Description of Units--Early distribution of trust property". The trustee will notify the Unitholders and the rating agencies promptly of any trust wind-up event or liquidation event. However, the trustee will not be responsible for giving notice of a trust wind-up or liquidation event unless and until (1) the trustee fails to receive amounts due on the underlying securities or under a swap agreement within any applicable grace period, (2) the trustee receives notice from a swap counterparty of the occurrence of a termination event, (3) the trustee receives notice from the underlying security issuer of an event constituting a default under the applicable underlying security issuance agreement that is also an underlying security default or (4) an officer of the trustee assigned to its corporate trust department obtains actual knowledge of an underlying security default, swap default or termination event. Upon the occurrence of a trust wind-up event or liquidation event, the trustee will notify the selling agent that the trust is required to sell underlying securities or other trust property. See "--Sale of trust property, secured party rights" below. 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 an underlying security default, the claim of the swap counterparty against the underlying securities (or proceeds thereof arising from sale thereof) and any other trust property will be limited (1) in the case of an early termination other than as a result of an underlying security default, to a claim against the trust property pro rata with that of the Unitholders based on the aggregate Unit principal balance and (2) in the case of an early termination as a result of an underlying security default, to the trust property. Sale of trust property, secured party rights After receiving a notice from the trustee that a trust is required to sell underlying securities or other trust property, the selling agent specified in the applicable prospectus supplement or otherwise appointed by the trustee will sell underlying securities or other trust property on behalf of the trust. The timing, price and other terms of any sale conducted by the selling agent will be determined by the selling agent in its sole discretion, but all such sales will be completed within 30 days (or a longer period of time as may be reasonable with respect to particular underlying securities or other trust property). If a default has occurred under an underlying security issuance agreement or an underlying security has become a disqualified underlying security and that event does not result in a termination of the trust, sales will be limited to the underlying securities affected by that event, except to the extent that the proceeds from the sale of those underlying securities are insufficient to make any swap termination payment. In addition to the provisions of the trust agreement with respect to the selling agent, in the event that the trust fails to make any payment when due under any swap agreement, the swap counterparty may have the right to take all action and to pursue all remedies with respect to the trust property that a secured party is permitted to take with respect to collateral under the Uniform Commercial Code as in effect from time to time in the State of New York, including the right to require the trustee promptly to sell some or all of the underlying securities held by the trust in the open market or, at the election of the swap counterparty, to sell underlying securities to the swap counterparty for their fair value as determined in good faith by the swap counterparty. In either case, the proceeds of sale will be applied to any amounts owed to the swap counterparty. Each trust agreement will provide that Unitholders will have no liability as sellers of the trust property in connection with any sale by the trustee or the selling agent. If provided in the applicable prospectus supplement, 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 underlying securities. 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 underlying 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 underlying securities by oral or written notice to that effect to the trustee, and may resign at any time. Distribution to Unitholders; termination The obligations created by the trust agreement (other than the obligation of the trustee to provide reports and other information) will terminate upon the scheduled final distribution date or the date of distribution of all trust property remaining after payment of all expenses and obligations of the trust. That distribution will be made after all trust property has been sold, as described above under "--Sale of trust property, secured party rights", and any swap termination payment (except for any such payment that is subordinated to the distribution to Unitholders), as described under "Description of Trust Property--Swap agreements--Swap termination payments", and any extraordinary trust expenses to be borne by that trust (if agreed by all Unitholders), as described under "--Trustee compensation" below, have been paid. Written notice of termination will be provided as described above under "--Reports to Unitholders" and "--Notices", and the final distribution on the Units will generally be made only if the Units are surrendered and cancelled at an office or agency of the trustee. Trustee The trustee will at all times be a corporation or association which is not an affiliate of the depositor (but may have normal banking relationships with the depositor or any obligor with respect to any underlying securities and their affiliates) organized and doing business under the laws of any state of the United States or of the United States. The trustee must be authorized to exercise corporate trust powers, have a combined capital and surplus of at least $200,000,000 and be subject to supervision or examination by federal or state authorities. Its long-term debt obligations must be rated in one of the four highest categories assigned to long-term debt obligations by each of the rating agencies, and it must at all times satisfy the requirements of Section 310(a) of the Trust Indenture Act of 1939, as amended, and Section (a)(4)(i) of Rule 3a-7 under the Investment Company Act. Unless another trustee is identified in the applicable prospectus supplement, the trustee for each trust initially will be LaSalle Bank National Association. The trustee may at any time resign and be discharged from the trust by giving written notice to the depositor, any swap counterparty and the Unitholders, subject to an eligible successor trustee being appointed by the depositor and accepting its appointment. If no successor trustee has been appointed and accepted its appointment within 30 days after a notice of resignation by an acting trustee, that trustee or the depositor may petition any court of competent jurisdiction for the appointment of a successor trustee. The trust agreement and, if applicable, the provisions of the Trust Indenture Act incorporated by reference in that agreement, contain limitations on the rights of the trustee, 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. However, if it acquires any "conflicting interest" (as defined in the Trust Indenture Act), it must eliminate the conflict or resign. Trustee compensation As compensation for and in payment of trust expenses related to its services under the trust agreement (other than extraordinary trust expenses as described below), the trustee will receive the trustee fees. Unless subordinated to the Units, the prospectus supplement will set forth the amount, source, manner and priority of payment with respect to such trustee fees. Trustee fees and expenses may be paid from a portion of the income received with respect to the underlying securities. The trust may also retain the depositor or a third party to act as an expense administrator to pay the trustee fees and certain other expenses. The depositor will 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 underlying 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, in the aggregate, the maximum reimbursable amount specified in the prospectus supplement. Under no circumstances will the depositor be obligated to indemnify the trustee for any such extraordinary trust expenses in excess of the maximum reimbursable amount. Unless otherwise specified in the prospectus supplement, any extraordinary trust expenses actually incurred by the trustee in excess of that amount will be payable from trust property or otherwise by the swap counterparty or Unitholders only if and to the extent that the swap counterparty or Unitholders representing 100% of the aggregate principal balance (or notional amount, as applicable), as applicable, so agree. Governing law The Units and each trust agreement will be governed by the laws of the State of New York. Unless otherwise specified in the applicable prospectus supplement, each trust agreement will be subject to the provisions of the Trust Indenture Act that are required to be part of the trust agreement and will, to the extent applicable, be governed by those provisions. The federal and state courts in the Borough of Manhattan in the City of New York will have non-exclusive jurisdiction in respect of any action arising out of or relating to the Units, each trust agreement or any swap agreement. Description of Trust Property General The trust property for a particular series of Units and the related trust will not constitute trust property for any other series of Units and the trust related to those Units. Generally, the Units of all classes of a particular series represent equal and ratable undivided ownership interests in the related trust property. The applicable prospectus supplement may specify, however, that specified assets or portions of assets constituting a part of the trust property can be beneficially owned solely by, or deposited solely for the benefit of, one class or a group of classes of Units of the same series. In that case, the other classes of the same series will not possess any beneficial interest in those specified assets. Underlying securities General. Each series of Units will represent an ownership interest in a designated security or pool of securities that were registered under the Securities Act or otherwise publicly issued, or are eligible for resale pursuant to Rule 144(k) under the Securities Act, and have been purchased by the depositor or one or more of its affiliates and deposited with the trust. The underlying securities will consist of one or more of the following issued under the laws of the United States, any U.S. State or any foreign jurisdiction: o debt obligations or investment grade term preferred stock issued or issued and guaranteed by one or more corporations, general or limited partnerships, limited liability companies, business trusts, banking organizations or insurance companies or other organizations, referred to as "corporate debt", o equipment trust certificates, including enhanced equipment trust certificates and pass-through equipment trust certificates, o trust preferred capital securities and other similar preferred securities of one or more trusts or other special purpose legal entities, o asset-backed securities of one or more trusts or other special purpose legal entities issued pursuant to a registration statement filed with the SEC on Form S-3, o an obligation issued or guaranteed by an Eligible Sovereign or any agency or instrumentality thereof for the payment of which the full faith and credit of the Eligible Sovereign is pledged, where Eligible Sovereigns include the United States of America, the Republic of France, the Federal Republic of Germany and the states thereof, the United Kingdom, Canada and the provinces thereof, Japan, the Kingdom of Belgium, the Kingdom of the Netherlands, and the Republic of Italy, or another sovereign described in the applicable prospectus supplement, o the obligations of one or more of the following government sponsored enterprises ("GSEs"): Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Student Loan Marketing Association, Resolution Funding Corporation, Federal Home Loan Banks (to the extent such obligations represent the joint and several obligations of the twelve Federal Home Loan Banks), Tennessee Valley Authority, Federal Farm Credit Banks and any other government sponsored enterprise specified in the applicable prospectus supplement that, at the time of the offering of the Units, has outstanding securities held by non-affiliates with an aggregate market value of at least $75,000,000 and that makes information publicly available comparable to that of Exchange Act reporting companies, or o certificates evidencing undivided fractional interests in a trust, the assets of which consist of promissory notes (the "GTC Notes"), payable in U.S. Dollars, of a certain foreign government, backed by a full faith and credit guaranty issued by the United States of America, acting through the Defense Security Assistance Agency of the Department of Defense, of the due and punctual payment of 90% of all payments of principal and interest due on the GTC Notes and a security interest in collateral, consisting of non-callable securities issued or guaranteed by the United States government thereof, sufficient to pay the remaining 10% of all payments of principal and interest due on the GTC Notes. If an underlying security is corporate debt, a trust preferred capital security or an equipment trust certificate, and the underlying security will not be, as of the issue date of the Units, a concentrated underlying security, then the depositor must reasonably believe that one of the following conditions is met: o the related underlying security issuer will be an Exchange Act registrant who is duly filing reports as specified under the Exchange Act, o the underlying securities are guaranteed by an Exchange Act registrant who is duly filing reports as specified under the Exchange Act, o the related underlying security issuer is a direct or indirect subsidiary of an Exchange Act registrant who is duly filing reports as specified thereunder and has a direct or indirect parent company whose periodic reports meet the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC, or o the underlying security satisfies the criteria below. If an underlying security that is corporate debt, a trust preferred capital security or an equipment trust certificate that will be, as of the issue date of the related Units, a concentrated underlying security, then the depositor must reasonably believe that one of the following additional conditions is met: o the issuer is eligible to use SEC Form S-3 or F-3 for a primary offering of common equity or a primary offering of non-convertible investment grade securities, or o the underlying securities are guaranteed by a direct or indirect wholly-owning parent company of the issuer, or a wholly-owned subsidiary of the issuer or the issuer's direct or indirect parent company, and o the issuer, guaranteeing parent company or guaranteeing subsidiary of the parent company is eligible to use SEC Form S-3 or F-3 for a primary offering of common equity or a primary offering of non-convertible investment grade securities, and o the issuer or the relevant parent company's periodic reports meet the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC. In the case of trust preferred capital securities or equipment trust certificates, the issuer of the obligation held by, or supporting the issuance of, the trust or other special purpose legal entity issuing the trust preferred capital securities or equipment trust certificates which may be deemed to be the issuer for the foregoing purposes. If a concentrated underlying security is an asset-backed security, the depositor must reasonably believe that the related issuer has at least $75,000,000 in outstanding securities held by non-affiliates and that either: o the related issuer files in accordance with informational requirements it has under the Exchange Act, periodic reports and other information with the SEC, or o the trust undertakes to provide to investors and file under the Exchange Act the periodic reports and other information with the SEC the related issuer would be required to file in accordance with informational requirements of the Exchange Act from time to time were such issuer subject to such requirements . In addition, each of the underlying securities will have been purchased by the depositor or one or more of its affiliates in the secondary market (either directly or through an affiliate of the depositor). The underlying securities that satisfy each of the applicable criteria described above are referred to as "eligible underlying securities" and the related issuer of each underlying security is referred to as an "eligible underlying security issuer". GSE debt securities generally are exempt from registration under the Securities Act pursuant to Section 3(a)(2) of the Securities Act (or are deemed by statute to be so exempt) and are not required to be registered under the Exchange Act. The securities of any GSE will be included in a trust only to the extent (A) its obligations are supported by the full faith and credit of the U.S. government or (B) the organization makes publicly available its annual report, which shall include financial statements or similar financial information with respect to the organization. Based on information contained in the offering document pursuant to which any GSE issuer's underlying securities were originally offered, the applicable prospectus supplement will set forth information with respect to the public availability of information with respect to any GSE issuer of underlying securities which constitute concentrated underlying securities for any trust as of the date of the prospectus supplement. The specific terms and conditions of the GSE underlying securities will be set forth in the related prospectus supplement. Unless otherwise specified in the related prospectus supplement, the underlying securities with respect to any GSE issuer will not be guaranteed by the United States and do not constitute a debt or obligation of the United States or of any agency or instrumentality thereof. Neither the United States nor any agency thereof is obligated to finance any GSE issuer's operations or to assist a GSE issuer in any manner. Prospective purchasers should consult the publicly available information with respect to each GSE issuer for a more detailed description of the regulatory and statutory restrictions on the related GSE's activities. All information contained in a prospectus supplement with respect to any underlying security will be derived solely from descriptions contained in a publicly available prospectus or an offering document for that underlying security (each such prospectus or offering document is referred to as an "underlying security disclosure document"), any periodic filings with respect to the underlying security or underlying security issuer or guarantor, or other available information. The applicable prospectus supplement will state whether the underlying security disclosure document with respect to any applicable concentrated underlying security was filed with the SEC in connection with the issuance of the related underlying security or otherwise in public filings by the related underlying security issuer or identify another source from which such underlying security disclosure document can be obtained. Prospective purchasers of the Units are urged to read this prospectus and the applicable prospectus supplement in conjunction with (1) each related underlying security disclosure document and (2) each registration statement of which any underlying security disclosure document is a part, including any reports filed by the related underlying security issuer under the Exchange Act (referred to as an "underlying security registration statement"). Except as may be provided in the applicable prospectus supplement with respect to any primary offering securities: o no representation is made by the trust, the trustee, the depositor, MS&Co. or any of their affiliates as to the accuracy or completeness of the information contained in any underlying security disclosure document, or underlying security registration statement, o no investigation of the financial condition or creditworthiness of that underlying security issuer or any of its affiliates, or of any ratings of the related underlying securities, will be made by the trust, the trustee, the depositor, MS&Co. or any of their affiliates in connection with the issuance of the related Units. Prospective purchasers of Units should carefully consider each underlying security issuer's financial condition and its ability to make payments in respect of the related underlying securities, and o unless the applicable prospectus supplement otherwise specifies, none of the trust, the trustee, the depositor, MS&Co. or any of their affiliates has participated in the preparation of any underlying security disclosure document, underlying security registration statement or other public information relating to the underlying securities or takes any responsibility for the accuracy or completeness of the information contained in the foregoing documents. Please refer to the applicable prospectus supplement (and the underlying security disclosure document referred to therein) for a description of the following material terms, as applicable, of any concentrated underlying security that constitutes a part of the trust property of the related trust: o the title and series, as well as the aggregate principal amount, denomination and form, of the underlying security, o whether the underlying security is senior or subordinated to any other obligations of the related underlying security issuer, o whether any of the obligations under the underlying security are secured or unsecured, and the nature of any collateral, o any limit on the aggregate principal amount of the underlying security, o the dates on which, or the range of dates within which, the principal of (and premium, if any, on) the underlying security will be payable, o the rate or rates or the method for determining those rates, at which the underlying security will bear interest, if any, the date or dates from which interest will accrue, and the dates on which that interest will be payable, o the obligation, if any, of the underlying security issuer to redeem any underlying security pursuant to any sinking fund or similar provisions, or at the option of a holder, and the periods within which or the dates on which, the prices at which and the terms and conditions under which the underlying security may be redeemed or repurchased, in whole or in part, o the periods within which or the dates on which, the prices at which and the terms and conditions under which the underlying security may be redeemed, if any, in whole or in part, at the option of the underlying security issuer, o whether the underlying security was issued at a price lower than its principal amount, o if other than U.S. dollars, the currency in which the underlying security is denominated, or in which payment of the principal of (and premium, if any) or any interest on the underlying security will be made, and the circumstances, if any, when that currency of payment may be changed, o material events of default or restrictive covenants with respect to the underlying security, o any retained interest with respect to the underlying security, and o other material terms of the underlying security. With respect to any portion of the trust property comprised of underlying securities other than concentrated underlying securities, the applicable prospectus supplement will describe the composition of that portion as of the relevant cut-off date, specified material events of default or restrictive covenants common to those underlying securities, and, on an aggregate, percentage or weighted average basis, as applicable, certain of the characteristics described above. Underlying security issuance agreements Each underlying security will have been issued pursuant to an indenture, trust agreement or other agreement (each such agreement is referred to as an "underlying security issuance agreement"). Except as specified in a prospectus supplement, all information contained in that prospectus supplement with respect to the provisions of any underlying security issuance agreement pertaining to a concentrated underlying security will be based solely on the description of that underlying security issuance agreement filed with the SEC or available from other public sources. Covenants. An underlying security issuance 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: o consolidate, merge, or transfer or lease assets, o 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, and o 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 any of its subsidiaries. An underlying security issuance 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, an underlying security issuance agreement typically may be amended or supplemented and past defaults may be waived with the consent of the trustee, if any, of the holders of not less than a specified percentage of the outstanding securities, or both. The underlying security issuance agreement related to one or more underlying 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 underlying 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 underlying securities against losses. The prospectus supplement used to offer any series of Units will describe material covenants in relation to any concentrated underlying security and, as applicable, will describe material covenants which are common to other underlying securities included in the trust property. Events of default. An underlying security issuance 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: o failure by the issuer to pay an installment of interest or principal on the securities, at the time required or to redeem any of the securities when required, in each case subject to any specified grace period, o failure by the issuer to observe or perform any covenant, agreement or condition contained in the securities or the underlying security issuance agreement which failure is materially adverse to security holders and continues for a specified period after notice thereof is given to the issuer, o 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 o certain events of insolvency or bankruptcy with respect to the underlying security issuer. Each underlying security issuance 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 underlying security issuance agreement with respect to any concentrated underlying security and applicable remedies with respect thereto. With respect to any portion of the trust property comprised of underlying securities other than concentrated underlying 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 underlying securities, against losses. If a covenant default occurs and the trust as a holder of the underlying securities is entitled to vote or take such other action to declare the principal amount of an underlying 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 underlying security in determining whether to declare the acceleration of the underlying securities. Limitations on remedies. An underlying security issuance 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 described in the applicable prospectus supplement, the underlying securities that constitute a part of the trust property of the related trust may be either senior or subordinated in right of payment to other existing or future obligations of the underlying security issuer. With respect to subordinated underlying securities, to the extent of the subordination provisions of those underlying securities, and after the occurrence of specified events, any holders of securities and direct creditors whose claims are senior to those of holders of subordinated underlying securities may be entitled to receive payment of the full amount due on those claims before holders of subordinated underlying securities are entitled to receive payment on account of the principal (and premium, if any) or any interest on their underlying securities. Consequently, the trust as a holder of subordinated underlying securities may suffer a greater loss than if it held unsubordinated debt of the underlying 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 underlying securities would receive all payments in respect of those underlying securities even if holders of subordinated underlying securities of the same underlying security issuer receive amounts in respect of their underlying securities. Please refer to the applicable prospectus supplement for (1) a description of any subordination provisions with respect to any applicable concentrated underlying securities and (2) the relative percentages of senior underlying securities and subordinated underlying securities, if any, in trust property comprised of underlying securities other than concentrated underlying securities. Secured obligations. Certain underlying securities that constitute a part of the trust property of the related trust may represent secured obligations of the underlying security issuer. Generally, unless an event of default has occurred and is continuing, or with respect to certain collateral or as otherwise specified in the related underlying security issuance agreement, an issuer of secured obligations 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 that collateral. An underlying security issuance agreement may also contain provisions for release, substitution or disposition of collateral for those underlying securities under specified circumstances with or without the consent of the trustee under that agreement or at the direction of not less than a specified percentage of the holders of those underlying securities. An underlying security issuance agreement will also provide for the disposition of collateral if specified events of default occur. In the event of a default in respect of any secured obligation, holders of the corresponding underlying securities may experience a delay in payments on account of principal (and premium, if any) or any interest on their underlying securities pending the sale of any collateral, and prior to or during that 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 the corresponding underlying securities (to the extent not repaid from the proceeds of the sale of collateral) will have only an unsecured claim ranking equally and ratably with the claims of all other general unsecured creditors. The underlying security issuance agreement with respect to any secured underlying security may include some, all or none of the foregoing provisions or variations of those provisions. The applicable prospectus supplement will describe the security provisions of those underlying securities and the related collateral. With respect to any portion of the trust property of a particular trust comprised of secured underlying securities other than concentrated underlying securities, the related prospectus supplement will disclose certain general information with respect to security provisions and collateral. Maturity and yield considerations. Each prospectus supplement will, to the extent applicable, contain information with respect to the type and maturities of the underlying securities related to conditions under which those underlying securities may be subject to early redemption (either by the applicable underlying security issuer or pursuant to a third-party call option), amortization, repayment (at the option of the holders of those underlying securities) or extension of maturity. Any such provisions of the applicable underlying securities will affect the weighted average life of the related Units. The effective yield to holders of the Units may be affected by particular aspects of the related trust property or the manner and priorities of allocations of collections with respect to the trust property between the classes of a particular series. In the case of Units where the related trust holds one or more redeemable underlying securities, extendible underlying securities or underlying securities subject to a third-party call option or early amortization, the yield to maturity may be affected by any optional or mandatory redemption, extension or repayment or amortization of the related underlying securities prior to their stated maturity. A variety of tax, accounting, economic and other factors will influence whether an underlying security issuer exercises any right of redemption in respect of its underlying securities. All else remaining equal, if prevailing interest rates fall significantly below the interest rates on the related underlying securities, the likelihood of redemption would be expected to increase. As a result, there can be no certainty as to whether any underlying security redeemable at the option of the relevant underlying security issuer will be repaid prior to its stated maturity. Unless the applicable prospectus supplement describes other remedies applicable to particular underlying securities, all underlying securities will be subject to acceleration if specified defaults occur. The maturity and yield on the Units will be affected by any early repayment of the related underlying securities as a result of any such acceleration by the holders of those underlying securities. If an underlying 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 underlying security issuers and correspondingly may affect an underlying security issuer's ability to satisfy its obligations under its underlying securities. Those factors include the underlying security issuer's operating and financial condition, leverage, as well as social, geographic, legal and economic factors. The extent to which the yield to maturity of any Units may vary from the anticipated yield due to the rate and timing of payments on the related trust property will depend on the degree to which those Units are purchased at a discount or premium and the degree to which the timing of payments on those Units is sensitive to the rate and timing of payments on the trust property. The yield to maturity of any Units will also be affected by variations in the interest rate applicable to, and the corresponding payments in respect of, those Units, to the extent that their interest rate is based on variable or adjustable rates. In the case of Units representing an interest in two or more underlying securities, disproportionate principal payments (whether resulting from differences in amortization schedules, payments due on scheduled maturity or in the case of an early redemption) on the underlying security or underlying securities having interest rates higher or lower than the interest rate then applicable to those Units may also affect the yield on those Units. The applicable prospectus supplement may contain additional information regarding yield and maturity considerations applicable to the related Units and the related trust property, including the underlying securities. Swap agreements At the time it is formed, a trust may enter into one or more swap agreements with third parties (which may be affiliates of the depositor). Each swap agreement consists of a master agreement and the confirmations relating to particular transactions under that master agreement. The following summary, together with any related information in the applicable prospectus supplement, is subject to the detailed provisions of the form of swap agreement filed as an exhibit to the registration statement. The applicable prospectus supplement will describe the specific terms of each transaction under the swap agreement, particularly the method of calculation of payments by the swap counterparty and the timing of those payments; if required, it will also contain specified information with respect to the swap counterparty and, if applicable, its guarantor. The trust may enter into swap agreements with more than one swap counterparty, in which case the following discussion will apply separately to each swap agreement with each swap counterparty. General. As specified in the applicable prospectus supplement, the transaction or transactions under a swap agreement may be one or more of the following: o a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, index swap, index option, bond option, total rate of return swap, 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 the foregoing transactions), o any combination of the foregoing transactions, or o any other transaction identified in the swap agreement or the relevant confirmation and described in the prospectus supplement. Each swap agreement will be in the form of a confirmation entered into pursuant to a master agreement in the form of the "1992 ISDA Master Agreement (Multicurrency--Cross Border)" or any updated similar form (referred to as the "ISDA Master Agreement"), published by the International Swaps and Derivatives Association, Inc. ("ISDA") and may incorporate the 2000 ISDA Definitions, the 1997 Government Bond Option Definitions or one or more other sets of standard definitions or updates or revisions of such definitions published by ISDA (referred to as the "ISDA Definitions"), and as modified and supplemented by a schedule, including to reflect the terms of a particular series of Units and the related trust agreement and any specific terms of the relevant transaction or transactions. Except as otherwise specified in the confirmation for any relevant swap transaction, each swap agreement and the relevant transactions thereunder will be governed in all relevant respects by the provisions of the ISDA Master Agreement and the ISDA Definitions, without regard to any amendments or modifications to the ISDA Master Agreement or the ISDA Definitions published by ISDA subsequent to the date of that swap agreement. Payments under swap agreement. In general, under a swap agreement, a trust and its swap counterparty will each agree to exchange specified payments on specified payment dates. 