EX-4.1 3 sat8ex4-1.txt Exhibit 4.1 ----------- TRUST AGREEMENT TRUST AGREEMENT, between MSDW Structured Asset Corp. (the "Depositor") and LaSalle Bank National Association (the "Trustee"), made as of the date set forth in Schedule I attached hereto, which Schedule together with Schedules II and III attached hereto, are made a part hereof and are hereinafter referred to collectively as the "Terms Schedule". The terms of the Standard Terms for Trust Agreements, dated July 7, 1999 (the "Standard Terms") are, except to the extent otherwise expressly stated, hereby incorporated by reference herein in their entirety with the same force and effect as though set forth herein. Capitalized terms used herein and not defined shall have the meanings defined in the Standard Terms. References to "herein", "hereunder", "this Trust Agreement" and the like shall include the Terms Schedule attached hereto and the Standard Terms so incorporated by reference. WHEREAS, the Depositor and the Trustee desire to establish the Trust identified in Schedule I attached hereto (the "Trust") for the primary purposes of (i) holding the Securities, (ii) entering into any Swap Agreement with the Swap Counterparty and (iii) issuing the Units; WHEREAS, the Depositor desires that the respective beneficial interests in the Trust be divided into transferable fractional shares, such shares to be represented by the Units; and WHEREAS, the Depositor desires to appoint the Trustee as trustee of the Trust and the Trustee desires to accept such appointment; WHEREAS, the Depositor shall transfer, convey and assign to the Trust without recourse, and the Trust shall acquire, all of the Depositor's right, title and interest in and under the Securities and other property identified in Schedule II to the Trust Agreement (the "Trust Property"); and WHEREAS, the Trust agrees to acquire the Trust Property specified herein in consideration for Units having an initial Unit Principal Balance identified in Schedule I attached hereto, subject to the terms and conditions specified in the Trust Agreement; NOW THEREFORE, the Depositor hereby appoints the Trustee as trustee hereunder and hereby requests the Trustee to receive the Securities from the Depositor and to issue in accordance with the instructions of the Depositor Units having an initial Unit Principal Balance identified in Schedule I attached hereto, and the Trustee accepts such appointment and, for itself and its successors and assigns, hereby declares that it shall hold all the estate, right, title and interest in any property contributed to the trust account established hereunder (except property to be applied to the payment or reimbursement of or by the Trustee for any fees or expenses which under the terms hereof is to be so applied) in trust for the benefit of all present and future Holders of the fractional shares of beneficial interest issued hereunder, namely, the Unitholders, and subject to the terms and provisions hereof and of the Standard Terms. IN WITNESS WHEREOF, each of the undersigned has executed this instrument as of the date set forth in the Terms Schedule attached hereto. LASALLE BANK NATIONAL ASSOCIATION as Trustee on behalf of the Trust identified in Schedule I hereto, and not in its individual capacity By: /s/ Brian D. Ames ---------------------------- Name: Brian D. Ames Title: Vice President MSDW STRUCTURED ASSET CORP. By: /s/ John Kehoe ---------------------------- Name: John Kehoe Title: Vice President Attachments: Terms Schedule (consisting of Schedules I, II and III) Schedule I (Terms of Trust and Units) Trust: SATURNS Trust No. 2001-8 Date of Trust Agreement: December 20, 2001 Trustee: LaSalle Bank National Association. References to Chase Bank of Texas, National Association in the Standard Terms shall be inapplicable. Initial Unit Principal Balance: $44,338,650 Issue Price: 100% Number of Units: 1,773,546 (Unit Principal Balance of $25 each) Minimum Denomination: $25 and $25 increments in excess thereof. The minimum denomination specified in Section 5.01(a) of the Standard Terms shall not apply. Each $25 of Unit Principal Balance is a Unit. Cut-off Date: December 20, 2001 Closing Date: December 20, 2001 Specified Currency: United States dollars Business Day: New York, New York and Chicago, Illinois Interest Rate: 7.40% Interest Reset Period: Not Applicable Rating: A3 on watch for possible downgrade by Moody's A- watch negative by S&P Rating Agencies: Moody's and S&P Scheduled Final Distribution Date: March 15, 2029. The Units will have the same final maturity as the Securities. Prepayment/Redemption: The Trust Property is subject to redemption at any time and is subject to call in accordance with Schedule III. If the rights under the Swap Agreement is partially exercised or if there is a partial redemption of the Securities, the Trustee