STRUCTURED ASSET TRUST UNIT REPACKAGINGS (SATURNSSM) STANDARD TERMS FOR TRUST AGREEMENTS MS Structured Asset Corp. (as Depositor) and The Bank of New York Mellon (as Trustee and Securities Intermediary) July 15, 2010 TABLE OF CONTENTS

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SECTION 4.05.  Preservation of Information, Communications to Holders	31
ARTICLE V   The Units
SECTION 5.01.  The Units	32
SECTION 5.02.  Execution, Authentication and Delivery	33
SECTION 5.03.  Registration; Registration of Transfer and Exchange	33
SECTION 5.04.  Mutilated, Destroyed, Lost and Stolen Units	35
SECTION 5.05.  Distributions in Respect of Units	35
SECTION 5.06.  Persons Deemed Owners	36
SECTION 5.07.  Cancellation	36
SECTION 5.08.  Currency of Distributions in Respect of Units; Redenomination	36
SECTION 5.09.  Appointment of Paying Agent	36
SECTION 5.10.  Authenticating Agent	37
SECTION 5.11.  Issuance and Transfer Restrictions	38
SECTION 5.12.  Optional Exchange	41
SECTION 5.13.  Callable Series	43
ARTICLE VI   The Depositor
SECTION 6.01.  Liability of the Depositor	43
SECTION 6.02.  Limitation on Liability of the Depositor	43
SECTION 6.03.  Depositor May Purchase Units	44
ARTICLE VII   Rights of Unitholders
SECTION 7.01.  Voting Rights with Respect to Underlying Securities	44
SECTION 7.02.  Amendments and Waivers Under Swap Agreement and Guarantee	45
ARTICLE VIII   Default on Underlying Securities and Permitted Investments
SECTION 8.01.  Realization Upon Default	46
ARTICLE IX   Trust Wind-Up Events and Liquidation Events
SECTION 9.01.  Liquidation Events	47
SECTION 9.02.  Trust Wind-Up Events	47
SECTION 9.03.  Expense Event	48
SECTION 9.04.  Special Depositor Wind-Up Event	49

 

 

EXHIBIT A	Form of Trust Agreement
EXHIBIT B	Form of Registered Unit
EXHIBIT C	Form of Guaranteed Delivery Letter
EXHIBIT D	List of Applicable Servicing Criteria under Item 1122(d) of Regulation AB

 

 

 

 

 

 

 

 

 

 

 

SECTION 5.03.  Registration; Registration of Transfer and Exchange.  (a) The Trustee shall cause to be kept a register for Registered Units (the registers maintained in such office and in any other office or agency of the Trustee from which distributions are made being herein sometimes collectively referred to as the “Unit Register”) in which, subject to such reasonable regulations as it may prescribe, a transfer agent and registrar (which may be the Trustee) (the “Unit Registrar”) shall provide for the registration of Registered Units and the registration of transfers and exchanges of Registered Units.  The Trustee is hereby initially appointed Unit Registrar for the purpose of registering Registered Units and transfers and exchanges of Registered Units as herein provided and the Trustee shall remain Unit Registrar for such purposes until the earlier to occur of (i) the appointment by the Depositor of a different Unit Registrar, (ii) the resignation or termination of the Trustee and appointment of a successor trustee in accordance with Section 10.07, in which case such successor trustee shall assume the duties of Unit Registrar and (iii) the termination of the Trust and discharge of the Trustee’s obligations under the Trust Agreement in accordance with the applicable terms of Articles IX and XI; provided, however, that the Trustee may appoint one or more Co-Unit Registrars.  Upon any resignation of any Unit Registrar appointed by the Depositor pursuant to clause (i) above, the Trustee shall promptly appoint a successor or, in the absence of such appointment, assume the duties of Unit Registrar.

 

Upon (i) the appointment by the Depositor of a Person other than the Trustee as Unit Registrar, (ii) the appointment of any Co-Unit Registrar or (iii) any change in the identity of the Unit Registrar or any Co-Unit Registrar, the Depositor will in each case give each of the Trustee and each Rating Agency, if any, written notice within three Business Days of any such appointment or change and of the location, and any change in the location, of the Unit Register, and the Trustee shall have the right to rely upon a certificate executed on behalf of the Unit Registrar by an Executive Officer thereof as to the names and addresses of the Holders of the Registered Units and the principal amounts and numbers of such Registered Units.

 

Upon surrender for registration of transfer of any Registered Unit at the office or agency of the Trustee, if the requirements of Section 8-401(1) of the UCC are met to the Trustee’s satisfaction, and subject to the transfer restrictions set forth in Section 5.11 hereof, the Trustee shall execute, authenticate and deliver, in the name of the designated transferee or transferees, one or more new Registered Units of any authorized denominations, of a like aggregate Unit Principal Balance.  The Trustee shall not register any transfer of Registered Units if such transfer would violate any provision of the Trust Agreement.

 

(b)           At the option of the Holder, Registered Units may be exchanged for other Registered Units of any authorized denomination or denominations of like tenor and aggregate Unit Principal Balance upon surrender of the Registered Units to be exchanged at the office or agency of the Trustee maintained for such purpose.  Whenever any Registered Units are so surrendered for exchange, the Trustee shall execute, authenticate and deliver the Registered Units that the Holder making the exchange is entitled to receive.

 

All Registered Units issued upon any registration of transfer or exchange of Units shall constitute complete and indefeasible evidence of ownership in the Trust Property and be entitled to the same benefits under the Trust Agreement as the Units surrendered upon such registration of transfer or exchange.

 

(c)           Every Registered Unit presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Trustee and the Unit Registrar, duly executed, by the Holder thereof or his attorney duly authorized in writing, with such signature guaranteed by a commercial bank or trust company located, or having a correspondent located, in the City of New York or the city in which the Corporate Trust Office is located, or by a member firm of a national securities exchange, and such other documents as the Trustee may require.

 

No service charge shall be made to a Holder for any registration of transfer or exchange of Units, but the Trustee may require payment by the Holders of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Units.

 

SECTION 5.04.  Mutilated, Destroyed, Lost and Stolen Units.  If (i) any mutilated Unit is presented to the Depositor and the Trustee or (ii) the Depositor and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Unit, and there is delivered to the Depositor and the Trustee such security or indemnity as they may require to save each of them and any Paying Agent harmless, and neither the Depositor nor the Trustee has received notice that such Unit has been acquired by a protected purchaser or other bona fide purchaser, then, in each case, the Trustee, shall execute, authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Unit, a new Unit of like tenor, form, terms and prin cipal amount, bearing a number not contemporaneously Outstanding, so that neither gain nor loss in interest shall result from such exchange or substitution.

 

Upon the issuance of any new Unit under this Section, the Trustee may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in respect thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

 

Every new Unit issued pursuant to this Section shall constitute complete and indefeasible evidence of ownership in the Trust Property, whether or not the destroyed, lost or stolen Unit shall be at any time enforceable by anyone, and shall be entitled to all the benefits of the Trust Agreement equally and proportionately with any and all other Units, if any, duly issued thereunder.

 

The terms of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Units.

 

SECTION 5.05.  Distributions in Respect of Units.  (a)  Any per Unit amount in respect of a Registered Unit that is payable and is punctually paid or duly provided for on any Distribution Date or any other date shall be distributed to the Person in whose name such Registered Unit (or one or more Predecessor Units) is registered at the close of business on the related Record Date notwithstanding the cancellation of such Registered Unit upon any transfer or exchange subsequent to such related Record Date.  Distributions on Registered Units shall be made, in accordance with arrangements satisfactory to the Trustee, by wire transfer to an account designated in writing by a Holder, or, in the case of distributions of Underlying Securities in kind, by delivery of such Underlying Securities to any DTC or other depositary account designated in writing by a Holder, or, if such arrangements with respect to any Holder are not so made no later than 15 calendar days prior to the applicable Distribution Date, at the Corporate Trust Office (with respect to the final distribution and distributions in kind of Underlying Securities) or by check mailed to the address of the Person entitled thereto as such address shall appear in the Unit Register.

 

(b)           Subject to the foregoing terms of this Section, each Unit delivered under the Trust Agreement upon transfer of or in exchange for or in lieu of any other Unit shall carry the rights to amounts to be distributed that are accrued and undistributed, and to accrue, that were carried by such other Unit.

 

SECTION 5.06.  Persons Deemed Owners.  Subject to Section 5.05 and except for the final distribution, the Depositor and the Trustee and any agent of the Depositor or the Trustee may treat the Person in whose name any Registered Unit is registered as the owner of such Unit on the related Record Date for the purpose of receiving distributions of principal of (and premium, if any) and (subject to Section 5.05) interest, if any, on such Unit and for all other purposes whatsoever, whether or not any such distributions with respect to such Unit are overdue, and neither the Depositor, the Trustee, nor any agent of the Depositor or the Trustee shall be affected by notice to the contrary.  All distributions made to any such Holder, or upon his order, sh all be valid, and, to the extent of the sum or sums paid, effectual to satisfy and discharge the liability for moneys distributable upon such Unit.

 

SECTION 5.07.  Cancellation.  All Units surrendered for payment, redemption, transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it.  No Units shall be authenticated in lieu of or in exchange for any Units canceled as provided in this Section, except as expressly permitted by the Trust Agreement.

 

SECTION 5.08.  Currency of Distributions in Respect of Units; Redenomination.  (a) Except as provided in (b) below, distributions of the principal of (and premium and interest, if any) on the Units will be made in the Specified Currency.

 

(b)           Except as set forth below or unless otherwise provided in the Trust Agreement, if distributions in respect of a Unit are required to be made in a Specified Currency other than U.S. dollars and such currency is unavailable due to the imposition of exchange controls or other circumstances beyond the control of the Depositor or the Trustee or their respective Affiliates, or is no longer used by the government of the country issuing such currency or for the settlement of transactions by public institutions of or within the international banking community, then all distributions in respect of su ch Unit shall be made at a time and in a manner determined by the Exchange Rate Agent in its sole discretion, which may be in the Specified Currency at such time as such currency is again available or so used or in such other currency and at such rates as the Exchange Rate Agent shall determine.

 

Each of the protections, releases, indemnities and other terms applicable to the Trustee under Section 10.01, 10.02, 10.03 and 10.05 shall apply to the Exchange Rate Agent in connection with its actions as Exchange Rate Agent for the Trust.

 

SECTION 5.09.  Appointment of Paying Agent.  (a)  The Trustee may appoint one or more paying agents (each, a “Paying Agent”) with respect to the Units.  Any such Paying Agent shall be authorized to make distributions to Unitholders pursuant to the Trust Agreement and shall report the amounts of such distributions to the Trustee.  The Trustee may remove the Paying Agent if the Trustee determines in its sole discretion that the Paying Agent shall have

 

 

(b)           The Paying Agent shall at all times be a corporation or an association, the combined capital and surplus of which is at least $200,000,000 and the long-term debt obligations of which are rated in one of the four highest categories assigned long-term debt obligations by each of the Rating Agencies, and is subject to supervision of examination by federal or state authority.  If such corporation or association publishes reports of conditions at least annually, pursuant to combined capital and surplus of such corporation or association shall be deemed to be its combined capital and surplus as set forth in its most recent report of conditions so published.  In the event that at any time the Paying Agent shall cease to be eligible in accordance with the te rms of this paragraph, the Paying Agent shall release all Trust Property to the Trustee and then resign immediately.  Upon such resignation, the Trustee shall act as Paying Agent until the appointment of a successor Paying Agent in accordance with paragraph (c) of this Section.

 

(c)           The terms of Sections 10.01, 10.02, 10.03, 10.05 and 10.06 shall apply to the Trustee also in its role as Paying Agent, for so long as the Trustee shall act as Paying Agent.

 

(d)           Any reference in the Trust Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.

 

SECTION 5.10.  Authenticating Agent.  (a) The Trustee may appoint any one or more Authenticating Agents (each, an “Authenticating Agent”) with respect to the Units which shall be authorized to act on behalf of the Trustee in authenticating the Units in connection with the issuance, delivery and registration or transfer or exchange of the Units.  Whenever reference is made in the Trust Agreement to the authentication of Units by the Trustee or the Trustee’s unit of authentication, such reference shall be deemed to include authentication on behalf of the Trustee by an Authenticating Agent.  Each Authenticating Agent must be acceptable to the Depositor.

 

(b)           Any institution succeeding to the corporate agency business of any Authenticating Agent shall continue to be an Authenticating Agent without the execution or filling of any power or any further act on the part of the Trustee or such Authenticating Agent.  An Authenticating Agent may at any time resign by giving notice of resignation to the Trustee, the Depositor and the Rating Agencies.  The Trustee may at any time terminate the agency of an Authenticating Agent by signing notice of termination to such Authenticating Agent and to the Depositor.  Upon receiving such a notice of resignation or upon such a termination, or in case at any time an Authenticating Agent shall cease to be acceptable to the Trustee or the Depositor, the Trustee may a ppoint a successor Authenticating Agent.  Subsequent to any such removal or resignation of the Authenticating Agent, the Trustee shall act as Authenticating Agent until a successor Authenticating Agent, if any, is appointed.  Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.  No successor Authenticating Agent shall be appointed unless acceptable to the Depositor.  The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.  The provision of Sections 10.01, 10.02, 10.03 and 10.05 shall be applicable to any Authenticating Agent.

 

(c)           Pursuant to an appointment made under this Section, the Units may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternate certificate of authentication in substantially the following form:

 

This is one of the Units described in the Trust Agreement.