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--Distributions--Interest on Units" or other types of interest rate bases) or other types of bases, all as specified in the applicable prospectus supplement, or one such amount may be floating and the other fixed. Those amounts will also be calculated with reference to the notional principal amount of the transaction or transactions under the swap agreement, which, unless otherwise specified in the prospectus supplement, will be equal to the aggregate principal amount of the related underlying securities on the date of determination (as such amount may have been reduced through any redemption, prepayment or exchange). The obligations of a trust to its swap counterparty may be secured by a security interest in the trust property in favor of the swap counterparty that will take priority over the interests of Unitholders in all or specified trust property. A swap agreement may provide for periodic exchanges of payment amounts, a single exchange or series of exchanges on one or more interest payment dates or on the maturity or prospective maturities of the related underlying 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 related underlying securities or other trust property. A call option granted by the trust will effectively reserve to the swap counterparty the right to (1) 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 related Units or (2) effect a conversion of the related underlying securities into other securities, 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 specified trust property at or prior to the maturity of the related Units. The prospectus supplement may specify that a put option written in favor of the trust will be automatically exercised by the trustee if specified events occur. A prospectus supplement may describe additional types of options granted by or in favor of a trust. On a swap payment date (including a swap payment date occurring on the maturity of some or all of the related underlying securities), 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. If described in the applicable prospectus supplement, such netting may also be applied to more than one transaction. On each distribution date for Units with respect to which the related trust has entered into a swap agreement, the trustee will have available for distribution to Unitholders funds equal to (1) the amount of any payments received on the swap agreement and other related trust property less (2) all payments made by the trustee to the swap counterparty, in each case since the immediately preceding distribution date. The effect of the swap agreement, therefore, will be that holders of the related Units will be entitled to distributions of interest (and, if applicable, of principal) in accordance with the terms of the swap agreement rather than the terms of the related underlying securities. No assurance can be given that the trustee will receive when due any payment due on those underlying securities or any net payment due under a swap agreement, or that the trustee will recover moneys under any related guaranty in the case of a payment default by the swap counterparty under a swap agreement. Modification and amendment. Each trust agreement will contain provisions permitting the trustee to enter into any amendment of a swap agreement to which the related trust is a party to cure any ambiguity in, or to correct, eliminate, add or supplement or otherwise change any provision of, that swap agreement if such amendment will not have a material and adverse effect upon any Unitholder. Each trust agreement will also contain a provision permitting the trustee to enter into any other amendment of the swap agreement if directed or consented to by the specified percentage of Unitholders materially and adversely affected thereby. Unless the applicable prospectus supplement otherwise provides, the trustee shall not enter into any amendment, or agree to a waiver or other modification, of the swap agreement that would have the effect of changing the principal amount, interest rate, maturity, or other terms specified in the trust agreement, of any class or series of Units without the consent of 100% of the outstanding Unit Principal Balance of each class of Units affected thereby. The Rating Agency Condition shall be satisfied with respect to any such amendment, waiver or modification 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 need not be satisfied, but in any event each applicable Rating Agency shall receive notice of such amendment, waiver or modication. In the case of any such amendment that would adversely affect the current rating of any class of Units by each rating agency rating such class of the Units, the amendment must be approved by all Unitholders of such class. No amendment to a swap agreement will be permitted unless the trustee first receives an opinion of counsel to the effect that the requested amendment will not alter the classification of the related trust for U.S. federal income tax purposes. Defaults. Events of default under a swap agreement may include: o any failure of the applicable trust to pay any amount when due under the swap agreement, o any failure of the applicable swap counterparty or any guarantor to pay any amount when due under the swap agreement, after giving effect to the applicable grace period, and o specified other standard events of default under the ISDA 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 ISDA Master Agreement and as modified by the related schedule. Several of the standard events of default under the ISDA Master Agreement will not be events of default under a swap agreement. Those excluded standard events of default 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) of the ISDA Master Agreement. The applicable prospectus supplement will describe any additional events of default under the relevant swap agreement. In specified cases, the trust will be the party affected by the event and as a result its swap counterparty will have the sole right to determine in good faith the amount of any swap transaction payment for purposes of calculating any swap termination payment. Notwithstanding the existence of a grace period with respect to a particular underlying security or underlying security issuance agreement, the failure of the underlying 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 default under the related underlying security issuance agreement. The applicable prospectus supplement will specify any additional circumstances constituting a default for purposes of any applicable swap agreement. Termination events. Termination events under a swap agreement may consist of the following: o the occurrence of an "Illegality" or "Tax Event" as described in Sections 5(b)(i) and 5(b)(ii) of the ISDA Master Agreement, o the occurrence of a "trust wind-up event" (as described under "Description of Trust Agreements--Trust wind-up events, liquidation events and disqualification events") (which termination event will apply to all transactions under the swap agreement), o an underlying security default occurs with respect to the related underlying security (as described under "Description of Trust Agreements--Trust wind-up events, liquidation events and disqualification events") (which termination event will apply only to the specific transaction or transactions under the swap agreement relating to that underlying security), o the related underlying security becomes a "disqualified underlying security" (as described under "Description of Trust Agreements--Trust wind-up events, liquidation events and disqualification events") (which termination event will apply only to the specific transaction or transactions under the swap agreement related to that underlying security), o any transaction under the swap agreement becomes a disqualified swap transaction (as described under "Description of Trust Agreements--Trust wind-up events, liquidation events and disqualification events") (which termination event will apply only to the specific disqualified swap transaction), or o the occurrence of an excess expense event (as defined under "Description of Trust Agreements--Trust wind-up events, liquidation events and disqualification events"). Depending on the circumstances, either the trust or the swap counterparty, or both the trust and the swap counterparty, will be deemed to be the party or parties affected by the relevant event and will be entitled to terminate the relevant transaction(s) under the swap agreement. However, for purposes of calculating any swap termination payment, the trust will be deemed the sole affected party, and as a result its 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 events described in Sections 5(b)(iii) and 5(b)(iv) of the ISDA Master Agreement will not apply. The applicable prospectus supplement will describe any additional termination events that apply, or any of the above termination events that do not apply, to a particular series of Units. Early termination of swap agreements. Except as otherwise specified in the applicable prospectus supplement, if specified events of default or termination events occur, the trustee or the swap counterparty will, by notice to the other party (if a notice is required under the swap agreement), in the case of a termination event terminate the particular affected transaction(s) under the swap agreement and in the case of an event of default terminate all transactions under the relevant swap agreement. The date of any such termination is referred to as an "early termination date". In the case of certain termination events, the date on which the relevant swap transactions will terminate must be designated by one of the parties, as specified in that swap agreement, and will occur only after notice and, in certain circumstances, after the swap counterparty has used reasonable efforts to transfer its rights and obligations under the relevant transactions to a related entity within a limited time period after notice of the termination event has been given. 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 designate a termination event for each affected transaction under the swap agreement, unless the trust would owe the swap counterparty a swap termination payment as a result of such a designation. The swap counterparty will have no obligation to the trust to exercise any right to terminate any particular transaction under the swap agreement, and will not act on behalf of the trust to exercise any right the trust may have to terminate any such transaction. If a termination event occurs and, when applicable, an early termination date is designated with respect to a swap transaction, the swap transaction will terminate and a swap termination payment may be payable by the trust to its swap counterparty or by the swap counterparty to the trust. If the trust is liable for a swap termination payment, underlying securities may be sold by the trustee through a selling agent. See "Description of Trust Agreements-- Trust wind-up events, liquidation events and disqualification events". Except as specified in the prospectus supplement, in the event that a trust terminates one or more transactions under a swap agreement and a trust wind-up event has not occurred, the underlying securities related to those transactions will be sold and the proceeds from such sale will be distributed to the Unitholders. Except as specified in the applicable prospectus supplement, to the extent that the aggregate principal amount of the underlying securities held by a trust is reduced through redemption, prepayment or exchange, the corresponding swap amount under any related 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 the event that an underlying security default results in a termination event, the trust will be the affected party (as defined below) for purposes of the calculation of any swap termination payment. Swap termination payments. If one or more transactions under a swap agreement is terminated prior to its maturity, the market value of each terminated transaction will be established by one or both parties, as specified in the swap agreement, based either (1) on the basis of the market quotations of the cost of entering into a replacement transaction, (2) if such market quotations are unavailable or do not produce a commercially reasonable result, on losses suffered by either party as a result of the termination of the relevant transaction or (3) as otherwise provided in the applicable prospectus supplement. If the market value of a particular transaction is positive for the trust, or the termination of that transaction 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. By contrast, if the market value is positive for, or the termination of a transaction would result in a loss to, the swap counterparty, a swap termination payment will be due from the trust to its swap counterparty. The swap termination payment for all terminated transactions under a swap agreement as a whole is the net amount payable after offsetting individual termination payments applicable to each transaction under that agreement. Depending on the type of the event of default or termination event that causes an early termination of any swap transaction, any swap termination payment due to the swap counterparty may be senior or subordinated in right of payment to the final distribution to be made to Unitholders. Any swap termination payment payable by a trust will be limited to the assets of the trust, and the related Unitholders will not be liable to the swap counterparty for a swap termination payment to the extent, if any, that the amount of those payments exceeds the assets of the trust. Nonetheless, the loss to Unitholders resulting from a termination payment may, if interest rates, currency rates, swap spreads, credit spreads or option volatilities, as applicable, have changed significantly since the closing date for the relevant offering of Units, be quite substantial in relation to the total value of the related underlying securities. A trust may be required to sell underlying securities through a selling agent in order to make any swap termination payments owed to the swap counterparty. Unitholders could also be materially adversely affected if a trust is required to sell underlying securities in order to make swap termination payments at a time when prices for the underlying securities in the secondary market are depressed, as a result of a default on the underlying securities or for any other reason. If a swap agreement is terminated, any further distributions in respect of the related underlying securities will be made pursuant to the underlying securities without the benefit of that agreement. If the applicable prospectus supplement so provides, in connection with any swap termination payment payable by a trust, the related Unitholders may, acting unanimously, deliver to the trustee the amount of that payment (together with any extraordinary trust expenses to be borne by that trust) and a written instruction to refrain from, or discontinue, the sale of the underlying securities. It is possible, however, that underlying securities may be sold by a selling agent in the time necessary for the Unitholders to exercise their rights described in the foregoing sentence. Guaranties of support. Unless the applicable prospectus supplement specifies arrangements for securing the obligations of a swap counterparty, the payment obligations of that swap counterparty under a swap agreement will be general, unsecured obligations of that swap counterparty. Repurchase agreements The trust for particular Units may enter into one or more repurchase agreements which will have economic effect similar to swap agreements. A repurchase agreement will be substantially in the form of the Bond Market Association Master Repurchase Agreement (1996 Version). Pursuant to any repurchase agreement, the trust will purchase underlying securities from the counterparty under the repurchase agreement (a "repo counterparty") on the date of issuance of the Units. Under a repurchase agreement, the repo counterparty will pay amounts to the trust at a fixed or floating rate, and the repo counterparty will be entitled to all interest income received on the underlying securities. In the event that any principal payments are made on the underlying securities prior to the stated expected payment date of principal for the underlying securities, such payments will be retained by the trust, subject to the right of the repo counterparty to make a substitution of new underlying securities under the terms of the repurchase agreement. The terms of the repurchase agreement will require the repo counterparty to repurchase the underlying securities on the date specified in the prospectus supplement, which may be the scheduled maturity of the Units, a date of termination or settlement of a related swap agreement, the date of a trust wind-up event, or another specified date. The prospectus supplement may also specify certain trust wind-up events upon which the repurchase agreement will be cancelled and the repo counterparty will not be required to repurchase the securities. Unless otherwise provided in the prospectus supplement, the repo counterparty will have the right to replace the underlying securities with substitute underlying securities only if (i) the underlying securities would constitute disqualified underlying securities or (ii) notice is given by the underlying security issuer that a principal payment will be made on the underlying securities prior to the stated expected payment date of principal for the underlying securities. The repo counterparty will not be required to make any substitutions. The prospectus supplement may provide that if the repo counterparty does not make a substitution in the event of a principal pre-payment, a trust wind-up event will occur at the option of the repo counterparty. "Substitute securities" must meet requirements specified in the prospectus supplement, which may include a requirement that the substitute securities have a face amount equivalent to the face amount of the securities (prior to any early principal repayments), one or more specified ratings, pay interest determined by reference to the same index as the initial underlying securities, be denominated in the same currency as the initial underlying securities, otherwise constitute an asset of the same class and type as the initial underlying securities and have a specified expected maturity and final legal maturity, or other requirements. Credit support The trust for particular Units may include, or the holders of those Units (or any class or group of classes within the same series of Units) may have the benefit of, credit support. Such credit support may be provided by any combination of the means described below or any other means described in the applicable prospectus supplement. The applicable prospectus supplement will describe whether the trust for any class or group of classes of Units contains, or the holders of those Units have the benefit of, credit support. It will also describe the amount, type and other relevant terms of each element of any such credit support and, if required, specified 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 or information with respect to such obligor is filed with the SEC and is eligible for incorporation by reference by registrants of securities backed by such credit support. Any credit support which takes the form of a guaranty of particular 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. The rights of holders of a particular class within the same series of Units to receive collections from the related trust and any credit support obtained for the benefit of the Unitholders of that series (or classes within that series) may be subordinated to the rights of the Unitholders of one or more other classes of the same series to the extent described in the applicable prospectus supplement. This type of subordination in effect provides credit support to Unitholders of those other classes. If losses are realized during a given period on the trust property relating to particular Units, such that the collections received on that property are insufficient to make all distributions on the Units of that series, those losses will be allocated to the Unitholders of any class within that series that is subordinated to another class, to the extent and in the manner described in the applicable prospectus supplement. In addition, if specified in the applicable prospectus supplement, specified 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 a reserve account may be applied as described below under "--Reserve accounts" and in the applicable prospectus supplement. If so provided in the applicable 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. Letters of credit, guaranty. Units (or any class or group of classes within the same series of Units) may, if specified in the applicable prospectus supplement, have the benefit of a letter or letters of credit issued by a bank or a financial guaranty or surety bond issued by a financial guarantor or surety company. In either case, the trustee or another person specified in the prospectus supplement will use reasonable efforts to cause the letter of credit, guaranty or surety bond to be obtained, to be kept in full force and effect (except to the extent that coverage may be exhausted through payment of claims) and to pay timely all related fees or premiums unless the payment of those fees or premiums is otherwise provided for. The trustee or another person specified in the applicable prospectus supplement will make or cause to be made draws or claims under the letter of credit, guaranty or surety bond 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, guarantor or surety, as applicable, will be required to satisfy any ongoing credit rating or other requirements. In the event that any such requirements cease to be satisfied, the trustee or another person specified in the applicable prospectus supplement will use reasonable efforts to obtain or cause to be obtained a substitute letter of credit, guaranty or surety bond, or another form of credit enhancement providing similar protection, that meets those 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, guarantor or surety, as applicable, will continue to satisfy any such requirements or that any such substitute letter of credit, guaranty or surety bond, or similar credit enhancement will be available providing equivalent coverage for the same cost. To the extent not so available, the credit support may be reduced to the level otherwise available for the same cost as the original letter of credit, guaranty or surety bond. Reserve accounts. If specified in the applicable prospectus supplement, the trustee or another person specified in the prospectus supplement will deposit or cause to be deposited into a reserve account maintained with an eligible institution (which may be the trustee) 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 the prospectus supplement. In the alternative or in addition to that deposit, a reserve account may be funded through application of a portion of collections received on the trust property relating to particular Units, in the manner and priority specified in the prospectus supplement. Description of Units The Units of each series will be subject to the terms of a trust agreement to be entered into between the depositor and the trustee. The following summary of the terms of the Units should be read together with the summary of the trust agreements under "Description of Trust Agreements" and any related discussion in the applicable prospectus supplement. The specific terms of each series of Units, to the extent that they differ materially from or are in addition to the summary below, will be described in the applicable prospectus supplement. General The Units issued under a particular trust agreement will represent the entire beneficial ownership interest in the trust created pursuant to that agreement. The Units of a particular series may be limited to a single class, or, if so specified in the applicable prospectus supplement, 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 the same series. Please refer to the applicable prospectus supplement for a description of the following terms of the series (and, if applicable, classes within that series) of the Units to which it relates: o the title of the Units, o the series of the Units and, if applicable, the number and designation of classes of that series, o whether the Units are callable or subject to early redemption, o certain information concerning the type, characteristics and specifications of the trust property being deposited into the related trust by the depositor, o any limit on the aggregate principal amount or notional amount, as applicable, of each class of that series, o the dates on which or periods during which that series or classes within that series may be issued, the offering price of that series and the applicable distribution dates on which the principal, if any, of (and premium, if any, on) that series or classes within that series will be distributable, o if applicable, the relative rights and priorities of each class within that series (including the method for allocating collections from and defaults or losses on the trust property to each such class), o whether the Units of that series or a class within that series are fixed rate or floating rate Units and the applicable interest rate or interest payments for each such class, including the applicable rate or schedule of interest payments, if fixed, or the method for calculating the rate, applicable to that series or class, if variable, the date or dates from which interest will accrue, the applicable distribution dates on which interest, principal and premium, in each case as applicable, on that series or class will be distributed and any related record dates, o any option (1) of a holder of Units of that series or a class within that series to withdraw a portion of the assets of the trust in exchange for surrendering a Unit or (2) of the depositor or a third party to purchase or repurchase any trust property, (in each case to the extent not inconsistent with the depositor's continued satisfaction of any 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 during which or the dates on which, and the terms and conditions under which any such option may be exercised, in whole or in part, o the denominations in which that series or class within that series will be issuable and transferable, o whether the Units of any class within that 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, o whether the Units of that series or of any class within that series are to be issued in the form of one or more global securities and, if so, the identity of the depositary, if other than The Depository Trust Company, for those global securities, o if a temporary Unit is to be issued with respect to that series or any class within that series, whether any interest distributable on a distribution date prior to the issuance of a definitive Unit of that series or class will be credited to the account of the persons entitled on that distribution date, o if a temporary global security is to be issued with respect to that series or any class within that series, the terms and conditions under which beneficial interests in that temporary global security may be exchanged in whole or in part for beneficial interests in a permanent global security or for definitive individual Units of the same series or class and the terms and conditions under which beneficial interests in a permanent global security, if any, may be exchanged for individual definitive Units of that series or class, o if other than U.S. dollars, the specified currency applicable to the Units of that series or any class within that series for purposes of denominations and distributions on that series or class and the circumstances and conditions, if any, under which that specified currency may be changed, and the currency or currencies in which any principal of or any premium or any interest on that series or class are to be distributed after any such change, o all applicable required percentages and voting rights relating to the manner and percentage of voting by Unitholders of that series and any class within that series with respect to certain actions by the depositor or trustee, and o any other relevant terms of that series or any class within that series. Units may be transferred or exchanged for a like face amount of Units at the corporate trust office or agency of the relevant trustee, subject to the limitations contained in the applicable trust agreement, without the payment of any service charge, other than any tax or governmental charge payable in connection with that transfer or exchange. MS&Co. or an affiliate may at any time purchase Units at any price in the open market or otherwise. Any Units so purchased by MS&Co. or such affiliate may, at the discretion of MS&Co., be held or resold. Distributions In general, distributions allocable to principal, premium, if any, and interest on particular Units will be made in the specified currency for those Units by or on behalf of the trustee on each distribution date as specified in the applicable prospectus supplement. The trustee will remit to each holder of record on the relevant record date preceding any distribution, other than the final distribution, its portion of the payment on the related underlying securities or, if applicable, swap agreement promptly, and in any event within one business day, after the trustee receives that payment or otherwise as set forth in the prospectus supplement. Neither the trustee nor the depositor, however, will have any liability for any shortfall in the amount received from the relevant underlying security issuer or, if applicable, the swap counterparty. Accordingly, if less than a particular amount due under the related underlying security or swap agreement is received by the trustee, or a particular amount is received after its due date, the corresponding distribution to Unitholders is reduced or delayed accordingly. If the specified currency for particular Units is other than U.S. dollars, the exchange rate agent may, at its discretion and at the request of a Unitholder in the manner described in the prospectus supplement, arrange to convert all payments in respect of those Units 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, 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 applicable prospectus supplement sets forth additional terms as to the conversion of currencies, in the case of Units with a specified currency other than U.S. dollars, the amount of any U.S. dollar distribution will be determined by the exchange rate agent in its sole discretion. All currency exchange costs will be borne by the holders of those Units by deduction from the relevant distributions. U.S. dollar distributions on Units will be made by wire transfer of immediately available funds to the holder of record on the record dates for those distributions, but only if appropriate wire transfer instructions have been received in writing by the trustee not later than 15 calendar days prior to the applicable distribution date. The applicable prospectus supplement may also provide for distributions to be made by check or against presentation of the relevant Units. In the case of Units issued between a record date and the related distribution date, interest for the period beginning on the issue date and ending on the day immediately prior to that distribution date will, unless otherwise specified in the prospectus supplement, be distributed on the next succeeding distribution date to the holders of Units on the record date for that succeeding distribution. Unless otherwise specified in the applicable prospectus supplement, a "business day" with respect to any Unit is any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close (A) in the City of New York or in the city where the corporate trust office of the trustee is located or (B) for Units denominated in a specified currency other than U.S. dollars, in the principal financial center of the country of the