Exhibit 4.1




                STRATS(SM) CERTIFICATES SERIES SUPPLEMENT 2004-12

                                    between





                   SYNTHETIC FIXED-INCOME SECURITIES, INC.,
                                  as Trustor





                                      and





                     U.S. BANK TRUST NATIONAL ASSOCIATION,
                    as Trustee and Securities Intermediary







        STRATS(SM) TRUST FOR MORGAN STANLEY SECURITIES, SERIES 2004-12

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                                        TABLE OF CONTENTS

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PRELIMINARY STATEMENT..........................................................................1

Section 1.   Certain Defined Terms.............................................................1

Section 2.   Creation and Declaration of Trust; Sale of Underlying Securities;
             Acceptance by Trustee.............................................................5

Section 3.   Designation.......................................................................6

Section 4.   Date of the Certificates..........................................................6

Section 5.   Certificate Stated Amount and Denominations.......................................6

Section 6.   Currency of the Certificates......................................................6

Section 7.   Form of Securities................................................................6

Section 8.   Swap Payments; Collateral Account.................................................7

Section 9.   Certain Provisions of Base Trust Agreement Not Applicable.........................7

Section 10.  Distributions.....................................................................7

Section 11.  Termination of Trust.............................................................10

Section 12.  Limitation of Powers and Duties..................................................10

Section 13.  Compensation of Trustee..........................................................11

Section 14.  Modification or Amendment of the Base Trust Agreement, the Series
             Supplement or the Swap Agreement.................................................12

Section 15.  Assignment of Rights under the Swap Agreement....................................12

Section 16.  Accounting.......................................................................13

Section 17.  No Investment of Amounts Received on Underlying Securities.......................13

Section 18.  No Event of Default..............................................................13

Section 19.  Notices..........................................................................13

Section 20.  Access to Certain Documentation..................................................14

Section 21.  Advances.........................................................................14



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Section 22.  Ratification of Agreement........................................................14

Section 23.  Counterparts.....................................................................14

Section 24.  Governing Law....................................................................14

Section 25.  Certificate of Compliance........................................................14

Section 26.  Certain Filing to be Made by the Trustee.........................................14

Section 27.  Establishment of Accounts........................................................15

Section 28.  Statement of Intent..............................................................15

Section 29.  Filing of Partnership Returns....................................................15

Section 30.  "Financial Assets" Election......................................................16

Section 31.  Trustee's Entitlement Orders.....................................................16

Section 32.  Conflict with Other Agreements...................................................16

Section 33.  Additional Trustee and Securities Intermediary Representations...................16

Section 34.  Additional Trustor Representations...............................................17

Section 35.  Certification Requirements.......................................................17

Section 36.  Additional Rights of the Swap Counterparty.......................................17

Section 37.  Modification of Certain Provisions of Base Trust Agreement.......................17

Section 38.  Evidence of Integration for Tax Purposes.........................................18

Section 39.  Optional Exchange................................................................18
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Exhibit A -- Identification of the Underlying Securities as of Closing Date
Exhibit B -- Terms of the Certificates as of Closing Date
Exhibit C -- Form of Certificates
Exhibit D -- Form of Swap Agreement
Exhibit E -- Evidence of Integration for Tax Purposes



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           STRATS(SM) SERIES SUPPLEMENT 2004-12, dated as of September 9, 2004
           (this "Series Supplement"), between SYNTHETIC FIXED-INCOME
           SECURITIES, INC., a Delaware corporation, as Trustor (the
           "Trustor"), and U.S. Bank Trust National Association, a national
           banking association, as trustee (the "Trustee") and as securities
           intermediary (the "Securities Intermediary").


                             PRELIMINARY STATEMENT

          Pursuant to the Base Trust Agreement, dated as of September 26, 2003
(the "Base Trust Agreement" and, as supplemented pursuant to the Series
Supplement, the "Agreement"), between the Trustor and the Trustee, such
parties may at any time and from time to time enter into a series supplement
supplemental to the Base Trust Agreement for the purpose of creating a trust.
Section 5.13 of the Base Trust Agreement provides that the Trustor may at any
time and from time to time direct the Trustee to authenticate and deliver, on
behalf of any such trust, a new Series of trust certificates. Each trust
certificate of such new Series of trust certificates will represent a
fractional undivided beneficial interest in such trust. Certain terms and
conditions applicable to each such Series are to be set forth in the related
series supplement to the Base Trust Agreement.

          Pursuant to this Series Supplement, the Trustor and the Trustee
shall create and establish a new trust to be known as STRATS(SM) Trust For
Morgan Stanley Securities, Series 2004-12, and a new Series of trust
certificates to be issued thereby, which certificates shall be known as the
STRATS(SM) Certificates, Series 2004-12, and the Trustor and the Trustee shall
herein specify certain terms and conditions in respect thereof. The Trust
shall also enter into a swap agreement (the "Swap Agreement") pursuant to
which the Trust will exchange interest payments due on the Underlying
Securities for payments from the Swap Counterparty which will be passed
through to the Certificateholders.

          The STRATS(SM) Certificates, Series 2004-12 shall be floating rate
Certificates (the "Certificates") issued in the form thereof set forth in
Exhibit C.

          On behalf of and pursuant to the authorizing resolutions of the
Board of Directors of the Trustor, an authorized officer of the Trustor has
authorized the execution, authentication and delivery of the Certificates, and
has authorized the Base Trust Agreement, the Swap Agreement (as defined
below), and this Series Supplement in accordance with the terms of Section
5.13 of the Base Trust Agreement.

          Section 1. Certain Defined Terms. (a) All terms used in this Series
Supplement that are defined in the Base Trust Agreement, either directly or by
reference therein, have the meanings assigned to such terms therein, except to
the extent such terms are defined or modified in this Series Supplement or the
context requires otherwise. The Base Trust Agreement also contains rules as to
usage which shall be applicable hereto.

          (b) Pursuant to Article I of the Base Trust Agreement, the meaning
of certain defined terms used in the Base Trust Agreement shall, when applied
to the trust certificates of a particular Series, be as defined in Article I
but with such additional provisions and modifications

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as are specified in the related series supplement. With respect to the
Certificates, the following definitions shall apply:

          "761 Election": Shall have the meaning set forth in Section 28 of
this Series Supplement.

          "Acceleration": The acceleration of the maturity of the Underlying
Securities after the occurrence of any default on the Underlying Securities
other than a Payment Default.

          "Accounts": Collectively the Certificate Account and the Collateral
Account.

          "Affected Party": Shall have the meaning provided under the Swap
Agreement.

          "Agreement": Agreement shall have the meaning specified in the
Preliminary Statement to this Series Supplement.

          "Base Trust Agreement": Base Trust Agreement shall have the meaning
specified in the Preliminary Statement to this Series Supplement.

          "Business Day": Any day other than a Saturday, Sunday or a day on
which banking institutions in New York, New York are authorized or obligated
by law, executive order or governmental decree to be closed.

          "Calculation Agent": Wachovia Bank, National Association, in its
capacity as calculation agent under the Swap Agreement.

          "Certificate Account": With respect to this Series, the Eligible
Account, which shall be a securities account established and maintained by the
Securities Intermediary in the Trustee's name, to which the Underlying
Securities and all payments made on or with respect to the related Underlying
Securities and all payments made to the Trust on or with respect to the Swap
Agreement shall be credited.

          "Certificateholder" or "Holder": With respect to any Certificate,
the Holder thereof.

          "Certificateholders" or "Holders": The Holders of the Certificates.

          "Certificates": Certificates shall have the meaning specified in the
Preliminary Statement to this Series Supplement.

          "Closing Date": September 9, 2004.

          "Collateral Account": With respect to this Series, the Eligible
Account, which shall be a securities account established and maintained by the
Securities Intermediary in the Trustee's name, to which any Posted Collateral
and all proceeds thereof shall be credited in accordance with the Swap
Agreement.



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          "Collection Period": The period from (but excluding) the preceding
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date), through and including the current Distribution
Date.

          "Corporate Trust Office": U.S. Bank Trust National Association, 100
Wall Street, Suite 1600, New York, New York 10005 or such other corporate
trust office as the Trustee shall designate in writing to the Trustor and the
Certificateholders.

          "Defaulting Party": Shall have the meaning provided under the Swap
Agreement.

          "Depositary": The Depositary Trust Company.

          "Depositor": The Trustor acting specifically with respect to the
conveyance of the Underlying Securities under this Series Supplement.

          "Distribution Date": Any Scheduled Distribution Date, the Maturity
Date or any Underlying Securities Default Distribution Date or, if applicable,
any Underlying Securities Redemption Distribution Date.

          "Interest Collections": For any Distribution Date, the sum of (i)
all amounts received during the Collection Period ending on such Distribution
Date from the Swap Counterparty pursuant to the Swap Agreement and (ii) any
amounts representing interest on the Underlying Securities that are actually
received by the Trust pursuant to the Underlying Securities on such
Distribution Date and not required to be paid to the Swap Counterparty
pursuant to the Swap Agreement.

          "Maturity Date": April 1, 2014.

          "Optional Exchange": Any exchange of Certificates held by the
Depositor for Underlying Securities under Section 39 of this Series
Supplement.

          "Payment Default": A default by the Underlying Securities Issuer in
the payment of any amount due on the Underlying Securities after the same
becomes due and payable (and the expiration of any applicable grace period on
the Underlying Securities).

          "Place of Distribution": New York, New York.

          "Posted Collateral": Shall have the meaning provided under the Swap
Agreement.

          "Rating Agency": S&P and any successor thereto. References to "the
Rating Agency" in the Agreement shall be deemed to be such credit rating
agency.

          "Record Date": With respect to any Distribution Date, the day
immediately preceding such Distribution Date.

          "S&P": Standard & Poor's Ratings Services or any successor thereto.



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          "Scheduled Distribution Date": (i) For so long as the Swap Agreement
shall not have been terminated, the 1st calendar day of each January, April,
July and October, or, if any such day is not a Business Day, then the
immediately following Business Day, commencing October 1, 2004, until the date
on which the Certificates have been retired; provided, however, that payment
on each Scheduled Distribution Date shall be subject to prior payment of
interest or principal, as applicable, on the Underlying Securities, or (ii)
upon the occurrence of a Swap Agreement Termination Event that is not also a
Trust Termination Event, Scheduled Distribution Dates will thereafter occur
semiannully on each April 1 and October 1, or the immediately following
Business Day, until the Certificates have been retired.

          "SEC Reporting Failure": Any circumstance in which the Underlying
Securities Issuer either (x) states in writing that it intends permanently to
cease filing periodic reports required under the Securities Exchange Act of
1934 or (y) fails to file its required periodic reports for any quarterly
reporting period, and (2) the Trustor determines after consultation with the
Securities and Exchange Commission, that under applicable securities laws,
rules or regulations the Trust must be liquidated or the Underlying Securities
distributed.

          "Specified Currency": United States Dollars.

          "Swap Agreement": The ISDA Master Agreement dated as of the Closing
Date, between the Trust and the Swap Counterparty (including the Schedule and
Credit Support Annex thereto) as supplemented by Confirmation Number 447612
and 447674, in the form attached hereto as Exhibit D.

          "Swap Agreement Termination Event": The occurrence of any "Event of
Default" or "Termination Event" under the Swap Agreement.

          "Swap Counterparty": Wachovia Bank, N.A., or any permitted successor
or assign thereto.

          "Trust": STRATS(SM) Trust For Morgan Stanley Securities, Series
2004-12.

          "Trust Termination Event": (a) the payment in full at maturity or
upon early redemption of the Certificates, (b) the final distribution of the
proceeds received upon a recovery on the Underlying Securities (after
deducting the costs incurred in connection therewith) after a Payment Default
or an Acceleration or other default with respect to the Underlying Securities
(and the expiration of any applicable grace period on the Underlying
Securities), (c) the distribution (or liquidation and distribution) of the
Underlying Securities in accordance with Section 10(i) hereof in the event of
an SEC Reporting Failure, (d) any Swap Agreement Termination Event pursuant to
which the Trust is the Defaulting Party or an Affected Party and amounts are
owed by the Trust under the Swap Agreement that are in excess of the
redemption proceeds or other current distributions on the Underlying
Securities or (e) any Optional Exchange of all Certificates then outstanding.

          "Underlying Securities": As of the Closing Date, $5,000,000
aggregate principal amount of 4.75% Subordinated Notes due 2014 issued by the
Underlying Securities Issuer, sold to the Trustee by Wachovia Securities and
identified on Exhibit A hereto.



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          "Underlying Securities Default Distribution Date": The date on which
the Trustee makes a final distribution of the proceeds received in connection
with a recovery on the Underlying Securities (in the case of Payment Default,
after deducting any costs incurred in connection therewith) following a
Payment Default or an Acceleration or other default with respect to the
Underlying Securities.

          "Underlying Securities Issuer": Morgan Stanley.

          "Underlying Securities Payment Date": The 1st day of each April and
October; provided, however, that if any Underlying Securities Payment Date
would otherwise fall on a day that is not a Business Day, such Underlying
Securities Payment Date will be the following Business Day, commencing on
October 1, 2004 and ending on April 1, 2014.

          "Underlying Securities Trustee": The trustee for the Underlying
Securities.

          "Unpaid Amounts": As to the Trust or the Swap Counterparty,
respectively, an amount equal to the regular scheduled payments that such
party is otherwise required to make under the Swap Agreement, through, but
excluding, the date on which the Swap Agreement is terminated.

          "Voting Rights": The Certificateholders shall have 100% of the total
Voting Rights with respect to the Certificates and shall be allocated among
all Holders of Certificates in proportion to the Stated Amounts held by such
Holders on any date of determination.

          "Wachovia Securities": Wachovia Capital Markets, LLC.

          Section 2. Creation and Declaration of Trust; Sale of Underlying
Securities; Acceptance by Trustee. (a) The Trust, of which the Trustee is the
trustee, is hereby created under the laws of the State of New York for the
benefit of the holders of the Certificates and the Swap Counterparty. The
Trust shall be irrevocable.

          (b) The Trustor, acting as Depositor, does hereby sell, assign,
convey and set-over to the Trustee, on behalf and for the benefit of the
Trust, the Underlying Securities at a purchase price of $4,910,000 in cash.
The Trustee shall pay the full purchase price for the Underlying Securities by
delivering to Wachovia Securities, for the account of the Depositor, and as
the assignee of Depositor with respect to such amounts, (i) $4,910,000 on the
Closing Date and (ii) $1,319 on October 1, 2004, which represents the accrued
and unpaid interest of the Underlying Securities on the Closing Date. The
amounts to be paid to Wachovia Securities set forth in clause (i) above, shall
be paid from the proceeds of the issuance of the Certificates to be received
by the Trustee on the Closing Date. The amounts to be paid to Wachovia
Securities set forth in clause (ii) above, shall be paid from the interest
payment on the Underlying Securities to be received by the Trustee on October
1, 2004. In the event that such interest payment on the Underlying Securities
is not received by the Trustee on such date or is otherwise insufficient to
pay such amount of accrued and unpaid interest to Wachovia Securities,
Wachovia Securities, for the account of the Depositor, and as assignee of
Depositor with respect to such amounts, shall have a claim for the unpaid
portion of such amount and shall share pari passu with Certificateholders to
the extent of such claim in the proceeds from the sale or recovery of the
Underlying Securities. The Trustor hereby instructs the Trustee on behalf of
and for the benefit



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of the Trust to enter into and execute the Swap Agreement and perform the
obligations thereunder on behalf of the Trust, including, but not limited to,
receiving and returning any collateral posted by the Swap Counterparty in
accordance with the Swap Agreement.

          (c) The Trustee hereby (i) acknowledges such sale, deposit and
delivery, pursuant to subsection (b) above, and receipt by it of the
Underlying Securities, (ii) acknowledges receipt of the duly authorized and
executed Swap Agreement, (iii) accepts the trusts created hereunder in
accordance with the provisions hereof and of the Base Trust Agreement but
subject to the Trustee's obligation, as and when the same may arise, to make
any payment or other distribution of the assets of the Trust as may be
required pursuant to this Series Supplement, the Base Trust Agreement, the
Certificates and the Swap Agreement, and (iv) agrees to perform the duties
herein or therein required and any failure to receive reimbursement of
expenses and disbursements under Section 13 hereof shall not release the
Trustee from its duties herein or therein.

          Section 3. Designation. There is hereby created a Series of trust
certificates to be issued pursuant to the Base Trust Agreement and this Series
Supplement to be known as the "STRATS(SM) Certificates, Series 2004-12". The
Certificates shall have the terms provided for in this Series Supplement. The
Certificates shall be issued in the amount set forth in Section 5 and with the
additional terms set forth in Exhibit B to this Series Supplement. The
Certificates shall be issued in substantially the form set forth in Exhibit C
to this Series Supplement with such necessary or appropriate changes as shall
be approved by the Trustor and the Trustee, such approval to be manifested by
the execution and authentication thereof by the Trustee. The Certificates
shall evidence undivided ownership interests in the assets of the Trust,
subject to the liabilities of the Trust and shall be payable solely from
payments or property received by the Trustee on or in respect of the
Underlying Securities and the Swap Agreement.

          Section 4. Date of the Certificates. The Certificates that are
authenticated and delivered by the Trustee to or upon Trustor Order on the
Closing Date shall be dated the Closing Date. All other Certificates that are
authenticated after the Closing Date for any other purpose under the Agreement
shall be dated the date of their authentication.

          Section 5. Certificate Stated Amount and Denominations. On the
Closing Date, up to 15,000 Certificates with an aggregate Stated Amount of
$5,000,000 may be authenticated and delivered under the Base Trust Agreement
and this Series Supplement. The Stated Amount of the Certificates shall equal
100% of the initial principal amount of Underlying Securities sold to the
Trustee and deposited in the Trust. Such Stated Amount shall be calculated
without regard to Certificates authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Certificates pursuant
to Sections 5.3, 5.4 or 5.5 of the Base Trust Agreement.

          Section 6. Currency of the Certificates. All distributions on the
Certificates will be made in the Specified Currency.

          Section 7. Form of Securities. The Trustee shall execute and deliver
the Certificates in the form of one or more global certificates registered in
the name of the Depositary or its nominee.



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          Section 8. Swap Payments; Collateral Account. (a) The Trust shall
pay to the Swap Counterparty (i) for so long as the Swap Agreement shall not
have been terminated, an amount equal to all interest payments payable on the
Underlying Securities on each Underlying Securities Payment Date or on any
other date on which such amounts are received by the Trust, excluding any
amount of interest that accrued with respect to the Underlying Securities from
the Underlying Securities Payment Date immediately preceding the Closing Date
to, but excluding, the Closing Date and (ii) all other amounts owing to the
Swap Counterparty under the Swap Agreement to the extent Trust assets are
sufficient therefor, including but not limited to all Unpaid Amounts upon the
occurrence of any Swap Agreement Termination Event

          (b) The Trustee shall within 3 Business Days of the Closing Date
establish the Collateral Account. Any and all amounts at any time on deposit
in the Collateral Account shall be held in trust by the Trustee for the
benefit of Certificateholders and the Swap Counterparty; provided, that, the
only permitted withdrawal from or application of funds on deposit in, or
otherwise to the credit of, the Collateral Account shall be (i) for
application to obligations of the Swap Counterparty to the Trust under the
Swap Agreement in accordance with the terms of the Swap Agreement or (ii) to
return Posted Collateral to the Swap Counterparty when and as required by the
Swap Agreement, which the Trustee shall return to the Swap Counterparty in
accordance with the related Swap Agreement.

          Section 9. Certain Provisions of Base Trust Agreement Not
Applicable. The provisions of Sections 5.11, 5.16, 6.2, Article VII, 8.1, 8.2
and 8.10 of the Base Trust Agreement and any other provision of the Base Trust
Agreement which imposes obligations on or creates rights in favor of the
Trustee or the Certificateholders as a result of or in connection with an
"Event of Default" or "Administrative Agent Termination Event" shall be
inapplicable with respect to the Certificates. In addition, there is no
"Administrative Agent" specified herein, and all references to "Administrative
Agent" in the Base Trust Agreement, therefore shall be inapplicable with
respect to the Certificates.