will randomly select Units to be redeemed in full from the proceeds of such partial exercise of the Swap Agreement or partial redemption of the Securities. Additional Distribution: If any of the Securities are redeemed by the Security Issuer prior to December 20, 2006 each of the Units which are redeemed in connection with such redemption of Securities (or a related exercise or deemed exercise pursuant to Schedule III) will receive a pro rata distribution from the proceeds of the redemption of the Securities remaining after payment of principal and interest on such Units up to a maximum of $2.50 per Unit. Corporate Trust Office: The definition of "Corporate Trust Office" in the Standard Terms shall not apply. The Corporate Trust Office shall be the Trustee's Asset-Backed Securities Trust Services Group having an office at 135 S. LaSalle Street, Suite 1625, Chicago, Illinois 60603 or such other addresses as the Trustee may designate from time to time by notice to the Unitholders, the Depositor, the Swap Counterparty and the Guarantor. Swap Agreement: The ISDA Agreement referred to in Schedule III. In addition, in connection with an additional issuance of Units, any additional Swap Agreement entered into in connection therewith. Swap Counterparty: Party A to the Swap Agreement referred to in Schedule III or any assignee thereof. In addition, in connection with an additional issuance of Units, Party A to any additional Swap Agreement or any assignee thereof. In the event that there is more than one Swap Counterparty at any time when a partial termination or a deemed exercise is to occur under only part of the options outstanding under all Swap Agreements, the Trustee shall randomly select which options under the Swap Agreements shall be selected for such partial termination or deemed exercise. Guaranty: Morgan Stanley Dean Witter & Co. (the "Guarantor") shall guarantee the obligations of Morgan Stanley & Co. International Limited ("MSIL") for so long as MSIL is Party A to any Swap Agreement with the Trust. Swap Notional Amount: The Notional Amount specified in Schedule III. Swap Payment Date: Any date upon which the rights under the Swap Agreement may be exercised. Swap Rate: Not Applicable Additional Swap Agreements: In connection with an additional issuance of Units, the Depositor may arrange for the Trust to enter into an additional Swap Agreement with identical terms as the Swap Agreement entered into as of the Closing Date with an additional Swap Counterparty, except that such Swap Agreement may have a different Swap Counterparty and premium amount than the Swap Agreement entered into on the Closing Date. The Rating Agency Condition must be satisfied in connection with respect to the Swap Counterparty. Distribution Date: Each March 15 and September 15, commencing March 15, 2002. If any payment with respect to the Securities held by the Trust is not received by the Trustee by 12 noon (New York City time) on a Distribution Date, the corresponding distribution on the Units will not occur until the next Business Day that the Trust is in receipt of proceeds of such payment prior to 12 noon, with no adjustment to the amount distributed. Record Date: Each March 1 and September 1, regardless of whether such day is a Business Day. Form: Global Depositary: DTC Trustee Fees and Expenses: As compensation for and in payment of trust expenses related to its services hereunder other than Extraordinary Trust Expenses, the Trustee will receive Trustee Fees on each Distribution Date in the amount equal to $3,750. The Trustee Fee shall cease to accrue after termination of the Trust. The "Trigger Amount" with respect to Extraordinary Trust Expenses for the Trust is $25,000 and the Maximum Reimbursable Amount is $100,000. The Trustee Fee will be paid by the Expense Administrator. Expenses will be reimbursed by the Expense Administrator in accordance with the Expense Administration Agreement. Expense Administrator: The Depositor will act as Expense Administrator on behalf of the Trust pursuant to an Expense Administration Agreement, dated as of December 20, 2001 (the "Expense Administration Agreement"), between the Depositor as Expense Administrator (the "Expense Administrator") and the Trust. The Expense Administrator will receive a fee equal to 0.025% per annum of the principal amount of the Securities held by the Trust as its fee, payable on the basis of a 360 day year consisting of twelve 30 day months. The Expense Administrator's fee is payable only from available interest receipts received with respect to the Securities after application of such receipts to payment of accrued interest on the Units and any Swap Termination Payments currently owing. In addition the Expense Administrator shall own that portion of the Securities which represent the interest of a fractional