specified currency. Interest on Units General. Each class of Units (other than certain classes of strip Units) of a particular series may have a different interest rate, as described below. In the case of strip Units with no or, in certain cases, a nominal principal balance, distributions of interest will be in an amount described in the applicable prospectus supplement. For purposes of the following description, "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 principal balance will be paid on each distribution date. Reference to the notional amount of a class of strip Units in this prospectus or the applicable prospectus supplement does not indicate that those Units represent the right to receive any principal distribution in that amount, but rather the 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 prospectus supplement. Fixed rate Units. Each class of Units of a particular series with a fixed interest rate will bear interest on the outstanding principal balance (or notional amount, as applicable), from its original issue date or from the last distribution date on which interest was paid, at the fixed interest rate stated in the applicable prospectus supplement, until the principal amount of the Units 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 of the Units is reduced to zero). A prospectus supplement may specify that holders of certain Units will be entitled to receive on specified dates an amount equal to specified portions of the interest received on the underlying securities held by the related trust. If a swap agreement provides for all interest payments on particular underlying securities to be paid to the swap counterparty, the interest rate applicable to the related Units will be the corresponding rate payable to the trust under that swap agreement, subject to adjustment in the event of any changes in the underlying portfolio. If the applicable prospectus supplement specifies a calculation agent, that calculation agent will 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 will, in the absence of manifest error, be conclusive and binding for all purposes. If the terms of a related swap agreement or the related underlying securities so provide, the interest rate for a particular series of Units or any class within that series may be subject to adjustment from time to time in response to specified changes in the rating assigned to that series or class by one or more rating agencies or changes in the portfolio of underlying securities, all as described in the applicable prospectus supplement. Unless otherwise specified in the applicable prospectus supplement, interest on fixed rate Units will be distributable in arrears on each distribution date. Floating rate Units. As specified in the applicable prospectus supplement, each class of Units of a particular series with a variable interest rate will bear interest on the outstanding principal balance (or notional amount, as applicable), from its original issue date to the first interest reset date (as described below) at the initial interest rate indicated in the applicable prospectus supplement. After that date, the interest rate for each interest period will be determined by reference to an interest rate basis, plus or minus any specified spread, or multiplied by any applicable spread multiplier. The "spread" is the number of basis points (one basis point equals one one-hundredth of a percentage point) that may be applicable to a particular series or class, and the "spread multiplier" is a specified percentage that may be applicable to that series or class, all as specified in the applicable prospectus supplement. If the terms of a related swap agreement or the related underlying securities so provide, the spread or spread multiplier on a particular series or class may be subject to adjustment from time to time in response to specified changes in the rating assigned to that series or class by one or more rating agencies, all as described in the applicable prospectus supplement. The applicable prospectus supplement may designate one or more of the following interest rate bases as a reference for the calculation of payments under the related swap agreement, which will determine the interest rate to be payable on the Units: LIBOR, the "commercial paper rate", the "Treasury rate", the "federal funds rate", the "CD rate" or any other rate basis (which may be based on, among other things, one or more market indices or the payments (whether scheduled or otherwise) made with respect to a designated asset or pool of assets) described in that prospectus supplement. Each of the foregoing rate bases is described in greater detail below. The "index maturity" for any floating rate Unit is the period of maturity of the instrument or obligation from which the rate basis 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, floating rate Units may also have either or both of the following (in each case expressed as an annual rate on a simple interest basis): (1) a maximum limitation, or ceiling, on the rate at which interest may accrue during any interest accrual period and (2) a minimum limitation, or floor, on the rate at which interest may accrue during any interest accrual period. Irrespective of any such maximum interest rate, the interest rate applicable to floating rate Units will in no event be higher than the maximum rate permitted by applicable law. If a swap agreement provides for all interest payments on particular underlying securities to be paid to the swap counterparty, the interest rate applicable to the related Units will be the corresponding floating rate payable to the trust under that swap agreement, subject to adjustment in the event of any changes in the underlying portfolio. If the applicable prospectus supplement specifies a calculation agent, that calculation agent will 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 will, in the absence of manifest error, be conclusive and binding for all purposes. The applicable prospectus supplement will state whether the interest rate on particular floating rate Units will be reset daily, weekly, monthly, quarterly, semiannually or annually, or on another periodic basis. The interest reset dates will be specified in the prospectus supplement. If an interest reset date would otherwise be a day that is not a business day, that interest reset date will occur on a prior or succeeding business day, as specified in the 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 each floating rate Unit, accrued interest will be calculated by multiplying its principal balance (or notional amount, as applicable) by the accrued interest factor of that Unit. Unless otherwise specified in the applicable prospectus supplement, the 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 applicable prospectus supplement specifies a different period, the interest factor (expressed as a decimal calculated to seven decimal places, without rounding) for each day is computed by dividing the interest rate in effect on that day (1) by 360, in the case of Units bearing interest at a rate based on LIBOR, the commercial paper rate, the federal funds rate or the CD rate or (2) 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 that date. Unless otherwise specified in the applicable prospectus supplement, the percentages resulting from any calculation of the interest rate on a floating rate Unit will be rounded, if necessary, to the nearest one hundred-thousandth, with five one-millionths rounded upward (e.g., 0.876545 would be rounded to 0.87655), and all currency amounts used in or resulting from that calculation will be rounded to the nearest one-hundredth of a Unit (with 0.005 of a Unit rounded upward). Interest on particular floating rate Units will be distributable on the distribution dates and for the interest accrual periods as described in the applicable prospectus supplement. LIBOR. For each floating rate Unit for which LIBOR is the rate basis 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, as follows: 1. On the second London banking day prior to the interest reset date for that interest period (referred to as the "LIBOR determination date"), the calculation agent 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 specified index maturity which appear on the Reuters LIBO Page at approximately 11:00 a.m., London time, on that 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 specified index maturity that appears on Telerate Page 3750 at approximately 11:00 a.m., London time, on that LIBOR determination date ("LIBOR Telerate"). "Reuters LIBO page" means the display designated as the "LIBO" page on the Reuters Monitor Money Rates Service (or any replacement page). "Telerate page 3750" means the display designated as page "3750" on the Telerate Service (or any replacement page). 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 LIBO page, or if no rate appears on Telerate page 3750, as applicable, LIBOR in respect of the relevant LIBOR determination date will be determined as described in (2) below. 2. If fewer than two offered rates appear on the Reuters LIBO page, or if no rate appears on Telerate page 3750, as applicable, on a particular LIBOR determination date, the calculation agent will request the principal London offices of four major banks in the London interbank market selected by the calculation agent to provide their offered quotations for deposits in U.S. dollars for the period of the specified index maturity, commencing on the relevant interest reset date, to prime banks in the London interbank market at approximately 11:00 a.m., London time, on that LIBOR determination date, and in a principal amount of not less than $1 million that is representative of a single transaction in that market at that time. If at least two such quotations are provided, LIBOR for the relevant interest period will be the arithmetic mean of those quotations. If fewer than two such quotations are available, LIBOR for the relevant 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 at approximately 11:00 a.m., New York City time, on the relevant LIBOR determination date for loans in U.S. dollars to leading European banks, for the period of the specified index maturity, commencing on the relevant 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 that market at that time. If fewer than three such banks are quoting rates as described in the previous sentence, LIBOR for the relevant interest period will be the same as LIBOR for the immediately preceding interest period (or, if there was no preceding interest period, the initial interest rate). In the case of any Unit with respect to which LIBOR is indexed to the offered rates for deposits in a currency other than U.S. dollars, or the method for determining U.S. dollar LIBOR varies from that described above, the applicable prospectus supplement will describe the method for determining such rate. Commercial paper rate. For each floating rate Unit bearing interest at a rate based on the "commercial paper rate", the "commercial paper rate" for each interest period will be determined by the calculation agent as of the second business day prior to the interest reset date for that interest period (referred to as a "commercial paper rate determination rate"). The "commercial paper rate" is the "money market yield" (as defined below) on the relevant commercial paper rate determination date of the rate for commercial paper having the specified index maturity, as 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 pertaining to the commercial paper rate determination date, then the "commercial paper rate" for the relevant interest period is the money market yield on the commercial paper rate determination date of the rate for commercial paper of the specified index maturity, as published in composite quotations in the H.15 Daily Update under the heading "Commercial Paper". If by 3:00 p.m., New York City time, on the relevant calculation date that rate is not yet published in either H.15(519) or the H.15 Daily Update, then the "commercial paper rate" for the relevant interest period is the money market yield of the arithmetic mean of the rates offered, as of 11:00 a.m., New York City time, on the commercial paper rate determination date, by three leading dealers of commercial paper in the City of New York selected by the calculation agent 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. If such dealers are not quoting offered rates as described in the previous sentence, the "commercial paper rate" for the relevant interest period will be the same as the "commercial paper rate" for the immediately preceding interest period (or, if there was no preceding interest period, the initial interest rate). The "money market yield" is 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 annual 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 is the earlier of (1) the tenth calendar day after that commercial paper rate determination date or, if that day is not a business day, the next succeeding business day and (2) the second business day preceding the date on which any distribution of interest is required to be made following the applicable interest reset date. Treasury rate. For each floating rate Unit bearing interest at a rate based on the "Treasury rate", the "Treasury rate" for each interest period will be the rate for the auction, which we refer to as the "auction", held on the Treasury rate determination date (as defined below) for that interest period of direct obligations of the United States (referred to as "Treasury securities") having the specified index maturity, as that rate appears under the caption "INVESTMENT RATE" on the display on Moneyline Telerate, Inc., or any successor service, on page 56 or any other page as may replace page 56 on that service, which we refer to as "Telerate Page 56", or page 57 or any other page as may replace page 57 on that service, which we refer to as "Telerate Page 57", or, in the event that such rate is not published prior to 3:00 p.m., New York City time, on the calculation date pertaining to that Treasury rate determination date, the bond equivalent yield of the rate for the applicable Treasury securities as published in the H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "U.S. Government Securities/Treasury Bills/Auction High". In the event that the results of the auction of Treasury securities having the specified index maturity are not published or reported as described above by 3:00 p.m., New York City time, on the relevant calculation date, the bond equivalent yield of the auction rate of the applicable Treasury securities, announced by the United States Department of the Treasury, or if such rate is not announced by the United States Department of the Treasury, or if the auction is not held on that Treasury rate determination date, the bond equivalent yield of the rate on such Treasury rate determination date of Treasury securities having the specified index maturity published in H.15(519) under the caption "U.S. Government Securities/Treasury Bills/Secondary Market", or if such rate is not published by 3:00 p.m., New York City time, on the related calculation date, then the "Treasury rate" for that interest period will be the rate on such Treasury rate determination date of the applicable Treasury securities as published in H.15 Daily Update, or other recognized electronic source used for the purpose of displaying the applicable rate, under the caption "U.S. Government Securities/Treasury Bills/Secondary Market", or if such rate is not published by 3:00 p.m., New York City time, on the related calculation date, then the "Treasury rate" for that interest period will be the rate on such Treasury rate determination date calculated by the calculation agent as the bond equivalent yield 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 primary United States government securities dealers, which may include affiliates of the depositor, selected by the calculation agent, for the issue of Treasury Bills with a remaining maturity closest to the specified index maturity. If such dealers are not quoting bid rates as described in the previous sentence, then the "Treasury rate" for the relevant interest period will be the same as the Treasury for the immediately preceding interest period (or, if there was no preceding interest period, the initial interest rate). The "Treasury rate determination date" for each interest period is the day of the week in which the interest reset date for that interest period falls on which Treasury securities would normally be auctioned. Treasury securities 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 the auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is held on the preceding Friday, that Friday will be the Treasury rate determination date pertaining to the interest period commencing in the next succeeding week. Unless otherwise specified in the applicable prospectus supplement, if an auction date will fall on any day that would otherwise be an interest reset date, then that interest reset date will instead be the business day immediately following the auction date. The "calculation date" pertaining to any Treasury rate determination date is the earlier of (1) the tenth calendar day after that Treasury rate determination date or, if that day is not a business day, the next succeeding business day or (2) the second business day preceding the date on which 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 at a rate based on the "federal funds rate", the "federal funds rate" for each interest period will be the effective rate on the interest reset date for that interest period (referred to as a "federal funds rate determination date") for federal funds as published in H.15(519) under the heading "Federal Funds (Effective)" as displayed on Moneyline Telerate, Inc., or any successor service, or page 120 or any other page as may replace the applicable page on that service, which is commonly referred to as "Telerate Page 120". In the event that such rate is not published prior to 9:00 a.m., New York City time, on the calculation date pertaining to that federal funds rate determination date, the "federal funds rate" for that interest period is the rate on that federal funds rate determination date as published in composite quotations in the H.15 Daily Update under the heading "Federal Funds/Effective Rate". If by 3:00 p.m., New York City time, on that calculation date such rate is not yet published in either H.15(519) or the H.15 Daily Update, then the "federal funds rate" for that interest period is the arithmetic mean of the rates for the last transaction in overnight federal funds by each of three leading brokers of federal funds transactions in The City of New York selected by the calculation agent, prior to 9:00 a.m., New York City time, on that interest determination date. If the brokers selected by the calculation agent are not quoting as set forth above, the "federal funds rate" for that interest period will be the same as the federal funds rate in effect for the immediately preceding interest period (or, if there was no preceding 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 for the period from and including a Monday to but excluding the next succeeding Monday will be reset by the calculation agent on that 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 day in that week. The "calculation date" pertaining to any federal funds rate determination date is the next succeeding business day. CD rate. For each floating rate Unit bearing interest at a rate based on 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 that interest period (referred to as a "CD rate determination date") for negotiable certificates of deposit having the specified index maturity, as published in H.15(519), "Selected Interest Rates", or any successor publication of the Board of Governors of the Federal Reserve System ("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 pertaining to that CD rate determination date, then the "CD rate" for that interest period will be the rate on such CD rate determination date for negotiable certificates of deposit of the specified index maturity, set forth in the daily update of H.15(519), available through the world wide website of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/h15/current, or any successor site or publication, which is commonly referred to as the "H.15 Daily Update", for the interest determination date for certificates of deposit having the index maturity specified in the applicable pricing supplement, under the caption "CDs (Secondary Market)". If by 3:00 p.m., New York City time, on that calculation date such rate is not yet published in either H.15(519) or the H.15 Daily Update, then the "CD rate" for that interest period will be calculated by the calculation agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on that 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 negotiable certificates of deposit of major U.S. money center banks of the highest credit standing (in the market for negotiable certificates of deposit) with a remaining maturity closest to the specified index maturity in a denomination specified in the applicable prospectus supplement. If such dealers are not quoting offered rates as described in the previous sentence, the "CD rate" for that interest period will be the same as the CD rate for the immediately preceding interest period (or, if there was no preceding interest period, the initial interest rate). The "calculation date" pertaining to any CD rate determination date is the earlier of (1) the tenth calendar day after that CD rate determination date or, if that day is not a business day, the next succeeding business day or (2) the second business day preceding the date on which any distribution of interest is required to be made following the applicable interest reset date. If any of the commercial paper rate, Treasury rate, federal 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 Unless the applicable prospectus supplement specifies a notional amount or other reference amount for a particular Unit, each Unit will have a principal balance equal to the maximum amount that the holder of that Unit will be entitled to receive in respect of principal from the related underlying securities. The initial aggregate principal balance (or notional amount, as applicable) of each class of a particular series of Units will be specified in the applicable prospectus supplement. Distributions of principal of any such class will be made on a ratable basis among all the Units of that class. Strip Units with no principal balance will not receive distributions of principal. The outstanding principal balance (or notional amount, as applicable) of a Unit will be reduced to the extent of distributions of principal and, if applicable, by the amount of any net losses realized on the related trust property. 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: o the rate of exchange between the specified currency for such Unit and the other currency (the "indexed currency") specified therein on specified dates, o the difference in the price of a specified commodity (the "indexed commodity") on specified dates, o 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 o such other objective price or economic measure as is described in the related prospectus supplement. The manner of determining the indexed principal amount of an 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 an 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 a particular Unit is not the U.S. dollar, the applicable prospectus supplement will describe the denominations, the currency or currencies in which the principal and interest with respect to that Unit are to be paid and any other related terms and conditions applicable to that Unit. If the specified currency or any successor currency for a foreign currency Unit is not available to the related trust due to exchange controls or other events beyond the control of the depositor or the trust, the trust will be entitled to satisfy its obligation to make the payment in that specified currency by making the payment in U.S. dollars, on the basis of an exchange rate determined by the exchange rate agent in its sole discretion. Multi-currency Units In the case of multi-currency Units, payments of principal or interest may be made in different currencies, as specified in the applicable prospectus supplement. The exchange rates will be calculated as specified in those Units and as described in the prospectus supplement. Other material terms and conditions will also be specified in the relevant Units and described in the prospectus supplement. Call rights and warrants If one or more specified persons have the right to purchase all or a portion of the Units of a particular series or to purchase trust property such that the trustee is obligated to redeem all or a portion of the Units of a particular series under specified circumstances, or if optional early redemption or similar provisions with respect to the underlying securities may result in a redemption of all or a portion of the Units of a particular series, the applicable prospectus supplement will designate that series as a "callable series". The terms and conditions under which a specified person may exercise its right to purchase or cause redemption of all or a portion of the Units of that series will be described in the applicable prospectus supplement. Such terms may include the following: o a minimum principal balance (or notional amount, as applicable) with respect to the Units being purchased or redeemed, o a requirement that the principal balance (or notional amount, as applicable) of the Units being purchased or redeemed be an integral multiple of a specified amount, o if the call right is exercised with respect to less than all of the Units, the manner of selecting the Units being purchased or redeemed, o specified dates during which such a purchase or redemption may be effected, and o the price at which such a purchase or redemption may be effected, which will be at least 100% of the outstanding principal balance of the relevant Unit. After receiving notice of the exercise of such a call right or warrant, the trustee will provide notice as specified in the applicable prospectus supplement. After satisfying any conditions applicable to the exercise of that right, each holder of a Unit that has been called will be entitled to receive a distribution of a ratable share of the aggregate price paid in connection with that exercise, in the manner and to the extent described in the applicable 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: o a requirement that the exchanging holder tender to the trustee Units of each class within such exchangeable series, o a minimum Unit principal balance or notional amount, as applicable, with respect to each Unit being tendered for exchange, o 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, o specified dates during which a holder may effect such an exchange, o limitations on the right of an exchanging holder to receive any benefit upon exchange from any credit support or other non-underlying securities deposited in the applicable trust, o 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 o 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 underlying securities to be distributed by the trustee. Unless the prospectus supplement states that "depositor optional exchange" is not 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 for a pro rata portion of the trust property of the related trust, subject to one or more of the conditions similar to those set forth above. Unless the underlying 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 an exemption from registration under 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) 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 Unit, the Unit principal balance or notional amount of such Unit to be exchanged, the Unit number or a description of the tenor and terms of such Unit, a statement that the option to elect exchange is being exercised thereby and a guaranty that the Unit to be exchanged with the form entitled "Option to Elect Exchange" on the reverse of the 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 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 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 underlying securities and only the trustee will have the ability to enforce the obligations of the underlying security issuer under the underlying securities. After an optional exchange, the Unitholders will be holders of the underlying securities and can enforce such obligations directly. Any holder of call rights or warrants shall be entitled to exchange Units acquired upon exercise of the call rights or warrants for a corresponding portion of trust property. You should note that any optional exchange will have the effect of reducing the outstanding amount of Units available for trading in the secondary markets. Optional exchanges may occur with respect to significant amounts of the Units and may disrupt secondary market trading in the Units, reduce the liquidity of the Units, increase the spread between bid and ask prices or have other adverse effects on any secondary market for the Units. Ratings At the time of issue, the Units of a particular series (or class within that series) will be rated in one of the investment grade categories recognized by one or more nationally recognized rating agencies. Unless an additional basis for that rating is described in the applicable prospectus supplement, the rating of any series or class will be based primarily on the related trust property and the relative priorities of the Unitholders of the relevant series or class to receive collections from, and to assert claims against, the trust with respect to that trust property. There can be no assurance that any such rating will remain in effect for any given period of time or that it will not be lowered or withdrawn entirely by the relevant rating agency. If any class of a particular series of Units is not offered pursuant to this prospectus and the applicable prospectus supplement, that class will not necessarily be rated in an investment grade category by a rating agency. Prospective purchasers of the Units should be aware that 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. A rating also does not comment as to market price or suitability for a particular investor. In addition, a rating is limited in scope to its terms. Prospective purchasers of particular Units are urged to review in its entirety any disclosure relating to any rating of those Units that is contained in the applicable prospectus supplement, including the text of any rating letter or letters, if provided. Form Each series and class of Units may be issued (1) in fully registered form without interest coupons with or without coupons attached and (2) as one or more global securities or as individual securities in definitive form with or without coupons. Units will be transferable on the records of the Unit register maintained by the trustee. For each series of Units, the trustee will maintain a register in which, subject to any reasonable regulations as it may prescribe, the trustee will provide for the registration of transfers of those 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. All Units of a particular series (or class within that series) offered hereby and by the applicable prospectus supplement unless otherwise provided in the applicable prospectus supplement will, after they are issued, be represented by one or more global securities that will be deposited with, or on behalf of, the Depository Trust Company ("DTC") (only for Units denominated and payable in U.S. dollars), the Euroclear System ("Euroclear"), Clearstream Banking, societe anonyme ("Clearstream"), or another entity specified in the applicable prospectus supplement. All of the foregoing entities are referred to as "depositaries". Global securities may be issued in registered form and in either temporary or permanent form or other form specified by the depositary. Global securities 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 it represents, a global security may only be transferred in its entirety, by the depositary to a nominee of the depositary, by a nominee of the depositary to the depositary or another nominee of the depositary, or by the depositary or any such nominee to a successor of the depositary or a nominee of that successor. After a Unit is issued as a global security, the depositary will credit, on its book-entry registration and transfer system, the respective principal amounts or notional amounts, as applicable, of the individual Units represented by that global security to the accounts of its participants. The accounts to be credited will be designated by the underwriter of the Units, or if the Units are offered and sold directly through one or more agents, by the depositor or those agents. Ownership of beneficial interests in a global security will be limited to participants and to persons that may hold beneficial interests through participants. Because holders will acquire, hold and transfer security entitlements with respect to a global security through accounts with the depository and its participants, a beneficial holder's rights with respect to a global security will be subject to the laws (including Article 8 of the Uniform Commercial Code) and contractual provisions governing a holder's relationship with its securities intermediary and the relationship between its securities intermediary and each other securities intermediary between it and the underlying security issuer. Unless and until it is exchanged in whole for securities in definitive registered form under the limited circumstances described below, a global security cannot be transferred except as a whole by and among the depository, its nominees and any successors of the depository or those nominees. Ownership of beneficial interests in a global security will be shown on, and transfers of ownership will be effected only through, records maintained by the depositary or by participants or persons that hold through participants. The laws of some states require that certain purchasers of a security take physical delivery of the security. 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 that security, that depositary or nominee will be considered the sole holder of the individual Units represented by that global security for all purposes under the trust agreement governing the Units. Except as described below, owners of beneficial interests in a global security will not be entitled to have any of the individual Units represented by that 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 Unitholders under the trust agreement governing those 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 that Unit, may be limited due to the lack of a physical certificate for that Unit. 