Exhibit 4.1
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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 March 5, 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 Schedule I 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) issuing the Warrants 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 and an initial Notional Amount, as applicable, 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.
IN WITNESS WHEREOF, each of the undersigned has executed this
instrument as of the date set forth in the 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: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: First Vice President
LASALLE BANK NATIONAL ASSOCIATION
as Warrant Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: First Vice President
MS STRUCTURED ASSET CORP.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Attachments: Schedules I, II and III
Schedule I
(Terms of Trust and Units)
Trust: SATURNS Trust No. 2005-1
Date of Trust Agreement: December 15, 2004
Trustee: LaSalle Bank National Association
Units: The Trust will issue two classes of
Units: the Class A Units and the Class B
Units.
Initial Unit Principal Balance
of the Class A Units: $60,000,000
Initial Notional Amortizing Balance
of the Class B Units: $1,574,000
Notional Amount: For the purposes hereof and of the
Standard Terms incorporated herein, the
Notional Amortizing Balance of the Class
B Units shall be the Notional Amount of
the Class B Units.
Issue Price of Units: Class A Units: 100%
Class B Units: 100%
Number of Units: Class A Units:
2,400,000 (Unit Principal Balance of $25
each)
Class B Units:
1,574 (Initial Notional Amortizing
Balance of $1,000 each)
Swap Agreement: Except as provided in this paragraph,
references to a Swap Agreement, a Swap
Counterparty and related references in
the Standard Terms shall be inapplicable.
For purposes of Sections 2.02, 2.03,
3.02(b), 3.02(c), 3.02(f), 3.04, 3.05,
3.08, 4.02(b), 4.02(c), 7.02, 9.03(b),
9.05, 10.02(a)(x), 10.07, 10.12, 10.13,
11.01, and 12.01 of the Standard Terms as
incorporated herein, use of the term Swap
Counterparty shall be deemed to be use of
the term Warrantholder, use of the term
Swap Agreement shall be deemed to be use
of the term Warrants and use of the term
Swap Termination Payment shall be deemed
to be use of the term Warrant Termination
Payment. The list of sections in this
paragraph shall not be construed as an
exclusive list and where the context so
requires, the preceding sentence may
apply to additional sections of the
Standard Terms.
Call Option / Call Rights: The Warrants. Each Warrant issued
hereunder represents a Call Option and a
Call Right to purchase $1,000 of Unit
Principal Balance of the Class A Units
and the Initial Notional Amortizing
Balance of the Class B Units
corresponding to the Applicable Class B
Equivalent Amount.
Applicable Class B Equivalent
Amount: With respect to each call, redemption,
exchange or other transaction, or portion
thereof, the applicable Unit Principal
Balance of Class A Units (x) divided by
the Initial Unit Principal Balance of the
Class A Units and (y) multiplied by the
initial issued number of Class B Units
provided under "Number of Units " above.
Callable Series: All Class A Units and Class B Units
issued hereby are subject to Call Options
and Call Rights granted in favor of
Warrantholders. All Class A Units and the
Class B Units are subject to redemption
in the event of a redemption of the
Underlying Securities.
Any Unitholder who receives notice that
its Units are being called or redeemed
shall tender the applicable Units to the
Trustee in accordance with such notice.
Any Units subject to call or redemption
shall be automatically canceled, and in
the case of a call, shall be
automatically re-issued to the applicable
Warrantholder without further action by
the applicable Unitholder, Warrantholder,
Trustee or any other person or entity on
the date of redemption or the Call Date,
as applicable. Any failure to so tender
any Unit shall have no force or effect.
Upon exercise of Warrants, the Call
Options and Call Rights represented by
such Warrants shall be automatically
canceled. The certificate representing
such Warrants shall be deemed to
represent the corresponding Class A Units
and Class B Units called by the exercise
thereof. The Trustee shall distribute the
Trust Property to the Warrantholder as
specified in Section 1.2 of Schedule III,
and upon such distribution such Class A
Units and Class B Units shall be
canceled.
First Regular Call Date: As defined in Schedule III.
Minimum Denomination: Class A Units:
$25 and $25 increments in excess thereof.
Each $25 of Unit Principal Balance is a
Unit.
Class B Units:
$1,000 Initial Notional Amortizing
Balance and $0.01 (one cent) Initial
Notional Amortizing Balance in excess
thereof.
The Minimum Denominations shall not
prevent transfers of fractional Units if
such fractional Units arise due to
exercises of the Warrants, redemptions of
the Underlying Securities or otherwise by
operation of this Trust Agreement.
Cut-off Date: Closing Date
Closing Date: December 15, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇▇▇▇▇▇ dollars
Business Day: New York, New York and Chicago, Illinois
Interest Rate and Class B Payments: The right of the Class A Units to accrued
interest is pari passu with the right of
the Class B Units to accrued Class B
Payments from accrued interest on the
Underlying Securities.
Class A Units:
The interest rate on the Class A Units is
6.125% per annum on the basis of a 360
day year consisting of twelve 30 day
months. During a period of deferral with
respect to the Underlying Securities,
interest will continue to accrue on the
Unit Principal Balance of the Class A
Units at 6.125% per annum and interest
will accrue on any deferred interest at
6.125% per annum.
Class B Payments:
On February 15, 2005, $12.812 will be
paid on each Class B Unit (for a total of
$20,166.66 for all 1,574 Class B Units)
and thereafter $38.437 will be paid on
each Class B Unit on each Distribution
Date thereafter (for a total of
$60,500.00 for all 1,574 Class B Units),
in each case from interest received on
the Underlying Securities; provided
however, if there is a period of deferral
commenced in accordance with the
Underlying Securities, payments on the
Class B Units will be deferred. During a
period of deferral, Class B Payments will
continue to accrue at the above specified
rate on each Class B Unit and interest
will accrue on any deferred Class B
Payment at a rate of 6.345% per annum on
the basis of a 360 day year consisting of
twelve 30 day months.
Notice of Interest Deferral: The Trustee shall provide written notice
to ▇▇▇▇▇'▇ within 15 days after the
Trustee has notice that the Underlying
Security Issuer has elected to defer
interest on the Underlying Securities.
Interest Reset Period: Not Applicable
Rating: Class A Units:
A1 by ▇▇▇▇▇'▇
A- by S&P
Class B Units:
A1 by ▇▇▇▇▇'▇
A- by S&P
Rating Agencies: ▇▇▇▇▇'▇ and S&P
Scheduled Final Distribution Date: February 15, 2034. The Units will have
the same final maturity as the Underlying
Securities.
Prepayment, Redemption and Call: The Trust Property is subject to
redemption in accordance with the terms
of the Underlying Securities and as
described in Schedule II. Any such
redemption will cause a redemption of a
corresponding portion of the Class A
Units and the Class B Units.
The Class A Units and the Class B Units
are subject to call in accordance with
the Warrant Terms.
If the Warrants are partially exercised
or if there is a partial redemption of
the Underlying Securities, the Trustee
will randomly select Class A Units to be
redeemed in full from the proceeds of
such partial redemption or called in full
from the proceeds of such partial
exercise.
If the Warrants are partially exercised
and if and to the extent that there is no
Alternative Exercise or if there is a
partial redemption of the Underlying
Securities, the Trustee will also
randomly select Class B Units for call or
redemption in an amount equal to an
Initial Notional Amortizing Balance of
Class B Units corresponding to the
Applicable Class B Equivalent Amount.
Additional Distribution: Class A Units:
If a Warrantholder exercises Warrants in
connection with a tender offer for
settlement prior to the First Regular
Call Date, each Class A Unit called in
connection with such exercise shall
receive, in addition to principal and
accrued interest, $1.50 per Class A Unit
from the proceeds of the Warrant
exercise.
Class B Payments:
If a Warrantholder exercises Warrants,
then the Class B Units designated to be
called in connection with such exercise
shall receive the corresponding portion
of the Class B Present Value Amount,
adjusted for accrued Class B Payments on
the Class B Units otherwise paid.
If the Underlying Security Issuer redeems
Underlying Securities and the previous
paragraph does not apply, then the Class
B Units designated for a redemption in
connection with such redemption of
Underlying Securities shall receive the
amount with respect to the Class B
Present Value Amount allocated for
distribution in accordance with the
applicable provisions of the Distribution
Priorities below, paid as of the date of
such redemption as an additional
distribution.