Unitholder that would remain after a partial exercise or deemed exercise of the Swap Agreement had the Swap Counterparty not been obligated to pay the Fractional Unit Make Whole Amount (pursuant to and as defined in the Swap Agreement). The Expense Administrator shall receive all interest and principal with respect to such portion of the Securities. The Expense Administrator will be responsible for paying the Trustee Fee and reimbursing certain other expenses of the Trust in accordance with the Expense Administration Agreement. Listing: The Depositor has applied to list the Units on the New York Stock Exchange ERISA Restrictions: None of the restrictions in the Standard Terms relating to the Employee Retirement Income Security Act of 1974, as amended, and related matters shall apply. Deemed Representations: Not Applicable QIB Restriction Not Applicable Trust Wind-Up Event: The Trust Wind-Up Events specified in Sections 9.01(a), 9.01(c), 9.01(d), 9.01(f) and 9.01(h) shall not apply. The Trust Wind Events specified in Sections 9.01(b) (Security Default), 9.01(e) (Early Termination Date designated due to "illegality" or "tax event" under the Swap Agreement), 9.01(g) (Disqualified Securities), 9.01(i) (Excess Expense Event) shall apply. Pursuant to Section 9.01(j), the following events also shall constitute Trust Wind-Up Events: (i) redemption (or completion of a self-tender) by the Security Issuer of all Securities held by the Trust and (ii) exercise of the right to purchase Securities under the Swap Agreement as to all Securities held by the Trust. If a Trust Wind-Up Event occurs because the Swap Counterparty exercises its rights to purchase all of the Securities held by the Trust and the Swap Counterparty specifies cash settlement in connection with such exercise and if the Selling Agent cannot obtain a bid for the Securities in excess of 100% of the aggregate Unit Principal Balance, then the Securities will not be sold, the Swap Counterparty's exercise of the call option will be deemed rescinded and the Trust Wind-Up Event will be deemed not to have occurred. Termination: If a Trust Wind-Up Event occurs (other than due to exercise of the right to purchase Securities under the Swap Agreement as to all Securities held by the Trust), any Securities held by the Trust will be liquidated (in the case of a Trust Wind-Up Event resulting from a self-tender offer, by tender to the Security Issuer) and the proceeds will be applied first to redeem the Units at 100% of their principal balance plus accrued interest and then to apply any remaining amounts to the payment of any amounts owed to the Swap Counterparty as a Swap Termination Payment under the Swap Agreement. In the event the Security Issuer makes a self-tender offer for the Securities, 100% of the Unitholders may direct the Trustee to tender all of the Securities held by the Trust. The Trustee will only accept an instruction to tender the Securities if all of the Securities held by the Trust are to be tendered. The Units will receive the proceeds after payment of a Swap Termination Payment determined on the basis of "Market Quotation" under the Swap Agreement (with the Trust as sole Affected Party) as advised by the Swap Counterparty. Terms of Retained Interest: The Depositor retains the right to receive any and all interest that accrues on the Securities prior to the Closing Date. The Depositor will receive such accrued interest on the first Distribution Date for the Units and such amount shall be paid from the interest payment made with respect to the Securities on March 15, 2002. The amount of the Retained Interest is $865,835. If a Security Default occurs on or prior to March 15, 2002 and the Depositor does not receive such Retained Interest amount in connection with such Distribution Date, the Depositor will have a claim for such Retained Interest, and will share pro rata with holders of the Units to the extent of such claim in the proceeds from the recovery on the Securities. Call Option Terms: Not applicable. Security Default: The definition of Security Default in the Standard Terms shall not apply. A "Security Default" shall mean one of the following events: (i) the acceleration of the outstanding Securities under the terms of the Securities and/or the applicable Security Agreement and failure to pay the accelerated amount on the acceleration date; (ii) the failure of the Security Issuer to pay an installment of principal of, or any amount of interest due on, the Securities after the due date thereof and after the expiration of any applicable grace period; or (iii) the occurrence of certain events of default under such Securities and/or Security Agreement relating to the insolvency or bankruptcy of the Security Issuer. Sale of Securities If the Trust must sell the Securities it holds, the Trust will sell the Securities