 

By:  _________________________________

as Authenticating Agent for

the Trustee

 

By:  _______________________________

Authorized Signatory

 

SECTION 5.11.  Issuance and Transfer Restrictions.  (a)  The Units shall be issued on the Closing Date upon (i) deposit of the Underlying Securities into the Trust by the Depositor in exchange for all the Units, (ii) satisfaction of the conditions set forth in Section 2.06 and (iii) the due authentication by the Trustee of the Units in the form set forth in Exhibit B attached hereto.

 

(b)           In the event that the Trust Agreement provides that the Units will be Book-Entry Units, the following terms shall apply:

 

(i)	The Units will be represented by one or more Global Securities registered in the name of a Depositary or its nominee.

(ii)

Unless otherwise provided in the Units or the Trust Agreement, any Global Security shall be exchangeable for Certificates registered in the name of Persons other than the Depositary or its nominee only if (i) the Depositary is no longer willing or able to act as a depositary and the Depositor is unable to locate a qualified successor within 30 days, or (ii) there shall have occurred and be continuing an event specified in Section 9.02.  Upon such issuance, the Trustee shall register such Certificates in the name of, and cause the same to be delivered to, such Person or Persons (or the nominee thereof) consistent with Section 5.02.

 

 

(iii)

Any Global Security may bear a legend in substantially the following form:

“This Certificate is a Global Security within the meaning of the Trust Agreement hereinafter referred to and is registered in the name of a Depositary or a nominee of a Depositary.  This Certificate is exchangeable for Certificates registered in the name of a person other than the Depositary or its nominee only in the limited circumstances described in the Trust Agreement, and may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary.”

 

(c)           (i)           25% Test.  If the Trust Agreement provides that the 25% Test applies, only this subclause (i) of this Section 5.11(c) shall apply to the Units governed thereby.  Units will be issued only as Definitive Registered Units and only after a definitive purchase agreement has been executed and delivered by the purchaser or the proposed transferee.  That agreement will contain additional representations, including whether the purchaser or proposed transferee is a Benefit Plan Investor or a Plan.  No transfer of any Unit shall be made to any Benefit Plan Investor, unless immediately after such transfer, eith er (x) no Units are held by a Plan or (y) Benefit Plan Investors hold less than 25% of the Units (for this purpose Units held by the Depositor, the Trustee or any other Person (other than a Benefit Plan Investor) that has discretionary authority or control with respect to the assets of the Trust or that provides investment advice for a fee (direct or indirect) with respect to such assets, or any affiliate of the Depositor, the Trustee of any such Person (within the meaning of Department of Labor Reg. § 2510.3-101(f)(3)) will not be treated as outstanding).  In addition, the Depositor and the Trustee will agree that, after the initial distribution of the Units, if any Units are held by Plans, neither they nor their affiliates will acquire any Units, unless that acquisition would not cause the ownership by Benefit Plan Investors immediately following the acquisition to exceed 25% of the Units.  Each Person that acquires a Unit, and each fiduciary who causes a Person to acquire a U nit, in its individual as well as its fiduciary capacity, agrees to indemnify and hold harmless the Depositor, the Trustee, MS&Co., each Distribution Participant and their respective affiliates from any cost, damages, loss or expense, incurred by them as a result of the representations made by such Person or fiduciary not being true.

 

(ii)

Prohibited Transaction Exemption Restriction.  If the Trust Agreement provides that the Prohibited Transaction Exemption Restriction applies, only this subclause (ii) of this Section 5.11(c) shall apply to the Units governed thereby.  By its acquisition of any Unit, the Holder will be deemed to have represented and warranted on each day that it holds such Unit either that (x) it is not a Plan, an entity whose underlying assets include the assets of any such Plan, or an governmental plan which is subject to any federal, state or local law that is substantially similar to the provisions of Section 406 of ERISA or Section 4975 of the Code, or (y) its purchase, holding and disposition of a Unit will not result in a prohibited transaction under Section 406 of ERISA or Sect ion 4975 of the Code (or, in the case of a governmental plan, any substantially similar federal, state or local law) unless an exemption is available (all of the conditions of which have been satisfied) or in any other violations of an applicable requirement of ERISA, the Code or other law.  Each Person that acquires a Unit, and each fiduciary who causes a Person to acquire a Unit, in its individual as well as its fiduciary capacity, agrees to indemnify and hold harmless the Depositor, the Trustee, MS&Co., each Distribution Participant and their respective affiliates from any cost, damages, loss or expense, incurred by them as a result of the representations made by such Person or fiduciary not being true.

 

(iii)

No Plan Restriction.  If the Trust Agreement provides that the No Plan Restriction applies, only this subclause (iii) of this Section 5.11(c) shall apply to the Units governed thereby.  Units may not be purchased, held by or transferred to any Person unless that Person is not a Plan, is not a governmental or other plan subject to restrictions substantially similar to Title I of ERISA or Section 4975 of the Code, and is not acquiring the Units with the assets of any such Plan or other plan.  Each Person who acquires any Unit, and each fiduciary which causes any such Person to acquire any Unit, in its individual as well as its fiduciary capacity, will be deemed by such purchase, holding or acquisition, on each date on which the Unit is held by such person, to have represented that it is not a Plan or any governmental or other plan subject to requirements substantially similar to Title I of ERISA or Section 4975 of the Code and is not using the assets of any such Plan to purchase those Units.  Each Person that acquires a Unit, and each fiduciary who causes a person to acquire a Unit, in its individual as well as its fiduciary capacity, agrees to indemnify and hold harmless the Depositor, the Trustee, MS&Co., each Distribution Participant and their respective affiliates from any cost, damages, loss or expense, incurred by them as a result of the representations made by such Person or fiduciary not being true.

(iv)	No ERISA Restriction.  If the Trust Agreement does not provide for the 25% Test, the Prohibited Transaction Exemption Restriction or the No Plan Restriction to apply, then none of Section 5.11(c)(i), (ii) or (iii) will apply to the Units governed thereby.

(d)           The Trustee and the Depositor are entitled to request additional evidence from a proposed transferee of such Units to ensure to their sole satisfaction the accuracy of the representations in the Trust Agreement and as described above.

 

(e)           If, at any time, the Trustee learns that any of the representations or warranties provided by a purchaser or potential transferee of Units is false or that any agreement made therein has been violated, any transfer of a Unit to such purchaser or potential transferee shall be null and void ab initio. The Selling Agent will arrange for the compulsory sale (at a price determined by the Depositor) for any Unit sold or otherwise acquired in contravention of any of the transfer restrictions set forth herein.  The Trustee shall also have such other powers to effect compliance with the terms of this Section 5.11 as it deems appropriate.

 

(f)           If the Trust Agreement specifies that the “QIB Restriction” is applicable, sales of the Units will be restricted to “qualified institutional buyers” as defined in Rule 144A under the Securities Act, and each purchaser of the Units will be deemed to have represented (or in the case of definitive Units, shall be required to represent) for the benefit of the Depositor, the Trustee and each Distribution Participant that such purchaser is a “qualified institutional buyer”.

 

(g)           Each Certificate shall be required to bear a legend describing the restrictions on transferability set forth in this Section 5.11 applicable thereto.

 

SECTION 5.12.  Optional Exchange.

 

(a)           A Trust Agreement may designate a series of Units as Exchangeable Units.  In order for a Unit of a given Exchangeable Series (or Class within such Exchangeable Series) to be exchanged by the applicable Unitholder, the Trustee and the Depositor must receive, at least 30 days (or such shorter period acceptable to the Trustee) but not more than 45 days prior to an Optional Exchange Date (i) such Unit with the form entitled “Option to Elect Exchange” on the reverse thereof duly completed or (ii) a letter (substantially in the form attached as Exhibit C) with a medallion guarantee from a member of a national securities exchange or the National Association of Securities Dealers, Inc., the Depositary (in accordance with its normal procedures) or a commerc ial bank or trust company in the United States setting forth the name of the Holder of such Registered Unit, the Unit Principal Balance or Notional Amount of such Registered Unit to be exchanged, the certificate number or a description of the tenor and terms of such Registered Unit, a statement that the option to elect exchange is being exercised thereby and a guarantee that the Registered Unit to be exchanged with the form entitled “Option to Elect Exchange” on the reverse of the Registered Unit duly completed will be received by such Trustee not later than five Business Days after the date of such letter.  If the procedure described in clause (ii) of the preceding sentence is followed, then such Registered Unit and form duly completed must be received by such Trustee by such fifth Business Day.  Any tender of a Unit by the Holder for exchange shall be irrevocable.  The exchange option may be exercised by the Holder of a Unit for less than the entire Unit Principal Balance of such Unit provided that the Unit Principal Balance or Notional Amount, as applicable, of such Unit remaining outstanding after redemption is an authorized denomination and all other exchange requirements set forth in the related Trust Agreement are satisfied.  Upon such partial exchange, such Unit shall be canceled and a new Unit or Units for the remaining Unit Principal Balance thereof shall be issued (which, in the case of any Registered Unit, shall be in the name of the Holder of such exchanged Unit).

 

(b)           Unless otherwise provided in the Trust Agreement, upon the satisfaction of the foregoing conditions and any applicable conditions with respect to the related Trust Property, the applicable Unitholder will be entitled to receive a distribution of a pro rata share of the Trust Property related to the Exchangeable Series (and Class within such Exchangeable Series) of the Unit being exchanged, in the manner and to the extent described in the Trust Agreement.  Alternatively, if so specified in the Trust Agreement, the applicable Unitholder, upon satisfaction of such conditions, may direct the Trustee to sell, on behalf of such Unitholder, such pro rata share of the Trust Property, in which event the Unitholder shall be entitled to receive the net proceeds of such sale, less any costs and expenses incurred by such Trustee in facilitating such sale, subject to any additional adjustments set forth in the Trust Agreement.

 

Any right of exchange in respect of Units of an Exchangeable Series shall be exercisable only to the extent that the Depositor determines that such exchange would not be inconsistent with the Depositor’s and such Trust’s continued satisfaction of the applicable requirements for exemption under Rule 3a-7 under the Investment Company Act.  The Trust Agreement shall set forth additional terms pertaining to any right of exchange, including but are not limited to, the following:

 

(i)	a requirement that the exchanging Holder tender to the Trustee Units of each Class within such Exchangeable Series;

(ii)	a minimum Unit Principal Balance or Notional Amount, as applicable, with respect to each Unit being tendered for exchange;

(iii)

a requirement that the Unit Principal Balance or Notional Amount, as applicable, of each Unit tendered for exchange be an integral multiple of an amount specified in the Trust Agreement;

(iv)	specified dates during which a Holder may effect such an exchange (each, an “Optional Exchange Date”);

(v)	limitations on the right of an exchanging Holder to receive any benefit upon exchange from any Credit Support or other non-Underlying Securities deposited in the applicable Trust;

(vi)	adjustments to the value of the proceeds of any exchange based upon the Unitholder’s allocable share of expenses incurred but not yet paid and the establishment of a reserve for any allocable Extraordinary Trust Expenses as set forth in the Trust Agreement; and

(vii)

a requirement that the exchanging holder obtain the consent of any Swap Counterparty to such exchange and tender to the Swap Counterparty a termination payment for termination of the portion of the Swap Agreement corresponding to the portion of the Underlying Securities to be distributed by the Trustee.

(c)           Unless the Trust Agreement states that “Depositor Optional Exchange” does not apply to the Units of a given Series, any Units held or beneficially owned by the Depositor or its affiliates from time to time will be subject to optional exchange by the Depositor or such affiliates for a pro rata portion of the Trust Property of the related Trust.  Unless the Trust Agreement otherwise provides, the Depositor may only exchange Units for a pro rata portion of the Trust Property if: (i) the exchange is made with respect to a minimum Unit Principal Balance of $250,000 and in amounts satisfying the minimum authorized denominations of the Unit s and of the Underlying Securities; (ii) such exchange is to be effected on any January 1, April 1, July 1 or October 1 (or the succeeding Business Day if such date is not a Business Day) with 45 days notice; (iii) any persons specified in the Trust Agreement consent; or (iv) the Depositor determines that more than 100 holders of the 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 Code.

 

(d)           Any holder of a Call Option shall be entitled to exchange Units acquired upon exercise of the Call Option for a corresponding portion of Trust Property.

 

SECTION 5.13.  Callable Series.  If one or more specified Persons has the right to purchase all or a portion of the Units of any given Series, the Trust Agreement will designate such Series as a “Callable Series,” and specify the terms upon which any such specified Person may exercise its right to purchase all or a portion of the Units.  Such terms may relate to, but are not limited to, the following:

 

(i)	a minimum Unit Principal Balance with respect to each Unit being purchased;

(ii)	a requirement that the Unit Principal Balance of each Unit being purchased be an integral multiple of a specified amount;

(iii)

specified dates during which such a purchase may be effected (each, a “Call Date”); and

(iv)	the price at which such a purchase may be effected (the “Call Price”).

After receiving notice of the exercise of such a call right, the Trustee will provide notice thereof as specified in the Trust Agreement.  Upon the satisfaction of any applicable conditions to the exercise of such right to purchase of the Units described in such Trust Agreement, each Unitholder will be entitled to receive a distribution of a pro rata share of the Call Price paid in connection with such exercise, in the manner and to the extent described in such Trust Agreement.

 

ARTICLE VI

 

 

SECTION 6.01.  Liability of the Depositor.  The Depositor shall be liable in accordance with the Trust Agreement only to the extent of the obligation specifically imposed thereby.