Class B Present Value Amount: With respect to a date, an amount equal
to the present value of the Future Class
B Unit Payments for such date in respect
of the Applicable Class B Equivalent
Amount, discounted at a rate of 6.345%
per annum on the basis of a 360 day year
consisting of twelve 30 day months.
Future Class B Unit Payments: With respect to any date, the Class B
Payments on the Applicable Class B
Equivalent Amount, other than Class B
Payments paid prior to such date, that
would have been payable in the amount and
at the times otherwise specified
hereunder through and including the
Scheduled Final Distribution Date without
regard to any call, redemption or other
early termination of the Class B Units.
Warrant Terms: The Warrants represent a Call Option and
Call Rights for the Units pursuant to
Section 5.13 of the Standard Terms.
Schedule III provides additional Warrant
Terms.
Call Date: Specified in Schedule III
Call Price: Specified in Schedule III
Warrant Agent: LaSalle Bank National Association
Warrantholder: A holder of Warrants.
Distribution Dates: Each February 15 and August 15, or the
next succeeding Business Day if such day
is not a Business Day, commencing
February 15, 2005, and any other date
upon which funds are available (including
without limitation funds available due to
a Trust Wind-Up Event) 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 or the Record Date.
Interest Deferment: Interest on the Units will be deferred if
distributions with respect to the
Underlying Securities are deferred. The
Underlying Security Issuer may defer
interest or commence an extension period
for up to 10 consecutive semi-annual
payment dates on the Underlying
Securities. No extension period or period
of deferral may extend beyond the stated
maturity of the Underlying Securities.
Distribution Priorities: Ordinary Distribution Date Priority: On
any Distribution Date as to which only
payments of interest on the Underlying
Securities have been received, or to the
extent such Distribution Date occurs due
to receipt of payments of interest on the
Underlying Securities, the Trustee shall
apply amounts available:
FIRST, to the payment of any accrued and
unpaid interest on the Class A Units and
any accrued and unpaid Class B Payments
pro rata in proportion to the outstanding
amount of accrued and unpaid interest and
unpaid payments on each, and
SECOND, to the payment of any accrued and
unpaid Expense Administrator's Fee.
Exercise of Warrants Priority:
On any Distribution Date occurring in
connection with an exercise of the
Warrants, or to the extent such
Distribution Date occurs due to the
exercise of Warrants, whether in whole or
in part, whether or not such exercise
results in a Trust Wind-Up Event, the
Trustee shall apply amounts available in
connection with such exercise
(corresponding to the amounts allocable
to the aggregate Corresponding Underlying
Security Amount related to such
exercise):
FIRST, to the payment of any accrued and
unpaid interest on the Class A Units and
any accrued and unpaid Class B Payments
being called pro rata in proportion to
the outstanding amount of accrued and
unpaid interest and unpaid payments on
each,
SECOND, to the payment of the outstanding
principal on the Class A Units being
called,
THIRD, to the payment of $1.50 on each
Class A Unit called as an Additional
Distribution, if the related Call Date
occurs prior to the First Regular Call
Date and occurs in connection with a
tender offer for the Underlying
Securities,
FOURTH, to the payment of the Class B
Present Value Amount with respect to each
Class B Unit called, adjusted for any
accrued Class B Payments paid under
Clause FIRST, as an Additional
Distribution on the Class B Units called,
FIFTH, to the payment of any accrued and
unpaid Expense Administrator's Fee,
including the Expense Administrator
Make-Whole Amount, if any, and
SIXTH, to the exercising Warrantholders,
to the extent such Warrantholders
specified or were deemed to specify that
their exercise was in connection with a
redemption of or a tender offer for the
Underlying Securities.
If any exercise of Warrants would result
in the Trust not having sufficient funds
to pay each of items FIRST through FIFTH
in full, notwithstanding any other
provision in this Trust Agreement
(including the Additional Warrants Terms
on Schedule III) or the Warrants, such
exercise will be rescinded pursuant to
Section 1.1(h) or Section 1.1(i) of
Schedule III.
Redemptions Priority:
On any Distribution Date occurring in
connection with a redemption of the
Underlying Securities, to the extent such
Distribution Date occurs due to a
redemption of the Underlying Securities
and only to the extent such Distribution
Date does not relate to an exercise of
Warrants, whether or not such redemption
results in a Trust Wind-Up Event, the
Trustee shall apply amounts available in
connection with such redemption
(excluding the amounts allocable to the
aggregate Corresponding Underlying
Security Amount related to any exercise
of Warrants provided for above):
FIRST, to the payment of any accrued and
unpaid interest on the Class A Units and
any accrued and unpaid Class B Payments
being redeemed pro rata in proportion to
the outstanding amount of accrued and
unpaid interest and unpaid payments on
each,
SECOND, to the payment of the outstanding
principal on the Class A Units being
redeemed,
THIRD, any remaining amounts, if any, to
the payment of the Class B Present Value
Amount with respect to Class B Units
redeemed, adjusted for any accrued Class
B Payments paid under Clause FIRST, as an
Additional Distribution on the Class B
Units redeemed,
FOURTH, any remaining amounts, if any, to
the payment of any accrued and unpaid
Expense Administrator's Fee, and
FIFTH, any remaining amounts, if any, to
the Warrantholders, as payment of any
Warrant Termination Payment.
Any amortization or other payment by the
Underlying Security Issuer on the
Underlying Securities shall be treated as
a redemption if not otherwise addressed
herein.
Other Trust Wind-Up Events Priority:
On any Distribution Date occurring in
connection with a Trust Wind-Up Event due
to an event or events other than an
exercise of Warrants or a redemption of
Underlying Securities (or to the extent
thereof), the Trustee shall apply amounts
available (excluding the amounts
allocable to the aggregate Corresponding
Underlying Security Amount related to any
exercise of Warrants provided for above
or the amounts distributable in
connection with a redemption as provided
for above):
FIRST, to the payment of the claims of
the Class A Units and the Class B Units
pro rata in proportion to the relative
claim amounts of each, and for this
purpose the Class A Units will have a
claim equal to their Unit Principal
Balance plus accrued and unpaid interest,
if any and the Class B Units will have a
claim equal to the Class B Present Value
Amount determined as of the date of
termination, in full satisfaction of the
claims of the Class A Units and the Class
B Units,
SECOND, to the payment of any accrued and
unpaid Expense Administrator's Fee, and
THIRD, any remaining amounts are paid to
the Warrantholders, as payment of any
Warrant Termination Payment.
Record Date: The Record Date for each Distribution
Date shall be the third Business Day
prior to such Distribution Date, without
adjustment for any change in the
Distribution Date due to the receipt of
funds for distribution after 12 noon,
except that in respect of the final
Distribution Date, when distributions
will be made against presentation of the
Units.
Form: Global security; except Units re-issued
in connection with an exercise of
Warrants.
Depositary: DTC
Trustee Fees and Expenses: As compensation for and in payment of
trust expenses related to its services
hereunder other than Extraordinary Trust
Expenses, the Trustee will receive
Trustee Fees on each Distribution Date in
the amount equal to $2,000. 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 Trustee 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
Trustee as Expense Administrator (the
"Expense Administrator") and the Trust.
The Expense Administrator will receive a
fee equal to $5,500 payable on each
Distribution Date. The Expense
Administrator Make-Whole Amount, if any,
shall also be considered part of the
Expense Administrator's fee hereunder and
under the Expense Administration
Agreement. The Amounts specified in this
paragraph are also referred to as the
"Expense Administrator's Fee".
If a period of deferral occurs, the
Expense Administrator will be entitled to
any excess accrued interest on the
Underlying Securities over the accrual
interest on the Class A Units and accrued
Class B Payments (including accrued
interest on deferred on Class B
Payments).
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.
Expense Administrator
Make-Whole Amount: Except to the extent such exercise is in
connection with a redemption, if any
exercise of Warrants, together with any
other Warrants exercised on the same Call
Date, is an exercise of less than all
Warrants remaining unexercised, the
applicable Call Price shall include an
amount equal to the present value of a
stream of payments equal to $5,500
payable on each scheduled Distribution
Date discounted at a rate of 5.0% per
annum on the basis of a 360 day year
consisting of twelve 30 day months from
but excluding the date of such exercise
until and including the Scheduled Final
Distribution Date, assuming for this
purpose that the Trust is not terminated
prior to the Scheduled Final Distribution
Date, multiplied by the Unit Principal
Balance of applicable Class A Units to be
called and divided by the Initial Unit
Principal Balance of the Class A Units.