through the Selling Agent in accordance with Section 9.03(b) and the following terms. The Selling Agent will solicit bids for all of the Securities held by the Trust from at least three registered broker-dealers of national reputation. The Selling Agent will, on behalf of the Trust, sell the Securities at the highest bid price received. Additional Issuance of Units: Upon no less than 5 days' notice to the Trustee, the Depositor may deposit additional Securities at any time in exchange for additional Units in a minimum aggregate amount of $250,000 and, if in excess of such amount, in a $25 integral multiple in excess thereof. The principal amount of Securities deposited must be in the same ratio to the Unit Principal Balance of the Units received for such deposit as the ratio of the aggregate principal amount of the Securities deposited on the Closing Date to the aggregate Unit Principal Balance on the Closing Date. The Depositor must either arrange for the Swap Counterparty and the Trust to increase proportionally the notional amount under the Swap Agreement or arrange for an additional Swap Agreement to be entered into between the Trust and an additional Swap Counterparty. The Rating Agency Condition must be satisfied in connection with any such additional issuance. Selling Agent: Morgan Stanley & Co. Incorporated. Notwithstanding any provision of the Standard Terms to the contrary, any sale of the Securities shall be conducted by and through the Selling Agent and not the Trustee. Rating Agency Condition: The definition of Rating Agencies Condition in the Standard Terms shall not apply. "Rating Agency Condition": With respect to any specified action or determination, means receipt of (i) oral or written confirmation by Moody's (for so long as the Units are outstanding and rated by Moody's) and (ii) written confirmation by S&P (for so long as the Units are outstanding and rated by S&P), that such specified action or determination will not result in the reduction or withdrawal of their then-current ratings on the Units; provided, however, that if the Rating Agency Condition specified herein is to be satisfied only with respect to Moody's or S&P, only clause (i) or clause (ii) shall be applicable. Such satisfaction may relate either to a specified transaction or may be a confirmation with respect to any future transactions which comply with generally applicable conditions published by the applicable rating agency. Eligible Account: The definition of "Eligible Account" in the Standard Terms shall not apply. "Eligible Account": A non-interest bearing account, held in the United States, in the name of the Trustee for the benefit of the Trust that is either (i) a segregated account or segregated accounts maintained with a Federal or State chartered depository institution or trust company the short-term and long-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the short-term and long-term unsecured debt obligations of such holding company) are rated P-1 and Aa2 by Moody's, A-1+ and AA by S&P, and, if rated by Fitch, F1 and AA by Fitch at the time any amounts are held on deposit therein including when such amounts are initially deposited and all times subsequent or (ii) a segregated trust account or segregated accounts maintained as a segregated account or as segregated accounts and held by the Trustee in its Corporate Trust Office in trust for the benefit of the Unitholders. Permitted Investments: The following shall be a Permitted Investment in addition to the investments specified in the Standard Terms: Units of the Dreyfus Cash Management Fund Investor Shares or any other money market funds which are rated in the highest applicable rating category by each Rating Agency (or such lower rating if the Rating Agency Condition is satisfied). Non-U.S. Persons Notwithstanding anything to the contrary herein or in the Standard Terms, any beneficial owner of any Units which is a non-U.S. person shall not be entitled to exercise any rights of the Unitholders to instruct or direct the Trustee. Other Terms: The Trust shall not merge or consolidate with any other trust, entity or person and the Trust shall not acquire the assets of, or an interest in, any other trust, entity or person except as specifically contemplated herein. The Trustee shall provide to the Unitholders copies of any notices it receives with respect to a redemption of the Securities or a call of the Securities under the Swap Agreement and any other notices with respect to the Securities. The reference to "B2" in the definition of Certificate in the Standard Terms shall be replaced with "Exhibit B2". The reference to "Section 10.02(ix)" in the definition of Available Funds in the Standard Terms shall be replaced with "Section 10.02(a)(ix)". The reference to "Section 3.04" in the definition of Unit Account