          Section 10. Distributions. (a) On each Distribution Date, so long as
no Swap Agreement Termination Event has occurred for which the Trust is the
Defaulting Party or an Affected Party, the Trustee shall distribute to the
Certificateholders the Interest Collections. On the Maturity Date, and to the
extent received on any other Scheduled Distribution Date, so long as no Swap
Agreement Termination Event has occurred for which the Trust is the Defaulting
Party or an Affected Party, the Trustee shall distribute to the
Certificateholders, the principal amount of the Underlying Securities to the
extent the principal of the Underlying Securities is received by the Trustee
on such date or during the related Collection Period plus any accrued interest
thereon.

          (b) If a Swap Agreement Termination Event has occurred for which the
Trust is the Defaulting Party or an Affected Party the Trustee, first, shall
distribute all collections received on the Underlying Securities to the Swap
Counterparty until all amounts owing to the Swap Counterparty under the Swap
Agreement for payments in connection with such Swap Agreement Termination
Event (including any Unpaid Amounts) have been paid in full and, second, shall
distribute all remaining amounts to the Certificateholders. If the
distribution in the preceding sentence is insufficient to pay in full all
amounts owing to the Swap Counterparty, the Trustee shall proceed to liquidate
or distribute the Underlying Securities in accordance with



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Section 10(h). Upon any liquidation of the Underlying Securities, the Trustee,
first, shall distribute the proceeds thereof to the Swap Counterparty until
all amounts owing to the Swap Counterparty have been paid in full and, second,
shall distribute all remaining amounts to the Certificateholders. In the event
of a Swap Agreement Termination Event, after paying all amounts due to the
Swap Counterparty as set forth in the first sentence of this Section 10(b), if
no Trust Termination Event has occurred, all Interest Collections shall
thereafter be distributed to Certificateholders on each applicable
Distribution Date. If a Swap Agreement Termination Event has occurred for
which the Swap Counterparty is the Defaulting Party or the only Affected
Party, notwithstanding the termination of the Swap Agreement, the Trustee
shall distribute any Unpaid Amounts to the Swap Counterparty from Interest
Collections on the Underlying Securities.

          (c) In all cases hereunder, if any payment with respect to the
Underlying Securities is made to the Trustee after the Underlying Securities
Payment Date on which such payment was due, the Trustee shall distribute such
amount received on the Business Day following such receipt.

          (d) In the event of a Payment Default while the Swap Agreement is in
effect and if any payment is due to the Swap Counterparty, the Underlying
Securities will be liquidated in accordance with Section 10(h). Otherwise, in
the event of a Payment Default, the Trustee shall proceed against the
Underlying Securities Issuer on behalf of the Certificateholders to enforce
the Underlying Securities or otherwise to protect the interests of the
Certificateholders, subject to the receipt of indemnity in form and substance
satisfactory to the Trustee; provided, that Holders of the Certificates
representing a majority of the Voting Rights on the Certificates will be
entitled to direct the Trustee in any such proceeding or direct the Trustee to
sell the Underlying Securities, subject to the Trustee's receipt of
satisfactory indemnity.

          (e) In the event of an Acceleration and a corresponding payment on
the Underlying Securities prior to any liquidation of the Underlying
Securities hereunder, the Trustee shall distribute the proceeds to the
Certificateholders no later than two (2) Business Days after the receipt of
immediately available funds pursuant to Section 10(b).

          (f) In the event the Trustee receives property other than cash in
respect of the Underlying Securities such property will be applied first, to
the Swap Counterparty until all amounts owing to the Swap Counterparty have
been paid in full and, second, to the Certificateholders. Property other than
cash will be liquidated by the Trustee, and the proceeds thereof distributed
in cash, to the extent necessary to pay to the Swap Counterparty all amounts
owed to it under the Swap Agreement and, thereafter, to the extent necessary
to avoid distribution of fractional securities to Certificateholders. In-kind
distribution of Underlying Securities or other property to Certificateholders
will be deemed to reduce the Stated Amount of Certificates on a proportionate
basis. Following such in-kind distribution, all Certificates will be
cancelled. No amounts will be distributed to the Trustor in respect of the
Underlying Securities. The Swap Counterparty shall direct the Trustee with
respect to any liquidation of such property to the extent of the full amount
owed to it under the Swap Agreement.

          (g) If an SEC Reporting Failure occurs, then the Trustor shall
promptly notify the Trustee, the Swap Counterparty and the Rating Agency of
such SEC Reporting Failure and



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the Trustee shall proceed to liquidate or distribute the Underlying Securities
in accordance with Section 10(h).

          (h) If at any time, the Trustee is directed to sell the Underlying
Securities, the Trustee shall solicit bids for the sale of the Underlying
Securities with settlement thereof on or before the third (3rd) Business Day
after such sale from three leading dealers in the relevant market, which may
include but is not limited to any three of the following dealers: (1) Wachovia
Securities, (2) Goldman, Sachs & Co., (3) Lehman Brothers Inc., (4) Merrill
Lynch, Pierce, Fenner & Smith Incorporated, (5) Citigroup Global Markets Inc.,
(6) J.P. Morgan Securities Inc. and (7) Deutsche Bank Securities Inc.;
provided, however, that no bid from Wachovia Securities or any affiliate
thereof shall be accepted unless such bid equals the then fair market value of
such Underlying Securities. The Trustee shall not be responsible for the
failure to obtain a bid so long as it has made reasonable efforts to obtain
bids. If a bid for the sale of the Underlying Securities has been accepted by
the Trustee but the sale has failed to settle on the proposed settlement date,
the Trustee shall request new bids from such leading dealers. In any
circumstance in which the sale of the Underlying Securities is required
hereunder, the Trustee shall, to the extent it is so directed by the Trustor,
provide Certificateholders with the option to elect to receive an "in-kind"
distribution of their pro rata share of the Underlying Securities; provided,
that, (1) an in-kind distribution shall be subject to the prior sale of
Underlying Securities in accordance with the provisions of this Section 10(h)
to the extent necessary, to pay any amounts owing to the Swap Counterparty
under Section 10(b), (2) a Certificateholders' pro rata share of the
Underlying Securities shall be a principal amount of Underlying Securities
equal to the aggregate principal amount of the Underlying Securities
multiplied by a fraction the numerator of which is the Stated Amount of that
holder's Certificates and the denominator of which is the aggregate principal
amount of the Underlying Securities minus the amount required to be
distributed to the Swap Counterparty pursuant to the second sentence of
Section 10(b) and (3) odd-lot amounts that cannot be distributed in-kind
because they are not within the authorized denominations of the Underlying
Securities shall be distributed in cash. Any such in-kind distribution shall
constitute the final distribution in respect of the Certificates as to which
such option is exercised.

          (i) Distributions to the Certificateholders on each Distribution
Date will be made to the Certificateholders of record on the Record Date.

          (j) All distributions to Certificateholders shall be allocated pro
rata among the Certificates based on their respective Outstanding Amounts as
of the Record Date.

          (k) Notwithstanding any provision of the Agreement to the contrary,
to the extent funds are available, the Trustee will initiate payment in
immediately available funds by 1:00 P.M. (New York City time) on each
Distribution Date of all amounts payable to each Certificateholder with
respect to any Certificate held by such Certificateholder or its nominee
(without the necessity for any presentation or surrender thereof or any
notation of such payment thereon) in the manner and at the address as each
Certificateholder may from time to time direct the Trustee in writing 15 days
prior to such Distribution Date requesting that such payment will be so made
and designating the bank account to which such payments shall be so made. The
Trustee shall be entitled to rely on the last instruction delivered by the
Certificateholder pursuant to this Section 10(f) unless a new instruction is
delivered 15 days prior to a Distribution Date.



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<PAGE>

          (l) The rights of the Certificateholders to receive distributions in
respect of the Certificates, and all interests of the Certificateholders in
such distributions, shall be as set forth in this Series Supplement. The
Trustee shall in no way be responsible or liable to the Certificateholders nor
shall any Certificateholder in any way be responsible or liable to any other
Certificateholder in respect of amounts previously distributed on the
Certificates based on their respective Outstanding Amounts.

          Section 11. Termination of Trust. (a) The Trust shall terminate upon
the occurrence of any Trust Termination Event.

          (b) Except for any reports and other information required to be
provided to Certificateholders hereunder and under the Base Trust Agreement
and except as otherwise specified herein and therein, the obligations of the
Trustee will terminate upon the distribution to the Swap Counterparty and
Certificateholders of all amounts required to be distributed to them and the
disposition of all Underlying Securities held by the Trustee. The Trust shall
thereupon terminate, except for surviving rights of indemnity.

          Section 12. Limitation of Powers and Duties. (a) The Trustee shall
administer the Trust and the Underlying Securities solely as specified herein
and in the Base Trust Agreement.

          (b) The Trust is constituted solely for the purpose of acquiring and
holding the Underlying Securities, entering into and performing its
obligations under the Swap Agreement and issuing the Certificates. The Trustee
is not authorized to acquire any other investments or engage in any activities
not authorized herein and, in particular, unless expressly provided in the
Agreement, the Trustee is not authorized (i) to sell, assign, transfer,
exchange, pledge, set-off or otherwise dispose of any of the Underlying
Securities, once acquired, or interests therein, including to
Certificateholders, (ii) to merge or consolidate the Trust with any other
entity, or (iii) to do anything that would materially increase the likelihood
that the Trust will fail to qualify as a grantor trust for United States
federal income tax purposes. In addition, the Trustee has no power to create,
assume or incur indebtedness or other liabilities in the name of the Trust
other than as contemplated herein and in the Base Trust Agreement.

          (c) The parties acknowledge that the Trustee, as the holder of the
Underlying Securities, has the right to vote and give consents and waivers in
respect of the Underlying Securities and enforce the other rights, if any, of
a holder of the Underlying Securities, except as otherwise limited by the Base
Trust Agreement or this Series Supplement. In the event that the Trustee
receives a request from the Underlying Securities Trustee, the Underlying
Securities Issuer or, if applicable, the Depositary with respect to the
Underlying Securities, for the Trustee's consent to any amendment,
modification or waiver of the Underlying Securities, or any document relating
thereto, or receives any other solicitation for any action with respect to the
Underlying Securities, the Trustee shall within two (2) Business Days mail a
notice of such proposed amendment, modification, waiver or solicitation to the
Swap Counterparty and each Certificateholder of record as of the date of such
request. The Trustee shall request instructions from the Certificateholders as
to what action to take in response to such request and shall be protected in
taking no action if no direction is received. Except as otherwise provided
herein, the Trustee shall consent or vote, or refrain from consenting or
voting, in the same proportion (based



                                      10
<PAGE>

on the Stated Amounts of the Certificates of each Class as allocated based on
the respective Voting Rights of each Class) as the Certificates were actually
voted or not voted by the Holders thereof as of the date determined by the
Trustee prior to the date such vote or consent is required; provided, however,
that, notwithstanding anything to the contrary in the Base Trust Agreement or
this Series Supplement, the Trustee shall at no time vote in favor of or
consent to any matter (i) which would alter the timing or amount of any
payment on the Underlying Securities (including, without limitation, any
demand to accelerate the Underlying Securities) or (ii) which would result in
the exchange or substitution of any Underlying Security whether or not
pursuant to a plan for the refunding or refinancing of such Underlying
Security, except in each case with the unanimous consent of the
Certificateholders; provided, further, that the Trustee shall not take any
such action if it would affect the method, amount or timing of payments due to
the Swap Counterparty or otherwise materially adversely affect the interests
of the Swap Counterparty under the Swap Agreement and result in a Swap
Agreement Termination Event, in each case without the prior written consent of
the Swap Counterparty. The Trustee shall have no liability for any failure to
act or to refrain from acting resulting from the Certificateholders' late
return of, or failure to return, directions requested by the Trustee from the
Certificateholders.

          (d) Notwithstanding any provision of the Agreement to the contrary,
the Trustee may require from the Certificateholders prior to taking any action
at the direction of the Certificateholders, an indemnity agreement of a
Certificateholder or any of its Affiliates to provide for security or
indemnity against the costs, expenses and liabilities the Trustee may incur by
reason of any such action. An unsecured indemnity agreement, if acceptable to
the Trustee, shall be deemed to be sufficient to satisfy such security or
indemnity requirement.

          (e) Notwithstanding any provision of the Agreement to the contrary,
the Trustee shall act as the sole Authenticating Agent, Paying Agent and
Registrar.

          Section 13. Compensation of Trustee. The Trustee shall be entitled
to receive from the Trustor as compensation for its services hereunder,
trustee's fees pursuant to a separate agreement between the Trustee and the
Trustor, and shall be reimbursed for all reasonable expenses, disbursements
and advances incurred or made by it (including the reasonable compensation,
disbursements and expenses of its counsel and other persons not regularly in
its employ). The Trustor shall indemnify and hold harmless the Trustee and its
successors, assigns, agents and servants against any and all loss, liability
or reasonable expense (including attorney's fees) incurred by it in connection
with the administration of this trust and the performance of its duties
thereunder. The Trustee shall notify the Trustor promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Trustor
shall not relieve the Trustor of its obligations hereunder. The Trustor need
not reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own willful misconduct,
negligence or bad faith. The indemnities contained in this Section 13 shall
survive the resignation or termination of the Trustee or the termination of
this Agreement.

          Failure by the Trustor to pay, reimburse or indemnify the Trustee
shall not entitle the Trustee to any payment, reimbursement or indemnification
from the Trust, nor shall such failure release the Trustee from the duties it
is required to perform under this Series Supplement. Any unpaid, unreimbursed
or unindemnified amounts shall not be borne by the Trust and shall



                                      11
<PAGE>

not constitute a claim against the Trust, but shall be borne by the Trustee in
its individual capacity, and the Trustee shall have no recourse against the
Trust with respect thereto.

          Section 14. Modification or Amendment of the Base Trust Agreement,
the Series Supplement or the Swap Agreement. (a) The Trustee shall not enter
into any modification or amendment of the Base Trust Agreement or this Series
Supplement unless such modification or amendment is in accordance with Section
10.1 of the Base Trust Agreement. If the Rating Agency Condition is not
satisfied with respect to any proposed modification or amendment of the Base
Trust Agreement or this Series Supplement, then any such modification or
amendment must be approved by 100% of the Certificateholders. The Trustee
shall not enter into any amendment or modification of this Agreement that
would affect the method, amount or timing of payment due to the Swap
Counterparty or the consent rights of the Swap Counterparty hereunder or
otherwise materially adversely affect the interests of the Swap Counterparty
under the Swap Agreement and result in a Swap Agreement Termination Event, in
each case without the prior written consent of the Swap Counterparty. The
Trustee shall provide fifteen Business Days written notice to the Swap
Counterparty before entering into any amendment or modification of this
Agreement pursuant to this Section 14.

          (b) The Trustee shall not enter into any modification or amendment
of the Swap Agreement without the prior written consent of holders of
Certificates representing 66 ?% of the Voting Rights and without prior written
confirmation from the Rating Agency that such amendment will not result in a
reduction or withdrawal of the then current rating of the Certificates;
provided, however, that each of the Swap Counterparty and the Trustee may
amend the Swap Agreement without the prior written consent of
Certificateholders to cure any ambiguity in, or to correct or supplement any
provision of the Swap Agreement which may be inconsistent with any other
provision of the Swap Agreement, or to otherwise cure any defect in the Swap
Agreement, provided that any such amendment does not materially adversely
affect the interest of the Certificateholders and that the Rating Agency will
have given its prior written confirmation that such amendment will not result
in a reduction or withdrawal of the then current rating of the Certificates;
provided further, however, that notwithstanding anything to the contrary, no
amendment may alter the timing or amount of any payment on the Swap Agreement
without the prior consent of 100% of the Certificateholders and without giving
the Rating Agency prior written notice of any such amendment.

          (c) Until a Responsible Officer of the Trustee has actual knowledge
of the occurrence of an event that would constitute a Swap Agreement
Termination Event, the Trustee shall be entitled to assume (and shall be fully
protected, indemnified and held harmless in doing so) that no Swap Agreement
Termination Event has occurred and may accordingly seek instructions under
Section 12 and this Section 14 exclusively from the Swap Counterparty.

          Section 15. Assignment of Rights under the Swap Agreement. The
Trustee may consent to any transfer or assignment by the Swap Counterparty of
its rights under the Swap Agreement, so long as the Rating Agency shall have
given its prior written confirmation that such transfer or assignment will not
result in a reduction or withdrawal of the then current rating of the
Certificates.



                                      12
<PAGE>

          Section 16. Accounting. Notwithstanding Section 3.16 of the Base
Trust Agreement, "Independent Public Accountants' Administration Report," no
such accounting reports shall be required. Pursuant to Section 4.2 of the Base
Trust Agreement, "Reports to Certificateholders," the Trustee shall cause the
statement described in Section 4.2 to be prepared and forwarded as provided
therein.

          Section 17. No Investment of Amounts Received on Underlying
Securities. All amounts received on or with respect to the Underlying
Securities shall be held uninvested by the Trustee.

          Section 18. No Event of Default. There shall be no Events of Default
defined with respect to the Certificates.

          Section 19. Notices. (a) All directions, demands and notices
hereunder and under the Agreement shall be in writing and shall be deemed to
have been duly given when received if personally delivered or mailed by first
class mail, postage prepaid or by express delivery service or by certified
mail, return receipt requested or delivered in any other manner specified
herein, (i) in the case of the Trustor, to Synthetic Fixed-Income Securities,
Inc., One Wachovia Center 301 South College Street, DC-7 Charlotte, NC 28288,
Attention: Investment Grade Debt Syndicate Desk, or such other address as may
hereafter be furnished to the Trustee in writing by the Trustor, and (ii) in
the case of the Trustee, to U.S. Bank Trust National Association, 100 Wall
Street, Suite 1600, New York, New York 10005, Attention: Corporate Trust,
facsimile number (212) 809-5459, or such other address as may hereafter be
furnished to the Trustor in writing by the Trustee.

          (b) For purposes of delivering notices to the Rating Agency under
Section 10.07 of the Base Trust Agreement, "Notice to Rating Agency," or
otherwise, such notices shall be mailed or delivered as provided in such
Section 10.07, "Notice to Rating Agency," to: Standard & Poor's Ratings
Services, 55 Water Street, New York, New York 10041; or such other address as
the Rating Agency may designate in writing to the parties hereto.

          (c) In the event a Payment Default or an Acceleration occurs, the
Trustee shall promptly give notice to the Swap Counterparty and to the
Depositary or, for any Certificates which are not then held by the Depositary
or any other depository, directly to the registered holders of the
Certificates thereof. Such notice shall set forth (i) the identity of the
issue of Underlying Securities, (ii) the date and nature of such Payment
Default or Acceleration, (iii) the principal amount of the interest or
principal in default, (iv) the Certificates affected by the Payment Default or
Acceleration, and (v) any other information which the Trustee may deem
appropriate.

          (d) Notwithstanding any provisions of the Agreement to the contrary,
the Trustee shall deliver all notices or reports required to be delivered to
or by the Trustee or the Trustor to the Certificateholders or the Swap
Counterparty without charge to such Certificateholders or the Swap
Counterparty.

          (e) The Trustee shall, in connection with any notice or delivery of
documents to Certificateholders (whether or not such notice or delivery is
required pursuant to the



                                      13
<PAGE>

Agreement), provide such notice or documents to the Swap Counterparty
concurrently with the delivery thereof to the Certificateholders.

          Section 20. Access to Certain Documentation. Access to documentation
regarding the Underlying Securities will be afforded without charge to any
Certificateholder so requesting pursuant to Section 3.17 of the Base Trust
Agreement, "Access to Certain Documentation." Additionally, the Trustee shall
provide at the request of any Certificateholder without charge to such
Certificateholder the name and address of each Certificateholder of
Certificates hereunder as recorded in the Certificate Register for purposes of
contacting the other Certificateholders with respect to their rights hereunder
or for the purposes of effecting purchases or sales of the Certificates,
subject to the transfer restrictions set forth herein.

          Section 21. Advances. There is no Administrative Agent specified
herein; hence no person (including the Trustee) shall be permitted or
obligated to make Advances as described in Section 4.3 of the Base Trust
Agreement, "Advances."

          Section 22. Ratification of Agreement. With respect to the Series
issued hereby, the Base Trust Agreement (including the grant of a security
interest in Section 10.8 of the Base Trust Agreement with respect to the
Underlying Securities conveyed hereunder), as supplemented by this Series
Supplement, is in all respects ratified and confirmed, and the Base Trust
Agreement as so supplemented by this Series Supplement shall be read, taken
and construed as one and the same instrument. To the extent there is any
inconsistency between the terms of the Base Trust Agreement and this Series
Supplement, the terms of this Series Supplement shall govern.