Listing: The Depositor has applied to list the
Class A Units on the New York Stock
Exchange.
ERISA Restrictions: With respect to the Class A Units, no
ERISA restrictions apply. With respect to
the Class B Units, the No Plan
Restriction applies.
QIB Restriction: Applicable to the Class B Units only.
Termination: If a Trust Wind-Up Event occurs, any
Underlying Securities held by the Trust
will be liquidated (by delivery to the
Underlying Security Issuer in the event
of a redemption, pursuant to the Warrant
Terms in the event of an exercise of the
Warrants or otherwise by sale thereof).
Warrant Termination Payment: Any amounts available for payment
pursuant to the Distribution Priorities
above as a Warrant Termination Payment.
Tender Offers: The Trust will not participate in any
tender offer for the Underlying
Securities and the Trustee will not
accept any instructions to the contrary
from the Unitholders, except in
connection with an exercise by a
Warrantholder of Warrants. Any
Warrantholder may exercise Warrants in
connection with any tender offer for the
Underlying Securities and the Trustee may
participate in the tender offer on behalf
of an exercising Warrantholder.
Depositor Optional Exchange: Depositor Optional Exchange applies to
this Series of Units.
Section 5.12(c)(ii) of the Standard Terms
shall be incorporated herein by replacing
5.12 (c)(ii) with the following: "(ii)
such exchange is to be effected on any
Distribution Date or any date that is 90
days before or after a Distribution Date
(or the succeeding Business Day if such
date is not a Business Day) with 45 days'
notice".
Pursuant to 5.12(c)(iii), a corresponding
portion of the Warrants must consent to
such an exchange. The Depositor may
satisfy the consent requirement of the
preceding sentence by tendering a
corresponding portion of Warrants or by
delivering consents from a corresponding
portion of Warrants (including Warrants
it owns) or any combination thereof.
Pursuant to 5.12(c)(iii), the Expense
Administrator must consent to such an
exchange.
Section 5.12(c)(iv) of the Standard Terms
shall be incorporated herein by adding
the following to Section 5.12(c): "(iv)
the Depositor determines that more than
100 holders of the Class A Units, and
only if no ERISA restrictions apply to
the Class B ▇▇▇▇▇, ▇▇▇ holders of the
Class B Units independent of the Trust
and each other will remain after such
exchange; unless the Depositor determines
that such an exchange is otherwise
consistent with the restrictions under
ERISA and Section 4975 of the Internal
Revenue Code of 1986."
Optional Exchange
Under Warrants: A Call Notice under Schedule III shall
also constitute a notice of and a demand
to exchange each of the Units acquired
pursuant to the related exercise for a
corresponding portion of Trust Property
pursuant to Section 5.12(d) of the
Standard Terms. Such notice and demand
may only be revoked or rescinded to the
extent that the related exercise is
revoked or rescinded and the settlement
of the Optional Exchange shall be the
Exercise Date.
Trust Property distributable to a
Warrantholder who has acquired Units by
exercise in connection with a tender
offer or redemption as addressed in
Section 1.1(i) of Schedule III, shall be
the Trust Property specified in Section
1.1(i) of Schedule III payable in the
manner specified in the Distribution
Priority.
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 or
Call 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
$1,265,333.33.
If a deferral period on the Underlying
Securities occurs before the retained
interest is scheduled to be paid, the
Depositor shall be entitled to interest
on the otherwise payable Retained
Interest at the rate of 6.345% per annum
on the basis of a 360 day year consisting
of twelve 30 day months as part of the
Retained Interest.
If an 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.
Sale of Underlying Securities: In connection with any sale of the
Underlying Securities by the Selling
Agent pursuant to the terms hereof, if a
Warrantholder is not an affiliate of the
Selling Agent, the Selling Agent will
extend a right of first refusal to each
such Warrantholder to purchase the
Underlying Securities at the highest bid
received by the Selling Agent.
If more than one Warrantholder exercises
such right of first refusal, Underlying
Securities will be sold to each
exercising Warrantholder in proportion to
the number of Warrants held by such
Warrantholder; provided, that if only one
Warrantholder exercises such right of
first refusal, such Warrantholder shall
be entitled to purchase any or all of the
Underlying Securities to be sold by the
Selling Agent.
Selling Agent: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.
Rating Agency Condition: The definition of Rating Agencies
Condition in the Standard Terms shall not
apply and the following shall apply
instead:
"Rating Agency Condition": With respect
to any specified action or determination,
means receipt of (i) written confirmation
by ▇▇▇▇▇'▇ (if the Units are rated by
▇▇▇▇▇'▇, for so long as the Units are
outstanding and rated by ▇▇▇▇▇'▇) and
(ii) written confirmation by S&P (if the
Units are rated 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. Such
confirmation 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.
Voting: With respect to any voting or other
rights of any Unitholder or Class of
Units based on the Unit Principal Balance
or denomination of the applicable Units,
each Class B Unitholder shall be treated
as holding Units with a Unit Principal
Balance or denomination equal to the
Class B Present Value Amount of the Class
B Units held by such Class B Unitholder
as of the applicable Record Date or date
of determination.
Unit Principal Balance: Except with respect to the "Voting"
provision above, when the Unit Principal
Balance is used with respect to the Class
B Units, it shall be deemed to mean
"Initial Notional Amortizing Balance".
Amendments: Notwithstanding anything to the contrary
in the Standard Terms, amendments to the
Warrants and to Schedule III hereof shall
be governed by Section 7.02 of the
Standard Terms. For the avoidance of
doubt, the terms of the Warrant and
Schedule III may not be amended without
consent of all Warrantholders.
Notwithstanding the foregoing, the
Depositor and Trustee may agree to amend
and restate this Trust Agreement from
time to time regarding the Warrants,
without consent of the Warrantholders, to
provide that Warrantholders shall be
entitled to call and receive directly the
underlying Trust Property corresponding
to the Class A Units and Class B Units
that would have been redeemed following
an exercise of Warrants, and not to call
the Class A Units. For the avoidance of
doubt, such amendment shall not affect
the Call Price or the first paragraph of
the Alternative Exercise provisions set
forth herein.
Additional Terms: Section 12.10 of the Standard Terms shall
apply as modified below to include the
Warrantholders:
"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, the Depositor
or the Warrantholders 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
liquidations, 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."
Compliance Certificate: The Trustee will provide to the Depositor
an appropriate compliance certificate in
connection with the annual report of the
Depositor and/or the Trust and, upon the
reasonable request of the Depositor, at
other times, with respect to the
Trustee's compliance with its duties and
obligations under this Trust Agreement. A
form of such certification is attached as
Annex A.
Distribution Reports: The Trustee shall file each distribution
report on Form 8-K within 4 days of the
related Distribution Date. Each such
distribution report or Form 8-K shall
contain text substantially similar to the
following:
The underlying security issuer or
guarantor, as applicable, is subject to
the informational requirements of the
Exchange Act. The underlying security
issuer or guarantor, as applicable,
currently files reports, proxy statements
and other information with the SEC. Those
periodic reports, current reports and
other reports and other information can
be inspected and copied at the public
reference facilities maintained by the
SEC at ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇. Copies of those
materials can be obtained by making a
written request to the SEC, Public
Reference Section, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, at
prescribed rates. The SEC also maintains
a website on the internet at
▇▇▇▇://▇▇▇.▇▇▇.▇▇▇ at which users can
view and download copies of reports,
proxy, information statements and other
information filed electronically. In
addition, those reports and other
information may also be obtained from the
underlying security issuer by making a
request to the underlying security
issuer.
Fiscal Year: The fiscal year of the Trust shall be the
calendar year and end each December 31.
ANNEX A TO SCHEDULE I
LASALLE BANK NATIONAL ASSOCIATION
ABS ANNUAL REPORT BACKUP CERTIFICATION
In connection with the preparation and delivery of the annual
report on Form 10-K of MS Structured Asset Corp. for the fiscal year ending
December 31, and the certifications given on behalf of SATURNS Trust No. 2005-1
with respect thereto, the undersigned hereby certifies that he is a duly elected
[ ] of LaSalle Bank National Association and further certifies in his capacity
as such as follows:
1. LaSalle Bank National Association has prepared all distribution reports with
respect to each distribution date for SATURNS Trust No. 2005-1 and has filed a
copy of such reports on Form 8-K during the fiscal year as described on Exhibit
A hereto.