in the Standard Terms shall be replaced with "Section 3.05". The transfer by the Depositor to the Trustee specified in Section 2.01(a) of the Standard Terms shall be in trust. Section 2.06 of the Standard Terms shall be incorporated herein by inserting "cash in an amount equal to the premium under the Swap Agreement and" after the phrase "constituting the Trust Property," therein. The reference to "calendar day" in the last sentence of Section 3.06 of the Standard Terms shall be replaced with "Business Day". Section 4.02(d) of the Standard Terms shall be incorporated herein by striking "and the Trustee on behalf of the Unitholders" from the first sentence of the second paragraph thereof. Section 5.03(c) of the Standard Terms shall be incorporated herein by striking "(if so required by the Trustee or the Unit Registrar)" from the first sentence thereof. Section 7.01(c)(i) of the Standard Terms shall be incorporated herein by replacing the first word thereof ("after") with "alter". Section 7.02 of the Standard Terms shall be incorporated herein by striking "(i) the Trustee determines that such amendment will not adversely affect the interests of the Unitholders and (ii)" from the first sentence thereof, inserting "on which it may conclusively rely" after "Opinion of Counsel" in such sentence, and striking "clause (ii)" from the second sentence of such Section. Section 9.03(a) of the Standard Terms shall be incorporated herein by striking "or oral" after the "at any time by" in the third sentence thereof. Clause (ix) of Section 10.02(a) shall not apply. Section 10.02(a)(x) of the Standard Terms shall be replaced with the following: (x) the Trustee shall have the power to sell the Securities and other Trust Property, in accordance with Article IX and XI, through the Selling Agent or, if the Selling Agent shall have resigned or declined to sell some or all of the Securities, any broker selected by the Trustee (at the direction of the Depositor) with reasonable care, in an amount sufficient to pay any amount due to the Swap Counterparty under the Swap Agreement (including Termination Payments) or reimbursable to itself in respect of unpaid Extraordinary Trust Expenses and to use the proceeds thereof to make such payments after the distribution of funds or Trust Property to Unitholders. Any such broker shall be instructed by the Trustee to sell such Trust Property in a reasonable manner designed to maximize the sale proceeds. Section 10.05(b) of the Standard Terms shall be incorporated herein by replacing ", pursuant to the first sentence of this paragraph" with "the Trustee shall be indemnified by the Trust, however," in the last sentence thereof. Section 10.06(a) of the Standard Terms shall be incorporated herein by inserting "or association" after the word "corporation" in the second sentence thereof. Section 10.07(a) of the Standard Terms shall be incorporated herein by replacing "notice or resignation" with "notice of resignation" in the second sentence thereof and striking the last two sentences thereof. Section 10.10(b) of the Standard Terms shall be incorporated herein by inserting "The Trustee shall not be liable for the acts or omissions of any co-trustee." after the last sentence thereof. Section 10.14 of the Standard Terms shall be replaced with the following: SECTION 10.14. Non-Petition. Prior to the date that is one year and one day after all distributions in respect of the Units have been made, none of the Trustee, the Trust or the Depositor shall take any action, institute any proceeding, join in any action or proceeding or otherwise cause any action or proceeding against any of the others under the United States Bankruptcy Code or any other liquidation, insolvency, bankruptcy, moratorium, reorganization or similar law ("Insolvency Law") applicable to any of them, now or hereafter in effect, or which would be reasonably likely to cause any of the others to be subject to, or seek the protection of, any such Insolvency Law. Section 12.01(a) of the Standard Terms shall be incorporated herein by replacing "(v)" with "(vi)" in the last proviso thereof. Section 12.01(c) of the Standard Terms shall be incorporated herein by inserting ",provided at the expense of the party requesting such amendment," after "Opinion of Counsel". Section 12.05 of the Standard Terms shall be incorporated herein by striking "the Trustee and" in the last sentence of the second paragraph thereof. The reference to "its President, its Treasurer, or one of its Vice Presidents, Assistant Vice Presidents or Trust Officers" in the first sentence of Section 5.02(a) of the Standard Terms shall be replaced with "a Responsible Officer". The reference to "the proper officers" in the second sentence of Section 5.02(a) of the Standard Terms shall be replaced with "a Responsible Officer". The reference