 

SECTION 6.02.  Limitation on Liability of the Depositor.  (a)  Unless otherwise expressly specified in the Trust Agreement, the Depositor shall not be under any obligation to expend or risk its own funds, except to the extent of its obligation to pay any amount payable under the Trustee Fee Letter or under Section 10.05(b) hereof, or otherwise incur financial liability in the performance of its duties thereunder or in the exercise of any of its rights or powers if reasonable grounds exist for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

 

(b)           Neither the Depositor nor any of the directors, officers, employees or agents of the Depositor shall be under any liability to the Trustee, the Trust Property or the Unitholders for any action taken, or for refraining from the taking of any action, in good faith pursuant to the Trust Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Depositor or any such person against any breach of warranties, representations or covenants made in the Trust Agreement, or against any specific liability imposed on the Depositor pursuant to the Trust Agreement, or against any liability which would otherwise be imp osed by reason of willful misfeasance, bad faith or negligence in the performance of duties specifically set forth in the Trust Agreement or by reason of reckless disregard of obligations and duties specifically set forth in the Trust Agreement.

 

The Depositor shall not be under any obligation to appear in, prosecute or defend any legal action unless such action is related to its duties under the Trust Agreement and, in its reasonable opinion, does not involve it in any expense or liability; provided, however, that the Depositor may in its discretion undertake any such action which it may deem necessary or desirable with respect to the Trust Agreement and the rights and duties of the parties thereto and the interests of the Unitholders.

 

SECTION 6.03.  Depositor May Purchase Units.  The Depositor or its Affiliates may at any time purchase Units in the open market or otherwise. Units so purchased by the Depositor may, at the discretion of the Depositor, be held or resold.

 

ARTICLE VII

 

Rights of Unitholders

 

SECTION 7.01.  Voting Rights with Respect to Underlying Securities.  (a)  Within three Business Days after receipt of notice of any meeting of, or other occasion for the exercise of voting rights or the giving of consents by, owners of any of the Underlying Securities, the Trustee shall give notice to the Depositor and the Unitholders, setting forth (i) such information as is contained in such notice to owners of Underlying Securities, (ii) a statement that the Unitholders will be entitled, subject to any applicable provision of law, any applicable terms of such Underlying Securities and any applicable provisions of the Trust Agreement (and to the extent of the voting rights allocated to the Unitholders), to instruct the Trustee as to the exerc ise of voting rights, if any, pertaining to such Underlying Securities and (iii) a statement as to the manner in which instructions may be given to the Trustee to give a discretionary proxy to a person designated in the notice received by the Trustee.  Such notice shall be given by the Trustee to the Depositor and the Unitholders of record on the record date fixed for the Underlying Security.

 

(b)           Unless otherwise specified in the Trust Agreement the voting rights allocable to the owners of the Underlying Securities pursuant to the terms thereof will be allocated among the Unitholders pro rata, in the proportion that the denomination of each Unit bears to the aggregate denomination of all Units; and upon the written request of the applicable Unitholder, received on or before the date established by the Trustee for such purpose, the Trustee shall endeavor, insofar as practicable and permitted under any applicable provision of law and any applicable provision of or governing the Underlying Securities, to vote in accordance with any nondiscretionary instruction set forth in such written request, provided, that the Trustee shall not vote except as specifically authorized and directed in written instructions from the applicable Unitholder entitled to give such instructions.

 

(c)           Notwithstanding Section 7.01(b), the Trustee must reject any vote to (i) alter the currency, amount or timing of payment of, or the method or rate of accruing, any principal or interest on the Underlying Securities underlying the Units held by such Unitholder or (ii) consent to any redemption or prepayment of the Underlying Securities underlying the Units held by such Unitholder or (iii) consent to the issuance of new obligations in exchange or substitution for any Underlying Securities pursuant to a plan or refunding of the Underlying Securities or any other offer for the Underlying Securities; in each case unless the Trustee is directed by the affirmative vote of all Unitholders to accept such amendment or offer as the case may be; and provided, further, that the Trustee receives an Opinion of Counsel of nationally recognized independent tax counsel, designated by the Depositor, that such exercise of voting rights with respect to any Underlying Securities (i) would not result in a “sale or other disposition” of such Underlying Securities within the meaning of Section 1001(a) of the Code and (ii) will not alter the classification of the Trust for federal income tax purposes.  The Trustee will not grant any consent (other than a unanimous consent) solicited from the owners of the Underlying Securities underlying the Units with respect to the foregoing matters in (i), (ii) and (iii) above nor will it accept or take any action in respect of any consent, proxy or instructions received from any Unitholder in contravention of such provisions.  In addition, if the Trustee determines (based upon an Opinion of Counsel fur nished by nationally recognized independent tax counsel, whether at the request of any Unitholder or otherwise) that the exercise of voting rights with respect to any Underlying Securities could result in a “sale or other disposition” of such Underlying Securities within the meaning of Section 1001(a) of the Code, the Trustee shall exercise such voting rights in a manner that would not result in any such sale or other disposition.  The Trustee will have no responsibility to undertake on its own initiative to determine that any exercise of voting rights will result in any such sale or other disposition and in any event will not undertake to make such determination unless given an indemnity reasonably satisfactory to it against the costs of such determination; provided, however, that the Trustee agrees that the indemnification under Section 10.05 provides reaso nable assurance against such risk or liability as to matters so indemnified unless the Depositor and the Trustee reasonably determine that the Maximum Reimbursable Amount will not adequately cover related costs.

 

SECTION 7.02.  Amendments and Waivers Under Swap Agreement and Guaranty.  (a) Without the need for the consent of any Unitholder, the Trustee shall enter into any amendment, modification, waiver, or other change of the Swap Agreement or the Guaranty to cure any ambiguity or manifest error in, or to correct or supplement or otherwise change any provision of, the Swap Agreement or the Guaranty, if such change will not materially and adversely affect any Unitholder.  Section 7.02(a) shall not be construed to require the consent of a Class of Units not materially and adversely affected by any amendment to the Swap Agreement in connection with an amendment pursuant to Section 7.02(b).

 

(b)           The Trustee shall enter into any other amendment, or agree to a waiver or other modification or other change, of the Swap Agreement or Guaranty if directed or consented to by the Specified Percentage of Unitholders materially and adversely affected thereby.

 

(c)           Notwithstanding subsection (b) above, the Trustee shall not enter into any amendment, or agree to a waiver or other modification, of the Swap Agreement or Guaranty that would have the effect of changing the principal amount, interest rate, maturity, or other terms specified in the related Trust Agreement, of any Class or Series of Units without the consent of 100% of the outstanding Unit Principal Balance of each Class of Units affected thereby.

 

(d)           In the case of any amendment or waiver, (i) the Trustee shall require an Opinion of Counsel, not at the expense of the Trustee, to the effect that such amendment will not alter the classification of the Trust for federal income tax purposes and (ii) the Rating Agency Condition shall be satisfied with respect to any amendment, waiver, modification or other change pursuant to this Section to any Swap Agreement unless Units representing 100% of the Unit Principal Balance of all affected Units vote in favor of such amendment with notice that the Rating Agency Condition need not be satisfied, but in any case each applicable Rating Agency and the Depositor shall receive written notice of such amendment.

 

(e)           In executing any such amendment or restatement created by any amendment or modification of the Swap Agreement, the Trustee shall be entitled to receive, and (subject to the standard of care provided in Article X hereof) shall be fully protected in relying upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by the Trust Agreement and that all conditions precedent thereto have been complied with.  The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee’s own rights, duties or immunities under the Trust Agreement or otherwise.

 

ARTICLE VIII

 

 

SECTION 8.01.  Realization Upon Default.  (a)  The Trustee, on behalf of the Unitholders, shall assert claims under the Underlying Securities or the Permitted Investments, and shall take such reasonable steps as are necessary to receive payment or to permit recovery thereunder with respect to any default, subject in all cases to the terms of Article X.

 

(b)           If the Trustee is unable to obtain full recovery in respect of a defaulted Underlying Security or Permitted Investment, the Trustee shall follow or cause to be followed such normal practices and procedures as it deems necessary or advisable to realize upon such defaulted Underlying Security or Permitted Investment, subject in all cases to the terms of Article X.

 

(c)           If there is an event of default (as defined in the indenture or other document pursuant to which the Underlying Securities were issued) with respect to any Underlying Security and such default is known to the Trustee, the Trustee shall promptly give notice to the Depositor and the Unitholders thereof as promptly as practicable as provided in Section 12.05 hereof, and in the manner and to the extent provided in TIA Section 313(c) within 90 days after such event of default occurs.

 

ARTICLE IX

 

 

SECTION 9.01. Liquidation Events.

 

(a)           Unless a Trust Wind-Up Event has also occurred and unless otherwise provided in the Trust Agreement (each such event below, a “Liquidation Event”):

 

(i)

In the event that (i) an Underlying Security Default occurs with respect to any Underlying Security or (ii) any Underlying Security held by the Trust becomes a Disqualified Underlying Security, then the Trust shall sell such Underlying Security and, if necessary, shall sell other Trust Property designated by the Depositor to the extent necessary to pay any Swap Termination Payment.

(ii)

In the event that any Swap Default or Termination Event occurs under any Transaction (including if the Swap Counterparty for such Transaction becomes a Disqualified Swap Counterparty), and such Transaction is terminated, the Trust shall sell any Affected Underlying Securities and, if necessary, shall sell other Trust Property to the extent necessary to pay any related Swap Termination Payment, and

(iii)

In the event that any Credit Support becomes Disqualified Credit Support, then such Credit Support shall be terminated.

(b)           Unless otherwise specified in the Trust Agreement, the Trust shall distribute any net proceeds to the Trust from a Liquidation Event to the Unitholders pro rata or in such other proportion as specified in the Trust Agreement.

 

(c)           The Trust shall continue thereafter.

 

SECTION 9.02.  Trust Wind-Up Events.  (a)  Unless otherwise provided in the Trust Agreement, if any of the following events (each event, a “Trust Wind-Up Event”) shall occur:

 

(i)	the occurrence of one or more Underlying Security Defaults which results in an Underlying Security Default with respect to all Underlying Securities held by the Trust or with respect to any Underlying Securities specified in the Trust Agreement;

(ii)	the consummation of any redemption of, tender for, exercise of any call option on, or other similar transactions with respect to all Underlying Securities held by the Trust;

(iii)

if and as specified in the Trust Agreement, any specified Swap Default or specified Termination Event under a specified Swap Agreement or specified Swap Agreements;

(iv)	any specified Credit Support default occurs under Credit Support specified in the Trust Agreement;

 

(v)

(A) the Underlying Security Issuer of one or more Concentrated Underlying Securities becomes a Disqualified Issuer or the Swap Counterparty becomes a Disqualified Swap Counterparty, if at such time the Swap Counterparty is not an affiliate of the Depositor (such event an “Exchange Act Reporting Event”) and (B) either (i) the Trust Agreement specifies that 3.10 and 3.11 shall not apply or (ii) the Depositor is unable after commercially reasonable efforts to effect an Exchange Act Reporting Termination in accordance with Section 3.10 on or prior to the date on which (1) the Depositor has determined in its reasonable, good faith discretion that the Depositor would be required to provide information on the underlying issuer pursuant to Item 1112(b) of Regulation AB or otherwise be in violation of its reporting obligations under the Exchange Ac t with respect to the Units in the absence of a termination of the Trust (including, without limitation, where the Exchange Act Report Event occurs during the fiscal year of the Trust in which the Units have been issued) and (2) the Depositor has given notice of such determination to the Trustee (such date, including any extended date notified by the Depositor, the “Latest Exchange Act Reporting Date”);

(vi)

any Credit Support held by the Trust becomes a Disqualified Credit Support and the Trust Agreement specifies that a Trust Wind-Up Event shall occur upon such Credit Support becoming a Disqualified Credit Support (provided that unless otherwise specified in the Trust Agreement, Section 3.10 and 9.02(a)(v) above shall apply in relation to such Disqualified Credit Support in the same manner as applicable to a Disqualified Issuer or Disqualified Swap Counterparty);

(vii)

any Excess Expense Event;

(viii)

the designation of a Special Depositor Wind-Up Event described in Section 9.04; and

(ix)	any other Trust Wind-Up Event set forth in the Trust Agreement.

(b)           Unless otherwise specified in the Trust Agreement, if more than one Trust Wind-Up Event occurs, only the first such event will be the “Trust Wind-Up Event” for all purposes under the Trust Agreement, each Swap Agreement and any related agreements or other documents.

 

SECTION 9.03.  Expense Event.  (a)  An “Excess Expense Event” will occur, and a Trust Wind-Up Event shall occur under Section 9.02, in the event that the Trustee incurs Extraordinary Trust Expenses in an aggregate amount exceeding the Trigger Amount, unless the Swap Counterparty or, if specified as permitted under the Trust Agreement, the Unitholders provide adequate assurance of indemnity to the Trustee in accordance with the terms of subsection (b) or (c), as applicable or the Depositor notifies the Trustee (no later than the fifth Business Day after receiving notice that an Excess Expense Event has occurred), that such Excess Expense Event is waived and the Trustee and the Depositor reasonably determine that the Extraordinar y Trust Expenses will not exceed the Maximum Reimbursable Amount.

 

(b)           Promptly upon the incurrence by the Trustee of Extraordinary Trust Expenses in an aggregate amount exceeding the Trigger Amount, and in any event within three Business Days after the Trustee has knowledge of such incurrence, the Trustee shall provide notice to each Swap Counterparty, the Depositor and the Rating Agencies, if any.  If the Trust Agreement so specifies, the Trustee shall also provide notice to the Unitholders.  Such notice shall state that an Excess Expense Event shall occur on the fifth Business Day following the provision of such notice unless prior to such day the Swap Counterparty agrees to indemnify the Trustee for Extraordinary Trust Expenses in an aggregate amount exceeding the Maximum Reimbursable Amount, to the reasonable satis faction of the Trustee and its counsel; provided, however, in no event shall the Trustee be released from its obligations under the Trust Agreement until such fifth Business Day.  If the Trust Agreement so specifies, the Unitholders, by unanimous agreement, may provide such indemnification.