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 Unitholder of record. None of the depositor, the trustee, any paying agent or the registrar for those Units will have responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial interests in that 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 particular series (or class within that series), after receiving any distribution of principal, premium or interest in respect of a definitive global security representing those Units, will credit immediately its participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of that global security, as shown on the records of the depositary. The depositor also expects that payments by participants to owners of beneficial interests in that global security held through those participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in registered in a "street name". Beneficial owners of global securities should consult their banks or brokers for information on how to receive payments on those Units, including (in the case of Units denominated in a currency other than U.S. dollars) on how to request payment in the specified currency for those Units. As long as the Units of a particular series are represented by a global security, the depositary's nominee will be the record holder of those Units 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 that Unit must instruct the broker or other direct or indirect participant through which it holds an interest in that 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. If the depositary for Units of a particular series (or class within that series) is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by the depositor within 30 days, the related trust will issue individual definitive Units in exchange for the global security or securities representing those Units. In addition, the depositor may at any time and in its sole discretion determine not to have any Units of a particular series or class represented by one or more global securities of that series or class in exchange for the global security or securities representing those Units. Further, if specified in the applicable prospectus supplement, an owner of a beneficial interest in a global security representing Units of a particular series or class may, on terms acceptable to the depositor and the depositary, receive individual definitive Units in exchange for its beneficial interest. In each of the foregoing circumstances, an owner of a beneficial interest in a global security will be entitled (1) to receive individual definitive Units of the series or class represented by that global security equal in principal amount or notional amount, as applicable, to that beneficial interest and (2) to have those definitive Units registered in its name. Individual definitive Units will be issued in denominations specified by the depositor or in the applicable prospectus supplement. 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 deposit with DTC. DTC also facilitates the settlement among its participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in its 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. DTC is owned by a number of those participants and by the New York Stock Exchange Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. ("direct participants"). 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 any of the participants mentioned in the preceding sentence, either directly or indirectly ("indirect participants"). The rules applicable to DTC and its participants are on file with the SEC. 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. The applicable prospectus supplement will describe any specific terms of the depositary arrangement with respect to any particular class or series of Units to the extent not described or different from the above description above. Voting of securities, modification of underlying security issuance agreements As promptly as possible, but in any event, within three 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 underlying securities related to particular Units, the trustee will give notice to the holders of those Units, setting forth the following: (1) the information contained in the notice to owners of those underlying securities, (2) a statement that the Unitholders are entitled, subject to applicable law, any applicable provisions of those underlying securities and the trust agreement (and to the extent of the voting rights allocated to the Unitholders), to instruct the trustee as to the exercise of any voting right pertaining to those underlying securities, and (3) a statement as to the manner in which instructions may be given to the trustee to grant any discretionary proxy to a person designated in the notice received by the trustee. The trustee will give its notice to the Unitholders of record on the relevant record date. Unless a different allocation of voting rights is described in the applicable prospectus supplement, the voting rights of owners of the relevant underlying securities pursuant to their terms will be allocated among the Unitholders ratably, in the proportion that the denomination of each Unit bears to the aggregate denomination of all Units. At the written request of any Unitholder, which must be received on or before the date established by the trustee for that purpose, the trustee will endeavor, to the extent practicable and permitted under applicable law and any applicable provision of the underlying securities, to vote in accordance with any nondiscretionary instruction contained in that written request. If the aggregate principal balance (or notional amount, as applicable) held by all Unitholders instructing the trustee to vote in a specified manner does not correspond to an even number of underlying securities, the trustee will vote the number of underlying securities most closely corresponding to that principal balance (or notional amount, as applicable), as instructed. Any portion of the principal balance (or notional amount, as applicable) representing less than half of an underlying security will not be voted, but any such portion representing half or more of an underlying security will be voted as instructed. Notwithstanding the foregoing, the trustee must reject any vote to (1) alter the currency, amount or timing of payment of, or the method or rate of accruing, principal or interest on the underlying securities, (2) consent to any redemption or prepayment of the underlying securities or (3) consent to the issuance of new obligations in exchange or substitution for any of the underlying securities. The foregoing prohibition does not apply if the trustee is directed by the affirmative vote of all holders of the related Units to accept the amendment or offer in question and receives advice of nationally recognized independent tax counsel, designated by the depositor, that the changes to the terms of the underlying securities to which the vote relates would not result in a "sale or other disposition" of the underlying securities within the meaning of Section 1001(a) of the Internal Revenue Code of 1986 or alter the classification of the trust for U.S. federal income tax purposes. The trustee must also reject any vote to alter any other terms of the securities unless it receives advice of tax counsel to the effect described in the preceding sentence. The trustee will not grant any consent (other than a unanimous consent) solicited from the owners of the underlying securities underlying the Units with respect to the foregoing matters in (1), (2) and (3) 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 trust property 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, liquidation events and disqualification 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 underlying securities or cash if the trust property is liquidated, as specified in the applicable trust agreement. Such notice to the Unitholders shall also specify: (1) the cause of the trust wind-up event, (2) the location and hours of the office or agency of the trustee at which Units should be presented and surrendered, (3) that each holder must supply transfer instructions in writing with respect to the related underlying securities, and (4) any other information required to be set forth by such trust agreement, as set forth in the applicable prospectus supplement. Unless the prospectus supplement specifies that the underlying securities will be distributed in kind, all underlying securities will be liquidated following a trust wind-up event, either through the selling agent as described under "Description of Trust Agreements--Sale of trust property, secured party rights" or through other procedures described in the prospectus supplement, and the cash proceeds of such liquidation will be distributed to the Unitholders after satisfaction of all other expenses and liabilities of the trust. Upon receipt by the trustee of (1) appropriate transfer instructions in writing from a holder with respect to such underlying securities and (2) 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 underlying securities or cash in accordance with such transfer instructions by physical delivery or, if applicable, by causing the book-entry depositary for such underlying securities to credit such underlying securities to an account of such holder with such depositary or an account of a designated participant in such depositary. Additional issuances of Units If specified in the applicable prospectus supplement, the depositor may at any time deposit additional underlying securities into the related trust. The principal amount of underlying securities deposited must be in the same ratio to the aggregate principal amount (or notional amount, as applicable) of the Units received for such deposit as the ratio of the aggregate principal amount of the underlying securities initially deposited to the aggregate principal amount of Units initially issued. The applicable prospectus supplement will specify whether any such additional underlying securities will be deposited, and any such additional Units will be issued, with accrued interest from the original closing date (or if a payment date has occurred, the most recent payment date) for the related trust or whether any accrued interest on the Securities will be subject to a retained interest in favor of the depositor. Any such issuance of additional Units is subject to: o a corresponding increase in any rights or obligations that the related trust may have under any swap agreement, swap guaranty or credit support arrangement, and o the receipt by the trustee of a prior written notice from each rating agency rating the Units to the effect that the additional issuance would not result in a reduction or withdrawal of the then current rating of the Units. Notwithstanding the foregoing, the trust may not, except with the consent of all Unitholders issue any additional Units if that issuance would alter the classification of the trust for U.S. federal income tax purposes. Upon any deposit of additional underlying securities and issuance of additional Units: o the additional underlying securities will constitute a part of the trust property of the related trust, and o the additional Units will generally represent undivided fractional interests in the trust property of the related trust, entitled to the same rights and subject to the same provisions as all previously issued Units of the same class. United States Federal Income Taxation The discussion under the heading "United States Federal Income Taxation" herein represents the opinion of Cleary, Gottlieb, Steen & Hamilton with respect to the material United States federal income tax consequences of the purchase, ownership and disposition of Units by a Unitholder who acquires its Units on the closing date. This discussion applies only to: o Units purchased by those initial holders who purchase such Units on the date on which the net proceeds of an offering of the Units of a particular series are received by the depositor, also referred to as the closing date, at the offering price provided for the Units in the applicable prospectus supplement, and o Units and trust property held as capital assets. This discussion does not describe all of the tax consequences that may be relevant to a holder in light of its particular circumstances or to holders subject to special rules, such as: o banks, savings and loan associations, and similar financial institutions, o insurance companies, o dealers in securities, including notional principal contracts, or foreign currencies, o traders in securities electing to mark to market, o persons holding Units as part of a hedge, straddle, conversion or similar transaction, o U.S. Unitholders (as defined below) whose functional currency is not the U.S. dollar, o partnerships or other entities classified as partnerships for U.S. federal income tax purposes, or o persons subject to the alternative minimum tax. This discussion is based on the Internal Revenue Code of 1986, as amended to the date hereof (the "Internal Revenue Code"), administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein and may be applied retroactively. 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. Persons considering the purchase of Units are urged to consult their tax advisers with regard to the application of the U.S. federal income tax laws to their particular situations as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction. Classification of the trust Unless otherwise stated in the applicable prospectus supplement, the trust will not be classified as a corporation or as an association taxable as a corporation. The trustee shall in no event cause the trust, and each holder of a Unit by its purchase thereof shall be deemed to have agreed not to make any election to cause the trust, to be treated as a corporation for U.S. federal income tax purposes. The prospectus supplement for each series of Units will include a discussion regarding the classification of the trust as a grantor trust, partnership or financial asset securitization investment trust ("FASIT"), as defined in Section 860L of the Internal Revenue Code. In every case in which the trust intends to treat itself as a partnership or FASIT, the applicable prospectus supplement will discuss the material U.S. federal income tax consequences of such classification. In a case where the appropriate classification of the trust is uncertain, the applicable prospectus supplement generally will describe potential alternative characterizations of the trust and the material U.S. federal income tax consequences thereof. The remainder of this discussion assumes that the trust will be a grantor trust for U.S. federal income tax purposes. Taxation under grantor trust rules The trustee will report income, gain, loss and deductions to the Internal Revenue Service (the "IRS") in accordance with the grantor trust provisions of the Internal Revenue Code. Under the U.S. 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 that is included in trust property, 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 of the trust and a termination of any swap agreement with respect to that Unitholder. In the case of Units of an exchangeable series, a Unitholder's withdrawal of the Unitholder's proportionate share of the underlying securities will not constitute a taxable event, but gain or loss may be recognized upon any related termination of a swap agreement. 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. See "Trust expenses", below. Allocation of basis and sales proceeds A Unitholder will be considered to have purchased its interest in the underlying 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 such underlying securities and the denominator of which is the sum of the fair market value of the underlying securities and the fair market value of any swap agreement (which may be negative, zero or positive), if any, in each case at the time of purchase. The Unitholder's initial tax basis in the underlying securities will equal such allocated purchase price. The Unitholder's tax basis in the underlying securities generally will be increased by any amounts included in income with respect thereto, and reduced by any payments thereon and any amortized bond premium with respect thereto. If the fair market value to the trust of the swap agreement, if any, 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 underlying 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 in an amount equal to the excess of the cost of the Unit over the amount allocated to the underlying securities. Upon a sale of a Unit, the same method would apply in allocating the amount realized by the selling Unitholder between the underlying 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 swap 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. Tax consequences to U.S. Unitholders As used herein, the term "U.S. Unitholder" means a beneficial owner of a Unit that is for U.S. federal income tax purposes: o a citizen or resident of the United States, o a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or of any political subdivision thereof, or o an estate the income of which is subject to U.S. federal income taxation regardless of its source, or o 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. Notwithstanding the preceding sentence, certain trusts in existence on August 20, 1996, and treated as a domestic trust prior to such date, may also be treated as U.S. Unitholders. The term U.S. Unitholder also includes certain former citizens and residents of the United States. The discussion below, up to the heading "Tax consequences to non-U.S. Unitholders", applies only to U.S. Unitholders. Taxation of underlying securities If the trust property includes a swap agreement, the tax treatment of the underlying securities and such swap agreement will depend on whether they are integrated into a single synthetic debt instrument or treated as separate financial instruments. The following discussion assumes that the underlying securities are not part of an integrated transaction, so that a U.S. Unitholder must take into account its pro rata share of the income from the underlying securities and the swap agreement, if any, as determined under the separate tax rules applicable to those instruments. In some cases, the trust property may be subject to rules providing for integration for tax purposes. Such rules, and the consequences of integrated treatment, are discussed below. The following discussion also assumes that the underlying securities are considered to be owned by the trust for U.S. federal income tax purposes. In some circumstances, the underlying securities and swap agreements may be treated together as a loan to the swap counterparty. See "Other characterizations of the underlying securities and swap agreements". Furthermore, the following discussion assumes that the underlying securities will constitute debt instruments in their entirety. If the underlying 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. See also the discussion below under "Straddle Rules". Payments of interest. Interest on an underlying security will be taxable to a U.S. Unitholder as ordinary interest income at the time it accrues or is received by the trust in accordance with the U.S. Unitholder's method of accounting for U.S. federal income tax purposes, provided that the interest is qualified stated interest (as defined below). Original issue discount. An underlying security that was issued at an issue price less than its stated redemption price at maturity will be considered to have original issue discount for U.S. federal income tax purposes (and will be referred to as an "original issue discount underlying security") unless the discount is de minimis (as described below). The stated redemption price at maturity of an underlying security equals the sum of all payments required to be made on the underlying security other than payments of "qualified stated interest". "Qualified stated interest" is generally stated interest that is unconditionally payable in cash or property (other than in debt instruments of the underlying security issuer) at least annually during the entire term of the underlying security at a single fixed rate or, subject to certain conditions, at a variable rate. If the difference between an underlying security's stated redemption price at maturity and its issue price is less than a de minimis amount (generally 1/4 of 1 percent of the stated redemption price at maturity multiplied by the number of complete years to maturity), then the underlying security will not be considered to have original issue discount. If the trust holds original issue discount underlying securities that mature more than one year from their date of issuance, U.S. Unitholders will be required to include their share of the original issue discount in ordinary gross income as it accrues, in accordance with a constant yield method based on a compounding of interest and regardless of whether the U.S. Unitholder uses the cash or accrual method of accounting. Under this method, U.S. Unitholders generally will be required to include in income increasing amounts of original issue discount in successive accrual periods. In some cases, original issue discount may be includible in income prior to the receipt of any cash attributable to such income. A U.S. Unitholder may make an election to include in gross income all interest that accrues on any underlying security (including stated interest, acquisition discount, original issue discount, de minimis original issue discount, market discount, de minimis market discount, and unstated interest, as adjusted by any amortizable bond premium or acquisition premium) in accordance with a constant yield method based on the compounding of interest (a "constant yield election"), as if such underlying security were newly issued on the date of purchase of the Units by the U.S. Unitholder and the issue price of such underlying security equaled the purchase price allocated thereto. An election made by a taxpayer with respect to one obligation can affect other obligations held by the taxpayer. U.S. Unitholders should consult with their tax advisors regarding the merits of making this election. Contingent debt obligations. Special rules govern the tax treatment of debt obligations that are treated under applicable Treasury regulations as providing for contingent payments ("contingent debt obligations"). These rules generally require accrual of interest income on a constant yield basis at an assumed yield determined at the time of issuance of the obligation. Adjustments will be required to these accruals when any contingent payments are made that differ from the payments calculated based on the assumed yield. Any gain on the sale, exchange, retirement or other disposition of a contingent debt obligation will be ordinary income. Loss, up to the amount of interest included in income with respect to the contingent debt obligation by the U.S. Unitholder in the current or prior taxable years, will be characterized as ordinary loss; any loss in excess of that amount will be capital loss. Furthermore, any gain or loss will be long-term capital gain or loss if the U.S. 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. Market discount. If the purchase price allocated to an underlying security is less than its stated redemption price at maturity or, in the case of an original issue discount underlying security, its adjusted issue price, the amount of the difference will be treated as market discount for federal income tax purposes, unless this difference is less than a specified de minimis amount. The adjusted issue price is the issue price of the underlying security plus previously accrued original issue discount, less any prior payments other than payments of qualified stated interest. A U.S. Unitholder that makes a constant yield election or a separate election under market discount rules will be required to include market discount in income as it accrues. Absent such election, a U.S. Unitholder will be required to treat any principal payment (or, in the case of an original issue discount underlying security, any payment that does not constitute qualified stated interest) on, and any gain on the sale, exchange, retirement or other disposition of an underlying security as ordinary income to the extent of the market discount accrued on the underlying security at the time of the payment or disposition. If the underlying security is disposed of in certain nontaxable transactions, accrued market discount will be includible as ordinary income to the U.S. Unitholder as if such U.S. Unitholder had sold the underlying security at its then fair market value. In addition, the U.S. Unitholder may be required to defer, until the maturity of the underlying security or its earlier disposition (including certain nontaxable transactions), the deduction of all or a portion of the interest expense on any indebtedness incurred or maintained to purchase or carry the Unit. Acquisition premium and amortizable bond premium. If the purchase price allocated to an underlying security exceeds the underlying security's adjusted issue price but is less than or equal to its stated redemption price at maturity, a U.S. Unitholder will be considered to have purchased the underlying security with an acquisition premium. Under the acquisition premium rules, the amount of original issue discount that the U.S. Unitholder must include in its gross income with respect to the underlying security for any taxable year will be reduced by the portion of the acquisition premium properly allocable to that year. If the purchase price allocated to an underlying security exceeds the underlying security's stated redemption price at maturity, a U.S. Unitholder will be considered to have purchased the underlying security with amortizable bond premium equal in amount to the excess of the purchase price over the amount payable at maturity (exclusive of any portion of such excess attributable to a conversion feature). A U.S. Unitholder may elect under Section 171 of the Internal Revenue Code to amortize this premium, using a constant yield method, over the remaining term of the underlying security (where the underlying security is not optionally redeemable prior to its maturity date). If the underlying security may be optionally redeemed prior to maturity after the trust has acquired it, the amount of amortizable bond premium is determined with reference to the amount payable on maturity or, if it results in a smaller premium attributable to the period of earlier redemption date, with reference to the amount payable on the earlier redemption date. A U.S. Unitholder who elects to amortize bond premium must reduce its tax basis in the underlying security by the amount of the premium amortized in any year. An election to amortize bond premium applies to all taxable debt obligations then owned and thereafter acquired by the U.S. Unitholder and may be revoked only with the consent of the IRS. If a U.S. Unitholder makes a constant yield election (as described under "Original Issue Discount" above) for an underlying security with amortizable bond premium, such election is treated as an election to amortize bond premium under Section 171, with the consequences described above. Stripped bond rules. Some Units may be entitled to either (i) principal distributions with disproportionate, nominal or no interest distributions or (ii) interest distributions with disproportionate, nominal or no principal distributions (such Units will be referred to as "strip Units"). A U.S. Unitholder that holds a strip Unit will be taxed under the "stripped bond" rules of the Internal Revenue Code. The U.S. Unitholder will be treated, for purposes of applying the original issue discount rules of the Internal Revenue Code, as having purchased a newly issued, single debt instrument providing for payments equal to the payments on the underlying securities allocable to the Unit. The issue price is the price at which the U.S. Unitholder is considered to have purchased its right to payments on the underlying securities. As described above under "Original Issue Discount", if such newly issued debt instrument has more than a de minimis amount of original issue discount, the U.S. Unitholder will be required to include the original issue discount in income as it accrues in accordance with the constant yield method. Unless otherwise specified in the applicable prospectus supplement, it is anticipated that a trust will, for information reporting purposes, account for original issue discount 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 original issue discount will differ for subsequent purchasers. U.S. Unitholders should consult their tax advisors regarding the proper calculation of original issue discount. Sale, exchange or retirement of an underlying security. Upon the sale, exchange or retirement of an underlying security (including a sale resulting from a sale of Units), a U.S. Unitholder generally will recognize taxable gain or loss equal to the difference between the amount realized on the sale, exchange or retirement and the U.S. Unitholder's adjusted tax basis in the underlying security. For these purposes, the amount realized does not include any amount attributable to accrued interest. Amounts attributable to accrued interest are treated as interest as described under "Payments of Interest" above. Except as described herein, gain or loss realized on the sale, exchange or retirement of an underlying security will generally be capital gain or loss and will be long-term capital gain or loss if at the time of sale, exchange or retirement the underlying security has been held for more than one year. Exceptions to this general rule apply to the extent of any accrued market discount not previously included in the U.S. Unitholder's taxable income. See "Market discount" above. See also the discussions under "Contingent debt obligations", "Straddle rules", and "Foreign currency rules". Taxation of the swap agreement The following discussion assumes that the swap agreement is not part of an integrated transaction for tax purposes. For the treatment of a swap agreement if it is part of an integrated transaction, see the discussion under "Taxation of Underlying Securities and Swap Agreement as an Integrated Transaction" below. Furthermore, 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 of the underlying securities and swap agreement". 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 U.S. Unitholders 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 U.S. 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 taxable 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. For certain taxpayers, including individuals, such deductions will generally be subject to the 2% floor applicable to miscellaneous itemized deductions. 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 Internal Revenue Code (subject to the discussion 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 U.S. 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. U.S. 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 U.S. 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 U.S. 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 U.S. 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 U.S. 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 U.S. 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 underlying securities to the extent such gain is capital gain. Other characterizations of the underlying 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 U.S. federal income tax purposes in accordance with its economic substance. Consequently, if a swap agreement is an option, a U.S. 