to "one of its authorized signatories" in the first sentence of Section 5.02(d) of the Standard Terms shall be replaced with "a Responsible Officer". The reference to the "Trust" in the first sentence of Section 5.08(b) of the Standard Terms shall be replaced with the "Trustee". References to D&P in the Standard Terms shall be incorporated as references to Fitch Inc. ("Fitch"). Schedule II (Terms of Trust Property) Securities: AT&T 6.50% Debentures due March 15, 2029 Security Issuer: AT&T Corp. Principal Amount: $50,700,000 Security Rate: 6.50% Credit Ratings: A3 on watch for possible downgrade by Moody's A- watch negative by S&P Listing: New York Stock Exchange Luxembourg Stock Exchange Security Agreement: An indenture dated as of September 7, 1990, between the Security Issuer and The Bank of New York, as trustee, as amended by a supplemental indenture dated as of October 30, 1992 and as further supplemented from time to time by supplemental indentures. Form: Global Currency of United States dollars Denomination: Acquisition Price 84.9482% by Trust: Security Payment Date: Each March 15 and September 15, commencing September 15, 1999. Original Issue Date: The Securities were issued March 26, 1999. Maturity Date: March 15, 2029. Sinking Fund Terms: Not Applicable Redemption Terms: The Securities are redeemable in whole or in part at any time and from time to time, subject to payment of a make-whole amount, if applicable. CUSIP No.:/ISIN No. 001957 AW9 Security Trustee: The Bank of New York Available Information The Security Issuer is subject to the Regarding the Security informational requirements of the Securities Issuer (if other than U.S. Exchange Act of 1934, as amended, and in Treasury obligations): accordance therewith files reports and other information with the Securities and Exchange Commission (the "Commission"). Such reports and other information can be inspected and copied at the public reference facilities maintained by the Commission at 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, D.C. 20549 at prescribed rates. Schedule III -------------------------------------------------------------------------------- Date: December 20, 2001 To: SATURNS Trust No. 2001-8 From: Morgan Stanley & Co. International Limited Attn: Asset-Backed Securities Group Contact: Chris Boas SATURNS Trust No. 2001-8 Fax: 312-904-2084 Fax: 212-761-0406 Tel: 312-904-7807 Tel: 212-761-1395 -------------------------------------------------------------------------------- Re: Bond Option Transaction. MS Reference Number S7525 The purpose of this letter agreement is to confirm the terms and conditions of the Transaction entered into between you and Morgan Stanley & Co. International Limited ("MSIL"), with Morgan Stanley & Co. Incorporated ("MS&Co."), as agent, on the Trade Date specified below (the "Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the Agreement below. The definitions and provisions contained in the 1997 ISDA Government Bond Option Definitions as published by the International Swaps and Derivatives Association, Inc. ("ISDA") are incorporated into this Confirmation and this transaction shall be deemed a "Government Bond Option Transaction" for purposes of such definitions. In the event of any inconsistency between those definitions and this Confirmation, this Confirmation will govern. 1. This Confirmation supplements, forms a part of, and is subject to, the ISDA Master Agreement dated as of December 20, 2001, as amended and supplemented from time to time (the "Agreement"), between you and us. All provisions contained in the Agreement govern this Confirmation except as expressly modified below. 2. The terms of the particular Transaction to which this Confirmation relates are as follows: I. General Terms Trade Date: December 20, 2001 Option Style: American Option Type: Call Buyer: MSIL ("Party A") Seller: SATURNS Trust No. 2001-8 ("Party B") Bonds: The obligation identified as follows: Bond Issuer: AT&T Corp. Issue: 6.50% Debentures due 2029 CUSIP: 001957 AW9 Coupon: 6.50% Maturity Date: March 15, 2029 Face Amount Purchased: USD 50,700,000 Premium: USD $126,750 Premium Payment Date: December 20, 2001 Number of Options: 50,700 Option Entitlement: USD 1,000 of face amount of the Bonds per Option. Strike Price: (i) For any Exercise Date prior to December 20, 2006, the redemption price of the Bonds including any make-whole amount (expressed as a percentage) subject to a maximum of 110% of the aggregate Unit Principal Balance or (ii) for any Exercise Date on or after December 20, 2006, 87.453% of the face amount of the Bonds. Calculation Agent: Party A II. Exercise Terms Automatic Exercise: Inapplicable Exercise Period: Any Business Day from, and including, 9:00 a.m. (New York time) on December 20, 2006 to, and including, the Expiration Time on the Expiration