          Section 23. Counterparts. This Series Supplement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and
the same instrument.

          Section 24. Governing Law. This Series Supplement and each
Certificate issued hereunder 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's 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 hereunder shall be determined in accordance with such
laws. The State of New York is the securities intermediary's jurisdiction of
the Securities Intermediary for purposes of the UCC.

          Section 25. Certificate of Compliance. The Trustor shall deliver to
the Trustee and the Swap Counterparty on or prior to June 30 of each year
prior to a Trust Termination Event the Officer's Certificate as to compliance
as required by Section 6.1(b) of the Base Trust Agreement.

          Section 26. Certain Filing to be Made by the Trustee. In the event
that an event requiring the sale of the Underlying Securities under this
Agreement occurs and the Underlying Securities are liquidated at a loss, the
Trustee will disclose pursuant to Treasury Regulation Section 1.6011-4 the
loss in accordance with the procedures of such regulation, unless the Trustee
obtains advice from counsel that such disclosure is not necessary. In general,
the Trustee



                                      14
<PAGE>

will (x) attach a completed Form 8886 to its tax return in the year the
requisite loss occurs and (y) file a completed form with the Office of Tax
Shelter Analysis (OTSA) at: Internal Revenue Service LM:PFTG:OTSA, Large and
Midsize Business Division, 1111 Constitution Avenue., NW., Washington DC 20224
(or such other address subsequently required).

          Section 27. Establishment of Accounts. The Securities Intermediary
and the Trustee hereby represent and warrant that:

          (a) Each Account for the Trust is a "securities account" within the
meaning of Section 8-501 of the UCC and is held only in the name of the
Trustee on behalf of the Trust. The Securities Intermediary is acting in the
capacity of a "securities intermediary" within the meaning of Section
8-102(a)(14) of the UCC;

          (b) All Underlying Securities have been (i) delivered to the
Securities Intermediary pursuant to the Agreement and (ii) credited to the
Certificate Account; and

          (c) Each Account is an account to which financial assets are or may
be credited, and the Securities Intermediary shall treat the Trustee as
entitled to exercise the rights that comprise any financial asset credited to
the Accounts.

          Section 28. Statement of Intent. It is the intention of the parties
hereto that, for purposes of federal income taxes, state and local income and
franchise taxes and any other taxes imposed upon, measured by or based upon
gross or net income, the Trust shall be treated as a grantor trust, but
failing that, as a partnership (other than a publicly traded partnership
taxable as a corporation) and, in any event, shall not be classified as a
corporation. The parties hereto agree that, unless otherwise required by
appropriate tax authorities, the Trustee shall file or cause to be filed
annual or other necessary returns, reports and other forms consistent with
such intended characterization. In the event that the Trust is characterized
by appropriate tax authorities as a partnership for federal income tax
purposes, each Certificateholder, by its acceptance of its Certificate, agrees
to report its respective share of the items of income, deductions, and credits
of the Trust on its respective returns (making such elections as to individual
items as may be appropriate) in accordance with Treasury Regulations Section
1.761-2(b) (the "761 Election") and in a manner consistent with the complete
exclusion of the Trust from subchapter K of the Code. The terms of the
Agreement shall be interpreted to further these intentions of the parties. As
further consideration for each Certificateholder's purchase of a Certificate,
each such Certificateholder is deemed to agree not to irrevocably delegate to
any person (for a period of more than one year) authority to purchase, sell or
exchange its Certificates.

          Each Certificateholder (and each beneficial owner of a Certificate)
by acceptance of its Certificate (or its beneficial interest therein) agrees,
unless otherwise required by appropriate tax authorities, to file its own tax
returns and reports in a manner consistent with the characterization indicated
above.

          Section 29. Filing of Partnership Returns. In the event that the
Trust is characterized (by appropriate tax authorities) as a partnership for
United States federal income tax purposes, and the 761 Election is
ineffective, the Trustor agrees to reimburse the Trust for any expenses
associated with the filing of partnership returns (or returns related
thereto).



                                      15
<PAGE>

          Section 30. "Financial Assets" Election. The Securities Intermediary
hereby agrees that the Underlying Securities credited to the Certificate
Account and any Posted Collateral credited to the Collateral Account shall be
treated as a "financial asset" within the meaning of Section 8-102(a)(9) of
the UCC.

          Section 31. Trustee's Entitlement Orders. If at any time the
Securities Intermediary shall receive any order from the Trustee directing the
transfer or redemption of any Underlying Securities credited to the Accounts,
the Securities Intermediary shall comply with such entitlement order without
further consent by the Trustor or any other Person. The Securities
Intermediary shall take all instructions (including without limitation all
notifications and entitlement orders) with respect to the Accounts solely from
the Trustee.

          Section 32. Conflict with Other Agreements. The Securities
Intermediary hereby confirms and agrees that:

          (a) There are no other agreements entered into between the
Securities Intermediary and the Trustor with respect to the Accounts. Each
Account and all property credited to the Account is not subject to, and the
Securities Intermediary hereby waives, any lien, security interest, right of
set off, or encumbrance in favor of the Securities Intermediary or any Person
claiming through the Securities Intermediary (other than the Trustee);

          (b) It has not entered into, and until the termination of the
Agreement will not enter into, any agreement with any other Person relating to
the Accounts and/or any financial assets credited thereto pursuant to which it
has agreed to comply with entitlement orders of any Person other than the
Trustee; and

          (c) It has not entered into, and until the termination of the
Agreement will not enter into, any agreement with any Person purporting to
limit or condition the obligation of the Securities Intermediary to comply
with entitlement orders as set forth in Section 31 hereof.

          Section 33. Additional Trustee and Securities Intermediary
Representations. The Trustee and the Securities Intermediary each hereby
represents and warrants as follows:

          (a) The Trustee and the Securities Intermediary each maintains its
books and records with respect to its securities accounts in the State of New
York;

          (b) The Trustee and the Securities Intermediary each has not granted
any lien on the Underlying Securities nor are the Underlying Securities
subject to any lien on properties of the Trustee or the Securities
Intermediary in its individual capacity; the Trustee and the Securities
Intermediary each has no actual knowledge and has not received actual notice
of any lien on the Underlying Securities (other than any liens of the Trustee
in favor of the beneficiaries of the Trust Agreement); other than the
interests of the Trustee, the Certificateholders and the Swap Counterparty,
the books and records of the Trustee and the Securities Intermediary each do
not identify any Person as having an interest in the Underlying Securities;
and

          (c) The Trustee and the Securities Intermediary each makes no
representation as to (i) the validity, legality, sufficiency or enforceability
of any of the Underlying Securities or (ii) the collectability, insurability,
effectiveness or suitability of any of the Underlying Securities.



                                      16
<PAGE>

          Section 34. Additional Trustor Representations. The Trustor hereby
represents and warrants to the Trustee as follows:

          (a) Immediately prior to the sale of the Underlying Securities to
the Trustee, the Trustor, as Depositor, owned and had good and marketable
title to the Underlying Securities free and clear of any lien, claim or
encumbrance of any Person;

          (b) The Trustor, as Depositor, has received all consents and
approvals required by the terms of the Underlying Securities to the sale to
the Trustee of its interest and rights in the Underlying Securities as
contemplated by the Agreement; and

          (c) The Trustor has not assigned, pledged, sold, granted a security
interest in or otherwise conveyed any interest in the Underlying Securities
(or, if any such interest has been assigned, pledged or otherwise encumbered,
it has been released), except such interests sold pursuant to the Agreement.
The Trustor has not authorized the filing of and is not aware of any financing
statements against the Trustor that includes a description of the Underlying
Securities, other than any such filings pursuant to the Agreement. The Trustor
is not aware of any judgment or tax lien filings against Trustor.

          Section 35. Certification Requirements. The Trustee agrees to
obtain, at the Trustor's direction and expense, a report of an independent
public accountant sufficient for the Trustor on behalf of the Trust to satisfy
its obligations with respect to certification requirements under Rules 13a-14
and 15d-14 of the Exchange Act.

          Section 36. Additional Rights of the Swap Counterparty. Section 10.8
of the Base Trust Agreement is hereby modified for purposes of this Series
Supplement to provide that the security interest referred to and created
pursuant thereto in the Trust assets shall, in addition to the obligations
provided for under Section 10.8(b)(3), secure all of the obligations of the
Trustor and the Trust to the Swap Counterparty under the Swap Agreement and
this Agreement. The Swap Counterparty shall have the rights of a third party
beneficiary with respect to this Agreement.

          Section 37. Modification of Certain Provisions of Base Trust
Agreement. The provisions of the Base Trust Agreement shall be modified as
they are applied with respect to this Series of Certificates to provide that
(i) notwithstanding Section 3.9 of the Base Trust Agreement, the Certificate
Account shall be held for the benefit of Certificateholders and the Swap
Counterparty and amounts in the Certificate Account shall be used to make
distributions to the Swap Counterparty as and when required under this Series
Supplement, (ii) the appointment of any successor of the Trustee under Section
8.7 of the Base Trust Agreement shall be subject to the prior approval of the
Swap Counterparty and (iii) notwithstanding Section 9.1(a) of the Base Trust
Agreement and subject to the proviso therein, the respective obligations and
responsibilities under this Agreement of the Trustor and the Trustee shall
terminate upon the distribution to Certificateholders and the Swap
Counterparty of all amounts held in all the Accounts and required to be paid
to such Holders or the Swap Counterparty pursuant to this Agreement and the
Swap Agreement on the Distribution Date coinciding with or following the final
payment on or other liquidation of the Underlying Securities and the
disposition of all



                                      17
<PAGE>

amounts acquired therefrom in accordance with this Agreement and the Swap
Agreement and the disposition of the final payments received under the Swap
Agreement.

          Section 38. Evidence of Integration for Tax Purposes. The Trustee
retains Exhibit E on behalf of each Certificateholder.

          Section 39. Optional Exchange.

          On any Business Day occurring on or after September 15, 2005,
subject to satisfaction of all of the conditions set forth in clause (b), the
Depositor may exchange Certificates held by it for a distribution of
Underlying Securities representing the same percentage of the Underlying
Securities as such Certificates represent of all outstanding Certificates.

          (a) The following conditions shall apply to any Optional Exchange.

          (A) A notice specifying the number of Certificates being surrendered
     and the optional exchange date shall be delivered to the Trustee no less
     than 5 days (or such shorter period acceptable to the Trustee) but not
     more than 30 days before the optional exchange date.

          (B) Certificates shall be surrendered to the trustee no later than
     10:00 a.m. (New York City time) on the optional exchange date.

          (C) The Trustee shall have received an opinion of counsel stating
     that the Optional Exchange would not cause the Trust to be treated as an
     association or publicly traded partnership taxable as a corporation for
     federal income tax purposes.

          (D) No more than one (1) Optional Exchange shall occur in any
     Collection Period.

          (E) The Trustee shall not be obligated to determine whether an
     Optional Exchange complies with the applicable provisions for exemption
     under Rule 3a-7 of the Investment Company Act of 1940, as amended, or the
     rules or regulations promulgated thereunder.

          (F) The provisions of Section 4.5 of the Base Trust Agreement shall
     not apply to an Optional Exchange pursuant to this Section 39. This
     Section 39 shall not provide any Person with a lien against, an interest
     in or a right to specific performance with respect to the Underlying
     Securities; provided that satisfaction of the conditions set forth in
     this Section 39 shall entitle the Depositor to a distribution thereof.

          (G) The aggregate principal balance of Certificates exchanged in
     connection with any Optional Exchange pursuant to this Section 39 shall
     be in an amount that results in a distribution of Underlying Securities
     in an even multiple of the minimum denomination of the Underlying
     Securities.



                                      18
<PAGE>

          (H) No Swap Agreement Termination Event shall have occurred as a
     result of the Optional Exchange except to the extent of a termination
     resulting from the reduction in the Hedge Notional Amount (as defined in
     the Swap Agreement) to an amount equal to the principal amount of the
     Underlying Securities after giving effect to the Optional Exchange.

I(I)        Any payments due under the Swap Agreement as a result of the
           reduction in such Hedge Notional Amount and any such Swap Agreement
           Termination Event (x) that are due to the Swap Counterparty
           (including but not limited to Unpaid Amounts) shall have been paid
           to the Swap Counterparty by the Depositor and (y) that are payable
           by the Swap Counterparty, shall be payable for the account of the
           Depositor.

          Section 40. ERISA Restrictions. Certificates may not be acquired by
or for the account of any employee benefit plan, trust or account, including
an individual retirement account, that is subject to the requirements of Title
I of the Employee Retirement Income Security Act of 1974, as amended, or that
is described in Section 4975(e)(1) of the Code, or by or for the account of
any entity whose underlying assets include any assets subject to these laws by
reason of investment in that entity by such plans, trusts or accounts. By
accepting and holding any Certificate, the holder of the Certificate will be
deemed to have represented and warranted that it is not a plan or entity
described above, and that its acquisition and holding of the Certificate are
in compliance with the foregoing restrictions.



                                      19
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Series Trust
Agreement to be executed by their respective duly authorized officers as of
the date first above written.

                                      SYNTHETIC FIXED-INCOME SECURITIES, INC.


                                      By:
                                         ------------------------------------
                                               Authorized Signatory

                                      U.S. BANK TRUST NATIONAL ASSOCIATION,
                                      as Trustee and Securities Intermediary


                                      By:
                                         -------------------------------------
                                              Responsible Officer

<PAGE>

                                                                   EXHIBIT A




        IDENTIFICATION OF THE UNDERLYING SECURITIES AS OF CLOSING DATE



Underlying Securities Issuer:                  Morgan Stanley

Underlying Securities:                         $5,000,000 of 4.75% Subordinated
                                               Notes due 2014.

Maturity Date/Final Distribution Date:         April 1, 2014

Original Principal Amount Issued:              $4,000,000,000

CUSIP No.:                                     61748AAE6

Stated Interest Rate:                          4.75% per annum.

Interest Payment Dates:                        April 1 and October 1

Principal Amount of Underlying                 $5,000,000
Securities Deposited Under Trust
Agreement:


The Underlying Securities will be held by the Trustee as securities
entitlements credited to an account of the Trustee or its agent at the
Depositary.



                                     A-1
<PAGE>

                                                                     EXHIBIT B


                 TERMS OF THE CERTIFICATES AS OF CLOSING DATE


Maximum Number of STRATS(SM)              15,000
Certificates, Series 2004-12:

Aggregate Stated Amount of STRATS(SM)     $5,000,000.
Certificates, Series 2004-12:

Authorized Denomination:                  $1,000 and integral multiples thereof.

Rating Agency:                            S&P.

Closing Date:                             September 9, 2004.

Record Date:                              With respect to any Distribution Date,
                                          the day immediately preceding such
                                          Distribution Date.

Trustee's Fees:                           The Trustee's fees shall be payable by
                                          the Trustor pursuant to a separate
                                          fee agreement between the Trustee and
                                          the Trustor.

Initial Certificate Registrar:            U.S. Bank Trust National Association

Corporate Trust Office:                   U.S. Bank Trust National Association
                                          100 Wall Street, Suite 1600 New York,
                                          New York 10005 Attention: Corporate
                                          Trust Department, Regarding STRATS(SM)
                                          Trust For Morgan Stanley Securities,
                                          Series 2004-12



                                     B-1
<PAGE>

                                                                    EXHIBIT C




                              FORM OF CERTIFICATE



THIS CERTIFICATE REPRESENTS AN UNDIVIDED INTEREST IN THE TRUST AND DOES NOT
EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY THE
TRUSTOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE DEPOSITED ASSETS ARE INSURED OR GUARANTEED BY ANY
GOVERNMENTAL AGENCY OR ANY OTHER PERSON.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY 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 THE DEPOSITARY
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), 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.

CERTIFICATE NUMBER:    1                  $5,000,000 Certificate Stated Amount
CUSIP:  86311VAB0                                           5,000 Certificates
CERTIFICATE INTEREST RATE:                              Variable Floating Rate

                    STRATS(SM) CERTIFICATES, SERIES 2004-12

evidencing an undivided interest in the Trust, as defined below, the assets of
which include $5,000,000 of 4.75% Notes due 2014 issued by the Underlying
Securities Issuer.

This Certificate does not represent an interest in or obligation of the
Trustor or any of its affiliates.

     THIS CERTIFIES THAT Cede & Co. is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in STRATS(SM) Trust
For Morgan Stanley Securities, Series 2004-12 (the "Trust") formed by
SYNTHETIC FIXED-INCOME SECURITIES, INC., as Trustor (the "Trustor") evidenced
by Certificates in the number and the Stated Amount set forth above.

     The Trust was created pursuant to a Base Trust Agreement, dated as of
September 26, 2003 (as amended and supplemented, the "Agreement"), between the
Trustor and U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the STRATS(SM) Certificates Series



                                      C-1
<PAGE>

Supplement 2004-12, dated as of September 9, 2004 (the "Series Supplement"
and, together with the Agreement, the "Trust Agreement"), between the Trustor
and 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 interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Trustee
with respect hereto. A copy of the Trust Agreement may be obtained from the
Trustee by written request sent to the Corporate Trust Office. Capitalized
terms used but not defined herein have the meanings assigned to them in the
Trust Agreement.

     This Certificate is one of the duly authorized Certificates designated as
"STRATS(SM) Certificates, Series 2004-12 (herein called the "Certificate" or
"Certificates"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound. The assets of the Trust include the Underlying
Securities, all proceeds of the Underlying Securities and the Trust's rights
under the Swap Agreement.

     Under the Trust Agreement, there shall be distributed on the dates
specified in the Trust Agreement (a "Distribution Date"), to the person in
whose name this Certificate is registered at the close of business on the
related Record Date, such Certificateholder's fractional undivided interest in
the amount of distributions of the Underlying Securities to be distributed to
Certificateholders on such Distribution Date and distributions to the Trust
under the Swap Agreement. The Underlying Securities will pay interest on April
1 and October 1 of each year. The principal of the Underlying Securities is
scheduled to be paid on April 1, 2014. The Swap Agreement provides for
payments on the 1st day of each January, April, July and October commencing in
October 2004.

     The distributions in respect of this Certificate are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts as set forth in the Series
Trust Agreement.

     The Underlying Securities held by the Trust are subject to the rights of
the Swap Counterparty, as provided for in the Series Supplement and the Swap
Agreement, and each Certificateholder, by accepting its Certificate,
acknowledges such rights in accordance with the terms of the Series Supplement
and the Swap Agreement.

     It is the intent of the Trustor and the Certificateholders that the Trust
will be classified as a grantor trust under subpart E, Part I of subchapter J
of the Internal Revenue Code of 1986, as amended. Except as otherwise required
by appropriate taxing authorities, the Trustor and the Trustee, by executing
the Trust Agreement, and each Certificateholder, by acceptance of a
Certificate, agrees to treat, and to take no action inconsistent with the
treatment of, the Certificates for such tax purposes as interests in a grantor
trust and the provisions of the Trust Agreement shall be interpreted to
further this intention of the parties.

     By acceptance of a Certificate, each Certificateholder (1) elects to
integrate the Underlying Securities and the Swap Agreement for United States
federal income tax purposes, (2) authorizes and directs the trustee (or the
trustee's agent) to retain, as part of the Certificateholder's books and
records, information that (a) describes the Underlying Securities



                                     C-2
<PAGE>

and the Swap Agreement, (b) identifies the two positions as integrated for
federal income tax purposes and (c) describes the features of the resulting
"synthetic" debt instrument and (3) agrees to retain copies of such
information as provided to the Certificateholder by the Trust.

     Each Certificateholder, by its acceptance of a Certificate, covenants and
agrees that such Certificateholder shall not, prior to the date which is one
year and one day after the termination of the Trust Agreement, acquiesce,
petition or otherwise invoke or cause the Trustor to invoke the process of any
court or governmental authority for the purpose of commencing or sustaining a
case against the Trustor under any federal or state bankruptcy, insolvency,
reorganization or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Trustor or
any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Trustor.