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 "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 Internal Revenue 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 underlying securities may be considered offsetting positions in personal property for purposes of the straddle rules discussed in the next section. In some cases, underlying securities and a related swap agreement may represent economically a loan to the swap counterparty secured by the underlying 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 underlying securities and the swap agreement combined. Such a loan would be subject to the rules governing debt instruments described above under "Taxation of underlying securities". Other characterizations may be possible, depending on the particular terms of the swap agreement. U.S. Unitholders should consult their own tax advisors with respect to the federal income tax treatment of the swap agreement. Straddle rules The underlying securities and the swap agreement may be considered offsetting positions in a "straddle" subject to the straddle rules of Section 1092 of the Internal Revenue Code. Under Section 1092, a selling U.S. Unitholder's capital gain or loss, if any, with respect to underlying securities that are positions in a straddle will be short-term unless such underlying 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 underlying securities. Further, if the underlying securities and the swap agreement are positions in a straddle, any interest or carrying charges incurred by a U.S. Unitholder with respect to its Units may have to be capitalized to the extent they exceed the U.S. Unitholder's interest income from the underlying securities, under Section 263(g) of the Internal Revenue Code. Under proposed regulations, payments made under a swap agreement may be treated as carrying charges for this purpose. Finally, if the underlying 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 Internal Revenue Code, all or a portion of any gain that would otherwise be capital gain may be recharacterized as ordinary income. Foreign currency rules If the underlying 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 Internal Revenue Code and the regulations promulgated thereunder) foreign exchange gain or loss will be computed separately from interest income and gain or loss from the underlying securities. The amount of interest income realized by a U.S. Unitholder that uses the cash method of tax accounting will be the U.S. dollar value of the foreign currency payment based on the exchange rate in effect on the date the payment is received, regardless of whether the payment is converted into U.S. dollars. A U.S. Unitholder that uses the accrual method of accounting for tax purposes will accrue interest income in the relevant foreign currency and translate the amount accrued into U.S. dollars based on the average exchange rate in effect during the interest accrual period (or portion thereof within the U.S. Unitholder's taxable year) or, at the accrual basis U.S. Unitholder's election, at the spot rate of exchange on the last day of the accrual period (or the last day of the taxable year within such accrual period if the accrual period spans more than one taxable year) or at the spot rate of exchange on the date of receipt, if such date is within five business days of the last day of the accrual period. A U.S. Unitholder that makes such election must apply it consistently to all debt instruments from year to year and cannot change the election without the consent of the IRS. A U.S. Unitholder that uses the accrual method of accounting for tax purposes will recognize foreign currency gain or loss, as the case may be, on the receipt of a foreign currency interest payment made with respect to an underlying security if the exchange rate in effect on the date the payment is received differs from the rate applicable to a previous accrual of that interest income. Foreign currency gain or loss will be treated as ordinary income or loss that is generally not treated as an adjustment to interest income received on the underlying security and is sourced based on the residence of the taxpayer. Similarly, foreign currency 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 underlying securities were acquired and the rate when the payment is made. Upon a sale, exchange or retirement of the underlying securities, gain or loss generally will be treated as ordinary income or loss to the extent that the gain or loss is attributable to changes in exchange rates over the period that the U.S. Unitholder is considered to have held the underlying securities. Original issue discount, market discount, acquisition premium and amortizable bond premium on a foreign currency underlying security are to be determined in the relevant foreign currency. Where the U.S. Unitholder must include original issue discount, or elects to include market discount, in income currently, the amount of original issue or market discount will be determined for any accrual period in the relevant foreign currency and then translated into U.S. dollars on the basis of the average rate in effect during the accrual period (or portion thereof within a U.S. Unitholder's taxable year). Alternatively, the U.S. Unitholder may elect to translate the foreign currency amount at the spot rate of exchange on the last day of the accrual period (or the last day of the taxable year within such accrual period if the accrual period spans more than one taxable year) or at the spot rate of exchange on the date of receipt, if that date is within five business days of the last day of the accrual period. A U.S. Unitholder that makes such election must apply it consistently to all debt instruments from year to year and cannot change the election without the consent of the IRS. Exchange gain or loss realized with respect to such accrued original issue or market discount shall be determined in accordance with the rules relating to accrued interest described above. If an election to amortize bond premium is made, amortizable bond premium taken into account on a current basis shall reduce interest income in a given period in units of the relevant foreign currency. Exchange gain or loss will be realized with respect to amortized bond premium based on the difference between the exchange rate computed on the date or dates the premium is amortized against interest payments and the exchange rate on the date the U.S. Unitholder acquired the underlying security. If an election to amortize bond premium is not made, any loss realized on the sale, exchange or retirement of an underlying security with amortizable bond premium will generally be capital loss to the extent of the bond premium. The principles described above would also apply to any synthetic debt instrument created by integrating the underlying 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 underlying securities will depend on its specific terms. In general, the timing of income and deductions would be determined under the principles described in "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. Taxation of underlying securities and swap agreement as an integrated transaction If the underlying 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 U.S. Unitholder may elect, or in some cases the IRS may require, integrated treatment. If the transaction is integrated, the U.S. Unitholder will be required to take into account its pro rata share of the income from the synthetic debt instrument resulting from such integration. In general, under the Integration Regulations, an underlying 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 Internal Revenue Code and Treasury Regulations) and certain other requirements are satisfied, including the identification of the integrated economic transaction in the U.S. 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 underlying 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. In certain cases, the IRS may require integration where a U.S. 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, which a U.S. Unitholder must include in income as it accrues. See the discussion of original issue discount and other income from a debt instrument under "Taxation of underlying securities" above. The issue date of the synthetic debt instrument will be the date on which the U.S. Unitholder purchases the Unit, and the term of the instrument will be the period from the issue date to the maturity date of the underlying securities. The issue price will be the adjusted issue price of the underlying securities as of the issue date of the synthetic debt instrument, decreased or increased by any payments of swap premium (as defined above under "Allocation of basis and sales proceeds") by or to the U.S. 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 underlying securities. Income from the underlying securities and swap agreement underlying a synthetic debt instrument will be treated separately for purposes of the withholding tax rules. See "Tax consequences to non-U.S. Unitholders", below. If a swap agreement hedges currency risk, then integration of the swap agreement and underlying 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 underlying securities and swap agreements not hedging currency risk. One difference is that to qualify for integration, the combined cash flows on the underlying security and swap agreement must be substantially equivalent to the cash flows on a debt instrument for which a yield can be calculated under the original issue discount rules. 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 underlying securities and swap agreements. The issue price of the synthetic debt instrument is determined by translating the adjusted issue price of the underlying securities into the currency in which the synthetic debt instrument is denominated at the spot rate on the issue date of the synthetic debt instrument. If the synthetic debt instrument is payable in U.S. dollars, U.S. Unitholders will not recognize any foreign exchange gain or loss (as defined above under "Foreign currency rules") with respect to the instrument. Credit support The applicable prospectus supplement will discuss the U.S. federal income tax treatment of any credit support that is part of trust property or that otherwise benefits Unitholders. Trust expenses Generally, for U.S. federal income tax purposes, U.S. Unitholders must take into account their full pro rata share of the trust's income, even if some of that income is used to pay trust expenses. A U.S. Unitholder may deduct its pro rata share of each expense paid by the trust to the same extent as if it directly paid the expense. However, some or all of the expenses of the trust may be miscellaneous itemized deductions. Individuals may only deduct certain miscellaneous itemized deductions to the extent they exceed 2% of adjusted gross income. Tax-exempt organizations A qualified pension plan or other entity that generally is exempt from federal income taxation pursuant to Section 501 of the Internal Revenue 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 Internal Revenue Code. Interest on the underlying securities (or synthetic debt instrument, if the underlying 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 Internal Revenue Code. A portion of any income or gain from the underlying 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 "Taxation of the swap agreement". Tax consequences to non-U.S. 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 beneficial owner of a Unit that is not a U.S. Unitholder and that is not subject to U.S. federal income tax with respect to the Units as a result of any direct or indirect connection to the United States (other than 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 underlying securities or income from the swap agreement if: o in the case of underlying securities, the underlying securities were issued after July 18, 1984, o the non-U.S. Unitholder does not own, actually or constructively, 10% or more of the total combined voting power of all classes of stock entitled to vote, and is not a controlled foreign corporation related, directly or indirectly, through stock ownership to, the underlying security issuer (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) and is not a bank extending credit under a loan entered into in the ordinary course of its trade or business, o interest on the underlying 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 underlying securities (or, in the case of a loan to the swap counterparty, the swap counterparty), except that this clause will not apply to underlying securities that are debt instruments with a fixed term issued on or before April 7, 1993, and o the certification requirement described below has been fulfilled with respect to the beneficial owner, as discussed below. Certification requirement. Interest and original issue discount will not be exempt from withholding tax unless the beneficial owner provides an appropriate statement (generally on IRS Form W-8BEN), signed under penalties of perjury, identifying the Unitholder and stating, among other things, that the Unitholder is not a U.S. person, or satisfies certain documentary evidence requirements for establishing that it is not a U.S. person. If a non-U.S. Unitholder is engaged in a trade or business in the United States, and if income or gain with respect to the Units is effectively connected with the conduct of this trade or business, the non-U.S. Unitholder, although exempt from withholding tax, will generally be taxed in the same manner as a U.S. Unitholder (see "Tax consequences to U.S. Unitholders" above), except that the Unitholder will be required to provide to the trustee a properly executed IRS Form W-8ECI in order to claim an exemption from withholding tax. These Unitholders should consult their own tax advisors with respect to other U.S. tax consequences of the ownership and disposition of Units including the possible imposition of a 30% branch profits tax. If the underlying securities or swap agreement provide for payments relating to a "United States real property interest" within the meaning of Section 897 of the Internal Revenue Code, then gain from the underlying 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. Unitholder may also be subject to U.S. federal income taxation with respect to a Unit if the Unitholder is a personal holding company, a corporation that accumulates earnings to avoid U.S. taxes on shareholders or a private foundation under the Internal Revenue Code. Information reporting and backup withholding Information returns may be filed with the IRS in connection with payments on the Units and the proceeds from a sale or other disposition of the Units or the trust property. A U.S. Unitholder will be subject to U.S. backup withholding tax on these payments if the U.S. Unitholder fails to provide its taxpayer identification number to the paying agent and comply with certain certification procedures or otherwise establish an exemption from backup withholding. A non-U.S. Unitholder may be subject to U.S. backup withholding tax on these payments unless the non-U.S. Unitholder complies with certification procedures to establish that it is not a U.S. person. For a non-U.S. Unitholder, the certification procedures required to claim the exemption from withholding tax described above will satisfy the certification requirements necessary to avoid the backup withholding tax as well. The amount of any backup withholding from a payment to a Unitholder will be allowed as a credit against the Unitholder's United States federal income tax liability and may entitle the Unitholder to a refund, provided that the required information is furnished to the IRS. ERISA Considerations The Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the Internal Revenue 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 general and separate accounts in which those plans, accounts or arrangements are invested) subject to Title I of ERISA or Section 4975 of the Internal Revenue Code (collectively, referred to as "plans") and on persons who are fiduciaries with respect to those 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 the plan. In addition, Section 406 of ERISA and Section 4975 of the Internal Revenue Code prohibit a broad range of transactions involving plan assets and persons (referred to as "parties in interest") having specified relationships to a plan and impose additional prohibitions where parties in interest are fiduciaries with respect to a plan. A fiduciary who causes or allows a prohibited transaction to occur may be subject to civil liability under ERISA, and the Internal Revenue Code imposes an excise tax on any party in interest who participated in the prohibited transaction. The relevant underlying security issuer, the depositor, any credit support provider, any swap counterparty or guarantor, the trustee and their affiliates may be parties in interest with respect to plans. The United States Department of Labor ("DOL") has issued regulations (referred to as the "plan asset regulations") concerning what constitutes assets of a plan when a plan invests in another entity. 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 specified other entities in which a plan makes an "equity" investment could be deemed for purposes of ERISA and Section 4975 of the Internal Revenue 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, 25% or more of the value of any class of equity interests in that entity is held by benefit plan investors. For purposes of the plan asset regulations, the term "benefit plan investor" includes (1) 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, (2) any plan described in Section 4975(e)(1) of the Internal Revenue Code and (3) any entity whose underlying assets include plan assets by reason of a plan's investment in the entity. Certain other exceptions from such treatment under the plan asset regulations may apply to an entity in which a plan makes an equity investment. Under one such exception, the assets of such an entity are not considered to be plan assets where a plan makes an investment in an equity interest that is a "publicly-offered security". A "publicly-offered security" is a security that is (a) "freely transferable", (b) part of a class of securities that is "widely held" and (c) part of a class of securities that is registered under Section 12 of the Exchange Act or sold to the plan as part of an offering of securities to the public pursuant to an effective registration statement under the Securities Act and the class of securities of which such security is a part is registered under the Exchange Act within 120 days (or such later time as may be allowed by the Securities and Exchange Commission) after the end of the fiscal year of the issuer during which the offering of such securities to the public occurred. Unless otherwise specified in the prospectus supplement, it is anticipated that the Units will be publicly-offered securities and the assets of the trust will not be considered to be assets of any plan investing in the Units pursuant to the plan asset regulations. If specified in the applicable prospectus supplement, Units may not be purchased, held by or transferred to any person unless that person is not a plan, is not a governmental or other plan subject to restrictions substantially similar to Title I of ERISA or Section 4975 of the Internal Revenue Code, and is not acquiring the Units with the assets of any such plan or other plan. The related trust agreement will provide that any purported transfer in violation of this restriction (referred to as the "no plan restriction") shall be void from the beginning. If the no plan restriction applies, each person who acquires a Unit, and each fiduciary which causes any such person to acquire any Unit, in its individual as well as its fiduciary capacity, will be deemed by such purchase, holding or acquisition, on each date on which the Unit is held by such person, to have represented that it is not a plan or any governmental or other plan subject to requirements substantially similar Title I of ERISA or Section 4975 of the Internal Revenue Code and is not using the assets of any such plan to purchase that Unit. The related trust agreement will provide that each person that acquires a Unit, and each fiduciary who causes a person to acquire a Unit, in such fiduciary's individual capacity, agrees to indemnify and hold harmless the depositor, the trustee, MS&Co. and their respective affiliates from any cost, damages, loss or expense, incurred by them as a result of the representations of that purchaser or fiduciary not being true. However, if the applicable prospectus supplement specifies that the "25% test" shall apply, Units will be issued only as definitive Units in registered form and only after a definitive purchase agreement has been executed and delivered. A definitive purchase agreement will also be required to be obtained from any proposed transferee of a Unit to which the 25% test applies. That agreement will contain additional representations regarding whether the purchaser or proposed transferee is a benefit plan investor (within the meaning of the plan asset regulations) or plan or is acquiring the Units with assets of a benefit plan investor or plan. No such purchase or proposed transfer will be permitted to the extent that it would cause the ownership of Units by benefit plan investors to be "significant" within the meaning of the plan asset regulations immediately after the purchase or proposed transfer, unless no Units are held by plans. In addition, the depositor and the trustee will agree that, after the initial distribution of a particular series of Units subject to the 25% test, if any Units are held by plans, neither they nor their affiliates will acquire any Units of that series, unless that acquisition would not cause the ownership by benefit plan investors immediately following the acquisition to be "significant". The related trust agreement will provide that each person that acquires a Unit, and each fiduciary who causes a person to acquire a Unit, in such fiduciary's individual capacity, agrees to indemnify and hold harmless the depositor, the trustee, MS&Co. and their respective affiliates from any cost, damages, loss or expense, incurred by them as a result of the representations of that purchaser or fiduciary not being true. Alternatively, if the applicable prospectus supplement specifies that the "prohibited transaction exemption restriction" shall 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 Internal Revenue 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), PTCE 95-60 (relating to investments by insurance company general 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. If the prohibited transaction exemption restriction applies, by its purchase of any Unit, the purchaser will be deemed to have represented and warranted that for so long as it holds the Unit either that: o It is not a plan, an entity whose underlying assets include the assets of any such plan, or an 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 Internal Revenue Code, or o 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 Internal Revenue Code (or, in the case of a governmental plan, any substantially similar federal, state or local law) unless an exemption is available (all of the conditions of which have been satisfied) or in any other violations of an applicable requirement of ERISA, the Internal Revenue Code or other law. The related trust agreement will provide that each person that acquires a Unit, and each fiduciary who causes a person to acquire a Unit, in such fiduciary's individual capacity, agrees to indemnify and hold harmless the depositor, the trustee, MS&Co. and their respective affiliates from any cost, damages, loss or expense, incurred by them as a result of the representations of that purchaser or fiduciary not being true. The applicable prospectus supplement may also specify a treatment with respect to ERISA and plan investors different from any of the foregoing. The underlying security issuance agreement may also contain considerations under ERISA and the Internal Revenue Code in connection with purchases of the underlying securities that a plan proposing to invest in the Units should note. 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 an investment will not result in a prohibited transaction and will satisfy the other requirements of ERISA and the Internal Revenue 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 MS&CO. 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. Plan of Distribution The Units may be offered and sold to or through MS&Co. as underwriter, dealer or agent, or through one or more other underwriters, dealers or agents, or directly to purchasers. The applicable prospectus supplement will describe 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 the Units and the proceeds to the depositor from that 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 the Units may be listed, and the place and time of delivery of the Units offered by that prospectus supplement. If underwriters are used in a sale of Units, the 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. 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 MS&Co., an affiliate of the depositor. Unless otherwise described in the applicable prospectus supplement, the obligations of the underwriters to purchase Units will be subject to specified conditions precedent, and the underwriters will be obligated to purchase all Units of a particular series, if any such Units are purchased. The initial public offering price for particular Units and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. In order to facilitate the offering of the Units, the certain underwriters and selling group members and their respective affiliates may engage in transactions that stabilize, maintain or otherwise affect the price of the Units or any other securities the prices of which may be used to determine payments on the Units. Specifically, the underwriters may sell more Units than they are obligated to purchase in connection with the offering, creating a short position for their own accounts. A short sale is covered if the short position is no greater than the number or amount of securities available for purchase by the agents under any overallotment option. The underwriters can close out a covered short sale by exercising the overallotment option or purchasing the Units in the open market. In determining the source of securities to close out a covered short sale, the agents will consider, among other things, the open market price of the Units compared to the price available under the overallotment option. The underwriters may also sell Units or any other securities in excess of the overallotment option, creating a naked short position. The underwriters must close out any naked short position by purchasing Units in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Units in the open market after pricing that could adversely affect investors who purchase in the offering. As an additional means of facilitating the offering, the underwriters may bid for, and purchase, Units or any other securities in the open market to stabilize the price of the Units or of any other securities. Finally, in any offering of Units through a syndicate of underwriters, the underwriting syndicate may also reclaim selling concessions allowed to an underwriter or a dealer for distributing the Units in the offering, if the syndicate repurchases previously distributed Units to cover syndicate short positions or to stabilize the price of Units. Any of these activities may raise or maintain the market price of the Units above independent market levels or prevent or retard a decline in the market price of these securities. The agents are not required to engage in these activities, and may end any of these activities at any time. 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 that agent will be described, 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 described in the prospectus supplement. If specified in the applicable prospectus supplement, the depositor will authorize agents, underwriters or dealers to solicit offers by specified institutions to purchase Units at the public offering price described in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a future date specified in the prospectus supplement. Such contracts will be subject only to the conditions described in the prospectus supplement and the prospectus supplement will specify the commissions payable for solicitation of such contracts. Sales of certain series of Units may be restricted to "qualified institutional buyers" or "QIBs" 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 of any such liabilities. 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 their businesses. If specified in the applicable prospectus supplement, underlying securities may be deposited into the related trust in connection with a distribution of those underlying securities by one or more affiliates of the depositor pursuant to a registration statement under the Securities Act. 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 MS&Co. 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, MS&Co. or one of its affiliates may be engaged by underlying security issuers as an underwriter or placement agent, in an advisory capacity or in other business arrangements. In addition, MS&Co. or its affiliates may make a market in securities of any underlying security issuer, including underlying securities that may constitute part of the trust property of a particular trust. Each Unitholder will be deemed to have acknowledged and agreed that MS&Co. or its affiliates may engage in any kind of business with, or have an investment in, any underlying security issuer or related persons, and in that connection, may obtain or be in possession of non-public information regarding particular underlying 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 such affiliate will be named, and its affiliation with the underwriters described, in the applicable prospectus supplement. Also, MS&Co., affiliates of the underwriters may act as principals or agents in connection with market-making transactions relating to the Units. Neither MS&Co, nor its affiliates is obligated to do so, however, and the agents may discontinue making a market at any time without notice. The underwriters, their affiliates or agents may use this prospectus in connection with any of those transactions. No assurance can be given as to the liquidity of any trading market for the Units. Validity of Units Cleary, Gottlieb, Steen & Hamilton, Washington, D.C., or other counsel identified in the applicable prospectus supplement will pass upon certain legal matters relating to the offering of the of the Units, including the validity of the Units. INDEX OF DEFINED TERMS 25% test.......................................................80 benefit plan investor..........................................80 business day...................................................47 calculation date...............................................52 callable series................................................56 CD rate........................................................53 Clearstream....................................................59 commercial paper rate..........................................51 commercial paper rate determination rate.......................51 composite quotations...........................................49 concentrated underlying security...............................19 corporate debt.................................................27 depositaries...................................................59 depositor optional exchange....................................57 direct participants............................................61 disqualification event.........................................19 disqualified credit support....................................20 disqualified swap transaction..................................20 disqualified underlying security...............................19 DOL............................................................79 DTC............................................................59 early termination date.........................................40 eligible underlying securities.................................29 eligible underlying security issuer............................29 ERISA..........................................................79 Euroclear......................................................59 excess expense event...........................................22 Exchange Act...................................................11 exchangeable series............................................56 extraordinary trust expenses...................................26 FASIT..........................................................66 federal funds rate.............................................53 GTC Notes......................................................27 indexed commodity..............................................55 indexed currency...............................................55 index-linked Units.............................................55 indirect participants..........................................62 integration regulations........................................75 ISDA...........................................................36 ISDA Definitions...............................................36 ISDA Master Agreement..........................................36 LIBOR determination date.......................................50 LIBOR Reuters..................................................50 LIBOR Telerate.................................................50 liquidation event..............................................20 money market yield.............................................51 no plan restriction............................................80 notional amount................................................47 parties in interest............................................79 plan asset regulations.........................................79 plans..........................................................79 prohibited transaction exemption restriction...................81 PTCE...........................................................81 qualified professional asset manager...........................81 repo counterparty..............................................42 Reuters LIBO page..............................................50 Rule 3a-7......................................................45 SEC............................................................11 spread.........................................................48 spread multiplier..............................................48 stock index....................................................55 swap premium...................................................66 Telerate page 3750.............................................50 Treasury rate..................................................52 trust wind-up event............................................22 underlying security default....................................21 underlying security disclosure document........................29 underlying security issuance agreement.........................31 underlying security registration statement.....................30 United States real property interest...........................78 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution The following are the expenses of the issuance and distribution of the securities being registered, all of which will be paid by the registrant. Other than the registration fee, all of these expenses are estimated. Filing Fee for Registration Statement............................... $ 460,000 Legal Fees and Expenses............................................. 500,000 Accounting Fees and Expenses........................................ 120,000 Trustee's Fees and Expenses (including counsel fees)................ 150,000 Listing Fees and Expenses........................................... 50,000 Printing and Engraving Fees......................................... 200,000 Rating Agency Fees.................................................. 200,000 Miscellaneous....................................................... 100,000 Total............................................................... $ 1,780,000 Item 15. Indemnification of Officers and Directors The Bylaws of MS Structured Asset Corp. (the "Corporation") 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 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 of the Corporation 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." The form of Underwriting Agreement filed as Exhibit 1.1, and incorporated herein by reference, contains some provisions relating to the indemnification of the Corporation's directors, officers and controlling persons. Item 16. Exhibits Exhibit Number Description -------------- ----------- 1.1 -- Form of Underwriting Agreement(1) 3.1 -- Certificate of Incorporation(1) and Certificate of Amendment(2) 3.2 -- By-Laws(2) 4.1 -- Standard Terms for 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(1) 23.1 -- Consent of Cleary, Gottlieb, Steen & Hamilton (included in Exhibits 5.1 and 8.1) 24.1* -- Power of Attorney, dated 12 November 2002 25.1 -- Statement of Eligibility of Trustee - -------------- * Previously filed. (1) Previously filed as part of the registration statement of MS Structured Asset Corp. (filed under the name MSDW Structured Asset Corp.) on Form S-3 No. 333-64879, pre-effective amendment number 3, dated July 7, 1999. (2) Previously filed as part of a current report of MS Structured Asset Corp. on Form 8-K Exchange Act File No. 001-16443 dated November 12, 2002. Item 17. Undertakings 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 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. (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 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. 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, as amended, 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 this Amendment No. 2 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in New York, New York on the 20th day of February, 2003. MS STRUCTURED ASSET CORP. By: /s/ Matthew J. Zola ------------------- Name: Matthew J. Zola Title: Director
Signature Title Date --------- ----- ---- February 20, 2003 - -------------------------------- Matthew J. Zola Director, President and Chief Executive Officer (Principal Executive Officer) * February 20, 2003 - -------------------------------- Michael B. Pohly Director, Treasurer, Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) * February 20, 2003 - -------------------------------- Donald J. Puglisi Director