2. I have reviewed all reports on Form 8-K containing distribution reports filed
in respect of periods included in the fiscal year covered by the annual report
of MS Structured Asset Corp. on behalf of SATURNS Trust 2005-1;
3. I am familiar with the operations of LaSalle Bank National Association with
respect to the SATURNS program and SATURNS Trust 2005-1 and the requirement
imposed by the trust agreement;
4. Based on my knowledge, the information in the distribution reports, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by the annual report;
5. Based on my knowledge, the information required to be provided under each
trust agreement, for inclusion in these reports, is included in these reports;
6. Based on my knowledge, and except as disclosed in the reports, the trustee
has fulfilled its obligations, including any servicing obligations, under the
trust agreement.
7. Based on my knowledge, and except as disclosed in the reports, there are no
material legal proceedings with respect to any trust, involving the trust or
LaSalle Bank National Association as trustee.
By:
------------------------------------------
Name:
Title:
Date:
EXHIBIT A TO ANNEX A TO SCHEDULE I
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SATURNS Trust Closing Collateral Payment Dates Form 8-K Filing Dates (Not
No.: Date Trust Agreement Filings in
connection with Closing
Date)
For FY [ ]
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2005-1 12/15/04 ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital I February 15 and August 15
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Schedule II
(Terms of Trust Property)
Underlying Securities: ▇▇▇▇▇▇▇ Sachs Capital I 6.345% trust
preferred capital securities due February
15, 2034.
Underlying Guarantor
Debentures:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. 6.345% Junior
Subordinated Debentures due February 15,
2034. If the Underlying Security
Guarantor causes the Underlying
Securities to be exchanged for the Junior
Subordinated Debenture Underlying
Security, such Junior Subordinated
Debenture shall be deemed to be the
Underlying Security and such exchange
shall not be treated as a redemption of
the Underlying Securities.
Underlying Security Issuer: ▇▇▇▇▇▇▇ Sachs Capital I
Underlying Security Guarantor: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc.
Principal Amount: $60,000,000
Underlying Security Rate: 6.345%. Interest payments on the
underlying securities may be deferred for
up to 10 consecutive semi-annual payment
dates at the option of the Underlying
Security Guarantor.
Credit Ratings: A1 by ▇▇▇▇▇'▇
A- by S&P
Listing: None
Underlying Security
Issuance Agreement: An amended and restated trust agreement
dated as of January 20, 2004, as
supplemented and amended from time to
time, between the Underlying Security
Guarantor and the Underlying Security
Trustee.
Form: Global
Currency of
Denomination: United States dollars
Acquisition Price by Trust: $59,660,000
Underlying Security
Payment Date: Each February 15 and August 15
Original Issue Date: The Underlying Securities were originally
issued on or about February 6, 2004 under
the Securities Act of 1933 in a principal
amount of $2,750,000,000.
Maturity Date: February 15, 2034
Sinking Fund Terms: Not Applicable
Redemption Terms: As described in the Underlying Securities
Issuance Agreement, the Underlying
Securities are redeemable, as a whole at
any time, or in part from time to time,
at the option of the Underlying Security
Issuer. Upon a "tax event" or "investment
company event", the Underlying Security
Issuer may redeem the Underlying
Securities for a redemption price equal
to the principal amount plus accrued
interest, if any.
CUSIP No.:/ISIN No. ▇▇▇▇▇▇▇▇▇
Underlying Security Trustee: The Bank of New York
Schedule III
ADDITIONAL WARRANT TERMS
ARTICLE I
EXERCISE OF WARRANTS
Section 1.1 Principal Terms.
(a) Call Price.
The Call Price per Warrant is the sum of (i)(a) $1,000 (corresponding
to 40 $25.00 Class A Units) or (b) if such exercise is in connection with a
tender offer for Underlying Securities held by the Trust for settlement prior to
the First Regular Call Date, $1,060 ($26.50 per Class A Unit), (ii) the
applicable Class B Present Value Amount (which will be adjusted for any accrued
Class B Payments on the Class B Units payable under (iii)), (iii) accrued and
unpaid interest on the applicable Class A Units and accrued and unpaid Class B
Payments on the applicable Class B Units being called and (iv) the applicable
Expense Administrator Make-Whole Amount. For the avoidance of doubt, such
amounts shall include accruals on deferred amounts.
(b) Call Dates.
A Warrantholder may designate as a Call Date (i) any Business Day from
and including 9:00 a.m. New York time on the First Regular Call Date, to and
including 4:00 p.m. New York time on the Expiration Date and (ii) any Business
Day prior to the First Regular Call Date as a Call Date, but only if notice of
redemption or tender offer has been delivered by the Underlying Security Issuer
with regard to the Underlying Securities held by the Trust.
Except as otherwise provided in this paragraph, a Warrantholder shall
give notice of its intention to exercise Warrants and related designation of a
Call Date on not less than 15 or more than 60-calendar days' notice. If the
Underlying Security Issuer has given notice of redemption with respect to the
Underlying Securities or if a tender offer is outstanding for the Underlying
Securities, a Warrantholder may give notice of its intention to exercise
Warrants and related designation of a Call Date with two Business Days notice
prior to the Call Date but no later than 4:00 p.m. New York City time on the
second Business Day immediately preceding the then-scheduled settlement of the
tender offer or redemption.
(c) Expiration Date. The Scheduled Final Distribution Date.
(d) First Regular Call Date. December 15, 2009.
(e) Corresponding Underlying Security Amount. The product of (x) the
applicable number of Warrants, (y) $1,000 and (z) the Security Factor.
(f) Security Factor. The aggregate principal amount of Underlying
Securities initially held by the Trust divided by the Initial Unit Principal
Balance of the Class A Units.
(g) Call Notice.
Each exercising Warrantholder shall deliver a notice in the form of
Exhibit B to the Trustee and the Warrant Agent, including the certification of
solvency specified therein, prior to the Call Date. Each such Call Notice must
specify exercise of either (i) all Warrants the notifying Warrantholder owns or
(ii) at least 250 Warrants.
A Call Notice also constitutes a notice of exchange of the Class A
Units and the Class B Units to be obtained by a Warrantholder as a result of
such exercise for Trust Property pursuant to Section 5.12(d) of the Standard
Terms.
(h) Automatic Rescission of Exercise.
Delivery of a Call Notice does not give rise to an obligation on the
part of the Warrantholder to pay the Call Price. With respect to each Warrant
exercised, if by 4 p.m. New York time on the Business Day prior to the Call Date
the applicable Warrantholder has not paid the applicable Call Price for a
Warrant to the Warrant Agent, except to the extent the Call Notice relates to a
tender offer or redemption of Underlying Securities addressed in Section 1.1(i)
below, then the exercise of the applicable Warrant shall be automatically
rescinded, the applicable Warrant shall be reinstated, no Call Date with respect
thereto shall be deemed to have occurred and no Call Notice deemed given, and
the applicable Warrantholder shall be entitled to exercise such reinstated
Warrants in the future.
(i) Tender Offer and Redemption.
Each Warrantholder shall specify in its Call Notice if its exercise is
in connection with a redemption or tender offer if the specified Call Date will
occur on or after the First Regular Call Date. Any Warrantholder giving a Call
Notice with respect to a Call Date prior to the First Regular Call Date shall be
deemed to specify that it is exercising its Warrants in connection with a tender
offer or redemption.
A Warrantholder specifying or deemed to specify that it is exercising
its Warrants in connection with a tender offer for or a redemption of the
Underlying Securities shall be deemed to instruct the Trustee to tender the
applicable Corresponding Underlying Security Amount in connection with such
redemption or tender offer.
To the extent Underlying Securities corresponding to such a deemed
instruction to tender are not accepted by the tender offeror or Underlying
Security Issuer and paid for in accordance with the terms of the tender offer or
redemption, a corresponding number of Warrants shall be reinstated, with
exercise thereof rescinded, no Call Date with respect thereto shall be deemed to
have occurred and no Call Notice deemed given, with the number of such
reinstated Warrants to be allocated among the Warrantholders specifying or
deemed to specify exercise in connection with such tender offer or redemption in
proportion to the number of Warrants initially so exercised by each, and each
such Warrantholder shall be entitled to exercise such reinstated Warrants in the
future. The Warrant Agent shall determine such allocation by notice to the
applicable Warrantholders.