     Certificates may not be acquired by or for the account of any employee
benefit plan, trust or account, including an individual retirement account,
that is subject to the requirements of Title I of the Employee Retirement
Income Security Act of 1974, as amended, or that is described in Section
4975(e)(1) of the Code, or by or for the account of any entity whose
underlying assets include any assets subject to these laws by reason of
investment in that entity by such plans, trusts or accounts. By accepting and
holding this Certificate, the holder of this Certificate will be deemed to
have represented and warranted that it is not a plan or entity described
above, and that its acquisition and holding of this Certificate are in
compliance with the foregoing restrictions.

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

     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.

     A copy of the Trust Agreement is available upon request and all of its
terms and conditions are hereby incorporated by reference and made a part
hereof.

     THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.



                                     C-3
<PAGE>



IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.



                                         STRATS(SM) TRUST FOR MORGAN
                                         STANLEY SECURITIES, SERIES 2004-12

                                         By:  U.S. BANK TRUST NATIONAL
                                         ASSOCIATION, not in its individual
                                         capacity but solely as Trustee


                                         By:
                                            ----------------------------------
                                               Authorized Signatory

Dated:  September 9, 2004

                    TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the STRATS(SM) Certificates, Series 2004-12, described in the
Trust Agreement referred to herein.

U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee


By:
     -------------------------------------
        Authorized Signatory



                                     C-4
<PAGE>

                                  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
Register, with full power of substitution in the premises.

Dated:


                                                                             *
                                    ----------------------------------------



*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed
by an "eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.



                                     C-5
<PAGE>

                                                                  Exhibit D-1

(Multicurrency - Cross Border)



                                    ISDA(R)
                 International Swap Dealers Association, Inc.

                               MASTER AGREEMENT

                         dated as of September 9, 2004




WACHOVIA BANK, NATIONAL                and  STRATS(SM) TRUST FOR MORGAN STANLEY
ASSOCIATION                                 SECURITIES, SERIES 2004-12


have entered and/or anticipate entering into one of more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming
those Transactions.

Accordingly, the parties agree as follows: --

1.   Interpretation

(a)  Definitions. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.

(b)  Inconsistency. In the event of any inconsistency between the provisions
of the Schedule and the other provisions of this Master Agreement, the
Schedule will prevail. In the event of any inconsistency between the
provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purpose of the relevant
Transaction.

(c)  Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.

2.   Obligations

(a)  General Conditions.

      (i) Each party will make each payment or delivery specified in each
      Confirmation to be made by it, subject to the other provisions of this
      Agreement.

      (ii) Payments under this Agreement will be made on the due date for
      value on that date in the place of the account specified in the relevant
      Confirmation or otherwise pursuant to this Agreement, in freely
      transferable funds and in the manner customary for payments in the
      required currency. Where settlement is by delivery (that is, other than
      by payment), such delivery will be made for receipt on the due date in
      the manner customary for the relevant obligation unless otherwise
      specified in the relevant Confirmation or elsewhere in this Agreement.

      (iii) Each obligation of each party under Section 2(a)(i) is subject to
      (1) the condition precedent that no Event of Default or Potential Event
      of Default with respect to the other party has occurred and is



                                    D-1-1
<PAGE>

      continuing, (2) the condition precedent that no Early Termination Date
      in respect of the relevant Transaction has occurred or been effectively
      designated and (3) each other applicable condition precedent specified
      in this Agreement.

(b)   Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a
reasonable objection to such change.

(c)   Netting. If on any date amounts would otherwise be payable: --

      (i) in the same currency; and

      (ii) in respect of the same Transaction,

by each party to the other. then, on such date, each party's obligation to
make payment of any such amount will be automatically satisfied and discharged
and, if the aggregate amount that would otherwise have been payable by one
party exceeds the aggregate amount that would otherwise have been payable by
the other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party the excess
of the larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii)
above will not, or will cease to, apply to such Transactions from such date).
This election may be made separately for different groups of Transactions and
will apply separately to each pairing of Offices through which the parties
make and receive payments or deliveries.

(d)  Deduction or Withholding for Tax.

     (i)   Gross-Up. All payments under this Agreement will be made without any
     deduction or withholding for or on account of any Tax unless such
     deduction or withholding is required by any applicable law, as modified
     by the practice of any relevant governmental revenue authority, then in
     effect. If a party is so required to deduct or withhold, then that party
     ("X") will: --

           (1) promptly notify the other party ("Y") of such requirement;

           (2) pay to the relevant authorities the full amount required to be
           deducted or withheld (including the full amount required to be
           deducted or withheld from any additional amount paid by X to Y
           under this Section 2(d)) promptly upon the earlier of determining
           that such deduction or withholding is required or receiving notice
           that such amount has been assessed against Y;

           (3) promptly forward to Y an official receipt (or a certified
           copy), or other documentation reasonably acceptable to Y,
           evidencing such payment to such authorities; and

           (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
           the payment to which Y is otherwise entitled under this Agreement,
           such additional amount as is necessary to ensure that the net
           amount actually received by Y (free and clear of Indemnifiable
           Taxes. whether assessed against X or Y) will equal ft full amount Y
           would have received had no such deduction or withholding been
           required. However, X will not be required to pay any additional
           amount to Y to the extent that it would not be required to be paid
           but for: --

                (A) the failure by Y to comply with or perform any agreement
                contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

                (B) the failure of a representation made by Y pursuant to
                Section 3(f) to be accurate and true unless such failure would
                not have occurred but for (I) any action taken by a taxing
                authority, or brought in a court of competent jurisdiction, on
                or after the date on which a



                                    D-1-2
<PAGE>

                Transaction is entered into (regardless of whether such action
                is taken or brought with respect to a party to this Agreement)
                or (II) a Change in Tax Law.

     (ii)  Liability. If: --

           (1) X is required by any applicable law, as modified by the
           practice of any relevant governmental revenue authority, to make
           any deduction or withholding in respect of which X would not be
           required to pay an additional amount to Y under Section 2(d)(i)(4);

           (2) X does not so deduct or withhold; and

           (3) a liability resulting from such Tax is assessed directly
           against X,

           then, except to the extent Y has satisfied or then satisfies the
           liability resulting from such Tax, Y will promptly pay to X the
           amount of such liability (including any related liability for
           interest, but including any related liability for penalties only if
           Y has failed to comply with or perform any agreement contained in
           Section 4(a)(i), 4(a)(iii) or 4(d)).

(e)  Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section 6(c),
be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment, at the Default Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed. If, prior to the occurrence or effective designation
of an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by
delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this Agreement.

3.   Representations

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into and, in the case of the representations in Section 3(f), at all times
until the termination of this Agreement) that: --

(a)  Basic Representations.

     (i) Status. It is duly organised and validly existing under the laws of
     the jurisdiction of its organisation or incorporation and, if relevant
     under such laws, in good standing;

     (ii) Powers. It has the power to execute this Agreement and any other
     documentation relating to this Agreement to which it is a party, to
     deliver this Agreement and any other documentation relating to this
     Agreement that it is required by this Agreement to deliver and to perform
     its obligations under this Agreement and any obligations it has under any
     Credit Support Document to which it is a party and has taken all
     necessary action to authorise such execution, delivery and performance;

     (iii) No Violation or Conflict. Such execution, delivery and performance
     do not violate or conflict with any law applicable to it, any provision
     of its constitutional documents, any order or judgment of any court or
     other agency of government applicable to it or any of its assets or any
     contractual restriction binding on or affecting it or any of its assets;

     (iv) Consents. All governmental and other consents that are required to
     have been obtained by it with respect to this Agreement or any Credit
     Support Document to which it is a party have been obtained and are in
     full force and effect and all conditions of any such consents have been
     complied with; and



                                    D-1-3
<PAGE>

     (v) Obligations Binding. Its obligations under this Agreement and any
     Credit Support Document to which it is a party constitute its legal,
     valid and binding obligations, enforceable in accordance with their
     respective terms (subject to applicable bankruptcy, reorganisation,
     insolvency, moratorium or similar laws affecting creditors' rights
     generally and subject, as to enforceability, to equitable principles of
     general application (regardless of whether enforcement is sought in a
     proceeding in equity or at law)).

(b)  Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this Agreement
or any Credit Support Document to which it is a party.

(c)  Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency
or official or any arbitrator that is likely to affect the legality, validity
or enforceability against it of this Agreement or any Credit Support Document
to which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.

(d)  Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of the
date of the information, true, accurate and complete in every material
respect.

(e)  Payer Tax Representation. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e) is accurate and true.

(f)  Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.

4.   Agreements

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party: --

(a)  Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs: --

     (i) any forms, documents or certificates relating to taxation specified
     in the Schedule or any Confirmation;

     (ii) any other documents specified in the Schedule of any Confirmation;
     and

     (iii) upon reasonable demand by such other party, any form or document
     that may be required or reasonably requested in writing in order to allow
     such other party or its Credit Support Provider to make a payment under
     this Agreement or any applicable Credit Support Document without any
     deduction or withholding for or on account of any Tax or with such
     deduction or withholding at a reduced rate (so long as the completion,
     execution or submission of such form or document would not materially
     prejudice the legal or commercial position of the party in receipt of
     such demand), with any such form or document to be accurate and completed
     in a manner reasonably satisfactory to such other party and to be
     executed and to be delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b)  Maintain Authorisations. It will use all reasonable efforts to maintain
in full force and effect all consents of any governmental or other authority
that are required to be obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party and will use all reasonable
efforts to obtain any that may become necessary in the future.

(c)  Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d)  Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.



                                    D-1-4
<PAGE>

(e)  Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of
this Agreement by a jurisdiction in which it is incorporated, organised,
managed and controlled. or considered to have its seat, or in which a branch
or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the
other party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.

5.   Events or Default and Termination Events

(a)  Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party: --

     (i) Failure to Pay or Deliver. Failure by the party to make, when due,
     any payment under this Agreement or delivery under Section 2(a)(i) or
     2(e) required to be made by it if such failure is not remedied on or
     before the third Local Business Day after notice of such failure is given
     to the party;

     (ii) Breach of Agreement. Failure by the party to comply with or perform
     any agreement or obligation (other than an obligation to make any payment
     under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
     notice of a Termination Event or any agreement or obligation under
     Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by
     the party in accordance with this Agreement if such failure is not
     remedied on or before the thirtieth day after notice of such failure is
     given to the party;

     (iii) Credit Support Default.

           (1) Failure by the party or any Credit Support Provider of such
           party to comply with or perform any agreement or obligation to be
           complied with or performed by it in accordance with any Credit
           Support Document if such failure is continuing after any applicable
           grace period has elapsed;

           (2) the expiration or termination of such Credit Support Document
           or the failing or ceasing of such Credit Support Document to be in
           full force and effect for the purpose of this Agreement (in either
           case other than in accordance with its terms) prior to the
           satisfaction of all obligations of such party under each
           Transaction to which such Credit Support Document relates without
           the written consent of the other party; or

           (3) the party or such Credit Support Provider disaffirms,
           disclaims, repudiates or rejects, in whole or in part, or
           challenges the validity of, such Credit Support Document;

     (iv)  Misrepresentation. A representation (other than a representation
     under Section 3(e) or (f)) made or repeated or deemed to have been made
     or repeated by the party or any Credit Support Provider of such party in
     this Agreement or any Credit Support Document proves to have been
     incorrect or misleading in any material respect when made or repeated or
     deemed to have been made or repeated;

     (v)  Default under Specified Transaction. The party, any Credit Support
     Provider of such party or any applicable Specified Entity of such party
     (1) defaults under a Specified Transaction and, after giving effect to
     any applicable notice requirement or grace period, there occurs a
     liquidation of, an acceleration of obligations under, or an early
     termination of, that Specified Transaction, (2) defaults, after giving
     effect to any applicable notice requirement or grace period, in making
     any payment or delivery due on the last payment, delivery or exchange
     date of, or any payment on early termination of, a Specified Transaction
     (or such default continues for at least three Local Business Days if
     there is no applicable notice requirement or grace period) or (3)
     disaffirms, disclaims, repudiates or rejects, in whole or in part, a
     Specified Transaction (or such action is taken by any person or entity
     appointed or empowered to operate it or act on its behalf);

     (vi) Cross Default. If "Cross Default" is specified in the Schedule as
     applying to the party, the occurrence or existence of (1) a default,
     event of default or other similar condition or event (however



                                    D-1-5
<PAGE>



     described) in respect of such party, any Credit Support Provider of such
     party or any applicable Specified Entity of such party under one or more
     agreements or instruments relating to Specified Indebtedness of any of
     them (individually or collectively) in an aggregate amount of not less
     than the applicable Threshold Amount (as specified in the Schedule) which
     has resulted in such Specified Indebtedness becoming, or becoming capable
     at such time of being declared, due and payable under such agreements or
     instruments, before it would otherwise have been due and payable or (2) a
     default by such party, such Credit Support Provider or such Specified
     Entity (individually or collectively) in making one or more payments on
     the due date thereof in an aggregate amount of not less than the
     applicable Threshold Amount under such agreements or instruments (after
     giving effect to any applicable notice requirement or grace period);

     (vii) Bankruptcy. The party, any Credit Support Provider of such party or
     any applicable Specified Entity of such party:-

           (1) is dissolved (other than pursuant to a consolidation,
           amalgamation or merger); (2) becomes insolvent or is unable to pay
           its debts or fails or admits in writing its inability generally to
           pay its debts as they become due; (3) makes a general assignment,
           arrangement or composition with or for the benefit of its
           creditors; (4) institutes or has instituted against it a proceeding
           seeking a judgment of insolvency or bankruptcy or any other relief
           under any bankruptcy or insolvency law or other similar law
           affecting creditors' rights, or a petition is presented for its
           winding-up or liquidation, and, in the case of any such proceeding
           or petition instituted or presented against it, such proceeding or
           petition (A) results in a judgment of insolvency or bankruptcy or
           the entry of an order for relief or the making of an order for its
           winding-up or liquidation or (B) is not dismissed, discharged,
           stayed or restrained in each case within 30 days of the institution
           or presentation thereof, (5) has a resolution passed for its
           winding-up, official management or liquidation (other than pursuant
           to a consolidation, amalgamation or merger); (6) seeks or becomes
           subject to the appointment of an administrator, provisional
           liquidator, conservator, receiver, trustee, custodian or other
           similar official for it or for all or substantially all its assets;
           (7) has a secured party take possession of all or substantially all
           its assets or has a distress, execution, attachment, sequestration
           or other legal process levied, enforced or sued on or against all
           or substantially all its assets and such secured party maintains
           possession, or any such process is not dismissed, discharged,
           stayed or restrained, in each case within 30 days thereafter; (8)
           causes or is subject to any event with respect to it which, under
           the applicable laws of any jurisdiction, has an analogous effect to
           any of the events specified in clauses (1) to (7) (inclusive); or
           (9) takes any action in furtherance of, or indicating its consent
           to, approval of, or acquiescence in, any of the foregoing acts; or

     (viii) Merger Without Assumption. The party or any Credit Support
     Provider of such party consolidates or amalgamates with, or merges with
     or into, or transfers all or substantially all its assets to, another
     entity and, at the time of such consolidation, amalgamation, merger or
     transfer: -

           (1) the resulting, surviving or transferee entity fails to assume
           all the obligations of such party or such Credit Support Provider
           under this Agreement or any Credit Support Document to which it or
           its predecessor was a party by operation of law or pursuant to an
           agreement reasonably satisfactory to the other party to this
           Agreement; or

           (2) the benefits of any Credit Support Document fail to extend
           (without the consent of the other party) to the performance by such
           resulting, surviving or transferee entity of its obligations under
           this Agreement.

(b)  Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event



                                    D-1-6
<PAGE>

Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--

     (i) Illegality. Due to the adoption of, or any change in, any applicable
     law after the date on which a Transaction is entered into, or due to the
     promulgation of, or any change in, the interpretation by any court,
     tribunal or regulatory authority with competent jurisdiction of any
     applicable law after such date. it becomes unlawful (other than as a
     result of a breach by the party of Section 4(b)) for such party (which
     will be the Affected Party):--

           (1) to perform any absolute or contingent obligation to make a
           payment or delivery or to receive a payment or delivery in respect
           of such Transaction or to comply with any other material provision
           of this Agreement relating to such Transaction; or

           (2) to perform, or for any Credit Support Provider of such party to
           perform, any contingent or other obligation which the party (or
           such Credit Support Provider) has under any Credit Support Document
           relating to such Transaction;

     (ii) Tax Event. Due to (x) any action taken by a taxing authority, or
     brought in a court of competent jurisdiction, on or after the date on
     which a Transaction is entered into (regardless of whether such action is
     taken or brought with respect to a party to this Agreement) or (y) a
     Change in Tax Law, the party (which will be the Affected Party) will, or
     there is a substantial likelihood that it will, on the next succeeding
     Scheduled Payment Date (1) be required to pay to the other party an
     additional amount in respect of an Indemnifiable Tax under Section
     2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
     6(e)) or (2) receive a payment from which an amount is required to be
     deducted or withheld for or on account of a Tax (except in respect of
     interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
     is required to be paid in respect of such Tax under Section 2(d)(i)(4)
     (other than by reason of Section 2(d)(i)(4)(A) or (B));

     (iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
     succeeding Scheduled Payment Date will either (1) be required to pay an
     additional amount in respect of an Indemnifiable Tax under Section
     2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
     6(e)) or (2) receive a payment from which an amount has been deducted or
     withheld for or on account of any Indemnifiable Tax in respect of which
     the other party is not required to pay an additional amount (other than
     by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of
     a party consolidating or amalgamating with, or merging with or into, or
     transferring all or substantially all its assets to, another entity
     (which will be the Affected Party) where such action does not constitute
     an event described in Section 5(a)(viii);

     (iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
     in the Schedule as applying to the party, such party ("X"), any Credit
     Support Provider of X or any applicable Specified Entity of X
     consolidates or amalgamates with, or merges with or into, or transfers
     all or substantially all its assets to, another entity and such action
     does not constitute an event described in Section 5(a)(viii) but the
     creditworthiness of the resulting, surviving or transferee entity is
     materially weaker than that of X, such Credit Support Provider or such
     Specified Entity, as the case may be, immediately prior to such action
     (and, in such event, X or its successor or transferee, as appropriate,
     will be the Affected Party); or

     (v) Additional Termination Event. If any "Additional Termination Event"
     is specified in the Schedule or any Confirmation as applying. the
     occurrence of such event (and, in such event. the Affected Party or
     Affected Parties shall be as specified for such Additional Termination
     Event in the Schedule or such Confirmation).

(j)  Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.




                                    D-1-7
<PAGE>

6.   Early Termination

(a)  Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions. If,
however, "Automatic Early Termination" is specified in the Schedule as
applying to a party, then an Early Termination Date in respect of all
outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section
5(a)(vii)(l), (3), (5), (6) or, to the extent analogous thereto, (8), and as
of the time immediately preceding the institution of the relevant proceeding
or the presentation of the relevant petition upon the occurrence with respect
to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to
the extent analogous thereto, (8).

(b)  Right to Terminate Following Termination Event.

     (i) Notice. If a Termination Event occurs, an Affected Party will,
     promptly upon becoming aware of it, notify the other party, specifying
     the nature of that Termination Event and each Affected Transaction and
     will also give such other information about that Termination Event as the
     other party may reasonably require.

     (ii) Transfer to Avoid Termination Event. If either an Illegality under
     Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
     Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
     Affected Party, the Affected Party will, as a condition to its right to
     designate an Early Termination Date under Section 6(b)(iv), use all
     reasonable efforts (which will not require such party to incur a loss,
     excluding immaterial, incidental expenses) to transfer within 20 days
     after it gives notice under Section 6(b)(i) all its rights and
     obligations under this Agreement in respect of the Affected Transactions
     to another of its Offices or Affiliates so that such Termination Event
     ceases to exist.

     If the Affected Party is not able to make such a transfer it will give
     notice to the other party to that effect within such 20 day period,
     whereupon the other party may effect such a transfer within 30 days after
     the notice is given under Section 6(b)(i).

     Any such transfer by a party under this Section 6(b)(ii) will be subject
     to and conditional upon the prior written consent of the other party,
     which consent will not be withheld if such other party's policies in
     effect at such time would permit it to enter into transactions with the
     transferee on the terms proposed.

     (iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or
     a Tax Event occurs and there are two Affected Parties, each party will
     use all reasonable efforts to reach agreement within 30 days after notice
     thereof is given under Section 6(b)(i) on action to avoid that
     Termination Event.