o Matthew J. Zola, by signing his name hereto, does sign this document on behalf of each of the persons identified above for whom he is attorney-in-fact pursuant to a power of attorney duly executed by such person and previously filed with the Securities and Exchange Commission. /s/ Matthew J. Zola ------------------- Matthew J. Zola EXHIBIT INDEX Exhibit Number Description 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 23.1 -- Consent of Cleary, Gottlieb, Steen & Hamilton (included in Exhibits 5.1 and 8.1) 25.1 -- Statement of Eligibility of Trustee EX-4.1 3 ex4-1redline220.txt Exhibit 4.1 STRUCTURED ASSET TRUST UNIT REPACKAGINGS (SATURNSSM) - -------------------------------------------------------------------------------- STANDARD TERMS FOR TRUST AGREEMENTS MS Structured Asset Corp. (as Depositor) and LaSalle Bank National Association (as Trustee) - -------------------------------------------------------------------------------- February 20, 2003 TABLE OF CONTENTS Page ---- ARTICLE I Definitions; Construction SECTION 1.01. Definitions.....................................................1 SECTION 1.02. Rules of Construction..........................................15 SECTION 1.03. Article and Section References.................................15 ARTICLE II Declaration of Trust; Entry into Swap Agreement SECTION 2.01. Creation and Declaration of Trust; Assignment of Underlying Securities.....................................................15 SECTION 2.02. Entry into Swap Agreement and Distribution Agreement...........16 SECTION 2.03. Acceptance by Trustee..........................................17 SECTION 2.04. Representations and Warranties of the Depositor................17 SECTION 2.05. Breach of Representation or Warranty...........................18 SECTION 2.06. Agreement to Authenticate and Deliver Units....................18 ARTICLE III Trust Powers; Administration of the Trust Property SECTION 3.01. Trust Property.................................................18 SECTION 3.02. Administration of the Trust....................................19 SECTION 3.03. Collection of Certain Underlying Security Payments.............20 SECTION 3.04. Sale...........................................................20 SECTION 3.05. Unit Account...................................................21 SECTION 3.06. Investment of Funds in the Accounts............................23 SECTION 3.07 Retained Interest..............................................24 SECTION 3.08. Access to Certain Documentation................................24 ARTICLE IV Distributions and Reports to Unitholders SECTION 4.01. Distributions..................................................24 SECTION 4.02. Reports to Unitholders and Others..............................24 SECTION 4.03. Calculation of Interest Rates..................................27 SECTION 4.04. Compliance with Tax Reporting and Withholding Requirements.....27 SECTION 4.05. Preservation of Information, Communications to Holders.........27 ARTICLE V The Units SECTION 5.01. The Units......................................................28 SECTION 5.02. Execution, Authentication and Delivery.........................28 SECTION 5.03. Registration; Registration of Transfer and Exchange............29 SECTION 5.04. Mutilated, Destroyed, Lost and Stolen Units....................30 SECTION 5.05. Distributions in Respect of Units..............................31 SECTION 5.06. Persons Deemed Owners..........................................31 SECTION 5.07. Cancellation...................................................32 SECTION 5.08. Currency of Distributions in Respect of Units; Redenomination..32 SECTION 5.09. Appointment of Paying Agent....................................32 SECTION 5.10. Authenticating Agent...........................................33 SECTION 5.11. Issuance and Transfer Restrictions.............................34 SECTION 5.12. Optional Exchange..............................................36 SECTION 5.13. Callable Series................................................38 SECTION 5.14. Additional Issuance............................................39 ARTICLE VI The Depositor SECTION 6.01. Liability of the Depositor.....................................39 SECTION 6.02. Limitation on Liability of the Depositor.......................39 SECTION 6.03. Depositor May Purchase Units...................................40 SECTION 6.04. Preparation and Filing of Exchange Act Reports; Obligations of the Depositor...............................................40 SECTION 6.05. Preferential Collection of Claims Against......................57 ARTICLE VII Rights of Unitholders SECTION 7.01. Voting Rights with Respect to Underlying Securities............41 SECTION 7.02. Amendments and Waivers Under Swap Agreement and Guarantee......42 ARTICLE VIII Default on Underlying Securities and Permitted Investments SECTION 8.01. Realization Upon Default.......................................43 ARTICLE IX Trust Wind-Up Events and Liquidation Events SECTION 9.01. Liquidation Events.............................................43 SECTION 9.02. Trust Wind-Up Events...........................................44 SECTION 9.03. Expense Event..................................................45 SECTION 9.04. Special Depositor Wind-Up Event................................45 SECTION 9.05. Disposition of Trust Property..................................45 SECTION 9.06. Limitation on Notice Requirement...............................49 ARTICLE X Concerning the Trustee SECTION 10.01. Duties of Trustee.............................................49 SECTION 10.02. Certain Matters Affecting the Trustee.........................50 SECTION 10.03. Limitation on Liability of Trustee............................51 SECTION 10.04. Trustee May Own Units.........................................52 SECTION 10.05. Trustee Fees and Expenses; Limited Indemnification............52 SECTION 10.06. Eligibility Requirements for Trustee..........................53 SECTION 10.07. Resignation or Removal of the Trustee.........................53 SECTION 10.08. Successor Trustee.............................................54 SECTION 10.09. Merger or Consolidation of Trustee............................54 SECTION 10.10. Appointment of Co-Trustee.....................................55 SECTION 10.11. Appointment of Office or Agency...............................55 SECTION 10.12. Representations and Warranties of Trustee.....................56 SECTION 10.13. Limitation of Powers and Duties...............................57 ARTICLE XI Termination SECTION 11.01. Termination of the Trust......................................57 ARTICLE XII Miscellaneous Terms SECTION 12.01. Amendment of Trust Agreement; Waivers.........................58 SECTION 12.02. Counterparts..................................................60 SECTION 12.03. Limitation on Rights of Unitholders...........................60 SECTION 12.04. Governing Law.................................................60 SECTION 12.05. Notices.......................................................60 SECTION 12.06. Severability of Terms.........................................61 SECTION 12.07. Perfection of Swap Counterparty Security Interest.............61 SECTION 12.08. No Recourse...................................................61 SECTION 12.09. Non-Petition..................................................61 SECTION 12.10. Merger and Consolidation......................................62 SECTION 12.11. Conflict With Trust Indenture Act.............................62 EXHIBIT A Form of Trust Agreement EXHIBIT B-1 Form of Registered Unit STRUCTURED ASSET TRUST UNIT REPACKAGINGS (SATURNSSM) STANDARD TERMS FOR TRUST AGREEMENTS LaSalle Bank National Association, as Trustee MS Structured Asset Corp., as Depositor These Standard Terms for Trust Agreements, dated February 20, 2003 ("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 (SATURNSSM) described in the Prospectus dated February 20, 2003 and the applicable Prospectus Supplement. Any such Trust Agreement may be in the form of Exhibit A hereto or such other form as MS 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 any Schedules 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 Schedules attached thereto, and these Standard Terms, the Trust Agreement and such Schedules shall control. The expression herein that specific terms may be supplemented, altered or otherwise changed by a Trust Agreement shall not be construed to mean that other terms may not. ARTICLE I Definitions; Construction SECTION 1.01. Definitions. Except as otherwise specified herein, the applicable Trust Agreement or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of these Standard Terms: "25% Test": The restriction on Transfer of Units set forth in Section 5.11(c)(i). "Account": As defined in Section 3.06. "Affected Transaction": As defined in the Swap Agreement. "Affected Underlying Securities": With respect to any Liquidation Event, the Underlying Securities affected by an Underlying Security Default, Disqualified Underlying Securities, or Underlying Securities related to a Termination Event. "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. "Authenticating Agent": As defined in Section 5.10. "Available Funds": With respect to any Distribution Date, (i) all amounts received by the Trustee on or with respect to the Underlying 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(a)(ix), in each case on deposit in the Unit Account, and available for distribution, on such Distribution Date. "Benefit Plan Investor": Any (i) "employee benefit plan" (as defined in Section 3(3) of ERISA), whether or not it is subject to the fiduciary responsibility provisions of Title I of ERISA, including any U.S. governmental plans and any foreign governmental or private pension plans, (ii) "plan" described in Section 4975(e)(1) of the Code, or (iii) entity whose underlying assets include plan assets by reason of a plan's investment in such entity or otherwise. "Book-Entry Unit": A Unit represented by a Global Security. "Business Day": As specified in the Trust Agreement. "Calculation Agent": As specified in the Trust Agreement, if any. "Callable Series": A Series so designated in the Trust Agreement which grants one or more specified persons the right to purchase all or a portion of the Units of any given Series. "Call Date": As defined in Section 5.13. "Call Option": As specified in the Trust Agreement. "Call Rights": A Call Option or other right specified in the Trust Agreement. "Call Price": As defined in Section 5.13. "Clearstream": Clearstream Banking, S.A. "Certificate": A certificate in the form attached as Exhibit B1, evidencing a Registered Unit. "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 Trust Agreement. "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 Underlying Security": Any Underlying Security that constitutes 10% or more of the Trust Property. Unless the Trust Agreement shall specify the method of determining whether an Underlying Security constitutes 10% or more of the Trust Property, such determination will be based upon the principal amount of the Underlying Securities. "Corporate Trust Office": The Trustee's offices at 135 S. LaSalle Street, Suite 1625, Chicago, Illinois 60603, Attention: Asset-Backed Securities Trust Services Group-SATURNS, 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 Trust Agreement. "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, registered in the name of the beneficial owner thereof or its nominee. "Depositary": DTC or, if so provided in the Trust Agreement, Euroclear or Clearstream; or another depositary specified in the Trust Agreement. "Depositor": MS 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 that has a value to the Trust of 10% or more of the Trust Property if a Concentrated Underlying Security of the related Credit Support Provider would be a Disqualified Underlying Security. "Disqualified Underlying Security": Unless otherwise specified in the applicable Trust Agreement, an Underlying Security as to which the applicable issuer of any Concentrated Underlying Security, other than a government security has ceased to be an Eligible Underlying Security Issuer (other than due to a reduction in the credit rating of the related underlying security or underlying security issuer) and no additional means of providing current information regarding that Underlying Security issuer is described in the applicable prospectus supplement, and either (i) twelve months have elapsed, or (ii) the applicable issuer has formally terminated its reporting obligations under the Exchange Act, unless the Depositor, after discussion with the staff of the SEC, determines that the Depositor would not be required to provide information with respect to that Underlying Security issuer if the Trust continued to hold such Underlying Security. "Disqualified Transaction": Any Transaction under a Swap Agreement that (i) has a value to the trust equal to 10% or more of the Trust Property if a Concentrated Underlying Security of the related Swap Counterparty would be a Disqualified Underlying Security, or (ii) is a credit swap transaction with a notional amount on the date of formation of the Trust of 10% or more of the Trust Property if a Concentrated Underlying Security of the related Reference Entity would be a Disqualified Underlying Security. "Distribution Agreement": The agreement between each Distribution Participant and the Depositor, relating to the distribution of the Units. "Distribution Date": As specified in the Trust Agreement. "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. "Early Termination Date": As defined in the Swap Agreement. "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. "Eligible Underlying Security": A designated security or pool of securities that: (i) were registered under the Securities Act, otherwise publicly issued, or are eligible for resale pursuant to Rule 144(k) under the Securities Act, and have been purchased by the depositor or one or more of its affiliates and deposited with the trust. (ii) consist of one or more of the following issued under the laws of the United States, any U.S. State or any foreign jurisdiction: (A) debt obligations or investment grade term preferred stock issued or issued and guaranteed by one or more corporations, general or limited partnerships, limited liability companies, business trusts, banking organizations or insurance companies or other organizations (for purposes of the definition of Underlying Securities, "Corporate Debt"); (B) equipment trust certificates, including enhanced equipment trust certificates and pass-through equipment trust certificates (for purposes of the definition of Underlying Securities, "Equipment Trust Certificates"); (C) trust preferred capital securities and other similar preferred securities of one or more trusts or other special purpose legal entities (for purposes of the definition of Underlying Securities, "Trust Preferred Capital Securities"); (D) asset-backed securities of one or more trusts or other special purpose legal entities issued pursuant to a registration statement filed with the SEC on Form S-3 or any successor to such form (for purposes of the definition of Underlying Securities, "Asset Backed Securities"); (E) an obligation issued or guaranteed by an Eligible Sovereign or any agency or instrumentality thereof for the payment of which the full faith and credit of the Eligible Sovereign is pledged, where Eligible Sovereigns include the United States of America, the Republic of France, the Federal Republic of Germany and the states thereof, the United Kingdom, Canada and the provinces thereof, Japan, the Kingdom of Belgium, the Kingdom of the Netherlands, the Republic of Italy and any other sovereign specified in the Trust Agreement; (F) the obligations of one or more of the following government sponsored enterprises ("GSEs"): Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Student Loan Marketing Association, Resolution Funding Corporation, Federal Home Loan Banks (to the extent such obligations represent the joint and several obligations of the twelve Federal Home Loan Banks), Tennessee Valley Authority, Federal Farm Credit Banks and any other government sponsored enterprise specified in the Trust Agreement that, at the time of the offering of the Units, has outstanding securities held by non-affiliates with an aggregate market value of at least $75,000,000 and that makes information publicly available comparable to that of Exchange Act reporting companies; (G) certificates evidencing undivided fractional interests in a trust, the assets of which consist of promissory notes (the "GTC Notes"), payable in U.S. Dollars, of a certain foreign government, backed a full faith and credit guaranty issued by the United States of America, acting through the Defense Security Assistance Agency of the Department of Defense, of the due and punctual payment of 90% of all payments of principal and interest due on the GTC Notes and a security interest in collateral, consisting of non-callable securities issued or guaranteed by the United States government thereof, sufficient to pay the remaining 10% of all payments of principal and interest due on the GTC Notes; or (H) an obligation issued by the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the International Finance Corporation or the European Bank for Reconstruction and Development, or another multilateral development bank that has a comparable volume of outstanding securities and files with the SEC comparable publicly available information, and the securities of which are exempted from registration under the Securities Act; (iii) with respect to a Concentrated Underlying Security that is Corporate Debt, a Trust Preferred Capital Security or an Equipment Trust Certificate, the Depositor must reasonably believe that one of the following additional conditions is met: (A) the issuer is eligible to use SEC Form S-3 or F-3 for a primary offering of common equity or an offering of non-convertible investment grade securities; or (B) the underlying securities are guaranteed by a direct or indirect parent company of the issuer, or a subsidiary of the issuer or the issuer's direct or indirect parent company; and (1) the issuer, guaranteeing parent company or guaranteeing subsidiary of the parent company is eligible to use SEC Form S-3 or F-3 for a primary offering of common equity or an offering of non-convertible investment grade securities, and (2) the issuer or the relevant parent company's periodic reports meet the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC. In the case of Trust Preferred Capital Securities or Equipment Trust Certificates, the issuer of the obligation held by, or supporting the issuance of, the trust or other special purpose legal entity issuing the Trust Preferred Capital Securities or Equipment Trust Certificates which may be deemed to be the issuer for the foregoing purposes. (iv) If a Concentrated Underlying Security is an Asset-Backed Security, the Depositor must reasonably believe that the related issuer has at least $75,000,000 in outstanding securities held by non-affiliates and that either: (A) the related issuer will be subject to the reporting requirements of the Exchange Act, or (B) the related issuer was subject to the reporting requirements of the Exchange Act and the Trust undertakes to provide copies to investors of the payment date reports and other reports provided by such issuer to the Trust, and such payment date reports and other reports provided by the related issuer to the Trust are comparable to the regular reports of issuers of asset-backed securities that file regular reports under the Exchange Act. (v) were purchased by the Depositor or one or more of its affiliates in the secondary market (either directly or through an affiliate of the Depositor) and if the Depositor or any of its affiliates acted as an underwriter or placement agent with respect to such Underlying Security, three months have elapsed since the related allotment and any unsold allotment have been sold out; unless such Underlying Securities are designated "Primary Offering Securities" in the applicable Trust Agreement and no such Underlying Security exceeds 7.5% of Trust Property. "Eligible Underlying Security Issuer": The related issuer of each Underlying Security that satisfies the definition of Eligible Underlying Security. "ERISA": The Employee Retirement Income Security Act of 1974, as amended, including any successor or amendatory statutes. "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 9.03(a). "Exchange Act": The Securities Exchange Act of 1934, as amended. "Exchange Rate Agent": Unless otherwise specified in the Trust Agreement, MS&Co. or an Affiliate or agent of MS&Co. designated by MS&Co.. "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). "Fitch": Fitch Ratings Inc. "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 deposited with or on behalf of DTC or other depository specified in the Trust Agreement and, in the case of a Registered Unit, registered in the name of the DTC, such depository or its nominee. "Guaranty": The Guaranty (if any) identified in the Trust Agreement of the obligations of the Swap Counterparty under the Swap Agreement. If the Trust Agreement does not specify a Guaranty, references to the Guaranty 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 Trust Agreement), 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 Swap Rate Accrual Period": The period from and including the Closing Date to but excluding the next Swap Payment Date. "Initial Underlying Security Accrual Period": The period from and including the Closing Date to but excluding the next Underlying Security Payment Date. "Insolvency Law": As defined in Section 12.09. "Interest Rate": As specified in the Trust Agreement. "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 9.01. "Maximum Reimbursable Amount": As specified in the Trust Agreement (or any other amount specified by the party agreeing to indemnify the Trustee). "Moody's": Moody's Investors Service, Inc. "MS&Co.": Morgan Stanley & Co. Incorporated. "No Plan Restriction": The restriction on transfer of Units set forth in Section 5.11(c)(iii). "Notional Amount": A notional amount specified in the Trust Agreement 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 Fitch, D-1+ or AAA by Fitch; (ii) demand and time deposits in, certificates of deposit of, or banker's 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 Fitch, F1 or AAA by Fitch (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-1 or Aaa by Moody's, A-1+ or AAA by S&P, and, if rated by Fitch, Fl+ or AAA by Fitch; (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 Fitch, Fl+ by Fitch; (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 Fitch, F1+ or AAA by Fitch. Copies of any repurchase agreement entered into will be delivered to the Rating Agencies, if any; and (v) 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). 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. ss. 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. "Plan": Any (i) "employee benefit plan" (as defined in Section 3(3) of ERISA) subject to the fiduciary responsibility provisions of Title I of ERISA, (ii) "plan" described in Section 4975(e)(1) of the Code subject to Section 4975 of the Code or (iii) entity whose underlying assets include plan assets by reason of a plan's investment in such entity or otherwise. "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. "Prohibited Transaction Exemption Restriction": The restriction on Transfer of Units set forth in Section 5.11(c)(ii). "Rating Agencies": As specified in the Trust Agreement. "Rating Agencies 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. "Record Date": As specified in the Trust Agreement. "Redenomination Date": As specified in Section 5.08. "Reference Entity": As specified in the Trust Agreement. "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's knowledge of and familiarity with the particular subject. "Retained Interest": If applicable, with respect to any Underlying 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 Trust Agreement, held by the Person so specified in such Trust Agreement. "S&P": Standard & Poor's, a division of The McGraw-Hill Companies, Inc. "Scheduled Final Distribution Date": As specified in the Trust Agreement. "SEC": The United States Securities and Exchange Commission. "Securities Act": The Securities Act of 1933, as amended. "Securities Intermediary": LaSalle Bank National Association acting in the capacity as a securities intermediary hereunder. "Selling Agent": Unless otherwise specified in the Trust Agreement, MS&Co. or any Affiliate of MS&Co. designated by it. "Series": All of the Units issued by a particular Trust. "Special Depositor Wind-Up Event": As defined in Section 9.04. "Specified Currency": Unless otherwise specified in the Trust Agreement, United States Dollars. "Specified Percentage": 66 2/3%, or such higher percentage of Units of any class or series as is specified in the Trust Agreement. "State": Any one of the 50 states of the United States or the District of Columbia. "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 Trust Agreement. 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 Trust Agreement. "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 Trust Agreement 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 Trust Agreement. "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 Trust Agreement. "Swap Payment Date": As specified in the Trust Agreement. "Swap Rate": As specified in the Trust Agreement. "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. "Swap 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. "Trust Agreement": 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 Underlying 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 Underlying 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 Underlying 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. "Trigger Amount": As specified in the Trust Agreement. "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 Wind-up Event": As defined in Section 9.02. "Trustee": LaSalle Bank 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. "Underlying Securities": As specified in the Trust Agreement. "Underlying Security Accrual Period": The Initial Underlying Security Accrual Period and each period from and including a Underlying Security Payment Date to but excluding the next succeeding Underlying Security Payment Date. "Underlying Security Issuance Agreement": The indenture, fiscal agency agreement, or other agreement with respect to a Underlying Security which sets forth the covenants and agreements of the Underlying Security Issuer in connection with issuance of the Underlying Security. "Underlying Security Amount": With respect to each Underlying Security Payment Date, an amount equal to the accrued interest and/or other payment obligation calculated with reference to the applicable Underlying Security for the immediately preceding applicable Underlying Security Accrual Period at the applicable Underlying Security Rate. "Underlying Security Default": Unless otherwise specified in the Trust Agreement, (i) the acceleration of the outstanding Underlying Securities under the terms of the Underlying Securities and/or the applicable Underlying Security Issuance Agreement and failure to pay the accelerated amount on the acceleration date; (ii) the failure of the Underlying Security Issuer (or any applicable guarantor on its behalf) to pay an installment of principal of, or any amount of interest due on, the Underlying Securities after the due date thereof and after the expiration of any applicable grace period; (iii) the initiation by the Underlying Security Issuer or applicable guarantor of any proceedings seeking a judgment of insolvency or bankruptcy or seeking relief under bankruptcy or insolvency laws or similar laws affecting creditor's rights; (iv) if not otherwise addressed in (iii), the passage of thirty (30) calendar days since the day upon which any person or entity initiates any proceedings against the Underlying Security Issuer or applicable guarantor seeking a judgment of insolvency or bankruptcy or seeking relief under bankruptcy or insolvency laws or similar laws affecting creditor's rights and such proceeding has not been dismissed prior to such thirtieth day; or (v) other events specified in the Trust Agreement. "Underlying Security Issuer": As specified in the Trust Agreement. "Underlying Security Payment Date": As specified in the Trust Agreement. "Underlying Security Rate": As specified in the Trust Agreement. "Underlying Security Trustee": As specified in the Trust Agreement, if applicable. "Unit Account": As defined in Section 3.05. "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 Underlying 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. "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. "Warrant": A Call Option or other right specified in the Trust Agreement. "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 Underlying Securities. (a) The Depositor, concurrently with the execution and delivery of the Trust Agreement, Transfers to the Trustee, in trust, 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 Underlying 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 Underlying Securities with the Trustee by physical delivery of such Underlying Securities, duly endorsed, to the Trustee, its nominee or in blank or cause the Underlying 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 Underlying Security, deliver or cause to be delivered to the Trustee all documents necessary to transfer such Underlying Security to the Trustee. In the event that the Depositor is unable to deliver any of the Underlying Securities on the Closing Date and such Underlying Securities constitute 5% or less of Trust Property, the Units will nevertheless be issued and the Depositor will assign to the Trustee the Depositor's contractual rights to receive from MS&Co. (x) the Underlying Securities as soon as commercially practicable thereafter, and after the Closing Date, (y) the amount of any distributions paid on such Underlying Securities after the Closing Date and prior to the date of delivery of such Underlying Securities to the Trustee and (z) if delivery of the relevant Underlying Securities does not occur on or before the earlier of (I) the fifth Business Day after the Closing Date and (II) the first Distribution Date (the "Final Delivery Date"), liquidated damages equal to the greater of the specified purchase price for such Underlying Securities or the market value of such Underlying Securities as determined on the Final Delivery Date, together with accrued interest at the applicable Underlying Security rate. The Trustee will distribute any payments received pursuant to the foregoing assigned rights promptly to the Unitholders. MS&Co.'s obligation to pay the foregoing amounts will be guaranteed by Morgan Stanley. If the record date or other terms for any Underlying Security require that MS&Co. shall be entitled to receive any payment to which the Trust is entitled in whole or in part, Ms&Co. shall transfer within one Business Day, the applicable portion of such amount allocable to the Trust to the Trustee. (c) The Guarantor shall deliver the Guarantee to the Trustee for the benefit of the Unitholders. (d) The Transfer of the Underlying 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 Other Agreements. 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 each other Agreement specified in the Trust Agreement, including, without limitation, agreements evidencing or ancillary to any Call Option, any repurchase agreement, and any expense administration agreement. 