 

(c)           Following an agreement to indemnify the Trustee for future Extraordinary Trust Expenses, upon the incurrence of Extraordinary Trust Expenses in excess of the Maximum Reimbursable Amount, then an “Excess Expense Event” will occur unless adequate assurance of indemnity is given to the Trustee in the manner specified in paragraph 9.03(b).

 

(d)           Nothing in this Section shall be construed to excuse the Depositor from its indemnification obligations under Section 10.05.

 

SECTION 9.04.  Special Depositor Wind-Up Event.  If the Depositor (or, if applicable, its permitted assignee) owns 100% of the Units, then it shall have the power to designate a distribution of the Trust Property to the Unitholders and the termination of the Trust (a “Special Depositor Wind-Up Event”) pursuant to this Article IX.

 

SECTION 9.05.  Disposition of Trust Property.  (a)  Subject to Section 9.06, as promptly as possible after the occurrence of a Trust Wind-Up Event or Liquidation Event, and in any case within three Business Days following such occurrence, the Trustee shall provide notice to the Unitholders, the Swap Counterparties, the Depositor and the Rating Agencies of the occurrence of a Trust Wind-Up Event or Liquidation Event specifying the particular Trust Wind-Up Event or Liquidation Event and in the case of a Liquidation Event, the particular Underlying Security, Swap Agreement or other Trust Property related to such Liquidation Event.  In the case of a Trust Wind-Up Event, the notice shall state that (i) Holders should surrender their Units to the Trustee, or deliver security or indemnity acceptable to the Trustee in order to receive their respective distributions of Trust Property, if any, (ii) the location and hours of the Corporate Trust Office at which Units should be presented and surrendered and (iii) that each Holder must supply transfer instructions in writing with respect to Trust Property to be distributed in cash or in kind; provided, however, that with respect to Units that are Global Securities as to which distributions will be made through the facilities of DTC or another Depositary, the Trustee may adhere to the applicable rules and procedures or DTC or such other Depositary in lieu of clauses (i), (ii) and (iii) of this sentence.

 

(b)           The Trustee will give notice to the Selling Agent to undertake to sell Underlying Securities promptly after the occurrence of a Trust Wind-Up Event or Liquidation Event, and in any case within three Business Days following such occurrence.  Immediately upon receipt of

 

 

The Selling Agent must solicit at least three bids for the Underlying Securities to be sold.  The Selling Agent must solicit at least three of such bids from registered broker-dealers of national reputation who deal in securities of the type in question, but additional bids may be solicited from one or more financial institutions or other counterparties with credit worthiness acceptable to the Selling Agent in its discretion.  The Selling Agent will, on behalf of the Trust, sell the Underlying Securities at the highest bid price received.  The Selling Agent may not bid for the Underlying Securities.  The Selling Agent may provide a right of last refusal to any Swap Counterparty, Call Option holder or other counterparty or holder with an interest in the Underlying Securities or other Trust Property that is not an affiliate of the Selling Agent or any holder of a Call Option.

 

If the Selling Agent is unable to sell Underlying Securities within 180 days of its first attempt to do and the Selling Agent determines that it is not commercially reasonable to continue to try to sell such Underlying Securities, it may give notice to the Trustee and the Depositor that it is unable to sell such Underlying Securities and that it has determined that it is commercially unreasonable to continue to attempt to sell such Underlying Security.  In such event, the Trustee shall arrange to distribute such Underlying Securities to Unitholders.

 

(c)           Subject to Section 9.06, as promptly as possible after the occurrence of a Liquidation Event, the Trustee shall take action on behalf of the Trust as specified in Section 9.01.  Subject to Section 9.06, as promptly as possible after the occurrence of a Trust Wind-Up Event, unless otherwise provided in the Trust Agreement, the Trustee on behalf of the Trust shall terminate all Swap Agreements, Credit Support and other agreements of the Trust, the Trustee shall permit delivery of any Trust Property to any Swap Counterparty or other person in accordance with any Swap Agreement or other agreement, and the Trustee shall cause the Selling Agent to liquidate all Trust Property.  The Trustee shall use reasonable efforts to cause such terminations and liquida tions within thirty days of the occurrence of such Trust Wind-Up Event.  Upon completion of the liquidation of Trust Property, the Trustee shall provide a notice to Unitholders, the Swap Counterparties, the Depositor and the Rating Agencies stating that the liquidation of Trust Property has been completed, specifying the amount of any Swap Termination Payment paid or to be paid and the amounts to be distributed to Unitholders.

 

The Trustee shall distribute the cash proceeds of liquidation, and if applicable, other Trust Property, to Unitholders upon surrender, or delivery of security or indemnity acceptable to the Trustee, by each Holder of its Units at the Corporate Trust Office specified pursuant to paragraph (a) of this Section 9.05.  Upon receipt by the Trustee of (i) appropriate transfer instructions in writing from a Holder with respect to the Underlying Securities and (ii) such Holder’ Units (or acceptable security or indemnity), the Trustee shall promptly deliver Underlying Securities to such Holder in an aggregate principal amount corresponding to the aggregate Unit Principal Balance of such Holder’s Units in accordance with such transfer instructions by (A) physical delivery or (B) if applicable, causing the book-entry depositary for such Underlying Securities to credit such Underlying Securities to an account of such Holder with such depositary or an account of a designated participant in such depositary, provided that such book-entry depositary will be an agency of the United States, DTC or another book-entry institution acceptable to the Depositary.  With respect to a Global Security, the Trustee may also distribute such cash or other Trust Property in accordance with the rules of DTC or other applicable Depositary.  Any Transfer made in accordance with this paragraph shall satisfy all obligations of the Trust with respect to the Unitholders.

 

(d)           If the related Trust Agreement so specifies, in connection with any Swap Termination Payment payable by the Trust, the Unitholders may, acting unanimously, deliver to the Trustee the amount of such outstanding Swap Termination Payment (together with, in the case of a Trust Wind-Up Event, any Extraordinary Trust Expenses in excess of the Maximum Reimbursable Amount payable to the Trustee) and a written instruction to discontinue sale of the Underlying Securities.  If the Selling Agent receives notice from the Trustee of the exercise by the Unitholders of their rights under this Section 9.05(d), the Selling Agent shall promptly discontinue sales of the related Underlying Securities (but the Selling Agent and the Trustee shall complete the settlement of any sale already agreed). It is expressly understood and agreed that Underlying Securities may be sold in the time necessary for the Unitholders to be notified of and act upon their rights under this Section 9.05(d).  If the Trust Agreement specifies that this provision shall be applicable, the Trustee shall provide notice of this right to the Depositor and the Unitholders together with an estimate of the amount of any Swap Termination Payment and applicable Extraordinary Trust Expenses at the time the Trustee provides notice to Unitholders of such Trust Wind-Up Event or Liquidation Event.

 

(e)           Unless otherwise provided in the Trust Agreement, and notwithstanding any other provision of this Agreement (and as specified in the Swap Agreement), in connection with early termination of a Swap Agreement or one or more Transactions thereunder, other than as a result of Underlying Security Default, the claim of the Swap Counterparty against the Underlying Securities (or proceeds thereof arising from sale thereof) and any other Trust Property will be limited to a claim pro rata with that of the Unitholders according to the amount of the Swap Termination Payment otherwise payable to the Swap Counterparty and the Unitholders’ aggregate Unit Principal Balance plus accrued interest.

 

(f)           The only distributions from the Trustee to which the Holders shall be entitled are, subject to the security interest in all of the Trust Property granted in favor of the Trustee to secure unpaid Extraordinary Trust Expenses (up to but not exceeding the Maximum Reimbursable Amount) and to the Swap Counterparty pursuant to the Swap Agreement, payments on the Underlying Securities, amounts, if any, recovered under the Swap Agreement (including Swap Termination Payments, if any, and amounts collected pursuant to Section 2(e) and Section 11 of the Swap Agreement) or Guaranty, received by the Trustee after the occurrence of the Trust Wind-Up Event, and any other remaining Trust Property, if any, which in each case the Trustee shall distribute pro rata to the Unitholders in the manner provided pursuant to Section 4.01 upon satisfaction of the conditions for transfer of Underlying Securities referred to in paragraph (b) of this Section.

 

(g)           Except for reports and other information required to be provided to Holders under the Trust Agreement, the obligations the Trustee and the Depositor will terminate upon the distribution to Unitholders of all amounts required to be distributed to them and the disposition of all Underlying Securities held by the Trustee, and such distribution shall constitute full satisfaction of all of the interests of the Unitholders under this Trust Agreement.

 

(h)           In the event that the Selling Agent resigns or declines to sell specific Underlying Securities, the Trustee shall proceed under Section 10.02(a)(ix).

 

(i)           The Selling Agent is an agent of the Trustee only and shall have no fiduciary or other duties to the Unitholders, nor shall the Selling Agent have any liability to the Trust in the absence of the Selling Agent’s bad faith or willful default.  The Selling Agent shall be permitted to sell Underlying Securities to Affiliates of the Selling Agent.  The Selling Agent may (in addition to declining to sell specific Underlying Securities as provided in Section 9.05(b)) resign at any time by written notice to the Depositor and the Trustee, such resignation to take effect upon appointment of a successor selling agent.  Except as provided in the first sentence of this Section 9.05(i), each of the protections, releases, indemnities and other term s applicable to the Trustee under Section 10.01, 10.02, 10.03 and 10.05 shall apply to the Selling Agent in connection with its actions as Selling Agent for the Trust.

 

(j)           Subject to Section 9.05(b) and Section 9.05(e), the Trustee agrees that upon any failure of the Trust to make any payment when due under the Swap Agreement, the Swap Counterparty shall have the right to take all action and to pursue all remedies with respect to such property that a secured party is permitted to take with respect to collateral under the UCC, including the right to require the Trustee promptly to sell all or any portion of the Underlying Securities in the open market or, if the Swap Counterparty elects, to sell the Underlying Securities to the Swap Counterparty for its fair value as determined in good faith by the Swap Counterparty.  In either case, the proceeds of sale shall be applied to any amounts owed to the Swap Counterparty.  Th e Trustee further agrees to take any actions necessary to facilitate the perfection of the aforementioned security interest of the Swap Counterparty in the property of the Trust as the Swap Counterparty may reasonably request.

 

(k)           No Unitholder shall have any liability as a seller of the Trust Property in connection with any sale of Trust Property by the Trustee or the Selling Agent.

 

SECTION 9.06.  Limitation on Notice Requirement.  The Trustee shall not be responsible for taking action with respect to a Trust Wind-Up Event or a Liquidation Event unless and until (i) the Trustee fails to receive funds due on the Underlying Securities or under the Swap Agreement when due and such funds are not received within any applicable grace period, (ii) receipt by the Trustee of notice from the Swap Counterparty of the occurrence of a Swap Default or Termination Event, (iii) receipt of actual notice of an Underlying Security Default from the Underlying Security Issuer or (iv) upon actual knowledge of any event that would constitute a Liquidation Event or a Trust Wind-Up Event by a Responsible Officer of the Trustee; provided, however, that the Trustee is responsible for making due inquiry as to whether a Liquidation Event or a Trust Wind-Up Event occurred if it has reason to believe that such a Liquidation Event or Trust Wind-Up Event has occurred.

 

ARTICLE X

 

 

SECTION 10.01.  Duties of Trustee.  (a)  The Trustee undertakes to perform such duties and only such duties as are specifically set forth in the Trust Agreement.  Any permissive right of the Trustee enumerated in the Trust Agreement shall not be construed as a duty.

 

(b)           The Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trustee which are specifically required to be furnished pursuant to any provision of the Trust Agreement, shall examine them to determine whether they conform to the requirements of the Trust Agreement.  If any such instrument is found not to conform to the requirements of the Trust Agreement, the Trustee shall take action as it deems appropriate to have the instrument corrected, and if the instrument is not corrected to the Trustee’s satisfaction, the Trustee will provide notice thereof to the Depositor, the Unitholders and the Rating Agencies, if any.

 

(c)           Upon a default by the Swap Counterparty in making any other payment due under the Swap Agreement and upon a default by the Guarantor after the Trustee makes demand under the Guaranty, the Trustee shall exercise such of the rights and powers vested in it by the Trust Agreement, and shall use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

 

(d)           No provision of the Trust Agreement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own misconduct; provided, however, that:

 

(i)

the duties and obligations of the Trustee shall be determined solely by the express terms of the Trust Agreement, the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in the Trust Agreement, no implied covenants or obligations (except for a fiduciary duty to the beneficiaries of the Trust) shall be read into the Trust Agreement against the Trustee and, in the absence of negligence, bad faith or willful misconduct on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee that conform to the requirements of the Trust Agreement;

 

(ii)	the Trustee shall not be personally liable for an error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

(iii)

except with respect to actions or duties required to be taken or performed, as applicable, by the Trustee under the express terms of the Trust Agreement, the Trustee shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights powers under the Trust Agreement if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; provided, however, that the Trustee agrees that the indemnification under Section 10.05 will provide reasonable assurance against such risk or liability as to matters so indemnified unless the Trust ee and the Depositor reasonably determine that the Maximum Reimbursable Amount will not adequately cover any related expenses or liability; and provided, further, that, unless the Unitholders provide to the Trustee reasonable assurance of the payment of the unpaid Trustee Fees and adequate indemnity against risk or liability in connection with the performance of its duties under Sections 3.09, 4.02 and 4.04,  the Trustee shall not be required to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties under Sections 3.09, 4.02 and 4.04 if (x) the Trustee Fees have not been paid in accordance with the Trustee Fee Letter and remain unpaid or the Trustee reasonably believes that the Trustee Fees will not be paid at the time such performance is required and (y)  the Trustee provides reasonable notice to the Deposit or and Unitholders that the Trustee will not perform the duties under Sections 3.09, 4.02 and 4.04, or any of them.   The reasonableness of the notice will be determined by all relevant facts including the circumstances giving rise to the notice and the periods fixed in this agreement for the performance of the duties; and

(iv)

in the event that the Paying Agent or the Unit Registrar shall fail to perform any obligation, duty or agreement in the manner or on the day required to be performed by the Paying Agent or Unit Registrar, as the case may be, under the Trust Agreement, the Trustee shall be obligated promptly upon its knowledge thereof to perform such obligation, duty or agreement in the manner so required.