     (iv) Right to Terminate. If:--

           (1) a transfer under Section 6(b)(ii) or an agreement under Section
           6(b)(iii), as the case may be, has not been effected with respect
           to all Affected Transactions within 30 days after an Affected Party
           gives notice under Section 6(b)(i); or

           (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
           Merger or an Additional Termination Event occurs, or a Tax Event
           Upon Merger occurs and the Burdened Party is not the Affected
           Party,

     either party in the case of an Illegality, the Burdened Party in the case
     of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
     or an Additional Termination Event if there is more than one Affected
     Party, or the party which is not the Affected Party in the case of a
     Credit Event Upon Merger or an Additional Termination Event if there is
     only one Affected Party may, by not more than 20 days notice to the other
     party and provided that the relevant Termination Event is then



                                    D-1-8
<PAGE>

     continuing, designate a day not earlier than the day such notice is
     effective as an Early Termination Date in respect of all Affected
     Transactions.

(c)  Effect of Designation.

     (i) If notice designating an Early Termination Date is given under
     Section 6(a) or (b), the Early Termination Date will occur on the date so
     designated, whether or not the relevant Event of Default or Termination
     Event is then continuing.

     (ii) Upon the occurrence or effective designation of an Early Termination
     Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
     respect of the Terminated Transactions will be required to be made, but
     without prejudice to the other provisions of this Agreement. The amount,
     if any, payable in respect of an Early Termination Date shall be
     determined pursuant to Section 6(e).

(d)  Calculations.

     (i) Statement. On or as soon as reasonably practicable following the
     occurrence of an Early Termination Date, each party will make the
     calculations on its part, if any, contemplated by Section 6(e) and will
     provide to the other party a statement (1) showing, in reasonable detail,
     such calculations (including all relevant quotations and specifying any
     amount payable under Section 6(e)) and (2) giving details of the relevant
     account to which any amount payable to it is to be paid. In the absence
     of written confirmation from the source of a quotation obtained in
     determining a Market Quotation, the records of the party obtaining such
     quotation will be conclusive evidence of the existence and accuracy of
     such quotation.

     (ii) Payment Date. An amount calculated as being due in respect of any
     Early Termination Date under Section 6(e) will be payable on the day that
     notice of the amount payable is effective (in the case of an Early
     Termination Date which is designated or occurs as a result of an Event of
     Default) and on the day which is two Local Business Days after the day on
     which notice of the amount payable is effective (in the case of an Early
     Termination Date which is designated as a result of a Termination Event).
     Such amount will be paid together with (to the extent permitted under
     applicable law) interest thereon (before as well as after judgment) in
     the Termination Currency, from (and including) the relevant Early
     Termination Date to (but excluding) the date such amount is paid, at the
     Applicable Rate. Such interest will be calculated on the basis of daily
     compounding and the actual number of days elapsed.

(e)  Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the
Schedule of a payment measure, either "Market Quotation" or "Loss", and a
payment method, either the "First Method" or the "Second Method". If the
parties fail to designate a payment measure or payment method in the Schedule,
it will be deemed that "Market Quotation" or the "Second Method", as the case
may be, shall apply. The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be subject to
any Set-off.

     (i) Events of Default. If the Early Termination Date results from an
     Event of Default:--

           (1) First Method and Market Quotation. If the First Method and
           Market Quotation apply, the Defaulting Party will pay to the
           Non-defaulting Party the excess, if a positive number, of (A) the
           sum of the Settlement Amount (determined by the Non-defaulting
           Party) in respect of the Terminated Transactions and the
           Termination Currency Equivalent of the Unpaid Amounts owing to the
           Non-defaulting Party over (B) the Termination Currency Equivalent
           of the Unpaid Amounts owing to the Defaulting Party.

           (2) First Method and Loss. If the First Method and Loss apply, the
           Defaulting Party will pay to the Non-defaulting Party, if a
           positive number, the Non-defaulting Party's Loss in respect of this
           Agreement.

           (3) Second Method and Market Quotation. If the Second Method and
           Market Quotation apply, an amount will be payable equal to (A) the
           sum of the Settlement Amount (determined by the



                                    D-1-9
<PAGE>

           Non-defaulting Party) in respect of the Terminated Transactions and
           the Termination Currency Equivalent of the Unpaid Amounts owing to
           the Non-defaulting Party less (B) the Termination Currency
           Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
           that amount is a positive number, the Defaulting Party will pay it
           to the Non-defaulting Party; if it is a negative number, the
           Non-defaulting Party will pay the absolute value of that amount to
           the Defaulting Party.

           (4) Second Method and Loss. If the Second Method and Loss apply, an
           amount will be payable equal to the Non-defaulting Party's Loss in
           respect of this Agreement. If that amount is a positive number, the
           Defaulting Party will pay it to the Non-defaulting Party; if it is
           a negative number, the Non-defaulting Party will pay the absolute
           value of that amount to the Defaulting Party.

     (ii) Termination Events. If the Early Termination Date results from a
     Termination Event:--

           (1) One Affected Party. If there is one Affected Party, the amount
           payable will be determined in accordance with Section 6(e)(i)(3),
           if Market Quotation applies, or Section 6(e)(i)(4), if Loss
           applies, except that, in either case, references to the Defaulting
           Party and to the Non-defaulting Party will be deemed to be
           references to the Affected Party and the party which is not the
           Affected Party, respectively, and, if Loss applies and fewer than
           all the Transactions are being terminated, Loss shall be calculated
           in respect of all Terminated Transactions.

           (2) Two Affected Parties. If there are two Affected Parties:--

               (A) if Market Quotation applies, each party will determine a
               Settlement Amount in respect of the Terminated Transactions,
               and an amount will be payable equal to (I) the sum of (a)
               one-half of the difference between the Settlement Amount of the
               party with the higher Settlement Amount ("X") and the
               Settlement Amount of the party with the lower Settlement Amount
               ("Y") and (b) the Termination Currency Equivalent of the Unpaid
               Amounts owing to X less (II) the Termination Currency
               Equivalent of the Unpaid Amounts owing to Y; and

               (B) if Loss applies, each party will determine its Loss in
               respect of this Agreement (or, if fewer than all the
               Transactions are being terminated, in respect of all Terminated
               Transactions) and an amount will be payable equal to one-half
               of the difference between the Loss of the party with the higher
               Loss ("X") and the Loss of the party with the lower Loss ("Y").

               If the amount payable is a positive number, Y will pay it to X;
               if it is a negative number, X will pay the absolute value of
               that amount to Y.

     (iii) Adjustment for Bankruptcy. In circumstances where an Early
     Termination Date occurs because "Automatic Early Termination" applies in
     respect of a party, the amount determined under this Section 6(e) will be
     subject to such adjustments as are appropriate and permitted by law to
     reflect any payments or deliveries made by one party to the other under
     this Agreement (and retained by such other party) during the period from
     the relevant Early Termination Date to the date for payment determined
     under Section 6(d)(ii).

     (iv) Pre-Estimate. The parties agree that if Market Quotation applies an
     amount recoverable under this Section 6(e) is a reasonable pre-estimate
     of loss and not a penalty. Such amount is payable for the loss of bargain
     and the loss of protection against future risks and except as otherwise
     provided in this Agreement neither party will be entitled to recover any
     additional damages as a consequence of such losses.

7.   Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of
the other party, except that:--



                                    D-1-10
<PAGE>

(a)  a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to
any other right or remedy under this Agreement); and

(b)  a party may make such a transfer of all or any part of its interest in
any amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be
void.

8.   Contractual Currency

(a)  Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency
other than the Contractual Currency, except to the extent such tender results
in the actual receipt by the party to which payment is owed, acting in a
reasonable manner and in good faith in converting the currency so tendered
into the Contractual Currency, of the full amount in the Contractual Currency
of all amounts payable in respect of this Agreement. If for any reason the
amount in the Contractual Currency so received falls short of the amount in
the Contractual Currency payable in respect of this Agreement, the party
required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in the
Contractual Currency so received exceeds the amount in the Contractual
Currency payable in respect of this Agreement, the party receiving the payment
will refund promptly the amount of such excess.

(b)  Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party
is entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency and will refund promptly to the other party any excess of
the Contractual Currency received by such party as a consequence of sums paid
in such other currency if such shortfall or such excess arises or results from
any variation between the rate of exchange at which the Contractual Currency
is converted into the currency of the judgment or order for the purposes of
such judgment or order and the rate of exchange at which such party is able,
acting in a reasonable manner and in good faith in converting the currency
received into the Contractual Currency, to purchase the Contractual Currency
with the amount of the currency of the judgment or order actually received by
such party. The term "rate of exchange" includes, without limitation, any
premiums and costs of exchange payable in connection with the purchase of or
conversion into the Contractual Currency.

(c)  Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the
party to which any payment is owed and will not be affected by judgment being
obtained or claim or proof being made for any other sums payable in respect of
this Agreement.

(d)  Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.



                                    D-1-11
<PAGE>

9.   Miscellaneous

(a)  Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.

(b)  Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced
by a facsimile transmission) and executed by each of the parties or confirmed
by an exchange of telexes or electronic messages on an electronic messaging
system.

(c)  Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d)  Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e)  Counterparts and Confirmations.

     (i) This Agreement (and each amendment, modification and waiver in
     respect of it) may be executed and delivered in counterparts (including
     by facsimile transmission), each of which will be deemed an original.

     (ii) The parties intend that they are legally bound by the terms of each
     Transaction from the moment they agree to those terms (whether orally or
     otherwise). A Confirmation shall be entered into as soon as practicable
     and may be executed and delivered in counterparts (including by facsimile
     transmission) or be created by an exchange of telexes or by an exchange
     of electronic messages on an electronic messaging system, which in each
     case will be sufficient for all purposes to evidence a binding supplement
     to this Agreement. The parties will specify therein or through another
     effective means that any such counterpart, telex or electronic message
     constitutes a Confirmation.

(f)  No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g)  Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

10.  Offices; Multibranch Parties

(a)  If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of
booking office or jurisdiction of incorporation or organisation of such party,
the obligations of such party are the same as if it had entered into the
Transaction through its head or home office. This representation will be
deemed to be repeated by such party on each date on which a Transaction is
entered into.

(b)  Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.

(c)  If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.

11.  Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other
party for and against all reasonable out-of-pocket expenses, including legal
fees and Stamp Tax, incurred by such other party by reason of the enforcement
and protection of its rights under this Agreement or any Credit Support
Document



                                    D-1-12
<PAGE>

to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.

12.  Notices

(a)  Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--

     (i) if in writing and delivered in person or by courier, on the date it
     is delivered;

     (ii) if sent by telex, on the date the recipient's answerback is
     received;

     (iii) if sent by facsimile transmission, on the date that transmission is
     received by a responsible employee of the recipient in legible form (it
     being agreed that the burden of proving receipt will be on the sender and
     will not be met by a transmission report generated by the sender's
     facsimile machine);

     (iv) if sent by certified or registered mail (airmail, if overseas) or
     the equivalent (return receipt requested), on the date that mail is
     delivered or its delivery is attempted; or

     (v) if sent by electronic messaging system, on the date that electronic
     message is received,

unless the date of that delivery (or attempted delivery) or that receipt as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

(b)  Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.

13.  Governing Law and Jurisdiction

(a)  Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b)  Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--

     (i) submits to the jurisdiction of the English courts, if this Agreement
     is expressed to be governed by English law, or to the non-exclusive
     jurisdiction of the courts of the State of New York and the United States
     District Court located in the Borough of Manhattan in New York City, if
     this Agreement is expressed to be governed by the laws of the State of
     New York; and

     (ii) waives any objection which it may have at any time to the laying of
     venue of any Proceedings brought in any such court, waives any claim that
     such Proceedings have been brought in an inconvenient forum and further
     waives the right to object, with respect to such Proceedings, that such
     court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the
Civil Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.



                                    D-1-13
<PAGE>

(c)  Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable
to the other party. The parties irrevocably consent to service of process
given in the manner provided for notices in Section 12. Nothing in this
Agreement will affect the right of either party to serve process in any other
manner permitted by law.

(d)  Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the
grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which it or its revenues or assets might otherwise be entitled
in any Proceedings in the courts of any jurisdiction and irrevocably agrees,
to the extent permitted by applicable law, that it will not claim any such
immunity in any Proceedings.

14.  Definitions

As used in this Agreement: --

"Additional Termination Event" has the meaning specified in Section 5(b).

"Affected Party" has the meaning specified in Section 5(b).

"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control"
of any entity or person means ownership of a majority of the voting power of
the entity or person.

"Applicable Rate" means: --

(a)  in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b)  in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

(c)  in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and

(d)  in all other cases, the Termination Rate.

"Burdened Party" has the meaning specified in Section 5(b).

"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.

"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

"Credit Event Upon Merger" has the meaning specified in Section 5(b).

"Credit Support Document" means any agreement or instrument that is specified
as such in this Agreement.



                                    D-1-14
<PAGE>

"Credit Support Provider" has the meaning specified in the Schedule.

"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

"Defaulting Party" has the meaning specified in Section 6(a).

"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.

"Illegality" has the meaning specified in Section 5(b).

"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed
in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to
such recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organised, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).

"law" includes any treaty, law, rule or regulation (as modified, in the case
of tax matters, by the practice of any relevant governmental revenue
authority) and "lawful" and "unlawful" will be construed accordingly.

"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and
foreign currency deposits) (a) in relation to any obligation under Section
2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so
specified, as otherwise agreed by the parties in writing or determined
pursuant to provisions contained, or incorporated by reference, in this
Agreement, (b) in relation to any other payment, in the place where the
relevant account is located and, if different. in the principal financial
centre, if any, of the currency of such payment, (c) in relation to any notice
or other communication, including notice contemplated under Section 5(a)(i),
in the city specified in the address for notice provided by the recipient and,
in the case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to such
Specified Transaction.

"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or reestablishing any hedge or related trading position
(or any gain resulting from any of them). Loss includes losses and costs (or
gains) in respect of any payment or delivery required to have been made
(assuming satisfaction of each applicable condition precedent) on or before
the relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does
not include a party's legal fees and out-of-pocket expenses referred to under
Section 11. A party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices
from one or more leading dealers in the relevant markets.

"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or
by such party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting
Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether



                                    D-1-15
<PAGE>

the underlying obligation was absolute or contingent and assuming the
satisfaction of each applicable condition precedent) by the parties under
Section 2(a)(i) in respect of such Terminated Transaction or group of
Terminated Transactions that would, but for the occurrence of the relevant
Early Termination Date, have been required after that date. For this purpose,
Unpaid Amounts in respect of the Terminated Transaction or group of Terminated
Transactions are to be excluded but, without limitation, any payment or
delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction
would be subject to such documentation as such party and the Reference
Market-maker may, in good faith, agree. The party making the determination (or
its agent) will request each Reference Market-maker to provide its quotation
to the extent reasonably practicable as of the same day and time (without
regard to different time zones) on or as soon as reasonably practicable after
the relevant Early Termination Date. The day and time as of which those
quotations are to be obtained will be selected in good faith by the party
obliged to make a determination under Section 6(e), and, if each party is so
obliged, after consultation with the other. If more than three quotations are
provided, the Market Quotation will be the arithmetic mean of the quotations,
without regard to the quotations having the highest and lowest values, If
exactly three such quotations are provided, the Market Quotation will be the
quotation remaining after disregarding the highest and lowest quotations. For
this purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If fewer than three
quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.

"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.

"Non-defaulting Party" has the meaning specified in Section 6(a).

"Office" means a branch or office of a party, which may be such party's head
or home office.

"Potential Event of Default" means any event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.

"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or
to make an extension of credit and (b) to the extent practicable, from among
such dealers having an office in the same city.

"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organised, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.

"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"Set-off" means set-off, offset, combination of accounts, right of retention
or withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or
imposed on, such payer.

"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of.-

(a)  the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and

(b)  such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not
(in the reasonable belief of the party making the determination) produce a
commercially reasonable result.

"Specified Entity" has the meaning specified in the Schedule.



                                    D-1-16
<PAGE>



"Specified Indebtedness" means, subject to the Schedule, any obligation
(whether present or future, contingent or otherwise, as principal or surety or
otherwise) in respect of borrowed money.

"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter
entered into between one party to this Agreement (or any Credit Support
Provider of such party or any applicable Specified Entity of such party) and
the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is a
rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions),
(b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.

"Stamp Tax" means any stamp, registration, documentation or similar tax.

"Tax" means any present or future tax, levy, impost, duty, charge, assessment
or fee of any nature (including interest, penalties and additions thereto)
that is imposed by any government or other taxing authority in respect of any
payment under this Agreement other than a stamp, registration, documentation
or similar tax.

"Tax Event" has the meaning specified in Section 5(b).

"Tax Event Upon Merger" has the meaning specified in Section 5(b).

"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in
effect immediately before the effectiveness of the notice designating that
Early Termination Date (or, if "Automatic Early Termination" applies,
immediately before that Early Termination Date).

"Termination Currency" has the meaning specified in the Schedule.

"Termination Currency Equivalent" means, in respect of any amount denominated
in the Termination Currency, such Termination Currency amount and, in respect
of any amount denominated in a currency other than the Termination Currency
(the "Other Currency"), the amount in the Termination Currency determined by
the party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or,
if the relevant Market Quotation or Loss (as the case may be), is determined
as of a later date, that later date, with the Termination Currency at the rate
equal to the spot exchange rate of the foreign exchange agent (selected as
provided below) for the purchase of such Other Currency with the Termination
Currency at or about 11:00 a.m. (in the city in which such foreign exchange
agent is located) on such date as would be customary for the determination of
such a rate for the purchase of such Other Currency for value on the relevant
Early Termination Date or that later date. The foreign exchange agent will, if
only one party is obliged to make a determination under Section 6(e), be
selected in good faith by that party and otherwise will be agreed by the
parties.

"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or an
Additional Termination Event.

"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.

"Unpaid Amounts" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become
payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or
prior to such Early Termination Date and which remain unpaid as at such Early
Termination Date and (b) in respect of each Terminated Transaction, for each
obligation under Section 2(a)(i) which was (or would have been but for Section
2(a)(iii)) required to be settled by delivery to such party on or prior to
such Early Termination Date and which has not been so settled as at such Early
Termination Date, an amount equal to the fair market value of that which was
(or would have been) required to be delivered



                                    D-1-17
<PAGE>

as of the originally scheduled date for delivery, in each case together with
(to the extent permitted under applicable law) interest, in the currency of
such amounts, from (and including) the date such amounts or obligations were
or would have been required to have been paid or performed to (but excluding)
such Early Termination Date, at the Applicable Rate. Such amounts of interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed. The fair market value of any obligation referred to in clause
(b) above shall be reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it shall be
the average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.




<TABLE>
<CAPTION>
<S>                                                  <C>
  WACHOVIA BANK, NATIONAL ASSOCIATION                STRATS(SM) TRUST FOR MORGAN STANLEY
              (Name of Party)                        SECURITIES, SERIES 2004-12
                                                                    (Name of Party)

  By:________________________________
     Name:                                           By: ___________________________________
     Title:                                              Name:
     Date:                                               Title:
                                                         Date:
</TABLE>



                                    D-1-18
<PAGE>

                                                                   Exhibit D-2

                                   SCHEDULE
                                    to the
                               MASTER AGREEMENT
                     dated as of September 9, 2004 between
                WACHOVIA BANK, NATIONAL ASSOCIATION ("Party A")
                                      and
  STRATS(SM) TRUST FOR MORGAN STANLEY SECURITIES, SERIES 2004-12 ("Party B")

Part 1.  Termination Provisions

(a)  "Specified Entity" means, with respect to Party A for all purposes of
     this Agreement, none specified, and with respect to Party B for all
     purposes of this Agreement, none specified.

(b)  "Specified Transaction" has its meaning as defined in Section 14 of this
     Agreement.

(c)  "Cross Default" does not apply to Party A or Party B.

(d)  "Credit Event Upon Merger" does not apply to Party A or Party B.

(e)  "Automatic Early Termination" does not apply to Party A or Party B.