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 Underlying 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 Underlying Securities or the Swap Counterparty or any other Person in connection with the Underlying 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 Underlying Securities and the related documents referred to in Section 2.01, now existing or hereafter acquired, (ii) the Swap Agreement, (iii) the Guarantee and (iv) the documents specified in the Swap 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's knowledge after the inquiry, there are not any liens or encumbrances on the Underlying 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's 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's 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's 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 Underlying 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 Underlying Securities and such other assets constituting the Trust Property, cash in an amount equal to the premium or other net payments to the Trust on the Closing Date under any Swap Agreement and 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 Underlying Securities and all payments on or collections in respect of such Underlying Securities due after a specified "Cut-off Date" set forth in the Trust Agreement; (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 Trust Agreement 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 Trust Agreement 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 Underlying 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 Underlying Securities and the Swap Agreement; to pledge the assets of the Trust (including the Underlying Securities) to secure the obligations of the Trust including obligations under the Swap Agreement; to sell the Underlying Securities through the Selling Agent in accordance with Section 9.05; 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 Underlying Securities and any Credit Support or other Trust Property and entering into the Swap Agreement as provided herein, holding the Underlying 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 Underlying 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 9.05, 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 Underlying 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 Underlying 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 Underlying Security, any Credit Support, the Swap Agreement or the Guarantee (or any other Trust Property); (ii) impair the value of any Underlying 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 Underlying Security or any Credit Support, (ii) entering into any amendment or modification of the Swap Agreement or the Underlying 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 Underlying 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 Underlying Security Payments. The Trustee shall make reasonable efforts to collect all payments required to be made pursuant to the terms of the Underlying Securities in a manner consistent with the terms of the Trust Agreement and such Underlying Securities. SECTION 3.04. Sale. The parties hereto agree and intend that the Transfer of Underlying 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 Underlying 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 and, subject to any security interest in 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 any security interest in 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 Underlying Securities, Swap Agreement and the Guarantee including: (i) all payments received by the Trustee on account of principal of the Underlying Securities; (ii) all payments received by the Trustee on account of interest (if any) on the Underlying Securities; (iii) all payments received by the Trustee on account of premium (if any) on the Underlying 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. (c) Additional Representations of the Trustee and the Securities Intermediary: (i) The Unit Account is a "securities account" within the meaning of Section 8-501 of the UCC and is held only in the name of the Trust. The Securities Intermediary is acting with respect to the Unit Account in the capacity of a "securities intermediary" within the meaning of Section 8-102(a)(l4) of the UCC. (ii) All Underlying Securities have been (i) delivered to the Securities Intermediary pursuant to the Trust Agreements; (ii) credited to the Unit Account; and (iii) registered in the name of the Securities Intermediary or its nominee, indorsed to the Securities Intermediary or in blank or credited to another securities account maintained in the name of the Securities Intermediary. In no case will any Underlying Securities or other financial asset credited to a Unit Account be registered in the name of the Depositor, payable to the order of the Depositor or specially indorsed to the Depositor except to the extent the foregoing have been specially indorsed to the Securities Intermediary or in blank. (iii) The Unit Account is an account to which financial assets are or may be credited, and the Securities Intermediary shall treat the Trustee as entitled to exercise the rights that comprise any financial asset credited to the account. (iv) The Securities Intermediary hereby agrees that the Underlying Securities credited to the Unit Account shall be treated as a "financial asset" within the meaning of Section 8-l02(a)(9) of the UCC. (v) If at any time the Securities Intermediary shall receive any order from the Trustee directing the transfer or redemption of any Underlying Securities on deposit in any Unit Account, the Securities Intermediary shall comply with such entitlement order without further consent by the Depositor or any other Person. The Securities Intermediary shall take all instructions (including without limitation all notifications and entitlement orders) with respect to each Unit Account solely from the Trustee. (d) The Securities Intermediary hereby confirms and agrees that: (i) There are no other agreements entered into between the Securities Intermediary and the Depositor with respect to any Unit Account; (ii) It has not entered into, and until the termination of this Agreement will not enter into, any agreement with any other Person relating to any Unit Account and/or any financial assets credited thereto pursuant to which it has agreed to comply with entitlement orders (as defined in Section 8-l02(a)(8) of the UCC) of such other Person; and (iii) It has not entered into, and until the termination of the Trust Agreements will not enter into, any agreement with the Depositor or the Trustee purporting to limit or condition the obligation of the Securities Intermediary to comply with entitlement orders as set forth above (e) The Trustee hereby represents and warrants as follows: (i) The Trustee maintains its books and records with respect to its securities accounts in the State of Illinois; and (ii) The Trustee has not granted any lien on the Underlying Securities nor are the Underlying Securities subject to any lien on properties of the Trustee in its individual capacity; the Trustee has no actual knowledge and has not received actual notice of any lien on the Underlying Securities (other than any liens of the Trustee in favor of the beneficiaries of the Trust Agreements); other than the interests of the Unitholders and the potential interests of the Call Option holders, the books and records of the Trustee do not identify any Person as having an interest in the Underlying Securities. (iii) The Trustee makes no representation as to (i) the validity, legality, sufficiency or enforceability of any of the Underlying Securities or (ii) the collectability, insurability, effectiveness or suitability of any of the Underlying Securities. (f) The Depositor hereby represents and warrants to the Trustee as follows (with respect to the Closing Date and any additional issuance): (i) Immediately prior to the transfer of the Underlying Securities to the applicable Trust, the Depositor owned and had good and marketable title to the Underlying Securities free and clear of any lien, claim or encumbrance of any Person. (ii) The Depositor has received all consents and approvals required by the terms of the Underlying Securities to the transfer to the Trustee of its interest and rights in the Underlying Securities as contemplated by the Trust Agreements. (iii) The Depositor has not assigned, pledged, sold, granted a security interest in or otherwise conveyed any interest in the Underlying Securities (or, if any such interest has been assigned, pledged or otherwise encumbered, it has been released), except such interests granted pursuant to the Trust Agreements. The Depositor has not authorized the filing of and is not aware of any financing statements against the Depositor that includes a description of the Underlying Securities, other than any such filings pursuant to the Trust Agreements. The Depositor is not aware of any judgment or tax lien filings against Depositor. 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 Business Day prior to the next Distribution Date. SECTION 3.07. Retained Interest. The Retained Interest, if any, in any Underlying Security or other Trust Property shall initially be held by the Person so specified in the Trust Agreement and to the extent specified therein. The Retained Interest will be established on an asset-by-asset basis. With respect to each Underlying Security, unless otherwise specified in the Trust Agreement, the Retained Interest shall be deducted by the Trustee from applicable collections in respect of such Underlying Security or other Trust Property. Unless otherwise provided in the Trust Agreement, 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 Trust Agreement with respect to which there is a Retained Interest may provide that commingled amounts received in respect of Underlying 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 Underlying 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 Underlying 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 and Others. (a) Unless otherwise specified in the applicable Trust Agreement, on each Distribution Date the Trustee shall forward or cause to be forwarded or made available to the Depositor, each Rating Agency, if any, each Swap Counterparty, each holder of Call Rights, 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) if applicable, the Interest Rate applicable to such Distribution Date and the amount of any scheduled payment of principal applicable to such Distribution Date; (iii) the aggregate stated principal amount of the Underlying Securities as of the Distribution Date and, if applicable, the interest rate applicable to the Underlying Securities for the Underlying Security Accrual Period therefor next beginning; (iv) the amount received by the Trustee on the related Underlying Securities for the Underlying 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 applicable and 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) if the ratings of the Units or the underlying securities are specified in the applicable prospectus supplement, the current ratings of the Units or the underlying securities, as applicable, if different from the ratings provided in the prospectus supplement and the names of the rating agencies that assigned such ratings; (ix) the cumulative amount of Extraordinary Trust Expense, if any, as of that Distribution Date; (x) with respect to any Trust having Trust Property which includes Credit Support, any change in the available amount of each element of Credit Support; and (xi) any additional information relevant to the Unitholders as specified in the Trust Agreement. 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. The Trustee will file a copy of such report with the SEC on Form 8-K within the time limits prescribed by such form, otherwise in compliance with SEC rules applicable to the trust, or as otherwise advised by counsel. 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 Underlying Securities, the Swap Agreement and any other assets of the Trust. (c) The Trustee will deliver to Unitholders, each Swap Counterparty and any Credit Support Provider copies of all notices and communications it receives from each Underlying Security Issuer within three (3) Business Days of receipt, including notice of any redemption of or self-tender for the Underlying Securities by the Underlying Security Issuer. The Trustee will also notify the Unitholders of any exercise of any call rights with respect to the Underlying Securities by a Swap Counterparty under the terms of a Swap Agreement. (d) If so specified in the Trust Agreement 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 Trust Agreement, 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, 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 Trust Agreement 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 Trust Agreement. 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 Trust Agreement, 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 Underlying Securities. If the Trust Agreement specifies a Calculation Agent, the Calculation Agent shall calculate the Interest Rate applicable to the Units from time to time as specified in the Trust Agreement. 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 Trust Agreement, 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 hereto (a "Certificate") or by one or more Global Securities. Unless otherwise specified in the applicable Trust Agreement, Units initially offered for sale pursuant to an effective registration statement under the Securities Act will be issued in denominations of $25 and in integral multiples of $25 in excess thereof. Unless otherwise specified in the applicable Trust Agreement, Units initially offered pursuant to an exemption from the registration requirements of the Securities Act will be issued in denominations of $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 Trust Agreement. 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 Trust Agreement. 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 Trust Agreement, to Call Option. (b) The Units issued under a Trust Agreement may be limited to a single class, or, if so specified in the Trust Agreement, 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 in definitive form or as one or more Global Securities. Unless otherwise specified in the Trust Agreement, 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, Euroclear, Clearstream, 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 a Responsible Officer. The signature of any Responsible Officer may be manual or facsimile. Units bearing the manual or facsimile signature of individuals who were at any time Responsible Officers shall be binding, notwithstanding that such individuals or any of them have ceased to be a Responsible Officer prior to the authentication and delivery of such Units or were not Responsible Officers 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's 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 executed by the Trustee by the manual signature of one of its Responsible Officers, 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's 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 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 protected purchaser or other 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 Underlying Securities in kind, by delivery of such Underlying 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 Underlying Securities) or by check mailed to the address of the Person entitled thereto as such address shall appear in the Unit Register. (b) 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 Trust Agreement, 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 Trustee 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, 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. 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 $200,000,000 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's certificate of authentication, an alternate certificate of authentication in substantially the following form: This is one of the Units described in the Trust Agreement. By: _________________________________ 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 Underlying 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 attached hereto. (b) In the event that the Trust Agreement 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 Trust Agreement, 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 9.02. 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." (c) (i) 25% Test. If the Trust Agreement provides that the 25% Test applies, only this subclause (i) of this Section 5.11(c) shall apply to the Units governed thereby. Units will be issued only as Definitive Registered Units and only after a definitive purchase agreement has been executed and delivered by the purchaser or the proposed transferee. That agreement will contain additional representations, including whether the purchaser or proposed transferee is a Benefit Plan Investor or a Plan. No transfer of any Unit shall be made to any Benefit Plan Investor, unless immediately after such transfer, either (x) no Units are held by a Plan or (y) Benefit Plan Investors hold less than 25% of the Units (for this purpose Units held by the Depositor, the Trustee or any other Person (other than a Benefit Plan Investor) that has discretionary authority or control with respect to the assets of the Trust or that provides investment advice for a fee (direct or indirect) with respect to such assets, or any affiliate of the Depositor, the Trustee of any such Person (within the meaning of Department of Labor Reg. ss. 2510.3-101(f)(3)) will not be treated as outstanding). In addition, the Depositor and the Trustee will agree that, after the initial distribution of the Units, if any Units are held by Plans, neither they nor their affiliates will acquire any Units, unless that acquisition would not cause the ownership by Benefit Plan Investors immediately following the acquisition to exceed 25% of the Units. Each Person that acquires a Unit, and each fiduciary who causes a Person to acquire a Unit, in its individual as well as its fiduciary capacity, agrees to indemnify and hold harmless the Depositor, the Trustee, MS&Co., each Distribution Participant and their respective affiliates from any cost, damages, loss or expense, incurred by them as a result of the representations made by such Person or fiduciary not being true. (ii) Prohibited Transaction Exemption Restriction. If the Trust Agreement provides that the Prohibited Transaction Exemption Restriction applies, only this subclause (ii) of this Section 5.11(c) shall apply to the Units governed thereby. By its acquisition of any Unit, the Holder will be deemed to have represented and warranted on each day that it holds such Unit either that (x) it is not a Plan, an entity whose underlying assets include the assets of any such Plan, or an 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 (y) 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) unless an exemption is available (all of the conditions of which have been satisfied) or in any other violations of an applicable requirement of ERISA, the Internal Revenue Code or other law. Each Person that acquires a Unit, and each fiduciary who causes a Person to acquire a Unit, in its individual as well as its fiduciary capacity, agrees to indemnify and hold harmless the Depositor, the Trustee, MS&Co., each Distribution Participant and their respective affiliates from any cost, damages, loss or expense, incurred by them as a result of the representations made by such Person or fiduciary not being true. (iii) No Plan Restriction. If the Trust Agreement provides that the No Plan Restriction applies, only this subclause (iii) of this Section 5.11(c) shall apply to the Units governed thereby. Units may not be purchased, held by or transferred to any Person unless that Person is not a Plan, is not a governmental or other plan subject to restrictions substantially similar to Title I of ERISA or Section 4975 of the Code, and is not acquiring the Units with the assets of any such Plan or other plan. Each Person who acquires any Unit, and each fiduciary which causes any such Person to acquire any Unit, in its individual as well as its fiduciary capacity, will be deemed by such purchase, holding or acquisition, on each date on which the Unit is held by such person, to have represented that it is not a Plan or any governmental or other plan subject to requirements substantially similar to Title I of ERISA or Section 4975 of the Code and is not using the assets of any such Plan to purchase those Units. Each Person that acquires a Unit, and each fiduciary who causes a person to acquire a Unit, in its individual as well as its fiduciary capacity, agrees to indemnify and hold harmless the Depositor, the Trustee, MS&Co., each Distribution Participant and their respective affiliates from any cost, damages, loss or expense, incurred by them as a result of the representations made by such Person or fiduciary not being true. (iv) No ERISA Restriction. If the Trust Agreement does not provide for the 25% Test, the Prohibited Transaction Exemption Restriction or the No Plan Restriction to apply, then none of Section 5.11(c)(i), (ii) or (iii) will apply to the Units governed thereby. (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 Trust Agreement and as described above. (e) If, at any time, the Trustee learns that any of the representations or warranties provided by a purchaser or potential transferee of Units is false or that any agreement made therein has been violated, any transfer of a Unit to such purchaser or 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 Trust Agreement 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) A Trust Agreement may designate a series of Units as Exchangeable Units. 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 Trust Agreement 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 Trust Agreement, 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 Trust Agreement. Alternatively, if so specified in the Trust Agreement, 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 Trust Agreement. 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 Trust Agreement 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 Trust Agreement; (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-Underlying 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 Trust Agreement; 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 Underlying Securities to be distributed by the Trustee. (c) Unless the Trust Agreement states that "Depositor Optional Exchange" does not apply to the Units of a given Series, any Units held or beneficially owned by the Depositor or its affiliates from time to time will be subject to optional exchange by the Depositor or such affiliates for a pro rata portion of the Trust Property of the related Trust. Unless the Trust Agreement otherwise provides, the Depositor may only exchange Units for a pro rata portion of the Trust Property if: (i) the exchange is made with respect to a minimum Unit Principal Balance of $250,000 and in $25 integral multiples in excess thereof; (ii) such exchange is to be effected on any January 1, April 1, July 1 or October 1 (or the succeeding Business Day if such date is not a Business Day) with 45 days notice; (iii) any persons specified in the Trust Agreement consent. (d) Any holder of a Call Option shall be entitled to exchange Units acquired upon exercise of the Call Option for a corresponding portion of Trust Property. SECTION 5.13. Callable Series. If one or more specified Persons has the right to purchase all or a portion of the Units of any given Series, the Trust Agreement 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 Trust Agreement. Upon the satisfaction of any applicable conditions to the exercise of such right to purchase of the Units described in such Trust Agreement, 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 Trust Agreement. SECTION 5.14. Additional Issuance (a) Unless otherwise provided in the Trust Agreement, upon no less than 5 days' notice to the Trustee, the Depositor may deposit additional Underlying 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 an integral multiple in excess thereof equal to the integral multiple for the minimum denomination otherwise applicable. (b) The principal amount of Underlying Securities deposited must be in the same ratio to the Unit Principal Balance (and Notional Amount, if applicable) of the Units received for such deposit as the ratio of the aggregate principal amount of the Underlying Securities deposited on the Closing Date to the aggregate Unit Principal Balance (and aggregate Notional Amount if applicable) on the Closing Date. (c) The Depositor must either arrange for any Swap Counterparty and the Trust to increase proportionally the notional amount under the Swap Agreement or arrange for an additional Swap Agreement, with a notional amount equal to the principal amount of the additional Underlying Securities deposited, to be entered into between the Trust and an additional Swap Counterparty (or a combination of an additional Swap Agreement and a notional balance increase of the existing Swap Agreement(s), with the combined effect of such proportional increase in the notional amount of the Swap Agreements). The Depositor must also arrange for an increase in or additional Credit Support corresponding to such additional issuance. (d) The Rating Agency Condition must be satisfied in connection with any such additional issuance. Each Swap Counterparty and any Credit Support Provider must consent to the additional issuance. (e) Notwithstanding the foregoing, the trust may not, except with the consent of all Unitholders issue any additional Units if that issuance would alter the classification of the Trust for U.S. federal income tax purposes. (f) Upon any deposit of additional Underlying Securities and issuance of additional Units, the additional Underlying Securities will constitute a part of the Trust Property of the related Trust and the additional Units will represent undivided fractional interests in the Trust Property of the related Trust, entitled to the same rights and subject to the same provisions as all previously issued Units of the same Class. 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 (or shall engage the Trustee to): (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, certifications 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. ARTICLE VII Rights of Unitholders SECTION 7.01. Voting Rights with Respect to Underlying Securities. (a) Within three 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 Underlying Securities, the Trustee shall give notice to the Unitholders, setting forth (i) such information as is contained in such notice to owners of Underlying Securities, (ii) a statement that the Unitholders will be entitled, subject to any applicable provision of law, any applicable terms of such Underlying Securities and any applicable provisions of the Trust Agreement (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 Underlying 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 Trust Agreement the voting rights allocable to the owners of the Underlying 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 Underlying 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) alter the currency, amount or timing of payment of, or the method or rate of accruing, any principal or interest on the Underlying Securities underlying the Units held by such Unitholder or (ii) consent to any redemption or prepayment of the Underlying Securities underlying the Units held by such Unitholder or (iii) consent to the issuance of new obligations in exchange or substitution for any Underlying Securities pursuant to a plan or refunding of the Underlying Securities or any other offer for the Underlying 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 Underlying Securities (i) would not result in a "sale or other disposition" of such Underlying Securities within the meaning of Section 1001(a) of the Code and (ii) will not alter the classification of the Trust for Federal Income Tax Purposes. The Trustee will not grant any consent (other than a unanimous consent) solicited from the owners of the Underlying 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 Underlying Securities could result in a "sale or other disposition" of such Underlying 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. (a) Without the need for consent of any Unitholder, the Trustee shall enter into any amendment, modification, waiver, or other change of the Swap Agreement or the Guarantee to cure any ambiguity or manifest error in, or to correct or supplement or otherwise change any provision of, the Swap Agreement or the Guarantee, if such change will not materially and adversely affect any Unitholder. Section 7.02(a) shall not be construed to require the consent of a Class of Units not materially and adversely affected by any amendment to the Swap Agreement in connection with an amendment pursuant to Section 7.02(b). (b) The Trustee shall enter into any other amendment, or agree to a waiver or other modification or other change, of the Swap Agreement or Guarantee if directed or consented to by the Specified Percentage of Unitholders materially and adversely affected thereby. (c) Notwithstanding subsection (b) above, the Trustee shall not enter into any amendment, or agree to a waiver or other modification, of the Swap Agreement or Guarantee that would have the effect of changing the principal amount, interest rate, maturity, or other terms specified in the related Trust Agreement, of any Class or Series of Units without the consent of 100% of the outstanding Unit Principal Balance of each Class of Units affected thereby. (d) In the case of both (a) and (b) above, (i) the Trustee shall require an Opinion of Counsel, not at the expense of the Trustee, to the effect that such amendment will not alter the classification of the Trust for Federal income tax purposes and (ii) the Rating Agency Condition shall be satisfied with respect to any amendment, waiver, modification or other change pursuant to this Section to any Swap Agreement 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, but in any case each applicable Rating Agency shall receive written notice of such amendment. (e) In executing any such amendment or restatement created by any amendment or the modifications of the Swap Agreement, the Trustee shall be entitled to receive, and (subject to the standard of care provided in Article X hereof) shall be fully protected in relying upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by the Trust Agreement and that all conditions precedent thereto have been complied with. The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee's own rights, duties or immunities under the Trust Agreement or otherwise. ARTICLE VIII Default on Underlying Securities and Permitted Investments SECTION 8.01. Realization Upon Default. (a) The Trustee, on behalf of the Unitholders, shall assert claims under the Underlying 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 Underlying 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 Underlying 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 Underlying Securities were issued) with respect to any Underlying 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 and Liquidation Events SECTION 9.01. Liquidation Events. (a) Unless a Trust Wind-Up Event has also occurred and unless otherwise provided in the Trust Agreement (each such event below, a "Liquidation Event"): (i) In the event that (i) an Underlying Security Default occurs with respect to any Underlying Security or (ii) any Underlying Security held by the Trust becomes a Disqualified Underlying Security, then the Trust shall sell such Underlying Security and, if necessary, shall sell other Trust Property to the extent necessary to pay any Swap Termination Payment. (ii) In the event that any Swap Default or Termination Event occurs under any Transaction (including if such Transaction becomes a Disqualified Transaction), and such Transaction is terminated, the Trust shall sell any Affected Underlying Securities and, if necessary, shall sell other Trust Property to the extent necessary to pay any related Swap Termination Payment, and (iii) In the event that any Credit Support becomes Disqualified Credit Support, then such Credit Support shall be terminated. (b) Unless otherwise specified in the Trust Agreement, the Trust shall distribute any net proceeds to the Trust from a Liquidation Event to the Unitholders pro rata or in such other proportion as specified in the Trust Agreement. (c) The Trust shall continue thereafter. SECTION 9.02. Trust Wind-Up Events. (a) Unless otherwise provided in the Trust Agreement, if any of the following events (each event, a "Trust Wind-up Event") shall occur: (i) the occurrence of one or more Underlying Security Defaults which results in an Underlying Security Default with respect to all Underlying Securities held by the Trust or with respect to any Underlying Securities specified in the Trust Agreement; (ii) the consummation of any redemption of, tender for, exercise of any call option on, or other similar transactions with respect to all Underlying Securities held by the Trust; (iii) if and as specified in the Trust Agreement, any specified Swap Default or specified Termination Event under a specified Swap Agreement or specified Swap Agreements; (iv) any specified Credit Support default occurs under Credit Support specified in the Trust Agreement; (v) all Underlying Securities held by the Trust become Disqualified Underlying Securities; (vi) if specified in the Trust Agreement, all Transactions becomes Disqualified Transactions or any specified Transactions become Disqualified Transactions; (vii) any Credit Support held by the Trust becomes Disqualified Credit Support and the Trust Agreement specifies that a Trust Wind-Up Event shall occur upon such Credit Support becoming Disqualified Credit Support; (viii) any Excess Expense Event; (ix) the designation of a Special Depositor Wind-Up Event described in Section 9.04; and (x) any other Trust Wind-Up Event set forth in the Trust Agreement. (b) Unless otherwise specified in the Trust Agreement, if more than one Trust Wind-Up Event occurs, only the first such event will be the "Trust Wind-Up Event" for all purposes under the Trust Agreement, each Swap Agreement and any related agreements or other documents. SECTION 9.03. Expense Event. (a) An "Excess Expense Event" will occur, and a Trust Wind-Up Event shall occur under Section 9.02, in the event that the Trustee incurs Extraordinary Trust Expense in an aggregate amount exceeding the Trigger Amount, unless the Swap Counterparty or, if specified as permitted under the Trust Agreement, the Unitholders provide adequate assurance of indemnity to the Trustee in accordance with the terms of subsection (b) or (c), as applicable. (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 Swap Counterparty, the Depositor and the Rating Agencies, if any. If the Trust Agreement so specifies, the Trustee shall also provide notice to the Unitholders. Such notice shall state that an Excess Expense Event shall occur on the fifth Business Day following the provision of such notice unless prior to such day the Swap Counterparty agrees to indemnify the Trustee for Extraordinary Trust Expense in an aggregate amount exceeding the Maximum Reimbursable Amount, 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 fifth Business Day. If the Trust Agreement so specifies, the Unitholders, by unanimous agreement, may provide such indemnification. (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 9.03(b). (d) Nothing in this Section shall be construed to excuse the Depositor from its indemnification obligations under Section 10.05. SECTION 9.04. 