SECTION 10.02.  Certain Matters Affecting the Trustee.  (a) Except as otherwise provided in Section 10.01:

 

(i)

the Trustee may request and rely upon and shall be protected in acting or refraining from acting upon any resolution, Officers’ Certificate, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document reasonably believed by it to be genuine and to have been signed by the proper party or parties;

 

(ii)	the Trustee may consult with counsel and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it under the Trust Agreement in good faith and in accordance with such advice or Opinion of Counsel;

(iii)

except for the duties and obligations of the Trustee expressly created by the Trust Agreement, the Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by the Trust Agreement or to institute, conduct or defend any litigation thereunder or in relation thereto, at the request, order or direction of any of the Unitholders, pursuant to the terms of the Trust Agreement, unless such Unitholders or the Depositor shall have, to the reasonable satisfaction of the Trustee and its counsel, offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; provided, however, that the Trustee agrees that the indemnification un der Section 10.05 will provide reasonable assurance against such risk or liability as to matters so indemnified to the extent that the Depositor and the Trustee reasonably determine that the Maximum Reimbursable Amount will adequately cover such costs and expenses.  If the Unitholders provide such direction, the Trustee will not be required to take the directed action unless the Unitholders provide reasonable assurance to the Trustee or the Depositor agrees in writing that the Trustee will be entitled to rely on the indemnification provided under Section 10.05 to the extent that the Depositor and the Trustee reasonably determine that the Maximum Reimbursable Amount will adequately cover such costs and expenses;

(iv)	the Trustee shall not be personally liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by the Trust Agreement;

(v)	the Trustee shall not be bound to make any investigation into the facts of matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, approval, bond or other paper or document believed by it to be genuine;

(vi)	the Trustee may execute any of the trusts or powers or perform any duties under the Trust Agreement either directly or by or through agents or attorneys or a custodian or administrative agent;

(vii)

the Trustee shall not be personally liable for any loss resulting from the investment of funds held in any Unit Account pursuant to Section 3.06;

(viii)

the Trustee shall not be deemed to have notice or knowledge of any matter unless a Responsible Officer assigned to and working in the Corporate Trust Office has actual knowledge thereof or unless written notice thereof is received by the Trustee at the Corporate Trust Office and such notice references the Units generally or the Trust Agreement; and

(ix)

the Trustee shall have the power to sell the Underlying Securities and other Trust Property, in accordance with Article IX and XI, through the Selling Agent or, if the Selling Agent shall have resigned or declined to sell some or all of the Underlying Securities, any broker selected by the Trustee (at the direction of the Depositor) with reasonable care, in an amount sufficient to pay any amount due to the Swap Counterparty under the Swap Agreement (including Swap Termination Payments) or reimbursable to itself in respect of unpaid Extraordinary Trust Expenses and to use the proceeds thereof to make such payments after the distribution of funds or Trust Property to Unitholders.  Any such broker shall be instructed by the Trustee to sell such Trust Property in a reasonable manner designed to maximize the sale proceeds.

 

(b)           All rights of action under the Trust Agreement or under any of the Units, enforceable by the Trustee, may be enforced by it without the possession of any of the Units, or the production thereof at the trial or other Proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the Holders, subject to the terms of the Trust Agreement.

 

SECTION 10.03.  Limitation on Liability of Trustee.  The Trustee assumes no responsibility for the correctness of the recitals contained in the Trust Agreement, the Units, the Swap Agreement and the Guaranty, or in any document issued in connection with the sale of the Units (other than the signature and authentication on the Units).  The sole obligor with respect to the Underlying Securities is the related Underlying Security Issuer, with respect to the Swap Agreement is the Swap Counterparty and with respect to the Guaranty, is the Guarantor.  Except as set forth in Section 10.12, the Trustee makes no representations or warranties as to the validity or sufficiency of the Trust Agreement, the Units (other than the signature and authe ntication on the Units), any Underlying Security, the Swap Agreement, the Guaranty or of any related document.  The Trustee shall not be accountable for the use or application by the Depositor of any of the Units or of the proceeds of such Units, or for the use or application of any funds paid to the Depositor or the Swap Counterparty in respect of the Underlying Securities.  The Units do not represent interests in or obligations of the Trustee and the Trustee shall not be responsible or accountable for any tax, accounting or other treatment proposed to be applied to the Units or any interest therein except as expressly provided in the Trust Agreement.

 

SECTION 10.04.  Trustee May Own Units.  The Trustee in its individual capacity or any other capacity may become the owner or pledgee of Units with the same rights it would have if it were not Trustee.

 

SECTION 10.05.  Trustee Fees and Expenses; Limited Indemnification.  (a)  As compensation for its regular and customary services and in payment of its regular and customary expenses under the Trust Agreement (including the reasonable compensation, expenses and disbursements of its counsel for regular and customary services hereunder) the Trustee shall be entitled to the Trustee Fees (which shall not be limited by any provision of law in regard to compensation or payment of a trustee of an express trust).  The Depositor agrees to pay such Trustee Fees when due in accordance with the Trustee Fee Letter; provided, ho wever, that, subject to paragraph (b) below, the Depositor shall be under no obligation to make any other payment for any other services and expenses, disbursements and advances of the Trustee.

 

(b)           The Trustee and any director, officer, employee or agent of the Trustee shall be indemnified by the Depositor and held harmless against any loss, liability or expense incurred in connection with the performance of any of the Trustee’s duties under the Trust Agreement or any Proceeding relating to the Trust Agreement, the Swap Agreement or the Units or the performance of any of the Trustee’s duties under the Trust Agreement, other than any loss, liability or expense (i) that constitutes a specific liability of the Trustee under the Trust Agreement or (ii) incurred by reason of willful misfeasance, bad faith or negligence in the performance of the Trustee’ duties thereunder or by reason of reckless disregard of the Trustee’s obligations and duties thereunder (such loss, liability or expense, other than as described in clauses (i) and (ii) of this sentence, “Extraordinary Trust Expenses”); provided, however, that with respect to any such Proceeding, (1) the Trustee shall have given the Depositor notice thereof promptly after the Trustee shall have knowledge thereof; (2) while maintaining control over its own defense in any such legal action, the Trustee shall consult with the Depositor in preparing such defense; (3) if any Person ever alleges such willful misfeasance, bad faith or negligence by the Trustee, the indemnification provided for in this paragraph (b) shall nonetheless be paid upon demand, subject to later adjustment or reimbursement, until such time as a court of competent jurisdiction enters a final judgment as to the extent and effect of the alleged willful misfeasance, bad faith or negligence; and ( 4) the Depositor shall in no event be obligated under the Trust Agreement to indemnify the Trustee for any Extraordinary Trust Expenses to the extent that such Extraordinary Trust Expenses, when aggregated with all Extraordinary Trust Expenses previously indemnified, exceeds the Maximum Reimbursable Amount.  Subject to clause (4) of the proviso to the immediately preceding sentence, the indemnity for Extraordinary Trust Expenses shall survive the termination or discharge of the Trust Agreement and the resignation or removal of the Trustee.  In the event the Trustee is not indemnified by the Depositor, whether due to bankruptcy, insolvency or otherwise, the Trustee shall be indemnified by the Trust, however, the Trustee shall nevertheless remain obligated to perform its duties under the Trust Agreement.  The Depositor reserves the right, in its sole discretion and at its sole expense, to assume the defense of any proceeding upon 15 days’ written notice to the Trustee, inclu ding, but not limited to, the right to designate counsel reasonably acceptable to the Trustee and to control all negotiations, litigation, arbitration, settlements, compromises and appeals related to such proceeding.  If the Depositor assumes the defense of any proceeding pursuant to this paragraph, it shall not be required to pay any fees and expenses of counsel pursuant to this Section for the Trustee incurred thereafter in connection with such proceeding, except to the extent that the Trustee reasonably determines in its sole discretion that counsel designated by the Depositor has a conflict of interest.  In the event of such conflict or if the Depositor does not assume such defense, the Depositor will pay the fees and disbursements of one counsel (in addition to any local counsel) separate from its own counsel, in each case subject to the proviso above.

 

(c)           The Trustee and the Depositor expressly acknowledge that the limited obligations of the Depositor (and in the case of the last sentence of paragraph (b) above, the Trust) to indemnify the Trustee pursuant to paragraph (b) of this Section do not extend to amounts attributable to compensation for services or payment of expenses of the Trustee, which amounts are payable in full in the form of the Trustee Fee.

 

(d)           The Trustee shall have a lien on the Trust Property and the power to reimburse itself for any unpaid Extraordinary Trust Expenses actually incurred in accordance with the terms and conditions of this Trust Agreement in an amount up to but not exceeding the Maximum Reimbursable Amount prior to the distribution of funds or Trust Property to the Swap Counterparty or the Unitholders.

 

(e)           All indemnity obligations of the Depositor provided in this Agreement shall count toward the Maximum Reimbursable Amount.

 

(f)           In addition to, but not in reduction or replacement of, the foregoing, fees and expenses to be paid to the Trustee hereunder, the Trustee and its Affiliates shall be entitled to receive and retain such other fees or compensation for trustee, administrative, advisor, custodian, transfer agent, registrar, sponsor, distributor, manager or other services provided by the Trustee or affiliates of the Trustee to mutual funds, exchange traded funds, investment companies, investment trusts or other entities in which the proceeds from the Unit Account may from time to time be invested, including “servicing fees,” “12b-1” fees or similar fees customarily paid by such entities.  The foregoing is intended to serve as an express exception to Section 11-2.3(d) of the New York Estates, Powers and Trusts Law and similar provisions of applicable law.

 

SECTION 10.06.  Eligibility Requirements for Trustee.  (a)  The Trustee shall at all times satisfy the requirements of TIA Section 310(a) and Section (a)(4)(i) of Rule 3a-7 under the Investment Company Act.  The Trustee hereunder shall at all times be a corporation or association which is not an Affiliate of the Depositor (but may have normal banking relationships with the Depositor or any obligor with respect to the Underlying Securities with respect to such Series of Units and their respective Affiliates) organized and doing business under the laws of any State or the United States, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $200,000,000 and subject to supervision or examination by federal or state authority, and the long-term debt obligations of which are rated in one of the four highest categories assigned long-term debt obligations by each of the Rating Agencies.  If such corporation or association publishes reports of conditions at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such corporation or association shall be deemed to be its combined capital and surplus as set forth in its most recent report of conditions so published.  In the event that at any time the Trustee shall cease to be eligible in accordance with the terms of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 10.07.

 

(b)           The Trustee shall comply with Section 310(b) of the TIA; provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1), any Series under which other securities are outstanding evidencing ownership interest in obligations of the Underlying Security Issuer if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met.

 

SECTION 10.07.  Resignation or Removal of the Trustee.  (a) Subject to the last sentence of this paragraph (a), the Trustee may at any time resign and be discharged from the Trust by giving written notice thereof to the Depositor, each Swap Counterparty and any Guarantor, the Rating Agencies, any Credit Support Provider and to all Unitholders.  Upon receiving such

 

 

(b)           If at any time the Trustee shall cease to be eligible in accordance with the terms of Section 10.06 and shall fail to resign after written request therefor by the Depositor, or if at any time the Trustee shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Depositor may, with the consent of each Swap Counterparty and any Guarantor which consents shall not be unreasonably withheld, remove the Trustee and appoint a successor trustee by written instrument, in duplicate, which instrument shall be delivered to the Tru stee so removed and to the successor trustee.  A copy of such instrument shall be delivered to the Unitholders, each Swap Counterparty and any Guarantor, and the Rating Agencies by the Depositor.

 

(c)           Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the terms of this Section shall not become effective until acceptance of appointment by the successor trustee as provided in Section 10.08.

 

SECTION 10.08.  Successor Trustee.  (a)  Any successor trustee appointed as provided in Section 10.07 shall execute, acknowledge and deliver to the Depositor, its predecessor trustee and the Rating Agencies an instrument accepting such appointment under the Trust Agreement, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor under the Trust Agreement, with the like effect as if originally named as trustee in the Trust Agreement.  The predecessor trustee shall deliver to the successor trustee all documents and statements held by i t under the Trust Agreement, and the Depositor and the predecessor trustee shall execute and deliver such instruments and do such other things as may reasonably be required for more fully and certainly vesting and confirming in the successor trustee all such rights, powers, duties and obligations.  No successor trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor trustee shall be eligible under the terms of Section 10.06.

 

(b)           Upon acceptance of appointment by a successor trustee as provided in this Section, the Depositor shall transmit notice of the succession of such trustee under the Trust Agreement to all Unitholders in the manner provided pursuant to Section 12.05.

 

SECTION 10.09.  Merger or Consolidation of Trustee.  Any corporation or association into which the Trustee may be merged or converted or with which it may be consolidated or any corporation or association resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or association succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee under the Trust Agreement, provided such corporation or association shall be eligible under the terms of Section 10.06, without the execution or filing of any paper or any further act on the part of any of the parties to the Trust Agreement, anything in the Trust Agreement to the contrary notwithstanding.