A Warrantholder specifying or deemed to specify that it is exercising
its Warrants in connection with a tender offer for or a redemption of the
Underlying Securities, to the extent such exercise is not rescinded, shall be
entitled to Trust Property in an amount equal to the proceeds of the tender
offer or redemption allocable to the applicable Corresponding Underlying
Security Amount in excess of the aggregate Call Price for the applicable number
of Warrants.
If the Warrant Agent receives a Call Notice or Call Notices with
respect to Warrants with an aggregate Corresponding Underlying Security Amount
that is less than the aggregate principal amount of Underlying Securities held
by the Trust subject to redemption, the Warrant Agent shall determine by notice
to the applicable Warrantholders which Warrants are to be terminated in
connection with such redemption by allocating the termination of Warrants pro
rata among remaining Warrantholders (including exercising Warrantholders holding
unexercised Warrants) in proportion to their holdings of unexercised Warrants.
Warrants so terminated shall be entitled to the applicable Warrant Termination
Payment.
If the Warrant Agent receives no Call Notices with respect to a
redemption of Underlying Securities, a number of Warrants equal to the aggregate
principal amount of Underlying Securities held by the Trust that are redeemed
divided by the product of (x) the Security Factor and (y) $1,000, shall be
terminated. The Warrant Agent shall determine by notice to the applicable
Warrantholders which Warrants are to be terminated by allocating such
termination among Warrantholders in proportion to the number of Warrants held by
each. Warrants so terminated shall be entitled to the applicable Warrant
Termination Payment.
Whenever the Warrant Agent is obligated to allocate the termination of
Warrants pro rata, and this allocation would result in some Warrants being
partially terminated, the Warrant Agent shall randomly re-allocate terminations
to the extent necessary to ensure that only whole Warrants are terminated or
such that only one Warrant is partially terminated.
(j) Payment of Call Price.
Except with respect to Warrants exercised or deemed exercised in
connection with a redemption of or tender offer for the Underlying Securities,
each exercising Warrantholder shall deposit the applicable Call Price for all
Warrants exercised by it with the Warrant Agent no later than the Business Day
prior to settlement of exercise.
The Warrant Agent shall notify the Trustee immediately upon its receipt
of payment of the applicable Call Price. The Warrant Agent shall transfer the
amount of any paid Call Price to the Trustee in immediately available funds, for
deposit in the Unit Account and application pursuant to the other terms of this
Trust Agreement no later than 4 p.m. New York time on the Business Day preceding
the Call Date and, pending such transfer, shall hold such amount for the benefit
of the Warrantholder in a segregated trust account.
(k) Appointment of Warrant Agent.
The Depositor hereby appoints the Warrant Agent as agent to (i) receive
for the benefit of the Warrantholders pending payment to the Trust in connection
with exercise of the Warrants from time to time, the Call Price amounts paid to
the Warrant Agent, (ii) receive for the benefit of the Warrantholders, in
connection with exercise of the Warrants from time to time, the Units deemed
tendered to the Trust pursuant to Section 1.2, and the Trust Property received
pursuant to the related Optional Exchange pending delivery thereof to the
relevant Warrantholders and (iii) otherwise act on behalf of and for the benefit
of the Trust, the Unitholders and the Warrantholders for purposes of this
Agreement, and the Warrant Agent accepts such appointment for itself and its
successors and assigns, subject to the terms and provisions hereof.
(l) Alternative Exercise.
Notwithstanding any other provision of this Trust Agreement, in
connection with any exercise of Warrants, if the Warrantholder beneficially owns
Class B Units on the date of such exercise, the portion of the Warrant exercise
equal to an amount corresponding to the amount of the Class B Units the
Warrantholder beneficially owns shall be designated as an "Alternative
Exercise". With respect to any portion of an exercise required to be designated
as an Alternative Exercise, the Warrantholder shall reduce the Call Price by the
corresponding value of Class B Units it beneficially owns and such Class B Units
shall be exchanged for Trust Property in connection with such Alternative
Exercise. No Class B Units will be deemed reissued to the Warrantholder or
called in connection with such Alternative Exercise.
As with an exercise that is not an Alternative Exercise, the "Callable
Series" provisions shall automatically cancel and re-issue Class A Units to the
Warrantholder, the notice of exercise shall constitute a notice of exchange of
the acquired Class A Units together with the applicable beneficially owned Class
B Units subject to such Alternative Exercise for Trust Property under the
"Optional Exchange Under Warrants" provisions, and any such notice of exchange
may only be revoked or rescinded to the extent the exercise as to Class A Units
is revoked or rescinded as specified in the "Optional Exchange Under Warrants"
provisions.
All other provisions of this Trust Agreement shall be appropriately
construed to give effect to the purposes of this subsection.
(m) Amendment of Trust Agreement
The Class A Units and Class B Units are currently subject to Call
Options and Call Rights granted in favor of the Warrantholders. Notwithstanding
any other provision of this Trust Agreement, including Section 1.1(l) with
respect to Alternative Exercises, the Depositor and Trustee may agree to amend
and restate this Trust Agreement from time to time regarding the Warrants,
without the consent of the Warrantholders, to provide that Warrantholders shall
be entitled to call and receive directly the underlying Trust Property
corresponding to the Class A Units and Class B Units that would have been
redeemed following an exercise of Warrants, and not to call the Class A Units.
For the avoidance of doubt, such amendment shall not affect the Call Price or
the first paragraph of the Alternative Exercise provisions set forth above.
Similarly, nothing in the above should be understood as exempting such amendment
from the application of Section 12.01(d) of the Standard Terms for Trust
Agreements.
Section 1.2 Delivery of Units. As soon as practicable after each
surrender of Warrants in whole or in part on the Call Date and upon satisfaction
of all other requirements described in the Warrants and in Section 1.1 hereof,
the Warrant Agent shall instruct the Trustee to confirm that the transfer
specified under the "Callable Series" provisions of Schedule I has occurred and
to cause a distribution of Trust Property to the Warrantholder as an Optional
Exchange taking into account Section 1.1(i) above, if applicable. A surrender of
the Warrants shall be deemed to be a simultaneous surrender of the Class A Units
and Class B Units acquired in exchange therefor.
If such exercise is in part only, the Warrant Agent shall instruct the
Trustee to authenticate new Warrants of like tenor, representing the outstanding
Warrants of the Warrantholder and the Warrant Agent shall deliver such Warrants
to the Warrantholder.
In each case, the Trustee shall act in accordance with such
instructions.
Section 1.3 Cancellation and Destruction of Warrants. All Warrants
surrendered to the Warrant Agent for the purpose of exercise (in whole or in
part) pursuant to Section 1.1 and actually exercised, or for the purpose of
transfer or exchange pursuant to Article III, shall be cancelled by the Warrant
Agent, and no Warrant (other than that reflecting any such transfer or exchange)
shall be issued in lieu thereof. The Warrant Agent shall destroy all cancelled
Warrants.
Section 1.4 No Rights as Holder of Units Conferred by Warrants. Each
Warrantholder agrees that the Warrants do not represent an ownership interest in
the Trust or its assets and that none of them shall treat the Warrants as an
ownership interest in the Trust for any purpose.
ARTICLE II
RESTRICTIONS ON TRANSFER
Section 2.1 Restrictive Legends. Each Warrant (including each Warrant
issued upon the transfer of any Warrant) shall be issued with a legend in
substantially the form contained in Exhibit A hereto.
Section 2.2 Notice of Proposed Transfer. Prior to any transfer of any
Warrant or portion thereof, the Warrantholder will give 5 Business Days (or such
lesser period acceptable to the Warrant Agent) prior written notice to the
Warrant Agent and the Depositor of such Warrantholder's intention to effect such
transfer.
ARTICLE III
REGISTRATION AND TRANSFER OF WARRANTS, ETC.
Section 3.1 Warrant Register; Ownership of Warrants. The Warrant Agent
will keep a register in which the Warrant Agent will provide for the
registration of Warrants and the registration of transfers of Warrants
representing numbers of Warrants. The Trustee and the Warrant Agent may treat
the Person in whose name any Warrant is registered on such register as the owner
thereof for all purposes, and the Trustee and the Warrant Agent shall not be
affected by any notice to the contrary. The Warrant Agent shall make such
adjustments to its records and the register as shall be necessary to reflect
terminations and exercise of Warrants.