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. SECTION 9.05. Disposition of Trust Property. (a) Subject to Section 9.06, 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, the Swap Counterparties, the Depositor and the Rating Agencies of the occurrence of a Trust Wind-up Event or Liquidation Event specifying the particular Trust Wind-Up Event or Liquidation Event and in the case of a Liquidation Event, the particular Underlying Security, Swap Agreement or other Trust Property related to such Liquidation Event. In the case of a Trust Wind-Up Event, the notice shall state that (i) Holders should surrender their Units to the Trustee, or deliver security or indemnity acceptable to the Trustee in order to receive their respective distributions of Trust Property, if any, (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 Trust Property to be distributed in cash or in kind; provided, however, that with respect to Units that are Global Securities as to which distributions will be made through the facilities of DTC or another depository, the Trustee may adhere to the applicable rules and procedures or DTC or such other depository in lieu of clauses (i), (ii) and (iii) of this sentence. (b) Immediately upon receipt of notice from the Trustee that the Trust is required to sell Underlying Securities, the Selling Agent shall undertake to sell Underlying Securities on behalf of the Trust; provided, however, that the Selling Agent may elect not to act as Selling Agent with respect to some or all of the Underlying 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 Underlying Securities. In the case of a Liquidation Event, sales under this provision shall be limited to the Affected Underlying Securities except where the proceeds from the Affected Underlying Securities are insufficient to make payment of the Swap Termination Payment. The Selling Agent must solicit at least three bids for the Underlying Securities to be sold. The Selling Agent must solicit at least three of such bids from registered broker-dealers of national reputation who deal in securities of the type in question, 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 Underlying Securities at the highest bid price received. None of the Selling Agent, its affiliates or its agents, may bid for the Underlying Securities. The Selling Agent may provide a right of last refusal to any Swap Counterparty, Call Option holder or other counterparty or holder with an interest in the Underlying Securities or other Trust Property that is not an affiliate of the Selling Agent or any holder of a Call Option. If the Selling Agent is unable to sell Underlying Securities within 180 days of its first attempt to do and the Selling Agent determines that it is not commercially reasonable to continue to try to sell such Underlying Securities, it may give notice to the Trustee that it is unable to sell such Underlying Securities and that it has determined that it is commercially unreasonable to continue to attempt to sell such Underlying Security. In such event, the Trustee shall arrange to distribute such Underlying Securities to Unitholders. (c) Subject to Section 9.06, as promptly as possible after the occurrence of a Liquidation Event, the Trustee shall take action on behalf of the Trust as specified in Section 9.01. Subject to Section 9.06, as promptly as possible after the occurrence of a Trust Wind-Up Event, unless otherwise provided in the Trust Agreement, the Trustee on behalf of the Trust shall terminate all Swap Agreements, Credit Support and other agreements of the Trust, the Trustee shall permit delivery of any Trust Property to any Swap Counterparty or other person in accordance with any Swap Agreement or other agreement, and the Trustee shall cause the Selling Agent to liquidate all Trust Property. The Trustee shall use reasonable efforts to cause such terminations and liquidations within thirty days of the occurrence of such Trust Wind-Up Event. Upon completion of the liquidation of Trust Property, the Trustee shall provide a notice to Unitholders, the Swap Counterparties, the Depositor and the Rating Agencies stating the liquidation of Trust Property has been completed, specifying the amount of any Swap Termination Payment paid or to be paid and the amounts to be distributed to Unitholders. The Trustee shall distribute the cash proceeds of liquidation, and if applicable, other Trust Property, to Unitholders 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 9.05. Upon receipt by the Trustee of (i) appropriate transfer instructions in writing from a Holder with respect to the Underlying Securities and (ii) such Holder' Units (or acceptable security or indemnity), the Trustee shall promptly deliver Underlying Securities to such Holder in an aggregate principal amount corresponding to the aggregate Unit Principal Balance of such Holder's Units in accordance with such transfer instructions by (A) physical delivery or (B) if applicable, causing the book-entry depositary for such Underlying Securities to credit such Underlying 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. With respect to a Global Security, the Trustee may also distribute such cash or other Trust Property in accordance with the rules of DTC or other applicable Depository. Any Transfer made in accordance with this paragraph shall satisfy all obligations of the Trust with respect to the Unitholders. (d) If the related Trust Agreement so specifies, 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 Expense in excess of the Maximum Reimbursable Amount payable to the Trustee) and a written instruction to discontinue sale of the Underlying Securities. If the Selling Agent receives notice from the Trustee of the exercise by the Unitholders of their rights under this Section 9.05(d), the Selling Agent shall promptly discontinue sales of the related Underlying Securities (but the Selling Agent and the Trustee shall complete the settlement of any sale already agreed). It is expressly understood and agreed that Underlying Securities may be sold in the time necessary for the Unitholders to be notified of and act upon their rights under this Section 9.05(d). If the Trust Agreement specifies that this provision shall be applicable, the Trustee shall provide notice of this right to Unitholders together with an estimate of the amount of any Swap Termination Payment and applicable Extraordinary Trust Expense at the time the Trustee provides notice to Unitholders of such Trust Wind-Up Event or Liquidation Event. (e) Unless otherwise provided in the Trust Agreement, 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 Underlying Security Default, the claim of the Swap Counterparty against the Underlying 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. (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 Underlying Securities, amounts, if any, recovered under the Swap Agreement (including Swap 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 Underlying 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 Underlying 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 Underlying 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 Underlying Securities to Affiliates of the Selling Agent. The Selling Agent may (in addition to declining to sell specific Underlying Securities as provided in Section 9.05(b)) resign at any time by written notice to the Trustee, such resignation to take effect immediately upon notice. Except as provided in the first sentence of this Section 9.05(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 9.05(b) and Section 9.05(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 Underlying Securities in the open market or, if the Swap Counterparty elects, to sell the Underlying 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 9.06. Limitation on Notice Requirement. The Trustee shall not be responsible for taking action with respect to a Trust Wind-Up Event or a Liquidation Event unless and until (i) the Trustee fails to receive funds due on the Underlying 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, (iii) receipt of actual notice of an Underlying Security Default from the Underlying Security Issuer or (iv) upon actual knowledge of any event that would constitute a Liquidation Event or a Trust Wind-Up Event by a Responsible Officer of the Trustee; provided, however, that the Trustee is responsible for making due inquiry as to whether a Liquidation Event or a Trust Wind-up Event occurred if it has reason to believe that such a Liquidation Event or Trust Wind-up Event has occurred. 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's 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's 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) if the Trust Agreement provides that this Section 10.02(a)(ix) applies, 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 Underlying 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 Underlying 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 Swap 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. (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 Underlying Securities is the related Underlying 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 Underlying 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 Underlying 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's 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's 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, the Trustee shall be indemnified by the Trust, however, 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 (and in the case of the last sentence of paragraph (b) above, the Trust) 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 or association which is not an Affiliate of the Depositor (but may have normal banking relationships with the Depositor or any obligor with respect to the Underlying 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 $200,000,000 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 Underlying 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, each Swap Counterparty and any Guarantor, the Rating Agencies, any Credit Support Provider and to all Unitholders. Upon receiving such notice of resignation, the Depositor, with the consent of each Swap Counterparty and any 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, each Swap Counterparty and any 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. (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 each Swap Counterparty and any 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, each Swap Counterparty and any 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. The Trustee shall not be liable for the acts or omissions of any co-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 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 Underlying Securities, entering into the Swap Agreement, accepting the Guarantee, entering into any ancillary agreements 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 Underlying 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. Preferential Collection of Claims Against the Trust. Irrespective of whether the TIA shall apply to this 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 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, the Depositor, each Swap Counterparty and any Guarantor 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; Waivers. (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 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 or with disclosure in the applicable prospectus supplement; (ii) to add or supplement any credit support for the benefit of any Unitholders, (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 evidence and provide for the acceptance of appointment under the Trust Agreement by a successor Trustee; (v)o to add to the covenants, restrictions or obligations of the Depositor or the Trustee for the benefit of the Unitholders, (vi) to comply with any requirements imposed by the Internal Revenue Code or other applicable law, including any amendment necessary to ensure the intended classification of the Trust for United States federal income tax purposes or (vii) to add, modify, supplement or otherwise change any of the terms of the Trust Agreement if no Unitholder will be materially and adversely affected by such change; provided, however, that with respect to any such amendment in this Section 12.01(a), the Rating Agency Condition shall be satisfied with respect to such amendment. Section 12.01(a)(vii) shall not be construed to require the consent of a Class of Units not materially and adversely affected by any amendment to the Trust Agreement in connection with an amendment pursuant to 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 Specified Percentage of the outstanding Unit Principal Balance of each Class of Units materially and adversely affected thereby. Unless specified in the related Trust Agreement, no amendment to the Trust Agreement may change the principal amount, interest rate, maturity, or other terms specified in the related Trust Agreement, of any Class or Series of Units without the consent of 100% of the outstanding Unit Principal Balance of each Class of Units 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, but in any case each applicable Rating Agency shall receive written notice of such amendment. (c) Promptly after the execution of any such amendment or modification, the Trustee shall furnish a copy of such amendment or modification to each Unitholder. (d) Notwithstanding the foregoing, no amendment or modification to the Trust Agreement shall be permitted unless the Trustee first receives an Opinion of Counsel, provided at the expense of the party requesting such amendment, that such amendment or modification will not alter the classification of the Trust for U.S. federal income tax purposes. The Trustee shall not agree to any amendment that would affect the rights or obligations of any Swap Counterparty of the respective Trust, without first obtaining the approval of that Swap Counterparty. (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. (f) Holders of Units evidencing not less than a Specified Percentage of the Units of a particular Class may, on behalf of all Holders of the Units of that Class, (1) waive, insofar as that Class is concerned, compliance by the Depositor or the Trustee with any restrictive provisions of the Trust Agreement before the time for such compliance or (2) waive any past default under the Trust Agreement with respect to the Units of that Class, except for (A) a default resulting from any failure to distribute amounts received as principal of (and premium, if any) or any interest on any such Unit and (B) a default in respect of any covenant or provision the modification or amendment of which would require the consent of the Holder of each outstanding Unit affected by the default. (g) In executing or accepting the additional trusts created by any amendment or the modifications thereby of the trusts created by the Trust Agreement, the Trustee shall be entitled to receive, and (subject to the standard of care provided in Article X hereof) shall be fully protected in relying upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by the Trust Agreement and that all conditions precedent thereto have been complied with. The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee's own rights, duties or immunities under the Trust Agreement or otherwise. 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's 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 Trust Agreement, 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. With respect to Global Securities, the Trustee may give any required notice to Unitholders in accordance with applicable rules and procedures of DTC or other applicable depository in satisfaction of any of its obligations to give any notice to Unitholders. Any required to be given to the Rating Agencies, if any, 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 Trust Agreement or as otherwise specified by the applicable Rating Agencies. 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 provide notice to the Rating Agencies as soon as is reasonably practicable with respect to each of the following of which the Trustee 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. 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 12.11. Merger and Consolidation 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. SECTION 12.12. 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. MS STRUCTURED ASSET CORP. By ----------------------------- Name: Title: LASALLE BANK 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, between MS Structured Asset Corp. (the "Depositor") and LaSalle Bank National Association (the "Trustee"), made as of the date set forth in Schedule I attached hereto, which Schedule together with Schedules II and III attached hereto, are made a part hereof. The terms of the Standard Terms for Trust Agreements, dated February 19, 2003 (the "Standard Terms") are, except to the extent otherwise expressly stated, hereby incorporated by reference herein in their entirety with the same force and effect as though set forth herein. Capitalized terms used herein and not defined shall have the meanings defined in the Standard Terms. References to "herein", "hereunder", "this Trust Agreement" and the like shall include the Schedules attached hereto and the Standard Terms so incorporated by reference. WHEREAS, the Depositor and the Trustee desire to establish the Trust identified in Schedule I attached hereto (the "Trust") for the primary purposes of (i) holding the Underlying Securities, (ii) entering into any Swap Agreement with the Swap Counterparty and (iii) issuing the Units; WHEREAS, the Depositor desires that the respective beneficial interests in the Trust be divided into transferable fractional shares, such shares to be represented by the Units; WHEREAS, the Depositor desires to appoint the Trustee as trustee of the Trust and the Trustee desires to accept such appointment; WHEREAS, the Depositor shall transfer, convey and assign to the Trust without recourse, and the Trust shall acquire, all of the Depositor's right, title and interest in and under the Underlying Securities and other property identified in Schedule II to the Trust Agreement (the "Trust Property"); and WHEREAS, the Trust agrees to acquire the Trust Property specified herein in consideration for Units having an initial Unit Principal Balance identified in Schedule I attached hereto, subject to the terms and conditions specified in the Trust Agreement; NOW THEREFORE, the Depositor hereby appoints the Trustee as trustee hereunder and hereby requests the Trustee to receive the Underlying Securities from the Depositor and to issue in accordance with the instructions of the Depositor Units having the terms specified in Schedule I attached hereto, and the Trustee accepts such appointment and, for itself and its successors and assigns, hereby declares that it shall hold all the estate, right, title and interest in any property contributed to the trust account established hereunder (except property to be applied to the payment or reimbursement of or by the Trustee for any fees or expenses which under the terms hereof is to be so applied) in trust for the benefit of all present and future Holders of the fractional shares of beneficial interest issued hereunder, namely, the Unitholders, and subject to the terms and provisions hereof and of the Standard Terms. IN WITNESS WHEREOF, each of the undersigned has executed this instrument as of the date set forth in Schedule I attached hereto. LASALLE BANK NATIONAL ASSOCIATION as Trustee on behalf of the Trust identified in Schedule I hereto, and not in its individual capacity By: --------------------------------------- Name: Title: MS STRUCTURED ASSET CORP. By: --------------------------------------- Name: Title: Attachments: Schedules [I, II and III] Schedule I (Terms of Trust and Units) Trust: SATURNS Trust No. [__________] Date of Trust Agreement: [____________] Units: Initial Unit Principal Balance of the Units: [Initial Notional Amount of the Units: Issue Price of Units: Number of Units: Minimum Denomination: Cut-off Date: Closing Date: Specified Currency: [United States dollars] Business Day: New York, New York and Chicago, Illinois Interest Rate: [_____]% per annum [basis] Interest Reset Period: [Not Applicable] Rating: Rating Agencies: [Moody's and S&P] Scheduled Final Distribution Date: [_____________]. The Units will have the same final maturity as the Underlying Securities. Prepayment/Redemption: [The Trust Property is subject to redemption in accordance with the terms of the Underlying Securities and as described in Schedule II and is subject to call in accordance with Schedule III. Any such call or redemption will result in the redemption of a proportional amount of the Units [and a proportional reduction in the Notional Amount of the Units. ]] Additional Distribution: Swap Agreement: 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. [Guaranty: Morgan Stanley shall guarantee the obligations of [any Morgan Stanley affiliate who is a Swap Counterparty]. ] Swap Notional Amount: Swap Payment Date: Swap Rate: 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, 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 prior to the effectiveness of such additional Swap Agreement. ] Distribution Date: Each [__________], or the next succeeding Business Day if such day is not a Business Day, commencing December 1, 2002, and any other date upon which funds are available for distribution in accordance with the terms hereof. If any payment with respect to the Underlying Securities held by the Trust is not received by the Trustee by 12 noon (New York City time) on a Distribution Date, the corresponding distribution on the Units will not occur until the next Business Day that the Trust is in receipt of proceeds of such payment prior to 12 noon, with no adjustment to the amount distributed. Record Date: Each [____________], regardless of whether such day is a Business Day. Form: [Global Security] Depositary: [DTC] Specified Percentage: 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 [_____]% per annum of the principal amount of the Underlying Securities held by the Trust as its fee, calculated on the basis of a 360 day year consisting of twelve 30 day months (the "Expense Administration Fee"). The Expense Administrator's fee is payable only from available interest receipts received with respect to the Underlying Securities after application of such receipts to payment of accrued interest on the Units. The 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 [____] ERISA Restrictions: [None][No Plan Restriction][25% Test][Prohibited Transaction Exemption Restriction] QIB Restriction: Primary Offering Securities: The Trustee, as purchaser of the Underlying Securities, hereby assigns to the Unitholders its rights against the related Underlying Security Issuers and the Placement Agents under the U.S. federal and state securities laws with respect to its purchase of the Underlying Securities. Accordingly, Unitholders may proceed directly against the related Underlying Security Issuers of Underlying Securities and the Placement Agents to enforce those rights without first proceeding against the Trust, the Trustee or any other person or entity. Each Underlying Security Issuer and its Placement Agents have acknowledged the existence of such assignment and agreed not to contest its enforceability. The Trustee shall remove from Trust Property any Underlying Securities, in whole and not in part, for which removal of such Underlying Securities is required to effectuate a final judgment or decree which requires a right of rescission with respect to such Underlying Securities in connection with any action brought under federal or state securities laws in respect of such Underlying Securities. [Disqualified Underlying Security: For Primary Offering Securities, insert provisions from prospectus] [Liquidation Events: For Primary Offering Securities, revise provisions as specified in prospectus] [Eligible Underlying Security: For Primary Offering Securities, restrict definition as specified in prospectus] Trust Wind-Up Event: [The following Trust Wind-Up Events shall not apply:] [The following additional events shall be Trust Wind-Up Events:] [If (i) cash settlement applies under the Swap Agreement, (ii) a Trust Wind-Up Event has occurred in connection with the exercise of any call rights under the Swap Agreement and (iii) the Selling Agent cannot obtain a bid for the Underlying Securities in excess of 100% of the aggregate Unit Principal Balance of the Units and accrued interest on the Underlying Securities, then the Underlying Securities will not be sold, the Swap Counterparty's exercise of the call rights will be rescinded (and the Swap Counterparty shall be entitled to exercise such options in the future) and any related Trust Wind-Up Event will be deemed not to have occurred.] Termination: [Distributions of Securities: Provisions of the Standard Terms allowing for otherwise providing for distributions of Underlying Securities with respect to the Units in connection with Liquidation Events or Trust Wind-Up Events shall not be incorporated herein.] [Indemnification by Unitholders: Provisions of the Standard Terms allowing for otherwise providing for Unitholders to offer indemnity to the Trustee with respect to a Trigger Event or to tender amounts in respect of a Swap Termination Payment shall not be incorporated herein.] Self-Tenders by Underlying Security Issuer: [The Trust will not participate in any self-tender by the Underlying Security Issuer for the Underlying Securities and the Trustee will not accept any instructions to the contrary from the Unitholders. However, the Swap Counterparty may exercise the Swap Agreement at any time in connection with a self-tender.] Depositor Optional Exchange: [Depositor Optional Exchange shall be subject to the consent of [the Swap Counterparty][the holder of Call Rights][the Expense Administrator.] [Depositor Optional Exchange shall be available on the following dates instead of the dates specified in the Standard Terms]. Terms of Retained Interest: Notwithstanding any other provision herein or in the Standard Terms, the Depositor retains the right to receive any and all interest that accrues on the Underlying Securities prior to the Closing Date. The Depositor will receive such accrued interest on the first Distribution Date (or redemption date if earlier) for the Units and such amount shall be paid from the interest payment made with respect to the Underlying Securities on the first Distribution Date. The amount of the Retained Interest is $[_____]. If a Underlying Security Default occurs on or prior to the first Distribution Date and the Depositor does not receive such Retained Interest amount in connection with such Distribution Date, the Depositor will have a claim for such Retained Interest, and will share pro rata with holders of the Units to the extent of such claim in the proceeds from the recovery on the Underlying Securities. Call Option Terms: [Specify terms of Call Option, Call Rights, Warrants, if applicable.] Sale of Underlying Securities: [If cash settlement applies and if the Swap Counterparty exercises any of its call rights other than in connection with a redemption of or a self-tender for the Underlying Securities by the Underlying Security Issuer (or to the extent such exercise corresponds to such redemption or self-tender), a number of Underlying Securities corresponding to the number of call rights exercised by the Swap Counterparty will be sold by the Selling Agent on behalf of the Trust. If the Selling Agent cannot obtain a bid for the Underlying Securities in excess of 100% of the aggregate Unit Principal Balance of the Class A Units to be redeemed and accrued interest on the Underlying Securities to be sold, then the Underlying Securities will not be sold, the Swap Counterparty's exercise will be rescinded (and the Swap Counterparty shall be entitled to exercise such call rights in the future) and any related Trust Wind-Up Event will be deemed not to have occurred.] Selling Agent: [Morgan Stanley & Co. Incorporated. Notwithstanding any provision of the Standard Terms to the contrary, any sale of the Underlying Securities shall be conducted by and through the Selling Agent and not the Trustee. ] Other Terms: Schedule II (Terms of Trust Property) Underlying Securities: Underlying Security Issuer: [Primary Offering Securities: Applicable] Principal Amount: Underlying Security Rate: Credit Ratings: [___ by Moody's] [___ by S&P] Listing: Underlying Security Issuance Agreement: Form: [Global] Currency of Denomination: [United States dollars] Acquisition Price by Trust: Underlying Security Payment Date: Original Issue Date: Maturity Date: Sinking Fund Terms: Redemption Terms: CUSIP No.:/ISIN No. Underlying Security Trustee: Available Information Regarding the Underlying Security Issuer (if other than U.S. Treasury obligations): The Security Issuer is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission"). Such reports and other information can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional Offices of the Commission: Woolworth Building, 233 Broadway, New York, New York 10279, and Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such materials can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, District of Columbia 20549 at prescribed rates. [Schedule III] [(Swap Agreement Confirmation)] EXHIBIT B1 FORM OF REGISTERED UNIT STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS") SERIES [________] [CLASS __] UNITS [EACH PURCHASER OR OTHER TRANSFEREE OF THIS UNIT OR ANY INTEREST HEREIN 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 THAT SUCH PURCHASER OR OTHER TRANSFEREE IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT. ] [IF THE TRUST AGREEMENT PROVIDES THAT THE 25% TEST APPLIES, A DEFINITIVE PURCHASE AGREEMENT MUST BE EXECUTED AND DELIVERED BY THE PURCHASER OR THE PROPOSED TRANSFEREE WHICH AGREEMENT WILL CONTAIN ADDITIONAL REPRESENTATIONS, INCLUDING WHETHER THE PURCHASER OR PROPOSED TRANSFEREE IS A (I) "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")), WHETHER OR NOT IT IS SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF ERISA, INCLUDING ANY U.S. GOVERNMENTAL PLANS AND ANY FOREIGN GOVERNMENTAL OR PRIVATE PENSION PLANS, (II) "PLAN" DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (III) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN SUCH ENTITY OR OTHERWISE, AND, IF SO, WHETHER SUCH PERSON IS SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR ANY SUBSTANTIALLY SIMILAR LAW.] [IF THE TRUST AGREEMENT PROVIDES THAT THE PROHIBITED TRANSACTION EXEMPTION RESTRICTION APPLIES, BY ITS ACQUISITION OF ANY UNIT, THE HOLDER WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED ON EACH DAY THAT IT HOLDS SUCH UNIT EITHER THAT (X) IT IS NOT A (I) "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF ERISA, (II) "PLAN" DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") SUBJECT TO SECTION 4975 OF THE CODE OR (III) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN SUCH ENTITY OR OTHERWISE OR (IV) 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 (Y) 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) UNLESS AN EXEMPTION IS AVAILABLE (ALL OF THE CONDITIONS WHICH HAVE BEEN SATISFIED) OR IN ANY OTHER VIOLATIONS OF AN APPLICABLE REQUIREMEMENT OF ERISA, THE INTERNAL REVENUE CODE OR OTHER LAW.] [IF THE TRUST AGREEMENT PROVIDES THAT THE NO PLAN RESTRICTION APPLIES, THE HOLDER, AND EACH FIDUCIARY WHICH CAUSES ANY SUCH PERSON TO ACQUIRE ANY UNIT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, WILL BE DEEMED BY SUCH PURCHASE, HOLDING OR ACQUISITION, ON EACH DATE ON WHICH THE UNIT IS HELD BY SUCH PERSON, TO HAVE REPRESENTED THAT IT IS NOT A (I) "EMPLOYEE BENEFIT PLAN" (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF ERISA, (II) "PLAN" DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") SUBJECT TO SECTION 4975 OF THE CODE, (III) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN SUCH ENTITY OR OTHERWISE OR (IV) GOVERNMENTAL OR OTHER PLAN SUBJECT TO REQUIREMENTS SUBSTANTIALLY SIMILAR TO TITLE I OF ERISA OR SECTION 4975 OF THE INTERNAL REVENUE CODE.] [EACH PERSON THAT ACQUIRES A UNIT, AND EACH FIDUCIARY WHO CAUSES A PERSON TO ACQUIRE A UNIT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, AGREES TO INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE TRUSTEE, [MS&CO.] AND THEIR RESPECTIVE AFFILIATES FROM ANY COST, DAMAGES, LOSS OR EXPENSE, INCURRED BY THEM AS A RESULT OF THE REPRESENTATIONS MADE BY SUCH PERSON OR FIDUCIARY NOT BEING TRUE.] [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.] Unit No. [__] CUSIP No. [_______________] REGISTERED INITIAL AMOUNT: $[_________] FRACTIONAL SHARE: [____]% AGGREGATE INITIAL AMOUNT OF UNITS: $[25,000,000] REGISTERED INITIAL NUMBER: [__] AGGREGATE INITIAL NUMBER OF ALL UNITS: [__] STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS") SERIES [________] [CLASS __] UNITS This certifies that Cede & Co. 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 the fractional undivided interest represented by this Unit of the amount of the distribution on the Units as determined pursuant to the Trust Agreement. The Trust Property will be held in trust by the Trustee identified in the Trust Agreement (the "Trust"). The Trust has been created pursuant to a Trust Agreement, dated as of [__________] (the "Trust Agreement"), between LaSalle Bank National Association, as Trustee of the Trust (the "Trustee"), and MS 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. By acceptance of this Unit, the Holder assents to and becomes bound by the Trust Agreement. The Trust Property consists of the Securities (excluding the Retained Interest of the Depositor) and any Permitted Investments. 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, to the Person in whose name this Unit is registered at the close of business on the Record Date, such Unitholder's fractional undivided interest in the amounts to be distributed to Holders of Units 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. Distributions on this Certificate 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 Chicago, Illinois. 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 135 South LaSalle Street, Suite 1625, Chicago, Illinois 60603 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: LASALLE BANK 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. LASALLE BANK NATIONAL ASSOCIATION, as Authenticating Agent By: ---------------------------- Authorized Signatory [If not a Global Security: Attachments: Schedule I to the Trust Agreement] 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 Chicago, Illinois, accompanied by a written instrument of transfer and, if applicable, a transfer letter in form and substance satisfactory to the Trustee duly completed and executed by the Holder hereof or such Holder's 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 LaSalle Bank National Association not in its individual capacity but solely as Trustee and in no event shall LaSalle Bank 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 LaSalle Bank 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: ________________ EX-5.1 4 saturnex5-1redline_0220.txt EXHIBIT 5.1 [Letterhead of Cleary, Gottlieb Steen and Hamilton] February 20, 2003 Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 MS Structured Asset Corp. 1585 Broadway New York, New York 10036 Ladies and Gentlemen: We have acted as special counsel to MS 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 (the "Registration Statement")) and the related prospectus (the "Prospectus"), first filed November 12, 2002, and amended by filings on January 22, 2003 and February 19, 2002, 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 February 19, 2003 (the "Standard Terms") between the Depositor and LaSalle Bank National Association ("LaSalle Bank"), as trustee, in the form included as an exhibit to the Registration Statement, between the Depositor and LaSalle Bank 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. 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 "Validity of Units." 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 /s/ Michael A. Mazzuchi ------------------------------- Michael A. Mazzuchi, a Partner EX-8.1 5 saturnex8-1redline_0220.txt EXHIBIT 8.1 [Letterhead of Cleary, Gottlieb Steen and Hamilton] February 20, 2003 Morgan Stanley & Co. Incorporated MS Structured Asset Corp. 1585 Broadway 1585 Broadway New York, New York 10036 New York, New York 10036 Ladies and Gentlemen: We have acted as special counsel to MS 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") of a registration statement on Form S-3 (the "Registration Statement") and the related prospectus (the "Prospectus"), first filed on November 12, 2002, and amended by filings on January 22, 2003 and February 19, 2003, with respect to the offering of Structured Asset Trust Unit Repackagings (the "Units"), which the Depositor plans to offer in series. Our advice forms the basis for the discussion of federal income tax consequences appearing under the heading "United States Federal Income Taxation," in the Prospectus and in each related Prospectus Supplement in which we are identified as counsel; such discussion represents our opinion with respect 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 "Validity of Units." 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: /s/ James M. Peaslee --------------------- James M. Peaslee, a Partner -----END PRIVACY-ENHANCED MESSAGE-----