 

SECTION 10.10.  Appointment of Co-Trustee.  (a) Notwithstanding any other terms of the Trust Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any party of the Trust Property may at the time be located, the Depositor and the Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, of all or any part of the Trust Property, and to vest in such Person or Persons, in such capacity, such title to the Trust Property, or any part thereof, and, subject to the other terms of this Section, such powers, duties, obligations, rights and trusts as the Depositor and th e Trustee may consider necessary or desirable.  If the Depositor shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, the Trustee alone shall have the power to make such appointment.  No co-trustee under the Trust Agreement shall be required to meet the terms of eligibility as a successor trustee under Section 10.06 and no notice to Unitholders of the appointment of a co-trustee or co-trustees shall be required under Section 10.08.

 

(b)           In the case of any appointment of a co-trustee pursuant to this Section, all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such co-trustee jointly, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed by the Trustee, the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to such Trust Property or any portion thereof in any such jurisdiction) shall be exercised and performed by such co-trustee at the direction of the Trustee.  The Trustee shall not be liable for the acts or omis sions of any co-trustee.

 

(c)           Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the co-trustees, as effectively as if given to each of them.  Every instrument appointing any co-trustee shall refer to the Trust Agreement and the conditions of this Article X.  Each co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, jointly with the Trustee subject to all the terms of the Trust Agreement, specifically including every provision of the Trust Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee.  Every such instrument shall be filed with the Trustee.

 

(d)           Any co-trustee may, at any time, constitute the Trustee, its agent or attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of the Trust Agreement on its behalf and in its name.  If any co-trustee shall die, become incapable of acting, resign or be removed, all its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

 

SECTION 10.11.  Appointment of Office or Agency.  The Units may be surrendered for registration of transfer or exchange, and presented for the final distribution with respect thereto, and notices and demands to or upon the Trustee in respect of the Units and the Trust Agreement may be served at the Corporate Trust Office.

 

SECTION 10.12.  Representations and Warranties of Trustee.  (a) The Trustee represents and warrants that:

 

(i)	the Trustee is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or association;

(ii)

the Trustee has full power, authority and right to execute, deliver and perform its duties and obligations under the Trust Agreement, the Units and the Swap Agreement and has taken all necessary action to authorize the execution, delivery and performance by it (or, with respect to the Units, by an Authenticating Agent on its behalf, if applicable) of the Trust Agreement, the Units and the Swap Agreement;

(iii)

the execution and delivery of the Trust Agreement, the Units and the Swap Agreement by the Trustee and its performance of and compliance with the terms of the Trust Agreement, the Units and the Swap Agreement will not violate the Trustee’s articles of incorporation, association or other constitutive documents or By-laws or constitute a default under, or result in the breach or acceleration of, any material contract, agreement or other instrument to which the Trustee is a party or which may be applicable to the Trustee or any of its assets;

(iv)

as of the Closing Date, each of the Trust Agreement, the Units and the Swap Agreement has been duly executed and delivered by the Trustee (or, with respect to the Units, by an Authenticating Agent on its behalf, if applicable) and each of the Trust Agreement and the Swap Agreement constitutes the legal, valid and binding obligation of the Trustee, enforceable in accordance with its terms, except as enforcement may be limited by the applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and general principles of equity;

(v)

the Trustee is not in violation, and the execution and delivery of the Trust Agreement, the Swap Agreement and the Units by the Trustee and its performance and compliance with respective terms of the Trust Agreement, the Swap Agreement and the Units will not constitute a violation, of any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction over the Trustee or its properties, which violation would reasonably be expected to have a material adverse effect on the condition (financial or otherwise) or operations of the Trustee or its properties or on the performance of its duties thereunder;

 

(vi)

there are no actions or proceedings against, or investigations of, the Trustee pending, or, to the knowledge of the Trustee, threatened, before any court, administrative agency or other tribunal (A) that could reasonably be expected to prohibit its entering into the Trust Agreement or the Swap Agreement or to render the Units invalid, (B) seeking to prevent the issuance of the Units or the consummation of any of the transactions contemplated by the Trust Agreement or the Swap Agreement or (C) that could reasonably be expected to prohibit or materially and adversely affect the performance by the Trustee of its obligations under, or the validity or enforceability of, the Trust Agreement, the Swap Agreement or the Units; and

(vii)

no consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Trustee of, or compliance by the Trustee with, the Trust Agreement, the Swap Agreement or the Units, or for the consummation of the transactions contemplated by the Trust Agreement or the Swap Agreement, except for such consents, approvals, authorizations and orders, if any, that have been obtained prior to the Closing Date.

(b)           Within 30 days of the earlier of discovery by the Trustee or receipt of notice by the Trustee of a breach of any representation or warranty of the Trustee set forth in this Section 10.12 that materially and adversely affects the interests of the Unitholders, the Trustee shall promptly cure such breach in all material respects.

 

SECTION 10.13.  Limitation of Powers and Duties.  The Trust is constituted solely for the purposes of acquiring and holding the Underlying Securities, entering into the Swap Agreement, accepting the Guaranty, entering into any ancillary agreements and issuing the Units.  The Trust may not incur any additional debt other than the debt that does not constitute a claim against the Trust to the extent that excess proceeds are insufficient to pay such debt.  The Trustee is not authorized to acquire any other investments or engage in any activities not authorized in the Trust Agreement and, in particular, the Trustee is not authorized (i) to sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of any of the Underlying Secu rities or interests therein, including to Unitholders (except upon termination of the Trust in accordance with Article IX and Article XI of the Trust Agreement) or (ii) to do anything that would cause the Trust to fail or cease to qualify as a “grantor trust” for federal income tax purposes.

 

SECTION 10.14.  Preferential Collection of Claims Against the Trust.  Irrespective of whether the TIA shall apply to this Agreement, the Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b).  A trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent required by TIA Section 311(a).

 

ARTICLE XI

 

 

SECTION 11.01.  Termination of the Trust.  (a)  Except as otherwise provided in Article IX, the respective obligations and responsibilities under the Trust Agreement of the Depositor and the Trustee (other than the obligations imposed by Section 10.05(b) and the obligations of the Trustee to provide reports and other information under the Trust Agreement and to make distributions to Unitholders as hereafter set forth) shall terminate upon the distribution to such Holders of all amounts held in all the Accounts and required to be paid to such Holders pursuant to the Trust Agreement; provided, however, that in no event shall the Trust continue beyond the expiration of 21 years from the death of the last survivor of the descendants of Queen Elizabeth II of England, living on the date of the Trust Agreement.

 

(b)           Written notice of any termination shall be provided to each Unitholder, the Depositor, each Swap Counterparty and any Guarantor and the Rating Agencies pursuant to Section 12.05 within ten Business Days, unless such termination occurs pursuant to the Scheduled Final Distribution Date.

 

(c)           On the Scheduled Final Distribution Date, the Trustee shall distribute to each Holder presenting and surrendering its Units, and to each Holder delivering such security or indemnity to the Trustee as the Trustee may require to save the Trustee and hold the Trustee harmless, the amount distributable on such Distribution Date pursuant to Section 4.01 in respect of the Units so presented and surrendered.  Any funds not distributed on such Distribution Date shall be set aside and held in trust for the benefit of Unitholders either (i) not presenting and surrendering their Units in the aforesaid manner or (ii) not delivering such security or indemnity to the Trustee as the Trustee may require to save the Trustee and hold the Trustee harmless, and shall be disposed of in accordance with this Section and Sections 4.01 and 5.09.  Immediately following the deposit of such funds in trust hereunder, the Trust shall terminate.

 

ARTICLE XII

 

 

SECTION 12.01.  Amendment of Trust Agreement; Waivers.  (a) The Trust Agreement may be amended from time to time by the Depositor and the Trustee without the consent of any of the Unitholders for any of the following purposes: (i) to cure any ambiguity or defect or to correct or supplement any provision in the Trust Agreement which may be defective or inconsistent with any other provision in the Trust Agreement or with disclosure in the applicable Prospectus Supplement; (ii) to add or supplement any credit support for the benefit of any Unitholders, (iii) to amend the definitions of Trigger Amount and Maximum Reimbursable Amount so as to increase, but not decrease, the respective amounts contained in such definitions or to otherwise amend or waive the te rms of Section 10.05(b) in any manner which shall not adversely affect the Unitholders in any material respect; (iv) to evidence and provide for the acceptance of appointment under the Trust Agreement by a successor Trustee; (v)·to add to the

 

 

(b)           The Trust Agreement may be amended from time to time by the Depositor and the Trustee with the consent of Specified Percentage of the outstanding Unit Principal Balance of each Class of Units materially and adversely affected thereby.  Unless specified in the related Trust Agreement, no amendment to the Trust Agreement may change the principal amount, interest rate, maturity, or other terms specified in the related Trust Agreement, of any Class or Series of Units without the consent of 100% of the outstanding Unit Principal Balance of each Class of Units affected thereby.  The Rating Agency Condition shall be satisfied with respect to such amendment unless Units representing 100% of the Unit Principal Balance of all affected Units vote in favor of su ch amendment with notice that the Rating Agency Condition will not be satisfied, but in any case each applicable Rating Agency shall receive written notice of such amendment.

 

(c)           Promptly after the execution of any such amendment or modification, the Trustee shall furnish a copy of such amendment or modification to each Unitholder.

 

(d)           Notwithstanding the foregoing, no amendment or modification to the Trust Agreement shall be permitted unless the Trustee first receives an Opinion of Counsel, provided at the expense of the party requesting such amendment, that such amendment or modification will not alter the classification of the Trust for U.S. federal income tax purposes.  The Trustee shall not agree to any amendment that would affect the rights or obligations of any Swap Counterparty of the respective Trust, without first obtaining the approval of that Swap Counterparty.

 

(e)           For purposes of this Section 12.01, Schedule III to any Trust Agreement and any Swap Agreements entered into in connection with any related Trust shall not be considered part of the Trust Agreement.  Section 7.02 shall govern action taken under the Trust Agreement with respect to any amendments to such Swap Agreements.

 

(f)           Holders of Units evidencing not less than a Specified Percentage of the Units of a particular Class may, on behalf of all Holders of the Units of that Class, (1) waive, insofar as that Class is concerned, compliance by the Depositor or the Trustee with any restrictive provisions of the Trust Agreement before the time for such compliance or (2) waive any past default under the Trust Agreement with respect to the Units of that Class, except for (A) a default resulting from any failure to distribute amounts received as principal of (and premium, if any) or any interest on any such Unit and (B) a default in respect of any covenant or provision the modification or amendment of which would require the consent of the Holder of each outstanding Unit affected by the default.

 

(g)           In executing or accepting the additional trusts created by any amendment or the modifications thereby of the trusts created by the Trust Agreement, the Trustee shall be entitled to receive, and (subject to the standard of care provided in Article X hereof) shall be fully protected in relying upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by the Trust Agreement and that all conditions precedent thereto have been complied with.  The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee’s own rights, duties or immunities under the Trust Agreement or otherwise.

 

SECTION 12.02.  Counterparts.  The Trust Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.

 

SECTION 12.03.  Limitation on Rights of Unitholders.  (a) The death or incapacity of any Unitholder shall not operate to terminate the Trust Agreement or the Trust Property, nor entitle such Unitholder’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of the Trust Property, nor otherwise affect the rights, obligations and liabilities of the parties thereto or any of them.

 

(b)           Except as otherwise expressly provided herein, no Unitholder shall have any right to control the operation and management of any Trust Property, or the obligations of the parties thereto, nor shall anything in the Trust Agreement set forth, or contained in the terms of the Units, be construed so as to constitute the Unitholders from time to time as partners or members of an association; nor shall any Unitholder be under any liability to any third person by reason of any action taken by the parties to the Trust Agreement pursuant to any provision thereof.

 

(c)           No Unitholder shall have any right by virtue of any provision of the Trust Agreement to institute any suit, action or proceeding in equity or at law upon or under or with respect to the Trust Agreement.

 

SECTION 12.04.  Governing Law.  The Trust Agreement and each Unit issued thereunder shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely therein without reference to such State’ principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby, and the obligations, rights and remedies of the parties thereunder shall be determined in accordance with such laws.

 

SECTION 12.05.  Notices.  All directions, demands and notices under the Trust Agreement shall be in writing and shall be delivered to the offices of the Trustee specified in the offering documents dated as of the Closing Date.  Unless otherwise provided in the Trust Agreement, any notice required to be given to a holder of a Registered Unit will be given by

 

 

Any notice required to be given to the Rating Agencies, if any, shall be in writing and shall be deemed to have been duly given if personally delivered or mailed by first class mail, postage prepaid, or by express delivery service to the Rating Agencies at the addresses set forth in the Trust Agreement or as otherwise specified by the applicable Rating Agencies.

 

SECTION 12.06.  Severability of Terms.  If any one or more of the covenants, agreements or terms of the Trust Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements or terms shall be deemed severable from the remaining covenants, agreements or terms of the Trust Agreement and shall in no way affect the validity or enforceability of the other terms of the Trust Agreement or of the Units or the rights of the Holders thereof.

 

SECTION 12.07.  Notice to Rating Agencies.

 

(a)           The Trustee shall provide notice to the Rating Agencies as soon as is reasonably practicable with respect to each of the following of which the Trustee has actual knowledge:

 

(i)	any material change or amendment to the Trust Agreement;

 

(ii)	the occurrence of any Swap Default or Termination Event;

 

(iii)

the resignation or termination of the Trustee;

 

(iv)	the final payment to Holders of the Units;

 

(v)	any change in the location of the Unit Account; and

 

(vi)	any Underlying Security Default.

 

(b)           The Trustee shall promptly furnish to the Rating Agencies copies of each report to Unitholders described in Section 4.02.  Any such notice pursuant to this Section shall be in writing and shall be deemed to have been duly given if personally delivered or mailed by first class mail, postage prepaid, or by express delivery service to the Rating Agencies at the addresses set forth in the Trust Agreement.