Section 3.2 Transfer and Exchange of Warrants. (a) No Warrant may be
offered, resold, assigned or otherwise transferred (including by pledge or
hypothecation) at any time except in accordance with this Section 3.2.
(1) Any purchaser or transferee of the Warrants shall represent that it
is (A) a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act that (1) is not a broker-dealer that owns and invests on a
discretionary basis less than $25 million in securities of issuers that are not
affiliated persons of the dealer and (2) is not a plan referred to in paragraph
(a)(1)(i)(D) or (a)(1)(i)(E) of Rule 144A or a trust fund referred to in
paragraph (a)(1)(i)(F) of Rule 144A that holds the assets of such a plan, if
investment decisions with respect to the plan are made by the beneficiaries of
the plan, (B) aware that the sale or transfer of the Warrants to it may be made
to it in reliance on the exemption from registration provided by Rule 144A under
the Securities Act and (C) acquiring the Warrants for its own account or for one
or more accounts, each of which is a qualified institutional buyer, and as to
each of which the purchaser or transferee exercises sole investment discretion,
and in each case in accordance with any applicable securities laws of any state
of the United States and other jurisdictions.
(2) Warrants 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 Warrants with the assets of any such Plan or
other plan. Each Person who acquires any Warrant, and each fiduciary which
causes any such Person to acquire any Warrant, in its individual as well as its
fiduciary capacity, will be deemed by such purchase, holding or acquisition, on
each date on which the Warrant 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 Warrants. Each Person that
acquires a Warrant, and each fiduciary who causes a person to acquire a Warrant,
in its individual as well as its fiduciary capacity, agrees to indemnify and
hold harmless the Depositor, the Trustee, the Warrant Agent, 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 contained
in this Section 3.2(a)(2) not being true.
(b) Upon surrender of any Warrant for registration of transfer or for
exchange to the Warrant Agent, the Warrant Agent shall (subject to compliance
with Section 3.2(a)) promptly execute and deliver, and cause the Trustee, on
behalf of the Trust, to execute and deliver, in exchange therefor, a new Warrant
of like tenor and evidencing a like number of Warrants, in the name of such
Warrantholder or as such Warrantholder (upon payment by such Warrantholder of
any applicable transfer taxes or government charges) may direct; provided that
as a condition precedent for transferring the Warrants, the prospective
transferee shall deliver to the Trustee and the Depositor an executed copy of
the Transfer Letter in the form of Exhibit C hereto.
(c) Any purported transfer of the Warrants (or any interest therein) in
violation of Section 3.2(a)(1) or Section 3.2(a)(2) hereof shall be void ab
initio and the purported transferee in such transfer shall not be recognized by
any Person as a holder of such Warrants for any purpose. The Depositor and the
Trustee shall each have the power to sell the Warrants (or any interest therein)
of a purported Warrantholder (or owner of any interest therein) who acquired its
interest in violation of Section 3.2(a)(1) or Section 3.2(a)(2) or who continues
to hold Warrants in violation of Section 3.2(a)(2).
Section 3.3 Replacement of Warrants. Upon receipt of evidence
reasonably satisfactory to the Warrant Agent of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction of any Warrant, upon delivery of an indemnity bond in such
reasonable amount as the Warrant Agent may determine, or, in the case of any
such mutilation, upon the surrender of such Warrant for cancellation to the
Warrant Agent, the Warrant Agent shall execute and deliver, and cause the
Trustee, on behalf of the Trust, to execute and deliver, in lieu thereof, a new
Warrant of like tenor bearing a number not contemporaneously outstanding.
Section 3.4 Execution and Delivery of Warrants by Trustee;
Authentication.
The Trustee agrees and acknowledges that it will, concurrently with the
receipt by it of the Underlying Securities and the execution, authentication and
delivery of Units, cause to be executed, authenticated and delivered to or upon
the order of the Depositor, Warrants duly executed and authenticated by or on
behalf of the Trustee.
The Trustee, on behalf of the Trust, hereby agrees (subject to
compliance with Article II) to execute and deliver such new Warrants issued in
accordance with Section 1.2 or this Article III as the Warrant Agent shall
request in accordance herewith.
Upon surrender for registration of transfer of any Warrant at the
office or agency of the Trustee, if the requirements of Section 8-401 of the
Uniform Commercial Code are met to the Trustee's satisfaction, and subject to
the transfer restrictions set forth in this Schedule III, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Warrants. All transfers of Warrants are subject to
the approval of the Trustee and the Trustee shall not register any transfer of
Warrants if such transfer would violate any provision of the Trust Agreement.
Section 3.5 Federal Income Tax Matters. Each Warrantholder agrees to
treat each Warrant as a call option for federal income tax purposes.
ARTICLE IV
WARRANT AGENT
Section 4.1 Limitation on Liability. The Warrant Agent shall be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of the Warrants
in reliance upon any instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document in good faith believed by it to be genuine
and to be signed, executed and, where necessary, verified and acknowledged, by
the proper Person or Persons. The Warrant Agent and any director, officer,
employee or agent of the Warrant Agent shall be indemnified by the Depositor to
the same extent that the Trustee is indemnified by the Depositor pursuant to
Section 10.05(b) of the Standard Terms.
Section 4.2 Duties of Warrant Agent. The Warrant Agent undertakes only
the specific duties and obligations imposed hereunder upon the following terms
and conditions, by all of which the Depositor, the Trust, the Trustee and each
Warrantholder shall be bound:
(a) The Warrant Agent may consult with legal counsel (who may be legal
counsel for the Depositor), and the opinion of such counsel shall be full and
complete authorization and protection to the Warrant Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion,
provided the Warrant Agent shall have exercised reasonable care in the selection
by it of such counsel.
(b) Whenever in the performance of its duties hereunder, the Warrant
Agent shall deem it necessary or desirable that any fact or matter be proved or
established by the Depositor or the Trustee prior to taking or suffering any
action hereunder, such fact or matter may be deemed to be conclusively proved
and established by a Depositor Order or a certificate signed by a Responsible
Officer of the Trustee and delivered to the Warrant Agent; and such certificate
shall be full authorization to the Warrant Agent for any action taken or
suffered in good faith by it hereunder in reliance upon such certificate.
(c) The Warrant Agent shall be liable hereunder only for its own
negligence, willful misconduct or bad faith.
(d) The Warrant Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained herein or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Trust and the Depositor only.
(e) The Warrant Agent shall not have any responsibility in respect of
and makes no representation as to the validity of the Warrants or the execution
and delivery thereof (except the due execution hereof by the Warrant Agent); nor
shall it be responsible for any breach by the Trust of any covenant or condition
contained in the Warrants; nor shall it by any act thereunder be deemed to make
any representation or warranty as to the Units to be purchased thereunder.
(f) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, Chief Financial Officer,
Chief Operating Officer, President, a Vice President, a Senior Vice President, a
Managing Director, its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary of the Depositor, and any Responsible Officer of the
Trustee, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
(g) The Warrant Agent and any shareholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Warrants or
other securities of the Trust or otherwise act as fully and freely as though it
were not Warrant Agent hereunder, so long as such persons do so in full
compliance with all applicable laws. Nothing herein shall preclude the Warrant
Agent from acting in any other capacity for the Trust, the Depositor or for any
other legal entity.
(h) The Warrant Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents.
(i) The Warrant Agent shall act solely as the agent of the Trust, the
Unitholders and the Warrantholders hereunder as respectively set forth herein.
The Warrant Agent shall not be liable except for the failure to perform such
duties as are specifically set forth herein, and no implied covenants or
obligations shall be read into the Warrants against the Warrant Agent, whose
duties shall be determined solely by the express provisions thereof. The Warrant
Agent shall not be deemed to be a fiduciary.
(j) The Warrant Agent shall not be responsible for any failure on the
part of the Trustee to comply with any of its covenants and obligations
contained herein.
(k) The Warrant Agent shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of its duties
hereunder and shall not be under any obligation or duty to institute, appear in
or defend any action, suit or legal proceeding in respect hereof, in each case
unless first indemnified to its satisfaction, but this provision shall not
affect the power of the Warrant Agent to take such action as the Warrant Agent
may consider proper, whether with or without such indemnity. The Warrant Agent
shall promptly notify the Depositor and the Trustee in writing of any claim made
or action, suit or proceeding instituted against it arising out of or in
connection with the Warrants.