(f)  Payments on Early Termination. Except as otherwise provided in this
     Schedule, "Market Quotation" and the "Second Method" apply. In the case
     of any Terminated Transaction that is, or is subject to, any unexercised
     option, the words "economic equivalent of any payment or delivery"
     appearing in the definition of "Market Quotation" shall be construed to
     take into account the economic equivalent of the option. Additionally, in
     the event an Early Termination Date is designated by Party B in
     connection with an Event of Default or Termination Event with respect to
     which Party A is the Defaulting Party or sole Affected Party, then in no
     event shall any Settlement Amount be payable under Section 6(e) of the
     Agreement by either Party A or Party B.

(g)  "Termination Currency" means United States Dollars.

(h)  Limitation on Defaults by Party B. The Events of Default specified in
     Section 5 of this Agreement shall not apply to Party B except for the
     following:

     (i) Section 5(a)(i) of this Agreement (Failure to Pay or Deliver);

     (ii) Section 5(a)(vii) of this Agreement (Bankruptcy), provided that, the
     failure to make any payment of interest on or principal of the
     Certificates which does not give rise to an event of default pursuant to
     the terms of the Trust Agreement shall not be deemed to constitute a
     Bankruptcy within the meaning of clause (2) thereof with respect to Party
     B; and

     (iii) Section 5(a)(viii) of this Agreement (Merger Without Assumption).



                                    D-2-1
<PAGE>

(i)  Additional Termination Events.

     (i) The occurrence of any of the following events shall be an Additional
     Termination Event:

     (A)  the unsecured and unsubordinated debt, deposit or letter of credit
          obligations of Party A or its Credit Support Provider, as
          applicable, are assigned a rating by S&P below the Hedge
          Counterparty Required Rating ("S&P Required Rating Downgrade
          Event"), and Party A fails to make a Permitted Transfer in
          accordance with the provisions of Part 6(a)(ii) of this Schedule
          within seven (7) days of such S&P Required Rating Downgrade Event,
          provided, however, that termination due to any such S&P Required
          Rating Downgrade Event shall not be permitted if S&P agrees in
          writing that it will not downgrade, reduce, suspend or withdraw
          S&P's then-current rating on the Certificates if this Agreement
          remains in full force and effect with respect to each transaction
          hereunder. Party A shall notify Party B within one (1) Business Day
          of the occurrence of a S&P Required Rating Downgrade Event;

     (B)  the unsecured and unsubordinated debt, deposit or letter of credit
          obligations of Party A or its Credit Support Provider, as
          applicable, are assigned a rating by S&P below the Hedge
          Counterparty Collateral Threshold Rating ("Collateral Rating
          Downgrade Event"), unless Party A either (i) transfers to Party B's
          Custodian under the Credit Support Annex an amount of Eligible
          Collateral equal to the Delivery Amount required to be transferred
          with respect to the Affected Transactions on that Credit Support
          Commencement Date (as defined in the Credit Support Annex) or (ii)
          makes a Permitted Transfer with respect to the Affected Transactions
          or (iii) provides Alternative Credit Support (as defined below) with
          respect to the Affected Transactions on or before the Credit Support
          Commencement Date. Party A shall notify Party B within five (5)
          Business Days of the occurrence of a Collateral Rating Downgrade
          Event;

     (C)  The Certificates become due and payable prior to their final
          scheduled maturity date for any reason;

     (D)  Party B fails to comply with sub-paragraph (e)(i) of Part 6 of this
          Schedule; any prepayment, redemption, retirement, liquidation or
          distribution of the Underlying Securities (including as a result of
          a Payment Default, an Acceleration or an SEC Reporting Failure) or
          other prepayment in full of all Certificates outstanding occurs
          under the Trust Agreement (or any notice is given to that effect and
          such prepayment, redemption, retirement, liquidation or distribution
          of the Underlying Securities is not capable of being rescinded); any
          Trust Termination Event (as defined in the Trust Agreement) occurs
          under the Trust Agreement (or any notice is given by the Trustee or
          any other authorized party to that effect) and the Trustee, the
          Certificateholders or any other authorized party thereunder takes
          any action or exercises any rights or remedies under the Trust
          Agreement or under law that would result in (1) the appropriation of
          all right, title and interest in and to the assets under the Trust
          Agreement in satisfaction, in whole or in part, of the



                                    D-2-2
<PAGE>

          obligations secured thereby, (2) the sale, liquidation or
          disposition of the assets under the Trust Agreement and the
          application of the proceeds thereof, in whole or in part, to the
          obligations secured thereby, or (3) the release of the security
          interest in the assets granted under the Trust Agreement in exchange
          for receiving either the payment, in whole or in part, of the
          obligations secured thereby or substitute collateral or credit
          support; or

     (E)  Party B fails to comply with sub-paragraph (j)(i) of Part 1 of this
          Schedule, or any Additional Termination Event occurs under paragraph
          (j) of Part 1 of this Schedule in either event to the extent of the
          applicable Affected Notional Amount as described in that paragraph.

     (ii) For purposes of the right to terminate under Section 6(b)(iv), Party
     A will be the sole Affected Party for any Additional Termination Event
     described in clause (A) or (B) of sub-paragraph (i) above, and Party B
     will be the sole Affected Party for any other Additional Termination
     Event.

     (iii) Notwithstanding which party is the Affected Party for any
     Additional Termination Event, upon the occurrence of an Early Termination
     Date for any Additional Termination Event under this Part 1(i), Party A
     shall make the calculations under Section 6(e) of this Agreement as
     though it were the non-Affected Party for purposes of Section 6(e)(ii)(1)
     of this Agreement.

     (iv) "Hedge Counterparty Required Rating" means, as applicable, at any
     time that any Certificates outstanding under the Trust Agreement and have
     a long-term rating of at least A by S&P, with respect to a Person as an
     issuer or with respect to long-term senior unsecured debt of such Person,
     BBB- by S&P (for so long as any Certificates are outstanding under the
     Trust Agreement and are rated by S&P); provided that should S&P effect an
     overall downward adjustment of its short-term or long-term ratings, then
     the applicable Hedge Counterparty Required Rating shall be downwardly
     adjusted accordingly; provided further, that any adjustment to a rating
     shall be subject to the prior written consent of S&P.

     (v) "Hedge Counterparty Collateral Threshold Rating" mean, so long as any
     Certificates are outstanding under the Trust Agreement and are rated by
     S&P:

     (A)  if the actual long-term rating assigned by S&P with respect to the
          Certificates outstanding under the Trust Agreement (in the event S&P
          has assigned more than one long-term rating with respect to the
          Certificates, then the applicable long-term rating shall be the
          highest of such long-term ratings) (the "Actual Certificate Rating")
          is "AA-" or above, "A" with respect to the long-term senior
          unsecured debt of Party A (so long as the short-term debt of Party A
          is rated at least "A-1") or "A+" with respect to the long-term
          senior unsecured debt of Party A (if Party A has a short-term debt
          rating below "A-1" or does not have a short-term debt rating) in
          each case, by S&P;



                                    D-2-3
<PAGE>

     (B)  if the Actual Certificate Rating is "A+" or "A", "A-" with respect
          to the long-term senior unsecured debt of Party A and "A-2" with
          respect to the short-term debt of Party A, in each case, by S&P; and

     (C)  if the Actual Certificate Rating is "A-" or below, then the Hedge
          Counterparty Collateral Threshold Rating shall be the Actual
          Certificate Rating;

          provided that should S&P effect an overall downward adjustment of
          its short-term or long-term ratings, then the applicable Hedge
          Counterparty Collateral Threshold Rating shall be downwardly
          adjusted accordingly; provided further, that any adjustment to a
          rating shall be subject to the prior written consent of S&P.

(vi)   "Alternative Credit Support" means an absolute and unconditional
       guarantee, credit intermediation arrangement, letter of credit or other
       additional credit support or collateral, in a form which meets S&P's
       then current criteria with respect to such types of credit support
       reasonably acceptable to S&P and for which S&P confirms in writing that
       such support will not cause the reduction or withdrawal of its then
       current rating of any outstanding class of Certificates under the Trust
       Agreement with respect to which it has previously issued a rating.

(vii)  "S&P" means, Standard & Poor's Ratings Services, a division of The
       McGraw-Hill Companies ("S&P") (so long as any Certificates deemed
       outstanding under the Trust Agreement are rated by S&P).

(j)    Mandatory Reduction Events. To protect Party A's interest in the Trust
       Agreement as a source of payment for Party B's obligations hereunder,
       including the priority of those payments under the Trust Agreement, the
       following provisions shall apply with respect to all Transactions
       hereunder:

     (i) If either (x) without the prior written consent of Party A, Party B
     enters into any "Hedge Agreement" (as defined in the Trust Agreement) on
     any date (a "Principal Payment Date") with any person or entity that
     would result in the Hedge Notional Amount exceeding the remaining
     Principal Balance on any date or (y) as the result of any payment,
     repayment, retirement or redemption of any amount of the Principal
     Balance under the Trust Agreement on any date (a "Principal Payment
     Date"), (A) the Principal Balance would be reduced to zero, or (B) the
     Hedge Notional Amount would exceed the remaining Principal Balance (after
     giving effect to that repayment), (each, a "Mandatory Reduction Event"),
     then not later than 1:00 p.m. (New York City time) on the date
     ("Mandatory Reduction Date") which is the second New York Business Day
     prior to that Principal Payment Date, Party B shall:

          (1)  notify Party A of that Mandatory Reduction Event, including the
               amount to be repaid and the outstanding Hedge Notional Amount;
               and

          (2)  specify in that notice each outstanding Transaction hereunder
               and the corresponding amount by which the Transactional
               Notional Amount of that Transaction is to be reduced for that
               Mandatory Reduction Event ("Affected Notional Amount") so that
               the Hedge Notional Amount for any



                                    D-2-4
<PAGE>

               date (after giving effect to all such reductions) would not
               exceed the Principal Balance for that date (after giving effect
               to any repayment) (except that if the Principal Balance is
               reduced to zero, the Hedge Notional Amount shall be reduced to
               zero).

         "Hedge Notional Amount" means, as of the date of determination, an
         amount equal to the aggregate Notional Amount outstanding on that
         date and for the then current Calculation Period of all
         Transactions outstanding under any Hedge Agreement (as defined in
         the Trust Agreement) then in effect.

         "Principal Balance" means, on any date, the aggregate principal
         amount of the Certificates, outstanding under the Trust Agreement
         on that date, after giving effect to all repayments, redemptions,
         advances or distributions of principal thereon on that date.

     (ii) For each Transaction for which a corresponding Affected Notional
     Amount is specified ("Affected Transaction") pursuant to sub-paragraph
     (i) above, the Notional Amount of that Affected Transaction shall be
     reduced as of the Mandatory Reduction Date by an amount equal to the
     Affected Notional Amount (and, if the Notional Amount otherwise accretes
     or amortizes after the Mandatory Reduction Date, the effect of that
     reduction shall be to reduce proportionately the Notional Amount of each
     future Calculation Period remaining under the Transaction), and an
     Additional Termination Event and Early Termination Date shall be deemed
     to have occurred on the Mandatory Reduction Date for that Transaction and
     Party B will be the sole Affected Party. For purposes of such Early
     Termination Date, the term "Terminated Transaction" as used in Section
     6(e) of this Agreement shall be only that part of the Affected
     Transaction relating to the Affected Notional Amount, and the remainder
     of the Affected Transaction shall continue in full force and effect as a
     Transaction hereunder subject to the terms of this Agreement. The amount
     payable under Section 6(e) of this Agreement with respect to any such
     Early Termination Date shall be due and payable in accordance with such
     Section 6(e), provided that such payment shall be made no later than the
     next "Distribution Date" under the Trust Agreement to occur after the
     Mandatory Reduction Date, and provided further that the Market Quotation
     with respect to any Terminated Transaction under this sub-paragraph (ii)
     shall be determined on the basis of the quotation of one Reference
     Market-maker selected by Party A, which may be Party A to the extent its
     quotation is reasonably determined in good faith.

(k)  Events of Default. An Event of Default shall not occur with respect to
     Party A under Section 5(a)(v)(1) or (2) or Section 5(a)(vi) when the
     failure to pay or deliver, or the default, event of default or other
     similar condition or event, as the case may be, arises solely (i) out of
     a wire transfer problem or an operational or administrative error or
     omission (so long as the required funds or property required to make that
     payment or delivery were otherwise available to Party A), or (ii) from
     the general unavailability of the relevant currency due to exchange
     controls or other similar governmental action, but in either case only if
     the payment or delivery is made within three Local Business Days after
     the problem has been corrected, the error or omission has been discovered
     or the currency becomes generally available.



                                    D-2-5
<PAGE>

(l)  Modification of Section 5(a)(i) - Failure to Pay or Deliver. Section
     5(a)(i) is hereby amended to change the reference to "third Local
     Business Day" in the third line of such subsection to read "thirtieth
     day" and to add the following language immediately after the word "party"
     at the end of the third line of such subsection "provided, however, such
     cure period shall not apply with respect to any amounts payable on the
     Termination Date".

(m)  Reports. For purposes hereof, Party B shall cause to be delivered to
     Party A within 10 days of the end of each calendar month a statement
     ("Reporting Statement") showing the Stated Amount of all Outstanding
     Certificates as of the end of such month and the Hedge Notional Amount as
     of the end of such month and each following month during the term of this
     Agreement for all outstanding Transactions under all Hedge Agreements
     which Party B has entered into, whether the same have already commenced
     or are scheduled to commence on a future date.

Part 2.  Tax Provisions

(a)  Payer Tax Representations. For the purpose of Section 3(e) of this
     Agreement, each party makes the following representation:

         It is not required by any applicable law, as modified by the
         practice of any relevant governmental revenue authority, of any
         Relevant Jurisdiction to make any deduction or withholding for or
         on account of any Tax from any payment (other than interest under
         Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by it
         to the other party under this Agreement.

         In making this representation, a party may rely on (i) the accuracy
         of any representations made by the other party pursuant to Section
         3(f) of this Agreement, (ii) the satisfaction of the agreement
         contained in Section 4(a)(i) or 4(a)(iii) of this Agreement, and
         the accuracy and effectiveness of any document provided by the
         other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
         Agreement, and (iii) the satisfaction of the agreement of the other
         party contained in Section 4(d) of this Agreement, provided that it
         shall not be a breach of this representation where reliance is
         placed on clause (ii) above and the other party does not deliver a
         form or document under Section 4(a)(iii) by reason of material
         prejudice to its legal or commercial position.

(b)  Payee Tax Representations. For the purpose of Section 3(f) of this
     Agreement:

     (i) Party A makes the following representation(s):

     (A)  It is a national banking association organized or formed under the
          laws of the United States and is a United States resident for United
          States federal income tax purposes.

     (B)  Party A makes no other Payee Tax Representations.

     (ii) Party B makes the following representation(s):

     (A)  It is a common law trust organized or formed under the laws of New
          York.



                                    D-2-6
<PAGE>

(c)  Tax Forms.

     (i) Delivery of Tax Forms. For the purpose of Section 4(a)(i), and
     without limiting Section 4(a)(iii), each party agrees to duly complete,
     execute and deliver to the other party the tax forms specified below with
     respect to it (A) before the first Payment Date under this Agreement, (B)
     promptly upon reasonable demand by the other party and (C) promptly upon
     learning that any such form previously provided by the party has become
     obsolete or incorrect.

          In addition, in the case of any tax form that is a Periodic Tax Form
          required to be delivered by Party B under this Agreement, Party B
          agrees to renew such tax form prior to its expiration by completing,
          executing and delivering to Party A that tax form ("Renewal Tax
          Form") in each succeeding third year following the year of execution
          of any such tax form or Renewal Tax Form delivered by Party B to
          Party A under this Agreement so that Party A receives each Renewal
          Tax Form not later than December 31 of the relevant year. "Periodic
          Tax Form" means any IRS Form W-9 that is delivered by Party B to
          Party A without a U.S. Taxpayer Identification Number.

     (ii) Tax Forms to be Delivered by Party A:

               Party A will deliver a correct, complete and duly executed U.S.
          Internal Revenue Service Form W-9 (or successor thereto), together
          with appropriate attachments, that eliminates U.S. federal
          withholding and backup withholding tax on payments to Party A under
          this Agreement.



     (iii) Tax forms to be Delivered by Party B:

               Party B will deliver a correct, complete and duly executed U.S.
          Internal Revenue Service Form W-9 (or successor thereto), together
          with appropriate attachments, that eliminates U.S. federal
          withholding and backup withholding tax on payments to Party B under
          this Agreement.



Part 3.  Documents

(a)  Delivery of Documents. When it delivers this Agreement, each party shall
     also deliver its Closing Documents to the other party in form and
     substance reasonably satisfactory to the other party. For each
     Transaction, a party shall deliver, promptly upon request, a duly
     executed incumbency certificate for the person(s) executing the
     Confirmation for that Transaction on behalf of that party.



                                    D-2-7
<PAGE>

(b)  Closing Documents.

     (i) For Party A, "Closing Documents" mean:

     (A)  an opinion of Party A's counsel addressed to Party B in form and
          substance acceptable to Party B;

     (B)  a duly executed incumbency certificate for each person executing
          this Agreement for Party A, or in lieu thereof, a copy of the
          relevant pages of its official signature book; and

     (C)  each Credit Support Document (if any) specified for Party A in this
          Schedule, together with a duly executed incumbency certificate for
          the person(s) executing that Credit Support Document, or in lieu
          thereof, a copy of the relevant pages of its official signature
          book.

     (ii) For Party B, "Closing Documents" mean:

     (A)  an opinion of Party B's counsel addressed to Party A in form and
          substance acceptable to Party A;

     (B)  a duly executed copy of the Trust Agreement and the other operative
          documents relating thereto and referred to therein, executed and
          delivered by the parties thereto.

     (C)  a copy, certified by the secretary or assistant secretary of Party
          B, of the resolutions of the board of directors or extracts from the
          bylaws of Party B authorizing the execution, delivery and
          performance by Party B of this Agreement and authorizing Party B to
          enter into Transactions hereunder; and

     (D)  a duly executed certificate of the secretary or assistant secretary
          of Party B certifying the name and true signature of each person
          authorized to execute this Agreement and enter into Transactions for
          Party B.

Part 4.  Miscellaneous

(a)  Addresses for Notices. For purposes of Section 12(a) of this Agreement,
     all notices to a party shall, with respect to any particular Transaction,
     be sent to its address, telex number or facsimile number specified in the
     relevant Confirmation, provided that any notice under Section 5 or 6 of
     this Agreement, and any notice under this Agreement not related to a
     particular Transaction, shall be sent to a party at its address, telex
     number or facsimile number specified below; provided further that any
     notice under the Credit Support Annex shall be sent to a party at its
     address, telex number or facsimile number specified in the Credit Support
     Annex.

       To Party A:

       WACHOVIA BANK, NATIONAL ASSOCIATION



                                    D-2-8
<PAGE>

       301 South College, DC-8
       Charlotte, NC 28202-0600

       Attention: Bruce M. Young
       Senior Vice President, Risk Management

       Fax: (704) 383-0575
       Phone: (704) 383-8778

       To Party B:

       STRATS(SM) Trust for Morgan Stanley Securities, Series 2004-12
       U.S. Bank Trust National Association
       100 Wall Street, Suite 1600
       New York, New York 10005
       Attention: Corporate Trust
       Fax: (212)809-5459

(b)  Process Agent. Not applicable.

(c)  Offices. Section 10(a) applies.

(d)  Multibranch Party. Neither party is a Multibranch Party.

(e)  "Calculation Agent" means Party A.

(f)  Credit Support Document.

     (i) For Party A, the following is a Credit Support Document: a Credit
     Support Annex dated the date hereof and duly executed and delivered by
     Party A and Party B and any applicable document governing Alternative
     Credit Support beginning on the effective date of such document.

     (ii) For Party B, the following is a Credit Support Document: none
     specified.

(g)  Credit Support Provider.

     (i) For Party A, Credit Support Provider means: none specified; provided
     that such party (other than Party A) executing a document governing
     Alternative Credit Support shall be a Credit Support Provider hereunder
     beginning on the effective date of such document.

     (ii) For Party B, Credit Support Provider means: none specified.

(h)  Governing Law. This Agreement will be governed by and construed in
     accordance with the law (and not the law of conflicts except with respect
     to Sections 5-1401 and 5-1402 of the New York General Obligations Law) of
     the State of New York.



                                    D-2-9
<PAGE>

(i)  Waiver of Jury Trial. To the extent permitted by applicable law, each
     party irrevocably waives any and all right to trial by jury in any legal
     proceeding in connection with this Agreement, any Credit Support Document
     to which it is a party, or any Transaction.