Date; provided, however, the Exercise Period shall also include any Business Day prior to December 20, 2006 with respect to any such Bonds as to which notice of redemption has been delivered by the Issuer (including if necessary, additional Bonds to allow for the exercise of whole Options). Exercise Date: For each Option exercised or deemed exercised, the day during the Exercise Period on which that Option is or is deemed to be exercised, subject to the Deemed Exercise and Alternative Settlement provision set forth below. Multiple Exercise: Applicable Minimum Number of Options: The lesser of 50,700 or the number of Options remaining unexercised; provided, that, if such exercise occurs contemporaneously with a redemption of the Bonds by the Bond Issuer, a number of Options corresponding to the number of Securities held by Party B that are being redeemed may be exercised instead. Maximum Number of Options: 50,700 Integral Multiple: 1 Written Confirmation of Exercise: Applicable. Buyer shall give irrevocable exercise notice which may be given orally (including by telephone) during the Exercise Period but no later than the Notification Date. Buyer will execute and deliver a written exercise notice confirming the substance of such oral notice, however, failure to provide such written notice will not affect the validity of the oral notice. Buyer may, by written notice thereof to Seller, delegate its rights to provide a notice of exercise hereunder to a third party (the "Third Party"). Any such delegation will be irrevocable by Buyer without the written consent of the Third Party. Any such Third Party will have the same rights and obligations regarding providing notice of exercise hereunder as the Buyer had prior to such delegation. While any such delegation is effective, Seller will only recognize a notice of exercise that is provided by the Third Party. For the avoidance of doubt, any delegation of rights pursuant to this paragraph does not release Buyer from any payment or other obligations to the Seller hereunder and no Third Party shall have any obligations to the Seller for the payment of amounts hereunder. If Party A specifies Cash Settlement in its notice of exercise and if Party B cannot obtain a bid for the Bonds held by it in excess of the Strike Price, then Party A's notice of exercise will be deemed rescinded. Notification Date: Any date at least 25 calendar days but not more than 60 calendar days prior to the Exercise Date, provided that any date which is 30 calendar days after the Bond Issuer provides notice of redemption is also a Notification Date. Limited Right to Confirm Exercise: Inapplicable Expiration Date: March 15, 2026 Expiration Time: 4:00 p.m. New York time Business Days: New York and Chicago III. Settlements: Settlement: Physical Settlement (subject to the Deemed Exercise and Alternative Settlement provision below), unless Party A specifies Cash Settlement, in which case Cash Settlement shall apply. Party A will notify Party B separately regarding the clearance system details. Bond Payment: An amount equal to the sum of: (i) The product of the Strike Price and the Exercised Call Notional Amount, (ii) The accrued interest, if applicable, and (iii) Any Fractional Unit Make Whole Amount. In addition, in connection with any partial exercise, Party A shall pay to the Expense Administrator an amount equal to the present value of the Trustee Fee (as defined in the Trust Agreement) that will accrue from the date of such exercise until the Scheduled Final Distribution Date (as defined in the Trust Agreement), assuming for this purpose that the Trust (as defined in the Trust Agreement) is not terminated prior to the Scheduled Final Distribution Date, multiplied by the Exercised Call Notional Amount and divided by $50,700,000. Cash Settlement Amount: If Cash Settlement is specified, then (i) Party B shall pay to Party A, against the payment by Party A set forth in clause (ii), the cash proceeds delivered in connection with sale of the Bonds by Party B (including any cash paid or delivered in respect of accrued interest on the Bonds) and (ii) Party A shall pay to Party B, against the payment and/or delivery set forth in clause (i), the Bond Payment. Exercised Call Notional Amount: The product of the Option Entitlement and the number of Options exercised on the relevant Exercise Date. Settlement Date: Exercise Date Deposit of Bond Payment: With respect to Physical Settlement only, Party A must deposit the Bond Payment with the Trustee on the Business Day prior to the Exercise Date. The Bonds are to be delivered "free" to Party A. Deemed Exercise and Alternative Settlement: In the event that any of the Bonds held by Party B are redeemed by the Bond Issuer and paid in full in accordance with their terms, an equivalent number of Options with respect to any remaining