(l) The Trustee will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may be required by the Warrant Agent in order to
enable it to carry out or perform its duties hereunder.
Section 4.3 Change of Warrant Agent. The Warrant Agent may resign and
be discharged from its duties hereunder upon thirty (30) days' notice in writing
mailed to the Depositor and the Trustee by registered or certified mail, and to
the Warrantholders by first-class mail at the expense of the Depositor; provided
that no such resignation or discharge shall become effective until a successor
Warrant Agent shall have been appointed hereunder. The Depositor may remove the
Warrant Agent or any successor Warrant Agent upon thirty (30) days' notice in
writing, mailed to the Warrant Agent or successor Warrant Agent, as the case may
be, and to the Warrantholders by first-class mail; provided further that no such
removal shall become effective until a successor Warrant Agent shall have been
appointed hereunder. If the Warrant Agent shall resign or be removed or shall
otherwise become incapable of acting, the Depositor shall promptly appoint a
successor to the Warrant Agent, which may be designated as an interim Warrant
Agent. If an interim Warrant Agent is designated, the Depositor shall then
appoint a permanent successor to the Warrant Agent, which may be the interim
Warrant Agent. If the Depositor shall fail to make such appointment of a
permanent successor within a period of thirty (30) days after such removal or
within sixty (60) days after notification in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the
Warrantholder, then the Warrant Agent or registered Warrantholder may apply to
any court of competent jurisdiction for the appointment of such a successor.
Any successor to the Warrant Agent appointed hereunder must be rated in
one of the four highest rating categories by the Rating Agencies. Any entity
which may be merged or consolidated with or which shall otherwise succeed to
substantially all of the trust or agency business of the Warrant Agent shall be
deemed to be the successor Warrant Agent without any further action.
Section 4.4 Warrant Agent Transfer Fee. The Warrant Agent will assess a
fee of $50.00 upon the issue of any new Warrant, such fee to be assessed upon
the new Warrantholder.
EXHIBIT A TO SCHEDULE III
FORM OF WARRANT CERTIFICATE
STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS")
SERIES 2005-1
WARRANTS
EACH PURCHASER OR OTHER TRANSFEREE OF THIS WARRANT OR ANY
INTEREST HEREIN OF THIS WARRANT, 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 AND OF THE TYPE SET FORTH IN THE
WARRANT TRANSFER LETTER.
THE HOLDER, AND EACH FIDUCIARY WHICH CAUSES ANY PERSON TO
ACQUIRE ANY WARRANT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, WILL
BE DEEMED BY SUCH PURCHASE, HOLDING OR ACQUISITION, ON EACH DATE ON WHICH THE
WARRANT 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 WARRANT, AND EACH FIDUCIARY WHO
CAUSES A PERSON TO ACQUIRE A WARRANT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY
CAPACITY, AGREES TO INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE WARRANT
AGENT, 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 IN THIS PARAGRAPH NOT BEING TRUE.
THIS WARRANT MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS PROVIDED IN THE TRUST AGREEMENT FOR THE TRUST TO WHICH THIS WARRANT
RELATES.
ANY PURPORTED TRANSFER OF THIS WARRANT CERTIFICATE (OR ANY
INTEREST HEREIN) IN VIOLATION OF SECTION 3.2(A)(1) OR SECTION 3.2(A)(2) OF
SCHEDULE III TO THE TRUST AGREEMENT SHALL BE VOID AB INITIO AND THE PURPORTED
TRANSFEREE IN SUCH TRANSFER SHALL NOT BE RECOGNIZED BY ANY PERSON AS A HOLDER OF
SUCH WARRANTS FOR ANY PURPOSE. THE DEPOSITOR AND THE TRUSTEE SHALL EACH HAVE THE
POWER TO SELL THE WARRANTS (OR ANY INTEREST HEREIN) OF A PURPORTED WARRANTHOLDER
(OR OWNER OF ANY INTEREST HEREIN) WHO ACQUIRED ITS INTEREST IN VIOLATION OF
SECTION 3.2(A)(1) OR SECTION 3.2(A)(2) OF SCHEDULE III TO THE TRUST AGREEMENT OR
WHO CONTINUES TO HOLD WARRANTS IN VIOLATION OF SECTION 3.2(A)(2) OF SCHEDULE III
OF THE TRUST AGREEMENT.
THIS WARRANT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Warrant ▇▇. ▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇
REGISTERED INITIAL NUMBER: 60,000
AGGREGATE INITIAL NUMBER
OF ALL WARRANTS: 60,000
STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS")
SERIES 2005-1
WARRANTS
This certifies that [ ] is the registered
owner of Warrants in the number specified above.
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 December 15, 2004 (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 Warrant is one of the Warrants 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 Warrant, the
Warrantholder assents to and becomes bound by the Trust Agreement.
Each Warrant issued by the Trust represents a Call Option and
Call Right to purchase $1,000 Unit Principal Balance of Class A Units and the
Applicable Class B Equivalent Amount. Exercises on this Certificate will be made
in accordance with a written notice to the Warrant Agent specified in the Trust
Agreement.
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 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and at such other places, if any, designated
by the Trustee, by any Warrantholder 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 Warrantholder 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. 2005-1
BY: LASALLE BANK NATIONAL
ASSOCIATION,
as Trustee
By: ______________________________
Authorized Signatory
DATED:
[SEAL]
Trustee's Certificate of
Authentication:
This is one of the Warrants referred
to in the within-mentioned Agreement.
LASALLE BANK NATIONAL ASSOCIATION,
as Authenticating Agent
By: ____________________________
Authorized Signatory
STRUCTURED ASSET TRUST UNIT REPACKAGINGS ("SATURNS")
SERIES 2005-1
The Trust Agreement permits the amendment thereof, in certain
circumstances, without the consent of the Warrantholders 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 Warrant 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 Warrantholder hereof or such Warrantholder'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 Warrants which evidence the same
aggregate Warrants, as requested by the Warrantholder 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.
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 Warrants 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 Warrants or any
interest therein except as expressly provided in the Trust Agreement.
ASSIGNMENT FOR SATURNS SERIES 2005-1
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)
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the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
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Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
*/
---------------------------------
-
---------------
*/ 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.
EXHIBIT B TO SCHEDULE III
FORM OF EXCERCISE NOTICE AND CERTIFICATION OF SOLVENCY
[DATE]
LaSalle Bank National Association
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
MS Structured Asset Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Structured Asset Trust Unit Repackagings ("SATURNS"), Series 2005-1
Ladies and Gentlemen:
We hereby give notice of our intent to acquire __________ Unit
Principal Balance of Class A Units and the Applicable Class B Equivalent Amount
of Class B Units for settlement on _________ (the "Call Date"). [We hereby
direct the Trustee and the Warrant Agent to treat this exercise [up to]
__________ Unit Principal Balance of Class A Units and an Applicable Class B
Equivalent Amount of Class B Units as an exercise in connection with a
[redemption][tender offer] up to the maximum amount allocable to us in
connection with this exercise.]
[We beneficially own _____________ Class B Units that we intend to
exchange pursuant to an Alternative Exercise. We designate [all][a portion of
our exercise in an amount of __________ Class B Units] to be an Alternative
Exercise. We will transfer such Class B Units to you or at your direction.]
We certify that our assets exceed our liabilities, that we are able to
meet our obligations as they come due, and that we are not subject to any
bankruptcy or insolvency proceeding.
[WARRANTHOLDER]
By:
---------------------------------
Name:
Title:
EXHIBIT C TO SCHEDULE III
FORM OF WARRANT TRANSFER LETTER
[DATE]
LaSalle Bank National Association
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
MS Structured Asset Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Structured Asset Trust Unit Repackagings ("SATURNS"), Series 2005-1
Ladies and Gentlemen:
In connection with its proposed purchase of Warrants (the "Warrants")
which represent the right to call $______________ aggregate Unit Principal
Balance of SATURNS 2005-1 ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital I Capital Security Backed Class
A Units and the Applicable Class B Equivalent Amount of SATURNS 2005-1 ▇▇▇▇▇▇▇
Sachs Capital I Capital Security Backed Class B Units, the undersigned
transferee (the "Transferee") confirms that:
1. The Transferee understands that substantial risks are involved in an
investment in the Warrants. The Transferee represents that in making its
investment decision to acquire the Warrants, the Transferee has not relied on
representations, warranties, opinions, projections, financial or other
information or analysis, if any, supplied to it by any person, including MS&Co.,
MS Structured Asset Corp., as depositor (the "Depositor"), or LaSalle Bank
National Association, as trustee (the "Trustee"), or any of your or their
affiliates, except as expressly contained in written information, if any. The
Transferee has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in the
Warrants, and the Transferee is able to bear the substantial economic risks of
such an investment. The Transferee has relied upon its own tax, legal and
financial advisors in connection with its decision to purchase the Warrants.