(j)  Netting of Payments. Section 2(c)(ii) of this Agreement will apply.

(k)  "Affiliate" has its meaning as defined in Section 14 of this Agreement.

Part 5.  Other Provisions

(a)  ISDA Publications.

     (i) 2000 ISDA Definitions. This Agreement and each Transaction are
     subject to the 2000 ISDA Definitions (including its Annex) published by
     the International Swaps and Derivatives Association, Inc. (together, the
     "2000 ISDA Definitions") and will be governed by the provisions of the
     2000 ISDA Definitions. The provisions of the 2000 ISDA Definitions are
     incorporated by reference in, and shall form part of, this Agreement and
     each Confirmation. Any reference to a "Swap Transaction" in the 2000 ISDA
     Definitions is deemed to be a reference to a "Transaction" for purposes
     of this Agreement or any Confirmation, and any reference to a
     "Transaction" in this Agreement or any Confirmation is deemed to be a
     reference to a "Swap Transaction" for purposes of the 2000 ISDA
     Definitions. The provisions of this Agreement (exclusive of the 2000 ISDA
     Definitions) shall prevail in the event of any conflict between such
     provisions and the 2000 ISDA Definitions.

(b)  Additional Representations. Section 3 is amended by adding the following
     Sections 3(g), (h), (i) and (j):

     "(g) Non-Reliance. For any Relevant Agreement: (i) it acts as principal
     and not as agent; (ii) it acknowledges that the other party acts only at
     arm's length and is not its agent, broker, advisor or fiduciary in any
     respect, and any agency, brokerage, advisory or fiduciary services that
     the other party (or any of its affiliates) may otherwise provide to the
     party (or to any of its affiliates) excludes the Relevant Agreement;
     (iii) with respect to Party A, it understands the Relevant Agreement and
     those risks, has determined they are appropriate for it, and willingly
     assumes those risks, and with respect to Party B, it has been directed to
     execute the Relevant Agreement and it understands the Relevant Agreement
     and those risks and willingly assumes those risks; (iv) it has not relied
     and will not be relying upon any evaluation or advice (including any
     recommendation, opinion, or representation) from the other party, or the
     representatives or advisors of the other party (except representations
     expressly made in the Relevant Agreement or an opinion of counsel
     required thereunder); and (vi) if a party is acting as a Calculation
     Agent or Valuation Agent, it does so not as the other party's agent or
     fiduciary, but on an arm's length basis for the purpose of performing an
     administrative function in good faith.

     "Relevant Agreement" means this Agreement, each Transaction, each
     Confirmation, any Credit Support Document, and any agreement (including
     any amendment, modification, transfer or early termination) between the
     parties relating thereto or to any Transaction.



                                    D-2-10
<PAGE>

     (h) Eligibility. It is an "eligible contract participant" within the
     meaning of the Commodity Exchange Act (as amended by the Commodity
     Futures Modernization Act of 2000).

     (i) FDIC Requirements. If it is a bank subject to the requirements of 12
     U.S.C. Section 1823(e), its execution, delivery and performance of this
     Agreement (including the Credit Support Annex and each Confirmation) have
     been approved by its board of directors or its loan committee, such
     approval is reflected in the minutes of said board of directors or loan
     committee, and this Agreement (including the Credit Support Annex and
     each Confirmation) will be maintained as one of its official records
     continuously from the time of its execution (or in the case of any
     Confirmation, continuously until such time as the relevant Transaction
     matures and the obligations therefor are satisfied in full).

     (j) ERISA. It is not (i) an employee benefit plan as defined in Section
     3(3) of the Employee Retirement Income Security Act of 1974, as amended
     ("ERISA") or a plan as defined in Section 4975(e) of the Internal Revenue
     Code of 1986, as amended (the "Code"), subject to Title I of ERISA or
     Section 4975 of the Code, or a plan as so defined but which is not
     subject to Title I of ERISA or Section 4975 of the Code (each, an "ERISA
     Plan"), (ii) a person or entity acting on behalf of an ERISA Plan, or
     (iii) a person or entity the assets of which constitute assets of an
     ERISA Plan.

(c)  Recorded Conversations. Each party and any of its Affiliates may
     electronically record any of its telephone conversations with the other
     party or with any of the other party's Affiliates in connection with this
     Agreement or any Transaction, and any such recordings may be submitted in
     evidence in any proceeding to establish any matters pertinent to this
     Agreement or any Transaction.

(d)  Confirmation Procedures. Upon receipt thereof, Party B shall examine the
     terms of each Confirmation sent by Party A, and unless Party B objects to
     the terms within three New York business days after receipt of that
     Confirmation, those terms shall be deemed accepted and correct absent
     manifest error, in which case that Confirmation will be sufficient to
     form a binding supplement to this Agreement notwithstanding Section
     9(e)(ii) of this Agreement.

Part 6.  Additional Terms Relating to the Trust Agreement

(a)  Permitted Transfers.

     (i) Notwithstanding Section 7 of this Agreement, Party A may make a
     Permitted Transfer without the prior written consent of Party B, and at
     Party A's own cost and expense, if either of the following events occurs:

     (A)  the unsecured and unsubordinated debt, deposit or letter of credit
          obligations of Party A are rated below the Hedge Counterparty
          Required Rating or the Hedge Counterparty Collateral Threshold
          Rating by S&P at the time of the transfer; or

     (B)  any Tax Event or Tax Event Upon Merger exists with respect to Party
          A at the time of the transfer.



                                    D-2-11
<PAGE>

     (ii)  "Permitted Transfer" means a transfer, in whole but not in part, of
     all of Party A's rights and obligations under this Agreement and which
     meets all of the following requirements:

     (A)  the transferee is a "Qualified Hedge Party " (as defined in the
          Trust Agreement) or a recognized dealer in interest rate swaps
          organized under the laws of the United States of America or a
          jurisdiction located in the United States of America (or another
          jurisdiction reasonably acceptable to Party B and the Trustee under
          the Trust Agreement) that, at the time of the transfer, maintains
          (or its proposed guarantor maintains) the Hedge Counterparty
          Required Rating from S&P on its unsecured and unsubordinated debt,
          deposit or letter of credit obligations;

     (B)  S&P confirms in writing that such transfer will not result in a
          reduction or withdrawal of its then current rating of the
          Certificates under the Trust Agreement with respect to which it has
          previously issued a rating;

     (C)  neither an Event of Default with respect to the transferee nor a
          Termination Event would exist immediately after that transfer;

     (D)  the transferee executes and delivers a written agreement reasonably
          satisfactory to Party B and the Trustee under the Trust Agreement in
          which the transferee, among other things, legally and effectively
          accepts all the rights and assumes all the obligations of Party A
          under this Agreement; and

     (E)  such transfer otherwise complies with the terms of the Trust
          Agreement.

(b)  Transfer. No Party to this Agreement may transfer its obligations under
     this Agreement pursuant to Section 7(a) of this Agreement except upon
     written confirmation from S&P that, any such reduction would not cause
     S&P's then-current rating on the Certificates to be adversely qualified,
     reduced, suspended or withdrawn.

(c)  Payments. All payments to Party B under this Agreement or any Transaction
     shall be made to the Certificate Account created under the Trust
     Agreement.

(d)  Set-off. Party A and Party B hereby waive any and all right of set-off
     with respect to any amounts due under this Agreement or any Transaction,
     provided that nothing herein shall be construed to waive or otherwise
     limit the netting provisions contained in Sections 2(c) and 6(e) of this
     Agreement or the setoff rights contained in the Credit Support Annex.

(e)  Trust Agreement

     (i) Party B hereby acknowledges that Party A is a secured party under the
     Trust Agreement with respect to this Agreement and a third-party
     beneficiary under the Trust Agreement and Party B agrees for the benefit
     of Party A that neither it nor any other Person will take any action
     (whether in the form of an amendment, a modification, waiver, approval,
     consent or otherwise) which may have a material adverse effect with
     respect to the rights, interest or benefits granted to Party A under the
     Trust Agreement with respect to this Agreement, whether or not this
     Agreement is specifically referred to or identified therein.



                                    D-2-12
<PAGE>

     (ii) On the date Party B executes and delivers this Agreement and on each
     date on which a Transaction is entered into, Party B hereby represents
     and warrants to Party A: that the Trust Agreement is in full force and
     effect; that Party B is not party to any separate agreement with any of
     the parties to the Trust Agreement that would have the effect of
     diminishing or impairing the rights, interests or benefits that have been
     granted to Party A under, and which are expressly set forth in, the Trust
     Agreement; that Party B's obligations under this Agreement are secured
     under the Trust Agreement; and that nothing herein violates or conflicts
     with any of the provisions of the Trust Agreement or any other documents
     executed in connection therewith.

(f)  Consent to Notice & Communications. Party B hereby consents to the giving
     to the Trustee of notice by Party A of Party A's address and telecopy and
     telephone numbers for all purposes of the Trust Agreement, and in
     addition, Party A shall also be entitled at any time to provide the
     Trustee with copies of this Agreement, including all Confirmations. In
     addition, Party A shall not be precluded from communicating with the
     Trustee or any party to, or any third party beneficiary under, the Trust
     Agreement for the purpose of exercising, enforcing or protecting any of
     Party A's rights or remedies under this Agreement or any rights,
     interests or benefits granted to Party A under the Trust Agreement.

(g)  No Bankruptcy Petition. Party A agrees that, prior to the date which is
     at least one year and one day after all Rated Indebtedness (as
     hereinafter defined) has been paid in full, it will not institute
     against, or join any other person or entity in instituting against, Party
     B any bankruptcy, reorganization, arrangement, insolvency, moratorium or
     liquidation proceedings, or other proceedings under federal or State
     bankruptcy or similar laws, provided that nothing herein shall preclude,
     or be deemed to estop, Party A from taking any action in any case or
     proceeding voluntarily filed or commenced by or on behalf of Party B or
     in any involuntary case or proceeding after it has commenced.

(h)  Limitation of Liability. Notwithstanding anything contained herein to the
     contrary, in executing this Agreement (including the Schedule, Credit
     Support Annex and each Confirmation) on behalf of Party B, the Trustee is
     acting solely in its capacity as trustee of Party B and not in its
     individual capacity, and in no event shall the Trustee, in its individual
     capacity or as beneficial owner of Party B, have any liability for the
     representations, warranties, covenants, agreements or other obligations
     of Party B hereunder, for which recourse shall be had solely to the
     assets of Party B.

(i)  Party A Rights Solely Against Collateral. The liability of Party B to
     Party A hereunder is limited in recourse to the assets of Party B and to
     the extent that the proceeds of such assets, when applied in accordance
     with the Trust Agreement, are insufficient to meet the obligations of
     Party B hereunder in full, Party B shall have no further liability in
     respect of any such outstanding obligations and any obligations of Party
     B which remain outstanding shall be extinguished. Party A further agrees
     that it shall not take any action against the directors, shareholders,
     administrator or officers of Party B to recover any amounts due hereunder
     (absent fraud or willful misconduct by any such person). This clause
     shall survive the termination of this agreement for any reason.



                                    D-2-13
<PAGE>

Part 7.  Definitions:

     All capitalized terms used herein and not defined, shall have the
     definition ascribed to them in the Trust Agreement.

     "Rated Indebtedness," means the Certificates issued under the Trust
     Agreement.

     "Securities Intermediary" means U.S. Bank Trust, National Association or
     any successor, acting as Securities Intermediary pursuant to the Trust
     Agreement.

     "Trust Agreement" means that certain STRATS(SM) Certificates Series
     Supplement 2004-12 between Synthetic Fixed-Income Securities, Inc., as
     trustor (the "Trustor") and the Trustee and Securities Intermediary,
     dated as of September 9, 2004, which was entered into pursuant to, and as
     a supplement to, that certain Base Trust Agreement, dated as of September
     26, 2003 by and between the Trustor and the Trustee.

     "Trustee" means U.S. Bank Trust, National Association or any successor,
     acting as Trustee pursuant to the Trust Agreement.



                                    D-2-14
<PAGE>

IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorized signatories as of the date hereof.

WACHOVIA BANK, NATIONAL ASSOCIATION



By:    __________________________________
Name:
Title:

STRATS(SM) TRUST FOR MORGAN STANLEY SECURITIES, SERIES 2004-11

By:  U.S. Bank Trust National Association, as Trustee



By:    __________________________________
Name:
Title:



                                    D-2-15
<PAGE>

                                                                  Exhibit D-3

                                    ISDA(R)
             International Swaps and Derivatives Association, Inc.

                             CREDIT SUPPORT ANNEX
                            to the Schedule to the
                             ISDA MASTER AGREEMENT
                         dated as of September 9, 2004
                                    between
                WACHOVIA BANK, NATIONAL ASSOCIATION ("Party A")
                                      and
        STRATS(SM) TRUST FOR MORGAN STANLEY SECURITIES, SERIES 2004-12
                                  ("Party B")

This Annex supplements, forms part of, and is subject to, the ISDA Master
Agreement referred to above (this "Agreement"), is part of its Schedule and is
a Credit Support Document under this Agreement with respect to Party A.

At any time a Collateral Event has occurred and is continuing with respect to
Party A, Party A shall be obligated to transfer Eligible Collateral in
accordance with the terms of this Annex. If a Collateral Event occurs and
thereafter ceases to be continuing (and provided that no Event of Default or
Potential Event of Default exists with respect to Party A) or Party A has made
a Permitted Transfer under this Agreement, then Party A's obligations to
transfer Eligible Collateral under this Annex will immediately cease with
respect to that Collateral Event, and Party B will, upon demand by Party A,
return to Party A, or cause its Custodian to return, all Collateral held under
this Annex.

"Collateral Event" means that the unsecured and unsubordinated debt, deposit
or letter of credit obligations of Party A carry an assigned rating by S&P
that is below the Hedge Counterparty Collateral Threshold Rating. The "Credit
Support Commencement Date" is in connection with a Collateral Rating Downgrade
Event, the first Business Day following the 30-day period after the occurrence
of the Collateral Rating Downgrade Event.

Accordingly, the parties agree as follows:

Paragraphs 1 - 12.  Incorporation

Paragraphs 1 through 12 inclusive of the ISDA Credit Support Annex (Bilateral
Form) (ISDA Agreements Subject to New York Law Only) published in 1994 by the
International Swaps and Derivatives Association, Inc. are incorporated herein
by reference and made a part hereof, except that Paragraph 1(b) is hereby
amended in its entirety to read as follows:

     "(b) Secured Party and Pledgor. Notwithstanding anything contained in
          this Annex to the contrary, (i) all references in this Annex to the
          "Secured Party" and all references to "other party" in Paragraphs 2,
          9 and 11(b) of this Annex, will be to Party B exclusively, and (iii)
          all references in this Annex to the "Pledgor" and all references to
          "Each party" or "a party" in Paragraphs 2, 9 and 11(b) of this
          Annex, will be to Party A exclusively."



                                    D-3-1
<PAGE>

Paragraph 13.  Elections and Variables

(a)  Security Interest for "Obligations". The term "Obligations" as used in
     this Annex includes no obligations of Secured Party and, for purposes of
     the definition of Obligations in Paragraph 12, includes no additional
     obligations of Pledgor.

(b)  Credit Support Obligations.

     (i)  Delivery Amount, Return Amount and Credit Support Amount.

     (A)  "Delivery Amount" has the meaning specified in Paragraph 3(a).

     (B)  "Return Amount" has the meaning specified in Paragraph 3(b).

     (C)  "Credit Support Amount" means (x) on and after a Credit Support
          Commencement Date and during the continuance of the related
          Collateral Event the amount specified in Paragraph 3(b); provided,
          however, if on or after such Credit Support Commencement Date Party
          A's ratings from S&P are below the Hedge Counterparty Collateral
          Threshold Rating for S&P, then it shall mean the S&P Credit Support
          Amount (as defined in Schedule 1 hereof).

          "Transaction Notional Amount" shall mean, as of the date of
          determination, an amount equal to the aggregate Notional Amount
          outstanding at the beginning of the related Calculation Period under
          the applicable Affected Transactions.

     (ii) Eligible Collateral. The following items will qualify as "Eligible
          Collateral":



                                    D-3-2
<PAGE>

<TABLE>
<CAPTION>
                                                                         Exhibit D-3

                                                                       Valuation
                                                                   Percentage (S&P):

<S>                                                                <C>
     (A)  Cash: U.S Cash: U.S. Dollars in depositary account             100%

     (B)  U.S. Treasury Securities: negotiable debt                     98.60%
          obligations  issued by the U.S. Treasury  Department
          ("Treasuries")  having a remaining maturity of up to
          and not more than 1 year.

     (C)  Treasuries having a remaining maturity of greater             94.10%
          than 1 year but not more than 5 years.

     (D)  Treasuries having a remaining maturity of greater             90.70%
          than 5 years but not more than 10 years.

     (E)  Treasuries having a remaining maturity of greater             85.30%
          than 10 years but not more than 20 years.

     (F)  Treasuries having a remaining maturity of greater             85.30%
          than 20 years not more than 30 years.

     (G)  Agency Securities: negotiable debt obligations of             98.20%
          the Federal National Mortgage Association (FNMA),
          Federal Home Loan Mortgage Corporation (FHLMC),
          Federal Home Loan Banks (FHLB), Federal Farm Credit
          Banks (FFCB), Student Loan Marketing Association
          (SLMA), Tennessee Valley Authority (TVA)
          (collectively, "Agency Securities") having a
          remaining maturity of not more than 1 year.

     (H)  Agency Securities having a remaining maturity of              93.30%
          greater than 1 year but not more than 5 years.

     (I)  Agency Securities having a remaining maturity of              88.60%
          greater than 5 years but not more than 10 years.

     (J)  Agency Securities having a remaining maturity of              80.80%
          greater than  10 years but not more than 20 years.

     (K)  Agency Securities having a remaining maturity of              80.80%
          greater than 20 years but not



                                    D-3-3
<PAGE>

          more than 30 years.

     (L)  FHLMC Certificates. Mortgage participation                     93%
          certificates issued by FHLMC evidencing undivided
          interests or participations in pools of first lien
          conventional or FHA/VA residential mortgages or
          deeds of trust, guaranteed by FHLMC, and having a
          remaining maturity of not more than 30 years.

     (M)  FNMA Certificates. Mortgage-backed pass-through                90%
          certificates issued  by FNMA evidencing undivided
          interests in pools of first lien mortgages or deeds
          of trust on residential properties, guaranteed by
          FNMA, having a remaining maturity of not more than
          30 years.

     (N)  GNMA Certificates. Mortgage-backed pass-through               90.60%
          certificates issued by private entities, evidencing
          undivided interests in pools of first lien
          mortgages or  deeds of trust on single family
          residences, guaranteed by the  Government National
          Mortgage Association (GNMA) with the full faith and
          credit of the United States, and having a remaining
          maturity of not more than 30 years.

     (O)  Commercial Paper. Commercial Paper with a rating               98%
          of at least P-1 by Moody's and at least A-1 by S&P
          and having a remaining maturity of not more than 30
          days.

     (P)  Other Items of Credit Support approved by the S&P      % to be determined
          to the extent any Certificates are rated by S&P.
</TABLE>



                                    D-3-4
<PAGE>

     (iii) Other Eligible Support. Not applicable.

     (iv) Thresholds.

          "Independent Amount" means for Pledgor:  zero.

          "Independent Amount" means for Secured Party:  zero

     (B)  "Threshold" means for Pledgor: at any time prior to a Credit Support
          Commencement Date, infinite; and thereafter, zero.

     (C)  "Minimum Transfer Amount" is $100,000.00 for any Delivery Amount of
          Pledgor, and zero for any Return Amount of Secured Party.

     (D)  Rounding: The Delivery Amount and the Return Amount will be rounded
          down to the nearest integral multiple of $10,000.

(c)  Valuation and Timing.

     (i)   "Valuation Agent" means, for purposes of Paragraphs 3, 4(d)(ii), 5
           and 6(d), the Pledgor.