Bonds held by Party B shall be deemed to have been exercised (and the requirements of notice of exercise and written confirmation of exercise deemed satisfied), in the same proportion as the portion of the Bonds held by Party B that are redeemed. The effective date of deemed exercise shall be 25 calendar days prior to the date on which Party B receives the cash proceeds delivered in connection with the redemption. As a result of such deemed exercise, (i) Party B shall pay to Party A, against the payment by Party A set forth in clause (ii), the cash proceeds delivered in connection with such redemption (including any cash paid or delivered in respect of accrued interest on the Bonds) and (ii) Party A shall pay to Party B, against the payment and/or delivery set forth in clause (i), the Bond Payment. 3. Additional Definitions. "Expense Administration Agreement" means the expense administration agreement dated as of December 20, 2001 between Party B and the Expense Administrator. "Expense Administrator" means MSDW Structured Asset Corp. acting pursuant to the Expense Administration Agreement. "Fractional Unit Make Whole Amount" means the amount specified in paragraph 9. "Trust Agreement" means the trust agreement dated as of December 20, 2001, between the MSDW Structured Asset Corp. and LaSalle Bank National Association. 4. Representations. Morgan Stanley & Co. Incorporated is acting as agent for both parties but does not guarantee the performance of Party A. 5. Additional Termination Event. As set forth in the Agreement, a Trust Wind-Up Event will result in an Additional Termination Event under the Agreement with respect to which Party B shall be the Affected Party and this Transaction shall be an Affected Transaction. 6. Swap Termination Payments. In the event an Early Termination Date is designated with respect to which this Transaction is an Affected Transaction (other than as a result of a self-tender), there shall be payable to Party A as a termination payment in lieu of the termination payment determined in accordance with Section 6(e) of the Agreement an amount equal to the excess (if any) of the sale proceeds in excess of the principal of and interest on the Units. If an early termination occurs due to a tender of the Bonds to the Bond Issuer, the Swap Termination Payment shall be determined under Section 6(e) determined on the basis of "Market Quotation" under the Swap Agreement (with Party B as sole Affected Party). If an early termination occurs due to a tender of the Bonds to the Bond Issuer, the Swap Termination Payment shall be paid prior to any payment on the Units. 7. Assignment. The rights under this Confirmation and the Agreement may be assigned at any time and from time to time in whole or in part; provided that the Rating Agency Condition (as defined in the Trust Agreement) is satisfied with respect to such assignment and any transfer. 8. Account Details. Payments to Party A: Citibank, N.A., New York SWIFT BIC Code: CITIUS33 ABA No. 021 000 089 FAO: Morgan Stanley & Co. International Limited Account No. 3042-1519 Operations Contact: Barbara Kent Tel 212-537-1449 Fax 212-537-1868 Payments to Party B: LaSalle Bank, Chicago, Illinois ABA No. 071 000 505 Reference: SATURNS 2001-8 Unit Account / AC-2090067/ Account No.: 67-8920-00-0 Operations Contact: Brian Ames Tel: 312-904-7807 Fax: 312-904-2084 9. Fractional Unit Make-Whole Amount. In the event any exercise or deemed exercise hereunder would result in a fractional Unit (as defined in the Trust Agreement) remaining after such exercise, Party A shall, in addition to amounts payable hereunder, pay to Party B the remaining fractional Unit Principal Balance (as defined in the Trust Agreement) together with accrued interest on such Unit and, if applicable, any Additional Distribution (as defined in the Trust Agreement). Party A shall be entitled to reimbursement from the Expense Administrator to the extent provided in the Expense Administration Agreement. Please confirm that the foregoing correctly sets forth the terms of our agreement MS Reference Number S7525 by executing this Confirmation and returning it to us. Best Regards, MORGAN STANLEY & CO. INTERNATIONAL LIMITED BY: /s/ John Kehoe --------------------------------------- Name: John Kehoe Title: Attorney in fact Acknowledged and agreed as of the date first written above: SATURNS TRUST NO. 2001-8 BY: LaSalle Bank National Association, solely as Trustee and not in its individual capacity. BY: /s/ Brian D. Ames --------------------------------------- Name: Brian D. Ames Title: Vice President MORGAN STANLEY & CO. INCORPORATED hereby agrees to and acknowledges its role as agent for both parties in accordance with the Schedule to the Agreement. BY: /s/ Susan Portelli --------------------------------------- Name: Susan Portelli Title: Attorney in fact