 

(c)           The Trustee shall provide to, or at the direction of, the Depositor all information requested by the Depositor for the Depositor to comply with Rule 17g-5 of the Exchange Act.

 

SECTION 12.08.  Perfection of Swap Counterparty Security Interest.  At the request of the Swap Counterparty, the Trustee will assist the Swap Counterparty in the perfection of the security interest in the Trust Property described in Section 3.04 and granted by the Trust to the Counterparty under the Swap Agreement.

 

SECTION 12.09.  No Recourse.  Each Unitholder by accepting a Unit acknowledges that such Unitholder’s Units represent beneficial interests in the Trust only and do not represent interests in or obligations of the Depositor, the Trustee, the Swap Counterparty, the Guarantor or any Affiliate of the foregoing Persons and no recourse may be had against such Persons or their respective assets, except as may be expressly set forth in the Trust Agreement, the Swap Agreement or the Units.

 

SECTION 12.10. Non-Petition. Prior to the date that is one year and one day after all distributions in respect of the Units have been made, none of the Trustee, the Trust or the Depositor shall take any action, institute any proceeding, join in any action or proceeding or otherwise cause any action or proceeding against any of the others under the United States Bankruptcy Code or any other liquidation, insolvency, bankruptcy, moratorium, reorganization or similar law (“Insolvency Law”) applicable to any of them, now or hereafter in effect, or which would be reasonably likely to cause any of the others to be subject to, or seek the protection of, any such Insolvency Law.

 

SECTION 12.11. Merger and Consolidation.  The Trust shall not merge or consolidate with any other trust, entity or person and the Trust shall not acquire the assets of, or an interest in, any other trust, entity or person except as specifically contemplated herein.

 

SECTION 12.12.  Conflict With Trust Indenture Act.  (a)  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Agreement by any of the provisions of the TIA, such required provision shall control.

 

(b)           The provisions of the TIA Sections 310 through 317 that impose duties on any Person (including the provisions automatically deemed included herein unless expressly excluded by this Agreement) are a part of and govern this Agreement, whether or not physically contained herein.

 

(c)           Except as expressly provided in this Agreement, all provisions specifically referencing the TIA shall be inapplicable until such time as this Agreement is qualified under the TIA.

 

IN WITNESS WHEREOF, the Depositor and the Trustee have caused this instrument to be duly executed by their respective officers thereunto duly authorized as of the date first above written.

 

MS STRUCTURED ASSET CORP.

 

By    /s/ In-Young Chase

Name: In-Young Chase

Title: Authorized Signatory

 

THE BANK OF NEW YORK MELLON, as

Trustee on behalf of the Trust identified in Schedule I

to the Trust Agreement dated today’s date and Securities

Intermediary, and not in its individual capacity

 

By    /s/ Maryann Joseph

Name: Maryann Joseph

Title: Vice President

 

 

 

TRUST AGREEMENT, between MS Structured Asset Corp. (the “Depositor”) and The Bank of New York Mellon (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 25, 2010 (the “Standard Terms”) are, except to the extent otherwise expressly stated, hereby incorporated by reference herein in their entirety with the same force and effect as though set forth herein.  Capitalized terms used herein and not defined shall have the meanings defined in the Standard Terms. References to “herein”, “hereunder”, “this Trust Agreement” and the like shall include the Schedules attached hereto and the Standard Terms so incorporated by reference.

 

WHEREAS, the Depositor and the Trustee desire to establish the Trust identified in Schedule I attached hereto (the “Trust”) for the primary purposes of (i) holding the Underlying Securities, (ii) entering into any Swap Agreement with the Swap Counterparty and (iii) issuing the Units;

 

WHEREAS, the Depositor desires that the respective beneficial interests in the Trust be divided into transferable fractional shares, such shares to be represented by the Units;

 

WHEREAS, the Depositor desires to appoint the Trustee as trustee of the Trust and the Trustee desires to accept such appointment;

 

WHEREAS, the Depositor shall transfer, convey and assign to the Trust without recourse, and the Trust shall acquire, all of the Depositor’s right, title and interest in and under the Underlying Securities and other property identified in Schedule II to the Trust Agreement (the “Trust Property”); and

 

WHEREAS, the Trust agrees to acquire the Trust Property specified herein in consideration for Units having an initial Unit Principal Balance or Notional Amount 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, an d subject to the terms and provisions hereof and of the Standard Terms.

 

IN WITNESS WHEREOF, each of the undersigned has executed this instrument as of the date set forth in Schedule I attached hereto.

 

THE BANK OF NEW YORK MELLON, as Trustee on

behalf of the Trust identified in Schedule I hereto and as

Securities Intermediary, and not in its individual capacity

By:  __________________________________

Name:

Title:

 

MS STRUCTURED ASSET CORP.

 

Name:

Title:

 

 

 

Attachments: Schedules [I, II and III]

 

 

 

 

 

Trust:

SATURNS Trust No. [__________]

 

Date of Trust Agreement:

[____________]

 

Units:

 

Initial Unit Principal Balance

[Initial Notional Amount

Specified Currency:

[United States dollars]

 

Business Day:

New York, New York and [             ]

 

Interest Rate:

[_____]% per annum [basis]

 

Interest Reset Period:

[Not Applicable]

 

Rating:

 

Rating Agencies:

[Moody’s and S&P]

 

Prepayment/Redemption:

[The Trust Property is subject to redemption in accordance with the terms of the Underlying Securities and as described in Schedule II and is subject to call in accordance with Schedule III.  Any such call or redemption will result in the redemption of a proportional amount of the Units [and a proportional reduction in the Notional Amount of the Units.  ]]

 

Additional Distribution:

 

Swap Agreement:

 

Swap Counterparty:

Party A to the Swap Agreement referred to in Schedule III or any assignee thereof.

 

[Guaranty:

Morgan Stanley shall guarantee the obligations of [any Morgan Stanley affiliate who is a Swap Counterparty].  ]

 

Swap Notional Amount:

 

Swap Payment Date:

 

Swap Rate:

 

Distribution Date:

Each [__________], or the next succeeding Business Day if such day is not a Business Day, commencing December 1, 2002, and any other date upon which funds are available for distribution in accordance with the terms hereof.

 

If any payment with respect to the Underlying Securities held by the Trust is not received by the Trustee by 12 noon (New York City time) on a Distribution Date, the corresponding distribution on the Units will not occur until the next Business Day that the Trust is in receipt of proceeds of such payment prior to 12 noon, with no adjustment to the amount distributed.

 

Record Date:

Each [____________], regardless of whether such day is a Business Day.

 

Form:

[Global Security]

 

Depositary:

[DTC]

 

Specified Percentage:

 

Trustee Fees and Expenses:

[As compensation for and in payment of trust expenses related to its services hereunder other than Extraordinary Trust Expenses, the Trustee will receive Trustee Fees on in the amount equal to $5,000 on an annual basis.  The Trustee Fee shall cease to accrue after termination of the Trust.]

 

Trustee’s Corporate Trust Office:

The Bank of New York Mellon

Corporate Trust Department

101 Barclay Street, 7W

New York, NY 10286

[Expense Administrator:

The Depositor will act as Expense Administrator on behalf of the Trust pursuant to an Expense Administration Agreement, dated as of the date of the Trust Agreement (the “Expense Administration Agreement”), between the Depositor as Expense Administrator (the “Expense Administrator”) and the Trust.

 

The Expense Administrator will receive a fee equal to [_____]% per annum of the principal amount of the Underlying Securities held by the Trust as its fee, calculated on the basis of a 360 day year consisting of twelve 30 day months (the “Expense Administration Fee”).  The Expense Administrator’s fee is payable only from available interest receipts received with respect to the Underlying Securities after application of such receipts to payment of accrued interest on the Units.

 

The Expense Administrator will be responsible for paying the Trustee Fee and reimbursing certain other expenses of the Trust in accordance with the Expense Administration Agreement. ]

 

Listing:

[The Depositor has applied to list the Units on [____]

 

ERISA Restrictions:

[None][No Plan Restriction][25% Test][Prohibited Transaction Exemption Restriction]

 

QIB Restriction:

 

Primary Offering Securities:

The Trustee, as purchaser of the Underlying Securities, hereby assigns to the Unitholders its rights against the related Underlying Security Issuers and the Placement Agents under the U.S. federal and state securities laws with respect to its purchase of the Underlying Securities. Accordingly, Unitholders may proceed directly against the related Underlying Security Issuers of Underlying Securities and the Placement Agents to enforce those rights without first proceeding against the Trust, the Trustee or any other person or entity. Each Underlying Security Issuer and its Placement Agents have acknowledged the existence of such assignment and agreed not to contest its enforceability.

 

The Trustee shall remove from Trust Property any Underlying Securities, in whole and not in part, for which removal of such Underlying Securities is required to effectuate a final judgment or decree which requires a right of rescission with respect to such Underlying Securities in connection with any action brought under federal or state securities laws in respect of such Underlying Securities.

 

 

[Liquidation Events:

For Primary Offering Securities, revise provisions as specified in prospectus]

 

[Eligible Underlying Security:

For Primary Offering Securities, restrict definition as specified in prospectus]

 

Trust Wind-Up Event:

[The following Trust Wind-Up Events shall not apply:]

 

[The following additional events shall be Trust Wind-Up Events:]

 

[If (i) cash settlement applies under the Swap Agreement, (ii) a Trust Wind-Up Event has occurred in connection with the exercise of any call rights under the Swap Agreement and (iii) the Selling Agent cannot obtain a bid for the Underlying Securities in excess of 100% of the aggregate Unit Principal Balance of the Units and accrued interest on the Underlying Securities, then the Underlying Securities will not be sold, the Swap Counterparty’s exercise of the call rights will be rescinded (and the Swap Counterparty shall be entitled to exercise such options in the future) and any related Trust Wind-Up Event will be deemed not to have occurred.]

 

Termination:

 

[Distributions of Securities:

Provisions of the Standard Terms allowing for otherwise providing for distributions of Underlying Securities with respect to the Units in connection with Liquidation Events or Trust Wind-Up Events shall not be incorporated herein.]

 

[Indemnification by Unitholders:

Provisions of the Standard Terms allowing for otherwise providing for Unitholders to offer indemnity to the Trustee with respect to a Trigger Event or to tender amounts in respect of a Swap Termination Payment shall not be incorporated herein.]

 

Self-Tenders by Underlying

Security Issuer:

[The Trust will not participate in any self-tender by the Underlying Security Issuer for the Underlying Securities and the Trustee will not accept any instructions to the contrary from the Unitholders.  However, the Swap Counterparty may exercise the Swap Agreement at any time in connection with a self-tender.]

 

Depositor Optional Exchange:

[Depositor Optional Exchange shall be subject to the consent of [the Swap Counterparty][the holder of Call Rights][the Expense Administrator.]

 

[Depositor Optional Exchange shall be available on the following dates instead of the dates specified in the Standard Terms].

 

Terms of Retained Interest:

Notwithstanding any other provision herein or in the Standard Terms, the Depositor retains the right to receive any and all interest that accrues on the Underlying Securities prior to the Closing Date.  The Depositor will receive such accrued interest on the first Distribution Date (or redemption date if earlier) for the Units and such amount shall be paid from the interest payment made with respect to the Underlying Securities on the first Distribution Date.

 

The amount of the Retained Interest is $[_____].

 

If a Underlying Security Default occurs on or prior to the first Distribution Date and the Depositor does not receive such Retained Interest amount in connection with such Distribution Date, the Depositor will have a claim for such Retained Interest, and will share pro rata with holders of the Units to the extent of such claim in the proceeds from the recovery on the Underlying Securities.

 

Call Option Terms:

[Specify terms of Call Option, Call Rights, Warrants, if applicable.]

 

Sale of Underlying Securities:

[If cash settlement applies and if the Swap Counterparty exercises any of its call rights other than in connection with a redemption of or a self-tender for the Underlying Securities by the Underlying Security Issuer (or to the extent such exercise corresponds to such redemption or self-tender), a number of Underlying Securities corresponding to the number of call rights exercised by the Swap Counterparty will be sold by the Selling Agent on behalf of the Trust.

 

If the Selling Agent cannot obtain a bid for the Underlying Securities in excess of 100% of the aggregate Unit Principal Balance of the Class A Units to be redeemed and accrued interest on the Underlying Securities to be sold, then the Underlying Securities will not be sold, the Swap Counterparty’s exercise will be rescinded (and the Swap Counterparty shall be entitled to exercise such call rights in the future) and any related Trust Wind-Up Event will be deemed not to have occurred.]

 

Selling Agent:

[Morgan Stanley & Co. Incorporated.  Notwithstanding any provision of the Standard Terms to the contrary, any sale of the Underlying Securities shall be conducted by and through the Selling Agent and not the Trustee.  ]

 

 

Underlying Securities:

 

Underlying Security Issuer:

 

[Primary Offering Securities:

Applicable]

 

Principal Amount:

 

Underlying Security Rate:

 

Credit Ratings:

[___ by Moody’s]

 

[___ by S&P]

 

Listing:

 

Underlying Security Issuance Agreement:

 

Form:

[Global]

 

Currency of

Denomination:

[United States dollars]

 

Acquisition Price by Trust:

 

Underlying Security Payment Date:

 

Original Issue Date:

 

Maturity Date:

 

Sinking Fund Terms:

 

Redemption Terms:

 

CUSIP No.:/ISIN No.

 

Underlying Security Trustee:

 

Available Information

Regarding the Underlying Security Issuer

(if other than U.S.

Treasury obligations):

The Security Issuer is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports and other information with the Securities and Exchange Commission (the “Commission”). Such reports and other information can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional Offices of the Commission: Woolworth Building, 233 Broadway, New York, New York 10279 [, and                          ]. Copies of such materials can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, District of Columbia 20549 at prescribed rates.