2. Such Transferee (A) is a "qualified institutional buyer" (as defined
in Rule 144A of the Securities Act) that (1) is not a broker-dealer that owns
and invests on a discretionary basis less than $25 million in securities of
issuers that are not affiliated persons of the dealer and (2) is not a plan
referred to in paragraph (a)(1)(i)(D) or (a)(1)(i)(E) of Rule 144A or a trust
fund referred to in paragraph (a)(1)(i)(F) of Rule 144A that holds the assets of
such a plan, if investment decisions with respect to the plan are made by the
beneficiaries of the plan, (B) is aware that the sale or transfer of the
Warrants to it may be made to it in reliance on the exemption from registration
provided by Rule 144A under the Securities Act and (C) is acquiring the Warrants
for its own account or for one or more accounts, each of which is a qualified
institutional buyer, and as to each of which the Transferee exercises sole
investment discretion, and in each case in accordance with any applicable
securities laws of any state of the United States and other jurisdictions.
3. The Transferee understands that the Warrants have not been and will
not be registered under the 1933 Act or under the securities or blue sky laws of
any state, and that (i) if it decides to resell, pledge or otherwise transfer
any Security, such resale, pledge or other transfer must comply with the
provisions of the Trust Agreement relating to the Warrants and (ii) it will, and
each subsequent holder will be required to, notify any purchaser of any Warrant
from it of the resale restrictions in the Trust Agreement.
4. The Transferee understands that each of the Warrants will bear a
legend substantially to the following effect, unless otherwise agreed by the
Depositor and the Trustee:
EACH PURCHASER OR OTHER TRANSFEREE OF THIS WARRANT OR ANY
INTEREST HEREIN OF THIS WARRANT, 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.
THE HOLDER, AND EACH FIDUCIARY WHICH CAUSES ANY PERSON TO
ACQUIRE ANY WARRANT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, WILL
BE DEEMED BY SUCH PURCHASE, HOLDING OR ACQUISITION, ON EACH DATE ON WHICH THE
WARRANT 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 WARRANT, AND EACH FIDUCIARY WHO
CAUSES A PERSON TO ACQUIRE A WARRANT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY
CAPACITY, AGREES TO INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE TRUSTEE, THE
WARRANT AGENT, 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 IN THIS PARAGRAPH NOT BEING TRUE.
THIS WARRANT MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS PROVIDED IN THE TRUST AGREEMENT FOR THE TRUST TO WHICH THIS WARRANT
RELATES.
ANY PURPORTED TRANSFER OF THIS WARRANT CERTIFICATE (OR ANY
INTEREST HEREIN) IN VIOLATION OF SECTION 3.2(A)(1) OR SECTION 3.2(A)(2) OF
SCHEDULE III TO THE TRUST AGREEMENT SHALL BE VOID AB INITIO AND THE PURPORTED
TRANSFEREE IN SUCH TRANSFER SHALL NOT BE RECOGNIZED BY ANY PERSON AS A HOLDER OF
SUCH WARRANTS FOR ANY PURPOSE. THE DEPOSITOR AND THE TRUSTEE SHALL EACH HAVE THE
POWER TO SELL THE WARRANTS (OR ANY INTEREST HEREIN) OF A PURPORTED WARRANTHOLDER
(OR OWNER OF ANY INTEREST HEREIN) WHO ACQUIRED ITS INTEREST IN VIOLATION OF
SECTION 3.2(A)(1) OR SECTION 3.2(A)(2) OF SCHEDULE III TO THE TRUST AGREEMENT OR
WHO CONTINUES TO HOLD WARRANTS IN VIOLATION OF SECTION 3.2(A)(2) OF SCHEDULE III
OF THE TRUST AGREEMENT.
THIS WARRANT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
5. The Transferee and each fiduciary which causes the Transferee to
acquire any Warrant, in its individual as well as its fiduciary capacity,
represents and agrees that the Transferee 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 Warrants with the assets
of any such Plan or other plan. The Transferee and each such fiduciary
understands that the representations made in this section 5 will be deemed made
on each day from the date hereof through and including the date on which the
Transferee disposes of the Warrants. The Transferee and each fiduciary who
causes the Transferee to acquire a Warrant, in its individual as well as its
fiduciary capacity, agrees to indemnify and hold harmless the Depositor, the
Trustee, the Warrant Agent, 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 in this paragraph not being true.
6. The Transferee understands that no subsequent transfer of the
Warrants is permitted unless such transfer is to a transferee who will own,
after giving effect to such transfer and any other simultaneous transfers, at
least 250 Warrants and the Transferee causes the proposed transferee to provide
to the Depositor and the Trustee such documentation as may be required pursuant
to Section 3.2 of the Warrant Agent Agreement, including, if required, a letter
substantially in the form hereof, or such other written statement as the
Depositor shall reasonably prescribe.
7. The Transferee is a Person who is either:
A. (1) a citizen or resident of the United States, (2) a corporation,
partnership or other entity organized in or under the laws of the United States
or any political subdivision thereof, or (3) an estate the income of which is
includible in gross income for federal income tax purposes regardless of source,
or (4) a trust if a court within the United States is able to exercise primary
supervision of the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust, or
B. a Person not described in (A), whose ownership of such Warrant is
effectively connected with such Person's conduct of a trade or business within
the United States within the meaning of the Internal Revenue Code of 1986, as
amended (the "Code"), and its ownership of any interest in such Warrant will not
result in any withholding obligation with respect to any payments with respect
to the Warrants by any Person (other than withholding, if any, under Section
1446 of the Code), or
C. a Person not described in (A) or (B) above, who is not a Person: (1)
that owns, directly or indirectly, 10% or more of the total combined voting
power of all classes of stock in the Underlying Securities Issuer (as defined in
Schedule II to the Trust Agreement) entitled to vote, (2) that is a controlled
foreign corporation related to the Underlying Securities Issuer within the
meaning of Section 864(d)(4) of the Code, or (3) that is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business.
8. The Transferee agrees that (i) if it is a Person described in clause
(A) above, it will furnish to the Depositor and the Trustee a properly executed
IRS Form W-9, and (ii) if it is a Person described in clause (B) above, it will
furnish to the Depositor and the Trustee a properly executed IRS Form W-8ECI,
and (iii) if it is a Person described in clause (C) above, it will furnish to
the Depositor and the Trustee a properly executed IRS Form W-8BEN (or, if the
Transferee is treated as a partnership for federal income tax purposes, a
properly executed IRS Form W-8IMY with appropriate certification for all
partners or members attached). The Transferee also agrees that it will provide a
new IRS form upon the expiration or obsolescence of any previously delivered
form, and that it will provide such other certifications, representations or
Opinions of Counsel as may be requested by the Depositor and the Trustee.
9. The Transferee understands that any acquisition of Warrants (or any
interest therein) in violation of Section 3.2(a)(1) (addressed in paragraph 2
hereof) or Section 3.2(a)(2) (addressed in paragraph 5 hereof) of Schedule III
to the Trust Agreement shall be void ab initio and the purported transferee in
such transfer shall not be recognized by any Person as a holder of such Warrants
for any purpose. The Transferee understands that the Depositor and the Trustee
shall each have the power to sell the Warrants (or any interest therein) of a
purported Warrantholder (or owner of any interest therein) who acquired its
interest in violation of Section 3.2(a)(1) or Section 3.2(a)(2) of Schedule III
to the Trust Agreement or who continues to hold Warrants in violation of Section
3.2(a)(2) of Schedule III to the Trust Agreement.
You and the Trustee are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
------------------------
Name:
Title:
Registered Name:
-------------------------
Address:
-------------------------
-------------------------
Payment Instructions:
--------------------