     (ii)  "Valuation Date" means, for any Collateral Event, the second New
           York Business Day prior to the Credit Support Commencement Date and
           thereafter any Local Business Day while the Collateral Event is
           continuing, provided that there shall be one Valuation Date per
           week on a date selected by the Valuation Agent, which shall be the
           same calendar day each week to the extent practicable, on a
           reasonably consistent basis. If the Delivery Amount for the
           Valuation Date associated with the Credit Support Commencement Date
           or a weekly Valuation Date equals or exceeds the Pledgor's Minimum
           Transfer Amount, then the demand by the Secured Party referred to
           in Paragraph 3(a) of this Annex shall be deemed to have been given
           (A) with respect to a Credit Support Commencement Date, on the
           first New York Business Day preceding the Credit Support
           Commencement Date, prior to the Notification Time and (B) with
           respect to a weekly Valuation Date, on that weekly Valuation Date,
           prior to the Notification Time, and subject to the terms and
           conditions of this Annex, the Pledgor will transfer to the Secured
           Party the amount of Eligible Collateral it is required to Transfer
           with respect to that Valuation Date in accordance with Paragraph
           3(a) of this Annex.

     (iii) "Valuation Time" means the close of business in New York City on
           the Local Business Day before the Valuation Date or date of
           calculation, as applicable; provided that the calculations of Value
           and Exposure will be made as of approximately the same time on the
           same date.

     (iv)  "Notification Time" means 11:00 a.m., New York time, on a Local
           Business Day.



                                    D-3-5
<PAGE>

(d)  Conditions Precedent and Secured Party's Rights and Remedies. No
     Specified Conditions apply.

(e)  Substitution.

     (i)   "Substitution Date" has the meaning specified in Paragraph
           4(d)(ii).

     (ii)  Consent. The Pledgor is not required to obtain the Secured Party's
           consent for any substitution pursuant to Paragraph 4(d).

(f)  Dispute Resolution.

     (i)   "Resolution Time" means 1:00 p.m., New York time, on the Local
           Business Day following the date on which the notice is given that
           gives rise to a dispute under Paragraph 5.

     (ii)  Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value
           of Posted Credit Support other than Cash will be calculated based
           upon the mid-point between the bid and offered purchase rates or
           prices for that Posted Credit Support as reported on the Bloomberg
           electronic service as of the Resolution Time, of if unavailable, as
           quoted to the Valuation Agent as of the Resolution Time by a dealer
           in that Posted Credit Support of recognized standing selected in
           good faith by the Valuation Agent, which calculation shall include
           any unpaid interest on that Posted Credit Support.

     (iii) Alternative. The provisions of Paragraph 5 will apply.

(g)  Holding and Using Posted Collateral.

     (i)   Eligibility to Hold Posted Collateral; Custodians. Secured Party
           will not be entitled to hold Posted Collateral itself, and instead
           the Secured Party will be entitled to hold Posted Collateral
           through a Custodian pursuant to Paragraph 6(b), provided that (1)
           Posted Collateral may be held in New York or an alternative
           jurisdiction acceptable to Party A, (2) the Custodian shall at all
           times be a bank or trust company with total assets in excess of $10
           billion and having a rating assigned to its unsecured and
           unsubordinated long-term debt or deposit obligations of at least
           BBB+ from S&P and (3) Posted Collateral may be held by the Trustee.
           Initially the Custodian will be U.S. Bank Trust National
           Association.

     (ii)  Use of Posted Collateral. The provisions of Paragraph 6(c) will not
           apply to Secured Party and without prejudice to Secured Party's
           rights under Paragraph 8 of the Credit Support Annex, Secured Party
           will not take any action specified in such Section 6(c).

(h)  Interest Amount.

     (i)   Interest Rate. The "Interest Rate" will be the rate actually earned
           by the Custodian on the Posted Collateral as from time to time in
           effect and the



                                    D-3-6
<PAGE>

           Custodian shall hold all Posted Collateral in the form of Cash in
           Eligible Investments (as defined in the Trust Agreement) at the
           direction of the Pledgor. Custodian will provide details concerning
           such earnings upon Party A's request.

     (ii)  Transfer of Interest Amount. The Transfer of the Interest Amount
           will be made on the first Local Business Day of each calendar month
           and on any Local Business Day that Posted Collateral in the form of
           Cash is Transferred to the Pledgor pursuant to Paragraph 3(b).

     (iii) Alternative to Interest Amount. The provisions of Paragraph
           6(d)(ii) will apply.

(i)  Additional Representation(s). Not applicable.

(j)  Other Eligible Support and Other Posted Support. Not applicable.

(k)  Demands and Notices. All demands, specifications and notices under this
     Annex will be made to a party as follows unless otherwise specified from
     time to time by that party for purposes of this Annex in a written notice
     given to the other party:

     To Pledgor:
     WACHOVIA BANK, NATIONAL ASSOCIATION
     201 South College Street, 6th Floor
     Charlotte, NC 28288-0601

     Attention:  Collateral Management Group

     Fax:       (704) 383-3194
     Phone:     (704) 383-9529

     To Secured Party:
     STRATS(SM) TRUST FOR MORGAN STANLEY SECURITIES, SERIES 2004-12
     U.S. Bank Trust National Association
     100 Wall Street, Suite 1600
     New York, New York 10005
     Attention: Corporation Trust
     Fax: (212) 809-5459


(l)  Addresses for Transfers.

     (i)   For each Transfer hereunder to Pledgor, instructions will be
           provided by Pledgor for that specific Transfer.

     (ii)  For each Transfer hereunder to Secured Party, instructions will be
           provided by Secured Party for that specific Transfer.



                                    D-3-7
<PAGE>

IN WITNESS WHEREOF the parties have executed this Credit Support Annex as of
the date hereof.

WACHOVIA BANK, NATIONAL ASSOCIATION



By:     __________________________________
Name:
Title:

STRATS(SM) TRUST FOR MORGAN STANLEY SECURITIES, SERIES 2004-11

By:  U.S. Bank Trust National Association, as Trustee



By:     __________________________________
Name:
Title:



                                    D-3-8
<PAGE>

                                                                   EXHIBIT D-4

                                  Schedule 1

                           S&P Credit Support Amount

     The term "S&P Credit Support Amount" shall mean for any Valuation Date
(i) Party B's Exposure for that Valuation Date plus (ii) the product of the
applicable S&P Volatility Buffer (as determined by reference to the applicable
provisions below) times the Transaction Notional Amount, minus (iii) Party A's
Threshold; provided, however the S&P Credit Support Amount shall be zero if
(x) S&P is no longer rating any of the Certificates, or (y) Party A's ratings
from S&P are not below the Hedge Counterparty Collateral Threshold Rating for
S&P.

                            S&P Volatility Buffers

     If, on the related Valuation Date, the highest rated Certificates are
rated "AA-" or higher by S&P, then the Volatility Buffer will be determined
using the following table:

<TABLE>
<CAPTION>
---------------------------- -----------------------------------------------------------------------------------------------------
 Party A Rating (as                              Remaining Maturity of the Highest Rated Certificates:
hereinafter defined)*
---------------------------- -----------------------------------------------------------------------------------------------------
                                          Up to 5 years                     Up to 10 years                    Up to 30 years
---------------------------- --------------------------------- --------------------------------- ---------------------------------
<S>                          <C>                               <C>                               <C>
A-2                                                      3.25%                             4.00%                             4.75%
---------------------------- --------------------------------- --------------------------------- ---------------------------------
A-3                                                      4.00%                             5.00%                             6.25%
---------------------------- --------------------------------- --------------------------------- ---------------------------------
BB+ or lower                                             4.50%                             6.75%                             7.50%
---------------------------- --------------------------------- --------------------------------- ---------------------------------
</TABLE>

     If, on the related Valuation Date, the highest rated Certificates are
rated "A" or "A+" by S&P, then the Volatility Buffer will be determined using
the following table:

<TABLE>
<CAPTION>
---------------------------- -----------------------------------------------------------------------------------------------------
Party A Rating (as                               Remaining Maturity of the Highest Rated Certificates:
hereinafter defined)*
---------------------------- -----------------------------------------------------------------------------------------------------
                                          Up to 5 years                     Up to 10 years                    Up to 30 years
---------------------------- --------------------------------- --------------------------------- ---------------------------------
<S>                          <C>                               <C>                               <C>
BBB+/BBB/BBB-                                            3.25%                             4.00%                             4.50%
---------------------------- --------------------------------- --------------------------------- ---------------------------------
A-2                                                      3.25%                             4.00%                             4.50%
---------------------------- --------------------------------- --------------------------------- ---------------------------------
A-3                                                      3.50%                             4.50%                             6.00%
---------------------------- --------------------------------- --------------------------------- ---------------------------------
BB+ or lower                                             4.00%                             5.25%                             7.00%
---------------------------- --------------------------------- --------------------------------- ---------------------------------
</TABLE>

     If, on the related Valuation Date, the highest rated Certificates are
rated "A-" or below by S&P, then the Volatility Buffer will be determined in
consultation with S&P and will be at such levels as may be required in order
for S&P to agree in writing that it will not downgrade, reduce, suspend or
withdraw S&P's then-current rating on the Certificates; provided, however, in
no event shall such Volatility Buffer levels exceed the levels set forth in
the table set forth


--------
* If Party A has a long-term or short-term rating from S&P which is not
expressly set forth in the applicable table above, then the S&P Volatility
Buffer shall be deemed to be 0.0%.



                                    D-4-1
<PAGE>

immediately above which would have applied had the highest rated Certificates
been rated "A" or "A+" by S&P.


"Party A Rating" means, Party A's rating with respect to its long-term senior
unsecured debt or its short-term debt, as applicable, by S&P on the related
Valuation Date; provided, however, if both Party A's long-term debt and
short-term debt are rated by S&P on such Valuation Date, then Party A Rating
shall mean the higher of the two ratings by S&P.



                                    D-4-2

<PAGE>

                                                                   EXHIBIT D-5

WACHOVIA

                         SWAP TRANSACTION CONFIRMATION
------------------------------------------------------------------------------




<TABLE>
<CAPTION>
<S>                 <C>
Date:               September 09, 2004
To:                 STRATS(SM) Trust for Morgan Stanley Securities, Series 2004-12 ("Counterparty")
Address:            U.S. Bank Trust National Association
                    100 Wall Street, Suite 1600
                    New York, N.Y. 10005  USA

Fax:                (212) 809-5459
Attention:          Corporate Trust
From:               Wachovia Bank, N.A. ("Wachovia")
Ref. No.:           464902, 464903
</TABLE>


Dear Corporate Trust:

This confirms the terms of the Transaction described below between
Counterparty and Wachovia. The definitions and provisions contained in the
2000 ISDA Definitions, as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of
any inconsistency between those definitions and provisions and this
Confirmation, this Confirmation will govern.

1. The terms of the particular Transaction to which the Confirmation relates
are as follows:

<TABLE>
<CAPTION>
<S>                                   <C>
Transaction Type:                     Interest Rate Swap

Currency for Payments:                U.S. Dollars

Notional Amount:                      USD 5,000,000.00

Term:
     Trade Date:                      September 03, 2004

     Effective Date:                  September 09, 2004. The Effective Date is the first day of the first Calculation
                                      Period. However, the rights and obligations of both parties under this Transaction
                                      are in effect as of the Trade Date.

     Termination Date:                April 01, 2014 in respect of Fixed Amounts.
                                      April 01, 2014 in respect of Floating Amounts, subject to the Following Business Day
                                      Convention.

Fixed Amounts:

     Fixed Rate Payer:                Counterparty

     Period End Dates:                Semi-annually on the 1st of each October and April commencing October 01, 2004,
                                      through and including the Termination Date; No Adjustment.

     Payment Dates:                   Semi-annually on the 1st of each October and April commencing October 01, 2004,
                                      through and including the Termination Date; provided, however, if the last Payment
                                      Date would be after the Termination Date as a result of an adjustment due to the
                                      Business Day Convention, then the last Payment Date shall occur on such date
                                      notwithstanding the fact that such date is after the Termination Date and the
                                      Term.

     Business Day Convention:         Following

     Business Day:                    New York

     Fixed Rate:                      4.75%

     Fixed Rate Day Count

     Fraction:                        30/360



                                                         D-5-1
<PAGE>

Additional Fixed Amount:

     Fixed Amount Payer:              Counterparty

     Fixed Amount:                    USD 43,000.0

     Fixed Amount Payment Date:       September 09, 2004

Floating Amounts:

     Floating Rate Payer:             Wachovia

     Period End Dates:                Quarterly on the 1st of each October, January, April and July commencing October
                                      01, 2004, through and including the Termination Date, subject to adjustment in
                                      accordance with the Following Business Day Convention.

     Payment Dates:                   Quarterly on the 1st of each October, January, April and July commencing October
                                      01, 2004, through and including the Termination Date.

     Business Day Convention:         Following

     Business Day:                    New York

     Floating Rate for initial
     Calculation Period:              Determined two London Banking Days prior to the Effective Date.

     Floating Rate Option:            USD-LIBOR-BBA

     Designated Maturity:             3 Months

     Spread:                          Plus 0.50%

     Floating Rate Day Count
     Fraction:                        Actual/360

     Floating Rate determined:        Two London Banking Days prior to each Reset Date.

     Reset Dates:                     The first day of each Calculation Period.

     Compounding:                     Inapplicable

     Rounding convention:             5 decimal places per the ISDA Definitions.

Interest Rate Cap:

     Cap Buyer:                       Wachovia

     Cap Rate:                        6.50%

     Payment Dates:                   Quarterly on the 1st of each October, January, April and July commencing October
                                      01, 2004, through and including the Termination Date.

     Business Day Convention:         Following

     Business Day:                    New York

     Floating Rate for initial

     Calculation Period:              Determined two London Banking Days prior to the Effective Date.

     Floating Rate Option:            USD-LIBOR-BBA

     Designated Maturity:             3 Months

     Spread:                          Plus 0.50%

     Floating Rate Day Count
     Fraction:                        Actual/360

     Floating Rate determined:        Two London Banking Days prior to each Reset Date.

     Reset Dates:                     The first day of each Calculation Period.

     Compounding:                     Inapplicable

     Rounding convention:             5 decimal places per the ISDA Definitions.

Interest Rate Floor:

     Floor Buyer:                     Counterparty

     Floor Rate:                      3.00%

     Payment Dates:                   Quarterly on the 1st of each October, January, April and July commencing October
                                      01, 2004, through and including the Termination Date.



                                                         D-5-2
<PAGE>

     Business Day Convention:         Following

     Business Day:                    New York

     Floating Rate for initial

     Calculation Period:              Determined two London Banking Days prior to the Effective Date.

     Floating Rate Option:            USD-LIBOR-BBA

     Designated Maturity:             3 Months

     Spread:                          Plus 0.50%

     Floating Rate Day Count
     Fraction:                        Actual/360

     Floating Rate determined:        Two London Banking Days prior to each Reset Date.

     Reset Dates:                     The first day of each Calculation Period.

     Compounding:                     Inapplicable

     Rounding convention:             5 decimal places per the ISDA Definitions.


2. The additional provisions of this Confirmation are as follows:

Calculation Agent:                    Wachovia

Payment Instructions:                 Wachovia Bank, N.A.
                                      CIB Group, ABA 053000219
                                      Ref: Derivative Desk (Trade No: 464902, 464903)
                                      Account #: 04659360006116

Wachovia Contacts:                    Settlements and/or Rate Resets:
                                      Tel: (800) 249-3865
                                      Fax: (704) 383-9139

                                      Documentation:
                                      Tel: (704) 383-4599
                                      Fax: (704) 383-9139

                                      Collateral:
                                      Tel: (704) 383-9529

                                      Please quote transaction reference number.

DTC Delivery Instructions:            Participant #2803 US Bank NA
                                      Agent #52675 Firstar Bank NA - Corporate Trust
                                      Agent Internal #786755000, STRATS Trust
                                      Morgan Stanley, Series 2004-12

Payments to Counterparty:             ABA #091 000 022
                                      BBK= U.S. Bank National Association, Minneapolis, MN.
                                      A/C 1801 2116 7365
                                      BNF= U.S. Bank Trust NA
                                      STRATS Trust MORGAN STANLEY, Series 2004-12, A/C# 786755000
</TABLE>


Documentation

This Confirmation supplements, forms part of, and is subject to, the ISDA
Master Agreement between Wachovia and Counterparty dated as of September 09,
2004, as amended and supplemented from time to time (the "ISDA Master
Agreement"). All provisions contained or incorporated by reference in the ISDA
Master Agreement will govern this Confirmation except as expressly modified
herein.



                                     D-5-3
<PAGE>



Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing a copy of this Confirmation and returning it to us at
fax number (704) 383-9139.

                                            Very truly yours,
                                            Wachovia Bank, N.A.



                                            By:_____________________________
                                            Name:
                                            Title:




                                            Ref. No. 464902, 464903


Accepted and confirmed as of date first above written:

STRATS(SM) Trust for Morgan Stanley Securities, Series 2004-12
By:  U.S. Bank Trust National Association, not in its individual
     capacity but solely as Trustee




By:_____________________________
Name:
Title:



                                    D-5-4
<PAGE>

                                                                EXHIBIT E



                   EVIDENCE OF INTEGRATION FOR TAX PURPOSES

This information is retained on behalf of each Certificateholder and is
intended to comply with requirements imposed by Section 1.1275-6(e) of the
United States Treasury Regulations.

     (1) The date the qualifying debt instrument was issued or acquired (or is
     expected to be issued or acquired) by the taxpayer and the date the
     Section 1.1275-6 hedge was entered into by the taxpayer.

     The Trust acquired the qualifying debt instrument on September 9, 2004
     and entered into the Section 1.1275-6 hedge on the same date. Each
     Certificateholder simultaneously acquires its interest in the qualifying
     debt instrument and enters into the Section 1.1275-6 hedge on the trade
     date identified in the trade confirmation for the purchase of
     Certificates.

     (2) A description of the qualifying debt instrument and the Section
     1.1275-6 hedge.

     The qualifying debt instrument is $5,000,000 in aggregate principal
     amount of 4.75% Subordinated Notes due April 1, 2014 issued by Morgan
     Stanley. The Section 1.1275-6 hedge is a swap agreement between the Trust
     and Wachovia Bank, N.A, as evidenced by an ISDA Master Agreement
     (including a schedule and credit support annex thereto) dated as of
     September 9, 2004 and as supplemented by a confirmation number 447612 and
     447674 in the form attached to this series supplement as Exhibit D.

     (3) A summary of the cash flows and accruals resulting from treating the
     qualifying debt instrument and the Section 1.1275-6 hedge as an
     integrated transaction (that is, the cash flows and accruals on the
     synthetic debt instrument).

     A single principal payment of $5,000,000 is payable on the maturity date
of April 1, 2014. Interest at LIBOR plus 0.50% (but no less than 3.00% per
annum and no more than 6.50% per annum) is payable on the 1st calendar day of
each January, April, July and October (or if the 1st calendar day is not a
business day, on the next succeeding business day).

     For any interest period (with respect to the first distribution date, the
period from and including the original issue date of the Certificates to, but
excluding, the first distribution date, and thereafter, with respect to each
distribution date, the period from and including the preceding distribution
date to but excluding the current distribution date), three-month LIBOR will
be, with respect to any LIBOR Determination Date, the London interbank offered
rate for three month (such period being referred to as the "Designated
Maturity") United States dollar deposits, commencing on the second London
Banking Day (as defined below) immediately following such LIBOR Determination
Date, which appears on Telerate Page 3750 (as defined below) as of 11:00 a.m.,
London time, on such LIBOR Determination Date. If such rate does not appear on
Telerate Page 3750 at such time, LIBOR for the Designated Maturity will be
determined on the



                                     E-1
<PAGE>

basis of the rates at which deposits in U.S. Dollars are offered by the
Reference Banks (as defined below) at approximately 11:00 a.m., London time,
on the LIBOR Determination Date to prime banks in the London interbank market
for a period of the Designated Maturity commencing on the first day of the
related Interest Period and in an amount that is representative for a single
transaction in such market at the relevant time. The Calculation Agent will
request the principal London office of each of the Reference Banks to provide
a quotation of its rate. If at least two such quotations are provided, the
rate for that Interest Period will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for that
Interest Period will be the arithmetic mean of the rates quoted by major banks
in New York City, selected by the Calculation Agent, at approximately 11:00
a.m., New York City time, on the first day of the related Interest Period for
loans in U.S. Dollars to leading European banks for a period of the Designated
Maturity commencing on the first day of the related Interest Period and in an
amount that is representative for a single transaction in such market at the
relevant time.



                                     E-2