 

 

 

 

 

 

 

 

[EACH PURCHASER OR OTHER TRANSFEREE OF THIS UNIT OR ANY INTEREST HEREIN OF THIS UNIT, BY ITS ACCEPTANCE HEREOF, IS DEEMED TO REPRESENT AND WARRANT FOR THE BENEFIT OF THE TRUSTEE AND THE DEPOSITOR OF THE TRUST, AND EACH DISTRIBUTION PARTICIPANT AS DEFINED IN THE TRUST AGREEMENT THAT SUCH PURCHASER OR OTHER TRANSFEREE IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT.  ]

 

[IF THE TRUST AGREEMENT PROVIDES THAT THE 25% TEST APPLIES, A DEFINITIVE PURCHASE AGREEMENT MUST BE EXECUTED AND DELIVERED BY THE PURCHASER OR THE PROPOSED TRANSFEREE WHICH AGREEMENT WILL CONTAIN ADDITIONAL REPRESENTATIONS, INCLUDING WHETHER THE PURCHASER OR PROPOSED TRANSFEREE IS A (I) “EMPLOYEE BENEFIT PLAN” (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)), WHETHER OR NOT IT IS SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF ERISA, INCLUDING ANY U.S. GOVERNMENTAL PLANS AND ANY FOREIGN GOVERNMENTAL OR PRIVATE PENSION PLANS, (II) “PLAN” DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR (III) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN’S INVESTMENT IN SUCH ENTITY OR OTHERWISE, AND, IF SO, WHETHER SUCH PERSON IS SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR ANY SUBSTANTIALLY SIMILAR LAW.]

 

[IF THE TRUST AGREEMENT PROVIDES THAT THE PROHIBITED TRANSACTION EXEMPTION RESTRICTION APPLIES, BY ITS ACQUISITION OF ANY UNIT, THE HOLDER WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED ON EACH DAY THAT IT HOLDS SUCH UNIT EITHER THAT (X) IT IS NOT A (I) “EMPLOYEE BENEFIT PLAN” (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF ERISA, (II) “PLAN” DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) SUBJECT TO SECTION 4975 OF THE CODE OR (III) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN’S INVESTMENT IN SUCH ENTITY OR OTHERWISE OR (IV) GOVERNMENTAL PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE OR LOCA L LAW THAT IS SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF SECTION

 

 

 

 

 

 

406 OF ERISA OR SECTION 4975 OF THE CODE, OR (Y) ITS PURCHASE, HOLDING AND DISPOSITION OF A UNIT WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL PLAN, ANY SUBSTANTIALLY SIMILAR FEDERAL, STATE OR LOCAL LAW) UNLESS AN EXEMPTION IS AVAILABLE (ALL OF THE CONDITIONS OF WHICH HAVE BEEN SATISFIED) OR IN ANY OTHER VIOLATIONS OF AN APPLICABLE REQUIREMENT OF ERISA, THE INTERNAL REVENUE CODE OR OTHER LAW.]

 

[IF THE TRUST AGREEMENT PROVIDES THAT THE NO PLAN RESTRICTION APPLIES, THE HOLDER, AND EACH FIDUCIARY WHICH CAUSES ANY SUCH PERSON TO ACQUIRE ANY UNIT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, WILL BE DEEMED BY SUCH PURCHASE, HOLDING OR ACQUISITION, ON EACH DATE ON WHICH THE UNIT IS HELD BY SUCH PERSON, TO HAVE REPRESENTED THAT IT IS NOT A (I) “EMPLOYEE BENEFIT PLAN” (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)) SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF TITLE I OF ERISA, (II) “PLAN” DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) SUBJECT TO SECTION 4975 OF THE CODE, (III) ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN’S INVESTMENT IN SUCH ENTITY OR OTHERWISE OR (IV) GOVERNMENTAL OR OTHER PLAN SUBJECT TO REQUIREMENTS SUBSTANTIALLY SIMILAR TO TITLE I OF ERISA OR SECTION 4975 OF THE INTERNAL REVENUE CODE.]

 

[EACH PERSON THAT ACQUIRES A UNIT, AND EACH FIDUCIARY WHO CAUSES A PERSON TO ACQUIRE A UNIT, IN ITS INDIVIDUAL AS WELL AS ITS FIDUCIARY CAPACITY, AGREES TO INDEMNIFY AND HOLD HARMLESS THE DEPOSITOR, THE TRUSTEE, [MS&CO.] AND THEIR RESPECTIVE AFFILIATES FROM ANY COST, DAMAGES, LOSS OR EXPENSE, INCURRED BY THEM AS A RESULT OF THE REPRESENTATIONS MADE BY SUCH PERSON OR FIDUCIARY NOT BEING TRUE.]

 

[THIS CERTIFICATE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY.  THIS UNIT IS EXCHANGEABLE FOR UNITS REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.]

 

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

 

 

[THIS UNIT MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS PROVIDED IN THE TRUST AGREEMENT FOR THE TRUST TO WHICH THIS UNIT RELATES.]

 

[THIS UNIT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.]

 

 

 

 

 

 

 

Unit No. [__]	CUSIP No. [_______________]
REGISTERED INITIAL AMOUNT: $[_________]	FRACTIONAL SHARE:  [____]%
AGGREGATE INITIAL AMOUNT OF UNITS: $[25,000,000]
REGISTERED INITIAL NUMBER: [__]
AGGREGATE INITIAL NUMBER OF ALL UNITS:  [__]

 

This certifies that Cede & Co. is the registered owner of an undivided fractional interest in the Trust Property referred to below.  The amount due on this Unit on any Distribution Date is the fractional undivided interest represented by this Unit of the amount of the distribution on the Units as determined pursuant to the Trust Agreement.

 

The Trust Property will be held in trust by the Trustee identified in the Trust Agreement  (the “Trust”).  The Trust has been created pursuant to a Trust Agreement, dated as of [__________] (the “Trust Agreement”), between the Trustee of the Trust named therein (the “Trustee”), and MS Structured Asset Corp.

 

To the extent not defined herein, all capitalized terms shall have the meanings assigned to such terms in the Trust Agreement and the Terms Schedule attached thereto.  This Unit is one of the Units described in the Trust Agreement and is issued under and subject to the terms, provisions and conditions of the Trust Agreement.  By acceptance of this Unit, the Holder assents to and becomes bound by the Trust Agreement.

 

The Trust Property consists of the Securities (excluding the Retained Interest of the Depositor) and any Permitted Investments.

 

Subject to the terms and conditions of the Trust Agreement (including the availability of funds for distributions and any grace period or cure period applicable to the Trust Property) and to the prior obligation of the Trust to pay (i) all amounts due to the Swap Counterparty pursuant to the Swap Agreement and (ii) all unpaid Extraordinary Trust Expenses, and until the obligations created by the Trust Agreement shall have terminated in accordance therewith, there will be distributed on each Distribution Date, to the Person in whose name this Unit is registered at the close of business on the Record Date, such Unitholder’s fractional undivided interest in the amounts to be distributed to Holders of Units pursuant to the Trust Agreement on such Distribution Date.  The amount to be distributed on the Scheduled Final Distribu tion Date will include the full repayment of principal.

 

Distributions on this Certificate will be made by wire transfer in accordance with a written notice to the Trustee providing appropriate wire transfer instructions given no later than 15 calendar days prior to the applicable Distribution Date.  If no such notice has been given, distributions will be made by the Trustee by check mailed to the Unitholder of record at its address as it appears in the Unit Register without the presentation or surrender of this Certificate or the making of any notation hereon, by wire transfer of immediately available funds.  Except as otherwise provided in the Trust Agreement and notwithstanding the above, the final distribution on this Certificate will be made after due notice by the Trustee of the pendency of such distribution and only upon presentation and surrender of this Certificate at the office or agency maintained for that purpose by the Trustee.

 

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 Corporate Trust Office and at such other places, if any, designated by the Trustee, by any Unitholder upon request.

 

Reference is hereby made to the further terms of this Certificate set forth on the reverse hereof, which further terms shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Trustee, by manual signature, this Certificate shall not entitle the Holder hereof to any benefit under the Trust Agreement or be valid for any purpose.

 

 

 

 

 

 

IN WITNESS WHEREOF, the Trustee, on behalf of the Trust, and not in its individual capacity, has caused this Certificate to be duly executed.

 

SATURNS TRUST NO. __________

 

BY: THE BANK OF NEW YORK MELLON,

as Trustee

By:  ______________________________

Authorized Signatory

 

DATED:

 

[SEAL]

 

Trustee’s Certificate of

Authentication:

 

This is one of the Units referred

to in the within-mentioned Agreement.

 

[                                 ],

as Authenticating Agent

By:  ____________________________

Authorized Signatory

 

 

[If not a Global Security: Attachments: Schedule I to the Trust Agreement]

 

 

 

STRUCTURED ASSET TRUST UNIT REPACKAGINGS (“SATURNS”)

 

SERIES ________

 

The Trust Agreement permits the amendment thereof, in certain circumstances, without the consent of the Holders of any of the Certificates.

 

As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registerable in the Unit Register upon surrender of this Certificate for registration of transfer at the office or agency maintained by the Trustee for that purpose, accompanied by a written instrument of transfer in form and substance satisfactory to the Trustee duly completed and executed by the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of authorized denominations evidencing the same aggregate interest in the Trust will be issued to the designated transferee.

 

As provided in the Trust Agreement and subject to certain limitations therein set forth, Certificates are exchangeable for new Certificates representing different numbers of Units which evidence the same aggregate interest in the Trust, as requested by the Holder surrendering the same.  No service charge will be made for any such registration of transfer or exchange, but the Trustee may require payment of a sum sufficient to cover any tax or governmental charges payable in connection therewith.

 

The Depositor, the Trustee and any agent of the Depositor or the Trustee may treat the person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Depositor, the Trustee, or any such agent shall be affected by any notice to the contrary.

 

The obligations and responsibilities created by the Trust Agreement and the Trust created thereby will terminate upon the payment to Unitholders of all amounts required to be paid to them pursuant to the Trust Agreement.

 

Notwithstanding anything contained in the Trust Agreement to the contrary the Trust Agreement has been accepted by the Trustee not in its individual capacity but solely as Trustee and in no event shall the Trustee 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 the Trustee be personally liable for the payment of any indebtedness or expenses of the Trust.  The Units do not represent interests in or obligations of the Trustee and the Trustee shall not be responsible or accountable for any tax, accounting or other treatment proposed to be applied to the Units or any interest therein except as expressly provided in the Trust Agreement.

 

ASSIGNMENT

 

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

 

PLEASE INSERT SOCIAL SECURITY

OR OTHER IDENTIFYING NUMBER

OF ASSIGNEE

 

 

(Please print or type name and address, including postal zip code, of assignee)

 

---

 

the within Certificate, and all rights thereunder, hereby irrevocably constituting and appointing

 

---

 

Attorney to transfer said Certificate on the books of the Certificate Registrar, with full power of substitution in the premises.

 

Dated:

 

_______________________________ */

Signature Guaranteed:

 

_______________________________ */

 

_______________

 

*/  NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Certificate in every particular, without alteration, enlargement or any change whatever.  Such signature must be guaranteed by a member of the New York Stock Exchange or a commercial bank or trust company.

 

 

The undersigned hereby irrevocably requests and instructs the Trustee to effect exchange of this Unit for the Trust Property in which this Unit evidences a beneficial interest (or portion thereof specified below) pursuant to its terms and in accordance with Section 5.12 of the Trust Agreement, to be delivered to the undersigned, at

 

---

 

---

 

---

 

Dated:  ________________

 

 

 

 

 

[To be medallion guaranteed by an authorized officer of a member of a national securities exchange or the National Association of Securities Dealers, Inc., The Depository Trust Company (in accordance with its normal procedures) or a commercial bank or trust company in the United States setting forth the name of the Holder of such Registered Unit]

___________ __, 20__

The Bank of New York Mellon,

     Trustee

Corporate Trust Department

New York, NY 10286

Re:

Exercise of option to exchange Units under the Structured Asset Trust Unit Repackagings (SATURNSSM) Series [________]

Dear Sir/Madam:

The undersigned Holder of Registered Units as described herein and issued under the Trust Agreement dated _________ __, 20__, including the Standard Terms for Trust Agreements dated July 15, 2010 (the “Standard Terms”) wishes to effectuate an optional exchange pursuant to Section 5.12(a) of the Standard Terms, as described below:

Name of Holder of Registered Units:                [________________]

 

Unit Principal Balance/Notional Amount to be Exchanged:  [________________]

Certificate Number/Description of Terms of Registered Units:

[__________________________

___________________________]

The option to elect exchange is hereby being exercised.  The “Option to Elect Exchange” on the reverse of each Registered Unit has been duly completed.  The Registered Units will be received by the Bank of New York Mellon as Trustee not later than five Business Days after the date of this letter.

Sincerely,

[Medallion Guarantee]

cc:           Depositor

 

Regulation AB Reference	Servicing Criteria
	General Servicing Considerations
1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.
	Cash Collection and Administration
1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days of receipt, or such other number of days specified in the transaction agreements.
1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.
1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 240.13k-1(b)(1) of the Securities Exchange Act.
1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations: (A) are mathematically accurate; (B) are prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) are reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.
	Investor Remittances and Reporting
1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the indenture trustee’s records as to the total unpaid principal balance and number of pool assets serviced by the related servicer.

1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.
1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the servicer’s investor records, or such other number of days specified in the transaction agreements.
1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.
	Pool Asset Administration
1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.
1122(d)(4)(ii)	Pool assets and related documents are safeguarded as required by the transaction agreements
1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.